globalization and competitive strategy in europe s vulnerable regions firm industry and country effects in labour intensive industries clark g l palaskas t tracey p and tsampra m 2004 globalization and competitive strategy in europe s vulnerable regions firm industry and country effects in labour intensive industries regional studies38 1077 1092 european integration has prompted great interest in the adjustment capacities of small and medium enterprises in regions characterized by high levels of unemployment and lower than average incomes at issue in these circumstances is the extent to which economic competitiveness can be enhanced by technological change and the resources of european and national governments relying upon the results of a detailed survey of small and medium sized firm competitive strategies in selected vulnerable regions across europe the paper focuses upon firm adjustment strategies in four labour intensive industries vulnerable to international competition it draws together the results of these surveys providing econometric and statistical analyses that demonstrate the commonalities and difference

transfer pricing in a dynamic marketing operations interface abstract a transfer price mechanism is proposed to coordinate the strategies of the marketing and operations functional areas operating in a dynamic interface environment in a decentralized firm marketing and operations are strategic decision makers in a differential game in which marketing has price and advertising and operations has production as control variables and advertising goodwill and production backlog are state variables a constant transfer price is entered into the objective functionals for marketing and operations and subgame perfect feedback strategies are derived for price advertising and production as functions of the state variables the feedback strategies allow a solution for the dynamic system involving goodwill and backlog and the total payoff to the firm the sum of the payoffs to marketing and operations is determined as a function of the transfer price finally for certain parameter conditions an interior maximum of the payoff function is achieved and the optimal transfer price is identified

a framework of economic analysis for tapered technology manufacturing alliances abstract globalization of production has altered the configuration of supply chains in many industries besides outsourcing joint ventures and strategic alliances are increasingly established to create competitive production organizations this paper addresses a case of tapered technology manufacturing alliance between a process technology firm with captive manufacturing capability and an efficient manufacturing firm in an asset heavy industry a framework of economic analysis is first developed for fusing the factors of technology licensing manufacturing efficiency risk sharing and demand uncertainty analysis methods of capacity economics are next described for participation analysis capacity allocation and contract term tradeoffs finally we demonstrate the utility of the methods by numerical examples with stylized industry data and by an analysis of alliance stability when facing potential new entrants

international competition income distribution and economic growth this paper shows that the neo keynesian case for wage led growth does not generally hold in an open economy model wage increases cause a loss of competitiveness that reduces the trade balance if the economy is relatively open to trade and price elasticities satisfy certain restrictions the worsening of the trade balance more than outweighs the increase in workers consumption thus reducing the growth rate the main theoretical innovation is a flexible markup pricing rule that allows changes in unit labor costs and exchange rates to affect profit margins implications for international relations and class conflict are discussed copyright 1989 by oxford university press

surplus division and investment incentives in supply chains a biform game analysis abstract in this paper we use a biform game approach for analyzing the impact of surplus division in supply chains on investment incentives in the first stage of the game firms decide non cooperatively on investments in the second stage the surplus is shared according to the shapley value we find that all firms have inefficiently low investment incentives which however depend on their position in the supply chain cross subsidies for investment costs can mitigate but not eliminate the underinvestment problem vertical integration between at least some firms yields efficient investments but may nevertheless reduce the aggregated payoff of the firms we show how the size of our effects depends on the structure of the supply chain and the efficiency of the investment technology various extensions demonstrate that our results are qualitatively robust

strategic transfer pricing most research into cost systems has focused on their motivational implications this paper takes a different approach by developing a model where two oligopolistic firms strategically select their cost based transfer prices duopoly models frequently assume that firms game on their choice of prices product prices however are ultimately based on the firms transfer prices that communicate manufacturing costs to marketing departments it is for this reason that transfer prices will have a strategic component to them we derive implications for cost system choice and transfer pricing including showing that firms may cross subsidize their products a result consistent with the empirical evidence

subordinate financialization and financial subsumption in south korea this paper analyzes the peculiarity of financialization in south korea after the 1997 asian financial crisis financialization research originally focused on the us experience and primarily underst

cost based transfer pricing under r d risk aversion in an integrated supply chain abstract this paper examines the economic role of transfer pricing for a vertically integrated supply chain when a risk averse production division manager faces uncertainty on the outcomes from r d investment in particular we compare two representative cost based transfer pricing methods full cost and variable cost pricing we construct an economic model based on the assumption that r d investment reduces the expected fixed costs of a production factor as well as the variable production costs we show that a firm s profit under full cost transfer pricing is greater than that under variable cost transfer pricing under certainty contrary to this benchmark result variable cost pricing becomes more profitable than full cost pricing when the risk averse manager bears relatively high risk

a game theoretic approach to transfer pricing in a vertically integrated supply chain we study the problem of setting transfer prices in a vertically integrated supply chain in which the divisions share technology and transactions costs we develop a cooperative game that provides transfer prices for the intermediate products in the supply chain this model is applied both when the market prices for these products are known and also when their valuations differ we provide a solution that is fair and acceptable to all divisions in the perfect information case the shapley value generates the transfer prices while in the asymmetric case we obtain transfer prices from the solution to a linear program

low wage manufacturing and global commodity chains a model in the unequal exchange tradition the institutional setting of subcontracted manufacturing has a profound impact on how the benefits of trade are distributed this paper develops a model that combines insights from unequal exchange theorists and global commodity chain analysis to clarify the distributive dynamics of production networks in which subcontracting and branding are defining features in this framework the ability of productivity growth to increase income from exports is constrained and depends on how the benefits of productivity improvements are captured as lower consumer prices or higher rents for brand name multinationals increasing consumption in affluent consumer markets raises export earnings however developing countries acting alone are constrained in their ability to affect the demand side of global commodity chains instead supply side policies to support industrial upgrading represent a more viable option for raising incomes copyright 2006 oxford university press

the dark side of ny lon financial centres and the global financial crisis this paper brings financial centres into the debate on the causes and consequences of the global financial crisis by focusing on new york and london it argues that the degree of commonality comp

fair transfer price and inventory holding policies in two enterprise supply chains abstract a key issue in supply chain optimisation involving multiple enterprises is the determination of policies that optimise the performance of the supply chain as a whole while ensuring adequate rewards for each participant in this paper we present a mathematical programming formulation for fair optimised profit distribution between echelons in a general multi enterprise supply chain the proposed formulation is based on an approach applying the nash bargaining solution for finding optimal multi partner profit levels subject to given minimum echelon profit requirements the overall problem is first formulated as a mixed integer non linear programming minlp model a spatial and binary variable branch and bound algorithm is then applied to the above problem based on exact and approximate linearisations of the bilinear terms involved in the model while at each node of the search tree a mixed integer linear programming milp problem is solved the solution comprises inter firm transfer prices production and inventory levels flows of products between echelons and sales profiles the applicability of the proposed approach is demonstrated by a number of illustrative examples based on industrial processes

integrating finance into global production networks coe n m lai k p y and wojcik d integrating finance into global production networks regional studies while successful in its aim of globalizing regional development the global production network gpn approach has thus far paid less attention to the role of finance in the dynamics of the global economy and regional development this lacuna is significant as finance is arguably even more globalized and networked than production to address this gap the paper distils the concept of the global financial network gfn from financial geography and related scholarship with advanced business services world cities and offshore jurisdictions at the core interactions between the gpn and the gfn are discussed focusing on the financing and financializing of gpns and the co evolution of globalization and financialization integrating finance into gpn research entails more than a simple extension of the approach it would also enrich it conceptually and enable it methodologically and empirically

gray market trade with product information service in global supply chains abstract this paper investigates the economic effects of a product information service when potential consumers who are segmented by their taste exist in gray markets specifically we construct an economic model that considers a multinational firm mnf who expands business to a country and chooses whether to provide information service regarding product characteristics if receiving the information consumers in a specific segment whose taste suits the characteristics have positive utility from consuming the product while those in other segments have no utility by contrast consumers in all segments have positive expected utility before consuming the product without information with these settings we demonstrate that there arises the equilibrium that the mnf provides no information service when gray market trade i e parallel trade is allowed in the country leading to lower consumer welfare than when it is prohibited a primary finding in the equilibrium is that such a situation arises especially when potential consumers are less segmented in this situation the regulator in the country should ban the parallel imports so as to enhance consumer welfare the result is counterintuitive and notable because one might intuitively infer that gray market trade is less desirable when customers are more minutely segmented and the product information service is thus more specific and necessary

modeling and design of global logistics systems a review of integrated strategic and tactical models and design algorithms the overall focus of this research is to demonstrate the savings potential generated by the integration of the design of strategic global supply chain networks with the determination of tactical production distribution allocations and transfer prices the logistics systems design problem is defined as follows given a set of potential suppliers potential manufacturing facilities and distribution centers with multiple possible configurations and customers with deterministic demands determine the configuration of the production distribution system and the transfer prices between various subsidiaries of the corporation such that seasonal customer demands and service requirements are met and the after tax profit of the corporation is maximized the after tax profit is the difference between the sales revenue minus the total system cost and taxes the total cost is defined as the sum of supply production transportation inventory and facility costs two models and their associated solution algorithms will be introduced the savings opportunities created by designing the system with a methodology that integrates strategic and tactical decisions rather than in a hierarchical fashion are demonstrated with two case studies the first model focuses on the setting of transfer prices in a global supply chain with the objective of maximizing the after tax profit of an international corporation the constraints mandated by the national taxing authorities create a bilinear programming formulation we will describe a very efficient heuristic iterative solution algorithm which alternates between the optimization of the transfer prices and the material flows performance and bounds for the heuristic algorithms will be discussed the second model focuses on the production and distribution allocation in a single country system when the customers have seasonal demands this model also needs to be solved as a subproblem in the heuristic solution of the global transfer price model the research develops an integrated design methodology based on primal decomposition methods for the mixed integer programming formulation the primal decomposition allows a natural split of the production and transportation decisions and the research identifies the necessary information flows between the subsystems the primal decomposition method also allows a very efficient solution algorithm for this general class of large mixed integer programming models data requirements and solution times will be discussed for a real life case study in the packaging industry 2002 elsevier science b v all rights reserved

risk and global economic architecture why full financial integration may be undesirable integration of global financial markets was supposed to lead to greater financial stability as risks were spread around the world the finan cial crisis has thrown doubt on this conclusion a failure in one part of the global economic system caused a global meltdown the recent crisis has shown that in the absence of appro priate government intervention privately profit able transactions may lead to systemic risk this paper provides a general analytic framework within which we can analyze the optimal degree and form of financial integration within this general framework full integration is not in general optimal indeed faced with a choice between two polar regimes full integration or autarky in the simplified model autarky may be superior

fair electricity transfer price and unit capacity selection for microgrids abstract microgrids are defined as an area of electricity distribution network that can operate autonomously from the rest of the network in order to achieve the best economic outcomes the participants in a microgrid can benefit from cooperation in microgrid design and operation in this paper a mathematical programming formulation is presented for fair optimised cost distribution amongst participants in a general microgrid the proposed formulation is based on the game theory nash bargaining solution approach for finding optimal multi partner cost levels subject to given upper bounds on the equivalent annual costs the microgrid planning problem concerning the fair electricity transfer price and unit capacity selection is first formulated as a mixed integer non linear programming model then a separable programming approach is applied to reform the resulting mixed integer non linear programming model to a mixed integer linear programming form the model is applied to a case study with a microgrid involving five participants

intrafirm trade arm s length transfer pricing rule and coordination failure abstract this paper demonstrates that uniform imposition of the arm s length principle on transfer pricing leads to coordination failure among countries in terms of economic welfare if the countries trade products in the form of intrafirm transactions by multinational firms mnfs to highlight this implication we first show that imposition of the arm s length principle on an mnf induces it to transfer a product among subordinate divisions at marginal cost i e the competitive price which is consistent with the purpose of the principle nonetheless if regulators in each country impose the principle on mnfs all of the following economic welfare measures decrease compared with the situation where the principle is not imposed 1 consumer welfare in each of the trading countries 2 profit of each mnf and thus 3 total world economic welfare this result indicates that it is possible that enforcement of the principle has no positive effect at all in the world because economic welfare of all economic agents deteriorates when the principle is imposed a numerical analysis demonstrates that this possibility arises in a broad range of circumstances even including the situation where a giant economic world power and a small underdeveloped country mutually trade products in these circumstances an agreement among trading countries that no country imposes the arm s length principle may encourage pareto improvement of the world economy

mr keynes and the post keynesians principles of macroeconomics for a monetary production economy attempts to establish the methodological connections between keynes s uncertainty concept and the evolving post keynesian literature it also considers why the hicksian islm keynesian approach went off the careful analytic tracks laid down by keynes

who profits from innovation in global value chains a study of the ipod and notebook pcs in an era when new ideas are brought to the market by global value networks of specialists rather than by one company a key question is who captures the most value from innovation in such a structure and why this paper addresses the question of who benefits from innovation in global value chains by looking at specific computer and electronics products we apply a novel industry studies methodology for measuring the distribution of financial value across the supply chains for two models from apple s ipod family and notebook pc models from lenovo and hewlett packard hp these are all examples of globally innovated products combining technologies from the u s japan and other countries and assembled in china our analysis shows that the gross margins of apple for its high end ipod products are generally higher than those earned by hp and lenovo for notebook pcs although not so high as to be considered supernormal a key reason for the difference is that apple s control of the core software proprietary standards and complementary infrastructure of the ipod enables it to retain greater profits whereas a large share of the pc industry profits are siphoned off to microsoft and intel who control key technical standards consistent with teece 1986 our results confirm the importance of stages of technical evolution appropriability regimes and complementary assets as determinants of profiting from innovation on the other hand we find that manufacturing has become commoditized and is no longer a key to profiting from innovation in final electronic products also contrary to recent suggestions in the literature we find no evidence of a causal link between product and industry architectures instead there is a vast electronics industry architecture that can easily support product level value chain configurations ranging from modular to integrated

transfer pricing and ownership structure we study the performance of jointly owned production units where upstream firms sell inputs to a downstream final market producer it is found that compared to integrated firms co ownership leads to overinvoicing of input prices transfer prices resulting in lower aggregate profits tax and tariff policy may lessen the organizational inefficiencies of jointly owned firms the analysis suggests that firms must have other reasons for forming jointly owned production units than those guided by production efficiency and benefits from delegation of decision making jel classification f23 l23

why financialisation hasn t depressed us productive investment the rate of capital accumulation in the usa has fallen markedly in recent decades works in the financialisation literature have tried to explain this phenomenon by arguing that rising financial payments and purchases have come at the expense of productive investment this article shows that such arguments are not supported by the data it also explains theoretically why rising dividend payments and the growth of corporations portfolio investment are compatible with the fact that corporations productive investment did not decline during the first two decades of neoliberalism in the usa there would necessarily be a trade off between these uses of funds if they were all funded out of current profits but there is no necessary trade off because borrowed funds are an additional source finally the article shows that the fall in us corporations rate of profit rate of return on investment in fixed assets fully accounts for the fall in their rate of capital accumulation

financialisation and the dynamics of offshoring in the usa imports are linked to higher cost mark ups and firm profits and the gains from such non competitive imports the result of offshoring are increasingly associated with the reinvestment of these higher profits our regression analysis of 35 us manufacturing and service industries over the period 1998 2006 supports aggregate and firm level studies showing that offshoring is associated with a higher share of corporate profit in total value added but the dynamic gains from offshoring have not been fully realised because firms have purchased financial assets especially share buybacks and higher dividend payments to raise shareholder value rather than investing in productive assets that raise productivity growth employment and income despite the corporate sector s contribution to national savings over the past decade the offshoring financialisation linkage reduces the capacity of non financial corporations to act as a driver of the recovery from the economic crisis that emerged in 2008

financialization of the global economy the instability of the world financial system starkly revealed in the recent debacle is not the only problem it poses its secularly increasing dominance over the real economy is in itself a phenomenon that needs examining the article traces the source of this increasing dominance not just to the increasingly leveraged and increasingly incomprehensible forms of intermediation between savers and those in the real economy who need credit and insurance but also to the increasingly universal doctrine that maximizing shareholder value is the sole raison d etre of the firm and the promotion by governments of an equity culture some of the social consequences of financialization are exacerbating inequalities greater insecurity misdirection of talent and the erosion of trust copyright 2008 oxford university press

unemployment and the real wage the economic basis for contesting political ideologies using the keynesian theory of effective demand this paper demonstrates how particular models such as that of cooperative capitalism enunciated by the left keynesian social democrats the marxian model of profit squeeze emphasizing distributive conflict and even the conservative model relying on supply side stimulus fit in as particular variants of a more general theoretical scheme through a reconstruction of the familiar is schedule the argument is weaved around the theme of the relations between unemployment and real wage in the context of both a closed and an open economy to explain the common macroeconomic basis of contesting ideologies copyright 1990 by oxford university press

financialisation and the slowdown of accumulation over the past decades financial investment of non financial businesses has been rising and accumulation of capital goods has been declining the first part of the paper offers a novel theory to explain this phenomenon financialization the shareholder revolution and the development of a market for corporate control have shifted power to shareholders and thus changed management priorities leading to a reduction in the desired growth rate in the second part the link between accumulation and financialization is tested econometrically by means of a time series analysis of aggregate business investment for usa uk france and germany extensive test of robustness are performed for the first three countries evidence that confirms the negative effect of financialization on accumulation is found author s abstract

regional financial development and bank competition effects on firms growth fernandez de guevara j and maudos j regional financial development and bank competition effects on firms growth regional studies this paper analyses the effect of regional financial development and bank competition on firms growth using the spanish provinces as a testing ground the results show that firms in industries with a greater dependence on external finance grow faster in more financially developed provinces the results also show that bank monopoly power has an inverted u effect on firms growth suggesting that market power has its highest effect at intermediate values the effect is heterogeneous among firms according to the financial dependence of the industry to which they belong this result is consistent with the literature on relationship banking which argues that bank competition can have a negative effect on the availability of finance for more informationally opaque firms fernandez de guevara j et maudos j le developpement financier regional et la concurrence bancaire l imp

globalization countries cities and multinationals mccann p and acs z j globalization countries cities and multinationals regional studies this paper explores the relationship between the size of a country the size of its cities and the importance of economies of scale in the modern era of globalization in order to do this it integrates three different literatures namely the literature on the optimal size of a country the literature on historical processes of urbanization and the performance of cities and the literature on the role of multinational firms in the global economy using an economic geography perspective but looking at these issues through the lens of economic history it is demonstrated that the importance of agglomeration effects and in particular relationship between city size and the prosperity of the nation state has changed over the different eras of globalization in earlier eras of globalization the importance of agglomeration was represented by a fairly simple relationship between the scale of the city and the scale