export market performance of oecd countries an empirical examination of the role of cost competitiveness we investigate the relationship between export market shares and relative unit labour costs using a long panel of 12 manufacturing industries across 14 oecd countries we ask how sensitive are export market shares to changes in relative costs and what determines this sensitivity both costs and embodied technology are important but neither can fully explain changing export positions we explore whether residual country specific trends might be linked to deep structural features of economies sensitivity to labour costs is lower in high tech industries and core erm countries industry elasticities have increased especially in industries subject to increasing product market competition

should a carbon tax be differentiated across sectors abstract if some but not all countries are cooperating to reduce co2 emissions one could make the following argument a high carbon tax for carbon intensive tradeable sectors in the cooperating countries will reduce the production of goods from these sectors and therefore co2 emissions in the cooperating countries however this will to a large extent be counteracted by increased production of such goods in the countries that have no climate policy and since it is only total co2 emissions from all countries that are relevant for the climate there is no point in a policy that simply relocates co2 emissions from the cooperating countries to the countries that have no climate policy according to this line of reasoning carbon intensive tradeable sectors should thus face a lower carbon tax than other sectors of the economy this paper shows that a carbon tax should not be differentiated across sectors in the economy provided one can use import and export tariffs on all traded goods it is also shown that such a differentiation of carbon taxes is optimal for the cooperating countries if they are prevented from using tariffs on the traded goods however informational or political factors constraining the use of tariffs are likely also to constrain the possibility of differentiating carbon taxes between sectors

integrator contracts with many agents and bankruptcy this article analyzes optimal livestock production contracts between an integrator company and many independent growers in three similar industries broiler turkey and swine the analysis provides an explanation for the simultaneous existence of distinct incentive schemes in these industries by examining the effects of bankruptcy the key factors are shown to be the output price volatility and the firm size with large companies dominating the broiler industry a small price volatility facilitates the use of two part piece rate tournaments by contrast given the prevalence of smaller companies in the swine industry a larger price volatility generates a bankruptcy risk which renders the use of tournaments infeasible given the combination of medium size companies in the turkey industry an intermediate price volatility produces a mixed result where tournaments and fixed performance standards exist simultaneously

the efficiency cost of protective measures in climate policy despite recent achievements towards a global climate agreement climate action to reduce greenhouse gas emissions remains quite heterogeneous across countries energy intensive and trade exposed eite industries in industrialized countries are concerned on stringent domestic emission pricing that puts them at a competitive disadvantage against producers of similar goods in other countries with more lenient emission regulation this paper focuses on climate policy design in the united states of america us and compares the economic implications of four alternative protective measures for us eite industries i output based rebates ii exemptions from emission pricing iii energy intensity standards and iv carbon intensity standards using a large scale computable general equilibrium model we quantify how these protective measures affect competitiveness of us eite industries we find that protective measures can improve common trade related competitiveness indicators such as revealed comparative advantage or relative world trade shares but at the same time may lead to a decline in the output value for eite industries because of negative income effects the economy wide cost of emission abatement under protective measures increase as compared to uniform emission pricing stand alone such that the gains of protective measures for eite exports may be more than compensated through losses in domestic eite demand

unilateral climate policy design efficiency and equity implications of alternative instruments to reduce carbon leakage abstract global cost effectiveness of unilateral emission abatement can be seriously hampered by carbon leakage we assess three widely discussed proposals for leakage reduction carbon motivated border tax adjustments industry exemptions from carbon regulation and output based allocation of emission allowances we find that none of these measures amounts to a magic bullet when both efficiency and equity criteria matter compared to unilateral emission pricing alone border carbon adjustments are most effective in leakage reduction and promotion of global cost effectiveness but can markedly exacerbate regional inequality exemptions and output based allocation tend to avoid distributional pitfalls but are less effective in leakage reduction and global cost savings exemptions may even decrease global cost effectiveness of unilateral emission abatement

do tournaments have incentive effects much attention has been devoted to studying models of tournaments or situations in which an individual s payment depends only on his or her output or rank relative to that of other competitors academic interest derives from the fact that under certain sets of assumptions tournaments have desirable normative properties because of the incentive structures they provide our paper uses nonexperimental data to test whether tournaments actually elicit effort responses we focus on professional golf tournaments because information on the incentive structure prize distribution and measures of individual output players scores are both available we find strong support for the proposition that the level and structure of prizes in pga tournaments influence players performance

trade offs in energy and environmental policy abstract the energy sector is undeniably undergoing a critical period faced with multiple challenges whether economic political or technological these challenges are related to the requirements set on the sector to meet a wide range of social demands associated with the three traditional dimensions of a sustainable energy system i e environmental sustainability security of energy supply and economic sustainability in particular the environmental pillar has gained ground after the paris agreement which has reinforced the requirement of a low carbon transformation of the sector a main challenge is to balance trade offs among competing goals when designing energy and environmental policies although making the energy sector greener is a common aspiration of governments and many countries are indeed being successful in this regard the success comes at a price in terms of the other non environmental dimensions of a sustainable energy system the aim of this special issue is to look in detail on some of the most pressing environmental challenges faced by the energy sector as well as the trade offs involved in reaching a greener energy system

management forecasts what do we know empirical research has addressed several issues related to management forecasts of earnings including the motivations management may have to release forecasts voluntarily bias in and accuracy of forecasts and reactions to management forecasts these issues are important to consider in order to interpret management forecasts properly this article summarizes this body of research and concisely describes the findings the discussion is intended to help analysts seeking to use the information in management forecasts in making their own assessments of a firm s future

unilateral climate policy and competitiveness economic implications of differential emission pricing unilateral emission reduction commitments raise concerns on international competitiveness and emission leakage that result in preferential regulatory treatment of domestic energy intensive and trade exposed industries our analysis illustrates the potential pitfalls of climate policy design which narrowly focuses on competitiveness concerns about energy intensive and trade exposed eite branches the sector specific gains of preferential regulation in favour of these branches must be traded off against the additional burden imposed on other industries beyond burden shifting between industries differential emission pricing bears the risk for substantial excess cost in emission reduction as policy concedes too low carbon prices to eite industries and thereby foregoes relatively cheap abatement options in these sectors from the perspective of global cost effectiveness we find that differential emission pricing of eite industries hardly reduces emission leakage since the latter is driven through robust international energy market responses to emission constraints as a consequence the scope for efficiency compared to uniform pricing is very limited only towards stringent emission reduction targets will a moderate price differentiation achieve sufficient gains from leakage reduction to offset the losses of diverging marginal abatement cost

testing the theory of tournaments an empirical analysis of broiler production broiler chickens are raised by contract growers whose rewards depend explicitly upon relative performance we use data on the performance of broiler producers facing both tournament and linear performance evaluation compensation structures to test three predictions from the theory of tournaments that changes in the level of prizes that leave prize differentials unchanged will not affect performance that in mixed tournaments more able players will choose less risky strategies and that tournament organizers will attempt to handicap players of unequal ability or reduce mixing to avoid the disincentive effects of mixed tournaments our evidence is consistent with each prediction

cost effective unilateral climate policy design size matters given the bleak prospects for a global agreement on mitigating climate change pressure for unilateral abatement is increasing a major challenge is emissions leakage border carbon adjustments and output based allocation of emissions allowances can increase effectiveness of unilateral action but introduce distortions of their own we assess antileakage measures as a function of abatement coalition size we first develop a partial equilibrium analytical framework to see how these instruments affect emissions within and outside the coalition we then employ a computable general equilibrium model of international trade and energy use to assess the strategies as the coalition grows we find that full border adjustments rank first in global cost effectiveness followed by import tariffs and output based rebates the differences across measures and their overall appeal decline as the abatement coalition grows in terms of cost the coalition countries prefer border carbon adjustments countries outside the coalition prefer output based rebates

structural estimation of rank order tournament games with private information in this article we propose and solve a game theoretic model of a rank order tournament with private information using the contract settlement data from a poultry company we estimate a fully structural model of a symmetric nash equilibrium of this game we show that growers equilibrium effort depends on four factors the spread in piece rates between the performance brackets the number of players in each tournament the number of performance brackets used and the density of growers private shocks we use estimates to simulate how changes in the tournament characteristics affecting equilibrium effort impact the growers and the integrator s welfare in most sporting events prizes are awarded not on basis of absolute performance but based on relative performance or tournaments be sides sporting events tournaments are also frequently used in labor contracts the name tournament typically suggests a rank order ordinal scheme such as is considered by lazear and rosen 1981 whereas a broader definition applies to any compensation scheme based on relative performance e g nalebuff and stiglitz 1983 tsoulouhas and vukina 1999 despite the sizeable theoretical litera ture on tournaments empirical work related to these models remains rather limited most of the theoretical literature on tournaments see mclaughlin 1988 for a survey has been con cerned primarily with the comparison of tour naments against various independent reward structures under various assumptions about risk preferences the number of participants and prizes specifications of production shocks and the asymmetry of information previous empirical work has largely focused on testing the predictions of the theoretical models this includes articles on executive compensation e g main o reilly and wade 1993 ericksson 1999 gibbons and murphy 1990 profes sional sports e g ehrenberg and bognanno

country level institutions and management earnings forecasts using a comprehensive sample hand collected from the original texts of management earnings forecasts from 27 countries we provide descriptive evidence on the country level institutional determinants and economic consequences of forecast characteristics using principal component factors constructed from a number of country level institutional variables we find that forecast disaggregation frequency precision and attribution vary significantly with the business and accounting environment of a country we further document that better quality management forecasts are generally associated with stronger stock market reactions and higher investment efficiency together our findings suggest that country level institutions play a vital role in voluntary disclosure characteristics

non competitive market behaviour in the international coking coal market in this paper a primal dual programming model of international coking coal trade is constructed to test for non competitive market behaviour world trade in 1996 is simulated under perfect competition and various non competitive market structures statistical tests are used to compare simulated trade flows with actual data assuming cournot nash behaviour an all consumer oligopsony market structure is preferred to alternative models under an all consumer oligopsony world coking coal prices and trade are lower than under perfect competition under an oligopsonistic structure welfare gains from productivity increases in australian coal mines might largely accrue to coal buyers

piece rates fixed wages and incentive effects statistical evidence from payroll records we develop and estimate an agency model of worker behavior under piece rates and fixed wages the model implies optimal decision rules for the firm s choice of a compensation system as a function of working conditions our model also implies an upper and lower bound to the incentive effect the productivity gain realized by paying workers piece rates rather than fixed wages that can be estimated using regression methods using daily productivity data collected from the payroll records of a british columbia tree planting firm we estimate these bounds to be an 8 8 and a 60 4 percent increase in productivity structural estimation which accounts for the firm s optimal choice of a compensation system suggests that incentives caused a 22 6 percent increase in productivity however only part of this increase represents valuable output because workers respond to incentives in part by reducing quality

contract choice in modern agriculture cash rent versus cropshare e conomists have expended enormous effort examining the rationale for various contractual arrangements in agriculture particularly sharecropping while economists have made considerable theoretical efforts to understand agricultural contracts few empirical studies have been undertaken the dearth of empirical analyses of agricultural contracts is particularly striking for modern western agriculture this is an important omission not only because the existing empirical work tends to focus on the question of efficiency but also because the theoretical models tend to examine contracts that bear little resemblance to those found in the united states today

the costs of compliance a cge assessment of canada s policy options under the kyoto protocol canada has committed itself under the kyoto protocol to reduce greenhouse gas emissions between 2008 and 2012 on average by six per cent from the base 1990 level as of 2009 however canada s greenhouse gas emissions are far above its 1990 level which calls for stringent short term policy measures if canada is to meet its legally binding commitment this paper uses a multi region multi commodity static general equilibrium model to quantify the economic impacts of alternative compliance strategies for canada in the context of climate policies undertaken by other kyoto parties the numerical results confirm fears by canadian policymakers of substantial economic adjustment costs should canada fulfill its kyoto commitments solely through domestic action however a rigorous use of the project based cdm on top of international emissions trading could allow canada to live up to its international climate policy commitment at politically much more tolerable costs

optimal emission pricing in the presence of international spillovers decomposing leakage and terms of trade motives abstract carbon leakage provides an efficiency argument for differentiated emission prices in favor of emission intensive and trade exposed sectors under unilateral climate policy however differential emission pricing can be used as a beggar thy neighbor policy to exploit terms of trade adopting an optimal tax framework we propose a method to decompose the leakage and terms of trade motives for emission price differentiation we employ our method for the quantitative impact assessment of unilateral climate policy based on empirical data we find that the leakage motive yields only small efficiency gains compared to uniform emission pricing likewise the terms of trade motive has rather limited potential for strategic burden shifting we conclude that in many cases the simple first best rule of uniform emission pricing remains a practical guideline for unilateral climate policy design

revealed comparative advantage and competitiveness in hungarian agri food sectors we examine the competitiveness of hungarian agriculture and food processing in relation to that of the eu based on four indices of revealed comparative advantage using highly disaggregate data for the period 1992 to 1998 consistency tests suggest that the indices are less satisfactory as cardinal measures but are useful in identifying the demarcation between comparative advantage and comparative disadvantage hungary is shown to have a comparative advantage in a range of agri food products including animals and meat this complements the findings of those studies that have used price and cost based approaches in identifying competitiveness in cereals and crops results indicate that the rca indices when interpreted as a binary measure have remained surprisingly stable during the period of transition although there is evidence of a weakening in the level of comparative advantage as revealed in the balassa index

comparing policies to combat emissions leakage border carbon adjustments versus rebates we explore conditions determining which anti leakage policies might be more effective complements to domestic greenhouse gas emissions regulation we consider four policies that could be combined with unilateral emissions pricing to counter effects on international competitiveness a border charge on imports a border rebate for exports full border adjustment and domestic output based rebating each option faces different potential legal hurdles in international trade law each also has different economic impacts while all can support competitiveness none is necessarily effective at reducing global emissions nor is it possible to rank order the options effectiveness depends on the relative emissions rates elasticities of substitution and consumption volumes we illustrate these results with simulations for the energy intensive sectors of three different economies the united states canada and europe although most controversial full border adjustment is usually most effective but output based rebating for key manufacturing sectors can achieve many of the gains

consistency tests of alternative measures of comparative advantage the commodity pattern of comparative advantage across countries is a central concept in international trade theory since the concept is based upon autarkic prices which are not observable in post trade equilibria its use in empirical research is most difficult the literature reports numerous alternative indices that purport to measure comparative advantage this paper examines the extent to which various measures are consistent using a large sample of trade flows the results have important implication for judging empirical studies based upon particular choices of a measure for comparative advantage

executive compensation and tournament theory empirical tests on danish data this article adds to the empirical literature on tournament theory as a theory of executive compensation i test several propositions of tournament models on a rich data set containing information about 2 600 executives in 210 danish firms during a 4 year period i ask are pay differentials between job levels consistent with relative compensation is pay dispersion between levels higher in noisy environments is the dispersion affected by the number of tournament participants is average pay lower in firms with more compressed pay structures does wider pay dispersion enhance firm performance most of the predictions gain support in the data

what will china s carbon emission trading market affect with only electricity sector involvement a cge based study abstract on december 29 2017 china s carbon trading scheme ets was officially launched and it may be the largest emission trading platform in the world this paper establishes 5 counter measured scenarios based on the recently launched china s national ets market and constructs a dynamic recursive computable general equilibrium model to study the impact of national ets on the economy energy and environment we find that the national ets will have a negative impact on gdp by 0 19 1 44 the national ets can significantly increase the price of electricity however the increase in the prices of other commodities will be much lower than that of electricity as long as the mechanism of the ets market remains unchanged emission reduction per year will increase linearly economic output and co2 emission are sensitive to annual decline factor adf this paper argues that china s national ets market is an effective tool to reduce co2 emission and we suggest that adf could be 0 5 when allocating carbon allowance for the electricity sector this could balance economic output and co2 reduction also it is easy to achieve the goal of double control total amount and intensity in china

carbon control policies competitiveness and border tax adjustments abstract several propositions have recently been made to use border tax adjustments btas to address the loss of competitiveness induced by unilateral stringent domestic pollution control policies this paper explores in a general equilibrium framework the sectoral and welfare implications of a unilateral domestic ghg control policy combined with a bta scheme using the canadian economy as an illustration we assess the extent to which btas achieve their objectives and analyze the impacts of different methods of recycling the bta proceeds to support domestic industries our simulation results suggest that imposing btas on the imports of non fossil and energy intensive products reduces or removes completely the negative competitiveness impacts that domestic industries suffer from the use of the proceeds of the btas to support domestic energy intensive industries improves their competitiveness and more importantly in some cases overprotects them as it allows them to even increase their output in comparison to the benchmark without emissions control our results also shed light on the existence of heterogeneity in the composition of energy intensive industries as far as the recycling method of the bta proceeds is concerned energy intensive industries that are more oriented toward the domestic market are better off with the recycling of the bta proceeds towards gross output than towards exports alone finally abstracting from the environmental benefits of reduced emissions we find that a bta entails a higher welfare cost to households

staggered boards corporate opacity and firm value abstract we explore the effect of corporate opacity on the relation between staggered boards and firm value we find that through mitigating takeover pressure staggered boards become increasingly beneficial to firm value as opacity increases in addition we document that staggered boards reduce value only in transparent firms additional tests indicate that as opacity increases staggered boards bear an increasingly positive relation to research and development and ceo pay performance sensitivity taken together these results suggest that corporate opacity affects the value impact of takeover protection

the league composition effect in tournaments with heterogeneous players an empirical analysis of broiler contracts we compare welfare effects of tournaments and piece rates in contracts with heterogeneous ability agents and demonstrate that tournaments that mix players of unequal abilities create a league composition effect when leagues are fixed and the time horizon sufficiently long piece rates improve welfare over tournaments using contract production data for broiler chickens we estimate the variances of growers abilities common production shock and grower s idiosyncratic shock growers abilities are heterogeneous and common production shocks are significant leagues in broiler tournaments disintegrate rapidly over time suggesting that tournament contracts offer more welfare than piece rates

world crude oil and natural gas a demand and supply model abstract this paper examines world markets for crude oil and natural gas over the period 1918 1999 it analyzes the time series properties of output and prices and estimates demand and supply elasticities during 1918 1973 and 1973 1999 oil and gas prices were stable during the first period they became volatile afterwards reflecting deep changes in the market structure following the oil shock in 1973 demand price elasticities were too low however demand income elasticities were high supply price elasticities were also too low the elasticity estimates help to explain the market power of the oil producers and price volatility in response to shocks and corroborate elasticity estimates in energy studies

pollution content tariffs environmental rent shifting and the control of cross border pollution this paper considers the optimal unilateral policy for a country that imports a good from a neighbouring country and is harmed by pollution generated during the production of that good if the foreign country has a variable abatement technology then home has an incentive to impose a tax on the pollution content of imports a pollution content tariff foreign regulation of pollution does not eliminate home s incentives to intervene but instead may create rent shifting opportunities by making the right to pollute a scarce asset foreign pollution quotas create rents that the home government can try to extract

emissions taxes versus intensity standards second best environmental policies with incomplete regulation the best emissions tax or emissions cap may be an inferior instrument under incomplete regulation leakage without leakage an intensity standard regulating emissions per unit of output is inferior due to an implicit output subsidy this inefficiency can be eliminated by an additional consumption tax with leakage an intensity standard can dominate the optimal emissions tax since the implicit output subsidy prevents leakage the addition of a consumption tax improves an intensity standard s efficiency may prevent leakage and may be efficient comparing intensity standards to output based updating shows that the latter dominates if updating is sufficiently flexible