fighting the tide alternative trade organizations in the era of global free trade a comment summary leclair leclair m s 2002 fighting the tide alternative trade organizations in the era of global free trade world development 30 6 949 958 concludes that in theory fair trade is a second best alternative to aid may impose losses on non fair trade producers and prolongs dependence on unsustainable modes of production this paper shows how these conclusions depend upon a particular definition of subsidy and upon the assumptions of full employment and that fair trade goods face price inelastic demand an adverse impact on non fair trade producers is possible but not intrinsic and the claim of economic inefficiency cannot be sustained within a more general analysis

fair trade towards an economics of virtue over the past 10 years the sales of fair trade goods particularly those carrying the fair trade labelling organizations international flo certification mark have grown exponentially academic interest in fair trade has also grown significantly over the past decade with researchers analysing the model from a wide range of theoretical perspectives whilst fair trade is generally acknowledged as a new supply chain model it has tended to be studied at the micro organisational level rather than at the macro systems level as a consequence its wider impact as institutional innovation at the field level appears to have been under theorised so far in order to address this research gap this article uses a neo institutionalist perspective to analyse fair trade not simply as a new exchange model working within existing organisational and economic structures but rather as an agent of institutional entrepreneurship at and beyond the field level from this latter perspective fair trade brings a new set of transformational meanings to extant exchange and consumption models and reforms fields of economic exchange by disrupting and then re assembling key institutional elements around modern consumption to roll back commodity fetishism and reconnect consumers and producers the type of institutional change driven by fair trade can be seen as a form of social entrepreneurship

optimal policies for a capacitated two echelon inventory system this paper demonstrates optimal policies for capacitated serial multiechelon production inventory systems extending the clark and scarf 1960 model to include installations with production capacity limits we demonstrate that a modified echelon base stock policy is optimal in a two stage system when there is a smaller capacity at the downstream facility this is shown by decomposing the dynamic programming value function into value functions dependent upon individual echelon stock variables we show that the optimal structure holds for both stationary and nonstationary stochastic customer demand finite horizon and infinite horizon results are included under discounted cost and average cost criteria

the effect of fair trade affiliation on child schooling evidence from a sample of chilean honey producers we evaluate the impact of fair trade ft affiliation on child schooling within a sample of chilean honey producers with a retrospective panel data approach from a theoretical point of view we argue that ft should have a positive effect on child schooling since it generates a short run pure income effect together with a medium run productivity effect on both adult and child wages on the other hand because of the higher productivity generated by the medium run effect the opportunity cost of child education increases if they work with their parents the direction of the impact of ft affiliation on child schooling is therefore uncertain and requires empirical testing our econometric findings document a positive and significant impact of affiliation years on child schooling after controlling for endogeneity and heterogeneity between the treatment and control sample

a comparison of petroleum futures versus spot prices as predictors of prices in the future abstract even though studies have indicated that the futures market leads the spot market in price discovery this paper hypothesizes that the predictive significance of each should be the same a number of different statistical tests are presented to test this hypothesis when deseasonalized data is employed the predictive significance of each series is found to be the same but when actual prices are employed futures prices did correctly anticipate the observed seasonal pattern

what drives the commodity price beta of oil industry stocks we test theoretical drivers of the oil price beta of oil industry stocks the strongest statistical and economic support comes for market conditions type variables as the prime drivers namely oil price bond rate volatility of oil returns and cost of carry though statistically significant exogenous firm characteristics and oil firms financing decisions have less compelling economic significance there is weaker support for the prediction that financial risk management reduces the exposure of oil stocks to crude oil price variation finally extended modelling shows that mean reversion in oil prices also helps explain cross sectional variation in the oil beta

regime switching in the reactions of stock markets in saudi arabia to oil price variations the study revisits the stock oil nexus by examining the reactions of equity markets to oil price shocks at national and sectoral levels for saudi arabia in a time varying framework by employing the markov switching egarch model developed by henry 2009 journal of banking and finance 33 405 based on weekly data the findings reveal that the behaviour of all stock markets switches between an expansion regime and a recession regime with more persistence for the expansion state additionally influential international events associated with stock market drops are clearly identified in the recession regime furthermore there is evidence of asymmetric reactions of the equity index returns and the probabilities of transition from one state to another to oil price variations with heterogeneous impacts across sectors and regimes the stock markets are more sensitive to oil price decreases than to oil price increases although the evidence of relatively slight differences in some findings across weekdays the study allows investors and policymakers to understand well the interactions of stock sector markets vis a vis the world oil market in a regime switching framework in order to make the right decision as regards portfolio diversification and regulation of the stock markets

does oil move equity prices a global view many studies indicate that oil price shocks have an adverse effect on real output and hence an adverse effect on corporate profits where oil is used as a key input the present study examines whether and to what extent the adverse effect of oil price shocks impacts stock market returns to this end we analyse 35 datastream global industry indices for the period from april 1983 to september 2005 our findings indicate that oil price rises have a negative impact on equity returns for all sectors except mining and oil and gas industries generally these results are consistent with economic theory and evidence provided by previous empirical studies little evidence of any asymmetry is detected in the oil price sensitivities in light of our findings we recommend that international portfolio investors consider hedging oil price risk

firm value and hedging evidence from u s oil and gas producers this paper studies the hedging activities of 119 u s oil and gas producers from 1998 to 2001 and evaluates their effect on firm value theories of hedging based on market imperfections imply that hedging should increase the firm s market value mv to test this hypothesis we collect detailed information on the extent of hedging and on the valuation of oil and gas reserves we verify that hedging reduces the firm s stock price sensitivity to oil and gas prices contrary to previous studies however we find that hedging does not seem to affect mvs for this industry in a classic modigliani and miller m m world with perfect capital markets risk management should be irrelevant when there are no information asymmetries taxes or transaction costs hedging financial risk should not add value to the firm because shareholders can undo any risk management activities implemented by the firm at the same cost in practice imperfections in capital markets create a rationale for lowering the volatility of earnings through hedging conventional explanations relate to the cost of financial distress tax incentives and the underinvestment problem risk management may also add value if hedging positions in derivatives contracts carry a premium that is not commensurate with risk or if active trading activities create a profit most empirical studies on this topic focus on the relation between corporate hedging and firm characteristics and try to determine whether the behavior of firms that hedge is consistent with extant theories the empirical evidence does not support any single theory however in addition most of these empirical studies provide only indirect evidence that hedging increases firm value recently however allayannis and weston 2001 directly test the relation between firm value and the use of foreign currency derivatives using a sample of 720 large firms between 1990 and 1995 they find that the value of firms that hedge on average is higher by about 5 this hedging premium is statistically and economically significant with a median market value mv of about

the effects of derivatives on firm risk and value using a large sample of nonfinancial firms from 47 countries we examine the effect of derivative use on firm risk and value we control for endogeneity by matching users and nonusers on the basis of their propensity to use derivatives we also use a new technique to estimate the effect of omitted variable bias on our inferences we find strong evidence that the use of financial derivatives reduces both total risk and systematic risk the effect of derivative use on firm value is positive but more sensitive to endogeneity and omitted variable concerns however using derivatives is associated with significantly higher value abnormal returns and larger profits during the economic downturn in 2001 2002 suggesting that firms are hedging downside risk

serial supply chains with economies of scale bounds and approximations we consider two models of stochastic serial inventory systems with economies of scale for which the forms of optimal policies are known in the first model each stage has a fixed order quantity while in the second model there is a fixed order cost for external supplies for each model we show that the optimal policy parameters can be bounded and approximated by a series of independent single stage optimal policy parameters we further construct closed form bounds and approximations for the single stage solutions and apply them to the serial systems these results provide simple and effective solutions that will help to facilitate implementations in practice they also allow us to see the connections between the serial and single stage systems and sharpen our intuition on optimal policy parameters and system behavior

virtuous interactions in removing exclusion the link between foreign market access and access to education abstract we outline a methodology which aims to give an answer to the widespread demand of impact analyses by regulators or by funding agencies which need to evaluate the current and past performance of development projects and may lack time series evidence we devise a retrospective panel data approach to evaluate the dynamics of the effects of fair trade affiliation on the schooling decisions of a sample of thai organic rice producers across the past 20 years we find that the probability of school enrolment in families with more than two children is significantly affected by fair trade affiliation years we try to ascertain whether our finding is robust to endogeneity of producers choices of local cooperative affiliation and adoption of organic techniques the significant difference between pre and post fair trade affiliation performance documents that fair trade participation generates a significant break in the schooling decisions of affiliated households

customer order information leadtimes and inventories we have an inventory to manage the scenario is standard in all respects save one instead of arriving unannounced customers provide advance warning of their demands how should we use this information and what is its effect on system performance the answers turn out to be strikingly simple there are very simple policies which perform effectively in some cases optimally also such demand leadtimes improve performance in precisely the same way that replenishment leadtimes degrade it

evaluating echelon stock r nq policies in serial production inventory systems with stochastic demand this paper studies echelon stock r nq policies in serial production inventory systems with stochastic demand we provide a recursive procedure to compute the steady state echelon inventory levels of the systems which can be used to evaluate the long run average holding and backorder costs as well as other performance measures the procedure is based upon an observation of a relationship between the inventory status of adjacent stages in a serial system we also device exact formulas for replenishment frequencies and setup costs our results apply to both continuous review systems with compound poisson demand and periodic review systems with independent identically distributed demands a preliminary numerical study was conducted to explore the cost effectiveness of echelon stock r nq policies for two stage systems with simple poisson demand we compared among the minimum costs of echelon stock r nq policies a lower bound on the minimum achievable costs and the minimum costs of installation stock r nq policies finally we present a modification of an existing approximate evaluation procedure

oil shocks and oil stocks evidence from the 1970s the present paper examines the returns to 29 oil companies listed on the new york stock exchange during the period surrounding the oil shock of 1973 the returns are decomposed into production refining foreign and domestic operations the hypothesis that domestic price controls benefitted refiners is tested finally the hypothesis that oil price risk was priced in the sense of the arbitrage pricing theory is tested

the value of corporate risk management we model and estimate the value of corporate risk management we show how risk management can add value when revenues and costs are nonlinearly related to prices and estimate the model by regressing quarterly firm sales and costs on the second and higher moments of output and input prices for a sample of 34 oil refiners we find that hedging concave revenues and leaving concave costs exposed each represent between 2 and 3 of firm value we validate our approach by regressing tobin s q on the estimated value and level of risk management and find results consistent with the model

optimal policies and approximations for a serial multiechelon inventory system with time correlated demand since clark and scarf s pioneering work most advances in multiechelon inventory systems have been based on demand processes that are time independent this paper revisits the serial multiechelon inventory system of clark and scarf and develops three key results first we provide a simple lower bound approximation to the optimal echelon inventory levels and an upper bound to the total system cost for the basic model of clark and scarf second we show that the structure of the optimal stocking policy of clark and scarf holds under time correlated demand processes using a martingale model of forecast evolution third we extend the approximation to the time correlated demand process and study in particular for an autoregressive demand model the impact of lead times and autocorrelation on the performance of the serial inventory system

optimizing reorder intervals for two echelon distribution systems with stochastic demand we consider a periodic review inventory system in which n non identical retailers replenish from a warehouse which further replenishes from an outside vendor with ample supply each facility faces poisson demand and replenishes according to a base stock policy in a fixed time interval fixed costs are incurred for placing an order the warehouse fills the retailers orders in the same sequence as the occurrence of the demand at the retailers the objective is to minimize the average system cost per period this paper develops an evaluation scheme and provides a method to obtain the optimal base stock levels and reorder intervals specifically with fixed reorder intervals we show that the optimal base stock levels can be obtained by generalizing the result in the literature to find the optimal reorder intervals we first allocate the total system cost to each facility and then construct a lower bound to the allocated facility cost these lower bound functions which are separable functions of reorder i

the dynamics of fair trade as a mixed form market this article analyses the fair trade sector as a mixed form market i e a market in which different types of players in this case nonprofit co operative and for profit organizations coexist and compete the purposes of this article are 1 to understand the factors that have led fair trade to become a mixed form market and 2 to propose some trails to understand the market dynamics that result from the interactions between the different types of players we start by defining briefly fair trade its different dimensions including the fair quality of the products and its organizational landscape focusing on the distinction between the pioneer alternative trading organizations and the second mover companies then we recall the theoretical emergence factors for each type of organization nonprofit co operative and for profit and apply these emergence factors to the context of fair trade this analysis allows us to capture the specificities of each type of operator with regard to fair trade and thus to have a better understanding of the dynamics in the sector such dynamics includes competition but also conflict and partnership our analysis includes elements on ethical imitation consumers behaviors effects on welfare and the role of the government

evaluation of cycle count policies for supply chains with inventory inaccuracy and implications on rfid investments inventory record inaccuracy leads to ineffective replenishment decisions and deteriorates supply chain performance conducting cycle counts i e periodic inventory auditing is a common approach to correcting inventory records it is not clear however how inaccuracy at different locations affects supply chain performance and how an effective cycle count program for a multi stage supply chain should be designed this paper aims to answer these questions by considering a serial supply chain that has inventory record inaccuracy and operates under local base stock policies a random error representing a stock loss such as shrinkage or spoilage reduces the physical inventory at each location in each period the errors are cumulative and are not observed until a location performs a cycle count we provide a simple recursion to evaluate the system cost and propose a heuristic to obtain effective base stock levels for a two stage system with identical error distributions and counting costs we prove that it is more effective to conduct more frequent cycle counts at the downstream stage in a numerical study for more general systems we find that location proximity to the customer error rates and counting costs are primary factors that determine which stages should get a higher priority when allocating cycle counts however it is in general not effective to allocate all cycle counts to the priority stages only one should balance cycle counts between priority stages and non priority stages by considering secondary factors such as lead times holding costs and the supply chain length in particular more cycle counts should be allocated to a stage when the ratio of its lead time to the total system lead time is small and the ratio of its holding cost to the total system holding cost is large in addition more cycle counts should be allocated to downstream stages when the number of stages in the supply chain is large the analysis and insights generated from our study can be used to design guidelines or scorecard systems that help managers design better cycle count policies finally we discuss implications of our study on rfid investments in a supply chain

optimal policies for multiechelon inventory problems with markov modulated demand this paper considers a multistage serial inventory system with markov modulated demand random demand arises at stage 1 stage 1 orders from stage 2 etc and stage n orders from an outside supplier with unlimited stock the demand distribution in each period is determined by the current state of an exogenous markov chain excess demand is backlogged linear holding costs are incurred at every stage and linear backorder costs are incurred at stage 1 the ordering costs are also linear the objective is to minimize the long run average costs in the system the paper shows that the optimal policy is an echelon base stock policy with state dependent order up to levels an efficient algorithm is also provided for determining the optimal base stock levels the results can be extended to serial systems in which there is a fixed ordering cost at stage n and to assembly systems with linear ordering costs

near optimal r q policies for a two stage serial inventory system with poisson demand we consider a two stage serial inventory system whose cost structure exhibits economies of scale in both stages in the system stage 1 faces poisson demand and replenishes its inventory from stage 2 and the latter stage in turn orders from an outside supplier with unlimited stock each shipment either to stage 2 or to stage 1 incurs a fixed setup cost we derive important properties for a given echelon stock r q policy for an approximation of the problem where all states are continuous based on these properties we design a simple heuristic algorithm that can be used to find a near optimal r q policy for the original problem numerical examples are given to demonstrate the effectiveness of the algorithm

the political economy of ec regionalism abstract many observers have noted a recent proliferation of regional trade agreements primarily centred in or on europe the paper analyses the causes and consequences of ec regionalism it begins by examining the development and importance of the phenomenon it finds that although the ec maintains preferential trade arrangements with virtually all countries preferential trade accounts for no more than 25 of total ec trade the paper investigates the causes of ec regionalism focusing on the determinants of both the demand by third countries and the supply by the ec lastly it examines future options

capacitated multi item inventory systems with random and seasonally fluctuating demands implications for postponement strategies we address multi item inventory systems with random and seasonally fluctuating and possibly correlated demands the items are produced in two stages each with its own lead time in the first stage a common intermediate product is manufactured the production volumes in the first stage are bounded by given capacity limits we develop an accurate lower bound and close to optimal heuristic strategies of simple structure the gap between them evaluated in an extensive numerical study is on average only 0 45 we use the model to investigate the benefits of various delayed product differentiation postponement strategies as well as other strategic questions including i the benefits of flexible versus dedicated production facilities ii the trade off between capacity and inventory investments and iii the trade off between capacity investments and service levels

94 effective policies for a two stage serial inventory system with stochastic demand a two stage inventory system is considered where poisson demand occurs at stage 1 and stage 1 replenishes its inventory from stage 2 which in turn orders from an outside supplier with unlimited stock each shipment either to stage 2 or to stage 1 incurs a fixed setup cost under the assumption that the supply leadtime at stage 2 is zero we characterize a simple heuristic policy whose long run average cost is guaranteed to be within 6 of optimality i e a 94 effective policy the paper also provides heuristic policies for more general inventory systems and reports computational results

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

the fair trade movement parameters issues and future research although fair trade has been in existence for more than 40 years discussion in the business and business ethics literature of this unique trading and campaigning movement between southern producers and northern buyers and consumers has been limited this paper seeks to redress this deficit by providing a description of the characteristics of fair trade including definitional issues market size and segmentation and the key organizations it discusses fair trade from southern producer and northern trader and consumer perspectives and highlights the key issues that currently face the fair trade movement it then identifies an initial research agenda to be followed up in subsequent papers

crude oil and the macroeconomy tests of some popular notions a note perhaps no other economic events in the post world war ii era have generated as much attention as the series of crude oil price shocks that have jolted the world economy since the opec boycott of 1973 a tremendous amount of space in the popular and professional literature has been devoted to analyzing the impacts of these shocks on the developed economies and the adjustments these shocks have induced one residual of this literature has been a general impression that since 1973 the functional relationship between crude oil prices and the developed macroeconomies has been dramatically and fundamentally altered yet to our knowledge no one has formally tested this impression recent evidence of hamilton 1983 suggests that crude oil prices had a strong impact on the u s business cycle well before 1973 further while textbook treatments of oil price shocks tend to highlight cost push inflationary effects the research of berndt and wood 1975 1979 and wilcox 1983 indicates the net complementarity between energy and capital in the u s economy is quite strong both before and after 1973 thus oil price shocks may have stronger real effects than generally believed in this paper we formally test three popular notions associated with the so called

supply chain coordination with multiple shipments the optimal inventory subsidizing contracts we study a supply chain involving a supplier retailer relationship when production lead time is long and the selling season is short the retailer has to place an order ahead of the season which resembles the classical newsvendor model however we consider the situation when the supplier agrees to deliver the order in multiple shipments in the season and then the retailer needs to determine the quantity and or timing of each shipment under a centralized setting we derive the optimal quantity and or timing decisions of the retailer under a decentralized setting incentive misalignment arises from ineffective allocation of inventory costs between the parties in addition to the well known double marginalization effect hence we devise an incentive contract which involves a risk sharing mechanism at the end of the season and an inventory subsidizing scheme for the entire season in practice the inventory subsidizing scheme can be implemented in different ways such as a direct subsidizing scheme o

the directional volatility connectedness between crude oil and equity markets new evidence from implied volatility indexes in this paper we use a set of newly introduced implied volatility indexes to investigate the directional connectedness between oil and equities in eleven major stock exchanges around the globe from 2008 to 2015 the inference on the oil equity implied volatility relationships depends on diebold and yilmaz 2012 2014 2015 who proposed a set of directional measures that enable the dynamic and directional characterization of the relationships among financial variables we find uniform results across the sample countries indicating that the connectedness between oil and equity is established by the bi directional information spillovers between the two markets however we find that the bulk of association is largely dominated by the transmissions from the oil market to equity markets and not the other way around the pattern of transmissions is varying over the sample period however most of the linkages between oil and equities are established from the mid of 2009 to the mid of 2012 which is a period that witnessed the start of global recovery

managing stochastic inventory systems with free shipping option abstract in many industries customers are offered free shipping whenever an order placed exceeds a minimum quantity specified by suppliers this allows the suppliers to achieve economies of scale in terms of production and distribution by encouraging customers to place large orders in this paper we consider the optimal policy of a retailer who operates a single product inventory system under periodic review the ordering cost of the retailer is a linear function of the ordering quantity and the shipping cost is a fixed constant k whenever the order size is less than a given quantity the free shipping quantity fsq and it is zero whenever the order size is at least as much as the fsq demands in different time periods are i i d random variables we provide the optimal inventory control policy and characterize its structural properties for the single period model for multi period inventory systems we propose and analyze a heuristic policy that has a simple structure the s t s policy optimal parameters of the proposed heuristic policy are then computed through an extensive numerical study we demonstrate that the heuristic policy is sufficiently accurate and close to optimal

lower bounds for multi echelon stochastic inventory systems we establish lower bounds on the minimum cost of managing certain production distribution networks with setup costs at all stages and stochastic demands these networks include serial assembly and one warehouse multi retailer systems we obtain the bounds through novel cost allocation schemes we evaluate the bounds performance for one warehouse multi retailer systems by comparing them with simple heuristic policies the bounds are quite tight for systems with a small number of retailers we also present simplified proof of known optimality results for serial and assembly systems

compatibility of regional and multilateral trading agreements reforming the wto process while the pillar of the world trade organization wto with respect to trade in goods services and intellectual property is nondiscrimination the cornerstone of regional trading agreements is discrimination 2 there has been a proliferation of regional trading agreements in recent years twenty nine new agreements have been notified to the general agreement on tariffs and trade gatt and the wto since 1992 27 on merchandise trade and two on trade in services this is almost half the number of agreements still in existence and notified to gatt prior to 1992 all but three wto members are parties to at least one regional agreement and some are parties to many more it is therefore not surprising that there is renewed interest in whether regional agreements compete with or complement the multilateral trading system 4 while there may be no clear answer it cannot be denied that recent regional developments have major implications for the rules based multilateral trading system one such development is that tariff preferences have or will become relatively unimportant in many regional trading agreements the reasons for this include the high proportion of trade outside many preferential agreements the limits to the coverage of the tariff preferences themselves the high share of post uruguay round tariffs that will be bound at zero and the low level of most favorednation mfn tariffs faced by non preferencereceiving countries this development is accompanied by the fact that the scope of application of many agreements has extended well beyond tariff preferences to disciplines that were traditionally the domain of gatt or may in the future be dealt with by the wto the european union eu provides a good example despite the numerous countries receiving tariff preferences its largest trading partners are outside the network of these agreements in fact 45 percent of eu imports originate in non preference receiving countries e g 17 percent in the united states and 10 percent in japan while tariff preferences are of considerable potential importance with the implementation of uruguay round commitments 51 percent of the value of imports from non preference receiving countries will enter the eu under bound duty free tariff rates further the trade weighted tariff average on manufactured imports from these countries will be 3 1 percent 6 development division world trade organization geneva switzerland helpful comments from maria pillinini of the wto are gratefully acknowledged as are those of richard snape of monash university and industries commission australia the views expressed in this article are those of the author and not the organization for which he works the wto came into existence on 1 january 1995 to inter alia facilitate the administration of the wto agreements that emerged from the uruguay round one of which is the revised 1947 general agreement on tariffs and trade i e gatt 1994b 2 unless otherwise specified the term regional trading agreements refers to both customs unions and free trade areas for trade in goods the extent of discrimination in regional agreements is related to the ease of accession of non parties and the openness of the agreements in general the three are japan korea and hong kong there were 128 members of gatt and following the completion of domestic ratification and wto accession procedures there will be approximately 160 members of the wto in the next few years there are presently 120 members 4 there are many excellent contributions to this debate see for example richard snape et al 1993 jagdish bhagwati 1995 and wto 1995 trade between the 15 members of the eu accounts for 60 percent of total eu trade the eu offers contractual preferences to 26 countries under free trade association or cooperation agreements and to 70 countries under the lom6 convention it offers noncontractual preferences to 145 countries under the generalized system of preferences gsp 6 while tariffs on agricultural products are generally higher than those on manufactured goods the agricultural sector is typically dealt with outside eu preferential agreements

coordination mechanisms of supply chain systems supply chain management scm has become an important management paradigm as supply chain members are often separate and independent economic entities a key issue in scm is to develop mechanisms that can align their objectives and coordinate their activities so as to optimize system performance in this paper we provide a review of coordination mechanisms of supply chain systems in a framework that is based on supply chain decision structure and nature of demand this framework highlights the behavioral aspects and information need in the coordination of a supply chain the identification of these issues points out several directions of future research in this area

competitive and cooperative inventory policies in a two stage supply chain we investigate a two stage serial supply chain with stationary stochastic demand and fixed transportation times inventory holding costs are charged at each stage and each stage may incur a consumer backorder penalty cost e g the upper stage the supplier may dislike backorders at the lower stage the retailer we consider two games in both the stages independently choose base stock policies to minimize their costs the games differ in how the firms track their inventory levels in one the firms are committed to tracking echelon inventory in the other they track local inventory we compare the policies chosen under this competitive regime to those selected to minimize total supply chain costs i e the optimal solution we show that the games nearly always have a unique nash equilibrium and it differs from the optimal solution hence competition reduces efficiency furthermore the two games equilibria are different so the tracking method influences strategic behavior we show that the system optimal solution can be achieved as a nash equilibrium using simple linear transfer payments the value of cooperation is context specific in some settings competition increases total cost by only a fraction of a percent whereas in other settings the cost increase is enormous we also discuss stackelberg equilibria

ethical value added fair trade and the case of cafe femenino this article engages various critiques of fair trade from its participation in commodification to providing a cover for fair washing corporations and argues that fair trade has the potential to answer the challenges contained within them if and when it initiates an ongoing process of developing the ethical valued added content of the label this argument is made in a number of ways first by distinguishing between economic and human development impacts and ethics this article argues that these impacts are necessary but not sufficient conditions for ethical trade second it engages the question of the possibility of ethical practice in economics generally developing the idea that when economics is concerned with securing the material basis of a broad range of life capacities it becomes ethical third fair trade practice itself is examined from this standpoint and is conceived of as both comprising a promising ethical value added practice as well as posing a problem in its current formulation that the framework of ethical value added can help understand and resolve finally an examination of these theoretical ideas in practice is undertaken through a case study of cafe femenino a fair trade coffee produced in peru in conclusion it is argued that for fair trade to build upon its economic and human impacts and therefore remain a meaningful ethical and economic alternative to corporate capitalism and globalization it must distinguish itself clearly in ethics from those market relations it wishes explicitly or implicitly to challenge

promised lead time contracts under asymmetric information we study the important problem of how a supplier should optimally share the consequences of demand uncertainty i e the cost of inventory excesses and shortages with a retailer in a two level supply chain facing a finite planning horizon in particular we characterize a multiperiod contract form the promised lead time contract that reduces the supplier s risk from demand uncertainty and the retailer s risk from uncertain inventory availability under the contract terms the supplier guarantees on time delivery of complete orders of any size after the promised lead time we characterize the optimal promised lead time and the corresponding payments that the supplier should offer to minimize her expected inventory cost while ensuring the retailer s participation in such a supply chain the retailer often holds private information about his shortage cost or his service level to end customers hence to understand the impact of the promised lead time contract on the supplier s and the retailer s performance we study the system under local control with full information and local control with asymmetric information by comparing the results under these information scenarios to those under a centrally controlled system we provide insights into stock positioning and inventory risk sharing we quantify for example how much and when the supplier and the retailer overinvest in inventory as compared to the centrally controlled supply chain we show that the supplier faces more inventory risk when the retailer has private service level information we also show that a supplier located closer to the retailer is affected less by information asymmetry next we characterize when the supplier should optimally choose not to sign a promised lead time contract and consider doing business under other settings in particular we establish the optimality of a cutoff level policy finally under both full and asymmetric service level information we characterize conditions when optimal promised lead times take extreme values of the feasible set yielding the supplier to assume all or none of the inventory risk hence the name all or nothing solution we conclude with numerical examples demonstrating our results

externalities in international trade the case for differential tariffs abstract this paper examines the economic justification for the use of differential tariffs to control for positive and negative externalities embodied in traded products in particular economic efficiency requires that taxes and subsidies should be applied to internalize external costs or benefits it is argued that products such as timber minerals and agricultural products that produce large negative environmental externalities should be differentially tariffed to either provide an incentive to cease destructive practices or provide funding for amelioration examples from the mining and agricultural sectors are used to demonstrate the magnitude of tariffs required to offset the estimated environmental damage products with embedded cultural content are used as examples of exports that may possess positive externalities and should be subject to a subsidy

newsvendor bounds and heuristic for optimal policies in serial supply chains we consider the classicn stage serial supply systems with linear costs and stationary random demands there are deterministic transportation leadtimes between stages and unsatisfied demands are backlogged the optimal inventory policy for this system is known to be an echelon base stock policy which can be computed through minimizingn nested convex functions recursively to identify the key determinants of the optimal policy we develop a simple and surprisingly good heuristic this method minimizes 2 n separate newsvendor type cost functions each of which uses the original problem data only these functions are lower and upper bounds for the echelon cost functions their minimizers form bounds for the optimal echelon base stock levels the heuristic is the simple average of the solution bounds in extensive numerical experiments the average relative error of the heuristic is 0 24 with the maximum error less than 1 5 the bounds and the heuristic which can be easily obtained by simple spreadsheet calculations enhance the accessibility and implementability of the multiechelon inventory theory more importantly the closed form expressions provide an analytical tool for us to gain insights into issues such as system bottlenecks effects of system parameters and coordination mechanisms in decentralized systems

technical note optimal control of an assembly system with multiple stages and multiple demand classes we consider an assembly system with multiple stages multiple items and multiple customer classes the system consists of m production facilities each producing a different item items are produced in variable batch sizes one batch at a time with exponentially distributed batch production times demand from each class takes place continuously over time according to a compound poisson process at each decision epoch we must determine whether or not to produce an item and should demand from a particular class arise whether or not to satisfy it from existing inventory if any is available we formulate the problem as a markov decision process and use it to characterize the structure of the optimal policy in contrast to systems with exogenous and deterministic production lead times we show that the optimal production policy for each item is a state dependent base stock policy with the base stock level nonincreasing in the inventory level of items that are downstream and nondecreasing in the inventory level of all other items for inventory allocation we show that the optimal policy is a multilevel state dependent rationing policy with the rationing level for each demand class nonincreasing in the inventory level of all nonend items we also show how the optimal control problem can be reformulated in terms of echelon inventory and how the essential features of the optimal policy can be reinterpreted in terms of echelon inventory

price discovery in oil markets a time varying analysis of the 1990 1991 gulf conflict abstract this study examines the behaviour of crude oil spot and futures markets in the uk and usa during the 1990 1991 gulf conflict the objective is to investigate the relative ability of spot and futures markets to impound information this is achieved with the use of a generalized model of price discovery which represents a synthesis of the two most commonly used methodologies in its field emphasis is placed on the time varying nature of price discovery relationships results indicate that such relationships are strongly temporal these findings offer new insights into the nature of relationships between spot and futures markets

98 effective integer ratio lot sizing for one warehouse multi retailer systems a warehouse supplies n retailers constant external demand occurs at each retailer and shortages are not allowed there are linear holding costs and fixed costs for ordering at the warehouse and at each retailer the goal is to minimize the long run average cost over an infinite time horizon we define a new class of policies for this problem whose simple structure facilitates both computation and implementation the cost of a policy that is optimal within this class is shown to be within 2 of the cost of an optimal policy for the original problem in the worst case such a policy can be computed in on log n time

traditional vs modern production systems price and nonmarket considerations of cacao producers in northern ecuador many factors besides profit maximization such as nonmarket ecological and social benefits influence smallholder households to adopt a specific agricultural production system or sell in a particular market thus different analytical techniques are needed that take into consideration more than monetary income to fully capture these additional benefits to better understand the production decisions of smallholder farmers we build on previous work on the household model and shadow wage estimation to develop a shadow wage for ecuadorian cacao producers that includes these nonmarket benefits we found that the shadow wage correctly indicated that on average these households would prefer to use an agroforestry production system instead of the more profitable modern system because of the nonmarket benefits received from the former system

economics and politics of food standards trade and development standards have played an important role in food trade for a very long time their rapid growth in recent years has triggered vigorous debates on their impacts on international trade and development with many arguing that standards are non tariff barriers to trade and that standards are marginalizing the poor i present conceptual frameworks and review empirical evidence on the equity and efficiency effects and the political economy of standards models which incorporate essential aspects of standards yield complex theoretical results and nuanced conclusions careful empirical analyses support such nuanced arguments and find complex effects for trade standards can create welfare gains but also involve rent redistribution which induces lobbying by interest groups to set the standards at their preferred level this makes it difficult to distinguish socially desirable standards from those resulting from political rent seeking for development it is crucial to explicitly account for a the endogeneity of the institutional organization of value chains and b both smallholder contracting and employment creation on large scale farms when considering the impact of standards on development and poverty

optimality of myopic policies for dynamic lot sizing problems in serial production lines with random yields and autoregressive demand we study lot size policies in a serial multistage manufacturing inventory system with two key generalizations namely 1 random yields at each production stage and 2 an autoregressive demand process previous research shows that the optimal policies in models with random yields even in models with a single installation lack the familiar order up to structure and are not myopic thus dynamic programming algorithms are needed to compute optimal policies and one encounters the curse of dimensionality this is exacerbated here by the need to expand the size and dimension of the state space to accommodate the autoregressive demand feature nevertheless although our model is more complex we prove that there is an optimal policy with the order up to feature and more importantly that the optimal policy is myopic this avoids the computational burden of dynamic programming our results depend on two assumptions concerning the stochastic yield namely that the expected yield at a work station is proportional to the lot size and the distribution of the deviation of the yield from its mean does not depend on the lot size we introduce the concept of echelon like variables a generalization of clark and scarf s classical concept of echelon variables to derive the structure of optimal policies furthermore we show that the same kind of policy is optimal for several criteria infinite horizon discounted cost infinite horizon long run average cost and finite horizon discounted cost with the appropriate choice of the salvage value function

ngo performance what breeds success new evidence from south asia abstract what is the best way for nongovernment organisations ngos to make a lasting impact on poverty this paper summarizes the findings of recent research into the impact sustainability and cost effectiveness of two ngos in india and two projects implemented by save the children fund uk in bangladesh the factors determining performance are explored through the interaction of organizational decisions with the external context although these interactions are complex and dynamic some clear conclusions emerge making a difference to livelihoods and capacities among poor people depends on ngo successes in fostering autonomous grassroots institutions and linking them with markets and political structures at higher levels these conclusions question the current predilection among donor agencies to fund large scale ngo service delivery

decentralized inventory control in a two component assembly system abstract we investigate a two component assembly system facing stationary stochastic demand with constant component replenishment lead times holding cost are charged for each component inventory which are managed by component suppliers final product demand is backordered when cannot be fulfilled in time and a penalty cost is charged we assume the long lead time component supplier takes normal base stock policy while the short lead time component supplier takes a modified base stock policy static game and stackelberg games are considered equilibria are analyzed and the cost in equilibria are compared with the system optimal solution difference shows the deterioration of system performance caused by decentralized inventory control we try to design a mechanism to coordinate the decentralized system that is to make decentralized system perform as well as system optimal solution though the decisions separated we show that a liner transfer based on the backorder between the component suppliers qualifies this task

competition and cooperation in a two stage supply chain with demand forecasts we consider a serial supply chain with one supplier and one retailer each obtains some demand forecast information which may be shared or not we investigate the members benefits from sharing information the forecasts follow a variant of the martingale model of forecast evolution mmfe we construct a simple transfer payment scheme to align the players incentives with that of the overall system the main finding is that unless the players incentives are aligned in this way sharing information makes little sense it might hurt one or the other player and the system as a whole

approximations of dynamic multilocation production and inventory problems consider a central depot or plant which supplies several locations experiencing random demands orders are placed or production is initiated periodically by the depot the order arrives after a fixed lead time and is then allocated among the several locations the depot itself does not hold inventory the allocations are finally received at the demand points after another lag unfilled demand at each location is backordered linear costs are incurred at each location for holding inventory and for backorders also costs are assessed for orders placed by the depot the object is to minimize the expected total cost of the system over a finite number of time periods this system gives rise to a dynamic program with a state space of very large dimension we show that this model can be systematically approximated by a single location inventory problem all the qualitative and quantitative results for such problems can then be applied

the use of nonlinear hedging strategies by us oil producers motivations and implications abstract this paper investigates the motivations and value effect of nonlinear hedges using a new dataset on the hedging activities of 150 u s oil producers we present empirical evidence that nonlinear hedging strategies are motivated by sensitivities of firm s investment expenditures and revenues to oil price fluctuations and quantity price correlation we also find a non monotonic relationship between the use of nonlinear hedges and financial constraints investment opportunities production uncertainty and changes in oil prices and volatilities also play a significant role in hedging strategy choice controlling for bias related to omitted variables and self selection in the estimation of marginal treatment effects of hedging strategy choice we find that oil producers with a higher propensity to use pure nonlinear hedging strategies tend to have higher marginal firm value

modified echelon r q policies with guaranteed performance bounds for stochastic serial inventory systems we consider the classic continuous review nstage serial inventory system with a homogeneous poisson demand arrival process at the most downstream stage stage 1 any shipment to each stage regardless of its size incurs a positive fixed setup cost and takes a positive constant lead time the optimal policy for this system under the long run average cost criterion is unknown finding a good worst case performance guarantee remains an open problem we tackle this problem by introducing a class of modified echelon r q policies that do not require qi 1 qi to be a positive integer stage i 1 ships to stage i based on its observation of the echelon inventory position at stage i if it is at or below ri and stage i 1 has positive on hand inventory then a shipment is sent to stage i to raise its echelon inventory position to ri qias close as possible we construct a heuristic policy within this class of policies which has the following features first it has provably primitive dependent performance bounds in a two stage system the performance of the heuristic policy is guaranteed to be within 1 k1 k2 times the optimal cost where k1 is the downstream fixed cost and k2 is the upstream fixed cost we also provide an alternative performance bound which depends on efficiently computable optimal r q solutions to n single stage systems but tends to be tighter second the heuristic is simple it is efficiently computable and it performs well numerically it is even likely to outperform the optimal integer ratio echelon r q policies when k1 is dominated by k2 third the heuristic is asymptotically optimal when we take some dominant relationships between the setup or holding cost primitives at an upstream stage and its immediate downstream stage to the extreme for example when h2 h1 0 where h1 is the downstream holding cost parameter and h2 is the upstream holding cost parameter

optimal policies for multi echelon inventory problems with batch ordering in many production distribution systems materials flow from one stage to another in fixed lot sizes for example a retailer orders a full truckload from a manufacturer to qualify for a quantity discount a factory has a material handling system that moves full containers of parts from one production stage to the next in this paper we derive optimal policies for multi stage serial and assembly systems where materials flow in fixed batches the optimal policies have a simple structure and their parameters can be easily determined this research extends the multi echelon inventory theory in several ways it generalizes the clark scarf model by allowing batch transfers of inventories rosling 1989 shows that assembly systems can be interpreted as serial systems under the assumption that there are no setup costs we show that the series interpretation still holds when materials flow in fixed batches which satisfy a certain regularity condition finally veinott 1965 identifies an optimal policy for a single location inventory system with batch ordering this paper generalizes his result to multi echelon settings

a survey of the economics of fair trade fair trade has spread in developing countries as an initiative aimed at lifting poor smallholder farmers out of poverty by providing them with premium prices availability of credit and improved community development and social goods fair trade is also viewed as a niche market for high value products in a context of globalization and trade liberalization policies that affect smallholder farmers in developing countries the question of whether fair trade affects the welfare of rural farmers however is particularly contentious this paper provides a review of the fair trade literature both theoretical and empirical with a specific focus on the analysis of small scale producer s welfare in developing countries our review shows that while most empirical papers have focused on the impacts of fair trade on prices and income our review highlights the importance of limited market access and changes in productivity likewise little is known about the impacts of fair trade on labor markets and human capital investments persistent methodological challenges make it challenging however to assess the causal impact of this certification and labelling initiative

joint inventory and cash management for multidivisional supply chains this paper develops a centralized supply chain model that integrates material flows with cash flows the supply chain is owned by a single firm with two divisions the downstream division headquarters facing random customer demand replenishes materials from the upstream division the firm installs a financial services platform that pools the divisions cash into a master account managed by the headquarters in each period cash is received from customers and paid to the outside vendor after materials are delivered the headquarters determines how much cash to retain for inventory replenishment the objective is to determine an optimal joint inventory replenishment and cash retention policy for the entire supply chain we prove that the optimal policy has a surprisingly simple structure both divisions implement a base stock policy for inventory replenishment the headquarters monitors the corporate working capital and implements a two threshold policy for cash retention this result is obtained by exte

what do corporations have to do with fair trade positive and normative analysis from a value chain perspective there has been tremendous growth in the sales of certified fair trade products since the introduction of the first of these goods in the netherlands in 1988 many would argue that this rapid growth has been due in large part to the increasing involvement of corporations still participation by corporations in fair trade has not been welcomed by all the basic point of contention is that while corporate participation has the potential to rapidly extend the market for fair trade goods it threatens key aspects of what many see as the original vision of fair trade most notably a primary concern for the plight of small producers and the goal of developing an alternative approach to trade and development and may even be undermining its long term survival the primary purpose of this article is to explore the normative issues involved in corporate participation in fair trade in order to do that however it first provides a positive analysis of how corporations are actually involved in fair trade in order to achieve both of these ends the article draws upon global value chain analysis

unbiasedness and time varying risk premia in the crude oil futures market abstract this paper presents some empirical evidence on market efficiency and unbiasedness in the crude oil futures market and some related issues on the basis of monthly observations on spot and futures prices of the west texas intermediate wti crude oil several tests are carried out on the relevant hypotheses the evidence suggests that futures prices are neither unbiased nor efficient forecasters of spot prices furthermore a garch m 1 1 model reveals the existence of a time varying risk premium

fighting the tide alternative trade organizations in the era of global free trade abstract this paper explores the proliferation of fair trade organizations their products services and client groups in order to establish the impact of this movement although small in volume alternative trade represents a unique response to the relentless pursuit of free trade through the gatt wto process the economic underpinnings of both fair trade and subsidy programs in general such as the eu s stabilization of exchange system are evaluated ultimately alternative trade can provide significant assistance to targeted groups within developing countries including gains in production and export proficiency on the negative side fair trade is likely to prolong the dependence of developing countries on products with poor future prospects

the exchange rate exposure of u s multinationals this article examines the exposure of u s multinationals to foreign currency risk evidence is presented that the relationship between stock returns and exchange rates differs systematically across multinationals given these results the study focuses on the determinants of exchange rate exposure the comovements between stock returns and the value of the dollar is found to be positively related to the percentage of foreign operations of u s multinationals copyright 1990 by the university of chicago

disentangling the effects of fair trade on the quality of malian cotton the increasing importance of premium segments and private labels raise skepticism about the ability of fair trade to help smallholders compete in high value added markets using panel data collected in mali this paper contributes to the debate by estimating the impact of fairtrade certification on the quality of malian cotton controlling for the nonrandom certification of producers results show a significant impact on the quality of cotton produced by both certified and geographically close noncertified growers via spillover effects the analysis suggests that contract farming enforced by third parties and demonstration effects foster the adoption of innovative agricultural practices

one warehouse multiretailer systems with centralized stock information we consider a distribution system with a central warehouse and multiple retailers the warehouse orders from an outside supplier and replenishes the retailers which in turn satisfy customer demand the retailers are nonidentical and their demand processes are independent compound poisson there are economies of scale in inventory replenishment which is controlled by an echelon stock batch transfer policy for the special case with simple poisson demand we develop an exact method for computing the long run average holding and backorder costs of the system based on this exact method we provide approximations for compound poisson demand numerical examples are used to illustrate the accuracy of the approximations we also present a numerical comparison between the average costs of a heuristic echelon stock policy and an existing lower bound on the average costs of all feasible policies

oil price shocks stock market economic activity and employment in greece abstract using a multivariate vector autoregression var approach this paper attempts to shed light into the dynamic relationship among oil prices real stock prices interest rates real economic activity and employment for greece the empirical evidence suggests that oil price changes affect real economic activity and employment oil prices are important in explaining stock price movements stock returns do not lead to changes in real activity and employment

the impact of rules of origin on trade flows a great deal of post war trade liberalization resulted from regional preferential trade agreements preferential trade agreements cut tariffs on goods originating only in those nations that have signed the agreement therefore they need rules of origin to determine which goods benefit from the tariff cut rules of origin have long been ignored for two good reasons they are dauntingly complex and at first sight appear mind numbingly dull the third standard reason for ignoring them the assertion that they do not matter much turns out to be wrong we show that rules of origin are important barriers to trade moreover such rules are emerging as an important trade issue for three additional reasons first preferential trade deals are proliferating worldwide second the global fragmentation of production implies complex international supply chains which are particularly constrained and distorted by rules of origin third the extent to which regionalism challenges the wto based trading system depends in part on incompatibilities and rigidities built into rules of origin our empirical results exploit a natural experiment that was created by technical changes to europe s lattice of rules of origin roos in 1997 this change known as diagonal cumulation relaxed the restrictiveness of rules of origin on trade among the eu s free trade agreement fta partners without changing the degree of tariff preference our analysis allows us to establish a lower bound and upper bound estimate of trade impact of roos reduced trade among the eu s trade partners the lower bound we find is something like 10 while the upper bound is around 70 the second part of the paper draws the policy lessons that arise from considering the implications of our empirical findings the most direct lessons are for fta writers we argue that europe s implementation of cumulation is a good way of reducing the welfare reducing impact of overlapping rules of origin without gutting their fraud fighting ability we also suggest a three part procedure for establishing a more multilateral framework for rules of origin which would be more transparent flexible administratively feasible and negotiable patricia augier michael gasiorek and charles lai tong

do firms hedge in response to tax incentives there are two tax incentives for corporations to hedge to increase debt capacity and interest tax deductions and to reduce expected tax liability if the tax function is convex we test whether these incentives affect the extent of corporate hedging with derivatives using an explicit measure of tax function convexity we find no evidence that firms hedge in response to tax convexity our analysis does however indicate that firms hedge to increase debt capacity with increased tax benefits averaging 1 1 percent of firm value our results also indicate that firms hedge because of expected financial distress costs and firm size an increasing number of corporations use financial derivatives each year the international swaps and derivatives association reports that the notional value of outstanding otc swap contracts increased from 11 3 trillion in 1994 to more than 60 trillion by mid 2000 http 00www isda org this is interesting because financial theory tells us that corporate risk management enhances value only in the presence of costly market imperfections a number of empirical studies examine derivative holdings to identify which of the proposed theoretical incentives and imperfections lead to corporate hedging our paper adds to the hedging literature by testing whether corporations respond to two tax related incentives to hedge the incentive to reduce volatility thereby increasing debt capacity and the tax benefits of debt and the incentive to reduce expected tax liabilities by reducing the volatility of taxable income we also use a refined dependent variable to measure net

production control in the face of storable raw material random supply and an outside market we study a periodic review production inventory control problem where both the supply of raw material and demand for the finished product are exogenous and random the raw material can be stored for future use can be purchased from or sold to an outside market we study both the lost sales and backlogging cases under both strict convex and linear raw material purchasing selling costs convexity of the purchasing selling cost implies that the more the firm purchases from or sells to the outside market the more expensive or less valuable the raw material becomes for all cases we find the partial characterizations for the optimal policies which all turn out to be very intuitively appealing in particular for each of the linear cost cases the optimal policy degenerates into a combination of two base stock policies one for the raw material inventory and the other for the finished product inventory

are fair trade goods credence goods a new proposal with french illustrations in the literature fair trade ft goods are usually associated with other products differentiated by process attributes such as organic food genetically modified gm food or child labour free clothing all of these products are regarded as credence goods this classification refers to the simplified definition of credence goods which describes product attributes which consumers cannot evaluate even after having consumed the good focusing on the characteristics of ft goods this article proposes a reassessment of the link between ft goods and credence properties as defined by darby and karni we first demonstrate that 1 the usual classification masks important particularities of ft goods compared to other goods with process attributes and 2 the full definition of credence goods may even provide a better description of the quality of ft goods however and this is our second theoretical contribution the lack of consensus among experts concerning ft standards and their level of efficiency encourage us to consider ft goods as indeterminate goods as defined by lupton this result leads us to suggest a new typology of product attributes summarized in an innovative diagram it sheds light on how competition between the different ft approaches works and why the ft market is still confined to a niche if not threatened with collapse we mainly illustrate our theoretical analysis with observations relating to the french ft market and institutions

uncovering the asymmetric linkage between financial derivatives and firm value the case of oil and gas exploration and production companies we investigate the role of derivatives in enhancing firm value of us oil and gas exploration and production companies over the period of 1998 2009 using both cross sectional and time series tests initially focusing on tobin s q we document a hedging discount in periods of increasing oil and gas prices while there is some evidence that hedging leads to an increase in firm value in periods of decreasing prices in the companion time series tests our core finding indicates that hedger portfolios underperform compared to non hedger portfolios i e confirming a hedging discount we extend these time series tests to provide a range of conditional analyses exploring the circumstances in which this discount manifests here we find that the hedging discount is specifically related to periods of elevating oil and gas prices especially if the price is high

dynamic corporate risk management motivations and real implications abstract we investigate the dynamics of corporate hedging programs used by us oil producers and examine the effects of hedging maturity choice on firm value we find evidence of a concave relationship between hedging maturity and the likelihood of financial distress and oil spot prices we further investigate the motivations of the early termination of outstanding hedging contracts using the essential heterogeneity approach we evaluate the causal effects of hedging maturity on firm value marginal firm value increases with short term hedging maturity the causal effects vary across oil producers with different hidden attributes

the pure effects of european integration on intra eu core and periphery trade this paper analyses the effects of eu integration on intra eu trade volumes with a special focus on the evolution of trade within and between the core and the periphery countries in the early phases of eu integration there have been sizable trade creation and diversion effects with respect to efta countries both the creation and the diversion effects of eu membership have declined as the eu and efta have integrated in all phases of eu integration both core periphery and intraperiphery growth of trade have experienced stronger positive effects than intracore trade hence the eu enlargements did not cause any kind of intra eu peripherality

trade matters in the fight against poverty narratives perceptions and lack of evidence in the case of fish trade in africa two opposing views exist in the literature on the potential role that international fish trade plays in economic development while some claim that fish trade has a pro poor effect others denounce the negative effect of fish export on local populations food security and doubt its contributions to the macro economy in this paper we explore this debate in sub saharan africa our analysis did not find any evidence of direct negative impact of fish trade on food security neither did it find evidence that international fish trade generates positive pro poor outcomes this paper discusses the possible reasons for this apparent lack of development impact and highlights the unsupported assumptions underlying the current discourse about international fish trade we suggest that given lack of evidence for the development benefits of fish trade between africa and developed countries fisheries policy could consider support for regional africa to africa trade that meets the growing african demand for lower value fish means of overcoming barriers to intra african trade in fish are discussed

asymmetric impact of oil price on islamic sectoral stocks abstract this paper extends the literature concerning non linearity in oil stock relationships by putting forward a new paradigm of sectoral and islamic elements we explore the asymmetric impact of oil price on islamic stocks from a sectoral perspective using non linear autoregressive distributed lag cointegration methodology the main advantage of this methodology relies on its ability to simultaneously capture the short and long run asymmetries through both positive and negative oil price shocks our results show weak linkages between oil price changes and the islamic composite index however the nature and sensitivity of the reaction of stock prices to oil price shocks vary considerably across different sectors in the longer horizon the relationships between oil price and many islamic sectoral stocks tend to follow a nonlinear pattern furthermore the behavior of the real economic sectors indices reflects the performance of the composite index that is oil price resistant during the turbulent period after 2008 the response of the sectoral indices to oil price movements witnessed notable changes where the sectoral gains from oil price drop that have been observed during the period of study have been found to diminish after 2008 our finding is in line with the argument that the islamic composite index is grounded more on and within the real sectors these findings are robust when considering different oil proxies and different data time frequencies

confronting the coffee crisis can fair trade organic and specialty coffees reduce small scale farmer vulnerability in northern nicaragua summary this paper links changing global coffee markets to opportunities and vulnerabilities for sustaining small scale farmer livelihoods in northern nicaragua changing governance structures corporate concentration oversupply interchangeable commodity grade beans and low farm gate prices characterize the crisis in conventional coffee markets in contrast certified fair trade and organic are two alternative forms of specialty coffee trade and production that may offer opportunities for small scale producers a research team surveyed 228 farmers to measure the impact of sales on organic and fair trade markets the results suggest that participation in organic and fair trade networks reduces farmers livelihood vulnerability 2004 elsevier ltd all rights reserved

on the determinants of corporate hedging finance theory indicates that hedging increases firm value by reducing expected taxes expected costs of financial distress or other agency costs this paper provides evidence on these hypotheses using survey data on firm s use of forwards futures swaps and options combined with computstat data on firm characteristics of 169 firms in the sample 104 firms use hedging instruments in 1986 the data suggest that firms which hedge face more convex tax functions have less coverage of fixed claims are larger have more growth options in their investment opportunity set and employ fewer hedging substitutes

oil and the macroeconomy when prices go up and down an extension of hamilton s results in an important paper hamilton 1983 demonstrated a strong correlation between oil price changes and gross national product growth in u s data however his study pertained to a period in which all the large oil price movements were upward and thus it left unanswered the question whether the correlation persists in periods of price decline moreover the price variable he used was somewhat distorted by price controls in the 1970s this note investigates whether hamilton s results continue to hold when the sample is extended to include the recent oil market collapse and the oil price variable is corrected for the effects of price controls particular attention is given to the possibility of asymmetric responses to oil price increases and decreases as suggested in the structural employment literature loungani 1986 davis 1987 hamilton 1988 like hamilton i based my investigation on the gnp equation in sims s 1 980b six variable quarterly vector autoregressive model