impacts of opec s political risk on the international crude oil prices an empirical analysis based on the svar models abstract the impacts of opec s political risk on the fluctuations of international crude oil prices have caused widespread concern and analyzing the impacts is of great significance to the investment decisions and risk aversion strategies in the crude oil markets therefore using the international country risk guide icrg index as a proxy for the countries political risk situation we empirically investigate the impacts of opec s political risk on the brent crude oil prices based on several structural vector autoregression svar models the main empirical results indicate that 1 the political risk of opec countries does have a significant and positive influence on brent crude oil prices in the sample period from january 1998 to september 2014 and the most significant positive influences appear in about one and a half year and last about a year 2 opec s integrated political risk contributes to 17 58 of the oil price fluctuations in the sample period which is only lesser than that of the oil demand shocks 34 64 3 compared with the political risk of opec countries in north africa and south america the political risk of opec countries in the middle east contributes most to the oil price fluctuations 4 among the eight components of the political risk in opec the internal conflicts contribute most to the oil price fluctuations in the sample period

imperfect information and the business cycle imperfect information has played a prominent role in modern business cycle theory this paper assesses its importance by estimating the new keynesian nk model under alternative informational assumptions one version focuses on confusion between temporary and persistent disturbances another on unobserved variation in the inflation target of the central bank a third on persistent mis perceptions of the state of the economy measurement error and a fourth assumes perfect information the standard nk dsge version imperfect information is found to contain considerable explanatory power for business fluctuations signal extraction seems to provide a conceptually satisfactory empirically plausible and quantitatively important business cycle mechanism

political risk and export promotion evidence from germany political risk represents an important hidden transaction cost that reduces international trade this paper investigates the claim that german public export credit guarantees hermes guarantees mitigate this friction to trade flows and hence promote exports we employ an empirical trade gravity model where we explicitly control for political risk in the importing country in order to evaluate the effect of export guarantees the idea behind export promotion through public export credit agencies ecas is that the private market is unable to provide adequate insurance for all risks associated with exports as a consequence firms export activities are limited in the absence of insurance provision using a novel data set on guarantees we estimate the effect of guarantees in a static and dynamic panel model we find a statistically and economically significant positive effect of public export guarantees on exports which indicates that export promotion is indeed effective furthermore political risk turns out to be a robust determinant of exports and hence should be taken into account in any empirical model of trade

organizational commitment in a mixed oligopoly agricultural cooperatives and investor owned firms a number of agricultural cooperativeorganizations prominent examples includetri valley growers and the saskatchewanwheat pool currently face considerable nancialand organizationalchallenges externally these challenges include a grow ing concentration in a number of sectors e g beef and pork packing and a greater preva lence of vertical integration and contracts internally cooperatives co ops encountergreater heterogeneity among members greater property rights problems cook anda decline in member commitment fulton1999 this latter factor has been cited asone reason for the declining market shareand poor nancialperformance of a numberof co ops fulton and gibbings the purpose of this article is to examinethe issue of member commitment in the con text of a mixed oligopoly where co ops andinvestor owned rms iofs compete witheach other in supplying a consumer good

does acquisition of a cooperative generate profits for the buyer the dairyworld case this article examines the takeover of a cooperative dairyworld by an investor owned firm saputo that was not previously present in the industry determines if this takeover generates greater returns for the investor owned firms iof and on the basis of this evidence makes some inferences about the behavior and performance of cooperatives and iofs the empirical evidence strongly supports the conclusion that saputo s stock price rose with its takeover announcement this outcome is consistent with a number of explanations including that saputo was unaffected by hubris a factor often suggested as the reason that many firms overbid when they undertake acquisitions dairyworld s poor liquidity and capital shortage problems as well as a limited number of suitors may have weakened its bargaining position in its dealings with saputo the observed increase in saputo s stock price is also consistent with the possibility that by taking over a cooperative saputo was able to decrease competition and thus increase its profits a fruitful area for future research would be a rigorous theoretical and empirical determination of the impact that these various factors have on acquisition profitability such analysis is required before inferences about the behavior and performance of cooperatives and iofs can be fully answered

assessing the importance of oligopsony power in agricultural markets oligopoly competition among few sellers is the cornerstone of industrial organization io conversely its sister concept oligopsony competition among few buyers is scarcely mentioned for example oligopsony is not discussed in the entire two volume handbook of industrial organization and monopsony is mentioned only in the context of incentives to integrate vertically two reasons apparently account for io economists lack of interest in buyer market power i they don t think it s very important and ii they don t believe it presents any unique modeling issues relative to seller market power scherer and ross illustrate this first viewpoint arguing that average concentration on the buyers side in manufacturing is undoubtedly lower than seller concentration p 519 tirole in his masterful treatise on io theory illustrates the second dispatching monopsony power in one sentence naturally the conclusions regarding monopoly power would also hold as well for monopsony power p 65 we argue that this dismissive treatment of buyer market power is not reasonable for economists interested in agriculture and agricultural markets the scherer and ross viewpoint may apply when considering generic inputs such as labor capital and energy competition for these inputs is apt to exceed competition for the outputs they produce because firms cross product market boundaries to compete for these inputs and there is essentially no branding among input buyers to diminish price competition among them moreover these inputs are typically mobile hence in elastic supply to individual buyers limiting the exercise of oligopsony power even in geographic settings where relatively few buyers prevail this view of input markets does not apply however to first handler markets for the raw agricultural commodities that are inputs into the processed or fresh packed food products we identify the following distinctive structural characteristics of these markets

does the quality of institutions limit the mena s integration in the world economy using a large sample of countries over the 1990s this paper examines the extent to which institutions functioning disables a greater participation of the middle east and north africa mena in the world economy it focuses on the impact on manufactured exports and fdi attractiveness and considers a broad index of political risk as well as indices targeted toward specific aspects of governance corruption government effectiveness and the rule of law the results are robust to different econometric approaches and lend strong support to the hypothesis that the functioning of institutions may disable the participation of mena countries in the world economy they suggest that the impact of an improvement in the quality of institutions may result in a sensitive increase of fdi inflows and manufactured exports that increase is comparable to the one resulting from liberalisation policies hence although institutional reforms can take time they deserve the necessary efforts given their outcomes as compared to other reforms

cooperatives as entrants a potential shortcoming of game theoretic models in industrial organization is their failure to consider consumers as players we introduce a customer coalition a cooperative as a potential entrant and compare the cooperative entry threat with that posed by the usualforprofit entrant we identify four fundamental distinctions between cooperative andfor profit entrants and demonstrate that the strategic interplay between a cooperative and an incumbent firm may differ markedly from that between the incumbent and a for profit entrant the results impart a prospectively powerful role to potential cooperatives in beneficially regulating free market performance

monetary information and monetary neutrality abstract the monetary theory of business fluctuations in market clearing models constructed under the rational expectations assumption as advanced by lucas and others involves the idea that suppliers and demanders will typically misinterpret movements in the general level of prices as representing more or less favorable relative opportunities for real activities the present paper examines the consequences of agents possessing contemporaneous monetary information of a potentially noisy variety for the non neutrality of unanticipated monetary events within such an equilibrium business cycle model this modification of the information structure has the strong testable implication that real activity will be uncorrelated with contemporaneous monetary data

exploring the effect of crisis on cooperatives a bayesian performance analysis of french craftsmen cooperatives the aim of this paper is to understand the economic performance of craftsmen cooperatives during the crisis period these cooperatives have the distinctive feature of being supply cooperatives we

technological innovation in agricultural co operatives in china implications for agro food innovation policies abstract technological innovation has become a major source of farmer co operatives competitive advantage however empirical research on co operatives innovation in a developing country context is rare we adopt an ethnographic case study method collecting data from 32 co operatives managers of four exemplar co operative cases and agricultural experts in china and collected much archival data in addition a delphi study was conducted to collect data on the innovation performance based on the distinctive characteristics of co operatives we found that first knowledge spillovers and technology acquisition modes are two constructs which best capture the dynamic of technological innovation in co operatives and develop a typology based on them second grassroots and social innovation in a chinese co operative context have their own characters and indeed a hybrid of capitalism e g agribusiness and new rural re structuring principles i e similar to ica ones third and finally we provide detailed agro food policy implications for each of the four types of co op innovation the results of the research may be learned by co ops and policy makers in other developing economies who face similar challenges as in china

credit support for export robust evidence from the czech republic the topic of this paper is quite a novel one it is one of few empirical academic papers dealing with export credit moreover it is the first analysis of this kind which focuses on transition economies the paper deals with export credit promotion in the czech republic the development and structure of czech trade and export support is presented first followed by an econometric analysis of the gravity model of czech republic trade a panel of 160 countries in 1996 2008 is analysed and two gravity models of exports for the czech republic are estimated the static model by fixed effects lsdv estimator and the dynamic model by system gmm due to ambiguous conclusions we assume that the behaviour of our explanatory variables is not uniform and our data set behaves as a mixture of countries with heterogeneous behaviour this means that traditional techniques of estimation which include all observations into one model do not give significant results thus we use robust techniques of estimation that solve the problem of heterogeneous patterns in data sets out of several possibilities we use the least trimmed squares estimator lts with a leverage point we show that guarantees are a significant factor that influences positively the volume of exports in the czech republic moreover there exist more variables that affect the size of exports in the czech republic market forces described by gdp distance political risk or gross fix capital formation are significant in our econometric model we find that higher gdp shorter distance or lower political risk have a positive impact on czech exports

aggregate information and the role of monetary policy in an open economy a model of a small open economy in which agents trade in local goods markets and an economy wide asset market is developed purchasing power parity is assumed to hold at the aggregate level however because of local deviations from purchasing power parity agents possess differential information using this framework it is shown that when the exchange rate is flexible monetary policy can influence the distribution of real output by altering the information content of the exchange rate however when monetary policy is committed to fixing the exchange rate by a feedback rule the distribution of real output is independent of the particular exchange rate rule chosen the stability of real output under the two regimes is compared and it is demonstrated that regardless of the stability of domestic monetary policy a flexible exchange rate regime is superior in this respect possible qualifications and extensions of these results are also discussed

revisiting the effects of regional trade agreements on trade flows with proper specification of the gravity model this paper uses a gravity model to assess ex post regional trade agreements the model includes 130 countries and is estimated with panel data over the period 1962 1996 the introduction of the correct number of dummy variables allows for identification of vinerian trade creation and trade diversion effects while the estimation method takes into account the unobservable characteristics of each pairs of trade partner countries the endogeneity of some of the explanatory variables as well as a potential selection bias in contrast to previous estimates results show that regional agreements have generated a significant increase in trade between members often at the expense of the rest of the world

the determinants of cross border equity flows abstract we explore a new panel data set on bilateral gross cross border equity flows between 14 countries 1989 1996 we show that a gravity model explains international transactions in financial assets at least as well as goods trade transactions gross transaction flows depend on market size in source and destination country as well as trading costs in which both information and the transaction technology play a role distance proxies some information costs and other variables explicitly represent information transmission an information asymmetry between domestic and foreign investors and the efficiency of transactions the geography of information is the main determinant of the pattern of international transactions while there is weak support in our data for the diversification motive once we control for the informational friction we broaden the scope of our results by presenting some evidence linking the results on equity transactions to equity holdings

insecurity and the pattern of trade an empirical investigation corruption and imperfect contract enforcement dramatically reduce international trade this paper estimates the reduction using a structural model of import demand in which insecurity acts as a hidden tax on trade we find that inadequate institutions constrain trade as much as tariffs do we also find that omission of indices of institutional quality biases the estimates of typical gravity models obscuring a negative relationship between per capita income and the share of total expenditure devoted to traded goods finally we argue that cross country variation in the effectiveness of institutions and the consequent variation in the prices of traded goods offer a simple explanation for the stylized fact that high income capital abundant countries trade disproportionately with each other

sectoral shifts and cyclical unemployment a substantial fraction of cyclical unemployment is better characterized as fluctuations of the frictional or natural rate than as deviations from some relatively stable natural rate shifts of employment demand between sectors of the economy necessitate continuous labor reallocation since it takes time for workers to find new jobs some unemployment is unavoidable this paper presents evidence that most of the unemployment fluctuations of the seventies unlike those in the sixties were induced by unusual structural shifts within the u s economy simple time series models of layoffs and unemployment are constructed that include a measure of structural shifts within the labor market these models are estimated and a derived natural rate series is constructed

imperfect competition in agricultural markets and the role of cooperatives a spatial analysis important characteristics of many agricultural markets are costly to transport raw products and relatively few processors one or more of which is often a cooperative this paper analyzes pricing behavior in these oligopsonistic spatial markets and focuses specifically upon the conjecture that cooperatives may have a procompetitive effect on the behavior of rival non co op processors the existence and magnitude of a procompetitive effect is shown to depend upon a number of structural and strategic factors including competitive relations among the non co op processors and a cooperative s membership and pricing policies

process innovation activity in a mixed oligopoly the role of cooperatives this article develops a sequential game theoretic model of heterogeneous producers to examine the market and welfare effects of cooperative involvement in process innovation activity in the agricultural sector the analysis examines an open membership input supplying cooperative co op that maximizes member welfare and finances its innovation activity through retained earnings analytical results show that the presence of the co op can increase the arrival rate of innovations while reducing the price of agricultural inputs cooperative involvement in innovation activity can thus be welfare enhancing and socially desirable with its effectiveness being determined by the degree of producer heterogeneity and the size of innovation costs

dynamic r d competition with learning to account for the possibility that firms are unsure about the ease of innovation we formulate a differential game of r d competition with an unknown hazard rate we show as time passes with success firms become more pessimistic about eventual innovation reducing their r d investment and possibly exiting the race an increase in the number of competing firms tends to increase firms r d intensities for given beliefs but because beliefs evolve at different rates depending on the number of firms in the race time paths of r d investment intensity are not unambiguously ordered with respect to the number of competing firms

in kind finance a theory of trade credit it is typically less profitable for an opportunistic borrower to divert inputs than to divert cash therefore suppliers may lend more liberally than banks this simple argument is at the core of our contract theoretic model of trade credit in competitive markets the model implies that trade credit and bank credit can be either complements or substitutes among other things the model explains why trade credit has short maturity why trade credit is more prevalent in less developed credit markets and why accounts payable of large unrated firms are more countercyclical than those of small firms

export credit subsidies export credit subsidies jacques melitz and patrick messerlin in recent years governments have increasingly resorted to export credit subsidies the major motivation for the proliferation of such schemes seems to be macroeconomic rather than microeconomic in nature the conventional argument namely that they simultaneously increase demand and improve the current account is fundamentally flawed in ignoring the second round effects on prices and the exchange rate the authors investigate whether there is a valid macroeconomic case for export credit subsidies and find that temporary measures can be useful in reducing the recessionary costs of a disinflationary program by permitting a larger appreciation of the exchange rate during the initial stages of the program they also present detailed evidence on the impact across different industries of export credits in france these are heavily concentrated on a small number of industries specifically machine tools construction metalworking aircraft ships and electrical equipment the distortionary effect on industrial structure is consequently large and any beneficial macroeconomic benefits are likely to be outweighed by the microeconomic costs the case for export credit subsidies is not persuasive

understanding retained patronage refunds in agricultural cooperatives the share of patronage refunds retained by an agricultural cooperative is modeled as arising from the portfolio decision of its median member the member is viewed as maximizing expected utility by allocating wealth between investments in farming assets and equity in the cooperative determinants of the share of patronage refunds retained are the expected rates of return on these two investments their variances their covariance and the expected future share of patronage and its variance empirical examinations of aggregate cooperative data and cross section analysis of seventeen regional supply cooperatives are found to be consistent with the model

export credit guarantees and export performance an empirical analysis for germany recent literature finds that exporters are particularly vulnerable to financial market frictions as a consequence exports may be lower than their efficient levels for this reason many countries support exporters by underwriting export credit guarantees the empirical evidence on the effects of those policies is however very limited in this paper we use sectoral data on export credit guarantees issued by the german government we investigate whether those guarantees indeed do increase exports and whether they remedy the export restricting effect of credit market imperfections both on the sectoral and on the export market levels exploiting the sectoral structure of a rich three way panel data set of german exports we control for unobserved heterogeneity on the country year sector year and country sector dimensions we document a robust export increasing effect of guarantees there is some evidence that the effect is larger for export markets with poor financial institutions and in sectors that rely more on external finance

cooperative enterprise an alternative conceptual basis for analyzing a complex institution a recent review of the theoretical literature on cooperative enterprise in agriculture concludes the formal treatment of agricultural co operation is currently impoverished by a long period of neglect levay p 40 the years between the early 1940s and the early 1960s were a period of creative ferment among cooperative theorists the most durable products of which were several variants of the model of the profit seeking firm from neoclassical price theory with the profit maximization objective replaced by other simple maximizing criteria e g enke helmberger and hoos such models are capable of generating hypotheses about cooperative price and output levels but more comprehensive theoretical analogues are necessary to investigate other important aspects of the modern complex cooperative corporation in agriculture it is the development of these latter that has suffered neglect while the past two decades may have generated little progress in the futher development of cooperative theory they have been productive years for the development of more comprehensive alternatives to the simple profitmaximization model to explain the behavior of the modem complex investor owned corporation this development began with the ad hoc theorizing of the various managerial theories of the firm proceeded with the creation of a new institutional economics based on the concepts of transactions costs property rights and agency relationships and is currently at the stage of integrating these previous developments into a generalized neoclassical theory of organizations de alessi this paper is motivated by the belief that the evolving concepts of neoclassical organization theory hold considerable promise for the further productive development of cooperative theory the purpose of the paper is to apply some of these concepts in cursory fashion to cooperative organizations and thereby suggest a framework for the eventual development of a more comprehensive organization theory of cooperatives

does the us exim bank really promote us exports this paper investigates the impact of us export import bank exim on us exports particularly in the wake of international competition from foreign national export credit agencies ecas we employ a gravity framework on a country industry year level panel data set that matches exim authorisations with us bilateral exports our results depict the general ineffectiveness of the bank in promoting exports within and across industries some heterogeneities behind the general finding are also uncovered industries other than aerospace parts and products are more likely to benefit from exim authorisations and exim authorisations to larger businesses seem to be more effective in encouraging exports furthermore we find no evidence that exim encourages us exports by offsetting foreign eca competition these results are neither affected by competing countries membership to the oecd arrangement nor by the size of american firms that received exim support our results cast doubt on the ubiquitously positive claims made by the bank and its supporters yet also provide policy lessons for countries that are either in the inception stages of establishing their own ecas or are now placing greater importance on eca financing in encouraging exports

strategic investment and the co existence of labour managed and profit maximising firms the authors examine firm profitability in mixed duopoly equilibrium with one labor managed lm firm and one profit maximizing pm firm and with strategic investment conventional wisdom suggests that firms deviating from profit maximization will suffer forced exit in the long run the authors reverse this conclusion in mixed lm pm duopoly with strategic investment no equilibrium can have both firms making zero profits and pm profitability implies lm profitability but not the converse adverse parameter shifts would cause the pm firm to exit first empirical evidence is consistent with this prediction of robust market survivability of lm firms

strategic r d policy this paper uses a natural extension of lee and wilde s 1980 model to show that the outcome of technological competition between firms or countries depends on the resolution of two forces the profit incentive and the competitive threat using a duopoly model of a patent race the paper illustrates that by understanding the relative strength of these two forces one can not only go a long way to understanding the outcome of these races but also obtain crucial insights into the desirability of various r d policies the particular example considered in the paper is the subsidizing of r d effort copyright 1989 by royal economic society

interest rates aggregate information and monetary policy abstract interest rates set on economy wide markets represent an important source of information to economic agents within the class of business cycle models advanced by lucas and barro this paper explores the information conveyed by such aggregate signals and the types of monetary policies that can influence economic activity by changing the information content of interest rates

the control of export credit subsidies and its welfare consequences a two stage bertrand duopoly model demonstrates how the sequence of firm and government actions can explain the origins of export credit subsidies and can affect the welfare consequences of international agreements to adopt subsidy rate ceilings firms act first by stating prices in applications for export credit and can induce positive subsidies by inflating the prices the subsidies transfer rents from governments to firms without changing welfare defined as profits less subsidy expenditures governments become the first to act by adopting subsidy rate ceilings that bind ceilings cause firms to lower prices such that if a positive ceiling binds welfare falls

the future of u s agricultural cooperatives a neo institutional approach thirty years ago helmberger speculated that industrialization of agriculture would lead to the demise of farmer cooperatives helmberger 1966 p 1434 in responding to helmberger s prediction abrahamsen countered by suggesting that as industrialization of agriculture evolved cooperatives would increasingly become the farmer s integrating agency abrahamsen p 1442 in this paper i examine these two divergent opinions by a briefly describing the structural and strategic evolution of u s farmer cooperatives since the helmberger and abrahamsen h a forecasts b utilizing recent developments in neo institutional economic organizational economic theory to generate hypotheses regarding structural and strategic shifts in u s agricultural cooperatives and c further applying neo institutional economics to speculate what the future might hold for u s producerowned and controlled agricultural cooperatives

public export credit guarantees and foreign trade structure evidence from austria foreign trade is usually not based on cash transactions but rather sales on credit are the rule the resulting monitoring costs for lenders and the risk of default on accounts receivable are part of the costs associated with cross border goods transactions relative to domestic trade credit cross border credit creates trade barriers due to differences in language business practice jurisdiction and payment enforceability between trading partners export credit insurance has long been a domain of public export credit agencies only since the early 1980s private insurance is gaining ground using disaggregated panel data for goods exports from austria over the period 1996 to 2002 we show that public export credit guarantees have a less than proportional positive effect on international trade volume they predominantly affect the country structure of foreign trade but leave the industry specialisation almost unchanged

monetary policy and the information content of prices rational expectations and cleared markets lead to the proposition that feedback monetary policy is irrelevant to real activity as in the analyses of sargent and wallace however if agents are differentially informed and have access to a common price then prospective monetary policy actions future feedback to imperfectly known current circumstances can alter real activity by changing the information content of prices

market leadership with a sequence of history dependent patent races this note extends the results of j vickers 1986 examining the consequences on the evolution of market structure of having payoffs and thus profits and incentives which depend on the technological history of the firms in a simple duopoly model the author determines the conditions under which the technological leadership of a firm is strengthened over time increasing dominance or is progressively eroded by the rival catching up this reformulation of vickers model can also accommodate incremental innovations i e technological changes that do not allow the innovator to overtake the rival copyright 1989 by blackwell publishing ltd

tests of equilibrium macroeconomics using contemporaneous monetary data abstract this paper uses contemporaneous monetary data to carry out econometric tests of the equilibrium approach to modelling the relation between monetary disturbances and macroeconomic fluctuations the theoretical analysis introduces into an equilibrium macroeconomic model the availability of preliminary data on current monetary aggregates and the process of accumulation of revised monetary data the econometric analysis tests two hypothesis derived from this extended model one hypothesis concerns the neutrality of perceived monetary policy the econometric results imply rejection of this hypothesis the other hypothesis concerns the non neutrality of errors in preliminary monetary data the econometric results fail to reject the contrary of this hypothesis these tests provide strong evidence against the reality of the equilibrium approach

dynamic r d competition the authors study a simple two stage stochastic patent race involving two firms they examine the behavior of the participants as they gain the lead or fall behind in the race the authors find that the leader engages in rd 2 a policy of issuing patents for intermediate research results and 3 the effects of research joint ventures whereby the firms coordinate their initial research efforts and share their results copyright 1987 by royal economic society

exchange rate policy and monetary information this paper develops a model of a small open economy in which the presence of local deviations from purchasing power parity give rise to differential information it is assumed that the monetary authorities are committed to buy and sell foreign exchange in order to support an exchange rate policy rule it is demonstrated that exchange rate policy can influence the distribution of real output i if agents possess incomplete and differential information and ii if they have contemporaneous money supply or balance of payments information it is also shown that exchange rate policy can be effective because of its ability to influence the information content of available monetary data the argument is turned around and used to support the frequent release of monetary data

prospective monetary policy and the empirical relation between money and output abstract this note clarifies the empirical implications of non neutral prospective monetary policy the basic message is that prospective monetary policy even if empirically important is not an explanation for the positive correlations between observed money growth and output found in the data

regulating innovative activity abstract without spillovers and under the winner take all hypothesis there is overinvestment in r d in a non cooperative equilibrium due to duplication of effort we show that a public firm can represent an effective instrument in the hands of a policymaker to mitigate such a problem in particular it is proved that in a mixed duopoly i each firm invests less than in a private duopoly and ii although the expected time of innovation is postponed social welfare is higher than in a private duopoly