environmental regulations innovation and firm performance a revisit of the porter hypothesis part of the research for this paper was supported by funding from nottingham innovative manufacturing research centre and the university of bedfordshire business and management research institute

the instability of fixed exchange rate systems when raising the nominal interest rate is costly abstract this paper points to a vicious circle which may arise when a government tries to defend its currency by raising the nominal interest rate in a fixed exchange rate system we present a stylised model in which raising the nominal interest rate helps to maintain the parity but is costly for the government the speculators are aware that this cost gives incentives for the government to stop defending the parity which in turn reinforces the speculation against the currency we show that this mechanism can generate self fulfilling currency crises the outcome of which depends on the level of sacrifice that the government is ready to endure and the evolution of domestic economic conditions we provide some informal evidence showing that this model explains some features of the 1992 93 ems crisis

real aspects of exchange rate regime choice with collapsing fixed rates abstract typical evaluations of the choice of exchange rate regime examine the performance of the real economy and assume that the regimes last indefinitely in contrast actual regimes are quite transitory this paper examines how the predictions of two popular models for the determination of some real economic variables must be modified when agents rationally perceive that a fixed rate regime will be transitory the models studied are simple stochastic versions of the models in dornbusch 1976 and flood and marion 1982

buying and selling attacks on fixed exchange rate systems abstract in this paper we show how rational expectations models of speculative attacks on fixed exchange rate systems can be extended to take into account the possibility that the central bank could be forced to either devalue or revalue essential to the analysis are the concepts of buying attack and selling attack by means of which we were able to describe how expectations about the future exchange rate are formed we also provide a discussion on the problem of uniqueness of the equilibrium that may arise in this kind of speculative attack models

modelling labour market adjustment to trade liberalisation in an industrialising economy this paper investigates labour market responses to trade liberalisation in an industrialising country short and long run responses of employment and wages are examined using a specific factor trade model which underpins the empirical work employment and wage equations are estimated using dynamic panel techniques for importable and exportable sectors in mauritius and for a period covering both the pre and post liberalisation regimes the empirical testing finds some support for the theoretical predictions of differential responses between sectors increases in female participation however appear to have dampened the adjustment burdens of liberalisation on importables there is relatively little evidence available about the effects of trade induced shifts in the composition of demand on inter industry employment and wage levels in developing countries analyses of the factor content of imports and exports suggest that a shift from import substitution is to export promotion ep policies will typically in the case of a developing country expand the more labour intensive industries increase labour demand overall and drive up real wages in the long run but trade liberalisation and increased foreign competition may not only affect the composition of the tradeables goods sector i e the distribution between importables and exportables they may also affect both the efficiency with which all firms use factors including labour and the distribution of output within a sector between more and less efficient firms thus the net long run effects of trade liberalisation on employment will depend upon the balance of structural and efficiency effects which cannot be identified from analyses of the composition of trade alone further we must also recognise that the short and long run effects of trade liberalisation on employment and wages may diverge the divergence depending on the degree of factor mobility and the competitiveness of labour markets the aim of this paper is to model labour market adjustment to trade liberalisation in an industrialisingz country it will do so using panel data evidence for mauritius an economy that has undergone significant trade liberalisation and transformation during the 1980s indeed mauritius is viewed simultaneously as a successful liberaliser and an economy with extensive government intervention in the labour market it provides a valuable test base

a currency crisis model with an optimising policymaker abstract a model is presented in which the abandonment of a fixed exchange rate regime is triggered by an optimising policymaker who wants to loosen monetary policy and boost aggregate demand agents in the foreign exchange market know the policymaker s objective function and build expectations of a regime switch into interest differentials the resulting rise in interest rates affects the policymaker s decision to switch regime it is shown that a rational expectations equilibrium exists where the fixed rate is abandoned in response to adverse demand shocks in some circumstances multiple equilibria arise which may lead to self fulfilling crises

vertical and horizontal intra industry trade a cross industry analysis for the united kingdom a large theoretical literature has emerged directed at explaining the presence of intra industry trade iit one of the distinctions which comes out of these models is that between horizontal iit where goods are differentiated by attributes and vertical iit where goods are differentiated by quality in this paper horizontal and vertical iit in u k trade are disentangled using a unit value dispersion criterion and a range of industry characteristics the paper not only points up the relative importance of vertical and horizontal iit in the united kingdom it also demonstrates how a failure to separate them out can impact on the interpretation of empirical results copyright 1995 by royal economic society

narrow and broad perspectives on trade policy and trade costs how to facilitate trade in madagascar madagascar is a high trade cost and relatively closed economy the wto s latest trade policy review tpr for the country like all tprs concentrates on border sources of trade costs those induced by trade policy instruments such as tariffs or implicit taxes imposed by slow and costly customs procedures or trade documentation requirements this narrow focus for trade policy and facilitation misses the substantive within and beyond the border sources of trade costs experienced by traders in a country like madagascar this paper illustrates the nature and significance of a narrow and broad view of trade costs and trade facilitation for this relatively remote and internally land locked economy

balance of payments crises in an optimal portfolio model abstract balance of payments crises are often associated with large current account movements preceding and following the crises in this paper we treat the issue of balance of payments crises in a general equilibrium model to allow for such current account movements at the same time we model the portfolio decisions of the individuals in an explicit risk and return framework the resulting behavior for money demand foreign exchange reserves and current account is derived most importantly the risk and return framework allows for a discussion of the influence of uncertain government domestic credit policies on the current account behavior preceding the attack and on the probability of an attack

the influence of chinese environmental regulation on corporation innovation and competitiveness abstract according to porter hypothesis appropriate environmental regulation can promote corporation innovation the innovation will even offset the corporation loss caused by environmental regulation and improve corporation competitiveness in order to explore the porter hypothesis practical situation in china this paper does an empirical study to explore this mechanism by using chinese pollution intensive corporations panel data samples during 2007 2012 results show that the implementation of flexible control policies has achieved initial success environmental regulation has significant positive effects on corporation s innovation but the fact of its weak effects also partly explains why environmental regulation still has negative effects on corporation competitiveness even it is insignificant from the point of regional differences east and middle regions have weak but not strong porter hypothesis phenomenon while that of the west region is not significant return on assets roa and gross domestic product gdp in the east region are relatively higher which is not based on high energy consumption and environmental pollution but due to the high transformation rate of research and development expenditure r d to roa for the middle region even it shows signs of the strong porter hypothesis but due to the fact that government gives fiscal subsidies and tax returns to companies to cover the cost from environmental regulation it only has the weak but not strong porter hypothesis phenomenon since this mechanism is not consistent with that of porter hypothesis

a natural experiment for identifying the impact of natural trade barriers on exports abstract the paper investigates the relative importance of trade policy and natural sources of export taxation in malawi a landlocked african economy these sources of export taxation are in turn used to explore how export supply would respond to trade liberalisation as opposed to measures which lower other international trade costs the findings indicate that trade policy barriers are now only a limited source of true export taxation and that trade policy reform needs to be complemented with reforms to reduce international trade including transport costs

the physical economy of the european union cross country comparison and determinants of material consumption abstract in this paper we investigate what determines observed differences in economy wide material use among the eu 15 member states the empirical basis for our analysis is an extended and revised material flow data set for each of the eu 15 countries in time series from 1970 to 2001 this data set comprises consistent data for domestic extraction imports and exports as well as for derived material flow indicators broken down by 12 types of materials we compare the level and composition of domestic material consumption dmc in the eu 15 member states and identify determinants of the observed differences across the european union member states overall dmc per capita varies by a factor of three ranging between 12 tonnes per capita in italy and the united kingdom and 37 tonnes per capita in finland this variability of dmc in the eu 15 is in a similar order of magnitude as the variability of gdp per capita or total primary energy supply per capita linear correlation analysis reveals that national income and final energy consumption relate to material use but cannot fully account for the observed differences in material consumption by breaking down overall material flow indicators into 12 categories of materials and analysing their use patterns in detail we identified a number of factors socio economic and natural that influence the level and composition of economy wide material use many of these factors are specific for certain types of materials others are more general and quite some driving factors counteract each other regarding the direction of their influence concluding we summarize the most important driving factors for domestic material consumption stressing population density as largely neglected but important explanatory variable for material use patterns discuss issues of environmental significance aggregation and the use of different denominators in material flow accounting and suggest a re interpretation of dmc

evaluating the efficiency of industrial environmental regulation in china a three stage data envelopment analysis approach abstract environmental regulation is of great concern to international academics and policy makers previous studies often regarded environmental regulation as an influencing factor when calculating eco efficiency or energy efficiency more attention should be given to the efficiency of environmental regulation especially in industrial field according to exiting studies industrial environmental regulation efficiency iere may be influenced by external environmental factors to explore the influence and obtain an actual efficiency this paper calculated iere in china by using the panel data of 30 regions from 2011 to 2015 the 12th five year plan period through the three stage data envelopment analysis approach firstly the undesirable slacks based model method was used to calculate the original iere secondly the economic base industrial structure urbanization level and education level were taken as external environmental variables and the effect of external environmental factors and stochastic disturbance were excluded thirdly the actual iere can be calculated after adjusting input values the results showed that china s iere was underestimated due to the impact from external environmental factors moreover the iere was more influenced by pure technical efficiency than scale efficiency the iere of each region varied thus targeted policies should be formulated according to local conditions this research provided a new analytical method for calculating environmental regulation efficiency the method can be applied either in other countries or in other sectors

rational and self fulfilling balance of payments crises speculative attacks on a pegged exchange rate must sometimes occur ifasset price paths are to be free of abnormal profit opportunities suchattacks are fully rational as they reflect the market s response to aregime breakdown that is inevitable the authors shows that under someexpectations about policy balance of payments crises can also be purely self fulfilling events in such cases even a permanently viableregime may collapse and the economy will possess multiple equilibriacorresponding to different subjective assessments of the probability ofa crisis the behavior of the domestic interest rate will naturally reflect the possibility of a speculative attack copyright 1986 by american economic association

effective protection policy appraisal and trade policy reform when the effective protection concept was rst developed it was widely regarded as a key widely used especially in the context of policy reform and policy appraisal in developing countries this paper re appraises tmeasure of the structure of protection and became widely deployed it was however subject to a he concept reviews the extent of its application and discusses the factors behind its longevity as an investigative tool the theoretical critique on the grounds that it was essentially a partial equilibrium measure which could not be easily embedded ipaper concludes that the measure still has a role to play in evaluating the structure of protection n a general equilibrium framework notwithstanding this critique the concept has continued to be

true protection concepts and their role in evaluating trade policies in ldcs in many ldcs it is not uncommon to find incentives designed to encourage import substitution activities coexisting alongside incentives aimed at encouraging export activities this article evaluates a recent approach to evaluating commercial policy which among other things highlights some of the implications of simultaneously pursuing import substitution and export promotion the study develops a model which emphasises the incidence of protection and identifies the concept of true protection empirical results for a number of ldcs are discussed and the implications of these results evaluated in addition the article contrasts this approach with the effective protection approach to evaluating commercial policy

collapsing exchange rate regimes some linear examples abstract we construct a pair of linear examples to study the collapse time of a fixed exchange rate regime the first example is a perfect foresight continuous time model which allows calculation of the exact collapse time and the tracking of reserves the second example is a discrete time stochastic model which yields an endogenous probability distribution over the collapse time and produces a forward discount of the exchange rate

capital controls and foreign exchange market crises in the ems abstract it is widely held that capital controls are necessary to prevent foreign exchange market crises in a fixed but adjustable exchange rate system like the ems it was therefore argued that capital market liberalization which came in july 1990 might lead to recurrent crises in the ems events since july 1990 have shown that capital controls were not necessary for the stability of the ems this paper shows that even with capital controls the system might enter turbulent periods and might experience a self fulfilling balance of payments crisis if the authorities are perceived to dislike high domestic interest rates a crisis can then be triggered by any small shock if the authorities are not willing to raise domestic interest rates sufficiently to defend the exchange rate

a life s work on trade and development this paper reflects on the career contributions of professor chris milner to the literature on international trade and economic development as such it not only provides an overview of a life s work but also sets the context for the nine papers which follow all of these were specially written for this special issue of the world economy and all relate to different areas that professor milner worked in

declining protection in developing countries fact or fiction this paper explores whether and to what extent evident trade reform falling average tariffs and rising exports in recent decades overstate the extent to which protectionism has declined in developing countries especially low income developing countries it identifies remaining significant protection especially of final manufactured goods this being associated with the presence of peak tariffs escalating tariff structures by stage of production and replacement of old forms of non tariff protection with new instruments of non tariff protection it also identifies significant protection arising from high international trade costs induced by inefficiencies in transportation ports and customs and from the growth of exports to preference receiving export markets

fiscal dependence on trade taxes and trade policy reform the article focuses on fiscal implications of structural adjustment loans sals from an a priori standpoint and by reference to the experience of five countries three of these countries have had revenue enhancement after trade policy reforms and the other two cases experienced revenue depletion the central point which emerges from the study is that it is not clear that trade liberalisation leads to fiscal enhancement or fiscal depletion both a priori the orising and country analyses demonstrate that a range of outcomes is possible depending upon initial conditions and the components of any reform package

policy and non policy barriers to trade and implicit taxation of exports in uganda uganda has made significant progress in reducing policy induced anti export bias in its trade policy in the 1990s taxes on exports have been abolished and import protection has been reduced considerably such trade barriers are only a component of thee transaction costs associated with trade poor infrastructure notably by increasing transport costs and institutional inefficiencies can significantly increase trade costs the effective protection of imports and implicit tax on exports due to transport costs is calculated and compared to effective protection due to trade policy barriers for uganda the results reveal that transport costs are often very high in many cases representing a greater cost tax to exporters than trade policy

environmental regulation and environmental productivity the case of china abstract constrained by the dual mission of supporting industrial growth and reducing emissions china s traditional emission reduction oriented environmental policies unavoidably face a dilemma this study adopts the gml index to calculate china s industrial productivity by considering environmental factors in addition based on the assumption of industry heterogeneity the author examines the non linear relationship between china s environmental regulation and environmental productivity and calculated the optimal regulation environment for industries according to this study when impact of undesirable outputs pollutant emissions is considered environmental regulation and environmental productivity are positively correlated which to some degree validates the porter hypothesis at present environmental regulation has significant positive effects on clean production industries but shows a lag effect on pollution intensive industries the degree of environmental regulation and environmental productivity show an inverted u shaped relation and display three thresholds it should be noted however that the relationship between regulation and productivity may vary across industries these findings have clear policy implications rather than continually increasing the level of environmental regulation the government should establish standards for individual industries that emphasize flexibility