social influence and mne strategic response to political risk a global network approach abstract according to the conventional view of mne host country relations mnes faced with political risk condition their strategic responses on each party s relative power positions or bargaining influence drawing insight from network theory institutional theory and international relations research i argue that firm sensitivity to political risk is contingent upon a complementary concept social influence social influence arises through the mutual embeddedness of mne and host government in a complex global network of nations to test my hypotheses i construct a global network of trade relations that i combine with a unique transaction level dataset from the global petroleum industry my results demonstrate that social influence as modeled by home host structural equivalence moderates the effects of political risk further my findings provide support for a conceptual and empirical distinction between social influence and the traditional bargaining influence examined in the literature

the disaggregation of corporations selective intervention high powered incentives and molecular units a vast array of organizational innovations and changes are transforming us corporations large firms have dramatically downsized refocused and vertically disaggregated they increasingly obtain goods and services pursue complex development efforts and exploit horizontal synergies without the aid of formal hierarchy large firms are also internally disaggregating into smaller more autonomous units that are treated much like external subcontractors the authors argue that these organizational innovations share an important underlying commonalty economic activity is converging toward exchange involving either internal within firm or external between firm networks of small autonomous production or service units small units and small firms have become the basic building block the molecular units of these new forms further exchange among the small autonomous units is commonly a mix of both market like and hierarchical features the authors develop a theoretical explanation for these trends the

the impact of integrated aquaculture agriculture on small scale farms in southern malawi sustainable agricultural intensification is an urgent challenge for sub saharan africa one potential solution is to rely on local farmers knowledge for improved management of diverse on farm resources and integration among various farm enterprises in this article we analyze the farm level impact of one recent example namely the integrated aquaculture agriculture iaa technologies that have been developed and disseminated in a participatory manner in malawi based on a 2004 survey of 315 respondents 166 adopters and 149 nonadopters we test the hypothesis that adoption of iaa is associated with improved farm productivity and more efficient use of resources estimating a technical inefficiency function shows that iaa farms were significantly more efficient compared to nonadopters iaa farms also had higher total factor productivity higher farm income per hectare and higher returns to family labor

exchange rate pass through in canadian manufacturing its direct and indirect components changes in the exchange rate have direct and indirect effects on the prices of domestically produced goods and imports in the domestic market the direct effects originate with the impact of the exchange rate on the marginal cost of imports the indirect effects with its impact on the price of materials used by domestic producers and hence on their marginal costs direct and indirect exchange rate pass through elasticities are estimated for 37 canadian manufacturing industries and their determinants are examined in a cross section analysis it is found that the direct and indirect elasticities are approximately equal in size for domestic goods while the direct effect is dominant for imports for a small number of industries the net result of the direct and indirect effects is that a depreciation of the domestic currency increases the competitiveness of imports contrary to conventional analysis important determinants of the direct indirect elasticities are the import share and non tariff barriers t

information technology and transnational integration theory and evidence on the evolution of the modern multinational enterprise reflecting amplified hazards in cross border exchange and imperfections in markets for intangibles internalization has been central in multinational enterprise mne theory this centrality notwithstanding the fact is that internalization coheres with lower powered incentives and carries an implicit drawback namely higher realized production costs with the emergence and deployment of information and communication technology ict modern mnes are reshaping their transnational governance to address this cost the modern mne uses ict to mitigate transaction costs and evolves more to arm s length exchange to incentivize lower production costs a testable prediction is that mnes in industries more susceptible to and employing more ict will exhibit a reduced propensity for transnational integration we examine this hypothesis using available data from 1982 to 1997 for us mnes across all manufacturing sectors regression results and robustness tests are strongly congruent with the prediction this study a first to explore empirically the role of ict in the evolution of transnational exchange suggests that mne theory until now founded primarily on transaction cost economics and a cross border control theory of value capture is more likely to keep pace with developments in mne practice by opening up to incentive theories of exchange governance and a cross border coordination theory of value creation

testing for market power in multi product industries across multiple export markets a large body of theoretical literature has developed in the past 15 years incorporating various models of imperfect competition into international trade theory empirical work testing for imperfect competition in export markets however has been much more limited in particular the empirical evidence in support of widespread imperfect competition in u s export and import sectors is somewhat scant and mixed 2 one technique for assessing the existence of market power in export markets has been developed by knetter 33 who estimated a reduced form single equation in which the export price to a specific market for a good was a function of the exchange rate a country specific dummy variable and a time dummy knetter rejected the null hypothesis of perfectly competitive markets in nearly all of the u s and german export markets studied 3 his methodology has been adopted by other researchers who have rejected the perfect competition hypothesis in other u s export markets 4

the private sector in agricultural research systems will it fill the gap abstract this article examines whether the private sector can fill the gap of declining public research in developing countries economic theory suggests private for profit research will focus on areas where returns to research are appropriable and reasonable profits are generated actual private for profit research activities concentrate on countries and industries with large markets appropriable returns strong science infrastructure and favorable government policies governments and donors can promote private research by easing constraints to private entry and operations but if governments stop funding research on public goods and technologies with limited market potential the private sector is unlikely to fill the gap completely

the search for a new paradigm for the development of national agricultural research systems this paper first reviews trends in the recent evolution of investment in national agricultural research systems it then synthesizes the major elements of an emerging paradigm for viewing the future evolution of research systems this paradigm has arisen in response to the funding crisis in public research organizations in the 1990s and the declining capacity of many of these organizations key elements of this new paradigm are a pluralistic institutional structure a growing role for the private sector new mechanisms for research funding improved efficiency and effectiveness of public research organizations and strengthening of global scientific links

asset specificity and economic organization abstract this paper examines the optimization problem of firm and market organization in which both production cost and transaction cost differences are expressed as a function of asset specificity in general markets enjoy advantages by aggregating the demands of many buyers thereby realizing economies of scale or scope such production cost savings need to be assessed in relation to the transaction cost advantages that internal organization sometimes enjoys over markets in adapting to changed circumstances as it turns out both production cost economies and the transaction cost differences between firm and market organization vary systematically with the characteristics of the investments this paper employs a unified framework to assess the choice of organization form the condition of asset specificity is featured

internationalization in the information age a new era for places firms and international business networks the new techno economic paradigm of the information age has brought about new structures and processes in international business ib in this article we examine the changing nature of the competitive advantages of places the competitive advantages and strategies of firms and the governance structure of ib networks in what has also been called the third industrial revolution these three areas of change in ib activities can be mapped respectively to the location l ownership o and internalization i advantages of the eclectic paradigm we interpret these oli factors as dynamic constructs in order to depict analytically the shifts in the ib environment and their implications for ib

the multinational firm direct investment is incorporated into a simple general equilibrium model of international trade the analysis focuses on an attempt to endogenize the internalization decision it is argued that a reasonable approach assumes that arm s length contracts must be simple so that complex arrangements require internalization the model relates direct investment to the degree of underlying uncertainty and to fundamental trade determinants such as relative factor endowments the behavior of the model contrasts sharply with that of the markusen helpman model which takes internalization for granted

accessing modern science policy and institutional options for agricultural biotechnology in developing countries the paper highlights the complexity of the challenge in developing forms of collaboration between a variety of actors in the biotechnology area in developing countries national research systems with diverse capacities in biotechnology international research centers local private research and development companies and advanced research institutes in both industrialized and developing countries case studies are provided from strong programs such as india china and brazil which will be tool developers as well as users programs that are developing an adaptive capacity in biotech to use tools and methods in a large number of countries whose research systems have virtually no capacity in molecular biology each type program presents challenges and opportunities for accessing new technologies based on facilitation of private investments public private partnerships and local capacity to design proprietary technologies working with the consultative group on international agricultural research centers as intermediaries and partners and with regional consortia policy and institutional issues for accessing modern science are then discussed and many of the challenges involve developing strategies in intellectual property management while pubic research organizations will need to develop innovative means of segmenting markets to complement private sector interests

symmetric pass through of tariffs and exchange rates under imperfect competition an empirical test abstract this paper examines the effect of tariffs and exchange rates on u s prices of japanese cars trucks and motorcycles in particular we test whether the long run pass through of tariffs and exchange rates are identical the symmetry hypothesis we find that this hypothesis is easily accepted in our sample we also find that the pass through relation varies across products ranging from about 0 6 for trucks to unity for motorcycles these coefficients have very different implications for trade policy we explain the results based on demand cost and institutional conditions in each industry

fragmenting global business processes a protection for proprietary information this study shows that when sourcing business services in foreign countries the fragmentation of processes across production units acts as an operational level adjustment variable for firms to adapt their information protection approach to the regulative environment of the host country they have selected and to the possibility to use internal controls over the activities performed abroad we hypothesize that when the above mechanisms are not available firms are more likely to fragment processes across multiple foreign production units instead of collocating all process tasks in the same unit thanks to it enabled integration capabilities firms can exploit the complementarities between the dispersed fragments of a process while reducing the misappropriation hazard of individual fragments empirical results and robustness tests are strongly congruent with these hypotheses we find also that the propensity to turn to the process fragmentation protection mechanism increases with firm host country specific experience and with the alternative value of the proprietary information involved in the activity sourced abroad

travel time and the liability of distance in foreign direct investment location choice and entry mode measures of geographic distance are often used to proxy for the impact of spatial separation on firm decisions and performance we develop a construct dyad travel time to measure the friction of interacting and costs of uncertainty from ex post behavioral monitoring across non collocated sites we measure the actual time required to travel between 1171 parent subsidiary dyads and show that dyad travel time but not geographic distance has significant predictive power in firm governance and location decisions while prior literature has independently modeled these we specify a simultaneous model offering stronger support for the interrelation of these decisions

in search of substitution between foreign production and exports abstract are foreign production and exports substitutes or complements standard theory of the multinational corporation mnc assumes substitution while previous empirical work examining the relationship has generally found strong evidence of complementarity this study examines product level data which more closely fits the assumption of a single product firm often used in mnc theory and finds substantial evidence for both a substitution and a complementarity effect between affiliate production and exports with japanese automobile parts for the us market i also test for and find evidence of substitution using product level data on a set of japanese produced final consumer goods

the effects of foreign exchange movements on u s domestic prices this paper draws on the fields of international economics and industrial organization to model and empirically examine the relationship between currency value fluctuations and domestic producer prices the major focus is the issue of whether and why domestic industries differ systematically in their response to exchange rate changes the major findings are that changes in the external value of the u s dollar between 1974 and 1987 passed most fully into domestic prices of industries heavily reliant on imported inports and producing goods highly substitutable for imports highly capital intensive and concentrated industries and those protected by extensive barriers to entry both from domestic and foreign sources have exhibited less domestic price change from the exchange rate movements copyright 1989 by mit press

investments in african agricultural research abstract over the past three decades africa s public agricultural research systems have changed in substantive ways the total number of researchers increased fourfold the dependency on expatriate researchers significantly declined while the education levels of national researchers improved initially the growth in research staff was matched by growth in expenditures but since the late 1970s real research spending has stagnated in addition loans and grants from donor agencies now account for a sizeable share of total funding for many african agricultural research systems many of the developments of the past decade in personnel expenditures and sources of support for public sector research and development r d in africa are not sustainable spending per scientist has declined continuously during the past 30 years most dramatically during the 1980s resources are spread increasingly thin over a growing group of researchers which has negative effects on the efficiency and effectiveness of agricultural research in africa

encouraging private sector research for tropical agriculture summary agricultural needs in poor tropical countries differ significantly from those in temperate rich countries yet little agricultural research is performed on products for the tropics private research is particularly concentrated in rich countries this is a result of significant failures in the market for research and development r d in particular the difficulty of preventing the resale of seed in developing countries to encourage private r d in tropical agriculture traditional funding of research may be usefully supplemented by a commitment to reward developers of specific new agricultural technologies rewards tied to adoption may be especially useful in increasing up take an illustration of how a commitment to reward developers of new agricultural technologies might work is provided

measuring the impacts of agricultural research on poverty reduction policymakers are increasingly calling upon agricultural research managers to consider poverty reduction objectives when making resource allocations the authors present a simple method to measure the impact of agricultural research on the poor this method has the advantage that it presents the results in a manner consistent with commonly used measures of poverty this consistency and focus should facilitate and enhance dialogue between policymakers and research managers when deciding on resource allocations and assessing impacts on poverty reduction an illustrative application is presented using data from malawi

ecosystem specific advantages in international digital commerce we consider the applicability to digital platforms of extant international business scholarship the organization of digital platforms has been seen to such an extent as predicated upon the bundling of external resources for collective value creation that their expansion may follow the logic of externalization we further that literature contrasting the governance of network multinationals with that of platform centric ecosystems building on and extending the theory of the ecosystem we propose the concept of ecosystem specific advantages we identify costs and difficulties in the transfer of such advantages to new markets emphasizing in particular the idea of bottlenecks we then propose a framework that can be applied to future research on digital platforms focusing on the users suppliers of complementary products and platform firms we also call for research on the dynamic process of creating transferring and upgrading ecosystem specific advantages

the boundaries of multinational enterprises and the theory of international trade this paper begins with a review of empirical evidence on multinational firms conceptual underpinnings of a theory are developed relying in particular on the notion of knowledge capital as a mobile joint input into geographically separated production facilities this idea is embedded in a simple two country general equilibrium model that supports multinational production in equilibrium under conditions consistent with the empirical evidence the final section examines internalization and shows why certain properties of knowledge capital also imply a preference for transferring technologies internally within the firm rather than through arm s length markets

crude oil prices and exchange rates causality variance decomposition and impulse response abstract this paper examines the short run and long run dynamic relationship between the u s imported crude oil prices and exchange rates the monthly data of the u s crude oil imports from five source countries during january 1996 and december 2009 are examined empirical results indicate that the exchange rates granger caused crude oil prices in the short run while the crude oil prices granger caused the exchange rates in the long run furthermore oil prices were affected by the exchange rate changes at a minimal level however in the medium run and the long run oil price shocks had a significant impact on exchange rate changes exchange rate shock has a significant negative impact on crude oil prices while the impulse response of the exchange rate variable to a crude oil price shock was statistically insignificant finally the impact of extreme price volatility in june 2008 on exchange rates was significant when world oil prices are stabilized currency fluctuations and uncertainty can be minimized

public and private returns from joint venture research an example from agriculture public research institutions are turning increasingly to the private sector for additional financial support such a trend in the short run lessens the need for public research expenditures but may in the long run prove to be very costly to the economy as a whole this is because private funding increases the chance that the direction of research will shift so that private benefits are enhanced such a shift is especially costly if public research funds are then not forthcoming that would have the potential of producing the maximum level of benefits to the economy as a whole a case study of canadian barley research is used to illustrate this problem

information assets technology and organization although there is good reason to expect that the growth of information work and information technology will significantly affect the trade offs inherent in different structures for organizing work the theoretical basis for these changes remains poorly understood this paper seeks to address this gap by analyzing the incentive effects of different ownership arrangement in the spirit of the grossman hart moore ghm incomplete contracts theory of the firm a key departure from earlier approaches is the inclusion of a role for an information asset analogous to the ghm treatment of property this approach highlights the organizational significance of information ownership and information technology for instance using this framework one can determine when 1 informed workers are more likely to be owners than employees of firms 2 increased flexibility of assets will facilitate decentralization and 3 the need for centralized coordination will lead to centralized ownership the framework developed shed

the role of product specific factors in intra firm trade of u s manufacturing multinational corporations this study examines the role of major product specific factors in the product patterns of intra firm trade of u s manufacturing mncs using pooled time series 1982 86 cross sectional nineteen products regression analysis this study finds that the technology intensity of a product has a strong positive effect on the propensity of the product to intra firm trade in contrast the economies of scale level appears to have a constraining effect on the propensity finally the vertical integration intensity and the international production intensity are found to have no significant bearings on the propensity

the choice of exchange rate index and domestic price passthrough this paper finds that the extent of real appreciation and real depreciation in the external value of the dollar since the late 70s has been overstated for most industries by the federal reserve board s 10 country index and is better proxied by the dallas fed s 101 country index earlier findings seem robust to the choice of index namely changes in the real external value of the dollar have passed most fully into domestic prices of industries heavily reliant on imported inputs and producing import substitutes and least fully into capital intensive and concentrated industries and those protected by entry barriers copyright 1991 by blackwell publishing ltd

exchange rate pass through and international pricing strategy a conceptual framework and research propositions the extent to which exchange rate fluctuations affect international prices is called exchange rate pass through this paper develops a conceptual model in explaining how exchange rate fluctuations are channeled into international pricing strategy and offers research propositions our model posits that the extent of exchange rate pass through in international pricing is affected by the firm s pricing orientation performance orientation distribution policy and brand equity as well as by exchange rate uncertainty and competitive symmetry

a model of exchange rate pass through abstract exchange rate pass through is the phenomenon whereby changes in the value of foreign exchange are reflected in changes in import prices this paper presents a partial equilibrium model in which firms are price setters who anticipate exchange rate changes in equilibrium firms strategies incorporate expectations about the exchange rate consistently and are best responses to the strategies of all others in the world market it is shown that exchange rate changes give rise to import price changes but the degree of exchange rate pass through depends upon domestic and foreign market structures and the exchange rate regime in general exchange rate pass through is higher if the home market is monopolistic or if the foreign market is competitive

paradox lost firm level evidence on the returns to information systems spending the productivity paradox of information systems is is that despite enormous improvements in the underlying technology the benefits of is spending have not been found in aggregate output statistics one explanation is that is spending may lead to increases in product quality or variety which tend to be overlooked in the aggregate statistics even if they increase output at the firm level furthermore the restructuring and cost cutting that are often necessary to realize the potential benefits of is have only recently been undertaken in many firms our study uses new firm level data on several components of is spending for 1987 1991 the dataset includes 367 large firms which generated approximately 1 8 trillion dollars in output in 1991 we supplemented the is data with data on other inputs output and price deflators from other sources as a result we could assess several econometric models of the contribution of is to firm level productivity our results indicate that is spending has made a substantial and statistically significant contribution to firm output we find that the gross marginal product mp for computer capital averaged 81 for the firms in our sample we find that the mp for computer capital is at least as large as the marginal product of other types of capital investment and that dollar for dollar is labor spending generates at least as much output as spending on non is labor and expenses because the models we applied were similar to those that have been previously used to assess the contribution of is and other factors of production we attribute the different results to the fact that our data set is more current and larger than others explored we conclude that the productivity paradox disappeared by 1991 at least in our sample of firms

the exchange rate pass through into import prices the case of japanese meat imports japan is a traditional net importer of food products in general and meat products in particular japanese meat imports come from a few countries thus making japan potentially very sensitive to the swings in one or a few bilateral exchange rates one of the key contributions of this article is the use of commodity meats in this case imports weighted exchange rates in the analysis the standard practice in previous international agricultural trade studies related to either exchange rate pass through or pricing to market was to use the aggregate trade weighted exchange rates usually provided by the central bank authorities or sources beef and poultry import prices indicate partial exchange rate pass through while import prices of pork indicate zero exchange rate pass through primarily due to gate price policy system applied to pork imports in terms of competitiveness these results suggest relatively more competitive markets among poultry importing firms somewhat competitive markets among beef importin

the impact of information and communication technology adoption on multinational firm boundary decisions this article evaluates the effect of adopting internet enabled information and communication technology ict adoption on the decision to reorganize production across national borders foreign boundary decision by multinational enterprises mnes using a transaction cost framework we argue that ict adoption influences foreign boundary decisions by lowering coordination costs both internally and externally for the firm we propose that the heterogeneity in the technology s characteristics namely complexity and the production processes degree of codifiability moderate this influence using a difference in differences methodology and exploiting the richness of confidential us census bureau microdata we find that overall ict adoption is positively associated with greater likelihood of in house production as measured by increases in intra firm trade shares furthermore we find that more complex forms of ict are associated with larger increases in intra firm trade shares finally our results indicate that mnes in industries in which production specifications are more easily codified in an electronic format are less likely to engage in intra firm relative to arm s length trade following ict adoption

private research and public benefit the private seed industry for sorghum and pearl millet in india in contrast to conventional wisdom private firms are spending substantial amounts of money on research to develop new cultivars for small farmer subsistence agriculture indian firms spend almost as much as the government on breeding pearl millet and sorghum the hybrids developed by firms are becoming popular with farmers about 900 000 ha were planted with private pearl millet and sorghum hybrids in 1987 the higher yields of private hybrids increased grain output by at least 200 000 t although prices for seed of private hybrids are higher than seed of cultivars developed by government research most of the benefits from private breeding research accrue to farmers and consumers the research for this paper was primarily financed by usaid new delhi we also received support from icrisat we would like to thank the scientists of the aicsip a1cpmip iari officials of the ministry of agriculture nsc sscs and executives of private seed companies for their cooperation we also appreciate the comments of john witcombe tom walker and wayne freeman on earlier drafts of this paper the opinions expressed in the paper are those of the authors and do not represent the opinions of usaid or icrisat

knowledge transfer capacity and its implications for the theory of the multinational corporation this study updates and extends research on foreign entry modes by examining the impacts of knowledge transfer capacity and knowledge tacitness research on international corporate expansion has long emphasized that deploying intangible knowledge based assets is required for successful international expansion more recently research from a knowledge based perspective has addressed the role of tacitness in constraining a firm s ability to transfer knowledge internationally we combine these perspectives to describe how knowledge tacitness affects the relative suitability of four archetypal entry modes exporting licensing establishing an alliance and wholly owned entry we then examine and develop conceptually a seldom studied firm characteristic knowledge transfer capacity we offer predictions that describe the combined effects of knowledge tacitness and transfer capacity on entry mode choice we distinguish between the transfer capacity of the organization that develops knowledge source transfer capacity and that of the organization that seeks to access that knowledge recipient transfer capacity the discussion addresses how our model generalizes to knowledge seeking strategies and to the study of ongoing multinational networks the study enriches and reconciles multiple theoretical perspectives on entry strategy it brings together the study of knowledge characteristics and firm heterogeneity in the theory of the multinational corporation and in international and strategic management more generally journal of international business studies 2003 34 356 373 doi 10 1057 palgrave jibs 8400037

the private delivery of public crop varieties rice in andhra pradesh although there has been a considerable growth of private seed enterprises in developing countries there are few examples of the private delivery of seed of public crop varieties that are not hybrids this paper discusses the example of rice in andhra pradesh where private enterprise is supplying an increasing proportion of the seed used by farmers the institutional conditions for private expansion into rice seed are examined the paper discusses instances where low transaction costs allow for the emergence of a wide range of seed enterprises but despite the success of private seed delivery inadequate attention has been given to incentives for variety promotion and to the importance of consumer education

is exchange rate pass through symmetric evidence from us imports this study addresses the question of whether exchange rate pass through into the import price is symmetric between appreciation and depreciation of the home currency the dramatic increase of the dollar in the early 1980s and the subsequent decline provided a necessary setting for testing whether there was a structural change in the exchange rate pass through examining import price data for 98 disaggregated sic industries in the us manufacturing sector and the us import price for all commodities mixed evidence is found regarding the stability of exchange rate pass through

building african scientific capacity for agricultural development abstract during africa s first two decades of independence from 1960 to 1980 priority was given to increasing the size of national extension services because it was assumed that technology could be imported from industrial countries and the international agricultural research centers over the past decade donors have turned their attention to assisting national agricultural research systems nars but many nars are performing poorly and are faced with a high turnover of scientific staff and inadequate operating budgets moreover the present donor financed project by project and country by country approach to building african scientific capacity is seriously flawed this paper examines africa s agricultural research history over the past six decades and draws lessons for strengthening national and regional agricultural research systems over the coming 30 years

the response of exchange rate pass through to market concentration in a small economy the evidence from korea this paper finds that domestic market concentration in korea a small country systematically affects pass through of individual industries the estimates suggest that exchange rates are only partially passed on to import prices in korea the evidence implies that imperfect competition is relevant for the exchange rate pass through even in a small economy this finding has important implications for issues such as inflationary effects of depreciation and the effect of trade liberalization

institutions and the r d of gm crops abstract this paper analyzes how different institutional structures shape the research and development r d of genetically modified crops gm crops whether this r d is conducted within companies cooperatives or public research organizations both publicly and privately funded r d is expected to influence the type of crops and traits that are developed and therefore the effects on society and ecosystems that potentially could follow from the use of gm crops this issue is analyzed empirically by statistical analysis of 1323 notifications for field trials with gm crops that have been submitted under two eu directives in seven european countries the results show that the type of r d organization influences the traits and crops that are developed companies are more likely to submit notifications that concern gm crops that secure the potential for profit than are other types of r d organizations while r d organizations that are purely publicly funded are more likely to submit notifications that only concern biosafety research than are cooperatives and companies consideration of the environment food safety and food security might justify institutional reforms of r d of gm crops this might include increased public funding combined with changes in intellectual property rights

serial correlation and the fixed effects model this paper generalizes the durbin watson type statistics to test the ols residuals from the fixed effects model for serial independence also generalized are the tests proposed by sargan and bhargava for the hypothesis that the residuals form a random walk a method for efficient estimation of the parameters is also developed finally an earnings function is estimated using the michigan survey of income dynamics in order to illustrate the uses of the tests and the estimation procedures developed in this paper

crafting smallholder driven agricultural research systems in southern africa abstract the national agricultural research systems narss in sub saharan africa have made enormous progress over the past four decades in replacing european with african scientists increasing the number of scientists and shifting priorities from export to food crops nevertheless most narss are having difficulty in producing a steady stream of new technologies for small scale farms and in generating adequate financial support from their government zimbabwe and malawi are among the first countries in africa to mount indigenousled reforms of their narss this paper documents the steps taken by the agricultural research council of zimbabwe to generate a consensus among scientists farmers and policy makers to reform the national agricultural research system by increasing the voice of smallholders and other stakeholders in setting research priorities making scientists more accountable to smallholders and generating new sources of financial support from user fees and taxes on commodities malawi is pursuing a commodity approach to revitalizing its narss the experience of both zimbabwe and malawi has shown that there is no blueprint for reforming narss in africa donors can assist the reform process by supporting local initiatives to craft smallholder driven research systems that are staffed with accountable scientists who are adequately financed from local sources

systems of innovation theory and the changing architecture of agricultural research in africa abstract this paper examines the on going evolution of the organisational architecture of agricultural research in africa once considered a rural backwater populated by agronomists extension agents and farmers agricultural research is now being explicitly placed within global debates about innovation technology institutions and development this is reflected in a growing interest in the use of systems of innovation theory to both understand and reform innovation processes within agriculture the basic argument put forward in the paper is that the conception of a global agricultural research system and associated efforts to create a coordinated multi layered supra national research infrastructure are at odds with both the realities of research at national level and the bio physical and socio economic heterogeneity that characterises rural africa it is suggested that a less directive approach to support for agricultural research is required to allow national characteristics and differences to come to the fore and to give more room for the development of the all important demand side

the politics of technological upgrading international transfer to and adaptation of gm cotton in argentina summary we describe patterns of international transfer to and adaptation of genetically modified gm cotton in argentina and ask whether political bargaining between the technology owner a multinational enterprise mne and host country actors may have influenced upgrading we suggest that the mne was able to use its exclusive capacity to upgrade gm cotton technologies as a negotiation tool to persuade host actors to change the rules that affected its multi lines of business in the country this implies wider policy scope to encourage technology upgrading host actors could negotiate over a wider range of aspects of interest to mnes

on the adoption of genetically modified seeds in developing countries and the optimal types of government intervention given the proprietary nature of most genetically modified gm seed technologies the question arises as to how farmers in developing countries can gain proper access based on empirical observations a theoretical model is developed focusing on farmers adoption decisions in response to pricing strategies of a foreign monopolist and a domestic supplier of conventional seeds government interventions such as seed subsidies encouragement of r d and intellectual property rights ipr enforcement and their effects on gm coverage and national welfare are analyzed the possibility of the government obtaining a license to distribute gm seeds domestically through a transfer to the monopolist is also considered

four formal izable theories of the firm in this essay i define and compare elemental versions of four theories of the firm these elemental theories are distilled from important contributions by hart holmstrom klein williamson and others although these contributions have been widely cited and much discussed i have found it difficult to understand the commonalities distinctions and potential combinations of these seemingly familiar contributions in this essay therefore i attempt to clarify these issues in three steps i begin with informal summaries of the theories then turn to simple but formal statements of each elemental theory and finally nest the four elemental theories in an integrative framework

trade policy and resource allocation in the presence of product differentiation traditionally the empirical analysis of the effects of trade policy on resource allocation has relied both on a partial equilibrium framework using effective rates of protection and on a multisector general equilibrium framework this paper responds to the growing dissatisfaction with the concept of perfect substitutability that has been assumed in these models it discusses the theorectical properties and implications of one practical specification of product differentation and explores quantitatively the impact of trade policy on relative prices and resource pulls with a general equilibrium model that incorporates product differentiation an analysis of the implications of product differentation for the autonomy of the domestic price system is extended to include intermediate products the specification of imperfect substitutability provides a practical way of capturing product differentation both in a partial equilibrium and in a general equilibrium model however partial equilibrium based estimates are not likely to be robust when there are substantial policy changes that affect a number of sectors simultaneously

exchange rate pass through abstract the resilience of trade balances of the major industrialized economies to changes in their exchange rates has evoked interest in the exchange rate pass through relationship so far there has not been a comprehensive survey of this literature the paper aims to fill this gap in two ways first it pieces together the theoretical literature on exchange rate pass through second it provides a critical survey of the empirical literature on exchange rate pass through emphasis is placed on the data and methodology employed in previous work this is done in order to guide future work in this growing area of research

supplying crop biotechnology to the poor opportunities and constraints abstract unlike the public sector research that launched the green revolution private firms based in industrialised countries have done the majority of agricultural biotechnology research and almost all commercialisation of genetically modified gm crops this paper examines consequences of the emergence of a few large companies as leaders in the commercialisation of biotechnology by addressing issues of access to technology costs of conducting research and distribution of economic benefits to provide context we first review the status of crop biotechnology research globally who is benefiting from the technology we then analyse the role of intellectual property rights market access and industry concentration public sector research and gm crop biosafety regulations in determining observed r d by firms the paper recommends policy measures that allow transfer of current technology to the poor and generate more biotechnology research focused on problems of the poor

exchange rates market structure and price cost margins evidence from a developing country this paper analyses the sensitivity of firm performance to exchange rate fluctuations in a two country world consisting of a developing domestic country and a developed foreign country we show that this sensitivity is closely related with market structure and the share of imported inputs in total cost when the share of imported inputs is low depreciation leads to an increase in price cost margin this increase intensifies in more competitive industries when the imported input share is high the price cost margin may decrease as a result of depreciation and this effect becomes pronounced in more competitive industries the empirical test where we used 3 digit turkish manufacturing industry data support most of the findings of our model

financing agricultural research international investment patterns and policy perspectives abstract for much of the post wwii period governments in rich and poor countries alike have increased public spending on and performance of agricultural research the public involvement in and policies toward agricultural research and development r d have undergone a sea of change in more recent years in this article we document these changes focusing on the public and rapidly evolving private roles in financing agricultural r d and the international dimensions of these funding and policy issues we restate the principles for government intervention in research and highlight the financing aspects of these interventions before concluding the paper with some reflections on the implications of all these changes for internationally conceived and funded public agricultural r d

the extent of nontariff barriers to industrial countries imports this paper examines the extent of non tariff barriers to sixteen industrial countries visible imports using three alternative measures it shows that governmental commodity specific border measures affect over 27 of all imports and over 34 of imports from developing countries it also shows that during the period 1981 83 ntbs became significantly more extensive detailed statistics reveal considerable variations in ntb coverage by commodity type of barrier importer and exporter the data on which these conclusions are based are compiled from official information at the finest level of disaggregation they are described in the paper

determinants of productivity per employee an empirical estimation using panel data abstract over several panels of countries this article studies the determinants of per employee productivity first in growth rate using the generalised method of moments and focusing on the role of ict then in level using more structural determinants

running out of steam a political incentive perspective of fdi inflows in china drawing on the sociological literature of state bureaucracy we develop a political incentive perspective on fdi inflows we argue that political term as a core feature of career advancement in state bureaucracy influences the incentives of newly appointed government officials and in turn their efforts toward achieving the state s goal of attracting fdi due to the mandatory retirement age which limits the career advancement officials in their first terms perceive that they have better chances of promotion and hence have stronger incentives to work toward advancement than those continuing to serve in the current position for the following term we test this argument by examining chinese city government leaders and fdi inflows in their cities from 2003 to 2010 using a difference in differences design the results show that first term leaders who are newly appointed after political turnover attract more fdi inflows than continuing leaders the difference is smaller when the new leaders are close to retirement but greater if they are appointed to cities with low prior gdp performance this study offers a new perspective on intra country fdi variations and extends the literature on the role of political institutions by investigating the political incentives of government officials

the economics of governance the economics of governance is an effort to implement the study of good order and workable arrangements where good order includes both spontaneous order in the market which is a venerated tradition in economics adam smith 1776 friedrich hayek 1945 kenneth a arrow and gerard debreu 1954 and intentional order of a conscious deliberate purposeful kind chester irving barnard 1938 p 9 also i interpret workable arrangements to mean feasible modes of organization all of which are flawed in comparison with a hypothetical ideal avinash dixit 1996 pp 4 9 the object is to work out the efficiency logic for managing transactions by alternative modes of governance principally spot markets various long term contracts hybrids and hierarchies interest among social scientists economists included in the study and practice of good order and workable arrangements has been steadily growing in contrast with the orthodox lens of choice prices and output supply and demand the economics of governance is a lens of contract construction broadly in the spirit of james buchanan s 2001 p 29 observation that mutuality of advantage from voluntary exchange is the most fundamental of all understandings in economics the economics of governance as herein described is principally an exercise in bilateral private ordering by which i mean that the immediate parties to an exchange are actively involved in the provision of good order and workable arrangements to be sure the need for private ordering varies with the rules of the game as provided by the state distinctions between lawlessness where the state provides limited or unreliable protection for property and contract dixit 2004 and lawfulness where the state undertakes to protect property and enforce contracts in a principled way are pertinent the first of these applies mainly to primitive and transition economies the second is commonly associated with western democracies recourse to private ordering under conditions of lawlessness is altogether understandable given the absence of state support the walter a haas school of business university of california berkeley ca 94720 1900 the paper has benefited from workshop presentations at the university of california berkeley the university of valencia insead fountainebleau and the 2004 annual conference of the international society for new institutional economics an abbreviated version was also given as the horst claus recktenwald lecture at nuremburg on 4 november 2004 comments and suggestions from fred balderston ernesto dalbo avinash dixit robert gibbons witold henisz ian larkin steven tadelis and dean williamson are especially acknowledged 1 lon fuller s 1954 p 477 definition of eunomics as the science theory or study of good order and workable arrangements is very much in the spirit of what i refer to as governance 2 one of the immediate ramifications of insistently comparing feasible alternatives all of which are flawed is that the purported inefficiencies that are ascribed to failures to achieve first best optimality are not dispositive but invite the query as compared with what i return to this issue in section iv 3 excluding corporate governance the numbers of articles that used the word governance during the period 1998 2000 as compared with the period 1977 1979 in selected economics business management sociology organization and political science journals were 60 vs 1 76 vs 4 79 vs 18 and 60 vs 25 where the journals surveyed were the american economic review journal of political economy quarterly journal of economics rand journal of economics and journal of economic perspectives in economics strategic management journal management science academy of management journal and academy of management review in business management administrative science quarterly organization science american journal of sociology american sociological review and annual review of sociology in sociology organization and american political science review political science quarterly journal of politics and political research quarterly in political science combining these four categories articles using the word governance increased from 48 to 275 over this 20 year interval dixit 2004 pp 149 50 reports that the number of web pages that turn up under the search for governance is huge

exchange rates and prices the adjustment of relative prices to exchange rate movements is explained in an industrial organization approach given labor costs in the respective currencies exchange rate movements change costs for firms selling in the home market and thus disturb the industry equilibrium the extent of absolute and relative price adjustment is shown to depend on market integration product substitutability the relative number of domestic and foreign firms and the market structure the impact of exchange rates on prices is illustrated in a variety of approaches including the cournot a dixit and j stiglitz 1977 and s salop 1979 models some empirical evidence is offered in support of the theory copyright 1987 by american economic association

why are different services outsourced to different countries the tradability revolution in services has led to a dramatic expansion of offshore outsourcing of services allowing firms to take advantage of lower production costs in foreign countries however production costs alone cannot explain the location determinants of offshore outsourcing of services in this paper we argue that minimizing transaction costs is also an important determinant of the location of offshore outsourcing of services we empirically analyze characteristics of services and characteristics of foreign countries that may impact on transaction costs in an outsourcing relationship and hence determine where services will be outsourced offshore we derive measures of service characteristics routineness complexity and interactiveness based on the tasks required to provide them further we posit that there are interaction effects between service and country characteristics using bureau of economic analysis data on us service outsourcing across 11 types of services to 31 countries between 1992 and 2005 we find that 1 services that are more routine less complex or less interactive are outsourced more to foreign countries 2 services are outsourced more to countries with higher institutional quality and greater cultural proximity 3 non routine complex and interactive services are outsourced relatively more to countries with a better institutional quality

an argument for deregulating the transfer of agricultural technologies to developing countries in the past few decades many developing countries have liberalized trade and investment removing barriers to imports and allowing the introduction of new foreign technologies unfortunately agriculture often remains outside this reform process regulatory obstacles continue to restrain the transfer of technologies through private trade in seeds and other inputs industrial countries characteristically allow the transfer of private and public technologies through multiple channels developing countries often force technology transfer through a single channel controlled by government agencies with an emphasis on official performance tests this article analyzes the institutional arrangements governing the international transfer of new agricultural technologies examining the cases of agricultural machinery in bangladesh and seed varieties in turkey the analysis shows that allowing the private transfer of technologies and refocusing input regulations on externalities could lead to significant productivity and income gains in developing countries