bluuebunny/crossref_metadata_2025 huggingface dataset:
Communication and co‐operation in product development: a case study of a European car producer
Authors: Calabrese Giuseppe
Published: March 2003

Continuous innovations in product and process technology, coupled with time‐to‐market pressure, have made rapid product development a key strategic objective of manufacturing firms. Consequently, many firms have started to define the ways in which products are designed, developed and produced, so as to reduce the time from conception to manufacture. The strategies employed to achieve this goal vary, and include the integration of functions through selective use of concurrent engineering, the formation of strategic project teams, and technological connections by CAD/CAM systems. The research reported in this paper, co‐ordinated by the WZB Institute of Berlin, is aimed examining organizational, technological and human resources practices that enhance quality in R&D by improving communication and co‐operation C&C) between the actors. Although the research was carried out in four countries(Germany, Italy, Japan and the USA) and in three sectors (car, personal computer and machine tools) this paper analyses the evidence provided by a set of face to face interviews of the managers, engineers and designers of a European car producer.
Toward the development of benchmarking tools for R&D project management
Authors: Coombs Rod , McMeekin Andrew , Pybus Roger
Published: March 2003

This paper presents an audit model for the process of R&D project management that can be used to check the robustness and repeatability of processes and provide a template for internal and external benchmarking. The intention is to offer a ‘fine‐grained’ model focusing rather closely on the R&D activities within the broader innovation process, thus complementing the more widely based innovation audit models that already exist.

Based on field‐work in six business units in ICI and five companies from other industries, the paper sets out three major variants of the R&D project management process. These variants reflect the fact that R&D projects take place in different circumstances and have different objectives.
Mid‐entry technology strategy: the Korean experience with CDMA
Authors: Chung KunMo , Lee KongRae
Published: March 2003

Mid‐entry strategy is an R&D strategy designed for an efficient utilisation of scientific and technological resources across the nations. It chooses the entry point of R&D projects in the mid‐stage of technical development. The technological situation of developing countries compels them to choose the mid‐entry strategies tailored to specific technologies. The development of the CDMA (Code Division Multiple Access) based digital cellular mobile communication system by ETRI, Korea’s government‐sponsored research institute, is an example showing the application of this strategy. ETRI utilised scientific resources owned by US based Qualcomm Ltd and co‐operated with local companies for the development. In the first half of 1996 the successful commercialisation of the CDMA digital cellular telephone service was launched in Korea, ahead of all other countries. Two Korean mobile communications providers have adopted the system.
Optimal expenditure patterns for risky R&D projects with time‐dependent returns
Authors: Messica Avi , David Israel
Published: March 2003

The basic Lucas model for risky R&D projects is revisited. New solutions for optimal expenditures are explored by exploiting the merits of the theory of differential equations. After applying the calculus of variations, a nonlinear differential equation is presented whose solution provides the optimal control for a constant conditional‐completion density function and different time‐dependent return models. New, exact, and approximate solutions are presented and discussed. It is found, for the class of risky R&D projects under study, that the behavior over time of the optimal expenditure is functionally similar to that of the expected return.
The use of options theory to value research in the service sector
Authors: Jensen Kjeld , Warren Paul
Published: March 2003

This paper examines the practicalities of applying real options theory to valuing research in the service sector, where the relationship between research and subsequent business benefit is less easily discerned than in most previous applications of options theory in, e.g. the pharmaceutical industry. The paper uses a compound options model, the Geske model, based on a three‐phase lifecycle consisting of research, development and deployment. This model was applied in a case study within the e‐commerce area to extract key messages for R&D managers relating to different value drivers. However, the case study emphasized the need to understand the relationship between the research activity and the subsequent revenue stream, and to be able to demonstrate the extent to which the former is necessary for the latter.
Valuation of R&D real American sequential exchange options
Authors: Lee Jongwoo , Paxson Dean A.
Published: March 2003

Valuation of R&D real American sequential exchange options requires specifying the pattern of R&D expenditures and the stochastic process of the eventual R&D project. We model the stages of R&D expense and then the ultimate discovery (and the development cost for the discovery) using real sequential (compound) exchange option models. We study E_Commerce R&D, so the timing is relatively short‐term, with initial R&D, a second phase of R&D, and a final development phase, when the project values are realized. We use proxies from the financial markets for expected project value and cost volatilities (and correlation). Then the real option valuation is based on an approximate American sequential exchange option.
The scope, motivation and dynamic of Guest Engineering
Authors: Lewis Michael , Slack Nigel , Twigg David
Published: March 2003

The exchange of technical personnel between organizational actors in a supply network has become known as Guest Engineering (GE). Despite increasing popularity as an inter‐organisational arrangement (especially in the automotive sector) it has generated relatively little academic research and therefore this paper seeks to extend our understanding of GE by exploring how its scope is determined, what motivates the participants and how the relationships evolve. The paper draws on extant GE, supply networks and Resource‐Based View (RBV) literature to derive research propositions that are used to analyse empirical work carried out with four automotive suppliers and four automotive OEMs. A number of preliminary conclusions are drawn. At a micro‐project level, the criticality of the individual ‘playing the GE role’ is highlighted, as are related concerns that collaborative team structures often fail to address broader social/cultural characteristics. At a macro‐project level, the study argues that difficulties and mistrust will often characterise integrated and competitively successful GE relationships. Finally, at a strategic level, GE needs to be understood as a process of resource transfer and transformation, and therefore the management of interdependency and power asymmetry are core considerations in effective adoption. The paper concludes with recommendations for further critical and practical work.
Economic compensation compositions preferred by R&D personnel of different R&D types and intrinsic values
Authors: Kim Bowon , Oh Heungshik
Published: March 2003

In order to enhance R&D performance, R&D managers make sure that R&D personnel are satisfied with their compensation, both economic and non–economic. An R&D compensation scheme would consist of many complex factors. In this research, we focus on ‘compensation composition’ as such a factor for the economic compensation system, i.e., the mix of compensation components such as team (or organization) performance based, individual (R&D personnel) performance based, and fixed (seniority based) portion of economic compensation. As part of non–economic compensation, intrinsic values such as social status and self–actualization perceived by the R&D personnel are influencing their level of satisfaction with the entire compensation system. Another critical factor we consider here is the difference in R&D types: there are three R&D types, i.e., basic, applied, and commercial R&D. We put forth two sets of propositions. First, there is statistically significant correlation among R&D personnel’s job satisfaction, performance measurement satisfaction, and compensation satisfaction. Second, depending on the types of their R&D activities, R&D personnel prefer a certain composition of economic compensation. In addition, the relationships are mediated by whether the R&D personnel feel intrinsic values of their jobs.
Development and application of a new methodology of evaluating industrial R&D projects
Authors: Osawa Yoshitaka , Murakami Michikazu
Published: March 2003

This paper proposes a new methodology of evaluating industrial R&D projects to assess the effectiveness of future R&D in terms of financial credibility, to prioritize them efficiently by clear criteria to reduce the time and burden consumed by both project leaders and management staffs. A new methodology has been developed and applied to all Sumitomo Electric Industries (SEI) R&D projects, and is recognized as a useful system for evaluating many R&D projects in a short period, such as 150 projects per month.
Focusing the fuzzy front–end in new product development
Authors: Kim Jongbae , Wilemon David
Published: March 2003

Effectively managing the ‘upfront or fuzzy front–end’ (FFE) of the product development process is one of the most important, difficult challenges facing innovation managers. In this paper, we define the FFE as the period between when an opportunity is first considered and when an idea is judged ready for development. We classify the outcomes of the FFE into product definition, time, and people dimensions. We suggest several strategies to manage the FFE by assigning a FFE manager or team; by providing organizational support for FFE activities; by understanding the sources of FFE ambiguity; by building an information system; and by developing relationships with supporters, partners, and alliances.
On the development and application of a self–organizing feature map–based patent map
Authors: Yoon Byung–Un , Yoon Chang–Byung , Park Yong–Tae
Published: March 2003

Recently, the range of R&D management has expanded to include management of technological assets such as technology information, product/process data, and patents. Among others, patent map (PM) has been paid increasing attention by both practitioners and researchers alike in R&D management. However, the limitation of conventional PM has been recognized, as the size of patent database becomes voluminous and the relationship among attributes becomes complex. Thus, more sophisticated data–mining tools are required to make full use of potential information from patent databases. In this paper, we propose an exploratory process of developing a self–organizing feature map (SOFM)–based PM that visualizes the complex relationship among patents and the dynamic pattern of technological advancement. The utility of SOFM, vis–à–vis other tools, is highlighted as the size and complexity of the database increase since it can reduce the amount of data by clustering and visualize the reduced data onto a lower–dimensional display simultaneously. Specifically, three types of PM, technology vacuum map, claim point map, technology portfolio map, are suggested. The proposed maps may be used in monitoring technological change, developing new products, and managing intellectual property.
Business model fashion and the academic spinout firm
Authors: Bower D. Jane
Published: March 2003

Studies indicate that most European new, technology–based firms (NTBFs) have been founded by relatively senior, highly–educated personnel coming from existing companies. These founders already have strong, industry and market links. A relatively small proportion have spun out of university or other public research facilities. However, this latter group has attracted particular attention from several interested groups, including governments and the scientific establishment. For governments, this has appeared to offer a means whereby public policy could have a direct and significant impact on economic development. Hence substantial public resources are increasingly being committed to support these developments in most industrialised countries. The founders of HEI spinouts are often academics aiming to commercialise nascent technologies and they face challenges which are less likely to arise for the founder with an industry background. The emerging technologies often commercialised in academic spinouts may have many potential applications. At the outset founders must make critical strategic choices of applications to develop, if they are to attract the substantial resources often needed for the risky development process. Some of these choices need an understanding of changing fashions in business models and investors’ current preferences for particular industries. It is a difficult challenge for academic founders with little prior market knowledge and linkages, and no previous experience of professional investors and their requirements, to select the applications and business models which will support successful venture creation. This paper explores a number of key issues which surround these decisions and their relation to the changing business environment. It is concluded that the acceptability of novel technologies and products is mediated by systemic interactions which are ill–understood by industry and government.
How Can Pictures be Propositions?
Authors: Shier David
Published: March 2003

Wittgenstein’s Picture Theory of language holds that one fact can represent another, and that propositions are pictures of states of affairs. What makes a fact into a picture of a given s tate of affairs are the correlations between picture elements and objects and the correlations between relations among picture elements and relations among objects. But a problem sometimes raised is that propositions can’t be pictures, as pictures—unlike propositions—do not say anything. An interpretation (e.g. Anscombe’s) holds that the above‐mentioned correlations do make the picture into a proposition. But this neither handles the objection, nor is it Wittgenstein’s view. Further, Wittgenstein’s own account faces serious difficulties in addressing these issues, and the Anscombe‐type interpretation obscures this fact.
The Enigma of Existence
Authors: Schlesinger George
Published: March 2003

Why is there a universe rather than nothing? And if there is a universe did it have to burst into being through the Big Bang? And if so, will the answer to the question: what caused the Big Bang? eventually be discovered, or will it remain a mystery forever? Or is there nothing mysterious about it at all? Is the suggestion that the Big Bang was a result of a divine act simply false, or devoid of meaning? The main argument of this essay is that a considerable amount of clarity will be achieved if we realise the radical difference between the kinds of hypothesis that are legitimate to account for events within the universe and events accounting for the very existence of the universe.
On the Unity of Compound Things: Living and Non‐Living
Authors: Hoffman Joshua , Rosenkrantz Gary S.
Published: March 2003

There appear to be at least two kinds of compound physical substances: compound pieces of matter, which have their parts essentially, and living organisms, which do not. Examples of the former are carbon atoms, salt molecules, and pieces of gold; and examples of the latter are protozoa, trees, and cats. Given that there are compound entities of these two kinds, and given that they can be created or destroyed by assembly or disassembly, questions naturally arise about the nature of the causal relations which unite their parts. In answer to these questions, we first argue that the parts of a compound piece of matter are connected via a relation of dynamic equilibrium of attractive and repulsive forces. We then argue that the parts of an organic living thing are united in a different way: they are functionally connected in a broadly Aristotelian sense which is compatible with an ultimately non‐teleological, naturalistic biology.
Irrealist Cognitivism
Authors: Skorupski John
Published: March 2003

This paper argues that normative claims are truth‐apt contents of cognition – propositions about what there is reason to believe, to do or to feel – but that their truth is not a matter of correspondence or representation. We do not have to choose between realism about the normative and non‐cognitivism about it. The universality of reasons, combined with the spontaneity of normative responses, suffices to give normative claims the distinctive link to a ‘convergence commitment’ which characterises any genuine judgement; an accurate epistemology of normative discourse need postulate no faculty of receptivity to a special domain of normative fact. Some general arguments for the view that cognitivism about a domain of discourse imposes realism about it are considered and rejected.
Deflating Compositionality
Authors: Horwich Paul
Published: March 2003

My approach to the compositionality of meaning is deflationary in two respects. In the first place it shows that there is no need for a Tarski‐style truth‐theoretic account of it, and thereby avoids the difficult methodological and technical problems that would have to be solved on such an account. And in the second place it shows that compositionality imposes no constraint whatsoever on theories of lexical meaning. On the first of these points I am opposing Davidson and the tradition in semantics that he instigated. On the second point I am opposing Fodor and Lepore who have denounced various accounts of lexical meaning (including the one I favour – the use theory) for not squaring with compositionality. My plan for this paper is to outline the deflationary approach, to sketch its advantages, and to defend it against objections that have been made by Davidson, Fodor and Lepore.
Representing Bodies
Authors: Cassam Quassim
Published: March 2003

According to the bodily awareness thesis (BAT), awareness of one’s own body is a necessary condition for the acquisition and possession of concepts of primary qualities such as force and shape. I discuss two arguments for this thesis. The acquisition argument for BAT focuses on the role of bodily sensation and action in the acquisition of the concept of force. I suggest that this argument requires us to conceive of the content of sensation as both representational and non–conceptual. The objective reality argument for BAT claims that awareness of one’s own body is an essential component of those experiences which are required for a proper grasp of concepts of primary qualities. I conclude by arguing, in opposition to Sartre and Merleau–Ponty, that there is no incoherence in the idea that one’s body is a thing among other things.
Verificationism Revisited
Authors: Weintraub Ruth
Published: March 2003

I aim to stand the received view about verificationism on its head. It is commonly thought that verificationism is a powerful philosophical tool, which we could deploy very effectively if only it weren’t so hopelessly implausible. On the contrary, I will argue. Verificationism – if properly construed – may well be true. But its philosophical applications are chimerical.
Some Remarks on the Concept of Toleration
Authors: Garzón Valdés Ernesto
Published: March 2003

The paper contains a conceptual analysis of “act of toleration” and the property of “being tolerant”. Being tolerant is understood as a dispositional property of persons manifested in what the author calls the “circumstances of toleration”. The main circumstances distinguished are: a tendency to prohibit a certain behaviour and the competence to determine the deontic status of the behaviour in question. An act of toleration, then, consists in not prohibiting (or cancelling the prohibition of) that behaviour. It is argued that this requires the existence of two different normative systems, the “basic system”, and the “justifying system”. Acts of toleration must be based on reasons coming from the latter. This insight enables one to establish a difference between reasonable and unreasonable toleration, as well as between toleration and related concepts like indifference, acquiescence, etc. The analysis also introduces the distinction between “vertical” and “horizontal” toleration. Acceptance of this last category implies that toleration does not necessarily require hierarchical relationships between those who tolerate and those whose actions are tolerated.
National Limits to Democratic Citizenship
Authors: Marin Rut Rubio
Published: March 2003

The author claims that the national community's right to self‐definition regarding membership finds some limits in its commitment to a liberal democratic order. Among these is the ultimate exclusion of permanent resident aliens from the sphere of civic equality. To the extent that access to the equal enjoyment of rights is connected to national citizenship as a membership status, the argument goes, permanent resident aliens should be granted the nationality of the country of residence automatically and unconditionally. The author also explores some objections that can be raised against this claim from a concern with the preservation of both a fair scheme of distribution of burdens and benefits within the state and the integrative capacity of liberal democracies.
Fusion of Descriptive and Normative Propositions. The Concepts of ‘Descriptive Proposition’ and ‘Normative Proposition’ as Concepts of Degree
Authors: Eng Svein
Published: March 2003

I introduce the concept of ‘fused descriptive and normative proposition.’ I demonstrate that and how this concept has a basis in reality in lawyers' propositions de lege lata, and I point out that and why we do not find fused modality in language qua language, morals and the relationship between parents and children. The concept of ‘fused descriptive and normative proposition’ is of interest in a number of contexts, inter alia in relation to law, cf. the debate about the status of lawyers' propositions de lege lata (“exactly what kind of propositions are lawyers' propositions about what is the law?”), and in relation to philosophy, cf. the debate about the relationship between ‘the is‘ and ‘the ought.’ As a consequence of the reality basis and interest of this concept, I see the concepts of ‘descriptive proposition’ and ‘normative proposition’ as the extreme points on a graduated dimension, from the purely descriptive to the purely normative.
A Theory of Legal Doctrine
Authors: Peczenik Aleksander
Published: March 2003

Legal doctrine in Continental European law (scientia iuris) consists of professional legal writings, e.g., handbooks, monographs, etc., whose task is to systematize and interpret valid law. By production of general and defeasible theories, legal doctrine aims to present the law as a coherent net of principles, rules, meta‐rules, and exceptions, at different levels of abstraction, connected by support relations. The argumentation used to achieve coherence involves not only description and logic but also evaluative (normative) steps. However, sceptics criticise juristic doctrine for its normative character, ontological obscurity, vagueness, fragmentation, and locality. The author answers this criticism pointing out the following. Normative reason is possible. Liberal ontology, admitting such entities as morally justified law, is possible as well. The vagueness of legal doctrine can be construed as defeasibility. Defeasibility is inevitable in the law and in human thinking in general. Fragmentation of legal doctrine is not absolute. Its theories are linked to overarching moral theories. Finally, locality is not absolute either. Though sometimes restricted to a given state, theories of legal doctrine display relevant similarities to corresponding theories in other states.
A Revision of the Constitutive and Epistemic Coherence Theories in Law
Authors: Rodriguez‐Blanco Veronica
Published: March 2003

This paper analyses and criticizes Joseph Raz's attacks on coherentist theories. It is argued that Raz's characterisation of epistemic coherence theories is too narrow and that his criticism of constitutive coherence theories is based on a conceptual mistake in his own description. The study is an indirect argument to rethink coherence theories of law and adjudication within a more powerful framework than that propounded by Raz.
Denationalization and the Very Idea of Democratic Constitutionalism: The Case of the European Community
Authors: Gerstenberg Oliver
Published: March 2003

Within the current debates about Euro‐constitutionalism, the conventional options are either to defend a vision of the European Union (EU) which separates global economic law from national sovereignty, and thus relies on the legitimizing powers of free markets, or to regard the legitimation problem (at least under current conditions) as beyond solution: This view argues that any further progress towards an ever closer Union would inevitably increase the legitimation deficit and that therefore the capacity for political action of the nation state should be protected or restored. This paper seeks to break the stranglehold of the, as is argued, false dichotomy (global markets vs. national democracy), and it argues that an extension of democracy beyond the nation state is possible.
Finger Counting: Continuous Daily Diagnoses
Authors: Powell William , Kragler Sherry
Published: March 2003

Monitoring reading behaviour is a major aspect of the work of teachers of reading. Clearly, in order to plan a sensible reading programme, teachers need information about children’s reading performance and needs. This article describes the use of a finger counting system as one way for teachers to continually monitor children’s reading behaviour and development.
Reading for Learning – Information Retrieval Skills in English
Authors: Dean Sue , Houldey Val
Published: March 2003

of work on reading for learning skills. The unit was team taught by a head of English and an LEA English consultant. Details of the unit of work as it developed, examples of the students’ work, the issues that arose and how the English Department has developed an overview to tackle this cross‐curricular aspect of the Key Stage 3 reading curriculum are included. The potential impact across the range of subject areas is also considered.
Which Words? Words which 4 to 6 Year Old Children Use in Their Writing
Authors: Huxford Laura , McGonagle Rosaleen , Warren Sue
Published: March 2003

The use of high frequency word lists has re‐emerged recently as a useful part of the knowledge base of primary teachers of literacy. The National Literacy Project framework for teaching makes explicit use of such lists. In this article Laura Huxford and her colleagues examine the contents of word lists and make some useful observations about the words it appears important to teach children to read at Key Stage 1.
Play as a route to literacy
Authors: Miller Linda
Published: March 2003

There is a ready acceptance amongst educators that play has an important role to play in learning, particularly in the early years. Yet, as Linda Miller shows, the role of play in literacy learning is under‐developed and she offers some suggested ways forward in this area.
The State of Play: Children’s Oral Culture, Literacy and Learning
Authors: Grugeon Elizabeth
Published: March 2003

This paper looks at the experiences of student teachers in relation to the oral culture of the playground. It suggests that in the year in which the National Literacy Strategy is being implemented, the language and lore of the playground remind us that there are a number of alternative literacies that children have access to outside the classroom. Student teachers recording these, saw ways in which children’s personal literacies might complement school literacy.
Community‐based literacy learning
Authors: Behrman Edward H.
Published: March 2003

Because reading and writing are social as well as personal activities, many recent curricular reforms that promote literacy development have focused on the relationship between the learner and the community. These reforms have been based on situated cognition theory, which holds that learning is intermeshed with the social and physical contexts of activity and that learning occurs through active participation in a community of practice. Yet there is no distinct orientation to the concept of community across the various educational programs. In fact, at least three different orientations to community appear in the literature on literacy reform: experiential community, classroom community, and anticipatory community. Both experiential and anticipatory community orientations situate literacy in non‐school settings that involve learners in ‘real‐life’ communities. The classroom community orientation attempts to reproduce the roles of mentor and apprentice found in non‐school communities; however, its claim to legitimacy of activity is based more on the learner’s manner of participation than in the activity itself.
Tax Structure and Revenue Instability Under External Shocks: Some General Equilibrium Calculations for Côte D’Ivoire
Authors: Dawkins Christina , Whalley John
Published: March 2003

This paper presents some general equilibrium calculations for Côte d’Ivoire which explore the significance of tax structure for the relationship between external shocks and revenue instability, an issue until recently little explored in the literature, either for Côte d’Ivoire or other developing countries. Results suggest that a low‐rate broadly based value‐added tax, as advocated by the World Bank in its structural adjustment lending, may be a poor revenue stabilizer compared with existing trade‐based tax regimes in many lower‐income commodity exporting countries. With high trade taxes, the external sector is smaller, and external sector shocks generate less revenue instability under existing arrangements compared with a broadly based yield‐neutral alternative, such as a VAT.
Export Bans, Environmental Protection, and Unemployment
Authors: Dean Judith M. , Gangopadhyay Shubhashis
Published: March 2003

This study investigates the case for an export ban on intermediate goods which generate environmental damage. Since export restrictions on intermediates have long been advocated as a method of stimulating domestic industries in developing countries, we consider whether the case for an export ban is strengthened or weakened by the presence of unemployment in the industrial sector. We find that, in the short run, an export restriction worsens unemployment, thus weakening the case for a ban. In the long run, however, the results are reversed. If the environmental problem is severe, unemployment has a negligible impact on the case for an export ban.
Uncertainty, Insurance, and Division of Labor
Authors: Lio Monchi
Published: March 2003

This paper develops an equilibrium model to investigate the relationships between transaction uncertainties, risk aversion, insurance, specialization, per capita real income, and productivity progress. It is shown that transaction uncertainties can restrict the division of labor; the level of division of labor decreases with the degree of risk aversion; insurance will promote the equilibrium level of division of labor, per capita real income, and productivity.
The Response to Reform in a Growing Economy: The Role of Rent‐Seeking Technology
Authors: Pecorino Paul
Published: March 2003

Individuals engaged in rent seeking accumulate sector‐specific human capital through learning‐by‐doing. If agents specialize, small reforms of the trade regime may fail to reduce the level of the rent‐seeking activity. The size of the reform necessary to induce movement out of rent seeking is increasing in the time that controls have been in place. If rent seeking and production are complementary activities, agents will not specialize in either, and will fully respond to a small reform of the trade regime. This is true even though they accumulate human capital specific to rent seeking.
Growth, Trade, and Government Policies of a Small Open Economy
Authors: Chyi Yih‐Luan
Published: March 2003

Utilizing a linear endogenous growth model, the paper provides an economic rationale for two empirical findings: the positive correlation between export growth and income growth, and the association of rapid structural changes with fast income growth. In the benchmark case, the small open economy converges eventually to a balanced growth path along which exports and total output grow at the same constant rate as consumption. Government policies affect the pattern of specialization and trade since they change the autarky or foreign relative price. Only taxation on the capital goods sector can affect asymptotic growth rates.
Environmental Preservation, Sectoral Unemployment, and Trade in Resources
Authors: Chao Chi‐Chur , Kerkvliet Joe R. , Yu Eden S. H.
Published: March 2003

This paper develops a general equilibrium model to examine the optimal level of environmental preservation in terms of its costs and benefits for a closed as well as an open economy. The optimal preservation policy for a closed economy is to tax the general population and use the tax revenue to compensate affected workers. Furthermore, for a small open economy, free trade in resources can meet whatever shortage of domestic productive resources that may occur, thereby leading to a higher optimal level of environmental preservation.
Income Distribution and Dualism: The Case of Kenya
Authors: Gîthînji Mwangi wa
Published: March 2003

Development economics has been dominated by the use of dualistic models of the economy. This study investigates whether the stylized facts that emanate from models, such as those of Sir Arthur Lewis and Harris and Todaro, arerelevant in examining issues of income distribution. Based on an examination of Kenyan household data, estimates of the distribution are compared with the stylized facts and past estimates. It is found that while the focus onrural–urban differences that arises from the dualistic models is justifiable, this concern with the spatial duality has led to the neglect of intrasectorial inequality, particularly rural inequality.
Technology Choice and Saving in the Presence of a Fixed Adoption Cost
Authors: Leung Charles Ka Yui , Tse Chung Yi
Published: March 2003

This paper explores the relationship between technology choice and saving in the presence of fixed costs of technology adoption. While richer agents adopt the more productive technology immediately it is available, poorer agents optimally choose to wait before switching to the better technology. In the interim, they save more than others and more than in the absence of the prospect of switching to the new technology. The paper thus provides an explanation for the phenomenon that the saving rate and the growth rate of output increase over time in the transition.
Devaluation, Asymmetric Money Demand, and Investment in a Small Open Economy
Authors: Islam Roumeen
Published: March 2003

This paper investigates the relationship between inflation and investment when cash is required to purchase some consumption goods in a small open economy while others are purchased with foreign currency or on credit. Devaluation acts as a differential tax on the good that must be purchased with domestic money and lowers the return to the factor used intensively in this sector. If this sector is relatively labor intensive, the steady‐state capital stock will increase in response to higher inflation. Nonneutrality of inflation exists even though money is only held for consumption purposes.
International Risk Sharing and Low Cross‐Country Consumption Correlations: Are They Really Inconsistent?
Authors: Pakko Michael R.
Published: March 2003

In dynamic‐equilibrium trade models, the common assumption that asset markets are complete implies that correlations of consumption across countries should be quite high. In contrast, measured consumption correlations tend to be rather low. While some suggest this implies that asset market incompleteness is a fundamental feature determining international trade dynamics, this paper provides an example of a simple model economy in which complete markets can be associated with consumption correlations that are lower than output correlations. Conditions for substitution elasticities associated with this result are derived for a two‐country, two‐good endowment model with heterogeneous agents.
International Trade, Technology Transfer, Growth, and Welfare in a Schumpeterian Model of Endogenous Growth
Authors: Kim Tae‐Hyung
Published: March 2003

This paper provides a simple analysis of the role of international technology transfer in the determination of the long‐run pattern of trade, growth, and welfare in a two‐country world within an endogenous growth framework. It is shown how the possibility and form of technology transfer impinge upon the long‐run pattern of trade and therefore long‐run growth rates and welfare. The most interesting finding of this paper is that, under certain conditions, there is a case in which restricted trade is growth‐ and welfare‐enhancing compared with free trade.
Why Do the Gains from Trade Reform Vary Between Countries?
Authors: Hertel Thomas W. , McCorriston Steve
Published: March 2003

This paper assesses, both theoretically and empirically, the determinants of differential gains from trade policy reform across countries. The theoretical model shows that asymmetrical features of the world economy, including the relative size of the differentiated products sector in each country, the dominance of domestic markets by indigenous producers, trade costs, and the relative importance of exports, all play an important role. Results from a multi‐region computable general equilibrium model substantiate the proposition that the initial pattern of asymmetry is relatively more important than scale and varietal effects, despite the fact that the latter have received more attention in the literature.
Unionization and International Market Share Rivalry: A Paradox
Authors: Bandyopadhyay Subhayu , Bandyopadhyay Sudeshna Champati
Published: March 2003

Two exporting firms (domestic and foreign) are considered which are symmetric in all respects except that one is unionized while the other faces a competitive labor market. Under free trade the unionized firm has the lower market share. Paradoxically, in the policy equilibrium, the unionized firm has the larger market share. Consequently, the nation hosting the unionized firm has the higher welfare level.
Expectations and the Black Market Premium
Authors: Pozo Susan , Wheeler Mark
Published: March 2003

The purpose of this paper is to gain a better understanding of the black market premium—the percentage differential between the black market and the official exchange rate. Tests are used to see whether the black market premium responds to variations in expectations about the official exchange rate in Argentina, Brazil, Colombia, and Mexico. Expectations of devaluation do cause movements in the black market premium for Argentina, Brazil, and Mexico but this behavior is not observed for Colombia. Colombian economic agents seem less sensitive to expected returns. This perhaps explains the relatively flat black market premium series observed for Colombia.
Excess Volatility of Realized Excess Profit from Currency Speculation in a Two‐Country General Equilibrium Model
Authors: Sul Donggyu
Published: March 2003

This paper examines whether the Lucas model can explain stylized facts in foreign exchange markets, by employing Monte Carlo studies. It is assumed that changes in the logarithms of endowments and of money supplies follow a multivariate Markov switching process. From the results of the Monte Carlo studies, with plausible values of the preference parameters, the excess volatility of the realized excess profit from currency speculation, the strong autocorrelation of the forward premium in the sample can be found in the model for four exchange rates. However, the implied covariance between the forward premium and depreciation rates is positive.
The Impact of Exchange Rate Risk on Intercountry Trade and Production
Authors: Amann Erwin , Römmich Michael
Published: March 2003

Analysing various arrangements of intercountry trade, this paper investigates the impact of exchange rate risk on production and expected trade. It addresses the question how a mean‐preserving spread of the exchange rate distribution effects strategic aspects of different trading arrangements. It is shown that in an uncertain environment the efficiency loss induced by double marginalization can in general not be overcome by negotiation.
Basic Stochastic Dynamic Systems of Growth and Trade
Authors: Jensen Bjarne S. , Wang Chunyan
Published: March 2003

Uncertainties are intrinsic features of dynamic economic systems, and this paper considers the dynamic implications of factor endowment (labor, capital) uncertainties for a small growing trading economy. The stochastic growth models presented extend the open neoclassical two‐sector growth model (Deardorff) to a stochastic environment in continuous time, and extend the diffusion dynamics of one‐sector growth models (Merton; Bourguignon) to a trading two‐sector economy. It is demonstrated that the basic propositions of deterministic steady‐state growth and endogenous growth theory, under some specifications and certain parametric restrictions, are preserved within a stochastic framework.
Learning‐by‐Doing and Strategic Trade Policy
Authors: Benchekroun Hassan , Long Ngo Van , Tian Huilan
Published: March 2003

The paper models international rivalry between a domestic firm that is going through a learning‐by‐doing phase, and a mature foreign rival. It is shown that the optimal production subsidy for the domestic firm depends on the degree of strategic sophistication of the foreign firm. Optimal production subsidy rules are derived under various scenarios. They are shown to be very sensitive to the specification of the game between the domestic and the foreign firms. Whether the optimal subsidy should decrease over time depends on the strategic sophistication of the foreign firm.
Real Exchange Rate Trends and Growth: A Model of East Asia
Authors: Devereux Michael B.
Published: March 2003

In contrast to the Balassa–Samuelson hypothesis, many fast‐growing Asian countries have experienced little trend real exchange rate appreciation, or even depreciation. Moreover, their long‐run real exchange rate trend seems to be dominated by movements in traded goods prices. A model is developed which is consistent with these observations. As in the Balassa–Samuelson model, productivity growth is concentrated in the traded goods sector. Nevertheless the real exchange rate may exhibit trend depreciation, driven by persistent deviations in the price of traded goods from those in the reference country. The key feature of the model is the presence of endogenous productivity growth in the distribution services sector.
The Nonequivalence of Tariffs and Quotas in a Dynamic Trade Model
Authors: Konieczny Jerzy D. , Waschik Robert G.
Published: March 2003

The paper provides a novel (and old) argument for the nonequivalence of tariffs and quotas, based on the famous paper by Hotelling published in 1931. Unlike tariffs, quantitative restrictions are inherently dynamic. As long as the foreign exporter earns positive marginal profits, he raises their present value by frontloading sales. As a result, unlike a tariff, equilibrium with a quota exhibits quantity and price dispersion over time. The dispersion may be significant even with small discount rates.
Economic Integration and Economic Growth with Science‐Pushed Industrial Innovation
Authors: Xie Xin
Published: March 2003

Because the returns to successful industrial research generally enjoy a larger scale economy than that to successful scientific research, this paper shows that while economic integration increases R&D employment, it may not raise the rate of long‐run economic growth owing to the shift of resources from basic scientific research to applied industrial research. In the long run, the pool of opportunity created by the former ultimately regulates the efficiency of the latter. The model also suggests a reduced incentive to subsidize basic research as a second factor that may contribute to slower technological progress after economic integration.
Resolving the Credibility Problem of an Honest Government: A Case for Foreign Investment Subsidy
Authors: Marjit Sugata , Ng Yew Kwang , Broll Udo , Moitra Bhaswar
Published: March 2003

We develop a simple model of direct foreign investment where the host country government cannot credibly signal its honest intention such as to stick to the contracted tax rate. The foreign firm has some prior belief regarding the ex post discretionary policies of the local government. Since the investment is completely irreversible, such a belief pattern might not induce the firm to invest in a country which badly needs it. It is shown that the host government can design a subsidy scheme which might attract foreign investment by removing the credibility problem.
Customs Union or Free Trade Area? The Role of Political Asymmetries
Authors: Bandyopadhyay Subhayu , Wall Howard J.
Published: March 2003

When trade policy is determined endogenously by lobbying, it matters whether countries are arranged into a customs union or a free trade area. This paper compares the two regimes when the member governments are asymmetric in their susceptibilities to lobbying and in their bargaining power within a customs union. In the model, a customs union never leads to lower tariffs for both countries, whereas it can lead to higher tariffs for both.
Unionized Bertrand Duopoly and Strategic Export Policy
Authors: Bandyopadhyay Subhayu , Bandyopadhyay Sudeshna C. , Park And Eun‐Soo
Published: March 2003

The paper reports that an export subsidy is optimal for a unionized Bertrand duopoly. Following results published by Brander and Spencer (Journal of International Economics, 1988, pp. 217–34), this establishes the robustness of export subsidization to the mode of competition (Cournot or Bertrand), and contrasts with nonunion results in the literature. If both firms are unionized and both governments pursue active trade policies, a subsidy remains optimal except for a narrow range of extreme substitutability between products. Nations with a lower opportunity cost of labor employ more aggressive policies in equilibrium.
Joint Ventures versus Fully Owned Subsidiaries: Multinational Strategies in Liberalizing Economies
Authors: Mukherjee Arijit , Sengupta Sarbajit
Published: March 2003

As ceilings on foreign shareholdings are withdrawn during liberalization, multinationals enter through fully owned subsidiaries that compete with their own joint ventures, unless local partners permit them to raise their stakes. In a framework of quantity competition, this paper demonstrates that an entry threat is more credible when joint venture investment is reversible, the units are independently managed and the local stake is high. Further, profitability of horizontal merger between the units encourages a share reallocation, while its absence favours a new subsidiary. Under irreversible investment, the threat is less credible and both share reallocations or new subsidiaries are less likely.