|
on Microeconomics |
|
Issue of 2009‒01‒31
seven papers chosen by Joao Carlos Correia Leitao Technical University of Lisbon |
| By: | Bruno Amable (Centre d'Economie de la Sorbonne); Lilas Demmou (Ministère des Fiances - DGTPE); Ivan Ledezma (Centre d'Economie de la Sorbonne) |
| Abstract: | According to a recent literature, the positive effect of competition is supposed to be growing with the proximity to the technological frontier. Using a variety of indicators, the paper tests the effect of competition and regulation on innovative activity measured by patenting. The sample consists of a panel of 15 industries for 17 OECD countries over the period 1979-2003. Results show no evidence of a positive effect of competition growing with the proximity to the frontier. Two main configurations emerge. First, regulation has a positive effect whatever the distance to the frontier and the magnitude of its impact is higher the closer the industry is to the frontier. Second, the effect of regulation is negative far from the frontier and becomes positive (or non significant) when the technology gap decreases. These results contradict the belief in the innovation-boosting effect of product market deregulation such as taken into account in the Lisbon Strategy. |
| Keywords: | Innovation, competition, distance to frontier. |
| JEL: | O30 L16 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:r08064&r=mic |
| By: | Kangsik, Choi |
| Abstract: | By introducing the government's preference for tax revenues into the theoretical framework of unionized mixed oligopolies, this study investigates the efficiency of privatization. The results show that (i) regardless of the government's preference for tax revenues, its incentive to privatize a public firm depends on the number of the private firms and (ii) social welfare can decrease with an increase in the number of firms depending on the level of government's preference for tax revenue. Moreover, if the number of private firms and the government's preference for tax revenue are sufficiently small, then social welfare under a unionized privatized oligopoly is greater than under a unionized mixed oligopoly while the government has an incentive not to privatize the public firm, and vice versa if only the number of firms is sufficiently large. |
| Keywords: | Government's Preference; Social Welfare; Tax; Privatization; Union. |
| JEL: | J51 L13 C7 D43 A11 H44 C72 |
| Date: | 2009–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13028&r=mic |
| By: | Gerlagh , Reyer (University of Manchester); Kverndokk, Snorre (Ragnar Frisch Centre for Economic Research); Rosendahl, Knut Einar (Research Department, Statistics Norway) |
| Abstract: | This paper addresses the timing and interdependence between innovation and environmental policy in a model of research and development (R&D). On a first-best path the environmental tax is set at the Pigouvian level, independent of innovation policy. With infinite patent lifetime, the R&D subsidy should be constant and independent of the state of the environment. However, with finite patent lifetime, optimal innovation policy depends on the stage of the environmental problem. In the early stages of an environmental problem, abatement research should be subsidized at a high level and this subsidy should fall monotonically over time to stimulate initial R&D investments. Alternatively, with a constant R&D subsidy, patents’ length should initially have a very long life-time but this should be gradually shortened. In a second-best situation with no deployment subsidy for abatement equipment, we find that the environmental tax should be high compared to the Pigouvian levels when an abatement industry is developing, but the relative difference falls over time. That is, environmental policies will be accelerated compared to first-best. |
| Keywords: | Environmental policy; research and development; innovation studies; patents |
| JEL: | H21 O30 Q42 |
| Date: | 2008–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2008_010&r=mic |
| By: | Larouche, P. (Tilburg University, Tilburg Law and Economics Center) |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubtil:2008021&r=mic |
| By: | Iehlé, Vincent |
| Abstract: | We prove that a natural monopoly can set subsidy free pricing and sustainable pricing schedules in general economic environment. The setting is a multiproduct and multiple agent contestable market where demands are elastic and where rivals can enter the sub-markets composed by a set of the products line and a set of agents. Our results suggest that the existence results of the extant literature admit analogues even in an environment where rivals have enlarged possibilities to enter the market and where demands react to prices. The approach makes use of cooperative games to deduce the main results under conditions of fair sharing cost, threshold in the consumption and regularity of the profit function. |
| Keywords: | cooperative game; existence result; natural monopoly; subsidy free pricing; sustainability. |
| JEL: | L11 C71 L12 |
| Date: | 2008–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13013&r=mic |
| By: | Jaap H. Abbring; Jeffrey R. Campbell |
| Abstract: | This paper extends the static analysis of oligopoly structure into an infinite-horizon setting with sunk costs and demand uncertainty. The observation that exit rates decline with firm age motivates the assumption of last-in first-out dynamics: An entrant expects to produce no longer than any incumbent. This selects an essentially unique Markov-perfect equilibrium. With mild restrictions on the demand shocks, sequences of thresholds describe firms' equilibrium entry and survival decisions. Bresnahan and Reiss's (1993) empirical analysis of oligopolists' entry and exit assumes that such thresholds govern the evolution of the number of competitors. Our analysis provides an infinite-horizon game-theoretic foundation for that structure. |
| JEL: | L13 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14674&r=mic |
| By: | Bee Yan Aw; Mark J. Roberts; Daniel Yi Xu |
| Abstract: | A positive correlation between productivity and export market participation has been well documented in producer micro data. Recent empirical studies and theoretical analyses have emphasized that this may reflect the producer's other investment activities, particularly investments in R&D or new technology, that both raise productivity and increase the payoff to exporting. In this paper we develop a dynamic structural model of a producer's decision to invest in R&D and participate in the export market. The investment decisions depend on the expected future profitability and the fixed and sunk costs incurred with each activity. We estimate the model using plant-level data from the Taiwanese electronics industry and find a complex set of interactions between R&D, exporting, and productivity. The self- selection of high productivity plants is the dominant channel driving participation in the export market and R&D investment. Both R&D and exporting have a positive direct effect on the plant's future productivity which reinforces the selection effect. When modeled as discrete decisions, the productivity effect of R&D is larger, but, because of its higher cost, is undertaken by fewer plants than exporting. The impact of each activity on the net returns to the other are quantitatively unimportant. In model simulations, the endogenous choice of R&D and exporting generates average productivity that is 22.0 percent higher after 10 years than an environment where productivity evolution is not affected by plant investments. |
| JEL: | F14 O31 O33 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14670&r=mic |