The popularity of public investment in local bio-fuels production as a rural development initiative is growing. An important consideration in determining the level of public support for a plant's development, however, is accurately measuring public externalities resulting from plant activity. The purpose of this paper was to first develop a...
There are essentially three reasons why it so challenging to adhere to the schedule or complete the to-do list. The externalities or things that we don't necessarily plan for often go unnoticed and fly under our radar screen when attempting to map out our week. They have tendency to eat...
The paper deals with a model of offshoring with externalities and firm heterogeneity. Due to the presence of externalities, temporary shocks like the Y2K problem can have permanent effects, i.e., they can permanently raise the extent of offshoring in an industry. Also, the initial advantage of a country as a...
During the past half century, multilateral trade liberalization has reduced tariffs to historically low levels. The Received Theory of multilateral trade agreements, based solely on terms-of trade externalities between national governments, offers an explanation that has become the conventional wisdom among international trade theorists. But it displays two puzzles that...
This paper analyzes the impact of supply-side externalities existing among downstream retailers on supply chain performance. Namely, multiple retail firms face stochastic demand, purchase the product from the upstream wholesaler, and make stocking decisions that affect all other retailers in the same echelon. Two sources of inefficiencies exist in such...
This paper builds a dynamic stochastic model-based on network externalities operating through trade channels-to explain the emergence of currency blocs, and specifically, why some countries join a currency union earlier than others. The paper develops and formalizes the intuition that currency bloc formation is path dependent, and that countries join...
This paper investigates the rationale for public intervention in the terrorism insurance market. It argues that government subsidies for terror insurance are aimed, in part, at discouraging self-protection and limiting the negative externalities associated with self-protection. The paper provides a thought that these externalities are essential for normative analysis of...
We investigate how multinational companies can foster economic development of the host country at the micro level. Traditionally the empirical literature measuring spillovers to the host economy arising from foreign direct investment has focused on productivity spillovers, i.e., technological externalities. In this paper we emphasise that pecuniary externalities from multinationals...
By jointly modelling both the inter and intra firm diffusion of e-business activities in the UK using data from the third UK Community Innovation Survey this paper addresses whether policy intervention in the diffusion process can be justified. The estimates indicate that the diffusion of basic and enhanced e-business usage...
This paper explores the prices of three aesthetic externalities (the presence of a water view, the appearance of nearby improvements, and the quality of landscaping in the neighborhood) in residential property markets. In particular, the paper focuses on how the implicit prices of such characteristics change with the residential real...
This paper quantifies the macroeconomic effects of capital income tax competition in the European Union using a two-country neoclassical dynamic general equilibrium model. This model incorporates three key externalities of tax competition: the relative price externality, the wealth distribution externality and the fiscal solvency externality. The paper considers tax strategies...
The goal of this paper is to estimate the size and importance of network externalities for the automated clearinghouse ACH banking industry using an equilibrium model of ACH usage. ACH is an electronic payment mechanism developed by the Federal Reserve and used by banks. This paper seeks to estimate the...
In this paper, trade policies intended to affect the production of a foreign monopolist that generates negative externalities are considered. The optimal tariff and optimal import quota are derived, and which policy measure should be used to maximize domestic welfare is examined. It is found that if the domestic government...
Human capital externalities have been rejected recently in a number of papers, focused mainly on the US experience. However, these papers only contemplate the possibility of aggregate externalities within politically defined boundaries, states or cities. Given the nature of human capital externalities, their size and very existence should depend on...
Mergers and acquisitions improve market efficiency by capturing synergies between the firms. However, take overs between firms also impose externalities on the remaining industry. This paper describes a new equilibrium concept designed to explain and predict mergers in the setting. It experimentally compare the new equilibrium concept to that of...
The white paper asserts that mergers and acquisitions improve market efficiency by capturing synergies between the firms. However takeovers between firms also impose externalities both positive and negative on the remaining industry. This paper describes a new equilibrium concept designed to explain and predict mergers in this setting. It experimentally...
This paper proposes a model for multilateral contracting, where contracts are written and renegotiated over time, and contracts may impose externalities on other agents. The paper characterizes the Markov perfect equilibria of the model, obtaining close-form solutions for the equilibrium for various applications, such as principal-agent problems, mergers and acquisitions,...
This paper presents a dynamic agency model in which changes in the structure of a firm affect its value due to altered incentives. There may be disadvantages in merging two firms even when such a merger allows the internalization of externalities between the two firms. Merging, by making unprofitable certain...
The causes of and extent of network externalities in payment systems such as the ATM and the ACH-market have been analyzed and tested in earlier studies. In this paper a similar study is made for the market for electronic card payments, i.e. the EFTPOS-market. The results are highly significant and...
Investors holding mutual funds in taxable accounts face a classic externality. The after-tax return of their investment depends on the behavior of others. In particular, redemptions may force the mutual fund to sell some of its equity positions in order to pay off the liquidating investors. As a result, it...
