30,470 research outputs found
The Trade and Welfare Effects of Mergers in Space
This paper analyzes the consequences of cross-border mergers in a spatial framework, thereby distinguishing three channels of influence: a price increase due to the elimination of product market competition, an adjustment in plant location which reduces overall transportation cost expenditures, and a harmonization in production costs due to a technology transfer within the firm. The welfare analysis illustrates that larger countries are better off after the merger. By contrast, smaller countries may lose, if the pre-merger production cost differential across firms is negligible and/or a post-merger technology transfer across production sites is infeasible. Furthermore, the analysis provides novel insights into the trade pattern effects of a merger. In this respect, the main result of the paper is that an adjustment of plant location in space can reverse the direction of (net) trade flows.spatial competition, cross-border merger, trade pattern, welfare analysis
Outsourcing and Trade in a Spatial World
This paper provides an analysis of outsourcing and trade in a spatial model à la Hotelling. In this setting, we discuss the trade-off between transport-cost-related disadvantages and outsourcing-induced production cost advantages of a large economy. The model gives a rich picture of possible trade and welfare effects of a movement towards free trade and points to the role of national transport costs for explaining these effects. Moreover, it gives economic insights in the countries’ incentives to lower tariffs and to participate in free trade agreements with partner countries that differ in size and economic capacity.international outsourcing, international trade, spatial competition
Outsourcing and Trade in a Spatial World
This paper provides an analysis of outsourcing and trade in a spatial model à la Hotelling. In this setting, we discuss the trade-off between transport cost related disadvantages and outsourcing-induced production cost advantages of a large economy. The model gives a rich picture of possible trade and welfare effects of a movement towards free trade. For example, if there is international outsourcing, both countries may gain from free trade, independently of who exports the consumption good. However, if specialized input production only occurs in the large economy and the small country exports the final good, overall world welfare may even decline, when moving towards free trade.International outsourcing; International trade; Spatial competition
Outsourcing and skill-specific employment in a small economy: Austria and the fall of the Iron Curtain
We present a model, in which a small industrialised economy outsources part of its production into a small foreign country which is well endowed with low-skilled labour. We analyse under which conditions sinking trade costs stimulate outsourcing activities, thereby increasing the wage dispersion and, if labour markets are unionised, also the employment of high-skilled relative to low-skilled labour. For a panel of Austrian industries, we find first that decreasing trade barriers, which can be associated with the fall of the Iron Curtain, indeed stimulate outsourcing to Eastern Europe and the former Soviet Union, and second, that outsourcing to these countries significantly shifts relative employment in favour of high- skilled labour.fragmentation; skill-specific employment; simultaneous equations
Globalization and Decent Work, Options for Panama
An analysis of economic trends in Panama, including the effects of trade liberalization and poverty on employment and child labor
Trade, wages, and profits
This paper formulates a structural empirical model of heterogeneous firms whose workers exhibit fair-wage preferences. In the underlying theoretical framework, such preferences lead to a link between a firm's operating profits on the one hand and wages of workers employed by this firm on the other hand. The latter establishes an exporter wage premium, since exporters have higher profits, given their productivity, than non-exporting firms. We estimate the parameters of the model in a data-set of five European economies and find that, when evaluated at these parameter values, the model has a high level of explanatory power. The estimates also enable us to quantify the exporter wage premium and the consequences of trade for the main variables of interest. According to our results, openness to international trade contributes to greater inequality across firms in terms of both operating profits and average wages. We also find evidence for gains from trade for all five countries, which go along with negative, but quantitatively moderate, aggregate employment effects. --structural models,heterogeneous firms,fair wages,labour market imperfections,exporter wage premium
International Capital Market Integration, Educational Choice and Economic Growth
This paper examines the impact of capital market integration (CMI) on higher education and economic growth. We take into account that participation in higher education is non-compulsory and depends on individual choice. Integration increases (decreases) the incentives to participate in higher education in capital-importing (-exporting) economies, all other things equal. Increased participation in higher education enhances productivity progress and is accompanied by rising wage inequality. From a national policy point of view, education expenditure should increase after integration of similar economies. Using foreign direct investment (FDI) as a measure for capital flows, we present empirical evidence which largely confirms our main hypothesis: An increase in net capital inflows in response to CMI raises participation in higher education and thereby fosters economic growth. We apply a structural estimation approach to fully track the endogenous mechanisms of the model.capital mobility, capital-skill complementarity educational choice, education policy, economic growth, wage income inequality
A class of Galerkin schemes for time-dependent radiative transfer
The numerical solution of time-dependent radiative transfer problems is
challenging, both, due to the high dimension as well as the anisotropic
structure of the underlying integro-partial differential equation. In this
paper we propose a general framework for designing numerical methods for
time-dependent radiative transfer based on a Galerkin discretization in space
and angle combined with appropriate time stepping schemes. This allows us to
systematically incorporate boundary conditions and to preserve basic properties
like exponential stability and decay to equilibrium also on the discrete level.
We present the basic a-priori error analysis and provide abstract error
estimates that cover a wide class of methods. The starting point for our
considerations is to rewrite the radiative transfer problem as a system of
evolution equations which has a similar structure like first order hyperbolic
systems in acoustics or electrodynamics. This analogy allows us to generalize
the main arguments of the numerical analysis for such applications to the
radiative transfer problem under investigation. We also discuss a particular
discretization scheme based on a truncated spherical harmonic expansion in
angle, a finite element discretization in space, and the implicit Euler method
in time. The performance of the resulting mixed PN-finite element time stepping
scheme is demonstrated by computational results
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