Global logistics indicators, supply chain metrics, and bilateral trade patterns

Past research into the determinants of international trade highlighted the importance of the basic spatial gravity model augmented by additional variables representing sources of friction. Studies modeled many sources of friction using various proxies, including indices based on expert judgment in some cases. This paper focuses on logistics friction and draws on a data set recently compiled by the World Bank with specific quantitative metrics of logistics performance interms of time, cost, and variability in time. It finds that the new variables that relate directly to logistics performance have a statistically significant relationship with the level of bilateral trade. It also finds that a single logistics index can capture virtually all of the explanatory power of multiple logistics indicators. The findings should spur public and private agencies that have direct or indirect power over logistics performance to focus attention on reducing sources of friction so as to improve their country's ability to compete in today's global economy. Moreover, since the logistics metrics are directly related to operational performance, countries can use these metrics to target actions to improve logistics and monitor their progress.Common Carriers Industry,Transport and Trade Logistics,Economic Theory&Research,Free Trade,Trade Policy

New technologies for e-commerce

Today electronic commerce (e-commerce) has changed the way of doing business, and contributes significantly to economic activity. In any case, e-commerce is not a static field but it is always evolving in order to support new and more complex real world processes. The agriculture sector is expected to undergo significant transformation as a result of new business models being adopted through ecommerce. Examples of the adoption of new technologies in agriculture are provided with a view to demonstrating the benefits that can be achieved. The first part I expound the basics of e-commerce and e-markets. After I describe potential benefits to agriculture from adoption of e-commerce. The last part I describe the ecommerce 2.0, what is a prospect evolution of e-commerce

Dragon by the Tail, Dragon by the Head, Bilateralism and Globalism in East Asia

In this paper, we examine the bilateral implications of regional and global trade arrangements in the East Asian context. Using a dynamic global CGE model, we examine a variety of trade scenarios, in terms of bilateral relations between China and two of its most populace regional partners, Vietnam and Japan. Given the differences between the latter two economies, it might be reasonable to expect divergence in the bilateral outcomes. Our findings indicate that differences in initial conditions can indeed have a significant impact on bilateral adjustments, and that these can be adverse for some partners in the absence of policies that promote trade complementarity. By the latter we mean bilateral import and export patterns where the aggregate grows faster for each country than their total trade, but which help sustain bilateral balance of payments equilibrium.Dragon; Head; Bilateralism; Globalism

Methodological concepts for integrated assessment of agricultural and environmental policies in SEAMLESS-IF

Agricultural and Food Policy, Environmental Economics and Policy, Farm Management, Land Economics/Use,

The role of retailers as channel captains in retail supply chain change: the example of Tesco

The large scale retailer with a strong retail brand and sufficient critical mass in the market place may reach a pivotal point in its development when the directors can address the question: “Does the company want to get directly involved in the functions of centralised buying, logistics and supply chain management?” This thesis takes one such company and expands in some detail about its growth towards excellence in the techniques of retail supply chain change. The evolution and critical decision moments provide an in depth case study for others to use as a benchmark. Its purpose is to examine the role of the retailer as a channel captain; a concept from an earlier marketing era, whose origins it reveals. It takes that learning together with contemporary supply chain thinking and examines real retail supply chain events in Tesco. The results of matching the new and old academic theory with practitioner events confirm that the channel captain is the retailer. It demonstrates that retailers can make the transition into that leadership position and apply supply chain management skills to competitive advantage. This can become a strategic tool both at national and international levels. The principles of this thesis could be used or applied in research in three areas: in depth with Tesco; in breadth, exporting expertise to other retailers; globally with retailers extending the operations internationally and suppliers seeking to trade with European retailers

A Multi-Tier Negotiation Protocol for Logistics Service Chains

Logistics service chains are characterized by multiple service providers contributing to the provision of a composite logistics service to a customer. In particular, various contractual dependencies exist across service chain levels. The object of our research is resource allocation which has to consider these dependencies to avoid overcommitment and overpurchasing. We propose a multi-tier negotiation protocol for solving this problem. The proposed artifact is developed from an interaction protocol engineering perspective in accordance with the design science paradigm. First evaluation experiments show that the protocol prevents overcommitments and overpurchasing, leading to higher expected profits for logistics service providers

Contract risks and credit spread determinants in the international project bond market

International bond markets have become an increasingly important source of long-term capital for infrastructure projects in emerging market economies over the past decade. The Ras Laffan Liquified Natural Gas (Ras Gas) project represents a milestone in this respect: its $1.2 billion bond offering, completed in December 1996, has been the largest for any international project. The Ras Gas project has the right to extract, process, and sell liquefied natural gas (LNG) from a field off the shore of Qatar. The principal off-taker is the Korea Gas Corporation (Kogas), which resells most of the LNG to the Korea Electric Power Corporation (Kepco) for electricity generation. In this clinical study the authors analyze the determinants of credit spreads for the Ras Gas project in terms of its contractual structure, with a view to better understanding the role of contract design in facilitating access to the global project bond market. Market risk perceptions have long been recognized to be a function of firm-specific variables, particularly asset value as embodied in contracts. The authors therefore study the impact of three interlocking contracts on the credit spreads of the project's actively traded global bonds: the 25-year output sales and purchase agreement with Kogas-Kepco, the international bond covenant, and an output price-contingent debt service guarantee by Mobil to debt holders. Using a sample of daily data from January 1997 to March 2000, the authors find that the quality of the off-taker's credit-and, more important, the market's assessment of the off-taker's economic prospects-drive project bond credit spreads and pricing. In addition, seemingly unrelated events in emerging debt markets spill over to project bond markets and affect risk perceptions and prices in this segment. Judicious use of an output price-contingent debt service guarantee by shareholders can significantly reduce project risks, and markets reward issuers through tighter credit spreads. Bondholders and shareholders share residual risks over time, despite covenants meant to preempt risk shifting. This type of risk shifting originates from incomplete contracts and the nonrecourse nature of project finance. It does not necessarily result from a deliberate attempt by management to increase shareholder value at the expense of debt holders by pursuing high-risk, low-value activities, although project managers and shareholders could still exploit their informational advantages by leaving output supply contracts incomplete in ways beneficial to their private interests. The results hold important lessons for global project finance. Projects incorporating certain design features can reap significant financial gains through lower borrowing costs and longer debt maturities: Judicious guarantees by parents that enjoy a particular hedging advantage enhance a project's appeal, as reflected in favorable pricing. Pledging receivables rather than physical assets as collateral and administering investor cash flows through an off-shore account offers additional security to debt holders. Projects should use their liability structure to create an implicit option on future private debt financing that matches the real option of a project expansion. The finding that bondholders bear residual risks means that shareholders can reduce their risks arising from bilateral monopolies and buy insurance against unforeseen and unforeseeable events.Payment Systems&Infrastructure,Economic Theory&Research,Banks&Banking Reform,Financial Intermediation,Environmental Economics&Policies,Banks&Banking Reform,Financial Intermediation,Economic Theory&Research,Environmental Economics&Policies,Housing Finance

Imports in the Washington State Economy: Importance and Regional Effects of Import Liberalization

This paper focuses on the import side of a regional economy quantifying the economic impact of import levels and trade liberalization. An innovation represents the linkage of a regional with a national model by combining two separate Computable General Equilibrium models into one framework. This allows for import price formation in liberalization scenarios on the national level and subsequent incorporation of these nationally simulated prices into the regional model. The regional model is applied to Washington State, one of the most trade dependent states of the U.S, the national model to the U.S. Data for the two identically structured models origin from the IMPLAN database which divides the U.S. and Washington economy into 509 industries. For both models, Monte Carlo techniques are used to mitigate parameter uncertainty inherent in CGE specifications. Two scenarios are simulated that differ in the assumptions about the macroeconomic and factor market adjustment options of the economies.Computable General equilibrium, regional modelling, trade liberalization, International Relations/Trade, C68, R13, F17,