Labor Market Flexibility as a Determinant of FDI Inflows

This paper shows that labor market flexibility, measured by labor market standards and regulations, has two opposing effects on FDI inflows. Labor market regulations and standards decrease FDI inflows through the cost channel, but they increase FDI inflows through the productivity channel. Allowing for a non-linear relationship between different indicators of labor market flexibility and FDI inflows revealed that some degree of labor market standards and regulations may be attractive for foreign investors. Results strongly suggest that foreign investments to and from different countries and in different sectors are affected differently by different aspects of labor market standards and regulations.foreign direct investment, labor market flexibility

Marking to Market for Financial Institutions: A Common Sense Resolution

Debate has intensified in recent years on the advantages and disadvantages of moving towards a full mark-to-market accounting system for banks and insurance companies. The debate has been heated by moves by the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board to harmonize accounting standards across countries. Proponents contend that mark-to-market accounting has the advantage of reflecting the relevant value of financial institution balance sheets, allowing regulators, investors and other users of accounting information to better assess their risk profile. Opponents counter that mark-to-market accounting leads to excessive and artificial volatility, especially when regulatory standards such as bank capital ratios are tied to reported accounting numbers.mark-to-market accounting, accounting standards, financial markets

The economics of standards: public policy and market performance

Economic conditions ; Payment systems

Corporate Average Fuel Economy Standards and the Market for New Vehicles

This paper presents an overview of the economics literature on the effect of Corporate Average Fuel Economy (CAFE) standards on the new vehicle market. Since 1978, CAFE has imposed fuel economy standards for cars and light trucks sold in the U.S. market. This paper reviews the history of the standards, followed by a discussion of the major upcoming changes in implementation and stringency. It describes strategies that firms can use to meet the standards and reviews the CAFE literature as it applies to the new vehicle market. The paper concludes by highlighting areas for future research in light of the upcoming changes to CAFE.CAFE, costs, structural estimation

Market Structure and Environmental Innovation

This paper studies firms’ incentives to invest in environmental R&D under different market structures (Cournot and Bertrand) and environmental policy instruments (emission standards, taxes, tradeable permits and auctioned permits). Because of market strategic effects, R&D incentives vary widely across market structures and instruments. For example, when firms’ products are strategic substitutes (i.e., Cournot), either emission standards, taxes or auctioned permits can provide the most incentives. But when firms’ products are strategic complements, either taxes or auctioned permits provide the most incentives. If markets are perfectly competitive, however, permits and emission standards offer similar incentives that are lower than those offered by taxesEnvironment, regulation, market structure, innovation

Market Structure and Environmental Innovation

This paper studies firms’ incentives to invest in environmental R&D under different market structures (Cournot and Bertrand) and environmental policy instruments (emission standards, taxes, tradable permits and auctioned permits). Because of market strategic effects, R&D incentives vary widely across market structures and instruments. For example, when firms’ products are strategic substitutes (i.e., Cournot), either emission standards, taxes or auctioned permits can provide the most incentives. But when firms’ products are strategic complements, either taxes or auctioned permits provide the most incentives. If markets are perfectly competitive, however, permits and emission standards offer similar incentives that are lower than those offered by taxes.environment; regulation; market structure; innovation

Quality Standards for Fruits and Vegetables: Help or Hindrance for Rural Development?

Horticulture has developed into one of the most dynamic agricultural sectors in the world. The cultivation of fruits and vegetables has significant potential for increasing agricultural income and reducing rural poverty, particularly in developing and emerging countries. However, it appears that the growing consolidation in the retail sector has shifted power relations along the value-added chain away from producers to retailers. In addition, food retailers rely more and more on their own quality standards. The growing significance of such private standards could help to guarantee the functioning of markets and, ultimately, market access. Yet, it could also increase bilateral dependencies and the risk that producers further up the supply chain are exploited. In turn, this could hinder market access, particularly for small-scale farmers. Public standards offer a reasonable alternative: they create transparency and equal rules for all market participants.Private Standards, Minimum Quality Standards, Rural Development, High-Value Crops

Variation in Organic Standards Prior to the National Organic Program

Interest in establishing nationally uniform certification, labeling, and management standards for organic products grew out of concern that the existence of multiple standards led to consumer and supply chain confusion about, and lack of confidence in, these products. The National Organic Program Final Rule, issued in December 2000, is the result of this interest. We analyze the certification system that was in place prior to the new national rule to evaluate the extent of differences between certification standards and how the national rule is likely to impact the market for organic products. Our analysis suggests that most differences among US certification standards were minor. Also, the most important impacts of the national standard may be in facilitating trade in ingredients and products certified by different certifiers, increasing buyer confidence, and facilitating exports. However, the national rule may decrease the ability of organic certifiers and consumers to place differing emphasis on the multiple goals of organic production and may decrease the flexibility of organic standards to respond to changing market conditions, including new technologies.organic agriculture, organic certification standards, organic labeling, organic market, Agribusiness, Marketing,

Accounting quality under IFRS during stressed volatility: an examination of UK banks

This paper examines whether accounting quality is maintained for UK banks that report under the IFRS accounting standards during times of stressed market price volatility. We find that the UK banks’ accounting quality, measured from 1992 to 2008 using the relationship between total shareholders’ equity and market price, experienced a significant decrease during the high levels of market price volatility in 2008. This paper contributes to research that examines the IFRS accounting standards and to the examination of accounting quality in banks during periods of stressed volatility. Furthermore, this study concludes by calling for the examination of methods and processes to mitigate risks that impact on accounting quality

Communication Standards Adoption in Developing Economies: Issues and Options for India

Given the importance of communications in todays world, its spread in developing economies is critical for their development. Emergence of standards reduces market and technological uncertainty and lays the foundation for market creation and enhances the diffusion of communication technologies partly through the advantages associated with network and scale economies. Standardisation has also become important with the rise in cross-fertilisation between information technology (IT) and other technologies, especially in communications. Under these circumstances, strategic implications of IT standardisation are huge because standards can determine the growth potential of individual firms, affect the competitive advantage of nations and even development of technologies and their diffusion. Policies for standards adoption have been used world-wide to facilitate the diffusion of communications technologies, acquire a larger market share of the global telecom market, build technological capabilities. The paper reviews various approaches to communications standard adoption as well as the experiences of other countries. These approaches and experiences and the associated market and regulatory failures are evaluated in the context of the current Indian situation. This evaluation suggests that a standards neutral policy is desirable for India.