Ratcheting in Renewable Resources Contracting

Real life implies that public procurement contracting of renewable resources results in repeated interaction between a principal and the agents. The present paper analyses ratchet effects in contracting of renewable resources and how the presence of a resource constraint alters the “standard” ratchet effect result. We use a linear reward scheme to influence the incentives of the agents. It is shown that for some renewable resources we might end up both with more or with less pooling in the first-period compared to a situation without a resource constraint. The reason is that the resource constraint implies a smaller performance de-pendent bonus, which reduces the first-period cost from concealing information but at the same time the resource constraint may also imply that second-period benefits from this concealment for the efficient agent are reduced. In situations with high likelihood of first-period pooling, the appropriateness of applying lin-ear incentive schemes can be questioned.Political support function, political economy, environmental regula-tion, lobbyism, rent-seeking, taxation, auction, grandfathering, emission trad-ing, European Union, interest groups, industry, consumers, environmentalists

Firm Investment & Credit Constraints in India, 1997 – 2006: A stochastic frontier approach

We use the stochastic frontier approach to estimate the impact of firm characteristics on investment decisions of Indian firms during the 1997-2006 period. The use of the stochastic frontier approach allows us to define the (unobserved) optimum investment that is consistent with a firm‟s characteristics such as the Tobin‟s q during each firm-year, and then estimate the deviation from this unobserved optimum in the form of an (investment) efficiency score that varies between zero and one. This deviation is interpreted as the degree of credit constraint, and we are also able to estimate the impact of firm characteristics such as leverage and business group affiliation on the degree of credit constraint via their marginal effects. Our results suggest that the degree of credit constraint of an average firm increased over time during the sample period, despite significant reforms of the Indian banking sector by the turn of the century. We also find that the degree of credit constraint decreases with cash flow and assets, which is consistent with the available literature. Further, there is a threshold effect of leverage, and the degree of credit constraint is greater for highly leveraged firms. Finally, we find that the beneficial impact of business group affiliation on the degree of credit constraint decreases over time, and is eliminated by the end of the sample period.Investment, Credit rationing, Imperfect information, Stochastic frontier analysis

Re-examining And Extending Penrose's Growth Theory: Updating Penrose For The 21St Century

Edith Penrose argued that firms face a constraint on organic growth because of growth activities in previous periods. Central to her ideas about growth is the distinction between managerial and entrepreneurial capabilities. Growth in previous periods creates adjustment costs which are associated with managerial capabilities and impacts on the growth opportunities which are associated with entrepreneurial capabilities. In this paper we revisit Penrose’s work to examine how the nature of growth in previous periods may effect growth in the current period. Employing a panel of all commercially active enterprises in the private (non-government) sector in Sweden over a 10 year period our results indicate that previous organic growth acts as a constraint on organic growth, however, acquisitive growth may act as a catalyst for organic growth. Based on these findings, we suggest extensions Penrose’s to growth theory

Capacity of UAV-Enabled Multicast Channel: Joint Trajectory Design and Power Allocation

This paper studies an unmanned aerial vehicle (UAV)-enabled multicast channel, in which a UAV serves as a mobile transmitter to deliver common information to a set of $K$ ground users. We aim to characterize the capacity of this channel over a finite UAV communication period, subject to its maximum speed constraint and an average transmit power constraint. To achieve the capacity, the UAV should use a sufficiently long code that spans over its whole communication period. Accordingly, the multicast channel capacity is achieved via maximizing the minimum achievable time-averaged rates of the $K$ users, by jointly optimizing the UAV's trajectory and transmit power allocation over time. However, this problem is non-convex and difficult to be solved optimally. To tackle this problem, we first consider a relaxed problem by ignoring the maximum UAV speed constraint, and obtain its globally optimal solution via the Lagrange dual method. The optimal solution reveals that the UAV should hover above a finite number of ground locations, with the optimal hovering duration and transmit power at each location. Next, based on such a multi-location-hovering solution, we present a successive hover-and-fly trajectory design and obtain the corresponding optimal transmit power allocation for the case with the maximum UAV speed constraint. Numerical results show that our proposed joint UAV trajectory and transmit power optimization significantly improves the achievable rate of the UAV-enabled multicast channel, and also greatly outperforms the conventional multicast channel with a fixed-location transmitter.Comment: To appear in the IEEE International Conference on Communications (ICC), 201

Is Fiscal Policy Sustainable in South Africa? An Application of the Econometric Approach

The question of fiscal sustainability is very important for adequate macroeconomic management. This paper analyses the sustainability of the government of South Africa’s fiscal policies during the period 1990-2005 using quarterly data. It is found that government revenue, government spending on goods and services, and interest payment are non-stationary but cointegrated. A standard three-variable framework of Vector Error Correction (VEC) model is used to test whether data from the historical process in South Africa are consistent with the intertemporal government budget constraint. The present value constraint (PVC) approach was the main tool used in the empirical analysis. The findings suggest that the PVC hold over the sample period and point to the sustainability of the historical fiscal process.

Amplifying Business Cycles through Credit Constraints

Theory suggests that endogenous borrowing constraints amplify the impact of external shocks on the economy. How big is the amplification? In this paper, we quantitatively investigate this question in the context of a dynamic general equilibrium model with borrowing constraints under two alternatives: (1) borrowing constraint endogenously depends on the borrower's net worth (2) borrowing constraint is exogenous. Calibrating our model to the Japanese economy, we find evidence of significant amplification in our impulse responses. Quantitatively applying the model to the Japanese case, we find TFP can significantly account for the Japanese business cycle during the period 1980 to 2000 and the impact is much amplified when we assume that borrowing constraints are endogenously determined.Borrowing constraint; Endogenous; Net worth; Business cycle; Amplification

Effect of resonance-oblateness coupling on a satellite orbit

Second order effects of the coupling between geopotential resonance and oblateness on a satellite orbit are calculated. Results show that: (1) these effects arise from the interaction of resonance with the secular changes of the orbit's node, perigee, and mean anomaly; (2) they have the same period and phase as first order resonance perturbations; and (3) their amplitudes are proportional to the square of the period and dominate the first order effects as the orbit becomes commensurate. A striking example of this coupling is seen in the 18 day resonance variation of the node of the orbit of the first earth resources technology satellite. Analysis of this one arc second (31m) variation yielded a strong 14th order constraint to the geopotential for odd degree terms. This constraint is poorly predicted by current models