A Quantile-based Test of Protection for Sale Model

This paper proposes a new test of the Protection for Sale (PFS) model by Grossman and Helpman (1994). Unlike existing methods in the literature, our approach does not require any data on political organization. We use quantile and quantile IV regressions to do so using the data from Gawande and Bandyopadhyay (2000). Surprisingly, the results do not provide any evidence favoring the PFS model. We also explain why previous work may have inadvertently found support for it.protection for sale, lobbying, political economy, quantile regression

A Quantile Based Test of Protection for Sale Model

This paper proposes a new test of the Protection for Sale (PFS) model by Grossman and Helpman (1994). Unlike existing methods in the literature, our approach does not require any data on political organizations. We formally show that the PFS model provides the following prediction: In the quantile regression of the protection measure on the inverse import penetration ratio divided by the import demand elasticity, its coefficient should be positive at the quantile close to one. We examine this prediction using the data from Gawande and Bandyopadhyay (2000). The results do not provide any evidence favoring the PFS model.Quantile Regression, Protection for Sale, Political Economy

Is a Voluntary Approach an Effective Environmental Policy Instrument? A Case for Environmental Management Systems

Using Japanese facility-level data from an Organisation for Economic Co-operation and Development survey, we estimate the effects of implementation of ISO14001 and publication of environmental reports on the facilities’ environmental performance. While most previous studies focused on an index of emissions toxicity, this study examines three areas of impacts, none of which have been explored in the literature: natural resource use, solid waste generation, and wastewater effluent. The study is also unique in that the effectiveness of ISO14001 is considered in relation to environmental regulations. Our findings are summarized as follows. First, both ISO14001 and report publication help reduce all three impacts; the former appears more effective in all areas except wastewater. Second, environmental regulations do not weaken the effect of ISO14001. Third, assistance programs offered by local governments—a voluntary approach—promote facilities’ adoption of ISO14001. These findings suggest that governments can use command-and-control and voluntary approaches concurrently.environmental management systems, ISO14001, environmental reports, voluntary actions, governmental assistance programs, environmental impacts, discrete choice model, endogeneity, GHK simulator

A Quantile-based Test of Protection for Sale Model

This paper proposes a new test of the Protection for Sale (PFS) model by Grossman and Helpman (1994). Unlike existing methods in the literature, our approach does not require any data on political organization. We use quantile and quantile IV regressions to do so using the data from Gawande and Bandyopadhyay (2000). Surprisingly, the results do not provide any evidence favoring the PFS model. We also explain why previous work may have inadvertently found support for it.Protection for Sale, Lobbying, Political Economy, Quantile Regression

Why do the Rich Save More? A Theory and Australian Evidence

We provide a theory to explain the existence of inequality in an economy where agents have identical preferences and have access to the same production technology. Agents consume a "utility" good and a "health" good which determines their subjective discount factor. Depending on initial distribution of capital the economy gets separated into different permanent-income groups. This leads to a testable hypothesis: "The rich save a larger proportion of their permanent income". We test this implication for the savings behaviour in Australia. We show that even after controlling for life-cycle characteristics permanent income and savings are positively correlated. An improvement in the health leads to a positive effect on savings behaviour.Saving; Inter-temporal Choice; Health; Income Distribution

Is Protection Really for Sale? A Survey and Directions for Future Research

This paper critically and selectively surveys the literature on protection for sale and discusses directions for future research in this area. It suggests that the standard approach needs to be augmented to provide more compelling tests of this model.Common agency, Political economy, Protection for sale, Quotas, Non tariff barriers

Protection for Sale or Surge Protection?

This paper asks whether the results obtained from using the standard approach to testing the influential Grossman and Helpman "protection for sale" (PFS) model of political economy might arise from a simpler setting. A model of imports and quotas with protection occuring in response to import surges, but only for organized industries, is simulated and shown to provide parameter estimates consistent with the protection for sale framework. This suggests that the standard approach may be less of a test than previously thought.Common agency, Political economy, Protection for sale, Quotas, Non tariff barriers

Protection for Sale or Surge Protection?

This paper asks whether the results obtained from using the standard approach to testing the influential Grossman and Helpman %u201Cprotection for sale (PFS)%u201D model of political economy might arise from a simpler setting. A model of imports and quotas with protection occurring in response to import surges, but only for organized industries, is simulated and shown to provide parameter estimates consistent with the protection for sale framework. This suggests that the standard approach may be less of a test than previously thought.

Is ISO 14001 a Gateway to More Advanced Voluntary Action? A Case for Green Supply Chain Management

Using Japanese facility-level data, we estimate the effects of ISO 14001 certification on the promotion of more advanced practices, namely green supply chain management (GSCM). Our results show that ISO 14001 promotes GSCM practices, in that facilities with environmental management systems (EMS) certified to ISO 14001 are 40 percent more likely to assess their suppliers’ environmental performance and 50 percent more likely to require that their suppliers undertake specific environmental practices. Further, we find that government approaches that encourage voluntary EMS adoption indirectly promote GSCM practices, in that the probability of facilities’ assessing their suppliers’ environmental performance and requiring them to undertake specific environmental practices increases by 9 percent and 10 percent, respectively, if a government assistance program exists. Combined, these findings suggest that there may be significant but previously unnoticed spillover effects of ISO 14001 and government promotion of voluntary action.voluntary actions, positive spillover, environmental management systems, ISO 14001, green supply chain management, government assistance programs, environmental impacts, discrete choice model, endogeneity

Why do the Rich Save More? A Theory and Australian Evidence

We provide a theory to explain the existence of inequality in an economy where agents have identical preferences and have access to the same production technology. Agents consume a “utility” good and a “health” good which determines their subjective discount factor. Depending on initial distribution of capital the economy gets separated into different permanent-income groups. This leads to a testable hypothesis: “The rich save a larger proportion of their permanent income”. We test this implication for the savings behaviour in Australia. We show that even after controlling for life-cycle characteristics permanent income and savings are positively correlated. An improvement in the health leads to a positive effect on savings behaviour