The selection effect of two-way trade in the Melitz model: an alternative approach

This paper studies the influential Melitz model of trade with heterogeneous firms using an alternative, intuitive approach. Contrary to what is often argued, it is an increase in product market competition that drives the bad firms out: with two-way trade, entry by foreign firms is not compensated by a “sufficient” reduction in the mass of surviving firms. To illustrate this, we decompose the total effect of trade in two partial effects: a domesticprofit-reducing effect due to foreign market penetration by the most productive firms; an average-profitreducing effect due to the payment of the fixed export costs. We also provide the new prediction that trade generally leads to (weakly) less entry in the industry. This clarifies key interpretation issues in a prolific literature.Firm Heterogeneity ; Intra-industry Trade ; Selection

Stages of Diversification and Capital Accumulation in an Heckscher-Ohlin World, 1975-1995

Why do we observe a U-shaped industrial concentration curve over an economy's development path? We show that at least one third of this phenomenon is explained by the effect of capital accumulation on industrial specialization.Heckscher-Ohlin; International Trade

International Specialization and the Return to Capital

How does factor accumulation affect the pattern of international specialization and returns to capital? We provide a new integrated treatment to this question using a panel of 44 developing and developed countries over the period 1976-2000. We confirm the Heckscher-Ohlin prediction that, with sufficient differences in country endowments, there is no factor price equalization and countries specialize in different subsets of goods. Innovatively, we obtain the returns to capital implied by this model: these are consistent with the Lucas paradox, which we explain after accounting for cross-country differences in the cost of capital goods. We also find that, along their development path, countries have often experienced structural change in the form of intra-industry specialization. Our findings are consistent with Ventura's hypothesis that growth can be promoted in this way through "beating the curse of diminishing returns" – indeed we find no decrease in the return to capital at any given capital-labor ratio despite capital accumulation by most countries within a cone of diversification.economic growth and international trade, Heckscher-Ohlin, multiple cones of diversification, marginal product of capital, return to capital, Lucas paradox, specialization

The selection effect of two-way trade in the Melitz model: an alternative approach

This paper studies the influential Melitz model of trade with heterogeneous firms using an alternative, intuitive approach. Contrary to what is often argued, it is an increase in product market competition that drives the bad firms out: with two-way trade, entry by foreign firms is not compensated by a “sufficient” reduction in the mass of surviving firms. To illustrate this, we decompose the total effect of trade in two partial effects: a domestic-profit-reducing effect due to foreign market penetration by the most productive firms; an average-profit-reducing effect due to the payment of the fixed export costs. We also provide the new prediction that trade generally leads to (weakly) less entry in the industry. This clarifies key interpretation issues in a prolific literature.Firm Heterogeneity; Intra-industry Trade; Selection

International Specialization and the Return to Capital, 1976-2000

Using panel data, we provide an integrated treatment of factor endowments, factor prices, and international specialization. In the various cross sections, we confirm the Heckscher-Ohlin prediction that, with sufficient differences in country endowments, there is no factor Price equalization and countries specialize in different subsets of goods. We also explain why, despite higher returns to capital, poor countries do not attract more capital from rich countries. Moreover, along their development path, countries experience the structural change predicted by theory. We find that these changes in specialization mainly occur within industries. Despite capital accumulation by most countries, we find no decrease in the return to capital at any given capital-labour ratio. This must have facilitated growth through capital accumulationEconomic Growth and International Trade; Heckscher-Ohlin; Multiple Cones; Marginal Product of Capital; Specialization

Stages of Diversification in a Neoclassical World

Recent research has documented a U-shaped industrial concentration curve over an economy's development path. How far can neoclassical trade theory take us in explaining this pattern? We estimate the production side of the Heckscher-Ohlin model using industry data on 44 developed and developing countries for the period 1976-2000. Decomposing the implied changes in industrial concentration over time shows that at least one third of these changes seems to be explained by a Rybczynski effect. This result suggests that capital accumulation led poor countries to diversify their industrial production, while rich countries made their production more concentrated in highly capital-intensive industries

International specialization and the return to capital

How does factor accumulation affect the pattern of international specialization and returns to capital? We provide a new integrated treatment to this question using a panel of 44 developing and developed countries over the period 1976-2000. We confirm the Heckscher-Ohlin prediction that, with sufficient differences in country endowments, there is no factor price equalization and countries specialize in different subsets of goods. Innovatively, we obtain the returns to capital implied by this model: these are consistent with the Lucas paradox, which we explain after accounting for cross-country differences in the cost of capital goods. We also find that, along their development path, countries have often experienced structural change in the form of intra-industry specialization. Our findings are consistent with Ventura's hypothesis that growth can be promoted in this way through beating the curse of diminishing returns - indeed we find no decrease in the return to capital at any given capital-labor ratio despite capital accumulation by most countries within a cone of diversification

Which dimensions of social responsibility concern financial investors?

Cahiers de Recherche du CERAG n° 2012-01 E2Social and environmental ratings provided by social rating agencies are multidimensional. Using the six sub-ratings provided by the Vigeo rating agency, we perform a principal component analysis and we highlight three main socially responsible (SR) dimensions related to (1) the direct non-financial stakeholders (employee, customers and suppliers), (2) the indirect stakeholders (environment and society) and (3) the financial stakeholders (stockholders and debt holders).We explore the link between stock returns and these three SR dimensions. Our main result is that, for each SR dimension, investors ask for an additional risk premium when they decide to hold non SR stocks. The cost of equity is thus lower for socially responsible firms. The average premium over the period 2003-2010 is larger for the components "direct non-financial stakeholders" and "financial stakeholders" than for the component "indirect stakeholders". For this last component, the premium obviously exists only since the end of 2008. Environment and community involvement have only recently become a more important risk factor in investors' minds. About the former risk premia ("direct non-financial stakeholders" and "financial stakeholders"), investors appear to penalize firms with the worst behavior in respect to their direct non-financial stakeholders and reward firms with good corporate governance practice

Etude cinétique de la complexation du cuivre en milieu hydrogénocarbonate par électrochimie

La détermination de la capacité complexante des eaux naturelles est généralement effectuée par titrage ampérométrique du cuivre à pH fixé. Beaucoup, sinon tous les tampons classiques utilisés perturbent les études de spéciation du cuivre par formation de complexes peu stables. Dans ce travail nous nous sommes intéressés à la complexation du cuivre par les ions carbonates généralement présents dans les eaux naturelles. Afin de mener à bien notre étude, nous avons mesuré, dans un milieu synthétique de force ionique et pH contrôlés (KNO3 0,02 M + NaHCO3 2,38.10-3 M) toutes les constantes des divers équilibres prévisibles : produits de solubilité de l'hydroxyde de cuivre Cu(OH)2 et de la malachite Cu2 (OH)2 CO3, constante de formation du carbonate de cuivre dissous CuCO3. A des valeurs de pH suffisamment faibles, la formation du complexe CUOH+ peut étre négligée. Les trois autres réactions ont été suivies race aux mesures combinées, d'une part du pH et, d'autre part, de l'activité en ion Cu2+ libre ou hydraté par ionométrie. Compte tenu des propriétés acido-basiques des diverses espèces, les mesures ont été effectuées à divers pH compris entre 5,5 et 8. Le complexe CuCO30étant l'espèce majoritaire dans ces solutions, sa labilité, pouvant perturber follement les déterminations des capacités complexantes par titrage ampérométrique, a été étudiée par diverses méthodes électrochimiques. La polarographie à tension sinusoïdale surimposée (AC) a indiqué une réduction rapide du cuivre (II) sur électrode de mercure. Deux vagues ont été obtenues en voltampérométrie sur électrode tournante à disque de platine (RDE), ce dédoublement étant d'origine cinétique compte tenu de l'évolution de ces vagues avec la température. Une estimation des valeurs des constantes de vitesse de formation kf et de dissociation kb, a permis de montrer la rapidité des réactions mises en jeu et la labilité du complexe CuCO30.The determination of the complexing capacity of natural waters by amperometric copper (II) titrations must be made in pH-buffered solutions. Most if not all of classical buffers influence copper speciation through the formation of weak complexes. This paper deals with an attempt to use the naturally occurring hydrogenocarbonate buffet. A detailed study of copper (II) chemistry in synthetic solutions at controlled ionic strength and pH (0.02 mol.l-1 KNO3, 2.38 mol.l-1 NaHCO3, controlled Pco2) was carried out. In these solutions copper (Il) chemistry may involve precipitation of copper hydroxide Cu(OH)2, copper hydroxycarbonate Cu2(OH)2 CO3 (malachite) and formation of the soluble complexes CuCO30 and CuOH+. At low enough values of pH CuOH+ formation may be neglected. The three other reactions are studied using copper ionometry with a specific electrode and equilibrium constants determined in the 5.5 to 8.0 pH range. As CuCO30 is a major species in these solutions its lability is of major concern for the validity of the amperometric determination of the complexing capacity by copper (II) titration and bas been studied by several electrochemical approaches. AC polarography indicated a rapid reduction of copper (II) on the mercury electrode. Two waves were obtained for the deposition of copper (Il) by voltamperometry with a rotated platinum disk electrode (RDE) presenting the characteristics of a kinetic control. However the values of the forward (kf) and backward (kb) reaction rate constants for CuCO30 formation or dissociation seem too high for a precise determination