Trade openness, transport networks and the spatial location of economic activity

Springer: This is a pre-print of an article published in Networks and Spatial Economics. The final authenticated version is available online at: https://doi.org/10.1007/s11067-018-9394-1This paper introduces a multi-country multi-regional model that allows the evaluation of the effects of trade openness in the distribution of economic activity across regions within countries. Relying on the agglomeration and dispersion forces characterizing the analytical framework of the New Economic Geography and New Trade Theory (neg/ntt) literature, we consider a general model with two differentiated sectors in terms of preferences, technologies and transport costs, allowing for any feasible world trade network topology where trade frictions are both transport and non-transport related (tariffs). We study systematically the critical thresholds that characterize the long run equilibria of economic activity. As benchmark simulations we choose two opposed domestic network topologies characterizing a homogeneous space and a heterogeneous space with some regions enjoying locational advantages. Our findings show that trade openness changes locational patterns in favor of better located regions with respect to the new world topology, which nevertheless may result in larger or lower spatial equality depending on the initial distribution of the economic activity. These results entail important implications in terms of transport infrastructure (accessibility) and trade (commercial agreements) policies, as both are interrelated when policy makers set regional equality goals.We gratefully acknowledge financial support from the Spanish Ministry of Economics and Innovation in the context of the following projects: ECO2010-21643 and ECO2013-46980-P. Nuria Gallego wants to express gratitude to UAM for research scholarship

Who leads Research Productivity Change? Guidelines for R&D policy makers

Relying on efficiency analysis we evaluate to what extent policy makers have been able to promote the establishment of consolidated and comprehensive research groups to contribute to the implementation of a successful innovation system for the Spanish food technology sector, oriented to the production of knowledge based on an application model. Using data envelopment analysis techniques and Malmquist productivity indices we find pervasive levels of inefficiency and a typology of different research strategies. Among these, in contrast to what has been assumed, established groups do not play the pre-eminent benchmarking role; rather, partially oriented, specialized and "shooting star" groups are the most common patterns. These results correspond with an infant innovation system, where the fostering of higher levels of efficiency and promotion of the desired research patterns are ongoing.Innovation Policy; Management; Productivity Change; Malmquist Index; Distance Function

Economic cross-efficiency

This paper introduces a series of new concepts under the name of Economic Cross-Efficiency, which is rendered operational through Data Envelopment Analysis (DEA) techniques. To achieve this goal, from a theoretical perspective, we connect two key topics in the efficiency literature that have been unrelated until now: economic efficiency and cross-efficiency. In particular, it is shown that, under input (output) homotheticity, the traditional bilateral notion of input (output) cross-efficiency for unit l, when the weights of an alternative counterpart k are used in the evaluation, coincides with the well-known Farrell notion of cost (revenue) efficiency for evaluated unit l when the weights of k are used as market prices. This motivates the introduction of the concept of Farrell Cross-Efficiency (FCE) based upon Farrell's notion of cost (revenue) efficiency. One advantage of the FCE is that it is well defined under Variable Returns to Scale (VRS), yielding scores between zero and one in a natural way, and thereby improving upon its standard cross-efficiency counterpart. To complete the analysis we extend the FCE to the notion of Nerlovian cross-inefficiency (NCI), based on the dual relationship between profit inefficiency and the directional distance function. Finally, we illustrate the new models with a recently compiled dataset of European warehousesSpanish Ministry for Science and Innovation and the State Research Agency under grants PID2019-105952GB-I00/AEI/10.13039/501100011033 and EIN2020-112260/AEI/10.13039/50110001103

Environmental policy instruments: technology adoption incentives with imperfect compliance

We study the incentives to adopt advanced abatement technologies in the presence of imperfect compliance. Interestingly, incentives under emission taxes and pollution abatement subsidies are the same that in the perfect compliance scenario. However, under emission standards imperfect compliance can increase firms’ incentives to invest, whereas under an emission permit mechanism investment incentives decrease only if widespread non-compliance induces a reduction in the permit price. Our results are valid for fairly general characteristics of the monitoring and enforcement strategies commonly found in both, theoretical and empirical applications

A Data Envelopment Analysis Toolbox for MATLAB

The Data Envelopment Analysis Toolbox is a new package for MATLAB that includes functions to calculate the main data envelopment analysis models. The package includes code for the standard radial input, output and additive measures, allowing for constant and variable returns to scale, as well as recent developments related to the directional distance function, and including both desirable and undesirable outputs when measuring efficiency and productivity; i.e., Malmquist and Malmquist-Luenberger indices. Bootstrapping to perform statistical analysis is also included. This paper describes the methodology and implementation of the functions, and reports numerical results using a reliable productivity database on US agriculture to illustrate their use

A Panel Data Toolbox for MATLAB

Panel Data Toolbox is a new package for MATLAB that includes functions to estimate the main econometric methods of balanced and unbalanced panel data analysis. The package includes code for the standard fixed, between and random effects estimation methods, as well as for the existing instrumental panels and a wide array of spatial panels. A full set of relevant tests is also included. This paper describes the methodology and implementation of the functions and illustrates their use with well-known examples. We perform numerical checks against other popular commercial and free software to show the validity of the results

Modelling the spatial and sectoral benefits of productivity enhancing innovations using a transport oriented multiregional IO framework: the ‘megatruck’ in Spain

We render operational the model outlined by Carter (1990) via the introduction of the research methods necessary for studying the spatial and sectoral (upstream and downstream) benefits of productivity-enhancing innovations within a real interregional input–output framework. As case study we examine the reduction in production costs derived from the adoption of longer and heavier vehicles in freight road transportation. We exploit a new Spanish regional table including a detailed disaggregation of the transportation sector. The productivity gains at the national level, resulting from a 30% reduction in transport costs, amount to 2.95% of the GVA at market prices. Results show that firms operating in this niche market appropriate most of the gross operation surplus (which increases by 10%), consistent with the existence of market power. The remaining transportation sectors see profits slightly worsened, suggesting limited substitution effects. A high regional heterogeneity exists because of the different input–output structuresThis work was supported by Ministerio de Fomento, Spain: [Grant Number P42-08

Comercio de derechos de emisión, adopción de tecnología y heterogeneidad de industrias: un enfoque experimental

The economic and environmental gains expected from particular environmental policies based on allowances trading programs depend on how they are specifically implemented in the field. In this paper we focus on a tradable permit program based on a double auction market combined with an industry structure that presents heterogeneity in conventional abatement cost functions across firms, and allows for the possibility of adopting a new low emissions technology. Our results show that there is a direct relationship between the technological heterogeneity within an industry and the efficiency of firms behavior when investing in cleaner technologies and the efficiency of the market when reaping the potential benefits from trade by way of permits reallocationLos beneficios económicos y ambientales esperados de una determinada política medioambiental basada en el comer comercio de derechos de emisisón dependen de cómo éstos son implementados en el campo. En este artículo, analizamos el comercio de derechos de emisión a través de un mecanismo de subasta doble combinado con una estructura de la industria que presenta heterogeneidad en los costes de reducción de emisiones de las empresas, donde se permite además la adopción de una nueva tecnología más limpia. Nuestros resultados muestran que existe una relación directa entre la heteroogeneidad de la tecnología dentro de una industria, la eficiencia del comportamiento inversor de las empresas, así como la eficiencia del mecanismo de mercado para extraer los beneficios potenciales derivados de una reasignación de los permisos de emisió

An experimental analysis of the effects of imperfect compliance on technology adoption

We present the results of an experimental investigation on incentives to adopt cleaner abatement technologies in the presence of imperfect compliance. We consider two emission control instruments—emission taxes and tradable permits—as well as diferent combinations of the inspection probability and fne for non-compliance, which can result in full or weak enforcement scenarios. We review and qualify existing theoretical predictions in several ways and fnd the main result is that allowing for weak enforcement causes tax evasion, reductions in permit prices and lower adoption rates of cleaner abatement technologies. As a result, there are increases in aggregate emissions. Finally, treatments with tradable permits under weak enforcement encounter insufcient trading.Funding for open access charge: CRUE-Universitat Jaume

An evaluation of cross-efficiency methods: With an application to warehouse performance

Cross-efficiency measurement is an extension of Data Envelopment Analysis that allows for tie-breaking ranking of the Decision Making Units (DMUs) using all the peer evaluations. In this article we examine the theory of cross-efficiency measurement by comparing a selection of methods popular in the literature. These methods are applied to performance measurement of European warehouses. We develop a cross-efficiency method based on a rank-order DEA model to accommodate the ordinal nature of some key variables characterizing warehouse performance. This is one of the first comparisons of methods on a real-life dataset and the first time that a model allowing for qualitative variables is included in such a comparison. Our results show that the choice of model matters, as one obtains statistically different rankings from each one of them. This holds in particular for the multiplicative and game-theoretic methods whose results diverge from the classic method. From a managerial perspective, focused on the applicability of the methods, we evaluate them through a multidimensional metric which considers their capability to rank DMUs, their ease of implementation, and their robustness to sensitivity analyses. We conclude that standard weight-restriction methods, as initiated by Sexton et al. [48], perform as well as recently introduced, more sophisticated alternativesSpanish Ministry of Science and Innovation (Ministerio de Ciencia e Innovación), the State Research Agency (Agencia Estatal de Investigación) and the European Regional Development Fund (Fondo Europeo de Desarrollo Regional) under grants EIN2020-11226