Managed Trade, Trade Liberalisation and Local Pollution

The current paper addresses the relationship between trade and endogenous pollution levels. The main focus is quite different from the previous literature. The mechanism linking pollution and trade is that trade provides the home government with a credible threat that helps motivate domestic firms to adopt cleaner technologies. This credible threat comes from the fact that the government has a greater incentive to protect a clean industry than to protect a very polluting one. In that sense, the existence of trade helps reduce domestic pollution compared to what would prevail in a situation of autarky. On the other hand, a commitment to free trade would be counterproductive: it limits the government's ability to credibly threaten its domestic firms. In fact we show that any trade liberalisation hurts the welfare of the home country. In terms of world welfare, moderate trade liberalisation is helpful but only as long as it does no affect the technology choices of the firms.

The Relationship Between Intellectual Property Law and Competition Law: An Economic Approach

This paper presents an economic analysis of the relationship between Intellectual Property (IP) Law and Competition Law. Contrary to some of the recent debate, our analysis emphasises the separation of IP Law and Competition Law: IP law should concern itself with assigning and defending intellectual property rights, while Competition Law should concern itself with the use of those rights. This separation extends to the enforcement of the law as well, where we argue that once property rights have been assigned, no further distinction based on intellectual or non-intellectual property should be made. While the IP/Competition Law interface has some specificity due to the types of behaviours that tend to arise more frequently where IP is concerned, we argue for a set of principles for Competition Policy that include restraint, a commitment not to revisit ex post the rights granted by IP law, and a commitment to make large changes in property right regimes only when very large changes in ex post regulation occur.

Mergers and Innovation

Do mergers raise substantial additional issues when the parties have significant innovation programs? To answer this, we examine the merger-related efficiencies that arise only with substantial innovation, arguing that innovation-intensive mergers should be treated more leniently than mergers without this dynamic dimension. We provide guidance on evidence that might determine the magnitude of such efficiencies. Next, we argue that where innovation is “directed” towards a product market, dealing with product line overlap should allay concerns about postmerger innovation. If research is not directed, we argue that theories of harm linked to the product market are unconvincing. Instead, one should look at theories of harms in the innovation market, which stem from the advantage in being first to innovate. Such first-mover advantages can be rooted in patent protection, switching costs, or network effects. This approach helps explain some of the remedies recently imposed on transactions such as Dow-Dupont and Bayer-Monsanto

Green Energy Depends on Critical Minerals. Who Controls the Supply Chains?

In light of the transition away from fossil fuel–based energy, this paper highlights the importance of understanding who controls vital parts of the global supply chains of critical minerals and rare earth elements (REEs). Analysis of direct ownership does not reveal the real sources of control over the decisions of the company. To identify those sources, we use an index that measures the degree to which important shareholders can affect voting decisions. This analysis is not straightforward, because companies along the supply chain are not necessarily incorporated in the countries in which mining and production activities take place, and shareholders can exert influence through multiple layers of subsidiaries. Our analysis reveals that China’s control over the global value chains involving critical minerals and REEs extends beyond what is commonly assumed. It also sheds light on environmental, social, and governance issues in the countries in which mining and/or production take place. The paper advocates increasing transparency regarding the sources of control to better assess and manage economic and geopolitical risks; enhancing recycling, to reduce dependency on foreign supply; avoiding protectionist and trade-reducing reactions; and encouraging research and development in order to speed up the adoption of technologies of substitution

Economic analysis of resilience: a framework for local policy response based on new case studies

A recent set of case studies on resilience of ecocultures forms the basis for our review of and comment on the resilience literature. We note the diversity of definitions of resilience and the confusion this creates in implementing resilience studies. We develop a synthesis view that establishes a framework for defining resilience in an implementable way. This framework emphasises the importance of defining the source of and magnitude of shocks. Next, we outline measurement issues, including a variety of performance measures. We argue that self-determination and local ownership of resources is supported in the cases, and review the effectiveness of the informal insurance arrangements that are observed. We close with the variables suggested by the case studies to include in a resilience index and lessons for regional goverments developing resilience policy

Partial compatibility with network externalities and double purchase

et al.We analyze an industry where two firms sell a good which generates a positive network externality whose value varies across consumers. The firms make product design decisions which determine the degree of compatibility of their goods before competing in quantities. However, consumers can always reap the benefits of compatibility by joining both networks. We show that such 'double purchases' drastically affect the nature of the product market equilibrium as well as the compatibility choices made by the firms. While the equilibrium level of compatibility chosen by the firms depends on the degree of consensus required to increase standardization, it tends to be higher than the social optimum. © Elsevier Science B.V.Financial support from NSF grant SES-8909730 and SPPS ‘Transport et Mobilite’ is gratefully acknowledged by A de Palma. Pierre Regibeau is grateful for the financial support of the Spanish Ministry of Education under a DG1CYT grant and of the European Union under a Human Capital Mobility Grant.Peer Reviewe