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1342. Economic Convergence through Savings, Trade and Technology Flows—Lessons from Recent Research
- Author:
- Per Botolf Maurseth
- Publication Date:
- 10-2002
- Content Type:
- Working Paper
- Institution:
- Norwegian Institute of International Affairs
- Abstract:
- This paper reviews the theoretical and empirical literature on income disparity between countries and convergence in economic growth. New theoretical models modify and often reverse the prediction of convergence in the traditional neo-classical model of economic growth. A particular feature of the recent literature as compared to traditional studies of economic growth is that it acknowledges interdependence between countries. International capital flows, trade in goods and (maybe most important) international technology flows influence individual countries growth performance. The empirical literature on the dynamics of the international distribution of income per capita reveals massive unconditional divergence in income levels. For sub-samples of countries on the other hand, the data support the conditional convergence hypothesis: when other factors are accounted for, there is a tendency for income per capita to converge. For the OECD countries, as well as for some other countries, knowledge flows, either embodied in traded goods or disembodied seem to be important for whether poorer countries are able to catch up with richer ones.
- Topic:
- International Relations, Economics, International Trade and Finance, and Science and Technology
1343. International R Spillovers and the Effect of Absorptive Capacity
- Author:
- Leo A. Grünfeld
- Publication Date:
- 08-2002
- Content Type:
- Working Paper
- Institution:
- Norwegian Institute of International Affairs
- Abstract:
- We study the productivity effects of R spillovers through imports, foreign direct investment and domestic intermediates, using a highly disaggregated data set for Norwegian business sectors. As opposed to the large body of similar studies, we explicitly analyse the importance of absorptive capacity effects, claiming that the positive contribution from R spillovers is an increasing function of the R activities of the economic units that receive the spillovers. We find strong support for the existence of R spillovers through imports and domestic intermediates, but no sign of such spillovers through foreign ownership. Surprisingly, we identify absorptive capacity effects relating to spillovers from imports, but no such effects with respect to domestic intermediates. One possible explanation is that the cost of learning from international R sources is larger than from domestic R sources, implying that own R investments can counteract the negative effect of geographical and cultural distance on R spillovers.
- Topic:
- International Relations, Economics, Industrial Policy, and International Trade and Finance
- Political Geography:
- Norway
1344. Multinationals Searching for R Spillovers
- Author:
- Leo A. Grünfeld
- Publication Date:
- 08-2002
- Content Type:
- Working Paper
- Institution:
- Norwegian Institute of International Affairs
- Abstract:
- This paper surveys the literature on R and technology spillovers as a motive for FDI. During the last years, a growing body of theoretical studies has generated formal arguments supporting the economic rationale for such behaviour. Yet, theoretical contributions are clustered within a few schools and a wider approach is necessary in order to understand the mechanisms that relate R spillovers to FDI. The empirical literature is more numerous, but provides ambiguous conclusions with respect to the strength of this motive. Micro studies provide less supportive results as compared to studies based on more aggregate data. Studies based on patent information are generally supportive to the existence of this motive.
- Topic:
- International Relations, Economics, International Trade and Finance, and Science and Technology
1345. International R Spillovers and the Absorptive Capacity of Multinationals
- Author:
- Leo A. Grünfeld
- Publication Date:
- 08-2002
- Content Type:
- Working Paper
- Institution:
- Norwegian Institute of International Affairs
- Abstract:
- This paper studies R spillovers as a motive for firms to go multinational. The establishment of a foreign subsidiary may increase a firm's ability to learn from foreign R activity since R spillovers between firms are moderated by geographical distance. As opposed to earlier studies on this subject, we also model the concept of absorptive capacity where spillovers are endogenised as a function of the firms'own R investments. We employ a three-stage Cournot duopoly model to identify under what conditions a firm chooses to service a foreign market through exports or localised production (going multinational). With exogenous R investments, the absorptive capacity effect contributes to increase the gains from going multinational when the firm is a technology leader in terms of R If R investments are endogenous, only medium-sized absorptive capacity effects will result in firms going multinational. Also, higher spillover rates do not necessarily drive down R and profits for the multinational firm. This stands in contrast to models that ignore the aspect of absorptive capacity.
- Topic:
- International Relations, Economics, International Trade and Finance, and Science and Technology
1346. Non-Cooperative Dynamics of Multi-Agent Teams
- Author:
- Robert L. Axtell
- Publication Date:
- 07-2002
- Content Type:
- Working Paper
- Institution:
- The Brookings Institution
- Abstract:
- Results on the formation of multi-agent teams are reviewed and extended. Conditions are specified under which it is individually rational for agents to spontaneously form coalitions in order to engage in collective action. In a cooperative setting the formation of such groups is to be expected. Here we show that in non-cooperative environments—presumably a more realistic context for a variety of both human and software agents—self-organized coalitions are capable of extracting welfare improvements. The Nash equilibria of these coalitional formation games are demonstrated to always exist and be unique. Certain free rider problems in such group formation dynamics lead to the possibility of dynamically unstable Nash equilibria, depending on the nature of intra-group compensation and coalition size. Yet coherent groups can still form, if only temporarily, as demonstrated by computational experiments. Such groups of agents can be either long-lived or transient. The macroscopic structure of these emergent 'bands' of agents is stationary in sufficiently large populations, despite constant adaptation at the agent level. It is argued that assumptions concerning attainment of agent-level (Nash) equilibrium, so ubiquitous in conventional economics and game theory, are difficult to justify behaviorally and highly restrictive theoretically, and are thus unlikely to serve either as fertile design objectives or robust operating principles for realistic multi-agent systems.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- United States and Latin America
1347. Spatial and Temporal Patterns in Civil Violence: Guatemala 1977-1986
- Author:
- Timothy R. Gulden
- Publication Date:
- 02-2002
- Content Type:
- Working Paper
- Institution:
- The Brookings Institution
- Abstract:
- This paper examines detailed records from the civil conflict in Guatemala between 1977 and 1986. It reveals a number of novel patterns which support the use of complex systems methods for understanding civil violence. It finds a surprising, non-linear relationship between ethnic mix and killing; thereby inviting analysis based on group dynamics. It shows the temporal texture of the conflict to be far from smooth, with a power spectrum that closely resembles that of other, better understood, complex systems. The distribution of incident sizes within the data seems to fall into two distinct sets, one of which, corresponding to "regular" conflict, is Zipf distributed, the other of which includes acts of genocide and is distributed differently. This difference may indicate that that agents of the state were proceeding under different types of orders. These results provide an empirical benchmark for the modeling of civil violence and may have implications for conflict prevention, peace keeping, and the post-conflict analysis of command structures.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- United States, Latin America, Central America, and Guatemala
1348. Environment's New Role in U.S. Trade Policy
- Author:
- John Audley
- Publication Date:
- 09-2002
- Content Type:
- Working Paper
- Institution:
- Carnegie Endowment for International Peace
- Abstract:
- Trade Act of 2002 integrates environmental policy priorities into U.S. trade negotiations. The manner in which resulting tensions between trade and environment are resolved requires greater involvement by Congress. Of particular short-term importance to Congress should be how bilateral negotiations with Chile and Singapore are concluded and regional negotiations with Central America begun. Congress should also use its oversight power to develop clearer instructions regarding a host of environmental policy issues, including investment and services negotiations, environmental reviews of trade agreements, and clarification of U.S. foreign assistance regarding technical assistance and capacity building for our trading partners. In short, TPA presents Congress with the leverage it needs to oversee trade negotiations, an opportunity to work with the administration and win back public support for U.S. trade policy that respects worker rights and protection of the environment.
- Topic:
- Environment, International Trade and Finance, and Politics
- Political Geography:
- United States and Chile
1349. Foreign Direct Investment: Does the Rule of Law Matter?
- Author:
- John Hewko
- Publication Date:
- 04-2002
- Content Type:
- Working Paper
- Institution:
- Carnegie Endowment for International Peace
- Abstract:
- THE CONVENTIONAL WISDOM within the international development community is that foreign direct investment (FDI) is an important component of economic growth and prosperity in transitional and developing countries and that a crucial, if not decisive, factor in enticing such investment is a stable, consistent, fair, and transparent legal and judicial system. As a recent World Bank publication concluded: The massive move by developing and transition countries toward market economies necessitated the adoption of strategies for the encouragement of private investment, domestic and foreign. Naturally, there was a general realization that such an objective could not be achieved without modifying and, sometimes, completely overhauling the legal and institutional framework and firmly establishing the rule of law, thereby creating the necessary climate of stability and predictability.
- Topic:
- Emerging Markets, Government, and International Trade and Finance
1350. Politics and Parallel Negotiations: Environment and Trade in the Western Hemisphere
- Author:
- John Audley and Edward Sherwin
- Publication Date:
- 04-2002
- Content Type:
- Working Paper
- Institution:
- Carnegie Endowment for International Peace
- Abstract:
- IN DECEMBER 1994, at the behest of then–U.S. president Bill Clinton, the leaders of the 34 Western Hemisphere democracies convened in Miami for the first comprehensive hemispheric summit in more than 25 years. The assembled heads of state pledged that their countries would forge a path toward regional integration based on four overarching principles: Governments should build strong democratic institutions, prosperity should be promoted through free trade and economic cooperation, poverty and discrimination should be eliminated, and the natural environment should be preserved through policies promoting sustainable development. “Future generations,” Clinton said at the time, “will look back on the Miami summit as a moment when the course of history in the Americas changed for the better.”
- Topic:
- Environment and International Trade and Finance
- Political Geography:
- United States, America, South America, Latin America, Central America, and North America