This paper examines the stable outcomes of organization choice between single-plant and multi-plant under asymmetric two regions. A typical implicit assumption on monopolistic competition models for trade and economic geography is that firms can produce and sell only at one place. This paper allows endogenous determination of the number of plants in a new economic geography model. In particular...

This paper applies the concept of damage coefficients introduced in Houba and Kremers (2008) to provide an estimate of the cost of climate change in particular the cost of changes in mean regional temperature and precipitation to the fruit vegetation sector. We concentrate on the production of apples in the German ‘Alte Land’ region. The estimated cost of climate change on apple-growing in the ...

This paper studies optimal production subsidy in a mixed duopoly with separation between ownership and management. Although many existing literature shows that the first best production allocation is achieved under several economic environments (so-called irrelevance result), we find that this result holds in the following two cases. (1) The owners simultaneously/sequentially decide their sales...

While theory suggests that information programs may correct market failures and improve welfare, the empirical impacts of these policies remain undetermined. We show that mandatory disclosure programs in the electricity industry achieve stated policy goals. We find that the proportion of fossil fuels decreases, and the proportion of clean fuels increases in response to disclosure programs. Howe...

This paper revisits the licensing of a non–drastic process innovation by an outside innovator to a Cournot oligopoly. We propose a new mechanism that combines a restrictive license auction with royalty licensing. This mechanism is more profitable than standard license auctions, auctioning royalty contracts, fixed–fee licensing, pure royalty licensing, and two-part tariffs. The key features are ...

This article surveys the growing theoretical literature on the motives for and welfare effectsof environmental corporate social responsibility (CSR). We show how both market andnonmarket forces are making environmental CSR profitable, and also discuss altruistic CSR.In particular, nongovernmental organizations strongly influence CSR activities, through bothpublic and private pol...

This paper examines the elements of institutional development critical to the enhancement of company performance in transition economies. This includes initial conditions, forms of privatization, institutional frameworks and the competitiveness of markets. Comparing empirical evidence, the paper concludes that there is a clear distinction in effectiveness of policies followed and their impact b...

The recent literature on firm exporting behaviour has pointed out to sunk-cost as key determinant of export behaviour yet little insight into what they include or how they vary with experience. In this paper we provide fresh evidence on the barriers to exporting and the role of export experience and other firm-level characteristics. Our results indicate that experience matters but in a non-line...

Corporate scandals, reflected in excessive management compensation and fraudulent accounts, cause considerable damage. Agency theory’s insistence on linking the compensation of managers and directors as closely as possible to firm performance is a major reason for these scandals. They cannot be overcome by improving variable pay for performance, as selfish extrinsic motivation is reinforced. Ba...

Considering markets with nonpivotal buyers, we analyze the anticompetitive effects of breakup fees used by an incumbent facing a more efficient entrant in the future. Buyers differ in their intrinsic switching costs. Breakup fees are profitably used to foreclose entry, regardless of the entrant’s efficiency advantage or level of switching costs. Banning breakup fees is beneficial to consumers. ...