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161. Meet Me Halfway but don't Rush—Absorptive capacity and strategic R investment revisited

Author:
Leo A. Grünfeld
Publication Date:
12-2001
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
In this paper, we analyse how R investment decisions are affected by R spillovers between firms, taking into consideration that more R investment improves the ability to learn from competing firms - the so-called absorptive capacity effect of R The model in this paper is an extension of d'Aspremont and Jacquemin (1988), where they show that exogenous R spillovers reduce the incentive to invest in R when firms compete in a Cournot duopoly. Our model treats R spillovers as endogenous, being a function of absorptive capacity effects. Contrary to earlier studies, we show that absorptive capacity effects do not necessarily drive up the incentive to invest in R This only happens when the market size is small or the absorptive capacity effect is weak. Otherwise firms will actually chose to cut down on R Furthermore, absorptive capacity effects also increase the critical rate of spillovers that determines whether participating in research joint ventures leads to lower or higher R investment. Finally, we show that strong learning effects of own R are not necessarily goodfor welfare. Moreover, if the market size is large, welfare will be at its highest when the learning effect is small.
Topic:
Economics, Industrial Policy, and International Trade and Finance
Political Geography:
Europe

162. Political Priorities and Economic Interests in Russian-Latvian Relations

Author:
Andris Spruds
Publication Date:
12-2001
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The paper focuses on interaction of political and economic aspects in Russian-Latvian relations. During the most of the 1990´s, the relationship was dominated by the «conflict manifestation, » which could be witnessed during the protracted Russian troop withdrawal and mutually irreconcilable positioning over NATO expansion and status of Russian-speaking population. However, in the context of EU enlargement and «economisation» of Russian foreign policy, economic factors may play an increasingly important role in Russian-Latvian relations. It is possible to discover a complex web of links and economic interdependence between economic actors in both Russia and Latvia. This especially refers to transit as Latvian ports remain among the major routes of Russian exports, primarily oil, to Western Europe. Yet, certain interests of particular economic groups in Russia as well as economic and political priorities of Russian government generally, in the region and domestically will have influence, not necessarily favourable, on further development of this economic interdependence.
Topic:
NATO and Politics
Political Geography:
Russia, Europe, Asia, and Latvia

163. The Europeanisation of Norway's Security Identity

Author:
Pernille Rieker
Publication Date:
12-2001
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
In this working paper Pernille Rieker looks into the relationship between the European integration process and changes in Norway's national security identity. Has the dominant national discourse on security changed since the early 1990s? If so, how are these changes related to the recent acceleration of the European integration process? And to what extent are such European influences on national security identities related to formal membership in the EU? While there is reason to believe that a Europeanisation of national security policies has taken place, the question is whether we may speak of a pro-found change in identity, or merely an instrumental adaptation to external changes. Several researchers have studied the influence of this participation on national institutions and policies; less attention, however, has been given to the Europeanisation of Norway's security identity. This paper is an attempt to fill this gap.
Topic:
National Security and Nationalism
Political Geography:
Europe and Norway

164. Firms' export decisions—fixed trade costs and the size of the export market

Author:
Hege Medin
Publication Date:
10-2001
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
This article presents two models of international trade under monopolistic competition. In increasing returns sectors firms face fixed, in addition to variable, trade costs, therefore both exporters and non-exporters may coexist. While nonexporters benefit from access to large domestic markets, exporters benefit from access to large foreign markets. Consequently, a small country has a higher share of exporting firms than a large one. In contrast to standard models, increasing returns sectors turn out more open in small countries than in large ones, and small countries may be net exporters of such commodities, despite the disadvantage of a smaller home market.
Topic:
Economics and International Trade and Finance
Political Geography:
Europe

165. Should one bargain over two issues simultaneously or separately?

Author:
Bård Harstad
Publication Date:
05-2001
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
International negotiations on trade (e.g. GATT and TRIPS) have typically been of the package-form, and different issues have therefore been linked to each other. Trade issues have not been linked to e.g. environmental agreements in negotiations, however. This paper studies the outcome of linked bargaining, where two issues are simultaneously negotiated over by two countries. We notice that there always exist gains from linkages in bargaining, and that such linking will always occur in equilibrium if there is a pre-stage where the countries are bargaining over the agenda. The outcome under linked bargaining is compared with the outcome under separate negotiations, and the circumstances where a country will gain or lose from linking are characterized. The results help us to understand different countries' preferences for linkages in bargaining.
Topic:
International Relations, Environment, and International Trade and Finance
Political Geography:
Europe

166. Recent Advances in Growth Theory. A Comparison of Neoclassical and Evolutionary Perspectives

Author:
Per Botolf Maurseth
Publication Date:
05-2001
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
Research on economic growth has experienced remarkable progress the last decade. The neoclassical perspective has benefited from development of new mathematical methods and new approaches to market structure, economics of scale and spillover effects. At the same time evolutionary theories on economic development have appeared, partly competing but also complementary to neoclassical theorising. In this paper, the development of the two perspectives on economic growth is reviewed and they are compared with each other. Despite evident differences there seems to be convergence between the two traditions. The two perspectives therefore do not belong to different paradigms in the Kuhnian sense and they can hardly be categorised as two isolated research programmes in the sense of Imre Lakatos. Evolutionary and neoclassical growth economics draw inspiration from similar sources, they are overlapping and to some extent complementary. The two traditions also interact with each other.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Europe

167. An Essay on Child Labor in Sub-Saharan Africa—A bargaining approach

Author:
Jens Chr.1 Andvig
Publication Date:
12-2000
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The separation of children from their families have a large number of social and economic aspects. At least the economic aspects are under-researched. At the point of transition of leaving their families somehow the children have to be considered as separate decisionmakers. This is the perspective I adopt in this essay. The question raised is whether poverty, changes in social norms or external shocks to the family system such as the AIDS epidemic, lead the children to prematurely fend for themselves in the context of Sub-Saharan Africa.
Topic:
Economics, Human Rights, and Poverty
Political Geography:
Africa

168. Security, integration and identity change

Author:
Pernille Rieker
Publication Date:
12-2000
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
In this working paper Pernille Rieker attempts to contribute to a better understanding of both how the EU functions as a security system and what kind of impact the integration process has on national security identities. While security has always been the main reason behind the integration process, security and integration have usually been studied separately. Integration specialists have given more attention to economy than to security, and security experts have studied traditional security institutions and overlooked the EU. Rieker attempts to combine these two theoretical traditions by drawing on a combination of recent work on security communities and international socialisation. While the development in the Nordic countries will be used as brief examples in the final part of the paper, a more detailed analysis of these countries' security identities will follow in a forthcoming study.
Topic:
Security, Development, and Government

169. Globalisation and industrial location: The impact of trade policy when geography matters

Author:
Arne Melchior
Publication Date:
12-2000
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The paper shows how industrial location and welfare depends on “most-favoured nation” (MFN) versus distance-related trade barriers, using a monopolistic competition model with regions located along a “Hotelling” line or on a square plain. Manufacturing production will cluster close to the periphery if transport costs are relatively high, but in central areas if MFN barriers are relatively high. The peripheries will be at a disadvantage, which increases when trade barriers are reduced. When countries or trading blocs are formed, a core-periphery pattern emerges within each of them. While lower transport costs create more centralisation within countries, lower MFN barriers between countries have the opposite effect.
Topic:
Economics, Globalization, Industrial Policy, and International Trade and Finance

170. Patterns of Trade and Foreign Direct Investment in Africa—A simple test of the new trade theory with multinationals

Author:
Lars C. Svindal and Leo A. Grünfeld
Publication Date:
12-2000
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
In this study, we present an empirical survey of the patterns of trade and FDI in Africa based on a sample of 28 countries and their transactions with the OECD countries. These patterns are used to test whether the predictions of the new trade theory with multinationals as described by Markusen and Venables (1995,1998) fit the development in Africa. The theory states that multinational production will gradually outgrow trade as countries converge in terms of income, yet our econometric study gives only week evidence supporting such a pattern. Alternative explanations are also investigated,and it is shown that trade barriers, geographical distance, income per capita and access to ocean explain much of the variation in trade and FDI in Africa.
Topic:
International Relations, Development, and Economics
Political Geography:
Africa