Unilateral Emissions Mitigation, Spillovers, and Global Learning

What's the role of unilateral measures in global climate change mitigation in a post-Durban, post 2012 global policy regime? We argue that under conditions of preference heterogeneity, unilateral emissions mitigation at a subnational level may exist even when a nation is unwilling to commit to emission cuts. As the fraction of individuals unilaterally cutting emissions in a global strongly connected network of countries evolves over time, learning the costs of cutting emissions can result in the adoption of such activities globally and we establish that this will indeed happen under certain assumptions. We analyze the features of a policy proposal that could accelerate convergence to a low carbon world in the presence of global learning.

Entrepreneurial Orientation, Intangible Assets and Firm Growth: the impact of ‘Spirit and Material’ on the growth of Chinese private firms

This paper has three contributions. First, it shows how field work within small firms in PR Chinese has provided new evidence which enables us to measure and calibrate Entrepreneurial Orientation (EO), as ‘spirit’, and Intangible Assets (IA), as ‘material’, for use in models of small firm growth. Second, it uses inter-item correlation analysis and both exploratory and confirmatory factor analysis to provide new measures of EO and IA, in index and in vector form, for use in econometric models of firm growth. Third, it estimates two new econometric models of small firm employment growth in PR China, under the null hypothesis of Gibrat’s Law, using our two new index-based and vector-based measures of EO and IA. Estimation is by OLS with adjustment for heteroscedasticity, and for sample selectivity. Broadly, it finds that EO attributes have had little significant impact on small firm growth, and indeed innovativeness and pro-activity paradoxically may even dampen growth. However, IA attributes have had a positive and significant impact on growth, with networking, and technological knowledge being of prime importance, and intellectual property and human capital being of lesser but still significant importance. In the light of these results, Gibrat’s Law is generalized, and Jovanovic’s learning theory is extended, to emphasise the importance of IA to growth. These findings cast new empirical light on the oft-quoted national slogan in PR China of “spirit and material”. So far as small firms are concerned, this paper suggests that their contribution to PR China’s remarkable economic growth is not so much attributable to the ‘spirit’ of enterprise (as suggested by propaganda) as, more prosaically, to the pursuit of the ‘material’.

Institutions and the Scale Effect

Growth models which imply a scale effect are commonly refuted on the basis of empirical evidence. A focus on the extent of the market as opposed to the scale of the country has led recent studies to reconsider the role that country scale plays when conditioning on other factors. We consider a variant of a simple learning by doing model to account for the potential role for institutions in determining the strength – and direction – of the scale effect. Using cross-country data, we find a significant interaction between property rights institutions and the effect of scale on long-run growth: In countries with poor property rights institutions, scale is positively related with income per capita; where property rights institutions are good, higher scale is associated with lower per capita ncomes. We find no evidence of such role for contracting institutions.