Industrial Development and the Innovation System of the Ethanol Sector in Brazil

The purpose of this paper is to analyze innovations and the innovation system and its dynamics in the ethanol sector in the State of Sao Paulo. More specifically, this paper focuses on the development process in the sector, the public policies taken to promote the sector, and the organizations and key players involved in these policies and their responses to unforeseeable changes in economic, social and technological environments. To this end, this paper takes an historical perspective and reviews data on the cultivation of sugar cane, the production of ethanol, and on sugar cane yields as indicators of the innovations achieved in the sector. The geographical distribution of these indicators is also examined. Next, several cases in Piracicaba and Campinas in the State of Sao Paulo are presented; these give us a more concrete idea of the processes involved in innovation and technology transfer. Based on these observations, the ethanol cluster and the innovation system of the State of Sao Paulo are discussed from the viewpoint of the flowchart approach to industrial cluster policy.

Political limits on the world oil trade : firm-level evidence from US firms

International politics affect trade patterns, especially for firms in extractive industries. We construct the firm-level dataset for the U.S. oil-importing companies over 1986-2010 to test whether the state of international relations with the trading partners of the U.S. affect importing behavior of the U.S. firms. To measure "political distance" between the U.S. and her trading partners we use voting records for the UN General Assembly. We find that the U.S. firms, in fact, import significantly less oil from the political opponents of the U.S. Our conjecture is that the decrease in oil imports is mainly driven by large, vertically-integrated U.S. firms that engage in foreign direct investment (FDI) overseas.

Political influence in commercial and financial oil trading : the evidence from US firms

International politics affects oil trade. But do financial and commercial traders who participate in spot oil trading also respond to changes in international politics? We construct a firm-level dataset for all U.S. oil-importing companies over 1986-2008 to examine how these firms respond to increases in "political distance" between the U.S. and her trading partners, measured by divergence in their UN General Assembly voting patterns. Consistent with previous macro evidence, we first show that individual firms diversify their oil imports politically, even after controlling for unobserved firm heterogeneity. However, the political pattern of oil imports is not entirely driven by the concerns of hold-up risks, which exist when oil transactions via term contracts are associated with backward vertical FDI that is subject to expropriation. In particular, our results indicate that even financial and commercial traders significantly reduce their oil imports from U.S. political enemies. Interestingly, while these traders diversify their oil imports politically immediately after changes in international politics, other oil companies reduce their oil imports with a significant time lag. Our findings suggest that in designing regulations to avoid harmful repercussions on commodity and financial assets, policymakers need to understand the nature of political risk.