The location of manufacturing firms and imperfect information in transport market

It is well know that transport charges are not symmetric: fronthaul and backhaul costs on a route may differ, because they are affected by the distribution of economic acitivities. This paper develops a two-regional general equilibrium model in which transport costs are determined endogenously as a result of a search and matching process. It is shown that economies or diseconomies of transport density emerge, depending on the search costs of transport firms and the relative importance of the possibility of backhaul transportation. It is found that the symmetry of the distribution of economic activity may break owing to economies of transport density when the additional search costs are small enough.

Tracing CO2 emissions in global value chains

This paper integrates two lines of research into a unified conceptual framework: trade in global value chains and embodied emissions. This allows both value added and emissions to be systematically traced at the country, sector, and bilateral levels through various production network routes. By combining value-added and emissions accounting in a consistent way, the potential environmental cost (amount of emissions per unit of value added) along global value chains can be estimated. Using this unified accounting method, we trace CO2 emissions in the global production and trade network among 41 economies in 35 sectors from 1995 to 2009, basing our calculations on the World Input–Output Database, and show how they help us to better understand the impact of cross-country production sharing on the environment.

Understanding traders' regional arbitage : the case of rice traders in Antananarivo, Madagascar

Many studies find that agricultural markets in developing countries are poorly integrated spatially. Traders' regional arbitrage plays a key role in integrating markets across space. We investigate the performance of regional arbitrage and the associated obstacles for rice traders in Antananarivo, Madagascar. On the basis of a trader-level biweekly survey spanning 2012–2013, we find that traders are not fully exploiting the regional arbitrage opportunities: most of them fail to purchase from the cheapest district and are paying higher prices than those in the cheapest district. One apparent obstacle is obtaining price information from many different regions. To reduce search costs, we provided regional price information via SMS to randomly selected traders, but found that this had a null-effect on improving arbitrage performance. Traders tend to concentrate on trading with a few fixed districts, even if they are informed about cheaper prices in other new districts, because they worry about quality uncertainty and the trustworthiness of new partners. These findings suggest that not only transmission of price information but also issues related to produce quality and matching prevent the performance of arbitrage and market integration.