Three essays on trade and investment

From H. G. Johnson's work (Review of Economic Studies, 1953–54) on tariff retaliation, the questions of whether a country can win a “tariff war” and how or even the broader question of what will affect a country's strategic position in setting bilateral tariff have been tackled in various situations. Although it is widely accepted that a country will have strategic advantages in winning the tariff war if its relative monopoly power is sufficiently large, it is unclear what are the forces behind such power formation. The goal of this research is to provide a unified framework and discuss various forces such as relative country size, absolute advantages and relative advantages simultaneously. In a two-country continuum-of-commodity neoclassical trade model, it is shown that sufficiently large relative country size is a sufficient condition for a country to choose a non-cooperative tariff Nash equilibrium over free trade. It is also shown that technology disparities such as absolute advantage, rate of technology disparity and the distribution of the technology disparity all contribute to a country's strategic position and interact with country size. ^ Leverage effect is usually used to explain the phenomenon of asymmetric volatility in equity returns. However, leverage itself can only account for parts of the asymmetry. In this research, it is shown that stock return volatility is related to firms’ financial status. Financially constrained firms tend to be more sensitive to the return changes. Financial constraint factor explains why some firms tend to be more volatile than others. I found that the financial constraint factor explains the stock return volatility independent of other factors such as firm size, industry affiliation and leverage. Firms’ industry affiliations are shown to be very weak in differentiating volatility. Firm size is proven to be a good factor in distinguishing the different levels of volatility and volatility-return sensitivity. Leverage hypothesis is also partly corroborated and the situation where leverage effect is not applicable is discussed. Finally, I examined the macroeconomic policy's effects on overall market volatility. ^

Association between mean residual life (MRL) and failure rate functions for continuous and discrete lifetime distributions

The purpose of this study was to correct some mistakes in the literature and derive a necessary and sufficient condition for the MRL to follow the roller-coaster pattern of the corresponding failure rate function. It was also desired to find the conditions under which the discrete failure rate function has an upside-down bathtub shape if corresponding MRL function has a bathtub shape. The study showed that if discrete MRL has a bathtub shape, then under some conditions the corresponding failure rate function has an upside-down bathtub shape. Also the study corrected some mistakes in proofs of Tang, Lu and Chew (1999) and established a necessary and sufficient condition for the MRL to follow the roller-coaster pattern of the corresponding failure rate function. Similarly, some mistakes in Gupta and Gupta (2000) are corrected, with the ensuing results being expanded and proved thoroughly to establish the relationship between the crossing points of the failure rate and associated MRL functions. The new results derived in this study will be useful to model various lifetime data that occur in environmental studies, medical research, electronics engineering, and in many other areas of science and technology.

Notes on sufficient conditions for a graph to be Hamiltonian

The first part of this paper deals with an extension of Dirac's Theorem to directed graphs. It is related to a result often referred to as the Ghouila-Houri Theorem. Here we show that the requirement of being strongly connected in the hypothesis of the Ghouila-Houri Theorem is redundant. The Second part of the paper shows that a condition on the number of edges for a graph to be hamiltonian implies Ore's condition on the degrees of the vertices.