Endogeneizing know-how flows through the nature of R&D investments

In this paper we carefully link knowledge flows to and from a firm s innovation process with this firm s investment decisions. Three types of investments are considered: investments in applied research, investments in basic research, and investments in intellectual property protection. Only when basic research is performed, can the firm effectively access incoming knowledge flows and these incoming spillovers serve to increase the efficiency of own applied research. The firm can at the same time influence outgoing knowledge flows, improving appropriability of its innovations, by investing in protection. Our results indicate that firms with small budgets for innovation will not invest in basic research. This occurs in the short run, when the budget for know-how creation is restricted, or in the long-run, when market opportunities are low, when legal protection is not very important, or, when the pool of accessible and relevant external know-how is limited. The ratio of basic to applied research is non-decreasing in the size of the pool of accessible external know-how, the size and opportunity of the market, and, the effectiveness of intellectual property rights protection. This indicates the existence of economies of scale in basic research due to external market related factors. Empirical evidence from a sample of innovative manufacturing firms in Belgium confirms the economies of scale in basic research as a consequence of the firm s capacity to access external knowledge flows and to protectintellectual property, as well as the complementarity between legal and strategic investments.

Why are capital flows so much more volatile in emerging than in developed countries?

The standard deviations of capital flows to emerging countries are 80 percent higher than those to developed countries. First, we show that very little of this difference can be explained by more volatile fundamentals or by higher sensitivity to fundamentals. Second, we show that most of the difference in volatility can be accounted for by three characteristics of capital flows: (i) capital flows to emerging countries are more subject to occasional large negative shocks ( crises ) than those to developed countries, (ii) shocks are subject to contagion, and (iii) the most important one shocks to capital flows to emerging countries are more persistent than those to developed countries. Finally, we study a number of country characteristics to determine which are most associated with capital flow volatility. Our results suggest that underdevelopment of domestic financial markets, weak institutions, and low income per capita, are all associated with capital flow volatility.

How do very open economies adjust to large immigration flows? Recent evidence from Spanish regions

In recent years, Spain has received unprecedented immigration flows. Between 2001 and 2006 the fraction of the population born abroad more than doubled, increasing from4.8% to 10.8%. For Spanish provinces with above-median inflows (relative to population),immigration increased by 24% the number of high school dropouts while only increasingcollege graduates by 11%. We study different channels by which regional labor markets haveabsorbed the large increase in relative supply of low educated workers. We identify theexogenous supply shock using historical immigrant settlement patterns by country of origin.Using data from the Labor Force Survey and the decennial Census, we find a large expansion ofemployment in high immigration regions. Disaggregating by industry, the absorption operatedthrough large increases in the share of low-educated workers, compared to the same industry inlow-immigration regions. We do not find changes in sectoral specialization. Overall, andperhaps surprisingly, the pattern of absorption is very similar to the one found in the US.

Gross capital flows: Dynamics and crises

This paper analyzes the behavior of international capital flows by foreign and domestic agents,dubbed gross capital flows, over the business cycle and during financial crises. We show thatgross capital flows are very large and volatile, especially relative to net capital flows. Whenforeigners invest in a country, domestic agents invest abroad, and vice versa. Gross capital flowsare also pro-cyclical. During expansions, foreigners invest more domestically and domesticagents invest more abroad. During crises, total gross flows collapse and there is a retrenchmentin both inflows by foreigners and outflows by domestic agents. These patterns hold for differenttypes of capital flows and crises. This evidence sheds light on the sources of fluctuations drivingcapital flows and helps discriminate among existing theories. Our findings seem consistent withcrises affecting domestic and foreign agents asymmetrically, as would be the case under thepresence of sovereign risk or asymmetric information.

International capital flows and credit market imperfections: A tale of two frictions

The financial crisis of 2007-08 has underscored the importance of adverse selection in financialmarkets. This friction has been mostly neglected by macroeconomic models of financialimperfections, however, which have focused almost exclusively on the effects of limited pledgeability.In this paper, we fill this gap by developing a standard growth model with adverseselection. Our main results are that, by fostering unproductive investment, adverse selection:(i) leads to an increase in the economy s equilibrium interest rate, and; (ii) it generates a negativewedge between the marginal return to investment and the equilibrium interest rate. Underfinancial integration, we show how this translates into excessive capital inflows and endogenouscycles. We also extend our model to the more general case in which adverse selection and limitedpledgeability coexist. We conclude that both frictions complement one another and show thatlimited pledgeability exacerbates the effects of adverse selection.

Open to closed system transition traced through the TDIC isotopic signature at the aquifer recharge stage, implications for groundwater 14C dating

14C dating models are limited when considering recent groundwater for which the carbon isotopic signature of the total dissolved inorganic carbon (TDIC) is mainly acquired in the unsaturated zone. Reducing the uncertainties of dating thus implies a better identification of the processes controlling the carbon isotopic composition of the TDIC during groundwater recharge. Geochemical interactions between gas, water and carbonates in the unsaturated zone were investigated for two aquifers (the carbonate-free Fontainebleau sands and carbonate-bearing Astian sands, France) in order to identify the respective roles of CO2 and carbonates on the carbon isotopic signatures of the TDIC; this analysis is usually approached using open or closed system terms. Under fully open system conditions, the seasonality of the 13C values in the soil CO2 can lead to important uncertainties regarding the so-called "initial 14C activity" used in 14C correction models. In a carbonate-bearing unsaturated zone such as in the Astian aquifer, we show that an approach based on fully open or closed system conditions is not appropriate. Although the chemical saturation between water and calcite occurs rapidly within the first metre of the unsaturated zone, the carbon isotopic contents (δ13C) of the CO2 and the TDIC evolve downward, impacted by the dissolution-precipitation of the carbonates. In this study, we propose a numerical approach to describe this evolution. The δ13C and the A 14C (radiocarbon activity) of the TDIC at the base of the carbonate-hearing unsaturated zone depends on (i) the δ13C and the A 14C of the TDIC in the soil determined by the soil CO2, (ii) the water's residence time in the unsaturated zone and (iii) the carbonate precipitation-dissolution fluxes. In this type of situation, the carbonate δ13C-A 14C evolutions indicate the presence of secondary calcite and permit the calculation of its accretion flux, equal to ~ 4.5 ± 0.5 x 10-9 mol grock-1 yr-1. More generally, for other sites under temperate climate and with similar properties to the Astian sands site, this approach allows for a reliable determination of the carbon isotopic composition at the base of the unsaturated zone as the indispensable "input function" data of the carbon cycle into the aquifer.

Determinación de sistemas de flujo regionales y locales en las depresiones tectónicas del Baix Empordà y La Selva (NE de España) en base a datos hidroquímicos e isotópicos

The Baix Empordà-Selva-Gavarres aquifer system is related to the fault set that created the tectonic basins of Empordà and Selva areas (NE Spain) during the Neogene. In this work, we describe groundwater hydrogeological, hydrochemical and isotopical (3H, δD, δ18O, and the 87Sr/86Sr ratio) characteristics of this system in order to illustrate the relevance of fault zones in groundwater flow-paths and the recharge. In that way, we identify two flow systems, with distinct hydrochemistry and isotopes. A local flow system originates at the Gavarres Range, and it flows towards the basins of the Baix Empordà and Selva, with an approximate residence time of 20 years. Additionally, a regional flow system has only been identified in the Selva basin. This one is related to the main fault zones, as preferential flow paths. Its recharge is located in mountain ranges with higher altitudes, namely the Transversal and Guilleries Ranges, with residence times larger than 50 years. Isotopical data has also shown mixing processes between both flow systems and rainfall recharge while multivariate statistical analysis of principal components has shown the main processes that control hydrochemistry of each flow systems

Groundwater Availability Modeling of the Lower Dakota Aquifer in Northwest Iowa, October 2008

The 2007 Iowa General Assembly, recognizing the increased demand for water to support the growth of industries and municipalities, approved funding for the first year of a multi-year evaluation and modeling of Iowa’s major aquifers by the Iowa Department of Natural Resources. The task of conducting this evaluation and modeling was assigned to the Iowa Geological and Water Survey (IGWS). The first aquifer to be studied was the Lower Dakota aquifer in a sixteen county area of northwest Iowa.

Anomalous roughening of Hele-Shaw flows with quenched disorder

The kinetic roughening of a stable oil-air interface moving in a Hele-Shaw cell that contains a quenched columnar disorder (tracks) has been studied. A capillary effect is responsible for the dynamic evolution of the resulting rough interface, which exhibits anomalous scaling. The three independent exponents needed to characterize the anomalous scaling are determined experimentally. The anomalous scaling is explained in terms of the initial acceleration and subsequent deceleration of the interface tips in the tracks coupled by mass conservation. A phenomenological model that reproduces the measured global and local exponents is introduced.

Systematic weakly nonlinear analysis of interfacial instabilities in Hele-Shaw flows

We develop a systematic method to derive all orders of mode couplings in a weakly nonlinear approach to the dynamics of the interface between two immiscible viscous fluids in a Hele-Shaw cell. The method is completely general: it applies to arbitrary geometry and driving. Here we apply it to the channel geometry driven by gravity and pressure. The finite radius of convergence of the mode-coupling expansion is found. Calculation up to third-order couplings is done, which is necessary to account for the time-dependent Saffman-Taylor finger solution and the case of zero viscosity contrast. The explicit results provide relevant analytical information about the role that the viscosity contrast and the surface tension play in the dynamics of the system. We finally check the quantitative validity of different orders of approximation and a resummation scheme against a physically relevant, exact time-dependent solution. The agreement between the low-order approximations and the exact solution is excellent within the radius of convergence, and is even reasonably good beyond this radius.

Phase-field model of Hele-Shaw flows in the high-viscosity contrast regime

A one-sided phase-field model is proposed to study the dynamics of unstable interfaces of Hele-Shaw flows in the high viscosity contrast regime. The corresponding macroscopic equations are obtained by means of an asymptotic expansion from the phase-field model. Numerical integrations of the phase-field model in a rectangular Hele-Shaw cell reproduce finger competition with the final evolution to a steady-state finger.

Particle dispersion in synthetic turbulent flows

We study particle dispersion advected by a synthetic turbulent flow from a Lagrangian perspective and focus on the two-particle and cluster dispersion by the flow. It has been recently reported that Richardson¿s law for the two-particle dispersion can stem from different dispersion mechanisms, and can be dominated by either diffusive or ballistic events. The nature of the Richardson dispersion depends on the parameters of our flow and is discussed in terms of the values of a persistence parameter expressing the relative importance of the two above-mentioned mechanisms. We support this analysis by studying the distribution of interparticle distances, the relative velocity correlation functions, as well as the relative trajectories.

Phase-field model for Hele-Shaw flows with arabitrary contrast II: numerical approach

We present a phase-field model for the dynamics of the interface between two inmiscible fluids with arbitrary viscosity contrast in a rectangular Hele-Shaw cell. With asymptotic matching techniques we check the model to yield the right Hele-Shaw equations in the sharp-interface limit, and compute the corrections to these equations to first order in the interface thickness. We also compute the effect of such corrections on the linear dispersion relation of the planar interface. We discuss in detail the conditions on the interface thickness to control the accuracy and convergence of the phase-field model to the limiting Hele-Shaw dynamics. In particular, the convergence appears to be slower for high viscosity contrasts.

Interface dynamics in Hele-Shaw flows with centrifugal forces. Preventing cusp singularities with rotation

A class of exact solutions of Hele-Shaw flows without surface tension in a rotating cell is reported. We show that the interplay between injection and rotation modifies the scenario of formation of finite-time cusp singularities. For a subclass of solutions, we show that, for any given initial condition, there exists a critical rotation rate above which cusp formation is suppressed. We also find an exact sufficient condition to avoid cusps simultaneously for all initial conditions within the above subclass.