Winner-Take-All Contention of Innovation under Globalization: A Simulation Analysis and East Asia's Empirics

This paper sets out to examine how innovation enhances export competitiveness: The proposition that export volume becomes enhanced as more productivity-enhancing innovation is captured by the exporting economy is the focus of this study. From a Schumpeterian perspective, innovation can be characterized by continuous creation and subsequent diffusion of newer technologies on the basis of the exporters' existing capital stock. Then we highlight the theoretical possibility that concentration of innovative activities in a small group of "winner" economies would lead to larger shares of "winner" economies' exports of innovation-active commodities than those commodities for which technology involved is already mature. The world's export data corroborates this theoretical prediction overall, and a focus upon East Asia has revealed the region's increasing resort to technology-intensive commodity sectors, which has presumably been enabled through attracting technology-bearing inward foreign direct investment. Considering the overall gains from innovation, acceleration of full "cycle" of innovation and imitation might be a desirable option.

The causal relationships in mean and variance between stock returns and foreign institutional investment in India

This paper examines the causalities in mean and variance between stock returns and Foreign Institutional Investment (FII) in India. The analysis in this paper applies the Cross Correlation Function approach from Cheung and Ng (1996), and uses daily data for the timeframe of January 1999 to March 2008 divided into two periods before and after May 2003. Empirical results showed that there are uni-directional causalities in mean and variance from stock returns to FII flows irrelevant of the sample periods, while the reverse causalities in mean and variance are only found in the period beginning with 2003. These results point to FII flows having exerted an impact on the movement of Indian stock prices during the more recent period.

Valuation of a new entrant in an oligopolistic market, including its option to abandon: A real-life case

The purpose of this paper is to increase current empirical evidence on the relevance of real options for explaining firm investment decisions in oligopolistic markets. We study an actual investment case in the Spanish mobile telephony industry, the entrant in the market of a new operator, Yoigo. We analyze the option to abandon in order to show the relevance of the possibility of selling the company in an oligopolistic market where competitors are not allowed free entrance. The NPV (net present value) of the new entrant is calculated as a starting point. Then, based on the general approach proposed by Copeland and Antikarov (2001), a binomial tree is used to model managerial flexibility in discrete time periods, and value the option to abandon. The strike price of the option is calculated based on incremental EBITDA margins due to selling customers or merging with a competitor.

Metro de Madrid rolling stock models and comparative studies relating to comfort

This paper presents the work carried out by Metro de Madrid and the Railway Technology Research Centre (Polytechnic University of Madrid), aimed at setting up rolling stock simulation models with a high level of detail. To do this, the features of the SIMPACK simulation tool used to create models have been briefly outlined, explaining the main features of models in two of the series modelled: 7000 and 8000. Finally, the results obtained from comparing comfort in the 7000 and 8000 series are presented.

Robust rolling stock in rapid transit network

This paper focuses on the railway rolling stock circulation problem in rapid transit networks, in which frequencies are high and distances are relatively short. Although the distances are not very large, service times are high due to the large number of intermediate stops required to allow proper passenger flow. The main complicating issue is the fact that the available capacity at depot stations is very low, and both capacity and rolling stock are shared between different train lines. This forces the introduction of empty train movements and rotation maneuvers, to ensure sufficient station capacity and rolling stock availability. However, these shunting operations may sometimes be difficult to perform and can easily malfunction, causing localized incidents that could propagate throughout the entire network due to cascading effects. This type of operation will be penalized with the goal of selectively avoiding them and ameliorating their high malfunction probabilities. Critic trains, defined as train services that come through stations that have a large number of passengers arriving at the platform during rush hours, are also introduced. We illustrate our model using computational experiments drawn from RENFE (the main Spanish operator of suburban passenger trains) in Madrid, Spain. The results of the model, achieved in approximately 1 min, have been received positively by RENFE planners

Integration of Timetable Planning and Rolling Stock in Rapid Transit Networks

The aim of this paper is to propose an integrated planning model to adequate the offered capacity and system frequencies to attend the increased passenger demand and traffic congestion around urban and suburban areas. The railway capacity is studied in line planning, however, these planned frequencies were obtained without accounting for rolling stock flows through the rapid transit network. In order to provide the problem more freedom to decide rolling stock flows and therefore better adjusting these flows to passenger demand, a new integrated model is proposed, where frequencies are readjusted. Then, the railway timetable and rolling stock assignment are also calculated, where shunting operations are taken into account. These operations may sometimes malfunction, causing localized incidents that could propagate throughout the entire network due to cascading effects. This type of operations will be penalized with the goal of selectively avoiding them and ameliorating their high malfunction probabilities. Swapping operations will also be ensured using homogeneous rolling stock material and ensuring parkings in strategic stations. We illustrate our model using computational experiments drawn from RENFE (the main Spanish operator of suburban passenger trains) in Madrid, Spain. The results show that through this integrated approach a greater robustness degree can be obtained

Numerical methods for option pricing.

This thesis aims to introduce some fundamental concepts underlying option valuation theory including implementation of computational tools. In many cases analytical solution for option pricing does not exist, thus the following numerical methods are used: binomial trees, Monte Carlo simulations and finite difference methods. First, an algorithm based on Hull and Wilmott is written for every method. Then these algorithms are improved in different ways. For the binomial tree both speed and memory usage is significantly improved by using only one vector instead of a whole price storing matrix. Computational time in Monte Carlo simulations is reduced by implementing a parallel algorithm (in C) which is capable of improving speed by a factor which equals the number of processors used. Furthermore, MatLab code for Monte Carlo was made faster by vectorizing simulation process. Finally, obtained option values are compared to those obtained with popular finite difference methods, and it is discussed which of the algorithms is more appropriate for which purpose.

Facade typologies as a tool for selecting refurbishment measures for the Spanish residential building stock

Today, the building sector alone accounts for 40% of the total energy consumption in the European Union (EU). In most EU member states, about 70–90% of the buildings were constructed at least 20 years ago. Due to this, these buildings have a worse energy efficiency behavior than the new ones that comply with current regulations. As a consequence, acting on the existing building stock is needed, developing special methods on assessment and advice in order to reduce the total energy consumption. This article addresses a procedure allowing the classification and characterization of existing buildings facades. It can help researchers to achieve in-depth knowledge of the facades construction and therefore knowing their thermal behavior. Once knowing that, the most appropriate upgrading strategies can be established with the purpose of reducing the energy demand. Furthermore, the classified facade typologies have been verified, complying with current and future Spanish regulations and according to the results obtained, a series of upgrading strategies based on the opaque part and those in the translucent part, have been proposed. As a conclusion, this procedure helps us to select the most appropriate improvement measures for each type of facade in order to comply with current and future Spanish regulations. This proposed method has been tested in a specific neighborhood of Madrid, in a selected period of time, between 1950 and 1980, but it could be applicable to any other city.

Robust rolling stock under uncertain demand in rapid transit networks

This paper focuses on the railway rolling stock circulation problem in rapid transit networks where the known demand and train schedule must be met by a given fleet. In rapid transit networks the frequencies are high and distances are relatively short. Although the distances are not very large, service times are high due to the large number of intermediate stops required to allow proper passenger flow. The previous circumstances and the reduced capacity of the depot stations and that the rolling stock is shared between the different lines, force the introduction of empty trains and a careful control on shunting operation. In practice the future demand is generally unknown and the decisions must be based on uncertain forecast. We have developed a stochastic rolling stock formulation of the problem. The computational experiments were developed using a commercial line of the Madrid suburban rail network operated by RENFE (The main Spanish operator of suburban trains of passengers). Comparing the results obtained by deterministic scenarios and stochastic approach some useful conclusions may be obtained.

Assessment of irrigators’ preferences for different water supply risk management tools: option contract and insurance.

Irrigators face the risk of not having enough water to meet their crops’ demand. There are different mechanisms to cope with this risk, including water markets (option contracts) or insurance. A farmer will purchase them when the expected utility change derived from the tool is positive. This paper presents a theoretical assessment of the farmer’s expected utility under two different option contracts, a drought insurance and a combination of an option contract and the insurance. We analyze the conditions that determine farmer’s reference for one instrument or the other and perform a numerical application that is relevant for a Spanish region.

Water option contracts for reducing water supply risks: an application to the Tagus-Segura Transfer

El agua es un recurso cada vez más escaso y valioso. Por ello, los recursos hídricos disponibles deben asignarse de una forma eficiente entre los diferentes usos. El cambio climático aumentará la frecuencia y severidad de los eventos extremos, y podría incrementar la demanda de agua de los cultivos. El empleo de mecanismos flexibles de asignación de agua puede ser imprescindible para hacer frente a este aumento en la variabilidad del balance hídrico y para asegurar que los riesgos de suministro, y no solo los recursos, son compartidos de manera eficiente entre los usuarios. Los mercados de agua permiten la reasignación de los recursos hídricos, favoreciendo su transferencia desde los usos de menor a los de mayor valor. Diferentes tipos de mercados de agua se han establecido en diferentes partes del mundo, ayudando a los participantes a afrontar los problemas de escasez de agua en esas zonas. En España, los intercambios de agua están permitidos desde 1999, aunque la participación de los usuarios en el mercado ha sido limitada. Hay varios aspectos de los mercados de agua en España que deben mejorarse. Esta tesis, además de proponer una serie de cambios en el marco regulatorio, propone la introducción de contratos de opción de agua como una posible mejora. La principal ventaja de este tipo de contratos es la estabilidad legal e institucional que éstos proporcionan tanto a compradores como vendedores. Para apoyar esta propuesta, se han llevado a cabo diferentes análisis que muestran el potencial de los contratos de opción como herramienta de reducción del riesgo asociado a una oferta de agua inestable. La Cuenca del Segura (Sureste de España), la Cuenca del Tajo y el Acueducto Tajo- Segura han sido seleccionados como casos de estudio. Tres análisis distintos aplicados a dicha región se presentan en esta tesis: a) una evaluación de los contratos de opción como mecanismo para reducir los riesgos de disponibilidad de agua sufridos por los regantes en la Cuenca del Segura; b) un marco teórico para analizar las preferencias de los regantes por diferentes mecanismos de gestión del riesgo de disponibilidad de agua, su disposición a pagar por ellos y los precios aproximados de estos instrumentos (seguro de sequía y contratos de opción de agua); y c) una evaluación del papel de los contratos de opción en las decisiones de aprovisionamiento de agua de una comunidad de regantes ante una oferta de agua incierta. Los resultados muestran el potencial de reducción del riesgo de los contratos de opción para regantes en España, pero pueden ser extrapolados a otros sectores o regiones. Las principales conclusiones de esta tesis son: a) la agricultura será uno de los sectores más afectados por el cambio climático. Si los precios del agua aumentan, la rentabilidad de los cultivos puede caer hasta niveles negativos, lo que podría dar lugar al abandono de cultivos de regadío en algunas zonas de España. Las políticas de cambio climático y de agua deben estar estrechamente coordinadas para asegurar un uso de agua eficiente y la rentabilidad de la agricultura; b) aunque los mercados de agua han ayudado a algunos usuarios a afrontar problemas de disponibilidad del recurso en momentos de escasez, hay varios aspectos que deben mejorarse; c) es necesario desarrollar mercados de agua más flexibles y estables para garantizar una asignación eficiente de los recursos entre los usuarios de agua; d) los resultados muestran los beneficios derivados del establecimiento de un contrato de opción entre usuarios de agua del Tajo y del Segura para reducir el riesgo de disponibilidad de agua en la cuenca receptora; e) la disposición a pagar de los regantes por un contrato de opción de agua o un seguro de sequía hidrológica, que representa el valor que tienen estos mecanismos para aquellos usuarios de agua que se enfrentan a riesgos relacionados con la disponibilidad del recurso, es consistente con los resultados obtenidos en estudios previos y superior al precio de mercado de estos instrumentos, lo que favorece la viabilidad de estos mecanismos de gestión del riesgo ; y f) los contratos de opción podrían ayudar a optimizar las decisiones de aprovisionamiento de agua bajo incertidumbre, proporcionando más estabilidad y flexibilidad que los mercados temporales de agua. ABSTRACT Water is becoming increasingly scarce and valuable. Thus, existing water resources need to be efficiently allocated among users. Climate change is expected to increase the frequency and severity of extreme events, and it may also increase irrigated crops' water demand. The implementation of flexible allocation mechanisms could be essential to cope with this increased variability of the water balance and ensure that supply risks, and not only water resources, are also efficiently shared and managed. Water markets allow for the reallocation of water resources from low to high value uses. Different water trading mechanisms have been created in different parts of the world and have helped users to alleviate water scarcity problems in those areas. In Spain, water trading is allowed since 1999, although market activity has been limited. There are several issues in the Spanish water market that should be improved. This thesis, besides proposing several changes in the legislative framework, proposes the introduction of water option contracts as a potential improvement. The main advantage for both buyer and seller derived from an option contract is the institutional and legal stability it provides. To support this proposal, different analyses have been carried out that show the potential of option contracts as a risk reduction tool to manage water supply instability. The Segura Basin (Southeast Spain), the Tagus Basin and the Tagus-Segura inter-basin Transfer have been selected as the case study. Three different analyses applied to this region are presented in this thesis: a) an evaluation of option contracts as a mechanisms to reduce water supply availability risks in the Segura Basin; b) a theoretical framework for analyzing farmer’s preferences for different water supply risk management tools and farmers’ willingness to pay for them, together with the assessment of the prices of these mechanisms (drought insurance and water option contracts); and c) an evaluation of the role of option contracts in water procurement decisions under uncertainty. Results show the risk-reduction potential of option contracts for the agricultural sector in Spain, but these results can be extrapolated to other sectors or regions. The main conclusions of the thesis are: a) agriculture would be one of the most affected sectors by climate change. With higher water tariffs, crop’s profitability can drop to negative levels, which may result in the abandoning of the crop in many areas. Climate change and water policies must be closely coordinated to ensure efficient water use and crops’ profitability; b) although Spanish water markets have alleviated water availability problems for some users during water scarcity periods, there are several issues that should be improved; c) more flexible and stable water market mechanisms are needed to allocate water resources and water supply risks among competing users; d) results show the benefits derived from the establishment of an inter-basin option contract between water users in the Tagus and the Segura basins for reducing water supply availability risks in the recipient area; e) irrigators’ willingness to pay for option contracts or drought insurance, that represent the value that this kind of trading mechanisms has for water users facing water supply reliability problems, are consistent with results obtained in previous works and higher than the prices of this risk management tools, which shows the feasibility of these mechanisms; and f) option contracts would help to optimize water procurement decisions under uncertainty, providing more flexibility and stability than the spot market.

Wind tunnel analysis of the aerodynamic loads on rolling stock over railway embankments: the effect of shelter windbreaks

Wind-flow pattern over embankments involves an overexposure of the rolling stock travelling on them to wind loads. Windbreaks are a common solution for changing the flow characteristic in order to decrease unwanted effects induced by the presence of crosswind. The shelter effectiveness of a set of windbreaks placed over a railway twin-track embankment is experimentally analysed. A set of two-dimensional wind tunnel tests are undertaken and results corresponding to pressure tap measurements over a section of a typical high-speed train are herein presented.The results indicate that even small-height windbreaks provide sheltering effects to the vehicles. Also, eaves located at the windbreak tips seem to improve their sheltering effect.

Fuel Cells: A Real Option for Unmanned Aerial Vehicles Propulsion

The possibility of implementing fuel cell technology in Unmanned Aerial Vehicle (UAV) propulsion systems is considered. Potential advantages of the Proton Exchange Membrane or Polymer Electrolyte Membrane (PEMFC) and Direct Methanol Fuel Cells (DMFC), their fuels (hydrogen and methanol), and their storage systems are revised from technical and environmental standpoints. Some operating commercial applications are described. Main constraints for these kinds of fuel cells are analyzed in order to elucidate the viability of future developments. Since the low power density is the main problem of fuel cells, hybridization with electric batteries, necessary in most cases, is also explored.

Efectos de la vegetación en el stock de carbono del suelo en el límite del árbol en la Sierra de Guadarrama

La vegetación es uno de los factores que condicionan los stocks de C en los suelos ya que determina la cantidad y calidad de la materia orgánica que incorpora al suelo, la estructura y condiciones microclimáticas edáficas, la respiración radicular, micorrizas y bacterias asociadas. En las últimas décadas se ha observado un ascenso del límite del árbol, así como la matorralización de la vegetación en los ecosistemas de montaña consecuencia del cambio climático y de los cambios en el uso del suelo. Sin embargo, las consecuencias de los cambios de la vegetación sobre los stocks de C del suelo no se conocen todavía de manera satisfactoria y los observados hasta ahora no son unívocos. El objetivo de este trabajo es identificar los parámetros relacionados con la vegetación que mejor predicen los stocks de C y N en el suelo.

Option contracts for allocating water in inter-basin transfers: the case of the Tagus-Segura Basin in Spain

Users in the Mediterranean region face significant water supply risks. Water markets mechanisms can provide flexibility to water systems run in tight situations. The largest water infrastructure in the Iberian Peninsula connects the Segura and Tagus Basins. Stakeholders and politicians in the Tagus Basin have asked that water transfers between the two basins be eventually phased out. The need to increase the statutory minimum environmental flow in the middle Tagus and to meet new urban demands is going to result in a redefinition of the Transfer?s management rules, leading to a reduction in the transferable volumes. To minimise the consequences of such restrictions to irrigators in the Segura Basin who depend on the transferred volumes, we propose the establishment of water option contracts between both basins that represents an institutional innovation with respect to previous inter-basin spot market experiences. Based on the draft of the new Tagus Basin Plan, we propose both a modification of the Transfer?s management rule and an innovative inter-basin option contract. The main goal of the paper is to define this contract and evaluate it with respect to non-market scenarios. We also assess the resulting impact on environmental flows in the Tagus River and water availability for users in the Segura Basin, together with the economic impacts of such contract on both basins. Our results show that the proposed option contract would reduce the impact of a change in the transfer?s management rule, and reduce the supply risks of the recipient area.