Trade Liberalization and Organizational Change

We embed a simple incomplete-contracts model of organization design in a standard two-country perfectly-competitive trade model to examine how the liberalization of product and factor markets affects the ownership structure of firms.In our model, managers decide whether or not to integrate their firms, trading off the pecuniary benefits of coordinating production decisions with the private benefits of operating in their preferred ways. The price of output is a crucial determinant of this choice, since it affects the size of the pecuniary benefits. In particular, non-integration is chosen at “low” and “high” prices, while integration occurs at moderate prices. Organizational choices also depend on the terms of trade in supplier markets, which affect the division of surplus between managers. We obtain three main results. First, even when firms do not relocate across countries, the price changes triggered by liberalization of product markets can lead to significant organizational restructuring within countries. Second, the removal of barriers to factor mobility can lead to inefficient reorganization and adversely affect consumers. Third, “deep integration” — the liberalization of both product and factor markets — leads to the convergence of organizational design across countries.

Body reserves mediate trade-offs between life-history traits: new insights from small pelagic fish reproduction

Limited resources in the environment prevent individuals from simultaneously maximizing all life-history traits, resulting in trade-offs. In particular, the cost of reproduction is well known to negatively affect energy investment in growth and maintenance. Here, we investigated these trade-offs during contrasting periods of high versus low fish size and body condition (before/after 2008) in the Gulf of Lions. Female reproductive allocation and performance in anchovy (Engraulis encrasicolus) and sardine (Sardina pilchardus) were examined based on morphometric historical data from the 1970s and from 2003 to 2015. Additionally, potential maternal effects on egg quantity and quality were examined in 2014/2015. After 2008, the gonadosomatic index increased for sardine and remained steady for anchovy, while a strong decline in mean length at first maturity indicated earlier maturation for both species. Regarding maternal effects, for both species egg quantity was positively linked to fish size but not to fish lipid reserves, while the egg quality was positively related to lipid reserves. Atresia prevalence and intensity were rather low regardless of fish condition and size. Finally, estimations of total annual numbers of eggs spawned indicated a sharp decrease for sardine since 2008 but a slight increase for anchovy during the last 5 years. This study revealed a biased allocation towards reproduction in small pelagic fish when confronted with a really low body condition. This highlights that fish can maintain high reproductive investment potentially at the cost of other traits which might explain the present disappearance of old and large individuals in the Gulf of Lions.

Tuberculosis epidemiology in islands: insularity, hosts and trade

Because of their relative simplicity and the barriers to gene flow, islands are ideal systems to study the distribution of biodiversity. However, the knowledge that can be extracted from this peculiar ecosystem regarding epidemiology of economically relevant diseases has not been widely addressed. We used information available in the scientific literature for 10 old world islands or archipelagos and original data on Sicily to gain new insights into the epidemiology of the Mycobacterium tuberculosis complex (MTC). We explored three nonexclusive working hypotheses on the processes modulating bovine tuberculosis (bTB) herd prevalence in cattle and MTC strain diversity: insularity, hosts and trade. Results suggest that bTB herd prevalence was positively correlated with island size, the presence of wild hosts, and the number of imported cattle, but neither with isolation nor with cattle density. MTC strain diversity was positively related with cattle bTB prevalence, presence of wild hosts and the number of imported cattle, but not with island size, isolation, and cattle density. The three most common spoligotype patterns coincided between Sicily and mainland Italy. However in Sicily, these common patterns showed a clearer dominance than on the Italian mainland, and seven of 19 patterns (37%) found in Sicily had not been reported from continental Italy. Strain patterns were not spatially clustered in Sicily. We were able to infer several aspects of MTC epidemiology and control in islands and thus in fragmented host and pathogen populations. Our results point out the relevance of the intensity of the cattle commercial networks in the epidemiology of MTC, and suggest that eradication will prove more difficult with increasing size of the island and its environmental complexity, mainly in terms of the diversity of suitable domestic and wild MTC hosts.

A method for comprehensively assessing economic trade-offs of new irrigation developments

To meet the anticipated increase in global demand for food and fibre products, large areas of land around the world are being cleared and infrastructure constructed to enable irrigation, referred to herein as ‘greenfield irrigation’. One of the challenges in assessing the profitability of a greenfield irrigation development is understanding the impact of variability in climate and water availability and the trade-offs with scheme size, cost and the sensitivity of crop yield to water stress. For example, is it more profitable to irrigate a small area of land most years or a large area once every few years? And, is it more profitable to partially or fully water the crop? This paper presents a new method for efficiently linking a river system model and an agricultural production model to explore the financial trade-offs of different management choices, thereby enabling the optimal scheme area and most appropriate level of farmer risk to be identified. The method is demonstrated for a hypothetical but plausible greenfield irrigation development based around a large dam in the Flinders catchment, northern Australia. It was found that a dam and irrigation development paid for and operated by the same entity is not, under the conditions examined in this analysis, economically sustainable. The method could also be used to explore the impact of different management strategies on the agricultural production and profitability of existing irrigation schemes within a whole of river system context.

Does international trade produce convergence?

In spite of increasing globalization around the world, the effects of international trade on economic growth are not very clear. I consider an endogenous economic growth model in an open economy with the Home Market Effect (HME) and non-homothetic preferences in order to identify some determinants of the different results in this relationship. The model shows how trade between similar countries leads to convergence in economic growth when knowledge spillovers are present, while trade between very asymmetric countries produces divergence and may become trade in a poverty or growth trap. The results for welfare move in the same direction as economic growth since convergence implies increases in welfare for both countries, while divergence leads to increases in welfare for the largest country and the opposite for its commercial partner in the absence of knowledge spillovers. International trade does not implicate greater welfare as is usual in a static context under CES preferences.

The Influence of Age and Size on Family-Owned Firms’ Financing Decisions: Empirical Evidence Using Panel Data

Based on four samples of Portuguese family-owned firmsdi) 185 young, low-sized family-owned firms; ii) 167 young, high-sized familyowned firms; iii) 301 old, low-sized family-owned firms; and iv) 353 old, high-sized family-owned firms d we show that age and size are fundamental characteristics in family-owned firms’ financing decisions. The multiple empirical evidence obtained allows us to conclude that the financing decisions of young, low-sized family-owned firms are quite close to the assumptions of Pecking Order Theory, whereas those of old, high-sized family-owned firms are quite close to what is forecast by Trade-Off Theory. The lesser information asymmetry associated with greater age, the lesser likelihood of bankruptcy associated with greater size, as well as the lesser concentration of ownership and management consequence of greater age and size, may be especially important in the financing decisions of family-owned firms. In addition, we find that GDP, interest rate and periods of crisis have a greater effect on the debt of young, low-sized family-owned firms than on that of family-owned firms of the remainder research samples.

Tracking people in 3D using position, size and shape

This paper presents a prototype tracking system for tracking people in enclosed indoor environments where there is a high rate of occlusions. The system uses a stereo camera for acquisition, and is capable of disambiguating occlusions using a combination of depth map analysis, a two step ellipse fitting people detection process, the use of motion models and Kalman filters and a novel fit metric, based on computationally simple object statistics. Testing shows that our fit metric outperforms commonly used position based metrics and histogram based metrics, resulting in more accurate tracking of people.