We analyse partial cross-ownership (PCO) and cooperative research and development (R&D) within a unified framework that incorporates deterministic R&D and spillovers under Cournot duopoly. We find that R&D investment under PCO is greater than that of noncooperative R&D for spillover rates below half, and that of cooperative R&D for some intermediate spillover rates above half. PCO arrangement can improve consumer surplus and welfare. However, in some situations, PCO can increase R&D levels while reducing consumer surplus relative to the cooperative R&D regime. When firms combine PCO with cooperative R&D, the R&D investment can be higher than under PCO alone for higher spillovers. We also find that optimal cross-ownership is an increasing function of spillovers but may be less than the regulatory cap. We further analyse one-way partial ownership and establish that the shareholding firm invests nothing in R&D for low spillovers. Some of our results can be empirically tested.
This paper reassesses the employment effects of minimum wage increases by exploiting cross-country and cross-industry variation in the bindingness of minimum wages. Using country–industry panel data with fixed effects estimation, we find no significant effects on overall wage employment at either the extensive margin (number of employees) or the intensive margin (hours worked per employee). Instead, minimum wage increases are associated with higher self-employment and lower average working hours among the self-employed. Sectoral results show that disemployment effects are concentrated in tradable industries and are more pronounced in high-wage industries where minimum wages are less binding. These findings suggest that employment outcomes reflect the interaction between firms’ ability to pass through higher labor costs and workers’ incentives to enter the labor market. The results underscore the importance of industry-level heterogeneity and highlight the need to move beyond uniform minimum wage policies in both research and policy design.
This study investigates the localized economic footprint of large-scale gold mining, assessing whether it reinforces enclave growth or reshapes local production networks. Using geocoded panel data on African manufacturing and service enterprises, we document that firms near active gold mines, relative to those near inactive mining sites, experience restructuring of local production systems, reflected in higher sales, employment, and labor productivity alongside reduced reliance on imported inputs. Primary channels include skill upgrading, domestic supply-chain deepening, and an improved local business environment with fewer infrastructure and administrative constraints. These spillovers are significantly amplified in better-governed countries characterized by high data transparency, highlighting how a transparent information environment enables resource extraction to support sustainable structural transformation rather than enclave-type growth.
Transport poverty is increasingly recognised as a structural driver of absolute poverty. This study examines how transport poverty shapes poverty outcomes and how transport policies can mitigate these effects. We propose the Transport Poverty–Growth–Inequality (TPGI) framework and test a Transport Kuznets Curve (TKC) describing the nonlinear relationship between transport development and transport inequality. While the core analysis is conducted at the regional level using dynamic panel models, robustness is assessed through supplementary cross-sectional and panel analyses at provincial and municipal scales. The results show that transport poverty significantly increases absolute poverty, especially in the southern regions where mobility constraints are most binding. Transport poverty is alleviated by both transport development and policies aimed at inequality reduction, though development exhibits a stronger marginal effect. This interaction is nonlinear: consistent with the TKC, transport development initially increases inequality but reduces it beyond a critical threshold. Overall, the findings indicate that transport investments must be complemented by equity-oriented measures to achieve inclusive and poverty-reducing outcomes.
This study analyzes the strategic interaction between the European Central Bank (ECB) and the United States Federal Reserve (Fed) within a static New Keynesian game-theoretic framework. While much of the existing literature has focused on fiscal coordination within a single monetary union, we extend the analysis to two independent monetary areas. We find that when both central banks respond independently to inflationary shocks, they do not internalize cross-border spillovers, thereby generating a tightening bias. We also show that deeper fiscal integration in the euro zone reduces this monetary tightening bias and lowers the external monetary pressure exerted on the Fed. This highlights a broader benefit of moving closer to a fiscal union in Europe, namely, its potential to support global macroeconomic and financial stability.
The Tradable Performance Standards (TPS) is an intensity-based emissions trading system, whereas the Renewable Portfolio Standard (RPS) is a distinct renewable energy mandate. Both instruments support carbon neutrality. The necessity of overlapping policies remains debated because additional regulation can elevate compliance costs. Using theoretical and numerical approaches, we examine how these two mandates interact in China’s electricity market. We show that the TPS reduces emissions intensity while creating an implicit output subsidy that encourages thermal overproduction and lowers electricity prices. Adding the RPS curbs thermal output, expands green generation, and improves fuel-use efficiency, while leaving the intensive-margin emissions intensity unchanged in the baseline representative-firm equilibrium. Welfare effects are non-monotonic in quota stringency, as moderate quotas correct the TPS output distortion whereas overly ambitious quotas generate high certificate costs. Benchmark-sensitivity analysis confirms that the primary mechanism remains robust under China’s subsequent benchmark tightening. These findings suggest that overlapping TPS–RPS policies can be welfare improving when renewable quotas are carefully calibrated and supported by certificate-price safeguards.
This study proposes a Bayesian Markov Chain Monte Carlo algorithm for estimating a spatial Durbin Type-III Tobit model. Simulations show that the Bayesian approach performs well in finite samples and may be preferred over maximum likelihood estimation method when the datasets are large and the number of covariates is high. Applying the model to cereal production in Southeast Asia, we find that climate change reduces cereal yields, but accounting for spillovers from neighboring temperature, precipitation, and soil conditions moderates the estimated damages. More broadly, the results suggest that assessing risks to crop yields and designing related policies should account for spillover effects, not conditions alone.
Moving beyond the conventional duality that characterizes state intervention versus civil energy in entrepreneurship research, this study investigates the underexplored impact of the “third sphere”, a hybrid space that blends characteristics of both. Focusing on Chinese merchant guilds as a paradigmatic practice within this “third sphere”, we examine their impact on city-level entrepreneurship from 2000 to 2019. Our empirical results demonstrate that merchant guilds exert a statistically significant positive effect on cities’ entrepreneurial activities in China. Mechanism analyses further suggest that merchant guilds can facilitate the agglomeration of heterogeneous capital and strengthen government-business partnerships, thereby driving entrepreneurship development. Moreover, the findings reveal a context-dependent dual role of merchant guilds. In regions with low levels of marketization, merchant guilds tend to function in ways similar to formal institutions. Conversely, in areas with weaker informal cultural foundations, they operate as inspirational networks among entrepreneurs. Theoretically, this study contributes to entrepreneurship literature by identifying the “third sphere” as an important and insufficiently examined source of entrepreneurial activities. Practically, it provides actionable insights for policymakers, suggesting that fostering the “third sphere” grounded in both state authority and social embeddedness can serve as a viable strategy for alleviating entrepreneurial frictions.
Firms face a fundamental challenge when allocating scarce human capital between proprietary technological efficiency and social innovation. Social initiatives such as ethical sourcing and circular supply chains help build brand identity and differentiate products, but the transparency they require inevitably leaks operational know-how to competitors. We formalise the strategic relationship between these two investments and show that it is not static: at low commitment levels, the spillover dominates and the two paths act as strategic substitutes, while past a critical threshold, the resulting differentiation softens competition and amplifies the returns to technological investments, turning them into strategic complements. The transition is robust to Bertrand pricing, oligopolistic competition, and fully symmetric games. From a welfare standpoint, the market undersupplies social innovation throughout, and two talent-targeted Pigouvian subsidies exactly close the gap, offering a tractable benchmark for policy design in industries where sustainability and efficiency increasingly converge.
The existing literature shows that outward foreign direct investment (OFDI) can enhance firm productivity, yet the role of host-country digitalization in shaping these gains remains underexplored. This paper examines how the digital environment of the host country conditions the productivity effects of OFDI. Using a firm–host-country–year panel of Chinese firms from 2013 to 2023 and a propensity score matching triple-difference (DDD) framework, we find that OFDI increases firm productivity on average. However, the magnitude of this effect declines as the level of digitalization in the host country rises. We attribute this attenuated effect to weakened absorptive capacity under highly digitalized environments. Specifically, firms appear to reallocate resources toward short-term or high-risk R&D activities, generating limited immediate productivity returns. These findings contribute to the literature by highlighting the contingent role of host-country digital infrastructure in mediating OFDI spillovers and offer policy implications for firms pursuing international expansion in increasingly digital economies.
