https://link.springer.com/content/pdf/10.1057%2Fpalgrave.ces.8100210.pdf

Multinational Firms in the World Economy

Nowhere has the divide between advocates and critics of globalization been more striking than in debates over free trade and the environment. And yet the literature on the subject is high on rhetoric and low on results. This book is the first to systematically investigate the subject using both economic theory and empirical analysis. Brian Copeland and Scott Taylor establish a powerful theoretical framework for examining the impact of international trade on local pollution levels, and use it to offer a uniquely integrated treatment of the links between economic growth, liberalized trade, and the environment. The results will surprise many.

	The authors set out the two leading theories linking international trade to environmental outcomes, develop the empirical implications, and examine their validity using data on measured sulfur dioxide concentrations from over 100 cities worldwide during the period from 1971 to 1986.

	The empirical results are provocative. For an average country in the sample, free trade is good for the environment. There is little evidence that developing countries will specialize in pollution-intensive products with further trade. In fact, the results suggest just the opposite: free trade will shift pollution-intensive goods production from poor countries with lax regulation to rich countries with tight regulation, thereby lowering world pollution. The results also suggest that pollution declines amid economic growth fueled by economy-wide technological progress but rises when growth is fueled by capital accumulation alone.

	Lucidly argued and authoritatively written, this book will provide students and researchers of international trade and environmental economics a more reliable way of thinking about this contentious issue, and the methodological tools with which to do so.

Trade and the environment : theory and evidence

Since the WWII the largest and fastest growing component of world trade has been the exchange of manufactures between industrialized economies. The emerging of the intraindustry trade has somewhat challenged and cast doubts on the traditional Heckscher-Ohlin-Samuelson (H-O-S) trade model. Economists have some insight into this phenomenon, and attention has accordingly shifted to influence of the product differentiation on the economies of scale. But their research has no little impact on the dominating trade theory. What's more, they cannot give sufficient explanation to the modern trade practices. This paper focuses on the differentiated producer goods and constructs a model yielding international returns to scale. It also employs this model to explore the relations between international returns, the traditional national returns to scale and the factor endowments theory of international trade.

National and International Returns to Scale in the Modern Theory of International Trade

This paper develops a two-sector general equilibrium model of an economy with an open access renewable resource. We characterize the autarkic steady state, showing that autarky prices (and 'comparative advantage') are determined by the ratio of intrinsic resource growth to labor. Under free trade, steady state trade and production patterns for a small open economy are determined by whether the resource good's world price exceeds its autarky price. Strikingly, if the small country exports the resource good while remaining diversified, then steady-state utility is lower than in autarky, and increases in the world price of exports are welfare-reducing.

International Trade and Open Access Renewable Resources: The Small Open Economy Case

This Paper focuses on two distinct facets of globalization: the decrease in the trade costs of goods and the decline of communication costs between headquarters and production facilities within firms. When the unskilled have about the same wage in the two regions, the decrease of these costs fosters the gradual agglomeration of plants in the core region accommodating the headquarters. By contrast, when the wage gap is significant, the process of integration eventually triggers the relocation of plants into the periphery. In particular, when falling communication costs drives the process of relocation, the welfare of all workers living in the core goes down whereas the welfare of those who reside in the periphery rises.

Globalization and the evolution of the supply chain: who gains and who loses ?

Public works often suffer from long durations and time escalations, which entail the dissatisfaction of collective needs. Using micro-level data on the works recently procured by the municipalities...

Understanding the procurement performance of local governments: A duration analysis of public works:

Empirical evidence shows that an increase in trade liberalisation causes an increase in foreign direct investments (FDIs). Here we propose an explanation to this apparent puzzle by exploiting the intensity of competition in a Bertrand duopoly with convex costs where the two …rms enter in a new market. We adopt Dastidar’s (1995) approach, delivering a continuum of Bertrand-Nash equilibria ranging above marginal cost pricing, to show that softening competition may

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Trade Costs, FDI incentives, and the Intensity of Price Competition

This paper investigates the impact of free trade on welfare in a two-country world modelled as an international Hotelling duopoly with quadratic transport costs and asymmetric countries, where a negative environmental externality is associated with the consumption of the good produced in the smaller country Countries’ relative sizes as well as the intensity of negative environmental externality affect potential welfare gains of trade liberalisation In line with Lambertini (1997a) we show that, as long as no trade policy is undertaken by the government of the larger country, trade liberalisation is not feasible since the latter always loses from opening to trade A subsidy policy in favour of the firm producing the clean good is, on the contrary, shown to give both countries the right incentives to liberalize trade Allowing for redistributive transfers between countries further extends the parametric range for which trade liberalisation is feasible under the subsidy scheme The alternative situation, in which the green firm is based in the larger country, is also briefly sketched to find that free trade does give rise to a global welfare increment with no need of accompanying trade policies

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Trade Liberalisation between Asymmetric Countries with Environmentally Concerned Consumers

This paper describes the Remi-Irpet macroeconometric multisectoral model. The Remi-Irpet, based on an input-output core structure, has its most distinctive feature in the modelling of vertical pecuniary externalities a la Fujita-Krugman-Venables which represents the core dynamization mechanism. Our contribution first presents the theoretical background of the model. Second, we present a simulation exercise performed through the model in which we evaluate the structural impact of incoming FDIs for Tuscany. The impact analysis is defined in terms of (i) change in the overall productive capacity and (ii) medium-term changes in prices and productivity, driven by the changes in the accessibility to labour and intermediate inputs.

A structural multisectoral model with new economic geography linkages for Tuscany

This paper focuses on the functional specialisation of a system of cities, with particular attention to the role and the formation process of secondary business centers.
At the European level, the latters can be identified in the large number of regional capitals, and properly defined as cities hosting both headquarters of multi-location firms and providers of standard non-tradable business services (SBS). I present a theoretical model in which the changes in urban system’s degree of functional specialisation are linked to (i) firms’ organisational choices, since firms decide whether splitting into headquarter and production plant or remaining integrated in a single establishment and to (ii) firms’ location decision with regards to the proximity with the tradable advanced business services providers. I model two types of communication costs, one between headquarters and advanced tradable business services providers (ABS) and one between headquarters and production plants. The interplay between the two types of communication costs is shown to have effects on the transition process from an “integrated” urban system where each city hosts every different functions to a “functionally specialised” urban system where each city is either a primary business center (hosting ABS), a secondary business centers (SBS) or a pure manufacturing city and all this city-types coexist in equilibrium. In particular, I find that maximum functional specialisation of the urban system turns out to be feasible only if firms face a very high share of the total costs represented by their heaquarter spending.

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Giuseppe Francesco Gori

Papers

Understanding the procurement performance of local governments: A duration analysis of public works:

Trade Costs, FDI incentives, and the Intensity of Price Competition

Trade Liberalisation between Asymmetric Countries with Environmentally Concerned Consumers

A structural multisectoral model with new economic geography linkages for Tuscany

Urban Functional Specialisation and the Interplay between Firm’s Communication Costs