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Intermediate Inputs (intermediate + input)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting80%

Selected Abstracts

Incomplete Adoption of a Superior Innovation

ECONOMICA, Issue 268 2000
Harvey E. Lapan
We consider a model in which an innovating monopolist of a technologically superior intermediate input must sell this product to final output producers. Prior research shows that, with complete information, the monopolist's optimal strategy will lead to complete adoption of this technologically superior innovation. In this article we show that, when the price of some competitively supplied input used in the final product market is endogenous and is altered by adoption of the innovation, then the optimal pricing strategy of the monopolist may lead to incomplete innovation. Thus, the standard result of complete adoption of the superior technology is partly attributable to the partial equilibrium nature of prior models. [source]

FREE TRADE AREAS AND RULES OF ORIGIN: ECONOMICS AND POLITICS

ECONOMICS & POLITICS, Issue 2 2007
RUPA DUTTAGUPTA
Incorporating an intermediate input into a simple small-union general-equilibrium model, this paper first develops the welfare economics of preferential trading under the rules of origin (ROO) and then demonstrates that ROOs can improve the political viability of Free Trade Agreements (FTAs). Two interesting outcomes are derived. First, a welfare-reducing FTA that was rejected in the absence of ROOs can become feasible in the presence of these rules. Second, a welfare- improving FTA that was rejected in the absence of ROOs can be endorsed in their presence, but upon endorsement it can become welfare inferior relative to the status quo. [source]

OUTSOURCING TYPES, RELATIVE WAGES, AND THE DEMAND FOR SKILLED WORKERS: NEW EVIDENCE FROM U.S. MANUFACTURING

ECONOMIC INQUIRY, Issue 1 2009
AEKAPOL CHONGVILAIVAN
Existing studies on the impact of outsourcing on relative wages and the demand for skilled workers mainly focus on aggregate outsourcing, in which imported intermediate inputs are used as a proxy. We depart from the existing studies by focusing on various types of outsourcing based on the six-digit NAICS U.S. manufacturing data. We show that downstream materials and service outsourcing are skill biased, whereas upstream materials outsourcing is not. We also produce other supplementary results pertaining to the impact of technology, different capital inputs on relative wages, and the demand for skilled workers. (JEL C33, F14, F15) [source]

Firm outsourcing decisions: evidence from U.S. foreign trade zones

ECONOMIC INQUIRY, Issue 2 2000
DL Swenson
This article examines the operations of firms located in U.S. foreign trade subzones to study the responsiveness of outsourcing to international cost changes. I find that firms reduce their reliance on foreign inputs when dollar depreciation increases the relative price of imported inputs. The effect is pervasive across industries and is economically significant. In addition, firms that rely more heavily on imported intermediate inputs reduce their overall shipments when dollar depreciation elevates their imported, input costs. However, the magnitude of the shipments effect is economically small, suggesting that firms respond to exchange rate movements by adjusting their operations on other dimensions. [source]

Assessing the effects of measurement errors on the estimation of production functions

JOURNAL OF APPLIED ECONOMETRICS, Issue 6 2006
Carmine Ornaghi
This article explores to what extent the poor results that are often found when estimating parameters of production functions can be attributed to measurement errors, due to the use of common price deflators across firms. Because of the lack of detailed micro-economic data, econometricians have to rely on industry-wide deflators when computing outputs and intermediate inputs. A unique feature of the longitudinal data used in this paper is that it reports firm-level prices. This allows for a comparative assessment of production function parameters where the outputs and intermediate inputs are computed using both firm-specific prices and industry-wide deflators. The empirical results presented in this paper show that the use of common deflators across firms leads to lower scale estimates, mainly because of a large downward bias in the estimated coefficients for labour. Copyright © 2006 John Wiley & Sons, Ltd. [source]

Productivity and economic growth in Kenyan agriculture, 1964,1996

AGRICULTURAL ECONOMICS, Issue 1 2002
Anders Gerdin
Abstract This paper analyses the patterns of productivity and economic growth in the aggregated Kenyan agriculture between 1964 and 1996. In the 1964,1973 period, the average output growth exceeded 4% but stagnated to an average of 1.2% during 1988,1996. Over the whole period, capital was the most important contributor to output growth. Mean growth rates of intermediate inputs subsequently decreased and were negative in 1988,1996. Labour was the least significant source of growth. The mean total factor productivity growth was less than 0.4% and decreased over time. The contribution of productivity growth to output growth increased from 10.2% in 1964,1973 to 26.8% in 1988,1996. [source]

EXTERNALITIES AND PARTIAL TAX REFORM: DOES IT MAKE SENSE TO TAX ROAD FREIGHT (BUT NOT PASSENGER) TRANSPORT?,

JOURNAL OF REGIONAL SCIENCE, Issue 4 2007
Edward Calthrop
ABSTRACT Externalities such as pollution and road congestion are jointly produced by the use of intermediate inputs by firms and the consumption of final goods by households. To cope with such externalities, policy proposals often suggest partial tax reforms. This paper uses a simple general equilibrium model to explore the effects of a reform of taxes on freight transport in a second-best setting. The theoretical model shows that the welfare effect of higher freight taxes is positive, unless passenger transport is severely under-taxed and the tax reform attracts substantially more passenger transport. Moreover, the optimal freight tax may be below or above marginal external cost. Budgetary neutral tax reform exercises with a numerical simulation model for the U.K. suggest that, under a wide variety of parameter values, higher freight transport taxes are indeed welfare increasing. The welfare gain of freight tax reform rises with the level of the passenger tax, but the optimal freight tax declines at higher taxes on passenger transport. Substantial net benefits of tax reform are obtained only under labor tax recycling of the revenues. [source]

An Evolutionary New Economic Geography Model

JOURNAL OF REGIONAL SCIENCE, Issue 4 2000
Wei Fan
In this paper we present a general new economic geography model with multiple industries and regions, full labor and capital mobility, land use in production and consumption, and a dynamic adjustment process in which consumers maximize utility and firms respond to nonzero profits. All industries use intermediate inputs as well as land, labor, and capital. Systems of cities form endogenously within this framework, including asymmetrical urban hierarchies and cities of different sizes and industry compositions. Each urban area has a bid-rent gradient and zones with land uses and densities as in the von Thünen model. The equilibrium depends not only on initial conditions but also on speeds of adjustment. The model is a prototype for empirical implementation, as illustrated with a simulation of the effects of transportation cost reductions. [source]

Armington elasticities in intermediate inputs trade: a problem in using multilateral trade data

CANADIAN JOURNAL OF ECONOMICS, Issue 4 2004
Mika Saito
In particular, the former tends to be higher than the latter when trade consists largely of intermediate inputs. Given that the variety of intermediate inputs traded across borders is increasing rapidly and that the effect of this increase is not adequately captured in multilateral trade data, the evidence shows that the employment of multilateral trade data to estimate Armington elasticities needs caution. JEL classification: F14, C51 Elasticités d'Armington dans le commerce des intrants intermédiaires: un problème dans l'utilisation des données sur le commerce international multilatéral., Ce texte montre que les estimations des élasticités d'Armington (c'est-à-dire les élasticités de substitution entre groupes de biens d'origines différentes) basées sur les données de commerce multilatéral peuvent être différentes de celles obtenues en utilisant des données de commerce bilatéral. En particulier, les premières sont en général supérieures aux secondes lorsque les échanges concernent surtout des biens intermédiaires. Comme la variété des biens intermédiaires échangés augmente rapidement et que les effets de cette augmentation ne sont pas capturés de façon adéquate dans les données de commerce multilatéral, notre résultat suggère la prudence lors de l'estimation des élasticités d'Armington à partir de données de commerce multilatéral. [source]

Transfer prices and the structure of intra-firm trade

CANADIAN JOURNAL OF ECONOMICS, Issue 1 2000
Vibhas Madan
In this paper the structure of intra-firm trade within the context of transfer price manipulation by a multinational firm is endogenized. ,High' and ,low' values of host-country tax rates give rise to intra-firm trade in final goods and intermediate inputs, and ,intermediate' values of the tax rate are associated with intra-firm trade in either the intermediate inputs or the final goods only. Higher tariffs and stricter local content restrictions bias intra-firm trade towards intermediate-good trade and final-good trade, respectively. In the presence of endogenous transfer prices host-country sales may increase if the multinational faces stricter trade restrictions and higher host-country tax rates. JEL Classification: F23, F12 Prix de cession interne et structure du commerce itnra-firme. Ce mémoire endogénéise la structure du commerce intra-firme dans le contexte d'un modèle qui permet la manipulation du prix de cession interne par une firme plurinationale. Des taux de taxation hauts et bas par le pays hôte entraînent un commerce international intra-firme tant dans les biens finaux que dans les intrants intermédiaires; des taux moyens de taxation sont associés à un commere intra-firme soit dans les intrants intermédiaires, soit dans les biens finaux mais pas dans les deux. Des droits de douane élevés et des restrictions sur le contenu intérieur plus importantes créent des distorsions en faveur du commerce intra-firme dans les biens intermédiaires et dans les biens finaux respectivement. Quand il existe des prix de cession interne endogènes, les ventes de la firme nationale peuvent s'accroître si la firme plurinationale fait face à des restrictions au commerce plus importantes et à des taux de taxation plus élevés de la part du pays hôte. [source]