ECONOMIC AND SOCIAL CONSEQUENCES OF BIOTECHNOLOGY: A SCENARIO ANALYSIS

Over the years agricultural technology has created remarkable commodity production growth rates and enhanced general economic growth through food production, manufactured goods and trade for most nations. Biotechnology holds the promise of continuing this remarkable record. There is a long list of potential benefits of biotechnology but unfortunately the perceived costs/risks are also many. These concerns have lead to significant consumer reluctance to accept the technology and, in some cases, outright consumer rejection of the technology. To discuss the future of biotechnology, scenario analysis is used to examine the social and economic impact of biotechnology on industrialized and emerging nations. Four scenarios are discussed in detail: biotechnology may be formally or informally banned (Scenario 1), fully accepted (Scenario 2), marketed through strict labeling (Scenario 3), or limited to non-food applications (Scenario 4). Consumer acceptance of this technology will be key to determining which scenario becomes the future for each nation. The likelihood of each scenario is different for each nation, the U.S. will most likely evolve into scenario 2 or 3, while in the EU scenarios 1 or 4 are more likely. Determining the future for emerging nations is extremely complex and dependent on several factors like malnutrition rates, environmental safety and historical trading routes. Each scenario has a major impact on small producers worldwide which ultimately influences the health of rural communities. The analysis indicates that emerging nations are the most sensitive to the timing of decisions being made about the future of biotechnology. If biotechnology becomes a reality, new data will be required to assess the social and economic impact of this technology.Research and Development/Tech Change/Emerging Technologies,

Government Banking in Russia: Magnitude and New Features

State-controlled banks are currently at the core of financial intermediation in Russia. This paper aims to assess the magnitude of government banking, and to reveal some of its special features and arrangements. We distinguish between directly and indirectly state-controlled banks and construct a set of bank-level statistical data covering the period between 2000 and 2011. By January 2011 the market share of state-controlled banks reached almost 54 percent of all bank assets, putting Russia in the same league with China and India and widening the gap from typical European emerging markets. We show that direct state ownership is gradually substituted by indirect ownership and control. It tends to be organized in corporate pyramids that dilute public property, take control away from government bodies, and underpin managerial opportunism. Statecontrolled banks blur the borderline between commercial banking and development banking. Dominance of public banks has a bearing on empirical studies whose results might suggest state-owned banks’ greater (or lesser) efficiency or competitiveness compared to other forms of ownership. We tend to interpret such results as influenced by the choice of indicator, period of observations, sample selection, etc., in the absence of an equal playing field for all groups of players. We suggest that the government’s planned retreat from the banking sector will involve non-core assets mainly, whereas control over core institutions will just become more subtle.Russia, banks, government, state-owned banks, public sector

The Allocation of Jurisdiction in International Antitrust

In this paper, we consider the organisation of international antitrust as an issue of institution design which involves a trade-off between an inadequate internalisation of external effects across jurisdictions and the risk of capture in a centralised agency. We focus on the first element of the trade-off and on merger control. We first point out that the current framework of public international law allows for wide discretion in the assertion of jurisdiction. We then consider various allocation of jurisdictions in a stylised model of international merger control which attempts to capture the essential features of the objectives being pursued and of the procedures being implemented in the major jurisdictions. We find that in this framework, much of the scope for conflict disappears. The fact that conflicts actually often arise in global industries must then be associated with the pursuit of objectives that antitrust authorities are not supposed to pursue. We also find that the allocation of jurisdiction matters surprisingly little for the final outcome.international antitrust; jurisdiction; merger control

ONCE BITTEN, TWICE SHY: EXPERIENCES OF A BANKING CRISIS AND EXPECTATIONS OF FUTURE CRISES

Survey data from Bulgaria show that people who had experienced a loss during a banking crisis are significantly more likely to expect a new crisis. This result holds despite 12 years between the earlier crisis and the survey, and the dramatically improved performance of the financial sector and the economy in the meantime. However, we find that earlier experiences affect expectations only for less informed individuals. Individuals who are more informed about the economy are unaffected by their prior experiences.banking crisis, trust, expectations

Location of R&D and high-tech production by vertically integrated multinationals

We develop a two-country general equilibrium model where firms make separate choices about the location of R&D and high-tech production. There are two agglomeration forces: R&D spillovers and backward linkages associated with high-tech production. The latter tends to attract production to the larger economy. We show that, for relatively weak R&D spillovers and intermediate trade costs, the smaller economy tends to specialize in R&D. For certain parameterizations, both concentration and dispersion of R&D activities are possible outcomes. Hosting an agglomeration of R&D activities does not necessarily lead to welfare gains

Regional specialization and trade patterns in Europe.

In the present paper we will study the effects of the construction of an internal market in Europe in 1992. The question to be answered is whether some regions in Europe have improved their positions in the internal EU trade from a better exploitation of their comparative advantages (productivity, factors endowment,...) and scale economies, as far as regions have two main reasons for trade: specialization in those activities they do the best and the exploitation of scale economies. The evolution of inter industrial trade will reveal whether the expectations of some qualified economist of a deeper specialization of northern European regions in human capital-intensive industries and in labour-intensive industries in the southern regions were correct. Besides, the development of intra industrial trade in this decade will prove if the benefits of scale economies were bigger in the south, where they were less exploited at the outset. Finally, we will also analyse the role of foreign direct investment (which can be observed as another way of exports and shares with trade the causal factors) in the reinforcement of specialization patterns across Europe. In this connection, we identify and analyse the evolution of trade patterns in Europe in the 1990´s through the utilization of Grubel-Lloyd index. Secondly, we utilize several indicators of comparative advantages (sectors average productivity, labour costs, human capital endowment, etc.) and of firms size to study whether they have also undergone some changes as a result of the internal market formation. Although the lack of regional data can make us formulate this analysis for countries rather than for regions, whenever necessary we will supplement it with the patterns of regional specialization within the countries, as far as the regional location of export industries can shed some light on this issue.

Mergers in Emerging Markets with Network Externalities: The Case of Telecoms

This paper develops a unifying framework to understand competition issues in networkindustries. It focuses on the telecom(munication) industry and takes two specific effectsof this industry into account. First, the telecom industry is in continuous evolution andalliances affect not only the current market power of the firms but also the evolution ofthe industry. Second, the production of services in the industry is evolving towards theprovision of integrated services in a "system" that benefits from strong "networkexternalities". The analysis suggests that the antitrust authorities should capture as wellsuch effects as the magnitude of the installed bases, the compatibility of the alliance’ssystem with other systems, the switching costs for customers and application writers,and the "credibility" of the alliance to offer the service. The developed frameworkbuilds on the existing models of networks and combines the different network effects. The relevance of the framework is shown for two important merger cases (WorldCom-MCI and MSG cases), involving respectively an existing market and an emerging one. ZUSAMMENFASSUNG - (Unternehmenszusammenschlüsse in entstehenden Märkten mit Netzexternalitäten: Das Beispiel der Telekommunikationsindustrie) In diesem Beitrag wird ein einheitlicher Bezugsrahmen zur Analyse des Wettbewerbs in Netzwerkindustrien entwickelt. Er zielt auf die Analyse der Telekommunikationsindustrie ab und berücksichtigt dabei spezielle Effekte dieser Industrie. Erstens ist die Telekommunikationsindustrie durch eine stetige Evolution gekennzeichnet und Allianzen zwischen den Unternehmen beeinflussen nicht nur die aktuelle Marktmacht der Unternehmen, sondern auch die Entwicklung der Industrie. Zweitens entwickelt sich die Produktion der Dienste in dieser Industrie immer stärker in Richtung auf das Angebot integrierter Dienste (Systemangebote), die Vorteile aus Netzexternalitäten nutzen. Die Analyse zeigt auch, daß die Wettbewerbsbehörden ebenfalls Merkmale wie die Anzahl der verfügbaren Anschlüsse, die Kompatibilität des Systems der Allianz mit anderen Systemen, die Wechselkosten der Kunden sowie die Glaubwürdigkeit der Dienstleistungsqualität der Allianz berücksichtigen sollten. Der entwickelte Bezugsrahmen stützt sich auf die vorhandenen Netzmodelle und kombiniert die unterschiedlichen Netzeffekte und -merkmale. Die Bedeutung des Ansatzes wird am Beispiel von zwei wichtigen Fusionsfällen aufgezeigt (WorldCom-MCI und MSG), bei denen es sich jeweils um einen existierenden und einen entstehenden Markt handelt.