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Full-Text Articles in Finance and Financial Management
Coordination Costs And Research Joint Ventures, Rodney Falvey, Joanna Poyago-Theotoky, Khemarat Teerasuwannajak
Coordination Costs And Research Joint Ventures, Rodney Falvey, Joanna Poyago-Theotoky, Khemarat Teerasuwannajak
Rodney Falvey
We consider a simple oligopoly model where firms engage in cost-reducing R&D and compare two R&D regimes: R&D competition and R&D cooperation in the form of a research joint venture (RJV). We introduce coordination costs for the RJV and examine how these affect the equilibrium outcomes. We find that the performance of the RJV in comparison to R&D competition is sensitive to the level of coordination costs. Although the RJV may no longer conduct a unit of R&D at a lower cost compared to an independent firm in the non-cooperative R&D regime, RJV members can still make savings on their …
Endowment Differences And The Composition Of Intra-Industry Trade, Manuel Cabral, Rodney Falvey, Chris Milner
Endowment Differences And The Composition Of Intra-Industry Trade, Manuel Cabral, Rodney Falvey, Chris Milner
Rodney Falvey
The empirical relationship between differences in endowments and different types of trade is investigated in this paper. Although net trade (NT) and vertical intra-industry trade (IIT) are both broadly viewed as reflecting endowment differences, we suggest that there will be systematic differences in the way their shares of trade adjust as endowment differences become larger. Empirical evidence for European Union trade with its 52 major trading partners confirms this. The share of horizontal IIT (net trade) decreases (increases) for all increases in absolute endowment differences, but the share of vertical IIT can both increase and decrease with increases in endowment …
Financial Constraints, The Distribution Of Wealth And International Trade, Emmanuel Amissah, Spiros Bougheas, Rodney Falvey
Financial Constraints, The Distribution Of Wealth And International Trade, Emmanuel Amissah, Spiros Bougheas, Rodney Falvey
Rodney Falvey
Extract:
As the Heckscher-Ohlin-Mundell paradigm predicts, in a world where capital markets are perfect and production exhibits constant-returns to scale, while aggregate wealth endowments can be an important source of comparative advantage, their internal distribution does not matter for the patterns of international trade. This is because in the absence of financial frictions the only factor that determines the availability of external finance is a project's net present value. In real life financial markets are far from perfect. Informational asymmetries between lenders and borrowers, corporate governance quality shortcomings and non-negligible intermediation costs are only a sample of the types of …