Manchester School最新文献

Our paper explores how firms facing positive direct network externalities cooperate to shape customer expectations while safeguarding their competitive positions in quantity (Cournot) and price (Bertrand) competition. The results reveal that firms gravitate toward adopting a cooperative full non-commitment structure in scenarios where network externalities are weak. Their rationale lies in their inability to effectively counteract potential price reductions that could result from any form of commitment. When facing moderate network externalities within a Bertrand competition framework, the preference for cooperative full non-commitment persists, whereas, in Cournot competition, firms cooperatively opt for partial commitment. This choice aims to strike a delicate balance between stimulating demand expansion and mitigating significant price reduction, ultimately leading to a collusive outcome. Under strong network externalities, the cooperative partial commitment is chosen regardless of the competition mode, albeit with a lower commitment level observed in Bertrand competition. The paper's analysis notably emphasizes the convergence of Cournot, Bertrand, and collusive outcomes, especially when significant network externalities are at play. Strikingly, the model uncovers a commitment paradox in which the same full commitment structure can either promote aggressive competition under regulatory intervention or entrench monopoly power when adopted through collusion. This underscores the crucial necessity for robust regulatory oversight, particularly in the digital age, where algorithms play pivotal roles in shaping cooperative commitment strategies.

This paper shows that a pro-cyclical risk-free rate can solve the problem of pro-cyclical defaults in costly state verification models. The paper computes numerically the coefficient of a Taylor rule that delivers pro-cyclical output, pro-cyclical capital and counter-cyclical defaults. This parametrization is consistent with the empirical evidence on Taylor rules.

The opening of public data is a necessary condition for the high-quality development of the digital economy and an important driver for improving green total factor productivity (GTFP) and achieving green and low-carbon economic development. This paper uses the establishment of public data open platforms in Chinese cities as a quasi-natural experiment and conducts an empirical analysis using panel data from 280 cities from 2006 to 2021, employing a multi-period difference-in-differences model to examine whether public data openness can improve GTFP. The study finds that public data openness significantly enhances GTFP, and this conclusion is robust to a battery of robustness tests. Heterogeneity analysis indicates that pilot policies have a stronger effect on improving GTFP in cities with non-resource-based economies, high levels of digital economy development, and strong innovation and entrepreneurship capabilities. Mechanism analysis indicates that public data openness can improve GTFP by promoting urban green technology innovation and optimizing the energy consumption structure. The research conclusions are of great significance for relevant departments in formulating public data policies and energy utilization strategies.

Existing studies on the determinants of accession to the World Trade Organization (WTO) have neglected the role that Aid for Trade (AfT) flows might have played in the accession process. The present study aims to fill this void in the literature by investigating the association between AfT flows and the probability of joining the WTO. The panel dataset includes 50 economies of which 29 economies that acceded to the WTO under the so-called (WTO Article XII) and 21 NonWTO Members (that act as a control group), with data spanning the period from 2002 to 2021. The empirical analysis has used the random effects logit model, and established that an increase in total AfT flows is associated with a higher probability of joining the WTO. This positive association is primarily driven by AfT interventions that help reduce trade costs, especially AfT for economic infrastructure (that affect the most the probability of WTO entry), followed by AfT flows for trade policy and regulation. The positive asssociation between AfT flows for productive capacities and the WTO entry is significant only at the 10% level. Finally, the magnitude of the positive relationship between total AfT flows and the probability of acceding to the WTO is larger, the lower the real per capita income of developing economies. Relatively advanced developing economies experience no significant association between total AfT flows and the probability of WTO entry. The study, therefore, underlines the critical role that AfT flows may play in easing the WTO accession for developing economies.

This study points out that the information owned by domestic monopolies plays a crucial role in the formulation of the government's differential External reference pricing (ERP) policy. Our key findings are that first, under an uninformed government and informed manufacturer (G1), only the pooling policy is an equilibrium. In other words, the government is unable to enhance the welfare of the society through differential ERP policies. Second, under an uninformed government and uninformed manufacturer (G2), if the difference between the two types of foreign market is comparatively small and the probability of a high-type foreign market is law enough; the separating policy is an equilibrium. That is, in this case, the government can enhance the welfare of the society through differential ERP policies. Finally, social welfare under G2 is no worse than that under G1, even though under G1, monopolies can fully capture the reservations of foreign retailers; however, under G2, monopolies cannot fully capture the reservations of foreign retailers. It is detrimental to the social welfare of the country for the domestic monopoly to have more information, even if this can capture more of the retained profit level of the foreign retailers.

Financial development has the capacity to assimilate economic, environmental, and political shocks to the maximum extent. Building on this strength, the present study investigates how Financial Sector Development (FSD) influences Environmental Protection Investment (EPIRR), while also accounting for the moderating role of Climate Policy Uncertainty (CPUI), using firm-level data from Chinese A-share listed companies spanning 2010 to 2022. To ensure robust and reliable findings, the study employs multiple methodological approaches. The findings show a strong positive relationship between FSD and EPIRR. It indicates that a stable and developed financial system improves credit access, lowers funding costs, and increases firms' ability to invest in environmental projects. It also encourages green products like sustainability-linked loans and improves long-term planning through stronger investor confidence. However, when CPUI is included as a moderating factor, the positive relationship weakens, which unveils that an uncertainty about future environmental rules makes firms and financial institutions cautious. As a result, they often delay or reduce their green investments due to unpredictable regulations, unclear enforcement, and uncertain returns on long-term sustainability efforts. This study adds to theory by using the Resource-Based View and Strategic Choice Theory to explain how FSD serves as a strategic resource and decision-making driver for corporate green investment. Empirically, it advances the sustainability finance literature by employing rigorous econometric techniques and robustness checks, while also incorporating alternative measures of FSD, as well as heterogeneity analysis, channel exploration, and the entropy balancing approach. Practically, it underscores the role of a well-developed financial sector in reducing financing barriers for green projects while highlighting the need for stable climate policies to foster long-term sustainability investments. This study reconceptualized the traditional Pecking Order Theory by demonstrating that in a well-developed financial system, firms prefer external funds over internal ones due to lower costs and reduced information gaps.

This research analyzes a manufacturer's quality choice for products sold in different countries in the presence of parallel import (PI). When PI is feasible, a distributor may choose to sell products authorized by the manufacturer and/or import unauthorized products from a sourcing country. If the retail price in the sourcing country is subject to price cap regulation, the manufacturer has an incentive to lower the per-unit wholesale price to marginal cost in order to prevent PIs by the distributor. Under such circumstances, it may become profitable for the manufacturer to downgrade the quality of the product sold in the sourcing country. Due to this quality degradation, global welfare declines if PI is allowed. These results hold whether the price cap is exogenously given or endogenously determined.