College of Behavioral & Social Sciences
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The collections in this community comprise faculty research works, as well as graduate theses and dissertations..
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Item Generating Up-to-date Starting Values for Detailed Forecasting Models(2008-01-27) Sampattavanija, San; Almon, Clopper; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In economic forecasting, it is important that the forecasts be based on data that is both reliable and up-to-date. The most reliable data typically come from conducting a census. These censuses produce estimates with a long lag between the reference year and the date of publication. However, we also have other sources of economic data that are less reliable but published more frequently. These higher frequency data should be a source of useful information for analyzing economic activity in the current, incomplete year. The objective of this study is to use high frequency (monthly and quarterly) data to generate forecasts of the annual data from reliable sources used in an inter-industry forecasting model. The results will be used as starting values to improve the model's short-term forecast performance. The distinguishing feature of this dissertation is that it studies the economic data at the sectoral level as opposed to other studies that only try to generate aggregate data. The aggregate data will be a by-product of these detailed estimates. Thus, we can forecast the trends of the aggregates and observe sectors that contribute to these trends. In this dissertation, I study data on four main aspectts of the U.S. economy: 1) Personal consumption expenditures, 2) Investment in equipment and software, 3) Investment in structures, and 4) Gross output. By historical simulations, I find that the performance of the forecasts depends heavily on the accuracy of the exogenous variables used in each forecast. The estimated detailed values are consistent with the macroeconomic data, used as regressors in the processes. Thus, generally, the results will be reliable as long as we have a good forecast of macroeconomic variables. The performance of the first-period forecast also depends on where in the calendar year the last published data is. The closer to the end of the year, the better is the accuracy of the forecast.Item Measurement and Determination of Rules of Origin in Preferential Trade Agreements (PTA's)(2007-06-07) Harris, Jeremy Tyler; Betancourt, Roger; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation explores the measurement and determinants of product-specific rules of origin (PSRO) in preferential trade agreements (PTAs). In order to study PSRO empirically it is necessary to be able to measure them in some objective way. We analyze in great detail the mechanisms for specifying PSRO in PTAs, propose a methodology for measuring their relative restrictiveness, and demonstrate that accounting for several previously overlooked factors can have important empirical implications. We then employ the proposed measurement methodology to analyze the determinants of restrictiveness in a panel dataset of five recent PTAs in the Western Hemisphere. Exploring four alternative hypotheses we find that, except in a few particular sectors, governments tend to negotiate less restrictive rules so as to assure market access rather than more restrictive rules that would serve as hidden protection.Item The Economics of Nuclear Power(2006-11-28) Horst, Ronald L; Rust, John; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)We extend economic analysis of the nuclear power industry by developing and employing three tools. They are 1) compilation and unification of operating and accounting data sets for plants and sites, 2) an abstract industry model with major economic agents and features, and 3) a model of nuclear power plant operators. We build a matched data set to combine dissimilar but mutually dependent bodies of information. We match detailed information on the activities and conditions of individual plants to slightly more aggregated financial data. Others have exploited the data separately, but we extend the sets and pool available data sets. The data reveal dramatic changes in the industry over the past thirty years. The 1980s proved unprofitable for the industry. This is evident both in the cost data and in the operator activity data. Productivity then improved dramatically while cost growth stabilized to the point of industry profitability. Relative electricity prices may be rising after nearly two decades of decline. Such demand side trends, together with supply side improvements, suggest a healthy industry. Our microeconomic model of nuclear power plant operators employs a forward-looking component to capture the information set available to decision makers and to model the decision-making process. Our model includes features often overlooked elsewhere, including electricity price equations and liability. Failure to account for changes in electricity price trends perhaps misled earlier scholars, and they attributed to other causes the effects on profits of changing price structures. The model includes potential losses resulting from catastrophic nuclear accidents. Applications include historical simulations and forecasts. Nuclear power involves risk, and accident costs are borne both by plant owners and the public. Authorities regulate the industry and balance conflicting desires for economic gain and safety. We construct an extensible model with regulators, plant operators, insurance companies, and consumers. The model possesses key attributes of the industry seldom found in combination elsewhere. We then add additional details to make the model truer to reality. The work extends and corrects existing literature on the definition, effects, and magnitudes of implicit subsidies resulting from liability limits.Item Energy Prices and Substitution in U.S. Manufacturing Plants(2006-04-17) GRIM, CHERYL; Haltiwanger, John; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Persistent regional disparities in electricity prices, growth in wholesale power markets, and recent deregulation attempts have intensified interest in the performance of the U.S. electric power industry, while skyrocketing fuel prices have brought renewed interest in the effect of changes in prices of all energy types on the U.S. economy. This dissertation examines energy prices and substitution between energy types in U.S. manufacturing. I use a newly constructed database that includes information on purchased electricity and electricity expenditures for more than 48,000 plants per year and additional data on the utilities that supply electricity to study the distribution of electricity prices paid by U.S. manufacturing plants from 1963 to 2000. I find a large compression in the dispersion of electricity prices from 1963 to 1978 due primarily to a decrease in quantity discounts for large electricity purchasers. I also find that spatial dispersion in retail electricity prices among states, counties and utility service territories is large, rises over time for smaller purchasers, and does not diminish as wholesale power markets expand in the 1990s. In addition, I examine energy type consumption patterns, prices, and substitution in U.S. manufacturing plants. I develop a plant-level dataset for 1998 with data on consumption and expenditures on energy and non-energy production inputs, output, and other plant characteristics. I find energy type consumption patterns vary widely across manufacturing plants. Further, I find a large amount of dispersion across plants in the prices paid for electricity, oil, natural gas, and coal. These high levels of dispersion are accounted for by the plant's location, industry, and purchase quantity. Finally, I present estimates of own- and cross-price elasticities of demand for both the energy and non-energy production inputs.Item ESSAYS ON COOPERATION IN DEVELOPING COUNTRY INDUSTRIAL CLUSTERS(2005-01-25) Thompson, Theresa Marie; Betancourt, Roger R.; Minehart, Deborah F.; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)An industrial cluster is a group of firms that are specialized by sector, located in close geographic proximity and consist of mostly small and medium sized enterprises. An introduction to these clusters is provided in Chapter One. Chapter Two develops a model to examine the conditions under which clustered firms in a less developed country may cooperate in a "joint action" to market their output in a developed country, eliminating the role of an intermediary firm in the developed country. The clustered firms are heterogeneous in expected quality of output and know the quality type of other firms, but the foreign intermediary does not. The intermediary, however, has a lower marketing cost than the clustered firms. The main result of the model is that joint action can occur among high quality type firms, but the low quality firms always use the foreign intermediary to distribute their output. Chapter Three examines empirically two aspects of collective efficiency, one passive and one active, through the analysis of a survey of the surgical instrument cluster in Sialkot, Pakistan. First, I test an idea from relational contracting theory that informal relationships can substitute for formal enforcement through the judicial system. Inter-firm trust is measured as the amount of trade credit offered to customers. The results show that suppliers are more likely to offer trade credit when they believe in the effectiveness of formal contract enforcement and when they participate in business networks (proxied by inter-firm communication). Customer lock-in helps to develop inter-firm trust since firms give more credit when relationships are of longer duration. This is because locked-in customers are less able to find alternate suppliers. Chapter Three also examines the firm-level characteristics that determine the firms' interest in intra-cluster cooperation to market their own goods. The results demonstrate that firms are more likely to be interested in such initiatives once they have already had some direct experience in marketing, and when firms have a lower opportunity cost of leaving their current customers, where opportunity cost is measured by the length of the trading relationship.Item No Cash and No Purse: Explaining Non-Monetary Trade in Russia in the 1990s(2004-11-01) Komarov, Ivan V; Murrell, Peter; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Why were most transactions in the Russian industry in the 1990s carried out without the use of money? Theories explaining the phenomenon, when carefully assessed, seem to have missing gaps in the argument or inadequate evidence. The present paper critically reviews the theories, suggests neglected considerations, proposes an alternative explanation, and empirically tests the hypothesis. A large representative sample of Russian firms is used in the empirical part. TOBIT analysis shows that firms start to use non-monetary payments because of their liquidity problems. Further use of non-monetary payments is connected to kartoteka, a tax collection method of withdrawal of taxes from the firm's bank account.Item Market Structures and Competition in System Markets(2004-06-25) Kang, Kyeong-Hoon; Vincent, Daniel R; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)The strong complementarity between components of a system makes the competition in system markets qualitatively different from those in other markets. When there are multiple types of systems depending on the combinations of the components, there can be several kinds of competition in one system market. The interaction between these competitions and its implication for the market structure are examined in the first two chapters. Chapter 1 finds that the competition in mixed system markets lessens the competition between the original systems. Chapter 1 also finds that relatively low integration and dissolution costs make the competition between the original systems less fierce. Chapter 2 finds that the competition in original systems' retail markets intensifies the competition between the original systems. As a result of the interactions, consumer surplus is the lowest and social welfare is the highest when the mixed system markets are competitive and retail markets are monopolistic. The last chapter examines how the complementarity between components results in strategic abandoning of market power in system markets. In industries where components have strong complementarity with each other, competition in one component market directly affects competition in the other. In this situation, an integrated manufacturer may want to abandon its duopolistic position in one component market if this leads new entrants to the component market to adopt its other component, and the loss from giving up the duopolistic position in one component market is less than the gains from the increased market share of the other component market. Though both the duopolists may want to choose this strategy, it is also possible that the best response to the rival's strategic abandoning of one component market is to keep the duopolistic position in both component markets. This is because when the duopolists both give up one component market, market shares for them remain the same as if they kept their duopolistic positions in both component markets. If the costs for making the retained component compatible with the new entrants' components are high, the equilibrium is asymmetric.Item Essays on Anti-dumping(2004-02-10) Malhotra, Nisha; Panagariya, Arvind; Limao, Nuno; Lyon, Andrew; Straszheim, Mahlon; EconomicsThis dissertation studies the use of the US antidumping (AD) legislation. In the first chapter, I use panel data on AD petitions filed by US industries from 1980 to1995 to study the determinants of antidumping filings. I argue that a negative binomial model is better suited to study the industry's decision to petition than the poisson model employed in the previous literature. I find that contrary to the past findings, import penetration, one of the International Trade Commission's material injury criteria, is not an important factor. I also find that a larger workforce, lower price cost margin, and a higher capital intensity increases an industry's probability of petitioning. In the second chapter I study the stock market response to AD petitions filed by US firms. The main question I study is why so few firms petition for import relief. It is known that at lest in the short run, petition itself can restrain imports, lead to higher prices and hence higher profits. Given this fact, what restrains more firms from filing for protection? I use an event study to analyze the impact of petitioning on the market value of a firm to analyze the puzzle. For some industries, firms experience a decline in their market value at the time of petition. Therefore, it is possible that firms fear that petitioning would signal cost inefficiency on their part. In turn, this concern may act as a deterrent to filing AD petitions. I test the hypothesis of a negative signal by comparing the market response of an AD petition for petitioning firms and non-petitioning firms producing the same product. The main aim of third chapter, based on joint work with Sumeet Gulati, is to evaluate whether the Softwood Lumber Agreement (SLA), signed between US and Canada in May 1996, had a significant economic impact on the industrial users (rather than producers) of lumber in the US. Firm's daily stock prices are used in an event study to analyze market's response to the signing of SLA. I find that the SLA imposed significant economic costs on the users of lumber. The fourth chapter is a case study of the chemical industry. Restricting imports by imposing antidumping duties protects domestic firms from predatory pricing by foreign firms, and reduces competition in the domestic market. I look at the cases filed by the chemical industry to illustrate this possibility.