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Coffee producers typically sell raw coffee beans as the first step in a global value chain. Recently, groups of producers have formed coffee cooperatives that attempt to regain market power by integrating the other steps of the value chain. This study uses matching to estimate the effect of membership in one such cooperative on the household economy of indigenous coffee producers in the state of Chiapas, Mexico. It contributes to the literature by considering new determinants of participation and outcomes of interest. First, social capital at the individual and village level is correlated with cooperative membership more than other demographic factors. Second, cooperative members report an increase in the share of coffee sold and income from coffee sales but not in per-kilo price or total income. These two results reflect particular features of the Chiapas reality and the desires of the indigenous people the cooperative serves. Thus, they reiterate the importance for economic development projects to consider the context of their interventions.

What roles do trade and foreign direct investment (FDI) play in international technology transfer? Do technologies introduced by multinational firms diffuse to local firms? How does the level of intellectual property rights (IPRs) protection in a country affect its ability to absorb foreign technologies? Using these questions as motivation, this paper surveys the recent trade literature on international technology transfer, paying particular attention to the role of FDI. Several useful conclusions emerge. First, the theoretical literature has shown that trade necessarily encourages growth only if knowledge spillovers are international in scope. Second, existing empirical evidence on the scope of knowledge spillovers (national versus international) is ambiguous. Third, recent empirical plant level studies have called into question earlier studies that argued that FDI has a positive impact on productivity of local firms that compete directly with multinationals. Fourth, there is strong evidence in support of vertical spillovers from FDI: i.e. those firms that either supply multinationals or use goods and services produced by them as intermediate inputs experience productivity gains from such interaction. Fifth, it is well established that the degree of global IPR protection affects the pattern of international trade and convincing evidence that it also influences flows of international technology transfer and FDI has also started to emerge.

Most current modeling approaches identify very small gains from trade reform. In this chapter, we examine recent developments in the literature to assess whether standard modeling approaches are mis-specifying, understating, or overstating the gains from trade reform. Key areas where the impacts of trade barrier reduction appear to be understated include the measurement of barriers; the aggregation of these barriers; process productivity gains, particularly those resulting from reallocation of resources between firms; product quality improvements and expansion of product variety; factor supply; and investment of gains from trade.

This paper presents an empirical analysis of trade credit supplied by Japanese manufacturing firms and General Trading Companies. After reviewing major trade credit models and relevant Japanese literature, empirical tests examine the applicability of existing trade credit theories. Results indicate existing trade credit theory has little power to explain the level of trade credit supplied by Japanese firms. Instead, support is found for the information and risk sharing models in the Japanese keiretsu literature and the financial channeling process by which lending institutions supply General Trading Companies with liquidity that is, in turn, supplied to manufacturing firms.

The purpose of the chapter is to test the hypothesis that food safety (chemical) standards act as barriers to international seafood imports. We use zero-accounting gravity models to test the hypothesis that food safety (chemical) standards act as barriers to international seafood imports. The chemical standards on which we focus include chloramphenicol required performance limit, oxytetracycline maximum residue limit, fluoro-quinolones maximum residue limit, and dichlorodiphenyltrichloroethane (DDT) pesticide residue limit. The study focuses on the three most important seafood markets: the European Union’s 15 members, Japan, and North America.Our empirical results confirm the hypothesis and are robust to the OLS as well as alternative zero-accounting gravity models such as the Heckman estimation and the Poisson family regressions. For the choice of the best model specification to account for zero trade and heteroskedastic issues, it is inconclusive to base on formal statistical tests; however, the Heckman sample selection and zero-inflated negative binomial (ZINB) models provide the most reliable parameter estimates based on the statistical tests, magnitude of coefficients, economic implications, and the literature findings. Our findings suggest that continually tightening of seafood safety standards has had a negative impact on exporting countries. Increasing the stringency of regulations by reducing analytical limits or maximum residue limits in seafood in developed countries has negative impacts on their bilateral seafood imports. The chapter furthers the literature on food safety standards on international trade. We show competing gravity model specifications and provide additional evidence that no one gravity model is superior.

We investigate institutional investors’ trading behavior of acquiring firm stocks surrounding merger activities for the period 1992–2001. We label investment companies and independent investment advisors as active institutions and banks, nonbank trusts, and insurance companies as passive institutions. We analyze the trading behavior of active and passive institutions surrounding merger announcements and their eventual resolution. Our results indicate that active institutions significantly increase their holdings of acquiring firm stocks for mergers with higher announcement period abnormal return and this increase is more pronounced for stock mergers than cash mergers. Active institutions display preference for stock proposals at the merger announcement on the basis of their prior beliefs and this is explained by the “overreaction phenomenon.” However, they update their beliefs between announcement and final resolution as more information arrives into the market. Finally, active institutions appear to correct their overreaction behavior by displaying their greater preference for cash proposals as compared to stock proposals at the quarter of eventual outcome. The trading behavior of passive institutions suggests that these institutions disregard the market response of merger announcement in trading acquiring firm stocks at the announcement quarter. The passive institutions gradually update their beliefs and utilize the information released at the announcement in rebalancing their portfolios at the final resolution.

This chapter contrasts the representation of Third World farmers in Fair Trade marketing campaigns with data drawn from long-term fieldwork involving cocoa producers in Ghana and evidence provided by older anthropological monographs on these communities. In doing so, it practically illustrates the disparity between global assumptions and local perspectives on production and consumption. The key contention underlying this chapter is that the representation of producers as needy, helpless, and disgruntled with multinational corporations is deeply problematic. Such a representation reveals a significant and somewhat concerning discrepancy between the lives of farmers and the narratives displayed in Western campaigns for trade justice. By using fieldwork data and earlier anthropological literature showing the determination, ingenuity, and far-sighted strategies of cocoa farmers in Ghana, this chapter demonstrates that producers in the Third World are not the passive and helpless individuals they are sometimes portrayed as.

This chapter provides a theory model of trade finance to explain the “great trade collapse.” The model shows that, first, the riskiness of international transactions rises relative to domestic transactions during economic downturns; and second, the exclusive use of a letter of credit in international transactions exacerbates a collapse in trade during a financial crisis. The basic model considers banks’ optimal screening decisions in the presence of counterparty default risks. In equilibrium, banks will maintain a higher precision screening test for domestic firms and a lower precision screening test for foreign firms, which constitutes the main mechanism of the model.

Much of the literature on strategic trade policy deals with industries and sectors characterized by international rivalry for market shares, and the struggle to capture “rents” over and above normal factor rewards. The present paper explores the validity and implications of strategic trade policy for small “states” and small firms that are not major players in international markets. The smallness of the firms may, in fact, be an advantage rather than a hindrance. The implications of smallness for strategic behavior are examined in the framework of a simple game-theoretic framework. These insights become sharper when extended to intra-industry trade in differentiated products. The desirable policy interventions for small countries and firms are quite different from those for large firms.

Iran’s influence on a number of cultural, political, and economic areas including religion and philosophy, literature, science and education, as well as statecraft is surveyed. The chapter also discusses how successive Iranian empires contributed to the growth of world trade and commerce. It is shown that Iran has had a great impact on the world throughout its long history and that its prominent role in contributing to the human heritage stands in sharp contrast to its isolation today, which is construed as a historical anomaly.