Akio Kawasaki (Oita University), Tomomichi Mizuno (Kobe University), and Kazuhiro Takauchi (Kansai University)
"Downstream new product development and upstream process innovation"
Journal of Economics
https://doi.org/10.1007/s00712-023-00841-y

Research and development (R&D) in upstream and downstream markets influence each other. This is because, in assembly industries, when upstream input prices are low, downstream firms can easily introduce or develop new products. The introduction of a new product creates a new final good market, creating an increased demand for inputs. This greater demand for inputs provides an incentive for upstream firms to reduce their costs through R&D. In this study, we consider both downstream R&D for new product introduction and upstream R&D for cost reduction. We show that if upstream R&D is efficient (inefficient), the results of the downstream new product introduction race are strategic complements (substitutes). Furthermore, in terms of timing, the upstream firm determines its input price after observing the downstream firm’s investment decision, with the upstream firm extracting benefits from downstream R&D by raising the input price. It is well-known that this behavior by upstream firms impedes downstream investment (the hold-up problem). Despite this timing structure, we show that the more downstream firms invest, the lower the input price.

Yasushi Kawabata (Nagoya City University), Yasuhiro Takarada (Nanzan University)
"Greening Trade Agreements Through Harmonization of Environmental Regulations"
Environmental and Resource Economics
https://doi.org/10.1007/s10640-023-00787-1

Countries are increasingly using free trade agreements (FTAs) and customs unions (CUs) to cooperate on environmental issues by including environmental provisions in regional trade agreements (RTAs). We examine whether countries form RTAs with regional environmental regulations and join a multilateral trade agreement (MTA) with a common environmental regulation that maximizes world welfare. Each government imposes an environmental tax to mitigate negative externalities caused by the consumption of differentiated goods. The main finding is that a deep FTA with regional harmonization of environmental taxes may act as a stumbling block for an MTA with multilateral harmonization of environmental taxes if the degree of product differentiation is intermediate. In contrast, a deep CU with a regional environmental tax serves as a building block, even if negative consumption externalities are transboundary.

Jared Desello (Japan University of Economics), Mary Grace Agner (University of Asia and the Pacific)
"Financial Inclusion and the Role of Financial Literacy in the Philippines"
International Journal of Economics and Finance
https://doi.org/10.5539/ijef.v15n6p27

This paper studies the relationship between financial literacy and financial inclusion in the Philippines using data gathered from the 2019 Financial Inclusion Survey (FIS). We apply ownership of financial account and use of financial services as indicators of financial inclusion.
Financial Inclusion and the Role of Financial Literacy in the Philippines | Desello | International Journal of Economics and Finance | CCSE[https://doi.org/10.5539/ijef.v15n6p27] Financial Inclusion and the Role of Financial Literacy in the Philippines doi.org