PRODUCTION TECHNOLOGY UNCERTAINTY AND THE OPTIMAL LOCATION OF THE FIRM*

ABSTRACT This paper investigates the implication of production-technology uncertainty for the exclusion theorem. The paper presents the result that the risk-averse firm facing production technology uncertainty prefers an intermediate location to avoid risk under certain conditions. The firm chooses an intermediate location (over a corner location) particularly if its degree of risk aversion overwhelms the inherent convexity of profit with respect to location. The latter depends, in turn, on the structure of production technology characterized by the elasticity of substitution and returns to scale parameters.     

A dynamic model of regional population growth and decline

"This paper presents a two-sector dynamic model of regional population change. The model contains a migration equation, an earnings equation, and an amenity equation for each region. In the context of this model, migration is seen as a disequilibrium process through which the regional populations move towards equilibrium positions. Migration occurs when one region is perceived to be superior to the other on the basis of its earnings and amenity levels. Equilibrium is achieved when population movements between the regions eliminate any differences in their relative attractiveness. A comparative-static analysis of the model is presented to analyze the effects of policy changes and exogenous shocks on the distribution of population among the regions." The geographical focus is on the United States.     

Recent Technology Imports into India: Results of a Survey

This paper analyses the results of a survey of twenty-four recent cases of technology imports into India. Over the last thirty years, large firms in Indian industry have come under increasing competitive pressure from small firms which pay lower wages and which are also favoured by government policy. Most small firms obtain technology through informal channels within the country. But some import technology; and larger firms import it in their defence against competition from small firms. Larger firms, with a history and a reputation, have better access to technology from abroad; smaller firms often go through an extensive search before they find a willing technology supplier. Irrespective of size, firms that import technology within their own specialization are observed to put more effort into technology choice, absorption and adaptation. Indian policies of across-the-board import substitution, by promoting diversification into new products developed abroad, tend to discourage specialization and hence to encourage technology imports and to work against technology absorption and innovation.     

Fighting the Taliban: Pakistan at war with itself

Some new groups calling themselves Pakistani Taliban with links to the Afghan Taliban have asserted themselves in the tribal areas of Pakistan. This has complicated the internal security scenario for Pakistan. This article traces the roots of the problem and argues that the State with its confessional character emits strong Islamist impulses making it easy for Taliban-like forces to take roots in Pashtun dominated areas in Pakistan. While the process of Talibanisation may not succeed in engulfing the entire state of Pakistan, it will certainly pose a critical internal challenge, contributing to its fragility and compelling Pakistan to stay perennially engaged with its internal security. Roll back is difficult but not impossible. This will involve the strong commitment of the State to take steps to bring about social, economic and political transformation in the Taliban-infested areas, and an effort on the part of the international community to help Pakistan in this critical endeavour.     

Evaluation of Fe isotope values as a provenance tool for chert artefacts from the north-eastern United States

Iron (Fe) isotope compositions of prehistoric stone tools and geological sources were compared to evaluate the robustness of this isotopic fingerprinting technique. Artefacts and source materials were collected from the Hatch site in central Pennsylvania, United States, where both veined chert (Bald Eagle chert) and stone tools coexist within several metres. Yellow artefacts (δ⁵⁶Fe = 0.38 ± 0.1, n = 7) and source materials (δ⁵⁶Fe = 0.42 ± 0.1, n = 8) isotopically matched within error. The source values also overlap yellow chert samples from three other Bald Eagle chert locations in the area. These values are different from six other chert locations in the north-eastern United States. These data suggest that the Fe isotope composition of chert artefacts reflect distinct geological sources. To enhance the mechanical characteristics of the stone tools, the chert experienced heat treatment, which induced a phase shift of the Fe oxide mineral goethite to hematite. This phase shift changes the colour of the chert to red. The red chert artefacts and source material also have overlapping Fe isotope values, but are 0.2‰ higher than the initial yellow chert. Experimental work where cherts were heated with different clays shows that Fe exchange with site soils induces the +0.2 fractionation. These data demonstrate that predictable Fe isotope fractionation occurs during heating, resulting in isotopically distinct artefacts.