Industrial Tariffs Research Articles

(Asymmetric) tariff‐driven foreign direct investment: Evidence from Korean firm‐level data

This study examines the effects of identified industry tariff shocks on firms' outward foreign direct investment (FDI) into their destinations. Using rich Korean firm‐level data for 2010–18, the study decomposes FDI outflows from multinational enterprises (MNEs) into the number of subsidiaries (extensive margin) and average FDI for individual subsidiaries (intensive margin) in the destination. New evidence of tariff‐driven FDI reveals that the tariff decrease shocks (TDS) (significant tariff decreases) lower the number of existing subsidiaries rather than the average FDI volume for the existing subsidiaries. In addition, more productive firms investing in developing countries lower the number of existing subsidiaries to a greater extent in response to TDS, implying that productive MNEs reallocate resources into selective core subsidiaries when a significant tariff decrease occurs.

Techno-economic analysis of integrating battery energy storage systems in industrial buildings

Abstract A techno-economic model is provided in this research to assess the viability of using building-integrated battery energy storage systems (BI-BESS) in industries. The factor of β as the ratio of energy to power is introduced in both economic and technical calculations to quantify the economic feasibility of the project with the help of a simple iterative algorithm for battery sizing. The load profile from an industrial building in Malaysia is considered for checking the effectiveness of the results. In addition, the optimum size of the battery achieved by comparing the optimum β from the benefit-cost ratio against β graph, and the ∆E against β graph. The results show that the optimum battery sizing achieved 84.05 kWh at β = 1.6. Furthermore, the battery parameters that affect the feasibility of using BI-BESS are evaluated. Finally, the results show that the proposed method is independent of the building load profile, and the same graph will apply to all buildings using the industrial tariff and current BESS technology for checking the feasibility of projects.

Appropriateness of EToU electricity tariff program for industrial type consumers: an investigation of cost benefit

In mitigating the peak demand, the energy authority in Malaysia has introduced the enhanced time of use (EToU). However, the number of participants joining the programs is less than expected. Due to that reason, this study investigated the investment benefit in terms of electricity cost reduction when consumers subscribe to the EToU tariff scheme. The significant consumers from industrial tariff types have been focused on where the load profiles were collected from the incoming providers’ power stations. Meanwhile, ant colony optimization (ACO) and particle swarm optimization (PSO) are applied to optimize the load profiles reflecting EToU tariff prices. The proposed method had shown a reduction in electricity cost, and the most significant performance has been recorded congruently. For a maximum 30% load adjustment using ACO optimization, the electricity costs have been decreased by 10% (D type of tariff), 16% (E1 type of tariff), 9% (E2 kind of tariff), and 1.13% (E3 type of tariff) when compared to the existing conventional tariff. The cost-benefit of the EToU tariff switching has been identified where the simple payback period (SPP) is below one year for all the industrial types of consumers.

Trade barrier decrease and environmental pollution improvement: new evidence from China’s firm-level pollution data

PurposeTrade and environment are essential issues closely related to the development of the national economy and the improvement of people’s livelihood in the new era. The Report to the 19th National Congress of the Communist Party of China (CPC) listed the construction of a strong trading power as an important part of building a modern economic system and pollution prevention and treatment as one of the three key battles to win the decisive victory of building a moderately prosperous society in all respects. However, the relationship between trade and environmental pollution is still very controversial in the existing literature, and there is a paucity of literature on the relationship between trade and environmental pollution based on micro data.Design/methodology/approachThis paper merged China’s Firm-Level Pollution Database with China’s Industrial Enterprise Database and China’s industry tariff rates. Additionally, by virtue of the quasi-natural experiment of China’s accession to the World Trade Organization (WTO), a difference in difference (DID) model was constructed to alleviate the endogeneity issue.FindingsAccording to the results, the trade barrier decrease (trade liberalization) significantly reduces the intensity of SO2 emissions, a major pollutant of enterprises, as the intensity of SO2 emissions decreased 2.16% for each unit decrease of the trade barrier. The analysis of the mechanisms shows that the SO2 emission intensity of enterprises is mainly due to the decrease of enterprises’ pollution emission rather than the decrease of output, and the decrease of enterprises’ pollution emission is mainly caused by the enterprises’ cleaner production process rather than the end treatment of pollution emission. The decrease of coal use intensity is an important mechanism of the decrease of SO2 emission intensity caused by the decrease of trade barriers. Among the technical effects of the change of the trade barrier affecting enterprises’ pollution emission, biased technical change rather than neutral technical change dominates.Originality/valueThe findings of this paper imply that expanding openness can enhance China’s social welfare not only through the economic growth mechanisms identified in the classical literature, but also through environmental improvements. This provides useful policy insights for promoting the construction of a strong trading power and winning the battle against pollution in the new era.

Misallocation in Open Economy

This paper estimates the impact of reducing export and import tariffs on firm input choices. In presence of borrowing constraints, lower export tariffs facilitate the reallocation of capital and labor inputs across firms, while a decline in import tariffs either tightens import competition or increases the availability of imported inputs; all three mechanisms suggest that a higher degree of openness should be associated with lower misallocation. To analyze the empirical relationship between openness and input misallocation, we draw on the annual surveys conducted by the Chinese National Bureau of Statistics (NBS) between 1998 and 2007. From the surveys, we con- struct firm-level measures of input misallocation that control for firm heterogeneity; we identify shocks to openness using industry tariff levels and firm trade shares. We find that firm facing higher tariffs in either import or export markets make less optimal input choices. We further decompose our analysis between input and output tariffs: our results suggest that the labor reallocation mainly occurs because of lower input tariffs, while the selection effect induced by changes in output tariffs does not necessarily cause more distorted firms to exit and, therefore, tends to have an insignificant effect on input allocation. Finally, we calculate the contribution of tariff changes towards aggregate misallocation and productivity: our results indicate that the impact of firm-level tariff reductions on aggregate misallocation and productivity was marginal in our sample period, but the presence of sizeable interactions between trade shocks and mis- allocation at the sector level suggests that our result should be interpreted as a lower bound of the overall effect.

Electrical production cost of young coconut waste pellet by using mini pellet mill-a feasibility study

<span>Biomass from plants, which have lignocellulosic structure have low bulk density of 30 kg/m3, is suitable to be pelletized to increase its specific density (gravity) for easy and inexpensive handling and storage. A new biomass waste material has evolved in interest due to abundant young coconut waste produced from famous young coconut drink and shake business in Melaka, Malaysia. The young coconut pelletization feasibility needs to be verified by firstly assessing its electrical production cost. Therefore, this paper aims to measure the electrical production cost for process involved in young coconut pelletization and analyze its competitiveness against other biomass material from other countries. This is executed by assessing the electrical production cost of three main process in pelletization; crushing, drying and pelleting. The equipments used are coconut crusher, lab-scaled industrial oven and mini pellet mill. The result demonstrates a significantly high electrical production cost, which is MYR141,430/tonne, while other material’s production cost only amounts to couple of Malaysian hundreds. Processes’ efficiency need to be massively improved by using drum drying method and by adding blender after crusher to increase the desired grain size to avoid raw material wastage. Electrical tariff must also be switched from commercial to industrial tariff. </span>

The Effect and Mechanism of Trade Liberalization on Wage

This research discussed the relationship and mechanism between trade liberalization and the wage level of enterprises. Using the firm-level data from Annual Survey of Industrial Firms(ASIF) database and tariff data from World Bank, we find that, the final goods trade liberalization will reduce the wage, while the intermediate goods trade liberalization will improve the level of enterprises' wages. And that trade liberalization affects wages through firm performance. The reduction of input tariff reduces firm’s input cost, and increases firm’s sales and profit, then the firm has more ability to provide higher wages. While the decline of output tariff damages firm’s performance, which leads enterprises to transfer the loss by reducing wages.

COMPLETION OF RATING ON THE SYSTEM OF SOCIAL PARTNERSHIP AT OIL ENTERPRISES IN THE REPUBLIC OF KAZAKHSTAN

This article presents the results of the analysis of the state of labor relations at modern oil and gas enterprises in Kazakhstan, as well as the trends in their changes under the influence of modernization processes. It justifies the approach to social partnership as one of the modern conditions (forms) of labor relations, which continues to change its content under the influence of production modernization processes in the oil and gas sector. The possibility of assessing the state of labor relations and the compliance of labor process participants with the requirements that modernization of the technical foundations of production presents is considered. A description is given of a methodology that allows us to assess the involvement of workers in the activities of the enterprise, as well as the state of formation of social partnership. The relevance of the study is that today, the role of social partnership is increasing because of the steady increase of conflict and competition levels in enterprises as a result of global inflation and crisis phenomena. The level of loyalty, peace of mind at the enterprise depends on the implementation of the principles of social partnership, the action of concluded industry and collective agreements. Oil-producing enterprises remain the flagship of the development of the entire national economy and represent an export-oriented industry. The scientific research method is the qualitative analysis, comparative analysis, application of the rating approach and ranking of results. As a result of the conducted research, based on the analysis of a number of indicators of companies that affect the level of social partnership, the problems of its development were clearly identified. In the course of the analysis, indicators that reflect the level of development of social partnership were grouped, a rating of companies was compiled according to the level of development of social partnership. Based on the calculation of the total rating, a final rating was compiled. The relationship between the final rating of social partnership companies and indicators of social and labor relations is considered. This article can be useful in case of the methodological and normative documents developments on social partnership, in particular, in case of concluding a General Agreement between employers, trade unions, and representatives of employers, when concluding industry tariff agreements, collective agreements, and also in event of a strategy development for oil companies to further avoid labor conflicts.

A duopolistic game for designing a comprehensive energy-efficiency scheme regarding consumer features: Which energy policy is the best?

Governments design energy-efficiency programs (EEPs) to reduce the energy consumption of the energy-intensive sectors. In this paper, we propose a comprehensive EEP for the industrial and household sectors as a multi-agent problem. A sustainable supply chain consisting of an energy supplier, an energy-efficient manufacturer, and a conventional manufacturer is considered on this matter in a duopoly. Some energy policies under direct, indirect, and combined intervention are applied by the government to improve the cost-effectiveness of the program. In addition, the authors investigate the rebound effects of energy consumption in both sectors, under the consumer behavioral intentions i.e., the efficiency-related awareness, loyalty, and income level as a novel contribution. A multi-stage model is extended based on Cournot model to formulate the problem. The scenarios’ comparison and sensitivity analysis of the equilibrium decisions indicate that energy financial policies (e.g., energy tariff) encourage the manufacturers to follow the energy-efficiency path upon their high-energy-consuming products and processes. The combined intervention is more effective than the unilateral policies to reduce energy intensity and increase the energy-saving and social welfare of the industrial and household sectors, respectively. The industrial tariff also seems to be more powerful policy than consumer tariff and energy-efficiency awareness to satisfy the investigated energy-related targets. Finally, the present study provides a management point of view of a sustainable supply chain for energy policy-makers.

Impact of removing industrial tariffs under the European–Vietnam free trade agreement

Purpose The purpose of this paper is to employ the computable general equilibrium (CGE) approach to examine how the European–Vietnam Free Trade Agreement (EVFTA) impacts on the Vietnamese economy in the case of the removal of industrial tariffs. Design/methodology/approach The authors construct a social accounting matrix based on the latest data of the Vietnam input-output Table for the year 2012 and then apply the CGE model to simulate the economic scenarios when the tariff rate of the industrial sector reduces to 0 percent. Findings The first simulation results demonstrate that the elimination of tariffs in the industrial sector will lead to a 9.13 percent increase in household consumption, together with an increase in the factors of production of the agricultural, industrial and service sectors by 9.61, 9.74 and 8.21 percent, respectively. The EVFTA also causes a deficit in the trade balance because the value of imports increases by 12.54 percent, while exports’ value slightly increases by 2.71 percent. Furthermore, there has been a drop of 2.29 percent in the total government income; nevertheless, social welfare witnesses a gain of 9.13 percent. The second scenario simulation draws crucial attention to policymakers that a small fluctuation in the production tax rate will cause a significant change in the economy. Practical implications The reduction of tariff in the industrial sector will increase the social welfare and strengthen the whole economy regarding the growth of household consumption, factors of production and trade value. On the unfavorable side, the EVFTA causes a national budget deficit and puts pressure on domestic production. This paper is a valuable reference for governments and policymakers when they decide to reduce tariffs or adjust production taxes once Vietnam integrates into the world economy. Originality/value This study differs from previous research works by utilizing a static CGE model to investigate the impact of removing the industrial tariff on the economy under EVFTA.

Determinants of Growth in Cement Production in Nigeria

Rapid industrialisation through sector-led industrial policies, prohibitive tariffs and aggressive subsidies has become commonplace in many African countries. In Africa’s largest economy, Nigeria, one of the flagship industries cited as a success story of successful industrialisation is the cement industry. However, the Nigerian cement industry manifests certain industry peculiarities such as oligopoly and bulky mass, that is not easily replicable across sectors. The aim of this paper is to isolate the key market characteristics and industry incentives granted to the cement sector so as to identify the most important determinants of the recorded phenomenal growth. Based on previous studies, four industry variables: concentration ratio, capital intensity, installed capacity and demand-supply gap were identified. In addition, four other macroeconomic variables that impacted production costs: financing costs, tax rate, real exchange rate and effective rate of protection; were also tested in the model. Data was obtained for the cement industry from 1980 to 2015 for the cointegration model. The results indicate that tariff protection was the most significant determinant of the growth in cement production. Subsidies, in form of tax holidays and cheaper financing, were only minimally important. The findings of this study underscore the huge cost of supporting the growth of industrialisation in African countries through various instruments.

COMPARATIVE ANALYSIS OF THE MOTIVATIONAL COMPONENT OF THE INDUSTRY-OUTPUT TARIFF AGREEMENTS IN THE INDUSTRIES OF FUEL & ENERGY COMPLEX

Industry tariff agreements have been studied from the point of view of the motivational component of staff labor in organizations of the fuel and energy complex. Criteria of comparison have been selected and the optimal labor motivation strategy in the oil, gas, coal and electric power industries has been revealed. Features and similar approaches in the organization of the motivation of the industries of the fuel and energy complex have been identified. World experience of the labor motivation in the fuel and energy industries, such as in the USA, Japan and in Europe has been examined in comparison with domestic practice in these sectors.

Trade liberalization and local labor market adjustment in South Africa

Despite a large literature analyzing trade liberalization in developing countries, little evidence exists around its effects in sub-Saharan African economies characterized by high levels of baseline unemployment and weak manufacturing sectors. Using a local labor market approach, we investigate the causal effects of tariff reforms implemented in South Africa between 1994 and 2004 on labor market outcomes at the individual level. More specifically, we construct a district-level measure of exposure to tariff reductions equal to a weighted average of industry tariffs using baseline industry shares as weights, and estimate the effect of this shock on local economies. We find that workers in districts facing larger tariff reductions experience a significant decline in both formal and informal employment in the tradable sector, driven primarily by a decline in manufacturing employment, relative to workers in districts less exposed to these reductions. There is no evidence of any significant effect on wages for those who remain employed. However, displaced workers do not show any evidence of transitions into other sectors, or migration to less affected regions; rather, they are more likely to become discouraged workers or exit the labor force entirely, and show an increased probability of accessing government transfers.

Managing Load Uncertainty Leveraging Real-time Scheduling of Energy Storage System

Abstract In this paper, we propose a real time control method for energy storage system (ESS) to minimize the total cost including the loss caused by load prediction error. To minimize total cost, we consider three types of costs: the energy cost from time-of-use (TOU) tariff, the monthly base cost determined from peak power and battery degradation cost. In order to consider the state-dependent battery degradation cost, we use dynamic programming for the optimal policy. Meanwhile, under the Korea commercial and industrial tariff, minimizing the peak power consumption is critical because it determines the monthly base cost and furthermore may affect for the next 12 months. However, peak shaving is vulnerable to the errors from day-ahead load prediction, and thus conservative strategies are desired. To alleviate the performance loss incurred from the load prediction error, we propose a concept of marginal power and learn the relationship between the marginal power and the load prediction errors based on the historical data. By exploiting the marginal power, the real-time ESS charging/discharging power becomes close to the optimal offline policy. Our extensive simulation for one year shows that the proposed method reduces the peak power cost by 45%.

Trade liberalization and informality in Argentina: exploring the adjustment mechanisms

This paper studies the link between trade reforms and labor informality in Argentina using a long time series spanning the 1980–2001 period. We explore cross-section mechanisms, that operate at the industry level, and time-series mechanisms, that operate at a general equilibrium level. We argue that firms can substitute formal with informal workers to smooth a negative trade shock. In this setting, industries exposed to larger tariffs cuts could experience increases in informality. In general equilibrium, there can be additional aggregate impacts in both manufacturing and non-traded sectors through workers reallocation among sectors, wage adjustments, and firm entry and exit. Using the cross-section variation of the data and an instrumental variable strategy we explore empirically the cross-section mechanisms. We find that reductions in industry tariffs increase labor informality, and the effect is differentially stronger in industries with a larger share of small-size firms. Using the time-series variation of the data, we are able to identify some of the general equilibrium effects. We find that the fall in the average national tariff decreased aggregate informality in the manufacturing sector but increased it in the non-traded sector.

Distributional impacts of energy-heat cross-subsidization

Energy and heat cross-subsidies are common in developing and transitioning countries, but the distributional and efficiency impacts of these policies (and reform) are largely unknown. In Post-Soviet countries such as Belarus, revenues from an industrial tariff on electricity are used to cross-subsidize heating for households. We analyze the distributional impacts of cross-subsidy reform with both input output methods and a calibrated static computable general equilibrium (CGE) model with heterogeneous households based on a household consumption survey. On average, GDP gains of roughly a quarter of a percent are computed across model runs which reduce taxes and subsidies from cross-subsidization. Reducing household heating subsidy rates equally across income groups is found to be regressive. Poorer households are overly-burdened due to higher heating expenditures while richer households enjoy gains from cheaper market prices for goods. The GDP gains are even larger when the tax rates are structured to create a distributionally-neutral reform.

Key determinants of wind energy growth in India: Analysis of policy and non-policy factors

Wind energy has been considered as an important resource to meet the energy needs of India in a sustainable manner, with over 30 GW installed capacity as on December 2017. However, the wind sector has witnessed a temporal and spatial asymmetrical growth in India over the last decade, attributed to policy inconsistency. We analyzed wind growth in six resource rich states of India from 2003 to 2016, using panel data regression, considering 16 exploratory variables categorized under policy, geographic, economic, social, technical and commercial heads. Contrary to expectation, both policy variables FIT and RPO came out as insignificant factors. The existing wind capacity and its share in the total generation capacity came out as significant drivers. Commercial factors like industrial tariff and utility's performance got reflected as other determinants. Stark variations were observed in state-wise analysis, with wind growth in some states responding to infrastructure factors like road network. Scaling up wind deployment in resource rich Indian states would require policy instruments contextualized to their economic profile, energy resources and power market.

СОВРЕМЕННЫЕ ТЕНДЕНЦИИ В МОТИВАЦИИ ПОВЫШЕНИЯ ТРУДОВОГО ПОТЕНЦИАЛА ПЕРСОНАЛА

This article describes the category of employee labor potential. Employee labor potential is presented as a system of physical and moral qualities of a personwhich determine limits and potential of his or her participation in the labor activity, abilityto achieve results in the certain conditions, to evolve in the labor process. The article presents different systems of encouragement and promotion as a means of development of an employee’s labor potential;determines the role of financial and non-financial incentives in this development; studies the oriental system of incentives (e.g. Japan) and thewestern system of incentives (e.g. the US). System of encouragement based on lifetime employment is accepted in the oriental system, where wages and promotion are appointed with the priority to the aged. In thewestern culture there is adopted a system of incentives through financial rewards (a system of common wage, payment for individual contracts, collective and individual bonuses according to industrial tariff rate) and promotion. Taking into account the Euro-Asian type of mentalitythat traditionally combines the features of both Eastern and Western cultures, there has been proposed an optimization scheme of the incentive system of the employeelabor potential in Russian companies, which includes four maincharacteristics: security and stability, economical welfare, self-realization, recognition in a team. It is expected that introducing stimulation system of the Eurasian type in Russia will largely optimize and stabilize labor efficiency.

Robust Operation of Energy Storage System with Uncertain Load Profiles

In this paper, we propose novel techniques to reduce total cost and peak load of factories from a customer point of view. We control energy storage system (ESS) to minimize the total electricity bill under the Korea commercial and industrial (KCI) tariff, which both considers peak load and time of use (ToU). Under the KCI tariff, the average peak load, which is the maximum among all average power consumptions measured every 15 min for the past 12 months, determines the monthly base cost, and thus peak load control is extremely critical. We aim to leverage ESS for both peak load reduction based on load prediction as well as energy arbitrage exploiting ToU. However, load prediction inevitably has uncertainty, which makes ESS operation challenging with KCI tariff. To tackle it, we apply robust optimization to minimize risk in a real environment. Our approach significantly reduces the peak load by 49.9% and the total cost by 10.8% compared to the case that does not consider load uncertainty. In doing this we also consider battery degradation cost and validate the practical use of the proposed techniques.

Analisis Ekonomi Solar Water Heater (SWH) Pada Bangunan Gedung Studi Kasus : Hotel Dangau Kecamatan Sungai Raya Kabupaten Kubu Raya

Abstract– Based on NASA satellite observations of daily insolation in 2013 at the location of hotel Dangau latitude u = 0.0, latitude, longitude t = 109.3, an average of 5.0816 kWh / m² / day. The high profile solar insolation in this location compared to the national average of 4.80 kWh / m² / day. This suggests a potential source of solar energy as a source of thermal energy which can be used to produce hot water by using the tool Solar Water Heater (SWH) or PATS. By using the means already PATS utilizing renewable energy sources. This thesis examines the economic analysis in the installation of a solar water heater in buildings Dangau hotel. The use Solar Water Heater are commonly used for both residential dwelling, hospital, swimming pool, hotel. From the analysis of the economic feasibility of investment by using the method of calculation of Net Present Value (NPV), the result is greater than one, while the value of Discounted Payback Period (DPP) is smaller than the life of the investment for 20 years, and the Internal Rate of Return (IRR) more greater than the Minimum Attractive Rate of Return (MARR). Investment by comparing energy prices and tariffs PLN show satisfactory results, with rates of Rp.1.352 PLN / kWh (industrial tariffs B2 / TR) produces Discounted Payback Period (DPP) 12 years and 6 months. Assuming PLN rate increase every year 5%, then the value obtained during the DPP for 8 years and 11 months of the project's life for 20 years. These results indicate that investment in hotel Dangau Solar Water Heater installation is feasible. Keywords– SWH, NPV, DPP, IRR, NASA, PLN rate.