Towards a Theory of Supplier Embeddedness: Contextualized Mechanisms, Contingent Conditions, Interactive Properties and Unorthodox Observations

Informal cross-border trade (ICBT) refers to the illegal activities of cross-border commerce conducted by unregistered small-scale traders. We seek to develop insights to understand the ICBT value chain and offer policy recommendations to successfully integrate it into the formal economy. Using a game-theoretic model, we analyze the operations and key market dynamics of ICBT. We analyze the policy implications of three representative UN directives: enhancing marginalized traders' access to formal channels, reducing export tax rates for formal traders, and introducing an alternative simplified trade regime (STR) for informal traders. All three policies result in an increase in government proceeds when the inherent profitability of the formal or STR channels is sufficiently high. Furthermore, social welfare increases when the policies effectively balance wholesale price competition within the formal and informal channels. We apply our model to a case study based on Uganda's agricultural exports over an 11-year horizon. The access enhancement policy is most effective in increasing government proceeds but least effective in improving the welfare of other participants. The tax reduction policy enhances traders' profitability but sacrifices the welfare of farmers and government proceeds substantially. Finally, the STR acknowledgement policy results in the largest increase in profitability of marginalized traders and farmers but comes at the cost of government proceeds.

Residential consumers are increasingly combining renewables with energy storage systems. However, changes in policies and support for these technologies may impact their adoption and the outlook for the energy industry. In this paper, we consider a grid-connected household's problem of determining the optimal capacities of these two technologies as well as the battery operating policy that minimizes its electricity costs when faced with time-of-use electricity prices and sellback credits. We identify the impact of household characteristics, technological progress, and electricity pricing policies on the levels of investment in these two technologies. Furthermore, we supplement our analytical results with a case study of two U.S. cities and identify policy guidelines for the design of a technology subsidy program aimed at stimulating the adoption of these technologies and the ensuing implications for residential customers, the environment, and grid reliability. Our paper has implications for several stakeholders in practice on (i) how the adoption of renewables is affected by energy storage (and vice versa) and (ii) how electricity pricing, technological progress, and subsidy policies can shape the adoption of both technologies.