Managing risk in the formative years: Evidence from young enterprises in Europe

This paper empirically investigates aspects of risk management in young small enterprises? effort to survive and grow. We use a new dataset on several thousands small businesses in their “formative age” (2–8 years old) in 10 European countries and 18 sectors. Firms across all types of sectors use internal risk mitigation strategies to manage technology risk and operational risk. Financial risk is managed by tapping formal and informal networks. Market risk appears less amenable to internal management action. Formal network participation (strategic alliances) is a strategy cutting across all kinds of risk with the exception of operational risk. Firms in knowledge-intensive sectors (high-tech manufacturing and KIBS) engage in risk management activities more extensively. Firms led by more educated entrepreneurs and/or operating in demanding volatile markets tend to network more and to use internal risk mitigation strategies more extensively.     

Inclusion of Environmental Goods in National Income Accounting

National income statistics take into account the values of market goods and completely ignore the environmental goods. The purpose of this paper is to suggest the integration of environmental goods into the framework of Leontiefs input–output analysis. It is suggested that environmental goods, such as clean air, fresh water, quiet, etc., be treated as sectors in the same way as market goods sectors. The final deliveries of the sectors may be positive, zero or negative, depending on the scarcity of the environ mental goods and political decisions. The paper gives a numerical illustration of how the environmental goods can be valued from an input–output analysis. It is recommended that a system should be devised to adjust the national income estimators of individual countries for the changes in the environmental goods caused by the economic activities of these countries.     

Servitization across countries and sectors: Evidence from world input-output data

This paper uses the supply tables underlying WIOT data to explore the provision of services by manufacturing. The service shares differ substantially across countries and sectors, while they remain largely stable over time. A latent class analysis assigns broadly defined manufacturing sectors to economy-wide growth models, differentiating between service- and manufacturing-driven models in catching-up and developed economies. Servitization increases with labor productivity. The service intensities in the sectoral production mix are lower in countries with higher manufacturing shares. This holds for both catching-up and developed economies. However, servitization is largely unrelated to productivity and employment growth. We therefore argue that the degree of servitization is contingent on and an attribute of the respective economic model in which a sector operates.     

Structural shifts in the manufacturing export performance of oecd economies

This paper identifies structural shifts in manufacturing export performance of the major OECD economies. The particular emphasis of this study is to see whether the longer-run responses of a country's exports to the growth in world demand have undergone trend changes. The econometric work focuses on the time variation in income elasticities from an export demand model over the period 1963–89. It thus covers a period in which there was a substantial slow-down in world economic growth and in which the manufacturing sectors in advanced economies underwent substantial restructuring in the wake of the two oil-price shocks and the competitive challenges of Japan and the NICs. The exercise attempted to evaluate the relative successes and failures of the different OECD economies to maintain or improve their positions in the ‘higher quality’ (income elastic) segments of world trade. Evidence was found for trend improvements in the income elasticity for UK exports from the early 1980s onwards and a trend decline for that of the US over the same period. The effects of non-tariff protection against Japanese exports also showed up in our results and an attempt was made to separately identify its effects.     

Expectations Formation and Business Cycle Fluctuations: An Empirical Analysis of Actual and Expected Output in UK Manufacturing, 1975–1996

Direct measures of expectations, derived from survey data, are used in a Vector Autoregressive (VAR) model of actual and expected output in eight industries in the UK manufacturing sector. No evidence is found with which to reject rationality in the derived expectations series when measurement error is appropriately taken into account. The VAR analysis illustrates the importance of intersectoral interactions and business confidence in explaining the time profile of industrial outputs, examines the mechanisms by which shocks are propagated across sectors and over time and investigates the relative importance of sectoral and aggregate shocks of different types.     

A Fuzzy clustering approach to the key sectors of the Spanish economy

The search for key sectors in an economy has been and still is one of the more recurrent themes in input–output analysis. When using clustering techniques, sectors can only belong to a group, having a particular performance. But, actually, the same sector could be important from different perspectives at the same time, to a different degree. So, a fuzzy clustering approach is needed. In this work we propose a multidimensional approach to classify the productive sectors of the Spanish input–output table for 1995, based on three groups of variables: those related to their productive integration, others measuring their specific weight in the economy and finally some showing their economic dynamic. We also incorporate into the analysis the technological level, which being a categorical variable presents special methodological problems. All these questions are tackled applying a robust and fuzzy clustering analysis, which gives as a result a classification of sectors illustrating the role that each one plays in the Spanish economy.     

The impact of R&D on factor-augmenting technical change – an empirical assessment at the sector level*

The aim of the paper is to quantify endogenous factor-augmenting technical change driven by R&D investments in a panel of 11 OECD countries over 1987–2007. This paper contributes to the scant empirical evidence on the speed, sources and direction of technical change for various sectors and production factors. Assuming cost-minimization behavior, a CES framework is used to derive a system of equations that is estimated by a GMM system estimator. The estimated factor-augmenting technology parameters show that in most sectors, technical change was labor-augmenting and labor-saving. Statistically significant effects of manufacturing and services R&D were found on factor-augmenting technical change (with the highest R&D elasticities found in the high-tech manufacturing and transport, storage and communication sectors). Whereas ‘in-house’ R&D stimulates total factor productivity, R&D spilled over to other sectors has a capital-augmenting effect accompanied by a higher use of labor. The results of this study provide a starting point for incorporating endogenous factor-augmenting technical change in impact assessment models aimed at broad policy analysis including economic growth, food security or climate change.     

The Fading Attraction of Central Regions: an Empirical Note on Core–Periphery Gradients in Western Europe

Abstract

This paper describes sectoral core–periphery gradients across Western European regions over the period 1975–2000, and it estimates the impact of EU membership on countries’ internal geography. Overall, it is found that the centrality of European regions has been losing importance as a determinant for the location of employment. Central regions have gained employment share in none of the eight broad sectors analysed, whereas peripheral regions have significantly gained employment share in four of these sectors. Accession to the EU has favoured countries’ peripheral regions in terms of manufacturing employment and their central regions in terms of service employment.     

Effects of Environmental Regulations on Trade Flow in Manufacturing Sectors: Comparison of Static and Dynamic Effects of Environmental Regulations

This study analyzes environmental regulations and trade performance in manufacturing sectors under static and dynamic conditions. We investigate environmental innovation induced by environmental regulations and the spillover effect on manufacturing sectors, determine whether the spillover effect offsets any negative effect found under static conditions and analyze environmental regulations on the import side. For this, we formulate a trade model that incorporates the environmental innovation equation. We analyze environmental tax, energy tax and the Emissions Trading System (ETS) using strong, balanced panel data from 19 OECD countries for 1996–2009. The results reveal that the static effect of energy tax on exports is negative, but the dynamic effect is positive; however, the positive effect does not offset the negative effect. In short, environmental tax and energy tax decrease the international competitiveness of the manufacturing sectors. Environmental tax and energy tax limit imports, especially in the high‐energy consumption group. The analyses of the ETS further complicate the overall picture. It shows that the further research on the effects of ETS on manufacturing firms' competitiveness over their foreign competitors in the global is required. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Productivity and Inflation: a Paradox

In his Budget speech, Mr. Lawson drew attention to the greatly improved record of productivity growth in UK manufacturing:
"During the 1960s, and again in the 1970s, growth in manufacturing productivity in the UK was the lowest of all the seven major industrial countries in the world. During the 1980s, our annual rate of growth of output per head in manufacturing has been the highest of all the seven major industrial countries."
Ironically this success in regard to productivity may cause a problem in regard to inflation if the UK moves to a fixed exchange rate policy within the EMS. In this Viewpoint we report the consequence of such a move and also describe the possible required rise in the exchange rate if price stability is to be attained. We show that price stability requires the exchange rate to rise (i) to offset world inflation and (ii) to compensate for the productivity gap between the traded and non-traded sectors.     

The Future of Japanese Manufacturing in the UK

The expansion of Japanese FDI into the UK manufacturing sector during the 1980s and early 1990s gave rise to the debate on the Japanization of British industry. The paper argues that this debate was constructed from a Western perspective. It did not locate the strategies and structures of Japanese subsidiaries within the broader context of how Japanese multinational corporations were evolving in this period. The necessity to look at these issues from a more global perspective is reinforced by the changes which have occurred since the mid 1990s in the environment for Japanese multinationals. The global economy offers more choices to firms about their location as well as facing them with a more competitive environment. In the Japanese case, this is leading to a growing differentiation between standardized mass production (which can be located in Asia and Eastern Europe) and science–led sectors of industrial production (which necessitate location near to centres of research and development expertise in the USA and Europe). This means that Japanese firms are reconsidering the strategy and structure of their subsidiaries in the UK. Standardized mass production will only survive in the UK as long as costs can be pushed further down and productivity increased, both of which are difficult conditions to meet given possibilities elsewhere in the world for cheap mass production. The growing area of investment will be in science–based manufacturing, though here the UK will be competing against the USA and Germany for Japanese investment. Here, however, the organizational and management characteristics of Japanese subsidiaries will make the necessary connections with local managers and local networks of expertise difficult to achieve. Thus Japanese subsidiaries in the UK are in a period of prolonged uncertainty about their role in the future. These changes open up the necessity for a new agenda of research which goes beyond the Japanization approach and is concerned with the organization and management of Japanese multinationals in an era of global competition.     

Sources of Structural Change for the UK Service Industries 1979–84

Over the period 1979 to 1984 the UK economy experienced severe structural change in that the oil and services sectors increased their share of employment and output, whilst the share of manufacturing fell by about 5 percentage points. This paper uses input–output tables for 1979 and 1984 to decompose the changes in output of total marketed services and the component industries into the changes due to price changes and those due to volume changes. The volume changes are, in turn, decomposed into those internal to the service industries, e.g. changes in demand for business services by communication, and those external to the industries, e.g. changes in demand for services by manufacturing. The analysis is done at a 101-industry level with results presented in the paper for the five service industries, Distribution and Catering, Transport, Communications, Business Services and Other Market Services. The paper is intended to give insight into the answers to the following questions: How much of the increase in service output has been due to the reallocation of activities previously done within manufacturing? In what respects were services insulated from the effects of the general recession 1979-812? Has the recent growth in services output been due to more consumers' expenditure and other. final demand or to other factors? The main conclusion is that changes in Input–Output coefficients were very important for structure change in UK services, almost entirely because they dominated the fastest-growing sector, business services.     

A case study for a new metrics for economic complexity: The Netherlands

We present a new approach for the economic analysis of countries, which we apply to the case of the Netherlands. Our study is based on a novel way to quantify exported products’ complexity and countries’ fitness which has been recently introduced in the literature. Adopting a framework in which products are clustered in sectors, we compare the different branches of the export of the Netherlands, taking into account the time evolution of their volumes, complexities and competitivenesses in the years 1995–2010. The High Tech and Life Sciences sectors share high quality products but low competitiveness; the opposite is true for Horticulture and Energy. We analyze in detail the Chemicals sector, finding a declining global complexity which is mostly driven by a shift towards products of lower quality. A growth forecast is also provided. In light of our results we suggest a differentiation in policy between the country’s self-defined industrial sectors.     

Improving performance through vertical disintegration: evidence from UK manufacturing firms

Unlike previous work on the vertical integration–performance relationship, we investigate the performance consequences of vertical disintegration. We offer a theoretical justification for the disintegration decision and we condition the disintegration effect on performance on the initial degree of firm integration, the timing and the direction of disintegration. Using a sample of UK manufacturing firms and controlling for disintegration endogeneity, we find that disintegration eventually results in improved operating performance, particularly when disintegration occurs as a reaction to poor performance and in cases of forward between‐sector disintegration. However, being highly integrated does not guarantee gains from disintegration. The implications of these findings are discussed. Copyright © 2008 John Wiley & Sons, Ltd.     

Impact of sequence of international entries on country exits

A classic model of international entries—the Uppsala model—postulated that firms enter foreign countries in increasing order of psychic distance between the home and the host country to minimize the risk of failure. A question that was left unanswered was whether this sequence of entry results in any performance benefits. Literature on the impact of psychic distance, or its components like culture distance, on the performance of foreign operations abounds but the order of entry that is critical to the Uppsala model remains conspicuously absent. This paper presents an analysis of foreign country entries and exits by the U.S. multinationals in the manufacturing and service sectors since 1965. Companies that enter foreign countries in increasing order of culture distance do gain a significant performance advantage over those who do not. Changes over time and across industry sectors are discussed.     

Demand chain management in manufacturing and services: web-based integration, drivers and performance

This paper investigated the relationship between Internet-enabled supply chain integration strategies and performance in manufacturing and services. It summarizes the literature on demand and supply integration and describes four web-based strategies. A stratified random sample was collected from UK manufacturers and services, and there was strong evidence that demand chain management (DCM) led to the highest performance in manufacturing, but few signs of DCM in services. Manufacturers and services relying on only web-based demand or supply integration outperformed their low integration counterparts, but lagged DCM in manufacturing. The study also investigated DCM adoption drivers and found that rational efficiency and bandwagon effects drove change. The findings have some important implications for theory as well as for manufacturing and service companies interested in improving their performance.     

Market access and the other determinants of North–South manufacturing location choice: An application to the Euro-Mediterranean area

This paper examines the impact of market and supply accessibility on the geographic distribution of manufacturing sectors in the Euro-Mediterranean area. The evolution of market and supplier access in the area is first investigated. Then, market and supplier access, production cost and regional integration are focused on as the main determinants of industrial location. A deeper regional integration agreements can act as an important dispersion force, driving the location of manufacturing in new member states and Mediterranean countries.     

论国际垂直专业化分工的工资效应——基于浙江制造业数据的实证分析

在全球生产网络化的背景下,中国制造业广泛参与国际垂直专业化分工,对劳动收入分配产生了重要影响。本文以外向经济较为发达的浙江省为例,测算了浙江26个制造业部门参与垂直专业化分工的程度,并就垂直化专业分工对浙江制造业工资收入的影响进行了实证分析。研究结果显示:浙江制造业部门参与国际垂直专业化分工总体上提升了行业工资收入水平;垂直专业化分工对制造业工资收入的促进作用在资本密集型行业中比在劳动密集型行业中更大。本文最后就如何提升浙江制造业工资水平、缩小行业工资差距提出了相应对策建议。     

知识密集型服务业发展与制造业战略升级研究

随着经济全球化的不断深入,提高技术创新能力已成为培育企业与产业核心竞争力和提高国际竞争力的必经之路。在知识经济时代,知识成为企业创造竞争优势的重要要素,而知识密集型服务业(KIBS)已成为技术创新的必然选择。目前我国KIBS发展仍相对滞后,不能够有效支撑制造业战略转型升级。因此,促进制造业升级有待KIBS的快速发展支持,改变低端竞争的局面。     

R&D and productivity: A broad cross-section cross-country look

The empirical literature on R&D and productivity has shown that there is indeed a positive influence of R&D investment on output growth. However, the exact relation depends to a large extent on the approach chosen (i.e., functional form). Because most studies concentrate on a limited number of countries or sectors and use their own specific methodology, comparison is difficult. This paper aims at providing a broad overview of cross-country and cross-sector differences in the relation between (direct) R&D and output growth, using a common methodology, so that comparison is easier. The functional form used is a translog production function, which is applied to data for 15 manufacturing sectors and 9 principal OECD countries.