Bilateral FDI and Canadian Export Activity

This study examines how Canadian exports to a specific trading partner are influenced by outward and inward direct investment flows to/from that country. A gravity-type empirical model guides a dynamic panel analysis which utilizes Organization For Economic Cooperation and Development (OECD) country-level data from 1989–2007. Besides refuting the contention that outward foreign direct investment (FDI) displaces exports, the findings also imply a strong role for intra-firm based export growth in response to inward FDI. The analysis is enriched by explicitly accounting for the dominant position of the United States within the context of Canada's overall trade and investment flows.     

Quality of life and spatial dimensions of the productivity slowdown

This research is concerned with explaning locational variations in the productivity slowdown within the urban manufacturing sector of the United States. The observed decline in labour productivity growth rates between the 1963–73 and 1973–82 subperiods is explained on the basis of both national and location-specific factors. An explict hypothesis examined here is that quality of life is an important area-specifc influence on productivity growth and related trends. Statistical analyses are conducted whereby either an aggregate amenity index or its individual amenity components are utilized to examine the importance of quality of life differentials. The results suggest that these amenities, particularly environmental quality, may be instrumental in explanining the differncial magnitude of the productivity slowdown across urban areas. Additional findings generally do not confirm the importance of other factors frequently cited as contributing to inter-area productivity differences. A regression diagnostic analysis was performed in order to test the sensitivity of the parameters of an appreciable influence on specific coefficients, out general conclusions regarding the impact of quality of life on productivity growth remain substantially unaltered.     

MEASURING PRODUCTIVITY GROWTH IN AUSTRALIAN BROADACRE AGRICULTURE

An important source of growth for Australian broadacre agriculture has been technical progress. We compare alternative measures of productivity growth including the traditional Tornqvist-Thiel total factor productivity index; variants of this approach that allow decreasing returns to scale; the Fisher ideal index; other nonparametric measures that do not impose particular functional forms and an econometric estimate from a translog industry cost function. The annual growth in productivity in broadacre agriculture over the period from 1953 to 1994 was in the range of 2.4 to 2.6 per cent and hence was quite robust to measurement technique.     

Impacts of Adjusting Environmental Regulations When Enforcement Authority Is Diffuse: Confined Animal Feeding Operations and Environmental Quality

Environmental Protection Agency (EPA) has recently adjusted regulations governing confined animal feeding operations (CAFOs), significantly increasing the number of regulated firms. A theoretical model is developed to analyze how changes to the number of regulated firms, monitoring effort, and compliance standards affect environmental quality. The model suggests increasing the number of regulated firms, ceteris paribus , has an ambiguous effect on environmental quality, and may actually reduce it. The impact of increasing compliance standards depends on how violations are prosecuted and sanctions are set. Greater monitoring effort increases environmental quality.     

Regional Efficiency Wages: Are They a Source of Real Earnings Differentials?

This paper investigates the role of spatial efficiency wage premiums as a partial explanation for both inter-industry and geographic wage differentials. The empirical approach is based on an analysis of panel data for six select manufacturing industries operating within specific (U.S.) states. Besides testing for the existence of a regional "wage curve," this research adds to the evidence on traditional determinants of spatial wage differentials. An explicit treatment of regional cost-of-living conditions is unique to the analysis; also, industry wage structures are accounted for in explaining regional wage differences. The findings here contribute to an initial body of evidence on regional efficiency wages. The empirical evidence indicates that the relationship between regional wages (nominal or real) and the local unemployment rate is much more complex than implied by the wage curve.     

Regional Skill Structure and the Diffusion of Technology

This paper examines the relationship between the skill structure of states manufacturing sectors and technological change. Various measures of technological change are utilized including private and public R&D stocks, high-tech capital, recent capital, and the spatial spillover effects attributed to R&D stocks. We analyze the impact of changes in technology on spatial wage-bill shares, utilizing panel data for the 48 contiguous states over three sequential five-year periods. Overall, the results show a positive connection between skill upgrading and technological change. In other words, we find that states that adopt new technologies have more skilled workforces. Of particular interest, we find that publicly funded R&D stocks from neighboring states play a significant role in skill upgrading. The general implication of this finding is that geographic proximity is key to diffusing government-funded technology that enhances state economic performance. Our results strengthen the case for regional cooperation among states in developing policies to attract both private and public R&D capital.     

THE RETURNS FROM RESEARCH IN AUSTRALIAN BROADACRE AGRICULTURE*

Many people share the view that too little is invested in R & D in agriculture. The relationship between several measures of productivity and research expenditure was estimated using data from ABARE's surveys of broadacre industries and a new data series on R & D expenditure for the period 1953 to 1988. The internal rate of return to research was estimated to be in the range of 15 to 40 percent which does not provide strong evidence that Australia is either under- or over-investing in public research.