Productivity gains,technology spillovers and trade: Indonesian manufacturing, 1980-96

The importance of R&D spillovers for productivity growth has been well documented in the literature. While studies in the developed country context have focused extensively on sectoral linkages, research on North-South spillovers has largely been confined to the aggregate level. This paper assesses the contribution of international R&D spillovers to manufacturing performance in Indonesia at the sectoral level. Drawing on OECD and Indonesian data sources, we consider two distinct phases: a phase characterised by intense policy regulation (1980-87), followed by a phase of liberalisation and reform (1988-96). Our results indicate that international technology spillovers made a significant contribution to the performance of Indonesian manufacturing, especially after liberalisation. The contribution of technology spillovers to productivity change is influenced by sectoral characteristics and industrial market structure.     

Investment climate and foreign direct investment in Malaysia: firm‐level evidence

Most of the foreign direct investment (FDI) studies on location determinants are based on macroeconomic characteristics. However, it is important to understand to what extent microeconomic obstacles hinder FDI. This study explores obstacles to FDI in Malaysia, based on firm‐level data. To overcome the problem of uncertainty in variable selection, Bayesian model averaging for logistic regression is employed. Using the Enterprise Surveys 2015 dataset for analysis, the Bayesian logistic regression approach provides robust findings on the importance of access to land, crime, and disorder as obstacles to FDI.     

Death of linkages in host countries? A firm‐level study on the channels of productivity spillovers in the Malaysian manufacturing sector

Productivity spillovers from multinational corporations (MNCs) to local firms have been an area of keen research interest in developing economics. Claims of positive spillovers in the form of technology transfers have been questionable, in part because of the many ambiguous conclusions obtained. The paper argues that the lack of focus in the mechanisms underpinning spillovers may be one of the reasons for the ambiguity. Using local input–output linkages as the mechanism for technology transfer, this study examines the presence and the enabling conditions for spillovers. Accounting for the variations in firms' characteristics, the findings show that skills‐oriented MNCs participating in international production networks transmit horizontal spillovers to local establishments. Vertical spillovers from MNCs are mostly relevant only to lower‐skilled establishments. For skilled and export‐oriented local establishments, technologies learned from producing for international production networks are more significant than forming linkages with MNCs in the domestic market.     

Productivity,ownership, and producer concentration in transition: Further evidence from Vietnamese manufacturing

After controlling for firm-level factor intensities and scale, and industry-level concentration, total factor productivity differentials between MNC (multinational corporation) joint ventures or SOEs (state-owned enterprises) and private firms were usually positive and statistically significant in 2001–2006. Differentials between wholly foreign MNCs and private firms were usually positive and significant in a lagged specification but not in a contemporaneous one. Estimates of productivity spillovers from SOEs and MNCs to private firms and the productivity effects of concentration tended to be insignificant statistically. Substantial variation of estimates among industries and time periods suggests that combining heterogeneous industries or time periods biases productivity estimates.     

Productivity response to reduction in trade barriers: evidence from Turkish manufacturing plants

We examine the effects of trade policy changes on the evolution of productivity in the Turkish manufacturing industry. Plant level productivities are estimated for the 1983–1996 period following the procedure of Olley and Pakes. Industry averages indicate that productivity gains are largest in import-competing industries with highest gains reaching 8% per year during periods of rapid decline in protection rates. We find that productivity improvements resulting from declining protection rates are statistically significant and economically important, especially in import-competing sectors. More importantly, productivity improvements due to declining protection rates increase with the plant size.

Democracy and foreign direct investment at the industry level: evidence for US multinationals

Theories of multinational enterprises emphasize that foreign direct investment (FDI) is undertaken in different industries for different reasons, yet studies of the effects of democracy on FDI most commonly use aggregate-level FDI data. This paper evaluates US FDI outflows to 15 industries (eight manufacturing, seven nonmanufacturing) in 54 countries in a linear dynamic panel-data gravity FDI model using a “system” generalized method of moments estimator and three widely used democracy indicators. At the aggregate-level, we estimate a positive effect of democracy on FDI, consistent with most prior studies. At the industry level, we estimate larger positive effects of democracy on FDI for service than manufacturing industries, particularly for finance and insurance and information, and negative effects for mining and oil and gas extraction.     

Productivity Measurement in Gambling: Plant‐level Evidence from the United Kingdom

Although gambling is one of the fastest‐growing service industries, there have been no studies of total factor productivity (TFP) in this sector. We attempt to fill this gap using establishment‐level data from the United Kingdom. We also discuss key measurement issues in calculating gambling productivity and estimate labor and TFP equations, based on a stochastic frontier production function framework, focusing in particular on the impact of information technology on productivity. Our preliminary results suggest that the production function models fit well, generating plausible elasticity estimates. We find consistent evidence that productivity increased following major reforms to gambling taxation in 2001. Our findings yield limited evidence of regional variations in efficiency. Another key preliminary result is that internet operations appear to be associated with higher relative efficiency.     

Knowledge spillovers from foreign direct investment in R&D: Evidence from Japanese firm-level data

This study uses firm-level panel data from the Japanese manufacturing industries and examines whether foreign direct investment generates intra-industry knowledge spillovers to domestic firms. The analysis found positive effects of R&D stocks of foreign firms on the productivity of domestic firms, while effects of capital stocks of foreign firms were absent, suggesting that knowledge of foreign firms spills over through their R&D activities, but not through their production activities. In addition, we found that the extent of spillovers from R&D stock of foreign firms is substantially larger than spillovers from R&D stock of domestic firms.     

Innovation and Firm‐Level Productivity: Evidence from Bangladesh

In this paper, the labor productivity impact of manufacturing firms’ innovation in Bangladesh, a region which has, to date, been understudied in this respect, is examined through World Bank Enterprise Survey data from 2003 to 2006. We apply the Cobb–Douglas production function, augmented with innovation‐related inputs (and other expected sources of productivity) in a simultaneous three‐equation system connecting R&D to its determinants, innovation output to R&D, and productivity to innovation output; and in a two‐equation system connecting innovation output to its determinants and productivity to innovation output. Our results reveal that Bangladeshi firms’ process innovation is an important factor for their labor productivity, whereas the significant effect of product innovation is not clearly established.     

Productivity and technology in Nepal:: An analysis of foreign and domestic firms

This study uses plant level data from the census of manufacturing establishments to examine the production technology and labor productivity of foreign and domestic firms in Nepal. The results show that the capital intensity in foreign firms is higher than that in domestic firms. The statistical results also imply that foreign firms have higher labor productivity. A simultaneous equation model suggests that foreign firms are technically not more efficient than domestic firms. In fact, analysis indicates that foreign firms are technically less efficient. The foreign firms may have derived their competitiveness from capital intensive technology that is found to be one of the major factors to boost labor productivity.     

深圳外贸出口效益实证测算与分析

改革开放以来,伴随深圳经济持续快速增长,深圳市外贸出口出现持续飞速发展的良好趋势,外贸出口总额从1979年的930万美元增加到2004年的778.56亿美元,年均增长率高达43.5%,远高于同期本市生产总值(GDP)的增长率。1979～2004年,全市外贸出口依存度年平均值达124%,1993～2004年,深     

Economic growth,local industrial development and inter-regional spillovers from foreign direct investment: Evidence from China

In many countries inward foreign direct investment (FDI) typically concentrates in a few regions. However, there is little empirical evidence on whether spatially concentrated FDI boosts economic growth in other regions within the same country. We use a dataset that covers 96% of Chinese cities from 1996 to 2004 and find that “inter-regional spillovers” from FDI concentrated in China's coastal cities have a positive and significant effect on the growth of inland cities. In addition, an inland city's industrial development affects its absorptive capacity to gain such inter-regional spillovers from coastal FDI.     

Rules of origin and technology spillovers from foreign direct investment under international duopoly

Using a simple three-country model of international duopoly, this study analyzes the optimal choice of rules of origin (ROO) in a free trade area/agreement (FTA) when firms from outside the FTA must undertake foreign direct investment (FDI) in FTA countries and conduct part of their production process within the FTA to comply with the ROO. FDI causes spillovers of the superior production technology from a non-FTA firm to its competitor within the FTA, depending on how much of the production process is shifted to the FTA area. In this situation, this study predicts that as the degree of multilateral trade liberalization before formation of the FTA is higher, the optimal ROO tends to be less stringent.     

改革开放以来影响广东省外贸出口因素的实证分析

本文分析了广东省外贸出口与进口、FDI、出口对象国的经济增长及人民币名义汇率等影响因素的长期均衡关系,然后分析了短期中广东省外贸出口量对各影响因素波动的反应。得出结论:长期中,广东省出口额与外国收入、进口额、人民币名义汇率之间存在着正相关关系,而短期内进口额和人民币名义汇率对出口影响较大。     

The contribution of multinationals to wage inequality: foreign ownership and the gender pay gap

Review of World Economics - While an abundance of studies exists documenting the significant wage premium of multinationals (MNE) and the effects of foreign direct investments on wage inequality,...     

Outward foreign direct investment and technical efficiency: Evidence from Taiwan's manufacturing firms

This paper uses firm-level panel data from Taiwan's manufacturing industries from 1987 to 2000 to investigate the impact of outward foreign direct investment (OFDI) on the technical efficiency of the OFDI firms. Propensity score matching is used to construct an appropriate group of non-OFDI firms to compare with OFDI firms, and a metafrontier framework is subsequently used to calculate comparable technical efficiencies for both groups of firms. Our empirical results reveal that the technical efficiencies of Taiwan's manufacturing firms were increasing over the entire sample period. In addition, our results suggest that the technological advances and the technical efficiency of Taiwan's manufacturing firms are positively correlated with their OFDI activity.     

Estimation of the East African Community's trade benefits from promoting intra‐regional trade

In the literature on economic integration, the optimum currency area (OCA) theory says that there should be a high degree of trade between potential members of a monetary union for them to benefit from the use of a single currency. This study uses an augmented gravity model of trade to estimate the East African Community's (EAC) trade effects, as this community decided to participate in a monetary union by 2024. The study uses the fixed effect filter (FEF) estimator, which follows a two‐step approach and outperforms the standard fixed effects (FE) estimator. The results indicate that EAC has the potential to increase trade among partner states by 122% more than expected from the normal trade levels. The study, therefore, supports the ongoing East African Monetary Union process. However, to improve the likelihood of creating a more sustainable monetary union, the study recommends these countries to primarily focus on the full implementation of the customs union and common market steps. The main contribution of this study is that it provides robust estimates of the EAC's effects on intra‐regional trade using more recent data and updated econometric techniques.     

Liberalization,export incentives,and trade intensity: new evidence from Nepalese manufacturing industries

This paper presents an empirical analysis of the consequences of liberalization and export incentives on trade intensity in Nepal, a “least developed” country with weak institutions and severe infrastructure bottlenecks. Industry level evidence provides no support for any link between protection and export performance, or that export intensity is determined primarily by relative factor abundance. Results suggest that lower protection and public sector dominance lead to higher import penetration, and that foreign investment increases import penetration when the policy regime is restrictive. Although some of these phenomena are due to specifically Nepalese factors, such as its open border with India, some general policy lessons for other least developed economies emerge.     

Productivity Spillovers from FDI in Malaysian Manufacturing: Evidence from Micro‐panel Data*

Using an establishment‐level panel dataset for the Malaysian manufacturing industries for 2000–2004, we argue that differences in the proxies and degrees of foreign shareholdings in measuring foreign presence lead to opposite signs and/or significance of spillover effects. The results show significant evidence of positive productivity spillovers to local establishments in the same industry, based on a broad measure of foreign presence. However, there is no evidence of positive spillover when employment share is used as a proxy for foreign presence. Furthermore, significant negative spillover effects are related to higher employment shares of wholly foreign‐owned establishments. Although there is no significant difference in labor productivity between wholly foreign‐owned and locally‐owned establishments, both majority and minority foreign‐owned establishments have significantly lower levels of labor productivity than locally‐owned establishments in Malaysia.