Home country employment and foreign direct investment: evidence from the Italian case

The present paper provides further insights on the relationshipbetween home country employment and foreign direct investment(FDI) undertaken by national firms. The unit of analysis iseach ensemble of firms operating in the same industrial sectorand localised in the same geographical region. That allows usto capture both direct and indirect effects of foreign productionon the parent's environment, which arise through the generationof linkages and externalities. Empirical evidence has been providedwith reference to the Italian case in the decade 1985–95.Results suggest that the impact of outward FDI on the labourintensity of domestic production is negative in the case ofvertical investment undertaken—especially by smaller firms—inless developed countries, and positive for horizontal and market-seekinginvestments in advanced countries.     

Outward foreign direct investment and domestic innovation performance: evidence from China

The existing literature has explored the existence of reverse technology spillover through outward foreign direct investment (OFDI), which means domestic firms improve their technological innovation and productivity due to overseas investment activities. This paper aims to examine how the host country affects reverse technology spillover from OFDI. The findings show domestic innovation performance (DIP) is positively related to OFDI in developed countries while it is negatively related to OFDI in transitional and emerging markets. It is also found that financial development and human capital weaken the positive relationship between OFDI in developed countries and DIP and also weaken the negative relationship between OFDI in transitional and emerging markets and DIP. These results are further confirmed through robustness checks.     

Competition for foreign direct investment: The role of technology and market structure

We analyze the location choice of a multinational corporation (MNC) between two host countries. We consider both passive and active governments and examine the role of production efficiencies, and of market structure, in the MNC's choice. Our findings include: (i) when the domestic firms export, the country with fewer firms always gets the MNC, but the MNC is indifferent between hosts with firms that have different efficiency levels, (ii) when the domestic firms do not export, the country with more firms gets the MNC if they are sufficiently inefficient, and the MNC locates in the country with less efficient firms.     

Regional foreign direct investment and technology spillover: evidence across different clusters in India

This paper examines whether there exist productivity spillovers from foreign direct investment (FDI) to domestic firms at the regional level, using firm-level panel dataset covering 22 manufacturing industries in India from 2000 to 2012. In order to estimate the productivity spillovers from FDI at the regional level, we select 10 industrial clusters across 4 regions in India. In estimating productivity, we control for a possible simultaneity bias by using semi-parametric estimation techniques. We find that local firms benefit from horizontal and vertical FDI, but the benefits from the latter are found to be substantially stronger. The absorptive capacity of domestic firms is highly relevant to harvest the spilled technology from foreign-owned firms. Furthermore, we find that domestic firms belonging to high-technology industries benefit more from FDI at the regional level. We also find that market concentration is a crucial conduit for firm innovation, technological upgradation, and having a direct effect on local firm total factor productivity.     

Rights,governance, and foreign direct investment: an industry-level assessment

Theories of multinational enterprises emphasize that foreign direct investment (FDI) is undertaken in different industries for different reasons, yet studies of the effects of rights and governance on FDI generally rely on aggregate-level FDI data. This paper evaluates US FDI outflows to 15 industries (eight manufacturing, seven non-manufacturing) in 54 countries in a linear dynamic panel data gravity FDI model using a ‘system’ generalized method of moments estimator and several widely used rights and governance indexes. At the aggregate level, we estimate that stronger rights and governance have a positive effect on FDI, consistent with most prior studies. At the industry level, we estimate larger positive effects of rights and governance on FDI for service than manufacturing industries, particularly for the information and the finance and insurance industries.     

Wages and wage growth in Poland: The role of foreign direct investment

In recent years Poland has received substantial inflows of foreign direct investment. This paper combines detailed labour market data with industry data from the Polish manufacturing sector to examine the effects of foreign direct investment inflows on wages and wage growth. The empirical evidence we assemble suggests that workers in industries with greater foreign presence enjoy higher wages and higher wage growth. This effect appears to be robust to a variety of empirical approaches, estimation techniques and specification checks.
JEL classification: F23, J31, 019, P33.     

U.S. foreign direct investment in Latin America and the Caribbean: a case of remittances and market size

This article investigates the effect of remittances on U.S. foreign direct investment (FDI) flows to Latin America and the Caribbean (LAC). It covers 26 countries for the period 1983–2010. The results show a positive and significant impact of remittances on U.S. FDI flows. However, this effect depends upon the level of gross domestic product (GDP) per capita of the host country. On average, the results show that increasing remittances by one standard deviation increases U.S. FDI flows by 0.44 percent a year. Also, host country demand positively affects U.S. FDI flows, which supports the market size hypothesis.     

Shaping user-side innovation through standardisation: The example of ICT

This paper looks at the relations that exist between standardisation and user-side innovation in ICT. Some necessary background information are followed by a discussion of how standards and user-side innovations are shaped. A mutual influence between standardisation and innovation can be identified. To avoid the emergence of standards that are beneficial only for a handful of users a co-ordinated representation of users in standards setting is suggested.     

Intertemporal market division:: A case of alternating monopoly

In this paper, we report on an equilibrium with market dominance that exists in a simple two-firm model that features neither entry barriers nor sophisticated punishment strategies. This equilibrium induces an intertemporal market division in which the two firms alternate as monopolists - despite the fact that the model also sustains a Cournot duopoly. Even when initially both firms are active in the market, the alternating monopoly reveals itself rather quickly. Moreover, it Pareto dominates the Cournot equilibrium - as it is close to the cartel outcome. Several examples of what well may be such alternating monopolies are presented.     

Benefit entitlement and unemployment duration: The role of policy endogeneity

The potential duration of benefits is generally viewed as an important determinant of unemployment duration. This paper evaluates a unique policy change that prolonged entitlement to regular unemployment benefits from 30 weeks to a maximum of 209 weeks for elderly individuals in certain regions of Austria. In the evaluation, we explicitly account for the fact that the program was an endogenous policy response to deteriorating labor market conditions for older workers in certain regions and sectors. The main results are: (i) REBP reduced the transition rate to jobs by 17%; (ii) accounting for endogenous policy adoption is important and quantitatively significant.     

Does financial liberalization improve the allocation of investment?: Micro-evidence from developing countries

Using firm level panel data from 12 developing countries we explore whether financial liberalization improves the efficiency with which investment funds are allocated. A summary index of the efficiency of investment allocation that measures whether investment funds are going to firms with a higher marginal return to capital is developed. We examine the relationship between this and various measures of financial liberalization and find that liberalization increases the efficiency with which investment funds are allocated. This holds after various robustness checks and is consistent with firm level evidence of a stronger association between investment and fundamentals after financial liberalization.     

Predator or prey?: Parasitic enterprises in economic development

In many developing and transition economies Mafia-like activities are rampant. Extortion and other forms of predation lower profitability in private businesses and distort investment incentives. Incorporated in a model of industrialization, bimodal club convergence may result. Economies may get stuck in a Predators’ Club characterized by a vicious cycle of poverty and predation. Societies with a low flow of new entrepreneurs are especially vulnerable to predation and never get out of this club. Poor societies with a high flow of new entrepreneurs, however, may grow out of the trap and join the rich Producers’ Club.     

Environmental levies and distortionary taxation:: Pigou, taxation and pollution

I note an important distinction between the optimal price of environmental quality in a second-best world and the optimal level of environmental quality. Using an analytical general equilibrium model, I show that for reasonable parameter values, an increase in tax distortions (arising from an increase in required tax revenues) leads to a fall in the optimal Pigouvian tax rate even while environmental quality improves. In general, knowledge of the direction of changes in optimal environmental tax rates due to changes in the economy is not sufficient for understanding the impact on environmental quality.     

Housing mobility programs and economic self-sufficiency: Evidence from a randomized experiment

This paper examines the effects of a randomized housing-voucher program on individual economic outcomes. Public housing residents who are offered relocation counseling together with housing vouchers that can only be redeemed in low-poverty areas experience a reduction in welfare receipt of between 11% and 16% compared to controls. These effects are not accompanied by changes in earnings or employment rates as measured by unemployment insurance records. Offering families unrestricted housing vouchers without additional counseling appears to have little effect on economic outcomes.     

Embedded industrial production systems: Lessons from waste management in zinc production

To meet the sustainability challenge private companies must implement corporate strategies and adopt novel technologies. The technical and social embeddedness of industrial production systems, however, complicates these systems' transition towards sustainability. In the paper, mechanisms and conditions are reported for the development and implementation of waste management options in embedded industrial production systems. The focus is on the Dutch zinc production industry, which had to deal with a major waste problem; the generation of jarosite. The industry's options were to increase the jarosite waste storage capacity, to develop a jarosite treatment process or to switch to a zinc-ore of low-iron content whereby no jarosite waste would be generated anymore. Required conditions appeared to be a combination of technological capability and technical embedding and favourable economics. Case study research, however, revealed that adequate stakeholder management is crucial to address social pressure exerted and to obtain external acceptance for any transition strategy. Whilst appropriate, internal technological capabilities are important, effective interactions with and enrolment of various firm-external actors are crucial. In the case of zinc, access to the heterogeneous external actor network was critical for the development of the jarosite treatment solution direction. In conclusion, both the technical, organizational and social embedding of new technologies are crucial for successful implementation.     

People, cities, growth and technological change : From the golden age to globalization

The concept of economic development appeared during the postwar period as the basis and the source of a very strong hope of eradicating extreme poverty from the face of the Earth. All along the three first decades of this period—the second half of the 20th century—this promise did not seem questionable. It was thought that there were clear signs that material progress reaching larger sectors of the population and economic growth were parallel processes, linked to urbanization. A new style was thus established—that of modern large cities. However, the dynamics of this period appears to be strongly associated with the economic activity related to the basic construction of one's own lifestyle. The effects of structural market saturation and the limits of the redistribution of income began to be noticed in as far back as the end of the 1960s, and even more clearly so towards the end of the 1970s. That was the moment when population growth in the megalopolises and large cities in general began to become stable and even to decline in absolute value. It was also the time when the acceleration of technological innovation began to play a major role in development policies, while low social inclusion and marginalization problems became evident. This paper delves into this hypothesis on the basis of ample empirical evidence. Numerous conclusions are drawn from the analysis, which are useful for a serious restatement of the controversial issue of Sustainable Development.     

A socio-technical framework for cyber-infrastructure design : Implication for Korean cyber-infrastructure vision

This study presents a practical case application of socio-technical framework to assess and predict the development of cyber-infrastructure (CI) in Korea. Applying a socio-technical system approach to CI, this paper attempts to gain a clear understanding of how CI will evolve and stabilize in the cyber environment. It investigates the complex interaction between social and technical aspects of CI by highlighting the co-evolving nature, diversity, and interface which constitute the next generation network environment. It describes the challenges in developing, deploying, and maintaining the diverse components of CI and provides a snapshot of Korea's current approach to supporting members in meeting this challenge. The purpose of this study is to provide insight into these challenges and opportunities by offering a socio-technical analysis of CI development involving the social dynamics and organizational, policy, management, and administration decisions inherent in the design and development of CI.     

The coevolution of firms and their knowledge environment: Insights from the pharmaceutical industry

What are the most effective learning strategies for firms given the characteristics of their knowledge environment? This paper addresses this question by documenting the major changes in the knowledge environment of the pharmaceutical industry, with a particular emphasis on the period since the emergence of biotechnology, and discussing the related changes in the learning strategies of established pharmaceutical firms. Both the historical analysis and a review of the empirical research on organizational learning and knowledge transfer reveal a strong emphasis of firms on external learning through interfirm collaborations and sourcing of external knowledge. This learning strategy seems to be driven by the speed, uncertainty, and dispersion of knowledge developments in the industry. Studying the connections between the knowledge environment and the effectiveness of organizational learning processes is important to understand organizational change and adaptation, and is an area of research that deserves further attention.