How productivity and domestic output are related to exports and foreign output in the case of Sweden

In this paper we examine the relationships between two sets of three variables: Swedish real exports, Swedish real GDP, and foreign real GDP in one set; and Swedish real exports, Swedish total factor productivity, and foreign real GDP in the other set. The foreign real GDP facing Sweden is proxied by total OECD real GDP minus Sweden's real GDP. Multivariate tests for integration and cointegration show that the variables in each model are cointegrated. We also perform Granger causality tests on these variables in our examination using the Toda-Yamamoto procedure. We discover bi-directional causality between Swedish real exports and Swedish real GDP (or Swedish total factor productivity). Foreign real GDP is shown to Granger cause Swedish real exports, but no significant causation of foreign real GDP on either domestic GDP or total factor productivity was found. A change in foreign real GDP thus appears to affect Swedish output and productivity only indirectly, through changes in Swedish exports. JEL classification:F41, F43, C30, C32     

Export,FDI and firm productivity

Many empirical papers tested the theoretical predictions of Helpman, Melitz and Yeaple (HMY, 2004) which sorts firms at different internationalization states according to their productivity levels. While these papers ignore the fact, that the theoretical predictions of HMY only apply to firms that become engaged in market-driven Foreign Direct Investment (FDI), we apply a more precise methodology using a French firm sample with more than 110?000 observations. Our results show that firms with a broader investment strategy, reflecting a great importance of market-driven motives, show higher productivity levels than firms with less encompassing foreign investment strategies. We conclude that the methodology is well-suited to sort firms according to the importance of market-driven FDI.     

Ownership advantages,home production,foreign production and exports of direct investing firms—Some evidence from austrian firms

This paper formulates a simple model of a monopolistic, horizontally integrated, multinational firm with multiplant economies of scale generated by inputs with public good characteristics. The econometric analysis of the model conducted with a sample of Austrian firms points to a substitutive relationship of foreign production and home production with foreign production significantly lowering exports. The estimation results, however, indicate in accordance with the economic model that multiplant economies of scales significantly lower the magnitude of substitution. Holding exports constant a complementary relationship between home production and foreign production would appear indicating that substitution would be much higher in the absence of multiplant economies of scale.     

Multinational production,exports and aggregate productivity

This paper presents and estimates a dynamic model of multinational production (MP) and exports with heterogeneous firms. The model highlights the interaction between firms' location and export decisions and their effect on aggregate productivity. The model is structurally estimated using firm-level Indonesian manufacturing data. The results are broadly consistent with the pattern of productivity, exports and MP across firms. Counterfactual experiments suggest that there are substantial productivity gains due to international trade and MP. The implied changes in steady state real wages, however, are relatively small. The experiments emphasize that the nature of firm-level trade and MP interactions are crucial to determining the aggregate effects of trade and foreign direct investment policy.     

How firm capabilities affect who benefits from foreign technology

We explore how firm capabilities affect the diffusion of technology brought with foreign direct investment (FDI). Using a panel dataset on Indonesian manufacturers from 1988 to 1996, we measure how the productivity of differing domestic firms responds to the entry of multinational competitors. We find that firms with investments in research and development and firms with highly educated employees adopt more technology from foreign entrants than others. In contrast, firms that have a small “technology gap,” meaning that they are close to the international best-practice frontier, benefit less than firms with weak prior technical competency. This finding suggests that the marginal return to new knowledge is greater for firms that have more room to “catch up” than it is for already competitive firms.     

The impact of foreign direct investment on the relative return to skill

Since the early 1980s, China has adopted favourable economic policies to attract FDI in order to facilitate technology development. Since inward FDI induces either sector‐ or factor‐biased technical progress, the impact of FDI on the distribution of income between skilled and unskilled labour is not trivial. This paper introduces vertical product differentiation to analyze the impact of FDI on the return to skill and concludes that, for a labour abundant country, this impact depends on whether the FDI‐induced technology transfer is skill‐ or labour‐biased, regardless of which sector receives FDI. The analysis shows that FDI with relatively labour‐biased technology will decrease the wage gap while FDI with relatively skill‐biased technology will increase the profit margin of the host country’s exports as well as its wage gap. The findings provide policy insights for FDI recipient countries in balancing wage growth between skilled and unskilled workers by managing inward FDI with relatively labour‐biased and skill‐biased technologies. This is particularly important for China given the expected further increase of inward FDI following its imminent membership of the WTO. JEL classification: F23, J31, P33.     

How does foreign direct investment affect economic growth in China?

How does inward foreign direct investment (FDI) affect a transitional economy? This study attempts to analyze the role of FDI in China’s income growth and market‐oriented transition. We first identify possible channels through which FDI may have positive or negative effects on the Chinese economy. Using a growth model and cross‐section and panel data for the period 1984‐98, we provide an empirical assessment, which suggests that FDI seems to help China’s transition and promote income growth, and that this positive growth effect seems to rise over time and to be stronger in the coastal than the inland regions. JEL classification: F21, F23, O53.     

The impact of foreign direct investment on horizontal export diversification: empirical evidence

Using data on stocks of Foreign Direct Investment (FDI) from 131 countries spanning the years 1984 to 2004 and the number of products exported by each country, we examine the effect of FDI on horizontal export diversification. To quantify the effects, we utilize parametric (quantile) and semi-parametric econometric methods. Results from both approaches indicate that, in general, an increase in the stock of FDI enhances the horizontal diversification of exports. The actual magnitude of the effect however, varies greatly across countries depending on the existing stock of FDI and stage of diversification, giving rise to an almost inverted U-shaped relationship. A further look at our results provides useful insights on the circumstances under which FDI may aid or inhibit the horizontal expansion of exports.     

外商直接投资对中国地区技术创新外溢的实证研究

中国是外商直接投资(FDI)流入最多的国家之一。本文通过对我国各个省级行政区的面板数据分析,发现FDI对我国技术创新存在着溢出效应,而这种溢出效应受到地区差异、所有制结构、市场规模等不同因素的制约。在实践中,我们要根据各地区实际情况,逐步改善中西部地区投资环境,强化市场竞争机制,加快各地区国有企业改革,鼓励私营企业参与竞争,提升FDI对中国各地区技术创新能力的溢出效应。     

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.     

Research Note: The slow growth of foreign direct investment in the Soviet Union successor states

This note reviews the statistical evidence on foreign direct investment (FDI) in the countries of the former Soviet Union taking into account data from both host countries and countries of origin. The main characteristics of this FDI and its variation among the successor states of the Soviet Union are established. The contribution of FDI to economic transition is so far limited to some sectors and regions, and unlikely to accelerate in the near future.
JEL classification: F21, F23, P31.     

The mediating role of export-oriented Japanese foreign direct investment in China

Since the early 1990s, China has become the largest destination of Japanese foreign direct investment （FDI）. Observing this trend, the authors analyzed whether Japanese FDI did promote exports from China to the rest of the world, and more importantly, whether this is a strategy adopted by Japanese multinationals to penetrate not only the Chinese market but also the global market. This analysis takes into account not only the direct effects of FDI on exports, but also the indirect effects, by examining the mediating role of export oriented Japanese FDI in China from 1998 to 2007 through panel analysis. The study contributes to the conceptual framework of indirect relationship among the macroeconomic variables, FDI and exports provides some insights into the strategy of export oriented Japanese FDI in creating a win-win platform for Japan and China.     

Tax incentives and foreign direct investment in China

The preferential tax policies for foreign direct investment (FDI) in China were terminated by a tax reform in 2008. This article uses the provincial-level panel data for 1998?2008 before the reform in order to study whether the tax incentive had been a significant determinant of foreign investment decisions. We find that market size and geographic location had significant impacts on the FDI inflow into China but the tax incentive policies were not a sufficient determinant of FDI inflow into China over the periods studied, which provides a rationale for the termination of the tax incentives in FDI at 2008 reform in China.     

外商直接投资对我国工业化进程的效应分析

本文利用误差修正模型考察了外商直接投资(FDI)对我国工业化的效应。一般认为,引进FDI可以有效地并持久地促进工业化进程。在验证这一重要论点之后,本文发现:FDI对我国工业化进程的影响存在着一定的时滞;初始的FDI有助于来年进一步引进FDI。本文异于已有研究处有:采用比较客观的工业化指数测度方法;强调了技术溢出效应在研究FDI与工业化关系中的意义。本文为未来的研究提供了方向。     

我国FDI和OFDI技术溢出效应的实证检验

对国内外有关国际直接投资渠道的技术溢出的研究文献进行了梳理,测算了1994—2008年我国以外商直接投资和对外直接投资反映的外国R&D资本存量,并建立了R&D溢出回归模型,对其进行回归分析。研究结果显示:国内R&D资本和外商直接投资对我国全要素生产率的提升具有促进作用,且国内R&D资本的作用更大;对外直接投资对我国全要素生产率的提升有微弱的阻碍作用。因此,在政策层面上应继续加大国内R&D支出,加强外商直接投资,积极开展对外直接投资,以推动我国技术进步。     

我国外汇储备急剧增长的原因及实证检验

截至2011年6月,我国外汇储备已高达31 975亿美元。贸易顺差、人民币汇率、外商直接投资和货币供给量被普遍认为是影响我国外汇储备规模的普遍因素。通过实证分析探讨了这些因素与外汇储备急剧增长之间的关系,并给出了相应的政策建议。     

Access to finance,foreign ownership and foreign takeovers in Germany

With this article we present the first microeconometric analysis of the impact of a foreign acquisition on the target firm’s access to finance. By using a large database of German firms, we furthermore investigate for the first time the link between foreign ownership and access to finance in Germany, one of the world's leading target countries for FDI. We use newly available comprehensive panel data that we constructed from information collected by the German statistical offices and from credit rating scores supplied by the leading German credit rating agency. We find foreign-owned firms in German manufacturing on average to show slightly more financing restrictions than domestically owned enterprises, but this very small difference diminishes once unobserved heterogeneity is taken into account. We further demonstrate that one reason for this finding is the preference of foreign investors for targets with relatively low credit-worthiness. Although the likelihood of a foreign acquisition appears to be correlated with credit rating, there is no impact of foreign takeovers on the credit constraints of the target firms ex post and therefore no support for the hypothesis that foreign takeovers ease financial frictions.     

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.     

Democracy in the neighborhood and foreign direct investment

The determinants of foreign direct investment (FDI) have been extensively studied. Even though there is extensive research in the area, most of it is based on analyzing the effects of host country characteristics on FDI flows, and yet there is little research on how neighboring country characteristics play a role in facilitating FDI flows to host countries. This paper analyzes the association between the democracy level in neighboring countries and FDI flows to host countries. Using bilateral FDI flows from the OECD countries, with a large host country sample, we find that countries surrounded by democratic countries attract higher FDI flows. Furthermore, we find evidence that countries that are surrounded by neighboring countries with good institutions tend themselves to have better institutions, experience lower civil conflict, and have higher political stability and hence indirectly attract higher FDI flows. Our findings suggest that if neighboring countries act in such way as to become more democratic, FDI flows to these countries would be higher since not only does improving the quality of democracy attract more FDI inflows, but also being surrounded by neighboring advanced democratic countries will also lead to higher FDI flows to them.