Liberalisation, FDI, and productivity spillovers--an analysis of Indian manufacturing firms

The objective of the intensification of reforms in India's trade,technology and industry policies in 1991 was to make Indianindustry competitive. In the light of these attempted changes,the present paper tested two hypotheses, namely (a) whetherliberalisation has improved the productivity of local firms;and (b) whether the spillovers from technology transfer haveincreased in the liberal regime. To test these, techniques frompanel data and stochastic production frontier were employedon 487 firms belonging to 24 three-digit manufacturing industriesfor the period 1989–90 to 1996–97. The results showedthat after liberalisation, the productivity of Indian industry,especially the foreign owned firms, has improved. The econometricresults suggested that only ‘scientific’ non-FDIfirms have benefited from the liberalisation. For the ‘non-scientific’firms, the impact is found to be productivity depressing. Withrespect to spillovers, only those domestic firms, which investedin R&D to decode the spilled knowledge, could benefit.     

AN APPLICATION OF WAGE BARGAINING MODELS TO NORWEGIAN PANEL DATA

Wage determination in Norwegian industry is investigated usinga panel of over 7,000 firms over 17 years. A standard right-to-managebargaining model serves as theoretical background for the empiricalspecification. Wage equations focusing on the relative importanceof insider vs outsider variables are estimated, controllingfor firm-specific fixed effects. Although outrider variablesare more important, insider variables have a significant effecton wages. Estimated insider weight is less than for countrieswith less-centralised wage determination. Using regional unemploymentdata we estimate unemployment elasticity between –0.04and –0.10. There is no strong evidence for real wage resistancein the long run.     

Higher education responsiveness through partnerships with industry: The case of a university of technology programme

ABSTRACT

In the context of mid-level skills shortages and the promotion of industry–education partnerships, this article examines the case of a longstanding partnership between the pulp and paper industry and a university of technology. The partnership resulted in the development of a focused qualification. We explore the experiences and understandings of academics and students in order to examine the benefits and pitfalls of such partnerships in addressing the needs of business, higher education and the students. The results show that while the university of technology has benefitted through work placements for their students and funding for industry-seconded lecturers, the partnership’s links are weakening. The programme is unattractive to high-achieving ‘matric’ graduates and is taken as a stepping-stone to other engineering fields. The article explores why this has developed. The curriculation of qualifications that are narrowly focused on one industry may limit articulation and portability of skills between different industries by graduates.     

The Temporary Staffing Industry and Workforce Development: Assessing a System of Local Experiments

Local workforce authorities in liberal market states are increasingly charged with mitigating long-term unemployment rooted in macroeconomic forces beyond their immediate control. In the US, and now elsewhere, these authorities have begun to establish partnerships with the temporary staffing industry as a means of extending their limited resources and improving job placement outcomes. Such partnerships are especially prominent in the US, where the Department of Labor has sanctioned policy experiments between local workforce authorities and the temporary staffing industry. In order to appraise these experiments, we present case-study evaluations of three diverse and highly touted employment schemes undertaken by American workforce authorities in conjunction with temporary staffing agencies. We find that under even the most favourable circumstances, the modest mechanisms of these programmes are unable to produce appreciable impacts within local labour markets.     

WAS JAPANESE GROWTH EXPORT-LED?

In three periods of its modern economic history (1913–37,1952–73, and 1973–90), Japan grew up to twice asrapidly as did other major industrialized countries. The paperinvestigates whether growth in these years was export-led. Theresults of five very different tests suggest that domestic forcesrather than foreign demand propelled longer-run growth. Thiswas particularly so in the high-growth period of 1952–73.Exports may, however, have been crucial in initiating severalcyclical upswings.     

Institutional problems of introducing innovations

The article considers the problems of the transition from the stage of making innovation decisions during the implementation of fundamental research and the exploratory studies for the practical development, creation, and introduction of innovations. It is noted that many of the accumulated problems were inherited from the Soviet times and that some emerged after the disintegration of sectoral research. It is proposed to use the experience of developed countries (Japan, South Korea) in addressing these issues with allowance for the specifics of the Russian applied sector. The suggested approach is called the “two-way innovation transition” where, on the one hand, the key role is assigned to management companies, which are set up as public-private partnerships and on the basis of chain organization provide the implementation of innovation projects and support the setting up of small innovation businesses, and, on the other hand, the promotion of a state-funded wide network of engineering centers oriented to the application of licenses and patents, including foreign ones, as well as to the maintenance of the imported technical facilities, equipment, and technologies.     

Verdoorn's law and increasing returns to scale in the UK regions, 1968-91: some new estimates based on the cointegration approach

The Johansen approach to estimating long-run cointegration vectorsis used with 1968–91 UK region by industry data to estimatereturns to scale. Thus, this approach has the advantages ofincluding a measure of capital, it overcomes the simultaneityproblems associated with the single-equation Verdoom law, andit involves estimating a correctly specified dynamic model inwhich is embedded the long-run solution(s). The results indicatethat there is substantial evidence that increasing returns arethe norm for the majority of manufacturing industries in Britishregions.     

The Assessment: The Economics of Sport

The study of sports economics has expanded rapidly in recentyears in response to significantly increased demand–forsport itself, for economic analysis relevant to commercial litigationin sport, for lively teaching material in schools and universities,and for research into the incentive properties of sporting contests.While much of the literature has focused on the issue of competitivebalance and how to achieve it, there have still been relativelyfew studies that apply the lessons of the economic theory ofcontests to the analysis of sports. There remain huge opportunitiesboth to develop our theoretical understanding of incentive mechanismsin sport and to conduct empirical research in the operationof incentives in sporting contests.     

Interpreting business partnerships in late Victorian Britain†

This article gives the first large‐scale assessment of business partnerships in England and Wales using business records within the population census for 1881. It seeks to understand the variety of ways that ‘partnership’ was used: explicit partnership, ‘de facto’ partnership, ‘joint’ activity, and asset ownership together. The article confirms that partnerships were chiefly between two people. Complexity and transaction costs largely precluded larger size and squeezed the partnership into a ‘middle ground’ between the sole proprietor and the corporation. The main size contrast was between farms with small employee numbers, and larger non‐farm business partnerships. Generally differences in the gender of business owners have greater salience than sectors. Few female business partnerships employed more than four people (mean 3.4), while male partnerships ranged up to several thousand employees (mean 33.6), and 18.6 for mixed gender. While many women were involved in businesses, their opportunities remained restricted, and most were in partnership with male partners. Family structures were important, with three‐quarters of all identifiable partnerships having some form of family relationship, with a strong preponderance of single women in female‐only partnerships, married men in male‐only partnerships, and widows in mixed gender businesses.     

Can Price Incentive to Smuggle Explain the Contraction of the Cocoa Supply in Ghana?

From the early 1960s to the early 1980s, the officially recordedoutput of cocoa in Ghana declined by 60%. During the 1983–95Economic Recovery Programme, however, the official output ofcocoa doubled. Although these developments have inspired muchempirical research, most of the studies have been unable toexplain the medium-term persistence of cocoa output in remainingbelow its estimated capacity level. The paper argues that theprice incentive to smuggle can explain as much as one-half ofthe observed decline in official output from its trend and thesubsequent recovery. A co-integration analysis and a dynamicerror-correction model of cocoa supply support the analysis.     

Can China's Diplomatic Partnership Strategy Benefit Outward Foreign Direct Investment?

In the context of global integration, whether a diplomatic partnership strategy can promote outward foreign direct investment (OFDI) and how it works are very important issues for China. Based on a dataset featuring China's partnerships collected from the Ministry of Foreign Affairs website, we establish an empirical framework to assess the role of China's diplomatic strategy in its OFDI arising from partnerships since 1993. The results show that the establishment or upgrade of partnerships has had a positive effect on Chinese firms’ decisions on OFDI for at least the short term, especially for firms with higher demand for policy guarantees from the government, such as non‐central firms and non‐Beijing firms. The results also show that the increase in OFDI is concentrated in host countries with higher political risks, such as developing countries, neighboring countries, and Belt and Road countries, which is consistent with China's diplomatic focus. Our research proves that China's diplomatic strategy can assist firms to invest abroad.     

Do Workers in Africa Get a Wage Premium if Employed in Firms Owned by Foreigners?

Do firms owned by foreigners pay higher wages than locally ownedfirms for apparently equivalent workers? Do such benefits accrueto all or only certain types of workers? This paper uses dataon individual wages in manufacturing industry for five Africancountries in the early 1990s to address these questions. Wepresent two main findings. First, foreign ownership is associatedwith a 20–40% increase in individual wages (conditionalon age, tenure and education) on average. This is halved to8–23% if we take into account the fact that foreign-ownedfirms are larger and locate in high-wage sectors and regions.Secondly, there is a tendency in some countries for more skilledworkers (using occupation and education categories) to benefitmore from foreign ownership than less skilled workers and thisconclusion holds after accounting for the size distributionof foreign firms. We discuss, but cannot directly test, theplausibility of two explanations for these findings: (i) foreign-ownedfirms employ technologies that are more skill-biased than technologiesin local firms and (ii) skilled workers in foreign firms aremore effective in rent-sharing than other workers. We contendthat these explanations may not be mutually exclusive and, hence,cannot be empirically distinguished.     

国家标准视角的官产学创新合作关系测度

大学、产业和政府之间的三螺旋关系在国际上的研究已日趋丰富并完善,但在中国却处于起步阶段,尤其是相关定量细化的规范性研究就更加屈指可数.文章借鉴Leydesdorff的三螺旋定量算法,以国家标准的起草制定为数据来源,通过2006-2010年度广西区内的纵向统计分析,以及2010年度沪、冀、辽、川、湘、桂、甘7省的横向统计分析,对其所反映的官产学关系予以研究,进行了官产学之间互动关系的定量规范性研究的初步探索.     

Enterprise form: Theory and history

A considerable theoretical and empirical literature studies the corporation’s enterprise choices, most prominently capital structure. Economists have paid less attention to other enterprise forms such as partnerships, which typically operate under different legal constraints and appeal to smaller enterprises. Yet partnerships were the dominant business organization for the period in which wealthy countries first experienced long-run economic growth, and they remain quantitatively significant in some important economies today. After reviewing the growing empirical literature on this subject, we use a series of simple models to study several aspects of the partnership’s choice of capital structure and how this relates to a firm’s choice of enterprise form. Common features of partnerships reflect the difficulty of raising capital for ventures whose prospects are hard to judge. These results highlight the need for several specific avenues for future research.     

The Social Cost of Carbon and its Policy Implications

The shadow price, or ‘social cost’, of carbon isan important indicator of the global incremental damage doneby emitting greenhouse gases today. Cost–benefit analysiswould set the optimal amount of greenhouse-gas-emission reductionat the point where this social cost just equals the incrementalcost of controlling emissions. The higher the value for thesocial cost of carbon, the more control is warranted. This comparisonassumes that cost–benefit analysis is the correct wayof determining climate-change policy, and many believe thisis not the case because of the very long-term, irreversible,and potentially catastrophic nature of global warming. But,in the short run at least, a comparison of cost and benefitsis required, and, in any event, all decisions imply costs andbenefits. But what is the ‘right’ figure for thesocial cost of carbon? This paper reviews the UK government'sassessment of the cost and concludes that it has been set fartoo high because of a misreading of the integrated assessmentmodels used to balance costs and benefits. Moreover, adoptionof the UK government's shadow price would have formidable implicationsfor energy policy in the UK, and for policies on afforestation.     

Export Performance in Africa and Asia's Manufacturing: Evidence from Firm-level Data

Asia's share of manufacturing export to gross domestic productin the 1990s was more than five times that of Sub-Saharan Africa.While explanations abound in the literature as to why Africahas failed, recent empirical work suggests that the reason forAfrica's dismal export performance lies in a low skill-to-landratio, which causes its comparative advantage to lie in primaryexports. This result is derived from a basic 2 x 2 Hecksher–Ohlinmodel. However, the aggregation inherent in the industry ornational level data sets that are used for testing this theoryhides substantial heterogeneity. Input intensity heterogeneityviolates the assumptions of the factor proportions frameworkand casts doubts on the reliability of estimation results. Moreover,measurement error on the skill variable at the aggregate levelcauses biases in Ordinary Least Squares estimation. This paperuses a combined micro- and macro-level data set for investigatingthe determinants of export performance in Asia and Africa'smanufacturing. Tobit estimations find no robust associationbetween skill intensity and export performance in the textileand garment industries in Ghana, Kenya and India. Africa andAsia's significant performance gap might be better explainedby there being poorer institutions in Africa as measured bythe Knack and Keefer (1995) index and Kaufman et al.'s (1999)‘rule of law’ composite index.     

The Solow model in the empirics of growth and trade

Translated to a cross-country context, the Solow model (Solow,1956) predicts that international differences in steady-stateoutput per person are due to international differences in technologyfor a constant capital–output ratio. However, most ofthe empirical growth literature that refers to the Solow modelhas employed a specification where steady-stateifferences inoutput per person are due to international differences in thecapital–output ratio for a constant level of technology.My empirical results show that the former specification cansummarize the data quite well by using a measure of institutionaltechnology and treating the capital–output ratio as partof the regression constant. This reinterpretation of the cross-countrySolow model provides an implication for empirical studies ofinternational trade. Harrod-neutral technology differences,as presumed by the Solow model, can explain why countries havedifferent factor intensities and may end up in different conesof specialization.     

Partnership building as an approach to addressing corporate social responsibility in the agriculture sector in Malawi

A key factor in improving Malawi's trade and economic growth will be how Corporate Social Responsibility (CSR) provides a platform for stakeholders to come together to manage Malawi's supply and value chains so as to also improve livelihoods, in particular in the agriculture sector, the most prominent in the country. This article analyses what motivates businesses in the Malawian agriculture sector to implement CSR, and how companies and other stakeholders give shape and substance to their partnerships. It examines three case studies that reflect the types of CSR partnerships that have emerged within the sector. These highlight the transition from issue-specific partnerships to ones established to address the underlying business case for CSR to promote competitive advantage and innovation in companies' core business strategies. The article concludes that the new models of partnership emerging in Malawi are indicative of the next generation of partnership development in Africa and elsewhere.     

DOMESTIC AND INTERNATIONAL INNOVATION PARTNERSHIPS: DO THEY MATTER FOR INNOVATION OUTCOMES OF SOUTH AFRICAN FIRMS?

This paper studies the impact of the diversity of domestic and international innovation partnerships on the innovation outcomes of South African firms. A number of competing hypotheses are formulated and tested empirically using a sample of South African firms in manufacturing and services by applying Ordinary Least Squares regression analyses. Results show that having an innovation partnership, particularly an international partnership, is beneficial to innovation outcomes. However, it also emerges that too diverse a set of international partnerships is detrimental to innovation outcomes. The paper concludes with a discussion and a number of proposals for future research.     

Accessing Modern Science: Policy and Institutional Options for Agricultural Biotechnology in Developing Countries

The private sector dominates biotechnology research in industrialized countries, but there are major market failures in developing countries in accessing the new tools and technologies. The public sector, national and international, will have to play a major role in filling this gap. This paper provides an overview of options that countries of different sizes and capacities can employ to gain access to the research tools and technologies that they need to address issues of relevance to poor producers and consumers. Particular attention is given to how public–private partnerships and market segmentation are being employed to access proprietary tools and technologies.