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.     

A fire sale without fire: An explanation of labor-intensive FDI in China

China's labor-intensive industries are characterized by low technology and high competition. The massive inflow of FDI in China's labor intensive industries is inconsistent with the conventional wisdom that FDI should be more prevalent in technology-intensive and low competition industries. To explain this puzzle, we offer a “fire sale” hypothesis: facing severe financial constraints, Chinese private firms give up their equity to form joint ventures with foreign firms in order to obtain financing. Using the garment industry as an example, we find that among domestic firms, the financial constraint index is highest for private firms and lowest for state-owned firms. We further estimate a probit model of joint-venture decisions by private firms. Our results suggest that those private firms with greater financial constraints are more likely to seek foreign joint ownership. The effect of financial constraints on joint venture decision is both statistically and economically significant.     

Technology Sourcing and Strategic Foreign Direct Investment

Empirical evidence suggests that technological spillovers are limited by distance. The present paper investigates the implications of this observation for the investment decisions of a technologically leading and lagging firm, located in different countries. Technological spillovers may induce “technology sourcing” foreign direct investment by the less advanced firm, as it seeks to upgrade its technology. Our main result, however, is that there may be strong incentives for the leading firm to undertake strategic investment abroad in order to prevent technology sourcing by the lagging firm. We analyze how trade costs, the technology gap between firms, technological spillovers, and the ability of a firm to transfer technology between plants affect the two firms’ entry decisions.     

Origin of FDI and Intra‐Industry Domestic Spillovers: The Case of Greek and European FDI in Bulgaria

This paper uses firm‐level data to assess the horizontal impact of foreign firm ownership on domestic productivity in Bulgaria. We identify a theoretical tradeoff between technological distance (of domestic versus foreign firms) and internalization capacity (of spillovers) and examine the extent to which this is reflected in the impact on the domestic economy of different types and origins of FDI. Emphasis is placed upon the effects of Greek FDI, which is known to be of a distinctively “regional” character. We find that Greek FDI produces significantly larger positive spillovers, which appear more suitable for the Bulgarian context of transition and economic restructuring. We also unveil some notable “hysteresis” and “technology bias” effects for FDI spillovers of all origins, as well as some country‐specific ownership‐structure and threshold effects.     

Offshoring and Firm Performance: Evidence from the Italian Manufacturing Industry

The fundamental question of whether offshoring is value enhancing and, more specifically, whether Italian manufacturing firms that undertake offshoring benefit from higher productivity and profitability is explored. Using data from the tenth wave of the “Survey on Manufacturing Firms” conducted by Unicredit‐Capitalia, it was found that, compared with domestic firms, firms relocating activities to a foreign country have different characteristics, and “better” firms might self‐select into offshoring decision. To disentangle the effect of offshoring on firms' performances from the effect of firm characteristics, several variants of propensity score matching are used. A mild and insignificant positive effect of offshoring on profitability was found and also evidence of a statistically significant positive effect of offshoring on productivity.     

Intra‐industry Knowledge Spillovers from Foreign Direct Investment in Research and Development: Evidence from China's “Silicon Valley”

This study examines a specific channel of technology diffusion from multinational enterprises to domestic firms in less developed regions: research and development (R&D) activities of multinational enterprises in the host country. Using firm‐level panel data from a Chinese science park, known as China's “Silicon Valley,” we find that the R&D stock of foreign‐owned firms has a positive effect on the productivity of domestic firms in the same industry, while the capital stock of foreign firms has no such effect. These results suggest that foreign firms' knowledge spills over within industries through their R&D activities, but not through their production activities. In addition, we find no evidence of spillovers from domestic firms or firms from Hong Kong, Macao, or Taiwan, suggesting that the size of knowledge spillovers is larger when the technology gap between source and recipient firms is larger.     

Pricing to Firm: an Analysis of Firm‐ and Product‐level Import Prices*

We use Hungarian Customs data on product‐level imports of manufacturing firms to document that the import price of a particular product varies substantially across buying firms. We relate the level of import prices to firm characteristics such as size, foreign ownership, and market power. We develop a theory of “pricing to firm” (PTF), where markups depend on the technology and competitive environment of the buyer. The predictions of the model are confirmed by the data: import prices are higher for firms with greater market power, and for more essential intermediate inputs (with a high share in material costs). We take account of the endogeneity of the buyer’s market power with respect to higher import prices and unobserved cost heterogeneity within product categories. The magnitude of PTF is big: the standard deviation of price predicted by PTF is 21.5%.     

Factors Determining the Adoption of Energy-Saving Technologies in Swiss Firms: An Analysis Based on Micro Data

This study investigates the factors that determine firms’ decisions to adopt energysaving technologies. We distinguish between the decisions of whether or not to use a technology (“inter-firm diffusion”), and of how intensely to use a technology (“intra-firm diffusion”). The empirical model used accommodates several effects that have been postulated in the theoretical diffusion literature: firm and industry heterogeneity, strategic considerations and external effects. Data for 2,324 Swiss firms for the year 2008 is used, with separate information for four categories of energy-saving technology applications (electromechanical and electronic, motor vehicles and traffic engineering, construction, power-generating processes). The results reveal significant differences with respect to firm characteristics and adoption barriers between inter-firm and intrafirm diffusion. In practically all cases, positive net external effects of adoption can be found. Inducement effects, particularly those traced back to intrinsic motivations for environment-friendly technologies, show clearly positive effects on adoption behavior.     

Moving to greener pastures? Multinationals and the pollution haven hypothesis

This paper presents evidence on whether multinationals are flocking to developing country “pollution havens”. Although we find some evidence that foreign investors locate in sectors with high levels of air pollution, the evidence is weak at best. We then examine whether foreign firms pollute less than their peers. We find that foreign plants are significantly more energy efficient and use cleaner types of energy. We conclude with an analysis of U.S. outbound investment. Although the pattern of U.S. foreign investment is skewed towards industries with high costs of pollution abatement, the results are not robust across specifications.     

Does foreign technology transfer spur domestic innovation? Evidence from the high-speed rail sector in China

This paper investigates the introduction of high-speed railway (HSR) technology into China to study the local impacts of foreign technology transfer. The large-scale technology transfer project, covering specific technological categories and directly benefiting railway-related firms in various cities, enables us to describe how foreign technology is digested and spurs follow-up innovation in firms apart from directly receiving ones. We find that technology transfer generates significant localized spillovers to nearby firms not only in terms of more patents, but also as higher productivity and revenue growth. Moreover, technological similarity, rather than input-output linkages, plays a dominant role in explaining the knowledge spillover both at the firm level and the aggregate level, which indicates the importance of absorptive capacity in digesting foreign technologies. Overall, our paper sheds new light on the innovation policy of developing countries as well as the global business strategy of multinational corporations (MNCs).     

民营化改制对中国产业效率的效果分析--2001年全国普查工业数据的分析

本项研究利用了第二次全国基本单位普查数据 ( 2 0 0 1年 ) ,在全部工业产业的基础上 ,考察了最新的民营化发展的动态 ,考察 2 0多年来形成的改制面和所产生的相应绩效效果。按照现行的国家规定的企业产权注册的详细分类指标 ,我们得以将改制企业从一般公有企业或私有企业中加以分离 ,从而能够通过相应的实证模型 ,来检验不同所有权因素 ,尤其是改制形成的不同股权类型对于产业效率的影响及其程度。主要的发现如下 :( 1 )国有企业 (包括传统国有、国有独资企业 )对于效率具有明显的负作用 ,私营企业、股份企业和三资企业则都表现为积极的对于效率的正相关推动作用 ,其中 ,私营企业推动产业效率的作用最强 ,三资和股份合作企业其次 ,再次则是股份企业和集体企业。( 2 )对于改制企业的不同资本股权来说 ,个人资本普遍具有最显著的对于效率的正相关的积极效果 ,法人资本表现为显著性不稳定的正相关作用 ,集体资本表现出与效率不相关的结果 ,而国家资本则表现出十分显著的负相关的效果。 ( 3 )对于股份有限、有限责任和股份合作制企业这三种股份企业之间差异的分析表明 ,股份有限公司的规模效益作用明显小于股份合作制企业 ,这是较多的国有产权的消极作用抵销了规模效益的积极作用的结果。相对于股份有限公?     

The Reverse Direct Investment: The Case of the Korean Consumer Electronics Industry

This paper discusses the nature of foreign direct investments by firms from developing countries in industrialized country markets, which is coined as “reverse direct investment.” On the basis of the experiences of the Korean consumer electronics firms operating in the U.S., this paper identifies the nature of the investment as “defensive” and “premature“ strategic moves of firms in their internationalization process. There investment are made not to exploit firms' monopolistic firm-specific advantages, but to protect their export markets at an earlier time than economic forces might have led them to do. However, in the process, firms try to convert their home country-specific advantage (e.g. low labor cost) into firm-specific ones as much as possible. [440]     

To innovate or to transfer?

FDI has been considered by many development economists as an important channel for transfer of technology to developing countries. It is suggested that modern, advanced technologies introduced by multinational firms can diffuse to domestic firms through spillovers. In this paper, we study innovation and technology transfer activities of domestic and foreign firms in Turkish manufacturing industries, and the impact of horizontal, vertical and labor spillovers on these activities. Our analysis shows that foreign firms are more innovative than their domestic counterparts, and transfer technology from abroad (mostly from their parent companies). Horizontal spillovers from foreign firms seem to be insignificant. The effects of foreign firms on technological activities of other firms in vertically related industries are ambiguous. High-tech suppliers tend to have a high rate of innovation when the share of foreign users is high, but the opposite is true for users: high-tech users supplied mainly by foreign firms tend to have a lower rate of innovation. Labor turnover is found to be the main channel of spillovers. Our findings reiterate the importance of tacitness of knowledge, and confirm that technology cannot easily be transferred through passive mechanisms.     

Impact of firm heterogeneity on direct and spillover effects of FDI: Micro-evidence from ten transition countries

This paper presents a comparative study of the importance of direct technology transfer and spillovers through FDI on a set of 10 transition countries, using a common methodology and appropriate methods to account for selection and simultaneity correction. This paper considers by far the largest firm level dataset (more than 90,000 firms) used by any study on the spillover effects of FDI. The main novelty of the paper is the explicit control for various sources of firm heterogeneity when accounting for different effects of FDI on firm performance. This work shows that the heterogeneity of firms in terms of absorptive capacity, size, productivity and technology levels affect the results. Controlling for these variables leads to some interesting results, which contrast with the previous empirical work in the field. We find that horizontal spillovers have become increasingly important over the last decade, and they may even become more important than vertical spillovers. Positive horizontal spillovers are equally distributed across size classes of firms, while negative horizontal spillovers seem to be more likely to accrue to smaller firms. Moreover, positive horizontal spillovers seem more likely to be present in medium or high productivity firms with higher absorptive capacities, while negative horizontal spillovers are more likely to affect low to medium productivity firms. These findings suggest that both direct effects from foreign ownership as well as the spillovers from foreign firms substantially depend on the absorptive capacity and productivity level of individual firms. In addition, these results show that foreign presence may also affect smaller firms to a larger extent than larger firms, but this impact may be in either direction.     

Lobbying, corruption and “optimal” tariff

This paper explores how a government officer enacts “optimum” import policy when confronting lobbies on trade policies from both domestic and foreign firms in a transition economy. Two results are found: firstly, if the inducement from the foreign firm on the government officer works, then the optimum tariff is negative, that is, import subsidy. However, this subsidy will turn to a positive tariff rate with the increasing lobbying inducement from domestic firms. Secondly, zero tariff duty is not an optimum choice under most circumstances. Besides, an asymmetric result is that when these two firms’ marginal costs are different, the optimum policy is to levy an import tariff on the one whose marginal cost is relatively small, while the other firm will get an import subsidy.     

Coordinating China's economic growth strategy via its government-controlled association for private firms

Scholars in economics and political science argue that one major function of government is to overcome coordination failure in economic development, especially during times of rapid environmental changes. But, how and through what means does the state coordinate firms to follow the changing directions of its economic objectives? This paper focuses on the case of a government-controlled business association, namely the All-China Federation of Industry and Commerce (ACFIC), and shows that the ACFIC may be serving, at least partially, as a means of avoiding the kind of coordination failures that are often associated with policy reform programs in authoritarian regimes like China when the government deems it necessary to radically and suddenly change its policy objectives. It does so by comparing the activities of firms that are members of ACFIC with non-members before and after the world financial crisis of 2008–09 which induced a significant change in government objectives. Before that crisis when priority in government objectives was “outward” (to stave off balance of payments crises that had befallen many other developing countries), ACFIC member firms were able to engage in exports and foreign investment to a greater extent than non-member firms, and even than those whose owners are members of the Congresses or Chinese Communist Party. After viewing the crises in international markets, and government objectives had turned more “inward”, ACFIC members were more likely to focus on domestic sales and investments.     

企业跨境风险投资海外技术探索：双重劣势与投资策略——基于科技型企业多案例分析

企业跨境风险投资（Cross—borderCorporateVentureCapital，简称跨境CVC）是指企业以知识搜寻和技术投资为导向的海外冒险活动，对在位企业创新活力提升、组织韧性增强及国际竞争力跃迁起重要作用。然而，在进行海外技术探索时，跨境CVC面临来自东道国制度环境和目标技术领域的双重外来者劣势，如何通过合理的投资安排应对双重劣势，对于跨境CVC价值实现格外重要。基于实物期权理论，对跨境CVC活动决策过程和投资逻辑进行研究，以英特尔、Alphabet、联想和百度4家科技型企业跨境CVC活动为研究样本进行案例分析，从投资单元、投资伙伴、技术领域、投资区位、投资阶段和投资信息披露等维度归纳双重外来者劣势应对策略。研究结论有助于丰富外来者劣势概念内涵并拓展实物期权理论应用场景，打开科技型企业跨境CVC过程“黑箱”，为我国企业跨境CVC战略规划与实施提供理论依据和实践指导。     

Do subsidies have positive impacts on R&D and innovation activities at the firm level?

In this paper we analyze whether and how “research” and “development” subsidies influence private R&D activity. Our empirical results show that “research” subsidies stimulate R&D spending within firms while “development” subsidies substitute such spending. At the theoretical level we find empirical support for the market failure argument that private R&D expenditure is best stimulated in areas where the gap between the social and the private rate of return to R&D is high. A policy implication is that technology programs should support research projects in the private sector in order to stimulate to more R&D.     

我国上市公司股权分置改革中的锚定效应研究

股权分置改革是我国资本市场发展中一个独特的经济问题。本文收集526家实施股改公司的相关资料,运用行为心理学著名的“锚定效应”理论,对股权分置改革中对价的制定和对价的影响因素两大问题进行分析、检验和解释。     

Foreign-owned versus Domestically-owned Firms: Economic Performance in Japan

This paper utilizes micro‐panel data for firms located in Japan and examines differences in corporate performance between foreign‐owned and domestically‐owned firms in the 1990s. We find that foreign‐owned firms not only reflect superior static characteristics, but also achieve faster growth. Moreover, foreign investors appear to invest in firms that may not be immediately profitable, but those that are potentially the most profitable in the future. There is also no evidence that foreign investor is “foot‐loose.” These imply that foreign investors bring useful firm‐specific assets into the Japanese market, which may work as an effective catalyst for necessary structural reform.