Market structure and minority presence: Black-owned firms in manufacturing

This study uses a market structure framework to analyze the presence of black-owned businesses in manufacturing sectors of the U.S. economy in 1972. Tobit analysis reveals that black-owned firms tend to be concentrated in those industries with a relatively large small-business presence. High advertising expenditures are a significant barrier to black presence in a given industry. The amount of government purchases from an industry is found to have no significant relationship to black presence.     

Economic performance and international trade engagement: the case of Portuguese manufacturing firms

By combining economic and financial data for Portuguese manufacturing firms with data on their exports and imports, we uncover some aspects of the relationship between international trade engagement and firms’ performances. In line with recent theoretical and empirical developments in the international trade literature: (i) we testify that Portuguese international trade is highly concentrated, especially on the import side, and both in inter- and intra-sector terms; (ii) we corroborate previous studies and theses according to which two-way traders outperform only importers, only exporters and above all domestic firms; (iii) we find that the greater the diversification of markets and goods (especially with regard to imports), the better the performance achieved by internationalised firms; (iv) we notice that the higher the intensity of firms’ international trade (especially imports), the better their performance; (v) we also present evidence that destination markets for exports and origin markets for imports are also important in explaining firm’s performance.     

ICT,offshoring, and the demand for part-time workers: The case of Japanese manufacturing

This paper examines the effects of information and communication technology (ICT) and offshoring on the skill demand in Japanese manufacturing. One of the contributions of this paper is that we focus explicitly on the demand for low-wage part-time workers, which we call low skilled workers. Estimating a system of variable factor demands for the period 1980–2011, we find that industries with higher ICT stock shifted demand from middle-low to middle-high and low skilled workers. Offshoring is associated with the increasing demand for high skilled workers but it has insignificant effects on the demand for middle-high, middle-low, and low skilled workers. The results together suggest that the increasing demand for low-wage part-time workers can be attributable to ICT in Japan.     

Exchange rates and ownership structure of Japanese multinational firms

This paper investigates the determinants of Japanese multinationals’ ownership structures. Unlike most previous studies that neglect the impact of financial constraints on ownership, we add the exchange rate as a measure of wealth and test whether exchange rates affect the ownership share of foreign direct investment projects. After controlling for other variables that affect ownership, we find that exchange rates have a significant effect on the likelihood of wholly owned subsidiaries. We also discuss several other explanations for the link between exchange rates and foreign direct investment and provide evidence that the link stems from capital-market imperfections.     

Exchange rate exposure and risk management: The case of Japanese exporting firms

This paper investigates the relationship between Japanese firms’ exposure to the exchange rate risk and their risk management. Following Dominguez (1998) and others, we first estimate the firms’ exposure to the exchange rate risk by regressing their stock prices on the exchange rate and the market portfolio. We next investigate possible influences of various risk management measures on the firms’ foreign exchange exposure. Risk management variables include financial and operational hedging, the invoice currency choice, and the price revision strategy (pass-through) of 227 listed firms in 2009, which were collected from a questionnaire survey of Japanese firms listed in the Tokyo Stock Exchange. Our main findings are as follows: First, firms with greater dependency on sales in foreign markets have greater foreign exchange exposure, judged by the market. Second, the higher the US dollar invoicing share, the greater the foreign exchange exposure is, which can be reduced by both financial and operational hedging. Third, yen invoicing reduces foreign exchange exposure. These findings indicate that Japanese firms use a combination of risk management tools to mitigate the degree of exchange rate risk.     

Two-dimensional analysis of the impact of outward FDI on performance at home: Evidence from Japanese manufacturing firms

This paper empirically investigates two dimensions of changes in firm behavior and performance before and after foreign direct investment (FDI). The first dimension is the difference between vertical and horizontal FDI. The second dimension is the effect of outward FDI on firms’ production and non-production activities in the home country. In our careful empirical analysis we use the propensity score matching method to show that the impact of outward FDI differs by dimension, that is, by FDI type and firms’ production and non-production activities. In particular, while horizontal FDI increases demand for non-production workers, vertical FDI increases demand for skilled production workers.     

Innovation and exporting: evidence from Spanish manufacturing firms

This paper investigates the relationship between innovation and the export behavior of firms using data from a representative panel of Spanish firms over 1991–2002. It presents a simple theoretical model of the firm decision to export and innovate that guides the econometric analysis. Consistent with the predictions of the theoretical model, the econometric results suggest a positive effect of firm innovation on the probability of participation in export markets. The results further reveal the heterogeneous effects of different types of innovations on the firm export participation. In particular, product upgrading appears to have a larger effect on the firm export participation than the introduction of cost-saving innovations. These findings are robust to firm unobserved heterogeneity, dynamic specifications, and to the use of instrumental variables to control for the potential endogeneity between innovation and exporting.     

IT,enterprise reform,and productivity in Chinese manufacturing firms

This paper is a first attempt at examining the impact that Information Technology (IT) and enterprise reform have on the productivity of Chinese manufacturing firms by using large-scale firm level datasets from 1995 to 2002. It is found that enterprise reforms captured by the entry and exit of firms have had a positive impact on aggregated productivity growth. In addition, IT plays a relatively important role in the productivity performance of post-reform enterprises, as opposed to enterprises which are not affected by major restructuring in the course of Chinese state-owned enterprise reforms.     

Importing,exporting and performance in sub-Saharan African manufacturing firms

This paper examines productivity differences between internationally trading and non-trading firms using data on a sample of firms from 19 sub-Saharan African countries. The paper provides the first evidence of whether exporters, importers and two-way traders perform better than non-traders, and whether there are differences in performance between different types of trading firms in sub-Saharan Africa. Our results indicate that exporters, importers and two-way traders perform better than non-exporters, non-importers and non-two-way traders. We further find that two-way traders perform better than importers only or exporters only, results largely consistent with recent results for other countries and regions. Considering information on export starters, continuers and exiters we also present some evidence suggesting that there is no significant difference in performance between export continuers and starters.     

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.     

Technical efficiency and ownership characteristics of manufacturing firms in a developing country: A Brazilian case study

Zusammenfassung Technische Leistungsf?higkeit und Eigentumsmerkmale von gewerblichen Unternehmen in einem Entwicklungsland: Eine brasilianische Fallstudie. — In diesem Aufsatz wird versucht, zwei Dinge zu tun: (1) eine qualitative Beurteilung der Leistungen verschiedener Gruppen von Unternehmungen vorzunehmen, die nach den Eigentumsverh?ltnissen klassifiziert wurden, und (2) Analysen und Sch?tzungen auf der Basis von Produktionsfunktionen durchzuführen, um die relativen Unterschiede zwischen ausl?ndischen, einheimischen und Staatsunternehmungen in bezug auf Leistungsf?higkeit und Skalenertr?ge zu ermitteln. Es wurde festgestellt, daβ für unterschiedliche Eigentumsklassen unterschiedliche Produktionsfunktionen gelten. Es werden Belege dafür vorgelegt, daβ Firmen in ausl?ndischem Eigentum gr?βere Skalenertr?ge erzielen und gr?βere Substitutionselastizit?ten besitzen als Industrieunternehmen, die im Eigentum von Inl?ndern stehen.

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Résumé L’efficience technique et les caractéristiques propriétaires des entreprises manufacturières dans un pays en voie de développement: Une étude de cas Brésilien. — Cet article essaie de faire deux choses: (1) d’entreprendre quelques jugements qualitatives sur la performance économique des groupes différents des entreprises comme classifiées par la propriété et (2) d’employer une analyse de la fonction de production et une estimation pour déterminer la différence relative d’entreprises possédées par des étrangers, le gouvernement et les privés locaux concernant l’efficience technique et les économies d’échelle. Nous avons trouvé qu’il y a des fonctions de production existantes pour des classes différentes et nous présentons quelque évidence que les entreprises possédées par les étrangers ont des rendements d’échelle plus grands et des élasticités de substitution plus grandes que les entreprises manufacturières locales.

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Resumen Eficiencia técnica y características de la propiedad de empresas manufactureras en un país en desarrollo: un estudio de caso del Brasil. — Este artículo représenta un intento para hacer dos cosas: (1) emitir juicios cualitativos sobre el desempe?o económico de diferentes grupos de empresas clasificadas según su propiedad y (2) emplear el análisis y la estimación de funciones de produción para determinar la diferencia relativa de firmas de propiedad extranjera, estatal y doméstica privada con respecto a su eficiencia técnica y economías de escala. Se encontró que existen diferentes funciones de producción para las distintas clases de propiedad. Se presenta alguna evidencia que firmas de propiedad extranjera poseen retornos de escala más grandes y elasticidades de sustitución mayores que empresas manufactureras de propiedad doméstica.

     

Product differentiation,export participation and productivity growth: Evidence from Chinese manufacturing firms

In this paper, we investigate how the degree of export participation and product differentiation affect firms' productivity growth through learning-by-exporting. We extend the model of Melitz and Ottaviano (2008) to endogenize the effort firms allocate to learning. This effort choice depends on both the degree to which firms enter export markets and the extent to which products are differentiated across producers. Using a firm-level dataset from China's manufacturing industries, we implement propensity score matching methods to test the model's predictions. Our results indicate that the degree of export participation is positively correlated with TFP improvements. Simultaneously, we empirically verify that firms exporting less differentiated products experience faster TFP growth than those exporting more differentiated products.     

Japanese government debt and sustainability of fiscal policy

We construct quarterly series of the revenues, expenditures, and debt outstanding for Japan from 1980 to 2010, and analyze the sustainability of the fiscal policy. We pursue three approaches to examine the sustainability. First, we calculate the minimum tax rate that stabilizes the debt to GDP ratio given the future government expenditures. Using 2010 as the base year, we find that the government revenue to GDP ratio must rise permanently to 40–47% (from the current 33%) to stabilize the debt to GDP ratio. Second, we estimate the response of the primary surplus when the debt to GDP ratio increases. We allow the relationship to fluctuate between two “regimes” using a Markov switching model. In both regimes, the primary surplus to GDP ratio fails to respond positively to debt, which suggests the process is explosive. Finally, we estimate a fiscal policy function and a monetary policy function with Markov switching. We find that the fiscal policy is “active” (the tax revenues do not rise when the debt increases) and the monetary policy is “passive” (the interest rate does not react to the inflation rate sufficiently) in both regimes. These results suggest that the current fiscal situation for the Japanese government is not sustainable.     

Multinational corporations and domestic market structure: The case of Greek manufacturing industries

Conclusions In this paper we examined the potential of MNCs to give rise or to promote concentrated markets in a host country. Foreign presence in the form of MNCs affectsdirectly the market structure of the economy by in-creasing both the relative inequalities in the size distributions of firms (entropy) and the level of absolute concentration (Herfindahl-CR4). MNCs tend to populate capital intensive sectors and may also account for a potentialindirect stimulation on the concentration process through their effects on domestic barriers to entry. Industries characterised by such horizontal FDI are likely to be able to earn and maintain supra-normal profits in the domestic market. However, the effective curb of competition caused by MNCs did not show uneven distribution of gains in profitability to be present in the market for a sample of 100 large MNCs and local firms. We should suggest that concentration and other market imperfections may be the basic factor determining profitability in Greece,not multinationality per se. Moreover, the potential indirect influence of MNCs on domestic barriers may act as an agent for promoting structural changes, especially in the capital intensive sector.     

Trade, foreign firms and economic policy in Indonesian and Thai manufacturing

This paper first examines the rapid growth and changing composition of manufactured exports in Indonesia and Thailand, highlighting the rapid growth of office and computer machinery and electric machinery, somewhat slower growth of non-electric and transportation machinery, as well as the low growth of previously large exports of textiles apparel. Second, the important contributions of foreign multinational enterprises (MNEs) to export growth in the machinery industries, particularly in electric, office, and computing machinery, are documented. Third, the paper describes trade policies in all these industries in some detail, emphasizing how low protection was a key facilitator of rapid export growth in the MNEs that dominated the electric, office, and computing machinery industry, while high protection reduced incentives to export among MNEs in the transportation machinery industry.     

Export behavior and productivity growth: Evidence from Italian manufacturing firms

Export Behavior and Productivity Growth: Evidence from Italian Manufacturing Firms. — This paper provides econometric evidence supporting the hypothesis that exporting implies learning effects. Learning-by-exporting is modeled as a change, induced by export behavior, in the stochastic process governing firms’ productivity. Empirically, this is implemented by specifying cross-section regressions of labor productivity growth on measures of export behavior, controlling for past productivity growth and other firms’ characteristics. Using a sample of Italian manufacturing firms, it is found that exporters do not exhibit faster productivity growth. Nevertheless, growth in value added per worker has a positive and significant relation with firms’ export intensity. In other words, only firms substantially involved in exporting have a significantly higher rate of productivity growth. This result suggests that learning-by-exporting is by no means simply the outcome of the presence in the export market.     

Investments in response to trade policy: The case of Japanese firms during voluntary export restraints

This paper develops a dynamic structural model of a single decision in order to analyze the effect of voluntary export restraints (VERs) on quality-upgrade and foreign direct investment (FDI) behavior. I estimate the model parameters using a variant of the two-step estimator developed by Bajari et al. (2007). Using panel data of Japanese firms in the U.S. automobile industry, both activities are found to have significant sunk cost, which introduces intertemporal interactions in decisions, and I also find that the entry costs for FDI are larger than fixed adjustment costs for quality-upgrade. I simulate counterfactuals based on the estimation of the structural model. In the absence of the VERs, both quality-upgrade and the probability of undertaking FDI decrease. The second simulation examines the substitution effect between the two investment activities. The proposal to restrict FDI policy causes a dramatic increase in the level of quality-upgrade. Similarly, the proposal to restrict quality-upgrade policy results in an increase in the probability of FDI.     

The impact of real exchange rate movements on firm performance: A case study of Taiwanese manufacturing firms

Taiwan experienced large depreciations of its currency, the New Taiwan (NT) dollar, in the late 1990s. The largest real depreciation, 13 per cent, occurred during the East Asian Financial Crisis. Since Taiwan was subjected neither to the economic turmoil of the crisis itself nor to the subsequent reforms, its experience provides a good opportunity for studying the effects of exchange rate changes on firm performance. This paper empirically examines the exchange rate effects on firm exports, domestic sales, total sales, value-added and productivity, by using data on firms listed on the Taiwan Stock Exchange merged with customs trade data covering the period of 1992–2000. Our findings indicate that the real depreciation of the NT dollar led to an increase in exports, domestic sales, total sales, value-added, and productivity. In addition, we find that the productivity improvement induced by real currency depreciation may be a result of firm scale expansion.     

Managerial perspectives of the shorter workweek in Georgia manufacturing firms

Conclusions At present, great opposition exists among Georgia's 50 largest manufacturing firms toward the adoption of the shorter workweek. More than twice as many (61 percent) of the managers opposed it as favored it (26.7 percent), with a representative number (12.3 percent) indifferent to the idea. This opposition appears to be based upon anticipated problems in the areas of scheduling, communication difficulties, costs, and employee considerations. Employee acceptance of the shorter workweek (as perceived by the managers surveyed) already exists in approximately two-thirds of the firms surveyed. This perceived acceptance is reflected in the potential shorter workweek advantages as reported by the same surveyed managers, namely decreased absenteeism and turnover and the ease of recruiting employees. While the probability of the modified workweek gaining wide acceptance in Georgia seems at best small, the shorter workweek movement cannot be ingnored. Its advocates promise to provide the key to greater productivity, increased efficiency and improved employee relations. This study has served to determine the attitudes of Georgia's largest manufacturing firms toward what may be the accepted work schedule of the future.     

More-money and less-cash effects of diversification: Evidence from Japanese firms

This study provides evidence for the more-money and less-cash effects of diversification based on the industry-adjusted debt and cash holdings of Japanese firms. Diversified firms are more leveraged while holding less cash than focused firms in the same industries, even after controlling for the standard determinants of capital structure, unobserved heterogeneity, and the endogeneity of firm scope. The study also finds that these effects are mitigated when a firm has an ownership structure that insulates managers from capital market pressures for risk-taking. This pattern suggests that the risk-taking incentives of managers differentiate the effect of diversification on finance across firms.