Equity Control of Multinational Firms: Effects on Resource Allocation and National Welfare

In this paper, we re-examine the effects of equity control of multinational firms on resource allocation and national welfare in a model with rural–urban migration and urban unemployment. A large number of recipient (host) countries are developing countries with dual economies. We indicate, among other things, that a restriction on multinational investment may lower the unemployment rate and increase the total employment in the host country. Furthermore, we find that the restriction on multinational investment raises the national welfare in the host economy if the tariff imposed on imports is sufficiently large and the difference between domestic and foreign capital rental is sufficiently small.     

Urban bias and wage inequality

This paper explores how urban bias affects skilled–unskilled wage inequality through building several general equilibrium models. In the basic model, we find that an increase in the degree of urban bias will widen wage inequality if the unskilled sector is more capital intensive than the skilled sector and reduce wage inequality if the skilled sector is more capital intensive than the unskilled sector. In the extended models, we find that the conclusion obtained in the basic model almost still holds under different conditions.     

跨国公司的市场行为:从垄断到竞争--以汽车工业为例

20世纪90年代中期前,一些外商投资企业垄断了中国同行业市场。之后由于国内同类竞争者的形成、多家跨国公司进入、进口商品大量增加等因素的影响,跨国公司对中国市场结构的影响开始向竞争性转变。这种转变给我们的启示是:跨国公司对东道国市场结构的影响不能纯粹的界定为垄断性或竞争性;引进外资时,不必担忧跨国公司在市场上会长期处于优势地位,他们对国内企业具有带动作用。     

On the choice between capital import and labor export

The paper analyses some questions arising in connection with inflow of foreign capital into a host country and its free zone. When capital is mobile between sectors capital import into any part of the economy decreases welfare. With sector-specific capital, import of capital into the protected sector (export sector) decreases (increases) welfare. If capital import into the export sector of the domestic zone is infeasible, there may be a case for establishing a free zone and allowing capital import exclusively there. With a suitable tax policy, capital import into the free zone will always be beneficial.     

Multinational Firms, International Knowledge Flows, and Dual Labor Markets in Developing Economies

This paper seeks to explain how the expansion of multinational firms in a developing economy affects its labor market variables, such as wages in indigenous firms, the average wage level and total employment. Three potential effects: the transfer of foreign knowledge and the associated technological change, diffusion of this knowledge among indigenous firms, and the inflow of the physical capital from abroad, are examined under two possible scenarios: fixed and unlimited labor supply. The results obtained depend on the organization of the labor market in the host country, differences in capital intensity between multinational and local sectors, the amount of physical capital transferred to the host country from abroad, as well as the magnitude of knowledge spillovers stemming from multinational activity to indigenous firms. The predictions of the model are more consistent with empirical observations reported in empirical studies than those of other theoretical studies existing in the literature.     

跨国公司技术溢出效应模型的建立及其发展

近年来,跨国公司的研发国际化发展愈来愈迅速,规模愈来愈大。跨国公司研发国际化将在东道国产生技术溢出效应,既给东道国带来积极效应,也会产生消极效应。为了更好地解释技术对于经济发展的贡献以及跨国公司技术转移给东道国产生的溢出效应,经济学家们相继建立了技术溢出效应模型,并随着实践的发展不断进行完善。     

Infrastructure,Multinational Affiliate Production,and the Pattern of Trade

In a two-country general equilibrium model with endogenously determined domestic and multinational firms, it is shown that public infrastructure development can have diverging implications for horizontal multinational affiliate firm production and trade, depending on the type of infrastructure invested in. Infrastructure investments with strong productive or local transport effects (i.e. schools or local roads) lead to greater domestic firm production and exports, fewer imports, and more foreign multinational affiliate firm production in the country making the investment. On the other hand, infrastructure projects that lower international trade and transaction costs (i.e. shipping ports or airports) lead to more domestic firms in both countries, a greater volume of bilateral exports in both directions, and less multinational affiliate production. Further, the effect of different types of infrastructure investment on income and welfare of the open economies is explored.     

Rural–urban human capital disparity and skilled–unskilled wage inequality in China

This paper builds three‐sector general equilibrium models to investigate how a shrink of rural–urban human capital disparity generates an impact on skilled–unskilled wage inequality in China. In the basic model where the urban skilled sector and the urban unskilled sector have no upstream and downstream linkage, we find that the wage inequality will be narrowed down if the urban skilled sector is more capital intensive than the urban unskilled sector. To capture the characteristic of China's state capitalism, we build an extended model where the urban skilled sector acts as an upstream industry for the urban unskilled sector, and find that the wage inequality will be reduced if the substitution elasticity of unskilled labor and intermediate product in the urban unskilled sector is large enough. When we consider the factual characteristics of the Chinese economy, our models predict that a shrink of rural–urban human capital disparity will be helpful to reduce the skilled–unskilled wage inequality in China.     

跨国公司进入方式规制的理论与政策研究

跨国公司采取直接投资进入东道国有两种方式:跨国并购和新建投资。在进入方式的选择上,在不同的约束条件下跨国公司和东道国具有不同的收益和成本,但现有的跨国公司直接投资规制的理论研究和政策分析没有区分这两种进入方式。文章认为,东道国政府在制定跨国公司直接投资的规制政策时,要综合权衡各种进入方式的积极效应和负面影响,制定适宜的规制政策,从而在引资过程中获得最大利益。文章还对跨国公司在华直接投资规制的实践进行了回顾,并提出了进一步的政策取向的建议。     

Securities laws in the host countries and the capital structure of US multinationals

We examine whether securities laws in the host countries influence the capital structure choice of United States (US) multinational corporations. We develop firm-level global indices to classify each corporation in terms of its exposure to the security laws that govern the rights of security holders in the countries where it has subsidiaries. The results show that the use of long-term debt is positively related to the firm's global standing in terms of common law legal origin, burden of proof, investor protection, disclosure requirements, and public enforcement. The securities laws in a country affect the capital structure of multinational corporations that has subsidiaries in that country.     

Unemployment and Economic Integration for Developing Countries

While financial or trade integration between countries may increase the size of the market and aid the adoption of more advanced technologies, will it also increase the level of urban unemployment for a developing country? In this model, there is unemployment in the urban sector. Manufacturing firms engage in oligopolistic competition and choose increasing returns technologies to maximize profits. Financial firms provide capital to manufacturing firms and they also engage in oligopolistic competition. We show that an increase in the wage rate in the manufacturing sector changes neither the level of technology nor the level of employment in the manufacturing sector. While financial or trade integration between developing countries leads manufacturing firms to adopt more advanced technologies, the level and rate of employment in the manufacturing sector will not deteriorate.     

跨国公司生产性服务业FDI地理集聚因素研究——基于中国1997—2009年的数据分析

信息壁垒的存在及高质量服务购买时的经验性特征,使跨国公司生产性服务业FDI在最初进入时往往会追随制造业。实证研究表明:除了制造业FDI,生产性服务业FDI往往和东道国制造业表现出很大的关联度;一国受教育程度、开放度等都是影响因素之一;东道国生产性服务业种类的上升会降低东道国制造业的生产成本。     

Outward foreign direct investment and sovereign risks in developing host country

Outward foreign direct investment can affect developing, technology-receiving host countries mainly through tax revenue, technology spillover and the competition effect. With the consideration of these three effects of the outward foreign direct investment on host country, we develop a dynamic game model of interaction between foreign investors and host country from a dynamic perspective, to reveal the dynamic evolution mechanism of the sovereign risk faced by outward foreign direct investment. The result shows that: host governments usually give a specific tax holiday for outward foreign direct investors, and during the period of tax holiday investment decision of investors would be influenced by technology spillover effect, specifically, the greater the technology spillover the slower the growth of investment stock. Once the system reaches a stable state, the host country will impose a tax on multinational corporations. If the equilibrium tax rate of industries or regions which makes it easy to obtain technology spillover is high, then the equilibrium capital stock would be low.     

On-the-job human capital accumulation in a real business cycle model: Implications for intertemporal substitution elasticity and labor hoarding

A substantial fraction of a worker's time at work goes to acquiring human capital. This paper explicitly considers on-the-job human capital accumulation from the perspective of time invested for acquiring skills and learning by doing in an RBC model and shows that the inability to account for human capital accumulation leads to a substantial bias in conventional estimates of intertemporal substitution elasticity.Our main results are based on the standard intuition that the opportunity cost of time invested in acquiring human capital moves procyclically, so that on-the-job time invested in acquiring human capital is “counter-cyclical.” Furthermore, the true wage rate becomes less procyclical, while production hours become more procyclical than total hours at work. The overall results can be viewed as providing a micro foundation for labor hoarding models without adjustment costs.     

Illegal immigration: a supply side analysis

"This paper analyzes the supply-side determinants of illegal immigration using a three-sector general equilibrium model of the source country. Agricultural liberalization raises illegal immigration while liberalization of the high tech sector reduces it. In contrast, capital mobility in the source country renders trade policy ineffective for controlling illegal immigration. Paradoxically, increased enforcement (by the host country) may raise source country unskilled wages, although illegal immigration falls. Finally, under capital mobility, a rise in the source country restrictions on capital inflow raises the level of illegal immigration and reduces the effectiveness of border enforcement efforts by the host country."     

An alternative approach to the monitoring of technological diffusion via foreign direct investment: evidence from the Greek manufacturing sector

The existing studies of foreign direct investment and the corresponding technological diffusion process that they generate, focus either on specific parameters of the production process in isolation, or they combine certain parameters to construct indices that are not consistent across studies. The present analysis proposes an alternative approach that captures the entire production process and multinational firms are viewed as the platform that transfers more advanced technologies to the host countries. As multinational firms are able to utilise more efficiently the available production process, an efficiency gap ensues between the domestically owned firms of a country and the multinational firms that operate in it. We capture and provide a measure and a monitoring mechanism of the technological diffusion process via foreign direct investment through the evolution of the efficiency gap between the two groups of firms whilst controlling for other variables that might contribute to such a gap. We apply our approach to the manufacturing sector of the Greek economy that experiences a consistent presence of foreign direct investment inflows over the time period 2001–2007.     

WHO GAINS FROM WHOM? SPILLOVERS,COMPETITION AND TECHNOLOGY SOURCING IN THE FOREIGN‐OWNED SECTOR OF UK MANUFACTURING

There is a growing literature explaining foreign direct investment flows in terms of ‘technology sourcing’, whereby multinational firms invest in certain locations not to exploit their firm‐specific assets in the host environment, but to access technology that is generated by host country firms. However, it is far from clear whether the literature has found significant evidence of such activity beyond a few isolated examples. This paper extends this work by allowing for the possibility of multinational enterprises (MNEs) sourcing technology not only from host country firms but also from each other within a host economy. The paper demonstrates that MNEs in the UK do indeed appropriate spillovers both from indigenous firms and from other foreign investors, but that there are also significant competition effects that act to reduce productivity in certain industries. The paper also explores which countries' affiliates gain most from technology sourcing in the UK, and which generate the greatest spillovers within the foreign‐owned sector.     

跨国公司投资对中国产业结构的影响

跨国公司投资对中国产业结构优化具有积极的影响。但由于跨国公司的本质是在东道国获取高额垄断利润,所以其必然与中国的投资导向发生某种偏离,对中国的产业结构产生消极的影响。因此,应对跨国公司投资给予积极的引导,促进中国的产业结构优化升级。     

Should Governments Subsidise Inward Foreign Direct Investment?

What happens when a government has incentives to subsidise inward FDI when labour markets are imperfectly competitive? Contrary to the traditional assumption in the literature, we allow the production in the multinational firm to either complement or substitute for local production. A new result is that the wage in the host country may decrease when production is moved to this country. The reason is that the union in the host country internalises product market externalities between the firms. Furthermore, it is shown that when a single country subsidises inward FDI, total world welfare might increase.     

东道国腐败对跨国公司进入模式的影响研究

作为东道国投资环境中的重要组成部分,腐败不但会对FDI流入总量产生影响,还会对跨国公司的战略产生影响,而首先受到影响的就是跨国公司的进入模式战略。本研究以19个新兴市场国家的745家跨国公司子公司作为样本,运用MANOVA分析、判别分析、Logistic分析等研究方法得到以下结论:第一,东道国国家层面感知腐败、产业层面感知腐败会使跨国公司采用持股比例较低的合资(控股或非控股)进入模式;第二,东道国腐败程度对跨国公司进入模式战略的影响会受到跨国公司进入东道国战略动机的调节。