The exceptional performance of Chinese outward direct investment firms

This paper finds that Chinese manufacturing firms that engage in outward foreign direct investment (ODI) have better economic performance than non-ODI manufacturing firms. Overall, ODI firms are more productive and have higher profitability than non-ODI firms. The sector analysis shows that the exceptional performance is significant for labor-intensive industries. Finally, the ODI activity can raise the productivity of other firms in an industry. The larger the ODI within an industry, the higher the productivity of all firms in that industry. The paper suggests that domestic firms set up their firm’s global strategy and reallocate the firm’s resources according to the changing investment environment, taking advantages of profit opportunities outside of domestic markets and invest abroad to get new markets and new technology.     

Automation,markets, and scale: can flexible niching modernize US manufacturing

The nimble use of programmable automation to permit small- and medium-sized manufacturing firms, individually and in concert, to create and respond to growing ‘niche’ markets has been held up as a key to the revitaization of mature industrial regions and, by extension, developed national market economies. Are formerly mass markets indeed becoming more fragmented, more ‘nichified’? If so, is the trend a structural, fundamental one, reflecting changing consumer tastes and/or the eclipse of scale economies as determinants of industrial structure? Or is the apparent success of niche-focused producers a corollary of growing income inequality and its impact on the structure of consumption? As for the supply side of the phenomenon, are small- and medium-sized firms closing their productivity gap with large, mass producers? Or is ‘nimble niching’ instead part of a US productivity problem rooted in excessive industrial dualism? Can one imagine a progressive type of dualism, in which specialization rather than wage differentials drives the division of tasks among different kinds of firms? If so, can and should public policy help such a regime to emerge?     

Migration,Unemployment, and Skill Downgrading

In this paper, we analyze the labor market impacts of immigration under flexible and rigid labor market regimes. A general equilibrium framework is developed, accounting for skill heterogeneity and labor market frictions, where unemployed medium‐skilled manufacturing workers are downgraded into low‐skilled service jobs, while low‐skilled service workers might end up unemployed. The analytical analysis shows that medium‐skill immigration decreases low‐skilled unemployment under the flexible regime, indicating a complementarity effect, while the rigid regime induces a substitution effect, leading to low‐skilled unemployment. Moreover, it leads to wage polarization. In a numerical analysis, the economic effects of different migration scenarios are quantified.     

基于柔性制造的大规模定制研究综述

基于柔性制造的大规模定制能够有效地解决需求多样化与大规模生产之间的冲突,并为现代制造企业提供一种全新的竞争模式。首先,介绍了柔性制造与大规模定制的内涵;其次,结合国内外现状进行了较为全面的综述;最后,针对基于柔性制造的大规模定制问题进行了总结和展望。     

Manufacturers and retailers in the global economy

We develop a model with multi‐product retailers acting as intermediaries between manufacturers and consumers. We show that the rise in retailer product assortment, the rise of up‐front payments in many retail markets and the observed shift in employment from manufacturing to retailing may be the consequence of the global integration of product markets. We also identify a novel benefit from market integration consisting of efficiency gains in the vertical distribution chain.     

INDUSTRIAL PERFORMANCE AND COMPETITION: THE CASE OF JAPANESE MANUFACTURING

Abstract.  The paper analyses the competitive process and performance behaviour of Japanese manufacturing between 1985 and 1997. Technological changes, international competition and reducing barriers in domestic and international markets are playing a significant role to speed up the performance behaviour in Japanese manufacturing. Scale economies, product differentiation and openness of the economy are used in explaining profit behaviour of manufacturing firms. Findings are compared with existing studies from Japan as well as from other developed countries such as Australia and the USA.     

不确定性、融资约束与企业投资新特点——基于上市公司的实证研究

利用我国证券市场制造业2001-2006年的数据,在考虑现有上市公司特点和证券市场及其他经济环境特点的基础上,对不确定性和融资约束与中国企业投资关系进行检验,结果显示:加速模型对企业投资行为有较强的解释作用;内部现金流和不确定性对企业投资有明显影响,且两种因素对投资的影响具有相互加强的作用;规模和国有股权比例高未必有利于企业融资;国有股比例越高,企业规模越大,投资对不确定性敏感性越大.因此,应该营造公平的融资环境和稳定的经济环境,尤其是短期市场的稳定性;应注意现阶段大型企业和国有股份程度高的企业的反直觉特点.     

Capital Inflows,Exchange Rate Flexibility and Credit Booms

Historically, capital flow bonanzas have often fueled sharp credit expansions in advanced and emerging market economies alike. Focusing primarily on emerging markets, this paper analyzes the impact of exchange rate flexibility on credit markets during periods of large capital inflows. It is shown that bank credit is larger and its composition tilts to foreign currency in economies with less flexible exchange rate regimes, and that these results are not explained entirely by the fact that the latter attract more capital inflows than economies with more flexible regimes. The findings thus suggest countries with less flexible exchange rate regimes may stand to benefit the most from regulatory policies that reduce banks' incentives to tap external markets and to lend/borrow in foreign currency; these policies include marginal reserve requirements on foreign lending, currency‐dependent liquidity requirements and higher capital requirement and/or dynamic provisioning on foreign exchange loans.     

Firms' Technological Trajectories and the Creation of Foreign Subsidiaries

Multinational firms are traditionally considered as firms possessing some technological lead and which are exploiting this proprietary advantage in international markets, but a growing literature has been arguing that multinational firms set up foreign subsidiaries not only as a means to exploit their own technology but also to enrich it. This paper provides some empirical evidence for this. The aim of the paper is to assess the effects of the creation of foreign subsidiaries on firms' technological trajectories.The idea is that by setting up subsidiaries in foreign countries, multinational firms can achieve some form of reverse technology transfer that can be expected to affect their technological trajectories.The empirical investigation uses data from 1992 to 1996 for a sample of 2185 Italian manufacturing firms. Results support the view that the creation of manufacturing subsidiaries has a positive impact on firms' productivity trajectories and this positive impact is greater when subsidiaries are created in regions where knowledge spillovers are expected to be relatively higher, such as the US.     

ON THE IMPACT OF FUNDAMENTALS,LIQUIDITY, AND COORDINATION ON MARKET STABILITY*

We develop a coordination game to model interactions between fundamentals and liquidity during unstable periods in financial markets. We then propose a flexible econometric framework for estimation of the model and analysis of its quantitative implications. The specific empirical application is carry trades in the yen–dollar market, including the turmoil of 1998. We find a generally very deep market, with low information disparities among agents. We observe occasional episodes of market fragility or turmoil with up by the escalator, down by the elevator patterns in prices. The key role of strategic behavior in the econometric model is also confirmed.     

Exporting, productivity and agglomeration

Economic analysis of adjustment to globalisation has shifted from countries and industries to firms and plants. One particularly fruitful area for research has been aspects of entry to, participation in and exit from export markets. This paper contributes to that literature. Its focus is the exporting behaviour of manufacturing firms in the United Kingdom. To isolate the impact of participation in export markets we use nearest neighbour matching. For 1988-2002, we find evidence that spillovers associated with agglomeration can raise the probability of export market entry and once entry has occurred there may be additional productivity benefits. Survival is driven partly by size and total factor productivity and partly by industry characteristics.     

Exchange rates,inflation and growth in small,open economies: a difference-in-differences approach

Financial crises in emerging markets have led many observers to recommend abandoning fixed exchange rates and adopting more flexible regimes. Moreover, some recent research suggests that the correct exchange rate regime may have a significant effect on inflation and even economic growth. The estimated effect found in such studies, however, likely suffers from an upward bias, as countries which choose a given exchange rate regime have other hard-to-measure policies and attributes which also affect economic performance. Utilizing a recent data set on actual, as opposed to official exchange rate regimes, this article employs the difference-in-differences method, currently popular in applied microeconomics, to a set of emerging markets that switched to more flexible currency policies. Results indicate that, contrary to previous studies, exchange rates themselves exert no significant impact on inflation or output.     

Canadian regional labour market evolutions: a long-run restrictions SVAR analysis

Canada's high reliance on commodities can work against its constitutionally mandated goal of regional equity in economic development, while also inhibiting macroeconomic performance and limiting monetary policy effectiveness. Yet, flexible and integrated regional labour markets can help achieve both equity and macroeconomic goals. Therefore, this study examines the dynamics of Canadian provincial labour markets using a long-run restrictions structural vector autoregression (SVAR) model. Labour market fluctuations are decomposed into the parts arising from shocks to labour demand (new jobs), labour supply through migration (new people) and internal labour supply (original residents). The results suggest that demand innovations primarily underlie provincial labour market fluctuations. Despite significant geographic and language barriers that could impede their performance, there also is little overall evidence to suggest that provincial labour markets are more sluggish or less flexible than US state labour markets. Finally, original residents benefit slightly more from increased provincial labour demand compared to findings for US states.     

美国重振制造业及其对我国的启示

制造业是美国经济保持繁荣的重要力量,经历了起起伏伏的发展历程,20世纪80年代以来实行的"去工业化"发展道路,削弱了美国制造业竞争力。金融危机之后,美国通过一系列法案以刺激制造业发展,兴建制造业创新研究中心,希望以高新技术改造传统制造业,增加就业,推动美国经济走上可持续增长的繁荣之路。通过分析金融危机以来美国和旧金山湾区为重振制造业采取的各项措施和当前形势,对我国制造业发展提出以下建议:面向内需及亚洲市场,继续保持传统制造业的优势;加大先进制造领域投入,创建国家制造业创新中心;跟踪研究页岩气开采工艺和技术,谨慎大规模开发。     

Exports, unemployment, and the welfare state

Abstract .  The paper analyzes the labour market effects of globalization when foreign market entry is costly and risky. With flexible labour markets, a fall in foreign market entry cost tends to generate more income inequality, but not necessarily so, as more firms pay foreign entry cost. By contrast, when labour markets are inflexible in the short run, globalization tends to increase unemployment. In this situation, government unemployment benefits reduce the wages that exporting firms need to pay workers as risk compensation. Thus more firms within an industry and more industries enter the foreign market, which in turn tends to increase unemployment.     

Monetary policy announcements and stock price dynamics in a small open economy

Using a monetary framework with stock markets, this paper investigates dynamic behaviors of a small open economy with various adjustments in the manufacturing prices. For an instantaneous adjustment of the manufacturing prices, stock values and exchange rates may appear to misjump or misadjust at the instant of the monetary policy announcement. When the manufacturing prices adjust sluggishly, exchange rates may overshoot but stock values can exhibit various dynamic patterns, including overshooting or undershooting.     

DRAMs, fiber and energy compared with three models of market penetration

When a new technology is introduced in the market, this technology generally follows an S-shaped curve, especially if measured on a relative (market share) basis. Marchetti and Nakicenovic and Norton and Bass have modeled the multivariant case of various technologies introduced at different times. A new, simple and flexible model has been proposed based on potential penetration. Potential penetration is penetration on the assumption that no other new technology will enter the market. In a stable competitive environment, potential penetration curves are typically positively sloped S-curves. The new model gives a good fit in markets with a limited number of competitors, which are capable of totally cannibalizing previous generations of technologies. It also fits well with markets with many competitors in a competitive equilibrium situation. Examples are the Dynamic Random Access Memory chips (DRAMs), fiber and energy market. The new model features fewer variables compared with existing models and can readily be adapted to technological processes with time varying parameters, which is particularly important in volatile competitive markets.     

Banking crises,labor reforms,and unemployment

Using a sample of 97 countries spanning the period 1980–2008, we estimate that banking crises have, on average, a large negative impact on unemployment. This effect, however, largely depends on the flexibility of labor market institutions: while in countries with more flexible labor markets the impact of banking crises is sharper but short-lived, in countries with more rigid labor markets the effect is initially more subdued but highly persistent. These effects are even larger for youth unemployment in the short term, and long-term unemployment in the medium term. Conversely, large upfront, or gradual but significant, comprehensive market reforms have a positive impact on unemployment, albeit only in the medium term.     

EU Enlargement, Migration and the New Constitution

The paper deals with the effects of migration resulting fromEU Eastern enlargement on the welfare states of Western Europe.Although migration is good in principle, as it yields gainsfrom trade and specialization for all countries involved, itdoes so only if it meets with flexible labour markets and ifit is not artificially induced by gifts of the welfare state.This is not the present state of affairs in Western Europe.In addition to measures that make labour markets more flexible,the introduction of delayed integration of working migrantsand the home country principle for nonworking migrants is arational reaction of the state. The proposed new EU constitution,which contains far-reaching rules for a European social union,should be amended accordingly. (JEL E2, F2, H0, J3, J6)     

Capital Controls,Global Liquidity Traps,and the International Policy Trilemma*

The zero bound on interest rates introduces a new dimension to the trilemma in international policy. The openness of the international financial market might render monetary policy ineffective, even within a system of fully flexible exchange rates, because shocks that lead to a liquidity trap in one country are propagated through financial markets to other countries. However, the effectiveness of monetary policy can be restored by the imposition of capital controls. We derive the optimal response of monetary policy to a global liquidity trap in the presence of capital controls. We show that, even though capital controls might facilitate effective monetary policy, capital controls are not generally desirable in terms of welfare.