The Impact of Perceived Expectations and Uncertainty on Firm Investment

This paper analyses the (differential) impact of perceived expectations and uncertainty on investment spending in small and large firms. We analyse two types of investment, viz. aggregate investment and investment in energy-saving technologies, using Dutch firm level data. The results show that expectations and uncertainty about input- and output prices and domestic demand have substantial but different effects on investment spending in firms of different sizes. Furthermore, we find evidence, at least for small firms, that there are important differences between the effects of uncertainty about input and output variables.     

Demand-side stabilization policies: What is the evidence of their potential?

Using disaggregated data for the United States, this paper explores the effects of the variability of fiscal and monetary policy shocks. Higher variability of government spending shocks around a steady-state growth trend results in, on average, a decline in aggregate demand growth and inflation, with limited effects on output growth. On the other hand, higher variability of monetary shocks results in, on average, an increase in inflation and a decline in output growth. These results indicate the desirability of avoiding large fluctuations over time in either government spending or the money supply.     

On the Differential Behaviour of National and Multinational Firms: A Within‐ and Across‐sectors Approach

This paper looks for different patterns of behaviour of national firms and multinational enterprises (MNEs). Its main contribution is the use of a computable general equilibrium perspective to analyse firms’ performance. The model is calibrated for the case of the Czech Republic, which has been a very attractive foreign direct investment location in the last three decades. We replicate the arrival of MNEs to different sectors of this country in turn and analyse the responses of both types of firms across the 20 different sectors in which the Czech economy has been split. Our results grasp the short‐run impact. The higher labour intensity of national firms leads them to different patterns of production and labour demand, compared with MNEs operating within the same sector. The demand side of the model (particularly, exports and private consumption) drives the evolution of production and labour demand across sectors. Regarding prices, we also find a differential pattern between both types of firms within and across sectors. Our analysis offers detailed evidence on how the impact of MNEs will differ depending on the sector to which they arrive. Finally, the aggregate results suggest that a completely different microeconomic panorama may underlie rather similar macroeconomic outcomes.     

政府消费性支出的总量乘数和结构乘数

2008年金融危机后,大规模财政支出成为各国刺激经济的主要措施之一。然而,在这些支出中,各国政府消费的产品差异明显。有鉴于此,本文构建了一个包含制造业和服务业两部门的新凯恩斯模型,并通过计算总量支出乘数和结构支出乘数来研究政府消费不同产品对总产出和两部门产出的影响。研究发现,需求引致、要素流动、政府总支出的挤出和财富效应是政府消费发生作用的四种机制;政府增加制造业消费,会通过财富效应等机制挤出政府总支出,使总产出增加和制造业产出增加,但会使服务业产出下降;政府增加服务业消费时,会使服务业产出上升,但将显著挤出政府总支出,使总产出和制造业产出下降。     

THE PROFIT–INVESTMENT–UNEMPLOYMENT NEXUS AND CAPACITY UTILIZATION IN A STOCK‐FLOW CONSISTENT MODEL

This paper studies under which conditions the share of profit in value‐added, financial constraints on investment and capital shortage may foster unemployment and may limit the growth of capital and/or the growth of aggregate demand, in a stock‐flow consistent model. The efficiency of demand‐side versus supply‐side economic policies (decrease of the real interest rate and/or of the real wage, increase of the leverage ceiling constraint) depends on capital shortage and credit rationing, which are not necessarily simultaneous due to the effects of investment on aggregate demand and supply.     

Microdynamics of Turkey's Export Boom in the 2000s

This paper examines the microdynamics behind the dramatic export boom experienced by Turkey during the 2000s. Using disaggregated exporter‐level customs data covering the universe of export transactions for Turkey during the period 2002–11, we characterise firm‐level dynamics in the export sector and we decompose export growth at the aggregate, sectoral and destination market levels to identify the role of firm turnover, destination turnover and product turnover. We show that year‐to‐year aggregate export growth is dominated by growth in continuous exporters, and for these, growth is dominated by exports to their continued destinations and of their continued products. However, the observed high degree of churning across firms, destinations and products accounts for a substantial part of Turkey's export growth over longer periods. The patterns of microdynamics of export growth are verified across sectors and across groups of destination markets with some exceptions regarding exports to new emerging markets where net exporter entry plays a more critical role for export growth over longer periods.     

基于经济增长的中国最优消费规模:1978—2006

中国长期实行"重投资、轻消费"的政策,消费率一直偏低。以限制消费为代价的经济增长不仅无法实现社会福利最大化和居民效用最大化,而且也是不可持续的。消费不足导致经济增长乏力,然而消费过度会导致投资不足从而阻碍经济增长,因此经济中存在最优的消费规模。在检验消费规模和经济增长关系的基础上,建立消费的内生增长模型,利用1978—2006年间29年的经验数据,求得中国消费率的最优值为66.46%,据以提出扩大消费以扩大内需、促进经济增长的政策建议。     

On the relationship between public and private spending in developing and developed countries

Using annual data, the paper studies the time-series evidence regarding the effectiveness of government spending. The emphasis is on the relationship between public spending and private spending. The objective is to identify whether the effects of public spending on macro variables are reinforced or mitigated through the spillover effects on private spending. The evidence attests to the importance of stimulating private spending to maximize the positive effect of an increase in public spending on real growth. Concerns about the crowding out effects of higher public spending on private demand are more dominant in developing countries. Moreover, the scope for government spending to determine aggregate uncertainty is much larger in developing countries. Overall, the evidence attests to the importance of managing trends and variability of government spending towards maximizing the fiscal multiplier. The paper's evidence spells out potential to maximize the fiscal multiplier via private spending and concerns about the ineffectiveness of fiscal policy where crowding out concerns dominate.     

湖北固定资产投资可持续性研究

本文从固定资产投资的总量增长、结构优化、效益提升和影响因素几个方面对湖北固定资产投资可持续性问题进行分析。研究结果显示：投资对湖北经济增长的贡献率不断提高,而湖北投资总量增速相对较慢,且缺乏稳定性;投资结构不尽合理,投资的资金来源渠道相对较少,过多地依赖国家预算内资金,投资资金的投向结构与全国整体情况严重趋同,缺乏个性和特色;投资宏观经济效益递减的速度相对高于全国平均水平;政府财政支出增长率是影响湖北固定资产投资的最重要的因素,其次是工业化和城市化水平、经济增长率,利率对投资的影响并不明显。     

新农村建设投资支出对扩大农村消费需求贡献的区域差异分析——基于东、中、西部面板数据的实证分析

本文利用1990-2008年全国31个省区的面板数据,实证分析了我国东、中、西部新农村建设投资支出对刺激农村消费需求的贡献。研究结果表明,东、中、西部地区的新农村建设投资支出均是消费需求的长期原因;除中部地区外,东、西部地区的两者短期关系也成立。新农村建设投资支出对农村居民消费的贡献率存在较明显的地区性差异,西部地区由投资支出所产生的效应最大,中部地区最小。     

Some observations on models of growth and distribution with autonomous demand growth

This paper offers some theoretical and methodological observations on a model of growth and distribution, recently developed by Franklin Serrano and others and called the Sraffian supermultiplier model, in which the growth of autonomous capitalist consumption demand and distribution are exogenously given and capacity utilization is at an exogenously given “normal” level in long‐run equilibrium. First, it provides a simple long‐run equilibrium version and dynamic formulation of the model, and compares it to other models of growth and distribution using a common framework and focusing on the effect of a change in income distribution on growth. Second, it shows that the model can be modified to examine other components of autonomous demand growth, including government spending, exports, consumption by workers, and investment and technical change, and to simultaneous multiple sources of autonomous demand growth. Finally, it comments on some methodological issues concerning the model, and on its implications for the notion of long‐run equilibrium.     

Manufacturing profits and strategies in Argentine industrial development, 1904–1930

This study focuses on the management strategies and profitability of 59 manufacturing companies across ten sectors in Argentina between 1904 and 1930. The manufacturers under study developed strategies best to control their environment. Common methods were diversification, self-financing, merging and political lobbying. The overall intent of these strategies was to protect their investment and better manage their companies by concentrating their sector and eliminating competition.     

Measuring Innovation in European Industry

This paper analyses the results of the 1993 Community Innovation Survey (CIS). Fifty per cent of European firms introduced a product or process innovation during 1990-92. The share of innovating firms varies between industrial sectors and firm size. The percentage of innovating firms is higher for large firms than for smaller ones. In high-tech sectors this share is two thirds and for traditional ones is one third. The largest part of firms' expenditure for innovation is linked to the adoption and diffusion of technologies through machinery and equipment, which absorbs 50% of firms' innovation expenditure. R&D activities represent, on average, 20% of total innovation expenditure while other innovative activities, such as design and trial production, account respectively for 10% and 11%. The mix of innovation inputs, especially R&D and investment, is strongly correlated with firm size, displays little change across countries and varies greatly across industries.     

Business Groups and the Big Push: Meiji Japan's Mass Privatization and Subsequent Growth

Paul Rosenstein-Rodan argues that economic development requirescoordinated investment in many interdependent industries, andprescribes a flood of state-controlled investment across allsectors—a so-called big push. Widespread government failuredefeated twentieth-century ‘big push’ schemes. Butspillovers across firms and industries, and from public goods,hold-up problems, and capital market limitations are real, andjustify coordinated growth across sectors if it can be donewithout government failures. Large, extensively diversifiedpyramidal business groups of listed firms dominate the historiesof developed economies and the economies of developing economies.Arguing that such groups provided this coordination in prewarJapan after a state-run big push failed, we propose that pyramidalbusiness groups are private-sector mechanisms for coordinatingbig push growth, and that competition between rival groups inducesefficiency unattainable in a state-run big push. We postulatethat a successful business-group led big push requires economicopenness, basic public goods, rule of law, separation of thestate from business, and a timely demise of business groupswhen the big push phase is complete. Where these criteria arenot met, growth stalls and oligarchic families become too powerfulto dislodge.     

Der deutsche Konjunkturzyklus: Vermessung und Zusammenhang mit Investitionen

On average, the German business cycle is four to five years long. The cycle is quite pronounced and explains about 27 % of the variation in year on year GDP growth. For fluctuations with a duration of more than two years, there is a significant unidirectional Granger causality running from GDP growth to investment. A closer look reveals two things: first of all, that the Granger causality runs from GDP to investment in equipment and machinery, not investment in construction, and second, that it is lagged foreign demand (exports) rather than domestic demand that has predictive power for investment.     

Store loyalty: its impact on retail revenue. An empirical study of purchasing behaviour in the UK

In this paper, we present some significant empirical findings about store loyalty and consumer spending in the United Kingdom across five retail sectors. Our findings are presented at two levels: Firstly, we compared loyalty levels across retail sectors in the UK and identified that home improvement stores generate the lowest levels of consumer loyalty. Secondly, by disaggregating the data by loyalty types, we found that, while loyal shoppers tend to have smaller monthly budgets than switchers, they spend double the amount in their “first choice” store. All our results highlight the importance of developing a corporate approach to managing customer loyalty in retailing.     

Does foreign direct investment expand the capability set in the host economy? A sectoral analysis

Most empirical studies examining the impact of foreign direct investment (FDI) on economic development use aggregate monetary-based measures such as GDP or TFP growth as indicators for development. We deviate from this approach and use instead the recently developed economic complexity index; this measure summarises the complexity of the productive structure of an economy, and its values can be interpreted as the number of capabilities present in a country. These capabilities are units of productive knowledge necessary for the production of goods, and goods differ in the number of necessary capabilities. Furthermore, we use sectoral FDI data to take differences between sectors of an economy into account, since the number of necessary capabilities also varies between the sectors. In our empirical analysis, covering 63 developing and developed countries over the period 2005–14, we find that FDI in the tertiary sector has a statistically significant and robust positive effect on the number of capabilities, whereas FDI in the primary and secondary sectors generally does not increase the capability set of an economy.     

MATURITY,STAGNATION AND CONSUMER DEBT: A STEINDLIAN APPROACH

This paper extends a Steindlian model of growth and income distribution to incorporate borrowing by consumers. It shows that borrowing by consumers can improve growth prospects in the short run by increasing consumer demand. However, in the longer run the effects of increasing consumer borrowing are ambiguous because, by increasing consumer debt, it redistributes income towards the rich who have a higher propensity to save, thereby possibly depressing aggregate demand and growth despite the borrowing‐induced expansion. The problem may be exacerbated by financial considerations involving the increase of the interest rate due to greater borrowing, but these considerations are not necessary for it. The problem is more likely to occur when autonomous investment demand is weak, i.e. when borrowing‐induced consumption increases are most required to counter tendencies towards stagnation.     

The Puzzle of Manufacturing Sector Investment

Investment in the manufacturing sector has lagged behind the rise in profits, cash flow, overall manufacturing activity and other drivers of investment since 2002. After reviewing several benchmarks that illustrate the lag in investment, various explanations as to why investment lagged are discussed. These explanations include: a lack of “animal spirits”; a capacity overhang from the late 1990s; rising structural costs; increased investment of U.S. firms overseas; the desire on the part of companies to improve their balance sheets and liquidity; and, significantly, increased spending on intangible investments (research and development, advertising, process improvements like “lean” manufacturing, employee training, and those information technology expenditures that are expensed). It is too soon to tell if the lag in capital expenditures will persist. But even if there has been a secular change in the pattern of investment spending, whether it will have negative impact on the economy in terms of productivity growth (and ultimately economic growth) or whether it implies a diminished role for manufacturing in the U.S. economy depends on the reasons for the change. If lagging investment is a result of, say, structural costs, it would have a negative impact. If, however, reduced capital expenditures reflect a shift toward intangible investment, then productivity growth need not be diminished and in fact could be raised.     

The Dynamic Links Between Exports,Foreign Direct Investment,and Economic Growth: Evidence from European Transition Economies

ABSTRACT

By applying time series and panel data cointegration analysis, this study investigates the causal relations between exports, inward FDI and GDP for fifteen European transition economies over the period 1995–2014. This study goes beyond previous empirical works by using two auxiliary variables in the aforementioned nexus: domestic investment and government spending. Empirical findings suggest that though the effect of openness is beneficial to all economies of the region, the presence of export-led growth and FDI-led growth hypotheses are validated mainly for the group of economies that entered the European Union in 2004. Conversely, for the remaining economies, the results confirm the prevalence of a culture for saving over spending, which eventually provokes the beneficial expansion of their local investment and export capacity.