Structural Adjustment and International Migration: An Analysis of the Thai Clothing Industry

Abstract

This paper examines the structural adjustment process using evidence from the Thai clothing industry, with a view to informing the policy debate about international migration. The analysis is based on in-depth interviews with 50 clothing firms in Thailand during November 2009–February 2010. The key finding is that not all firms opt to hire unskilled foreign workers. The differences in company characteristics between firms that hire foreign workers and those that do not are clear. The latter are likely to be relatively large in size (in terms of both employees and sales), perform better and actively undertake upgrading activities. The former are typically struggling to maintain their profit margins, are relatively small and do not adequately invest in upgrading activities. Interestingly, hiring foreign workers is not the first response of firms, but reflects a tightening in the labour market and the fact that these companies have not yet successfully undertaken process upgrading. Allowing unskilled foreign workers in on a temporary basis with appropriately designed measures would be a win–win solution for labour-importing and exporting countries, as well as for the migrants themselves. The paper raises concerns about imposing one-size-fits-all policy measures in managing the flows of unskilled foreign workers.     

Liberalization and labour: The fate of retrenched workers in the cotton textile industry in India

Abstract

In 1991 the Indian government began to tread seriously the path of liberalization. It started to open up the economy, discuss the privatization of the public sector, invite foreign investment and reform the labour market. Liberalization has proved to be highly controversial. While there has been considerable debate about the consequences for labour, there have been few empirical studies of the effects so far. This paper intends to address this lacuna by focusing on the case of retrenched workers in the cotton textile industry. Our argument is fourfold. First, it cannot be assumed that the informal sector can readily absorb a sudden localized surge in unemployment. Second, even where retrenched workers have found employment in the informal sector, their conditions of employment in terms of wages, working hours, health and safety and representation are likely to be worse. Third, the National Renewal Fund has not been effective as a social safety‐net for retrenched workers nor as a mechanism for regenerating industry. Finally, it cannot be assumed that the trade unions will be able to negotiate a satisfactory deal for redundant workers. These points are explored through an investigation into retrenched workers in the cotton textile mills of Ahmedabad, Gujarat state.     

“The tribe of pundits called economists” and economic debate in post‐independence India

Abstract

The rise of an economics profession in post‐Independence India is outlined, and something of the contribution of that profession to economic debate in India considered. The roots of the economics profession and of economic debate after 1947 are traced to the colonial era, and the institutions and the institution‐builders essential to its emergence after 1947 discussed. Five “generations” of Indian economists, active both before and after 1947, are identified. Attention is drawn to the high quality of debates on the Indian economy, the high level of theoretical discourse and the quality of political economy traditions. Particular attention is paid to the remarkable contribution of the Economic Weekly/Economic and Political Weekly, and there is treatment of the relationship between the academy, on the one hand, and the state and its representatives on the other.     

Foreign Direct Investment and the Performance of European Agribusiness Firms

This article analyses the relationship between foreign direct investment and the performance of European agribusiness firms. Motivated by the role of heterogeneous firms in new trade theory and using a firm‐level dataset, statistical analyses identify key differences between firms investing in foreign economies and those that do not. A binary choice model quantifies the relationship between firm characteristics and the decision to engage in foreign investment. Size and – less strongly – productivity are greater for multinationals relative to domestic firms. Furthermore, European multinationals are characterised by a larger debt to equity ratio and show lower labour and input costs.     

Some implications of generalised C.E.S. production functions for normative effects of output prices and shifts in supply schedules

Abstract

This paper studies the demand for hired casual labour under production risk for a sample of Indian cultivators. A simple static household model under production risk is constructed to yield the demand for hired labour function. A detailed discussion of the various technological and non‐technological regressors is then presented. Empirical results reveal that the risk variables do not have a significant influence on hiring‐in behaviour. This result is important since the theoretical literature shows that a marginal increase in risk would lead to a decline in the demand for labour. Further, caste factors do not appear to influence hiring‐in, contrary to evidence for eastern India. Land‐augmenting technological factors appear to be the most important in explaining rightward shifts in the demand curve over time.     

Finance Constraints and Firm Transition in the Informal Sector: Evidence from Indian Manufacturing

This paper focuses on the role of finance constraints in determining the lack of transition of firms in India from very small family firms, which are the predominant type of firms in the informal sector, into larger informal firms that employ non-family labour. Using a rich firm-level data-set drawn from nationally representative surveys of the Indian informal manufacturing sector, this paper tests for the role played by finance constraints in firm transition in the informal sector at the firm and district level. There is evidence that the difficulty that firms face in accessing external finance acts as a significant constraint to small firm growth in the informal sector. Looking at data from India's districts, it is found that the financial development in a given district increases the likelihood that firms in the district will make the transition from household enterprises into non-household enterprises.     

The behavioural economics of health protection: an empirical evidence of moral hazard in U.S. hog farms

Healthy workers are productive. When firms could not pay according to worker's health preventative effort levels due to asymmetric information, they provide an incentive contract to cope with the moral hazard problem. We test the existence of ex ante moral hazard in the U.S. hog farms. Using a national employee survey data in 1995 and in 2000, we find that even though employers provide protective devices to reduce the negative effects of poor environmental conditions on employees’ respiratory health, many employees do not wear the devices, which is consistent with the moral hazard behaviours. The probability of using a protective device is 10 per cent lower in the farms with an agency problem than in family farms without an agency problem, even after we control for medical insurance provision types. Reducing pollutants, providing protective devices and instilling the importance of using masks help to alleviate moral hazard incidences.     

Economic Liberalization and Productivity Growth: Further Evidence From Bangladesh

The impact of economic liberalization reforms on the productive performances of manufacturing firms remains a contentious issue in the literature. This paper attempts to contribute to the debate by empirically estimating productivity growth of Bangladesh food manufacturing using firm level data before and after reform. Empirical results show that the share of output growth was accounted for by input growth in most sectors of this industry. In some sectors, the estimated rate of total factor productivity (TFP) growth is negligible or even negative. Decomposition of the TFP growth shows that technological progress plays a significant role in TFP growth across firms within the sub-sectors of this industry. Empirical results also show that the relative contribution of capacity realization to TFP growth is not substantial in inhibiting the industry's high and sustained growth. These dismal performances indicate that the industries responded a little to the implementation of economic reforms.     

Do rural public works influence agricultural wages? The case of the employment guarantee scheme in India

Abstract

Since growth alone will not make a significant difference to agricultural wages in an oligopsonistic labour market, a case is made out for special employment programmes along the lines of the Employment Guarantee Scheme (EGS) in the Indian state of Maharashtra. The EGS has a substantial effect on agricultural wages—especially long‐term. Diminution of income supplementation through this scheme, following a sharp reduction in the share of poor participants, was thus partly offset by higher agricultural wages. To the extent that this income diminution reflected exclusion of the poor from the EGS because of deficiencies in its design and implementation, prompt remedial action would enhance significantly their bargaining power vis‐a‐vis that of large landholders.     

Innovation in Agro-Foods: A Comparative Analysis of Value Chains

ABSTRACT

The innovative activity of firms has been linked to the introduction of a new product or process associated with the development or application of new technological knowledge. New products generally contain innovative techniques that increase the quality of goods. New processes are based on the use of new technologies to increase the efficiency of production. However, the exclusive link between technology and innovation has been criticized for various reasons. It provides a restrictive vision considering innovation as part of the manufacturing and services sectors. Innovation in firms affects not only the development and application of new technologies but also the adoption and the reorganization of business processes, internal organization, external relations, and marketing. The literature in the field of management emphasizes the importance of integrating product, process, and organization to translate new ideas into market success. Thus, to obtain a complete picture of the innovative efforts of firms in the agro-food industry, the concept of innovation has been extended to both technological and nontechnological innovations. This analysis provided evidence of innovations used by agro-food firms. It also identified latent demand for future innovation.     

Trade,Technology and the Demand for Skills in Tunisia, 1998–2002

Abstract

Although many developing countries have experienced an increase in the relative demand for skilled workers leading to a rise in wage inequality, the role played by trade in this trend remains a matter of debate. Using a firm-level database covering manufacturing and non-manufacturing sectors in Tunisia over the period 1998–2002, this paper investigates whether trade-induced technological change could explain the increase in the relative demand for skilled workers. The empirical analysis is based on the estimation of an employment-share equation. Controlling for potential endogeneity issues, the results confirm that trade-induced technology adoption was a channel through which openness to trade raised the relative demand for skilled workers in Tunisia. Unlike trade, however, foreign investment in Tunisia did not appear to increase the demand for skills.     

The Labour Process in Rural Haryana (India): A Field-Report from Two Villages

Forms of labour hiring and the extent of unemployment are analysed using primary data collected from two villages in Haryana (India) during 2002–3. Data from these villages show that wage labourers, particularly women, faced extremely high levels of unemployment. Employment in agriculture was limited and new forms of labour hiring contracts had emerged under conditions of high unemployment. Earnings of manual workers were very low and gender disparities in wages very high. In one of the villages, a high concentration of landholdings and a decline in labour use facilitated the use of long-term workers. Labour relations were characterized by significant degrees of unfreedom, although the extent and nature of unfreedom varied considerably between casual and long-term workers, and between the two villages. In particular, long-term siri workers worked under conditions that were akin to bondage. It is argued that a very high degree of unemployment, combined with unequal caste and land relations and dependence on employers for credit, contributed to sustenance of unfree labour relations in rural Haryana.     

Commercial Strategies in the Olive Oil Bottling Sector in Spain

Abstract

The main objective of this study is to analyse the olive oil bottling sector in Spain, applying the strategic group methodology to a group of firms from the sector. The study is divided in four sections:

? Identification of the strategic groups, using multivariate statistical techniques.

? Characterization of the groups, analysing their internal structure, delimiting and explaining their strategies.

? The positioning.

? And differences in the results of the groups.     

Well‐off small‐scale tobacco growers and farm workers in the Mexican agrarian reform (1972–1990)

In this article, I study small‐scale growers of blonde tobacco varieties from the state of Nayarit in Mexico who had contract farming arrangements with the state‐owned company Tabamex (1972–1990). I refer to them as “well‐off small‐scale tobacco growers” given that in the 1960s, 1970s, and the 1980s, they became one of the subaltern social groups that benefited the most from the Mexican Agrarian Reform. I want to set this research apart from the ones carried out on tobacco growers in Nayarit, which have almost exclusively understood this group as agricultural producers and have perceived as secondary, and even as anecdotal, the impact of the high levels of wage labour hired in the region. I argue that in order to have a better understanding of the social relations at play, it is important to take into account that Nayarit tobacco growers have also been employers of farm workers. Hence in my analysis, I have also included the seasonal farm workers hired by these small‐scale tobacco growers because of their importance in the labour force. More specifically, I have looked into the vulnerability and invisibility of these workers both within this branch of agricultural activity and state institutions.     

The Impact of Internationalisation on the Swedish Food Industry

Abstract

The European integration process has changed the competitive landscape in many industries. The questions raised in this paper concern the reactions of national firms that are subjected to this process of internationalisation of competition.

This study highlights the vertical inter-dependence within a system of production and distribution. In internationalisation theory, most studies have focused on how firms become international or global players, where entrance into new markets is seen as a result of strategic decisions.

To illustrate this process, three industries in food production, that is the baking, the brewing and the confectionery industries, were chosen.

The results indicate that a supra-industrial strategic recipe exists, with a core content of specialised volume production. The discussion on company strategies focussed on the retail sector. The findings might be interpreted in the light of Galbraith's theory of countervailing power.     

The Internationalization of Firms From India: Investment,Mergers and Acquisitions

This paper analyses the rapid expansion in outflows of foreign direct investment from India and the spurt in foreign acquisitions by Indian firms, during the past decade, situated in the wider context of international investment from developing countries. Much of the investment was in manufacturing activities and most of the acquisitions were in industrialized countries. The economic stimulus and the strategic motive for the internationalization of firms from India were provided by a range of underlying factors driving the process, which differed across sectors and firms. The rapid growth in investment and acquisitions by Indian firms were partly attributable to factors implicit in the liberalization of the policy regime and the greater access to financial markets; but it must be recognized that Indian firms could not have become international without the capacity and the ability to compete in the world market. The attributes of Indian firms, which created such capacities and abilities, are embedded in the past and have emerged over a much longer period of time.     

Trade Reforms and the Efficiency of Firms in India

In this paper, we analyse the impact of reforms on manufacturing efficiency in India. The sector chosen--the cotton textile industry in India--is a very large employer and exporter and also has considerable historical significance. Its response to the reforms therefore is being watched with some concern. The paper concludes that while there was considerable dispersion in efficiency levels before the reforms, this dispersion has decreased since the reforms. To analyse this, we estimate a best practice frontier for the industry and then measure efficiency as the distance from this frontier. We find that efficiency has increased because the reforms have influenced other factors such as market shares, exports and imports and capital-labour ratios. Our results also indicate that geography--the location of the firm within a state and its proximity to a major urban centre--influences the efficiency levels of firms within it.     

Agribusiness,Peasant Agriculture and Labour Markets: Ecuador in Comparative Perspective

The consolidation of capitalist agriculture in countries such as Ecuador has led to a recent revaluation of territories (central highlands) where cheap labour has facilitated agribusiness development linked to the world market. This process generates growth in the numbers of rural wage workers and the creation of a labour market that, in relation to others in several Latin American countries, has certain particularities: permanent jobs, gender balance, an absence of intermediaries and low levels of precariousness. Small‐scale peasant producers are marginalized in this context and play functional roles within the current dynamics of agribusiness firms. The organizational weakness of rural wage earners and the pursuit of clientelist relationships by firms do not allow rural workers and local communities to devise economic and social strategies that might improve their position in this ‘field of forces’ in the territory.     

Developer behaviour and development control

Summary

Studies by the North Carolina group established the decision modelling approach to study urban growth. These studies established the central role played by developers in the process, and the rational and adaptive behaviour of developer decision‐making. Events have since changed the developer's decision environment: the growing complexity and uncertainty of the development control process and the changing structure of the development industry towards larger and more integrated firms.

This author argues that if developers are truly rational and adaptive there should be some observable and stable relationship between their structure and operation and their performance in the development control process. This paper reports the findings of a case study which examines such relationships in the subdivision approval process in Scarborough, Ontario. Thirteen developer/development variables were tested. The major finding is that firm size was the most important variable. Large firms did not do well in negotiation but they took much less time in implementing the conditions of approval and in starting the building work. It is further argued that such behaviour is compatible with the financial, production and marketing characteristics of development firms.     

Chinese Peasant Choices: Migration,Rural Industry or Farming

A nationally representative rural labour force survey of China is analysed to explore the allocation of labour among farming, local non-farming and temporary migration activities. Various tests of labour market segmentation are conducted. The estimated returns to labour off the farm greatly exceed those on the farm. The personal and household determinants of activities, and of days worked in them, are examined for demand or supply constraints on employment; some results are consistent with the former. The relationship between days worked off and on the farm suggests that the opportunity cost to households of non-farm work is very low. The evidence is consistent with there being rationing of non-farm employment. However, tastes, imperfect information, imperfect capital markets, risk-aversion and transaction costs are also relevant. The overcoming of the obstacles to diversification away from farming is important for rural development in China.