Foreign outward direct investment and exports in Austrian manufacturing: Substitutes or complements?

Foreign Outward Direct Investment and Exports in Austrian Manufacturing: Substitutes or Complements? — The relationship between foreign outward direct investment and exports is crucial for assessing the impact of increased internationalization by foreign outward direct investment on a country’s welfare. Three models of trade and FDI are reviewed to generate hypotheses on their direct relationship over time as well as on common determinants. The propositions are empirically examined with time-series cross-section data for Austrian manufacturing. The results indicate a significant complementary relationship between FDI and exports in the eighties and early nineties. Moreover, long-run multipliers of exogenously increased FDI and exports are calculated. They are found to be positive but small in magnitude.     

Vertical foreign direct investment: Evidence from Japanese and U.S. multinational enterprises

Foreign direct investment (FDI) in developing countries has increased since the 1990s, but there is mixed evidence of vertical FDI associated with factor-seeking motives. This paper estimates the vertical motive of offshore production by multinational enterprises (MNEs) by exploiting past schooling characteristics as instruments for skilled-labor abundance in a host country. Using panel data on Japanese and U.S. MNEs in the 1990s, I find that skilled-labor abundance has a significantly negative impact on sales of manufacturing foreign affiliate only for Japanese MNEs. The results suggest that vertical FDI activity was more prevalent in Japanese MNEs than U.S. MNEs. A plausible explanation is that Japanese MNEs might be more vertically integrated with their offshore production than U.S. MNEs. A difference in foreign outsourcing activities could generate the observed deviation between Japanese and U.S. MNEs.     

Foreign direct investment and productivity spillovers: Evidence from the Spanish experience

Foreign Direct Investment and Productivity Spillovers: Evidence from the Spanish Experience. — The aim of this paper is to analyse the impact of foreign direct investment (FDI) on firms’ productivity using a panel of Spanish manufacturing firms for the period 1990–1998. Firstly, we show that for countries, like Spain, that are undergoing significant structural changes over the period in question it is important to control for both time-invariant as well as time-variant sectoral characteristics. Secondly, we confirm previous findings that one needs to take into account the “absorptive capacity” of firms when considering whether they are able to avail of externalities associated with FDI presence. For the Spanish case we find that only firms with sufficient levels of such capacity experience positive spillovers.     

Trade,Geography, and Industry Growth in U.S. Manufacturing

Much of the recent empirical literature examining the New Economic Geography has focused on how access to markets impacts wages. In this article, we consider an alternative aspect of the theory by examining how access to markets affects industry growth. We develop a model relating the growth of two key measures of market size—market access and supplier access—to growth in industry employment and the real value of industry shipments. We estimate the model using data on U.S. manufacturing industries between 1984 and 1996. We find strong evidence to suggest that access to markets positively affects industry growth.     

A multidimensional analysis of the international performance of U.S. manufacturing industries

A Multidimensional Analysis of the International Performance of U.S. Manufacturing Industries. — This study analyzes the determinants of three alternative measures of the international performance of U.S. manufacturing industries: export shares, the average number of foreign markets served, and the intensity of foreign direct investment. The factors affecting these three variables and various interactions among them are estimated econometrically using a sample of 37 U.S. industries. Overall, variables reflecting industrial organization, technological innovation, and scale economies are found to be more significant than traditional factor-proportions or labor-cost factors in explaining U.S. manufacturing performance in overseas markets.     

Openness and total factor productivity in Swedish manufacturing, 1980–1995

Openness and Total Factor Productivity in Swedish Manufacturing, 1980–1995. — This paper studies the effect of openness on total factor productivity (TFP) growth. Using industry-level data for Swedish manufacturing from 1980 to 1995, the paper shows that integrated industries tend to be more engaged in R&D and have more entry and exit activity than other industries. The results show that domestic R&D intensity does not contribute to the TFP growth rate. Instead, openness to international markets, which helps facilitate technology spillovers, is an important factor. There is also some evidence that producers exiting the market are less productive, implying that such exits will increase the average productivity of the industry.     

The impact of exchange rate risk on the foreign direct investment of U.S. multinational manufacturing companies

This paper extends the examination of the effects of exchange rate risk on the foreign direct investment decision of U.S. multinationals in manufacturing. It does so by explicitly developing a model which incorporates exchange rate risk into the objective function of the firm and tests the model on cross-sectional data over the years 1974 to 1977 for investment in both developed and less developed countries. These are the only years for which data on all crucial variables are available. In all cases the risk aversity hypothesis was substantiated and the same model was appropriate for both developed and less developed countries.     

The complementarity between U.S. foreign direct investment stock and trade

Within a gravity model framework, this paper will establish that trade and foreign direct investment (FDI) are complementary, using trade and FDI stock data on a bilateral basis between the U.S. and 51 other countries over the period 1982 to 1994. U.S. outward FDI is found to have a larger predicted impact on U.S. exports than does inward FDI. On the other hand, inward FDI is found to have a larger predicted impact on U.S. imports than does U.S. outward FDI. These results are directly linked to patterns of intrafirm trade within the multinational enterprise (MNE), a result consistent with the transactions cost theory of MNEs. In addition, a sectoral analysis indicates that U.S. outward FDI in manufacturing has a large predicted impact on both exports and imports, whereas U.S. outward FDI in services has a large predicted impact on U.S. exports but little or no predicted impact on imports. Detailed comments and suggestions were provided by Joe Daniels, Albert Berry, and seminar participants at the University of Toronto, York University, Industry Canada, and the 1999 annual Canadian Economics Association meeting. Research assistance was provided by George Georgopoulos and Anthony Yao. The authors are responsible for any remaining errors.     

An empirical assessment of the preconditions of Japanese manufacturing foreign direct investment in the United States

An Empirical Assessment of the Preconditions of Japanese Manufacturing Foreign Direct Investment in the United States. — This study undertook a multivariate regression analysis of Japanese foreign direct investment in the US (FDIUS), based on firm- and industry-specific data. Firm size was a positive and significant explanatory variable of firms’ completed transactions as well as their additions to investment value. Firms’ overall profit was a positive and significant indicator of firms’ addition to investment value, but not their completed transactions. Firms’ return on assets was generally a positive, albeit insignificant indicator of FDIUS. Three industry-specific variables (prior exports to the US, industry concentration, and technological intensity) were examined and all were positive but insignificant indicators of FDIUS.     

Local labor market conditions and foreign direct investment flows in the U.S.

This study evaluates the impact of industry and state-specific economic conditions on inward Foreign Direct Investment (FDI) in several states in the U.S. FDI inflows in the U.S. are attracted by high industry and state specific labor productivity, and also by high state spending on education. Multinational companies seem to highly value a productive and educated labor force.     

The trade balance effects of U.S. foreign direct investment in Mexico

This paper examines the effect of U.S. foreign direct investment (FDI) in Mexico on U.S. exports to and imports from Mexico. The rise of intrafirm exports and imports following U.S. FDI in Mexico suggests that FDI affects trade flows. Empirical estimation proceeds with tests for stationarity and cointegration. The finding of cointegration among the variables leads to estimation of the hypothesized relationships with a vector error-correction model. Impulse response functions and variance decomposition reveal that FDI leads to increased exports and imports during the time period considered.     

What’s trade got to do with it? Relative demand for skills within Swedish manufacturing

What’s Trade Got to Do with It? Relative Demand for Skills within Swedish Manufacturing. — This paper seeks to identify the contribution of trade and technological change to the increase in inequality between skilled and unskilled workers in Sweden since the 1970s. An empirical approach is adopted which allows for the outsourcing of the low-skill parts of the production chain to low-wage locations and is applied to detailed industry and bilateral trade data, the latter distinguishing between low-wage sources of imports and OECD countries. The paper finds that, in contrast to previous studies, trade with low-wage countries may have contributed to the rise in inequality in Swedish manufacturing. The empirical results also suggest that the increased use of technology also played a role in creating greater inequality between skilled and unskilled workers in Sweden, with the magnitude of this impact increasing in the 1990s.     

Exchange rate expectations and foreign direct investment flows

Exchange Rate Expectations and Foreign Direct Investment Flows. — Theories about exchange rate expectations are difficult to check empirically. We study FDI data to find indirect evidence on the formation of exchange rate expectations by foreign direct investors. Using panel data techniques on exchange rate movements and FDI flows from the United States to 20 OECD countries we find that skewness of devaluations has a robust positive impact on FDI flows while average devaluation and its volatility do not. We view this evidence as consistent with the hypothesis that relatively large exchange rate movements generate mean-reverting long-run expectations. This finding is consistent with survey-based evidence on exchange rate expectations.     

不要误读美国房价

旅美学者沈克明较为细致地介绍了美国房地产市场的情况,并和中国进行了对比。对比之下,他认为中国消费者对房屋价值的认识还不够成熟,一旦消费者认清房屋价值的关键所在,中国目前不少所谓高端别墅的价格将会大幅缩水。当然,中美房地产市场不尽相同。面对中国庞大的人口,土地、房屋是稀缺产品,价值、价格的衡量因考虑多种因素。但无论如何,文章给读者带来了一些新的视角和独特的思考,也让我们较为全面地了解了美国房地产市场。美国的房地产市场一个多层次、完善成熟的市场：既有天价房,也有一般老百姓消费得起的普通住房,更有政府为低收入者提供大量“廉租房”。特别是美国政府对贫困人群住房问题的关注,值得我们借鉴。     

Japanese foreign direct investment and regional trade

We examine the relationship between Japanese FDI outflows, domestic and foreign fixed investment, and the exchange rate. The results indicate that aggregate FDI outflows have been driven by investment in Japan and the exchange rate, while the geographic distribution of such investment has been influenced by foreign economic conditions. We also find that FDI outflows have a temporary impact on exports but a permanent effect on imports. We find no evidence that behavior with respect to East Asia differs from that with respect to North America or Europe.     

Foreign direct investment and industrialization in ASEAN countries

Zusammenfassung Ausl?ndische Direktinvestitionen und Industrialisierung in ASEAN-L?ndern. - Der Beitrag analysiert die wirtschaftlichen Wirkungen von ausl?ndischen Direkt-investitionen in den ASEAN-L?ndern (ohne Singapur) in den siebziger und frühen achtziger Jahren. Sowohl die branchenm?\ige Zusammensetzung von Direktinvestitionen als auch die Vermarktungsstrategien von deutschen, japanischen und amerikanischen Konzernen weisen in dieser Region deutliche Unterschiede auf. Gleichwohl scheint sich der Einflu\ von Direktinvestitionen aus unterschiedlichen Herkunftsl?ndern auf Industrialisierung und Exportausweitung im Laufe der Zeit angen?hert zu haben. Au\erdem ergibt die Untersuchung Anhaltspunkte dafür, da\ das Entstehen international wettbewerbsf?higer Industriezweige in ASEAN-L?ndern mehr durch den mit Direktinvestitionen verbundenen Technologietransfer gef?rdert worden ist als durch eine Pionierrolle von ausl?ndischen Tochterunternehmen beim Export von Industrieprodukten.

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Résumé Investissement étranger direct (IED) et industrialisation dans les pays ANASE.- L’auteur donne une évaluation de TIED dans les quatre pays ANASE (excepté Singapore) dans les années soixante-dix et les années matinales quatre-vingt. La composition sectorielle de PIED et les stratégies de ?marketing? appliquées par les entreprises transnationales allemandes, japonaises et américaines étaient substantiellement différentes dans la région mais les effets de l’IED sur l’industrialisation et l’expansion des exportations semblent à converger sur temps. De plus, il y a des signes que le transfert de technologie a contribué plus au développement des industries internationalement compétitives dans les pays ANASE que la directe participation des établissements étrangers dans les exportations manufacturières.

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Resumen Inversión extranjera directa (IED) e industrialización en los países de la ASEAN. - Este trabajo presenta una evaluación de la IED en el ?grupo de los otros cuatro? de la ASEAN en los a?os setenta y comienzos de los a?os ochenta. La composición sectorial de la IED y las estrategias de mercadotecnia de empresas transnacionales de Alemania Federal, el Japón y los EEUU han diferido substancialmente en la region, mas el impacto de la IED sobre la industrialización y la expansión de exportaciones parece haber convergido en el tiempo. Además hay indicaciones de que la transferencia de tecnología ha contribuído más a la apariciíon de industrias competitivas internacionalmente en los países de la ASEAN que la participación directa de subsidiarias de empresas extranjeras en las exportaciones manufactureras.

     

Flexible manufacturing and U.S. trade performance

Zusammenfassung Flexible Produktionsweise und die amerikanische Exportleistung. — Der Autor benutzt ein Modell, das die Produktionstechnologie in 37 Zweigen des Maschinenbaus der USA im Jahre 1983 beschreibt, und kommt zu dem Schlu\, da\ flexible Technologien durchweg einen positiven Beitrag leisten, wenn es darum geht, die Nettoexporte zu erkl?ren, w?hrend die Technologie der Massenproduktion weder einen positiven noch einen negativen Beitrag leistet. Industrien, die durch gro\e Betriebe mit flexibler Produktion, einen hohen Automatisierungsgrad, eine gro\e Zahl neuer Produkte und schnelles Wachstum gekennzeichnet sind, erzielen die beste Exportleistung. Es zeigt sich au\erdem, da\ ein Modell des intra-industriellen Handels bei Verwendung derselben Daten die beobachteten Ver?nderungen der Exportentwicklung weit schlechter erkl?rt als das Faktorproportionen-Modell.

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Résumé Flexibilité dans la production et la performance des exportateurs américains. — En utilisant un modèle qui décrit la technologie de production dans 37 industries mécaniques aux Etats Unis en 1983, l’auteur découvre que la technologie flexible contribue beaucoup à expliquer les exportations nettes tandis que la technologie de la production en masse donne l’impression de n’avoir pas une influence ni positive ni négative. Les industries qui sont caractérisées par de grands établissements avec une production flexible, d’un haut niveau d’automatisation, d’un grand nombre de nouveaux produits et d’un accroissement rapide ont le plus grand succès sur les marchés mondiaux. L’auteur trouve aussi qu’un modèle de commerce intra-industriel qui est appliqué aux mêmes dates explique beaucoup moins de la variation observée des exportations que le modèle de la dotation en facteurs.

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Resurnen Producción manufacturera flexible y el comercio de los EE UU. — Utilizando un modelo que describe la tecnología de producción en 37 industrias de ingenieria de los EE UU en 1983 se encuentra que la tecnologia flexible contribuye consistente y positivamente a explicar las exportaciones netas, mientras que la tecnologia de producción masiva parece no haber contribuido ni positiva ni negativamente a dicha explicación. Las industrias caracterizadas por plantas grandes con production flexible, un alto grado de automatization, un gran número de productos nuevos y un crecimiento rápido han sido las de mayor éxito en cuanto a las exportaciones. También se encuentra que un modelo de comercio intraindustrial aplicado a los mismos datos explica aún mucho menos de la variación del comercio observada que el modelo de la proportion de factores.