Firm's choice of ownership structure: An empirical test with Korean multinationals

This paper examines the choices of ownership structure of multinational firms (MNFs) based in a newly developed country (South Korea) for their foreign affiliates. A transaction cost economics perspective is employed, taking advantage of a distinct and comprehensive firm-level data set. This is investigated as a whole-set sample of all overseas affiliates and as a sample of only partially owned affiliates using a number of analytical techniques. The paper shows that the choice of equity ownership structure is affected by the characteristics of various host countries. We find that the MNF prefers sharing control rights with a local partner when its affiliate is in a resources-based sector, when it enters a country with a large black market, or when there is large socio-cultural difference between the home and the host country.     

An empirical analysis of the gender earnings gap between the public and private sectors in Korea: A comparative study with the US

This paper conducts an empirical analysis of the gender earnings gap in the public and private sectors by comparing the cases in Korea with those in the US. Using comparable data sets by the Panel Study of Income Dynamics for the US and the Korean Income Panel Study for Korea, this study decomposes the gender earnings gap in order to identify the causal factors. One of the main factors attributable to a much lower gender earnings gap found in the Korean public sector is the self-selection by female workers with high levels of human capital who decide to enter the public sector. Another factor is the differing levels of efforts made by institutions, in areas such as wage structure, the enforcement of gender equality related laws, and the provision of paid family leave, which may affect differently the gender earnings gap in the public and private sector jobs. The empirical results of this study suggest that the differing levels of institutional efforts lower the gender earnings gap within the Korean public sector.     

An empirical analysis of ASEAN's labor-intensive exports

This paper investigates the factors affecting the demand for ASEAN's labor-intensive exports. Results obtained using a panel data set including exports to 25 countries indicate that an appreciation in ASEAN countries would substantially reduce exports of clothing, furniture, and footwear. In addition, an increase in foreign income and an appreciation among competitors would raise ASEAN's exports. These results indicate that profit margins for labor-intensive manufactures are thin and that slow growth abroad will curtail ASEAN's exports. These findings imply that policymakers should seek to promote domestic and regional demand, expand the technological base, and consider exchange rate coordination to mitigate “beggar-thy-neighbor” policies.     

An empirical analysis of contracting by Chinese firms

Why do firms use formal contracts or relational contracts with their business partners? The paper uses survey data based on a large number of Chinese firms to uncover some important factors for why and when formal contracts or relational contracts are used. This study identifies geographical location as an important factor in affecting Chinese firms' contracting decisions. We find that a firm is more likely to use formal contracts with its clients and suppliers if they are located in a city different from the firm's main business location. We also find that larger (smaller) firms tend to adopt formal (relational) contracts. However, while the number of clients has a negative impact on a firm's adoption of formal contracts with its clients, the number of suppliers has a positive impact on its adoption of formal contracts with the suppliers.     

An empirical analysis of college enrollment in The Netherlands

Summary In this paper we present empirical results on the demand for university training in the Netherlands. We integrate investment and consumption aspects of education and explicitly take account of the existence of capital market imperfections. The model has been estimated using time-series data. We pay attention to the dynamic structure and the nonlinearity of the functional specification. To a large extent the qualitative effects of the variables suggested by the theory on college enrollment correspond to the results. The effect of tuition on enrollment is not significantly different from zero at the 5 percent level. The elasticity of male enrollment for financial aid is substantial, but the elasticity for per capita income is even higher (close to one). The model allows deriving projections of college enrollment and investigating the impact of government policy.The authors gratefully acknowledge comments on an earlier version by S.K. Kuipers and J. Pen.     

An empirical analysis of Sri Lanka's Manufacturing Productivity slow-down

This paper analyses empirically the changes in Sri Lanka's manufacturing productivity during a period of regime shift from import substituting industrialisation to export-oriented industrialisation. We have used a varying coefficients stochastic production frontier model on a balanced panel data set to shed light on the effects of trade liberalisation on Total Factor Productivity which incorporates both changes in Technical Efficiency and Technical Progress. The results of the empirical validation of the stochastic production frontier model reveal that there were two distinct phases of output and productivity growth under each of the two trade liberalisation episodes that occurred during 1978–88 and 1988–97, respectively. The analysis carried out in this paper decomposing Total Factor Productivity into Technical Progress and Technical Efficiency also reveals that during early years of each episode, perspiration or factor inputs was the driving force of increased output growth giving way to ‘inspiration’ or technical progress as each phase matured. The stochastic production frontier empirics reported in this paper together with negative feedback effects emanating from the political turmoil and the prolonged ethnic conflict virtually brought the growth of foreign direct investment to a grinding halt in late 1980s, when the election of new right-wing government appears to have given a shot in the arm to overcome the paralysis of technical progress that seem to have contributed to the productivity slow-down in Sri Lanka's manufacturing sector in the eve of the new millennium.     

An empirical analysis of China's aggregate import demand function

This study uses the cointegration concept to analyze the long-run relationship of China's aggregate import demand function for the period 1970–1999. The conventional specification for the import demand function reveals that the volume of imports demanded responds to domestic activity and relative prices. This study considers four definitions of domestic activity, namely gross domestic product (GDP), GDP minus exports [IMF Staff Pap. 45 (1998) 236], “national cash flow” [Econ. Lett. 74 (2002) 265], and final expenditure components [Appl. Econ. 21 (1989) 957]. The empirical results indicate a long-run equilibrium relationship between these measures of domestic activity and China's import demand. Overall, domestic activity and relative prices are inelastic in the long run. This study also highlights some policy implications.     

Export performance and economic growth causality: An empirical analysis

The cointegration and causal relationship between export growth and economic growth is investigated for the Nordic economies. On the basis of Johansen's technique and the augmented Granger causality tests, the evidence shows that these macroeconomic aggregates are causally related in the long run for each economy. Granger causality is unidirectional, running from economic growth to export growth in Denmark, and bidirectional in Finland, Norway, and Sweden. The established bidirectional causality suggests that the expansion of exports is an integral part of the economic growth process.     

Economic situation of non-whites after 1964: An empirical analysis

Conclusion Based on the above mentioned results, it is plausible that the Civil Rights Act of 1964 generally has had a positive effect on the economic situation of non-whites, and on the average, has brought an improvement in the income, unemployment rate, and occupational distribution of non-whites in the United States. Therefore, the hypothesis of this study is supported and has shown that either because of, or concurrently with the Civil Rights Act of 1964, there has been a significant reduction in the propensity to discriminate since 1964.     

An empirical analysis of market performance in the car industry

This article focuses on the determinants of market performance in the car industry. Trade and market patterns are studied using firm-level international data. Econometric models are developed and evaluated for a sample of firms from the major producing countries for the period 1970–1985. Among the factors responsible for the market shares of the different firms are international differences in unit labor costs, income levels, the European Community (EC) and locally based production scales, and transaction costs in the form of trade barriers.     

Comparative home-market advantage: An empirical analysis of British and American exports

This paper derives and tests the hypothesis that a country exports relatively more of those goods for which it has a relatively larger home market, i.e., a comparative home-market advantage. This prediction is based on a two-country, many-good intraindustry trade model with economies of scale, international transaction costs and differences in expenditure shares and country size. The data from 1970 to 1987 of 26 industries of the manufacturing sector in the United States and the United Kingdom supports this hypothesis. It is also shown that the relationship between home-market size and export structure becomes significantly stronger for industries with high fixed costs. JEL no. F12, F14, F17     

An empirical analysis of the expenditure budget in research and development*

Abstract. This paper extends the prior empirical research that explains the perceived use or importance of budget control or both, with organizational context and structure in manufacturing organizations. In this paper, the perceived importance of expenditure budget control in research and development (R&D) work groups is explained empirically by organizational context (R&D work group size, source of R&D funding, and size of R&D budget) and the management control system (steps in the control process, social control). Data obtained from 76 R&D work groups in ten organizations support the five hypotheses. Generally, there is an interaction between the steps in the control process and each of the other independent variables on the perceived importance of expenditure budget control for management control of the R&D work group. Résumé. Le présent article s'inscrit dans le prolongement des travaux de recherche empiriques précédents visant à expliquer l'utilisation perçue du contrôle budgétaire ou son importance - sinon les deux - dans le contexte et la structure d'organisation des entreprises manufacturières. Dans cet article, l'importance du contrôle du budget des investissements perçue par les groupes de travail en recherche et développement (R & D) s'explique concrètement par le context organisationnel (la taille du groupe de travail en R & D, la source de financement des activités de R & D et l'importance des crédits affectés à ces activités) et par le système de contrôle de gestion (étapes du processus de contrôle, contrôle social). Les données obtenues auprès de 76 groupes de travail en R & D dans dix organisations viennent confirmer les cinq hypothèses des auteurs. L'on relève, de façon générale, une interaction entre, d'une part, les étapes du processus de contrôle et chacune des autres variables indépendantes et, d'autre part, l'importance perçue du contrôle du budget des investissements aux fins du contrôle de gestion du groupe de travail en R & D.     

Black immigrants in the U.S. labor market: An earnings analysis

This article investigates the existence and sources of earnings differentials between black Americans and black immigrants, and between black and nonblack immigrants. Employing the Public Use Sample of the 1980 census, the gross earnings differentials between black immigrants and black Americans are estimated to be 8.7 percent in favor of Americans (i.e., Americans earn 8.7 percent more than immigrants). About 2 percentage points and 6.7 percentage points of the gross differential are, respectively, due to differences in average characteristics and in returns to the characteristics. The gross differential between black and nonblack immigrants is 22.1 percent in favor of nonblack, of which 13.8 percentage points are due to differences in average characteristics and 8.3 are due to differences in returns to characteristics.     

An empirical analysis of the growth of it enterprises in China

The paper makes an empirical analysis to the main factors effecting IT corporate growth-human resource and R＆D. By using data of China＇s listed IT companies, we focus on the relationship among corporate value （net return of equity, ROE） or development of corporate value （Tobin＇s Q） and manager＇s salary, R＆D fee, R＆D employee, etc. The conclusion shows that development of corporate value （Tobin＇s Q） has positive correlativity with the plurality of board chairman and general manager, independent directors＇ proportion, R＆D fee, and R＆D employees while it is non-obvious positive with salary of superior managers, holding stocks of general manager, capital investment, and negative with corporate scale. The conclusion is accordant with the development status of Chinese IT corporation.     

近期我国货物出口增长乏力的实证分析

本文通过对近期我国货物出口增长乏力现象进行实证分析。从理论和实践两方面阐述了产生这一现象的主要成因，并就此提出当前我国应采取的相应对策。     

Unravelling causation: An empirical analysis of contingent protection in Australia

Conclusion The processes which national AD/CVD regulatory authorities must follow to disentangle the interrelationship betweendiminished domestic industrial performance and the extent which it has beencaused by unfairly traded imports are unclear. The want of a clear theoretical and administrative framework has contributed to a situation whereby, according to Pangratis and Vermulst (1994), the: inadequate guidance provided by the Code(s) combined with the lack of consensus on the economic analyses concerning basic injury-related concepts has resulted in a multitude of national rules and practices concerning the injury-side of the anti-dumping (and countervailing) instrument(s) (p.27).     

An empirical study of regression analysis as an analytical procedure*

Abstract. A newly issued AICPA auditing standard focuses attention on analytical procedures. Regression analysis has been shown to be a useful audit tool and is used to a limited extent in practice. This study compares a univariate regression-based decision rule with that of exponential smoothing. The effect on the regression-based decision method when additional input information is included to develop a multivariate model is also evaluated. Comparisons are accomplished by seeding various error patterns into the audit period data and evaluating the results of the various models. The results indicate that the regression-based decision model was at least as efficient and effective as the exponential smoothing-based model. Additional input information into the univariate regression model to develop a multivariate model did improve auditor decisions for some types of accounts but did not significantly affect the number of incorrect rejections and/or acceptances for other types. The multivariate model did improve the achieved precision of the univariate model but still did not reach desired levels. Résumé. Dans un Auditing Standards Procedures qu'il publiait récemment, l'AICPA se penche sur les procédés analytiques. L'analyse de régression s'est révélée un instrument de vérification utile et son emploi dans la pratique est modéré, Les auteurs comparent une règle de décision fondée sur une régression comportant une seule variable aléatoire avec celle du lissage exponentiel. L'incidence d'un supplément d'information à l'entrée sur la méthode de décision fondée sur la régression permet de mettre au point un modèle à plusieurs variables aléatoires, que les auteurs évaluent également. Les comparaisons sont réalisées en introduisant divers scénarios d'erreur dans les données de la période soumise à la vérification. Les résultats de l'étude indiquent que le modèle de décision fondé sur la régression est au moins aussi efficient et efficace que le modèle fondé sur le lissage exponentiel. L'introduction d'un supplément d'information dans le modèle de régression à une seule variable aléatoire de manière à créer un modèle à plusieurs variables aléatoires a de fait amélioré les décisions du vérificateur pour certains types de comptes, mais n'a pas eu d'incidence significative sur le nombre d'erreurs de première et de seconde espèces pour d'autres types de comptes. La performance du modèle à plusieurs variables aléatoires est de fait supérieure à celle du modèle à une seule variable aléatoire, sans toutefois permettre d'obtenir les niveaux de précision souhaités.     

Forward rate,spot rate and risk premium: An empirical analysis

Zusammenfassung Terminkurs, Kassakurs und Risikopr?mie. -In diesem Aufsatz wird ein Verfahren entwickelt, um die Risikopr?mie zu messen, von der angenommen wird, da? sie in direkter Beziehung zum Swapsatz steht, also der Differenz zwischen Kassa-und Terminkurs. Die Erfahrung zeigt, da? die Risikopr?mie im Laufe der Zeit schwankt, weil sich der Swapsatz und/oder die Sch?tzkoeffizienten ver?ndern. Wenn das Modell die Risikopr?mie einbezieht, sagt es die Wechselkurse besser voraus, als wenn es allein die Terminkurse enth?lt. Die Testergebnisse zeigen, da? die allgemeine Markteffizienz-Hypothese (das Risikopr?mien-Modell) der einfachen Markteffizienz-Hypothese überlegen ist, wenn es darum geht, die künftigen Kassakurse vorauszusch?tzen. Au?erdem stellt sich heraus, da? die “andom walk”pothese nicht besser ist als das Risikopr?mienmodell.

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Résumé Cours à terme, cours au comptant et prime de risque. -Cet article développe une méthode de mesurer la prime de risque sous la supposition qu’il y a une relation directe entre cette prime et la prime à terme, c’est-à-dire la différence entre cours à terme et cours au comptant. L’évidence montre que la prime de risque varie sur temps parce que la prime à terme et/ou des coefficients estimés changent. L’inclusion de la prime de risque en cas d’un pronostic des taux de change surpasse le modèle si seul le cours à terme est utilisé. Les résultats du test démontrent que l’hypothèse générale d’efficience de marché (modèle de la prime de risque) est supérieure à l’hypothèse simple d’efficience de marché si l’on fait un pronostic des taux au comptant. De plus, l’hypothèse de ?random walk? ne produit pas des meilleurs résultats que le modèle de prime de risque.

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Resumen Tasa a término, tasa spot y sobretasa por riesgo. -En este trabajo se desarrolla un esquema para medir la sobretasa por riesgo, la cual se supone estar relacionada directamente con la tasa a término. La evidencia empirica demuestra que la sobretasa por riesgo varía en el tiempo debido a una sobretasa a término variable, a coeficientes estimados no constantes o a ambos factores. La inclusión de la sobretasa por riesgo en la predicción de tasas de cambio supera los resultados obtenidos con un modelo de tasas de cambio a término solamente. Los resultados del test indican que la hipótesis general de mercados eficientes (modelo con sobratasa por riesgo) es superior a la hipótesis simple de mercados eficientes en la predicción de tasas spot futuras. Además, la hipótesis del ?random walk? no résulta mejor que la de la sobretasa por riesgo.

     

The role of R&D in high-technology trade: An empirical analysis

Conclusion This paper attempts to establish the relationship between the level of R&D activities of a country and its trade performance in high-technology products. Empirical evidence based on the limited data used in the paper shows that this relationship appears to be quite significant. An analysis of the implications of this relationship reveals that the low level of R&D in Canada is due to, among other factors, the prevalence of foreign ownership of Canadian manufacturing industries, and the resource-based characteristic of the Canadian economy. Given the nature of foreign-owned firms, the paper suggests that countries should not rely on them as a crucial instrument in the creation of an indigenous capacity to produce high-technology products which are competitive at the world level. Instead, domestic policies aimed at the development and nurturing of the countries' own scientific and technological skills are required. The views expressed in this paper are those of the author. They should not be construed as the official views of the Ministry of State for Science and Technology of the Government of Canada. Research assistance provided by Tom Wudwud and Penny Robinson is well appreciated. The author, however, is responsible for any omissions or errors that remain.