Managing technological development: Lessons from the newly industrializing countries

This survey looks at the technological development of the newly industrializing countries to draw some important lessons for firms and governments in other developing countries. First, inventing products and processes is not at the center of the technological development needed for successful industrialization. It is at the fringe. What is at the center is acquiring the capabilities needed for efficient production and investment. Second, some countries have overemphasized the drive for technological self-sufficiency and paid a high price in poor productivity. What makes the best economic sense is to combine foreign and local technological elements—and to do this in a way that progressively develops local capabilities in areas where they can be more efficient. Third, the acquisition of technological capability does not come merely from experience, though experience is important. It comes from conscious efforts — to monitor what is being done, to try new things, to keep track of developments throughout the world, to accumulate added skills, and to increase the ability to respond to new pressures and opportunities. Fourth, the economic environment, through its influence on the technological efforts of firms, is very important in determining the productivity of a country's resources. The environment is shaped by the incentives and penalties that affect the way firms use and adapt technology. It is also shaped by the activities of specialized technological agents that can provide technological information, means, and understanding to firms.     

Bargaining with multinationals

This paper analyses the process of bargaining between multinational companies and host governments in developing countries. It describes the sources of bargaining power for the government and the problems of coordinated action on the part of several developing countries on the basis of collective self-reliance.     

研发密集度与跨国公司组织模式选择——基于金融市场摩擦的分析

本文探讨了在东道国金融市场不完善的条件下,行业研发密集度与跨国公司组织模式之间的关系。本文的基本逻辑是,因为研发密集度高的行业对东道国金融市场的依赖程度更高,而跨国公司可以通过选择组织模式和投资区位以消除金融市场不完全的影响,因此,不同的行业跨国公司的组织模式和区位选择会随行业研发密集度的不同而不同。本文分析结果表明:首先,在研发密集度较高的行业,更多的企业会选择在发达地区进行FDI,而在落后地区进行外包;其次,随着落后地区金融市场效率的提高,所有行业在发达和落后地区的外包都会变得更加普遍;最后,本文还进一步分析了行业生产率分布对企业组织模式的影响。本文的结论为现有经验研究结果提供了理论支持。     

The reverse home-market effect in exports: a cross-country study of the extensive margin of exports

Do small countries have higher proportions of firms that export in manufacturing industries than large ones? As small countries are well known to be more open than large ones, it may appear uncontroversial to claim that the answer is yes. Nevertheless, this contradicts predictions from many standard trade models positing a home-market effect in the number of manufacturing firms and exporters. In this article, I present a theoretical model where a home-market effect in the number of firms coexists with a reverse home-market effect in the number of exporters: as in standard models, the number of firms in a small country relative to that in a large one is lower than relative income, but, in contrast to standard models, the relative number of exporters is larger. As a consequence, small countries will have higher proportions firms that export in manufacturing industries—a claim I support empirically.     

Global value chains and servicification of manufacturing: Evidence from firm-level data

Recent literature on global value chains (GVCs) has mainly focused on manufacturing firms’ global sourcing and investment strategies. Our question here is that, if the manufacturing firms established foreign manufacturing plants and engaged in sourcing inputs and exporting outputs, have they changed their domestic employment composition toward service workers? This is what we call servicification of manufacturing firms in this paper. To answer this question, using Korean firm-establishments matched data, we examine changes in the shares of service employment in manufacturing firms from 2008 to 2013, when those firms are participating in both import-and-export and foreign direct investment (i.e., GVC firms). We find that the two-way trading firms that own manufacturing plants in foreign countries—and particularly in nearby foreign countries—have changed their domestic employment structures to increase the number of service workers they employ. Moreover, the relatively greater increase in the share of R&D workers than of wholesale-and-retail workers serves as further evidence of the servicification of domestic manufacturing. Overall, our findings suggest that Korean firms who engage in GVCs through both trade and foreign direct investment have reorganized domestic labor structure to be able to provide high value-added headquarter services for their manufacturing plants that are closely located in foreign countries.     

Country of origin,branding strategy and internationalisation: the case of Chinese piano companies

This paper studies the internationalisation of Chinese piano firms from a branding perspective. The purpose of the paper is twofold. First, it examines the interplay between the country of origin (COO) effect and international branding, and how COO affects the choice of branding strategies in international markets. Second, it explores the possible link between international branding decisions and international expansion of the firm. A model is introduced that illustrates the relationships between COO, branding options and internationalisation. Corresponding to its progress in internationalisation, a firm's branding development in international markets may follow certain stages. As the firm moves to advanced stages, it increases its international brand equity; the impact from negative COO will decrease and eventually become irrelevant. The literature on internationalisation is largely based on the experience of MNEs from Western developed countries. Multinational firms from developing countries such as China possess some unique characteristics that make it very difficult to apply Western theories to them. The emergence of MNEs from developing countries calls for the development of new theories.     

The Welfare Goal of Antitrust Laws in Asia: for whom should the law toil?

It is argued that an antitrust law should include a clear, long‐term, economy‐wide welfare goal. For any country—especially for developing countries—legislating to promote the competitive process, it is essential to include in the law a clearly‐specified objects clause to guide administrative and judicial conduct. Without a clear objects clause, firms, competition agencies, and the courts will not have any guidance as to the government's overarching goal when it passed the legislation. This uncertainty will lead to inefficient regulation; will run the risk of special interests being accommodated; and will lead to the likelihood of false positives and negatives being made by regulators and the courts. We review the antitrust laws in some Asian economies and find that most of them have not incorporated a clear objects clause in their statutes.     

Can China's Diplomatic Partnership Strategy Benefit Outward Foreign Direct Investment?

In the context of global integration, whether a diplomatic partnership strategy can promote outward foreign direct investment (OFDI) and how it works are very important issues for China. Based on a dataset featuring China's partnerships collected from the Ministry of Foreign Affairs website, we establish an empirical framework to assess the role of China's diplomatic strategy in its OFDI arising from partnerships since 1993. The results show that the establishment or upgrade of partnerships has had a positive effect on Chinese firms’ decisions on OFDI for at least the short term, especially for firms with higher demand for policy guarantees from the government, such as non‐central firms and non‐Beijing firms. The results also show that the increase in OFDI is concentrated in host countries with higher political risks, such as developing countries, neighboring countries, and Belt and Road countries, which is consistent with China's diplomatic focus. Our research proves that China's diplomatic strategy can assist firms to invest abroad.     

Evaluating participation in African monetary unions: A statistical analysis of the CFA Zones

Thirteen African nations are engaged in two monetary unions with France, often referred to as the CFA Zone. Despite the acknowledged benefits of Zone membership — a convertible currency, pooled resources and greater monetary and fiscal “discipline” — several observers have questioned whether particular aspects of the Zone such as the lack of autonomy of the two Central Banks and the surrender of the exchange rate as a policy instrument have impeded its members' growth. This paper addresses that question by testing whether CFA Zone countries had different GNP growth rates from selected “comparator” countries during 1960–1982. Results show that CFA countries grew significantly faster than comparator Sub-Saharan African countries but usually slower, and often significantly so, than the whole sample of developing countries. When the comparison is made by subperiod (before and after 1973), CFA countries' performance vis-à-vis that of their comparators improved during the 1973–1982 period, casting further doubt on the claim that the monetary union is not functioning adequately.     

Firm Productivity,Innovation, and Financial Development

How do firm‐specific actions—in particular, innovation—affect firm productivity? What is the role of the financial sector in facilitating higher productivity? Using a rich firm‐level data set, we find that innovation is crucial for firm performance as it directly and measurably increases productivity. The impact of innovation on productivity is larger in less‐developed countries. Evidence of financial sector development influencing the innovation‐productivity link is weak, but the effect is difficult to identify due to correlation between indicators of a country's financial and nonfinancial development. Furthermore, we find evidence that the innovation effect on productivity is more significant for high‐tech firms than for low‐tech firms.     

Do R&D tax incentives work? Firm-level evidence from China

Tax incentives have been used worldwide to encourage firm R&D, but there is little evidence on their effectiveness as a policy tool in developing countries. We use a panel dataset of Chinese listed companies covering 2007 to 2013 to assess the effects of tax incentives on firm R&D expenditures and analyze how institutional conditions shape these effects. Our results show that tax incentives motivate R&D expenditures for our sample firms. A 10% reduction in R&D user costs leads firms to increase R&D expenditures by 3.97% in the short run. We also find considerable effect heterogeneity: Tax incentives significantly stimulate R&D in private firms but have little influence on state-owned enterprises' R&D expenditures. Moreover, the effects of tax incentives are more pronounced for private firms without political connections. Hence, reducing political intervention complements tax incentives' capacity to foster firm R&D in developing countries.     

WHO DEVELOPS INNOVATIONS IN MEDICINE FOR THE POOR? TRENDS IN PATENT APPLICATIONS RELATED TO MEDICINES FOR HIV/AIDS,TUBERCULOSIS, MALARIA,AND NEGLECTED DISEASES

This paper analyzes patent data of medicines and vaccines for diseases spreading in low‐income countries. The data were retrieved from a database of the Japan Patent Office. Who invents medicines for the poor of the world? This is the main question that the paper addresses. Results indicate that not only public institutions but also private firms have played an important role in developing innovations for fighting both global diseases such as HIV/AIDS and tuberculosis, and so‐called neglected diseases including malaria, which seem to spread almost exclusively in low‐income countries. Moreover, the basic mechanism of innovation is similar between the development of medicines for HIV/AIDS and those for neglected diseases. Finally, among firms, infectious disease fighting innovations are quite diverse. R&D stock and economies of scope are used to explain frequent patent applications by a high‐performing pharmaceutical firm.     

权力平等分配是否有利于家族代理效率提升——家族控制、内部股权集中度与代理效率研究

家族企业的两类代理问题是家族企业区别于其他类型企业的特色之一。文章以深市上市家族企业为研究对象,对家族控制权与代理效率之间的关系,以及股权在家族成员之间的配置中的调节作用进行了实证研究。结果表明,控制性家族对企业控制权的增强有助于提高代理效率。内部股权集中度对家族控制权与代理效率之间的关系起到了显著正向调节作用,这表明家族控制权在内部权力分配集中的阶段对代理效率的贡献更强;另一方面也说明家族内部权力分配的不平等性并不一定会损害家族企业的治理效率,对于家族控制权更高的企业,适度的权力集中分配会对家族企业的发展提供有效的支持。     

从经济发展看日本战后的环境政策演变

战后,日本曾创造了经济的奇迹,又在短时期内摆脱了“公害大国”的形象,并长期使环境保护和经济发展“双赢”。这其中。环境政策和制度的改革产生了广泛和本质的影响。日本作为一个经济发达的国家在治理环境中面临新的问题时。做到了适应经济发展而不断采取新的环境战略,对发展中国家有着重要的启示作用。     

International subcontracting: Improved prospects in manufactured exports for small and very poor LDC's

In recent years one of the most dynamic manufactured export sectors in developing countries has been the assembly and processing operations subcontracted from multinational firms. The paper analyzes this relatively new phenomenon as a possible opportunity for the small and very poor developing countries to increase their manufactured exports. After making a case that domestic size and level of economic development are not preconditions of success in exporting manufactures, it is further argued that small and very poor countries may even have a comparative advantage in international subcontracting. Not only does international subcontracting avoid some of the traditional obstacles which these countries experience in exporting manufactures, but the gains from this activity seem to be particularly beneficial to them.     

Effects of Currency Devaluations on the Economic Growth in Developing Countries: The Role of Foreign Currency-Denominated Debt

Assuming that a developing country has to denominate its debts in the currencies of the principal creditor countries, how is the country??s economic performance affected when currency devaluation occurs? The aim of this paper is to prove that devaluation can be contractionary and that its occurrence can be the result of a self-fulfilling prophecy. Assuming credit constraints on firms?? borrowing capacity and nominal price rigidities, a sharp change in the value of the domestic currency leads to an increase in the real costs of foreign currency-denominated debt. Hence, firms?? profits as well as their borrowing capacity decrease, provoking a drop in future investment and output. Moreover, expectations about future output can alone trigger a currency devaluation, confirming the initial expectations in a self-fulfilling way. Finally, it is discussed in an empirical analysis the impact of devaluation on the economic growth in a sample of five countries.     

中国投资是东道国内部冲突的抑制剂还是催化剂

随着国家内部冲突取代了国家间战争成为集体政治暴力的主要形式,对内部冲突中国际维度的关注促使人们思考以国际投资为代表的全球化与跨国企业的影响。从理论上看,国际投资可能会引发冲突,也可能会降低冲突发生的可能性。中国虽然是全球第二大对外直接投资(OFDI)国,但研究中国OFDI对东道国内部冲突影响的实证文献几乎没有。作者基于2004—2016年中国对115个发展中国家的直接投资数据,实证研究了中国OFDI对东道国爆发内部冲突的影响及其作用机制。结果显示,中国对发展中国家的OFDI显著降低了当地爆发内部冲突的概率,而全球第一大OFDI国美国对发展中国家的OFDI对当地爆发内部冲突的抑制作用则不明显。在影响机制上,中国对发展中国家的OFDI显著降低了当地的失业率,有助于增加民众参与武装冲突的机会成本,降低叛乱行为的合法性与成功率,进而减少东道国内部冲突的爆发。以上发现体现出中国投资对东道国内部稳定性的贡献。但这并不意味着可以忽视中国企业“走出去”过程中出现的一些问题。     

Competition,asset build up and export incentives: The role of imperfect credit market

This paper studies the export incentive of credit rationed, competitive and homogenous firms through asset build up highlighting the generic trade-off between competition and asset value in an imperfect credit market where poor and rich firms have different levels of assets. It is a contribution to the issues related to finance and trade in developing countries as raised first in Jones and Marjit (2001, AER). Our theoretical and empirical results indicate that although firms in more competitive industries are likely to be exporters, history of greater local competition before the entry of firms into export market i.e. under autarky, hurts export incentive by limiting cash flows and asset build up. In our set up more intense local competition hence lower price is an advantage to access global markets, but associated low profits and hence lower assets acts a detriment.     

Foreign trademarks in developing countries

Foreign trademarks are used in some cases to cover imported goods and generally products made in the host countries by foreign manufacturing subsidiaries and licensees. This industrial property right is a major source of market power for those subsidiaries making consumer goods. Domestic enterprises making similar goods must either accept a reduced share of the market or must enter into trademark license agreements. But even in those cases, although licensees of foreign-owned trademarks receive a current profit out of the licence, they cannot enjoy the result of the goodwill development.Although the advertising expenditures are borne by the consumers of the developing countries, the accrual in goodwill is for the benefit of non-resident owners of this intangible asset. These private benefits — mostly appropriated by the foreign trademark owner — can be considered as net social costs to the recipient country.     

Measuring third world security expenditure: A research note

There is growing evidence that important amounts of security expenditure may not enter the budgets or the national accounts of many developing countries. This article outlines five of the most common mechanisms used by governments to obscure their security-related outlays: double bookkeeping, use of extra-budgetary accounts, highly aggregated budget categories, military assistance and governmental manipulation of foreign exchange. Delineating those countries which have used these — or other — mechanisms is difficult but some examples do exist and are used here to illustrate how countries have hidden security-related expenditure from public scrutiny.