Offshoring of Tasks: Taylorism Versus Toyotism

This paper contributes to the recent debate on trade in tasks, drawing on insights from the theory of the firm as well as recent developments in trade theory. Recent empirical literature suggests that between 20 and 30 per cent of all jobs in key OECD countries could be digitised and offshored. This study offers a cluster analysis which documents that offshorable and non‐offshorable tasks tend to be performed together across occupations. Therefore, when assessing the offshorability of a job, one needs to take into account all tasks being performed by the worker and the gains from fragmenting jobs versus the benefits of multi‐tasked workers (taylorism versus toyotism). Furthermore, one needs to distinguish between fragmentation of production and fragmentation of jobs.     

Patterns of foreign direct investment in poor countries

This paper introduces endogenous adoption costs for productive assets in a Ramsey-type growth model with international capital flows. There are two classes of productive assets: owner-specific and location-specific. Adoption costs are an increasing function of the level of technology embodied in the investor's owner-specific assets and a declining function of the host country's location-specific assets. In this setting, the observed pattern of international capital flows is consistent with diminishing returns to capital. Further, our model predicts that the sectoral allocation of foreign direct investment is similar in rich and poor countries.     

Does mutual recognition of qualifications stimulate services trade? The case of the European Union

This article analyses the services trade impact of recognition of professional qualifications using a unique database compiled by the European Commission. It observes that there is large variation in the number of regulated professions across the EU. The number of recognitions is small relative to total employment in regulated professions. Nevertheless, a robust positive relationship between services trade and recognition of qualifications is found. Recognition stimulates two-way trade between the source and the host country, suggesting that arms-length exports as well as cross-border outsourcing take place. Recognitions in health and education professions are most strongly related to services trade.     

Technology adoption and multiple growth paths: An intertemporal general equilibrium analysis of the catch-up process in Thailand

As opposed to the Veblen—Gerschenkron catching-up hypothesis, the recent literature allows for technological divergence in backward economies. We extend a nonlinear adoption function to include openness and interact with capital accumulation in an intertemporal general equilibrium framework. The threshold gap necessary to catch up is endogenously determined by the economy's absorptive capacity. The model generates multiple transition growth paths depending on whether technological catch-up is achieved, and due to the endogeneity of the threshold gap, endogenous switching between development paths might be observed. Our simulations of the Thailand experience show how lack of investment in education and protectionism generate loss of transition growth and technological divergence. The paper highlights the role of absorptive capacity, and especially its importance for economies on the balance between low growth and high growth paths. JEL no. O41, O53     

Gatekeepers to consumer markets: the role of retailers in international trade

This study explores how recent developments in the retail sector affect trade in consumer goods. It focuses on three developments in the retail sector: (i) internationalization; (ii) market structure; and (iii) the growing market share of retailers' private labels. Using gravity model estimation techniques it is found that the foreign operations of a retailer are positively related to imports from the host to the home country of the retailer. Imports are negatively related to ownership concentration, while the market share of private labels is negatively related to imports of food and positively related to imports of non-food consumer goods. For both product categories private labels shift sourcing towards poor countries. The trade response to trade liberalization is higher both at the extensive and intensive margin in countries with lower retail concentration.     

Cross-cultural analysis of the global mindset and the internationalization behavior of small firms

This research analyzes the influence of a global mindset on the internationalization behavior of Norwegian and Portuguese small firms. It specifically sets out to assess the role of global orientation of the entrepreneur and firm perspectives on the global market. Based on a sample of 354 small firms, we used structural equation modeling to conduct our analysis. The results show the differing importance of a range of factors in explaining global mindset in different contexts. The global mindset of Norwegian entrepreneurs conditions their behavior and international experience, while for Portuguese entrepreneurs it affects the cognitive domain and their technical expertise. Global mindset and global orientation have more relevant effects on the internationalization behavior of Norwegian firms than that of Portuguese firms.     

Productivity Growth and Organizational Learning

A new specification of the sources of productivity growth is offered. Motivated by the lack of innovation and technology adoption in backward economies, a third channel of growth related to organizational structure, work ethics, and discipline in the production process (for simplicity called organizational learning) is suggested. The suggested specification generates new insights about the dominating source of growth during the development process: organizational learning in backward economies, technology adoption in middle‐income economies, and innovation in developed economies. This adds to the current understanding of development as a transition from technology adoption to innovation. Numerical simulations of the Thai catch‐up process since 1965 illustrate the importance of organizational learning. A counterfactual experiment shows how investments in secondary education contribute to the move from organizational learning to adoption of more advanced foreign technology.     

Comparative Advantage and Economies of Scale: When Does Ricardo Dominate Smith?

This paper develops a two-country, two-sector (X and Y) model of international trade. One country has comparative advantage in the increasing returns Y-sector. The direction of trade depends on the relative size of the countries and the relative strength of economies of scale and comparative advantage. An equilibrium where the smallest country exports the Y-good and the largest country loses from trade is possible. A dynamic equilibrium where the X-sector is subject to learning by doing locks in the initial pattern of specialization. Yet, there may be few welfare gains from protecting the X-sector in the small country.     

Regulatory barriers to trade in services: A new database and composite indices

This paper presents new data on services trade regulation for 46 countries in 22 services sectors over 6 years (2014–2019). The data consist of qualitative information which is scored and weighted to produce composite indices. They cover market access and national treatment restrictions with respect to all GATS modes of supply, but also behind the border domestic regulation such as licensing, non-transparent regulatory procedures and competition policy. The database is updated annually. The trade restrictiveness indices (STRIs) are significantly correlated with services trade flows, but also with the performance of the sectors subject to the restrictions including logistics performance indicators, interest spreads, density of ATMs and secure servers, broadband penetration and outcomes such as legal rights and the time to resolve insolvency.     

Multinational supermarket chains in developing countries: does local agriculture benefit?

There is no consensus in the empirical literature on how entry of multinational supermarket chains affects farmers in developing countries. Econometric analyses struggle with causality issues and are unclear about the channel of effects. We quantify the dynamic effects of supermarket expansion on agriculture within a structural framework that clarifies the adjustment mechanisms involved. The model specification allows for endogenous interaction between agricultural productivity and supermarkets' choice of suppliers. Based on numerical simulations, two results emerge. First, we offer a possible interpretation of the conflicting evidence in the empirical literature. Whether farmers benefit from supermarkets or get stuck in a low productivity trap depends on the extent of local constraints related to production capacity and market access. Second, supply chain development initiated by supermarkets can help farmers escape the low productivity trap. While supermarkets face a short-run cost to supplier upgrading, they gradually gain from more productive local suppliers.