nep-int New Economics Papers
on International Trade
Issue of 2011‒03‒12
24 papers chosen by
Alessia A. Amighini
University Amedeo Avogadro

  1. The role of Preferential Trade Agreements (PTAs) in facilitating global production networks By Hayakawa, Kazunobu; Yamashita, Nobuaki
  2. Managers' Mobility, Trade Status and Wages By Giordano Mion; Luca David Opromolla
  3. THE Effects of Multilateral Trade Liberalization on the Extensive and the Intensive Margins of Trade By Christodoulopoulou, Styliani
  4. Trade agreements between developing countries: a case study of Pakistan - Sri Lanka free trade agreement By Ahmed, Saira; Ahmed, Vaqar; Sohail, Safdar
  5. Offshoring and Corruption: Does Corruption Matter By Gustavsson, Patrik
  6. Examining the Potential for Cross-South Pacific Trade: ASEAN and Latin America By Mia Mikic; Elias Jakobson
  7. The choice of transport technology in the presence of exports and FDI By José Pedro Pontes; Armando J. Garcia Pires
  8. Trade integration as a way forward for the Arab world : a regional agenda By Chauffour, Jean-Pierre
  9. Innovation, antidumping, and retaliation By Kaz Miyagiwa; Huasheng Song; Hylke Vandenbussche
  10. Business Conditions and Default Risks across Countries By Pflüger, Michael P.; Russek, Stephan
  11. Ex ante bargaining and ex post enforcement in trade credit supply: theory and evidence from China By Yanagawa, Noriyuki; Watanabe, Mariko
  12. Exporting versus foreign direct investment: Learning through propinquity By Anthony Creane; Kaz Miyagiwa
  13. Going multinational and ownership:evidence from French matched firms. By Alexandre Gazaniol; Frédéric Peltrault
  14. Net Campaign Contributions, Agricultural Interests, and Votes on Liberalizing Trade with China By John Gilbert; Reza Oladi
  15. How does country risk matter for foreign direct investment? By Hayakawa, Kazunobu; Kimura, Fukunari; Lee, Hyun-Hoon
  16. Globalization and development in sub-Saharan Africa By Jomo Kwame Sundaram; Oliver Schwank; Rudiger von Arnim
  17. Labour Quality and Inward FDI: A Firm-level Empirical Study in China By Faqin Lin
  18. Rewiring World Trade. Part II: A Weighted Network Analysis By Tiziano Squartini; Giorgio Fagiolo; Diego Garlaschelli
  19. Rewiring World Trade. Part I: A Binary Network Analysis By Tiziano Squartini; Giorgio Fagiolo; Diego Garlaschelli
  20. Trade in bilateral oligopoly with endogenous market formation By Alex Dickson; Roger Hartley
  21. Labor Taxation and FDI decisions in the European Union By Hansson, Åsa; Olofsdotter, Karin
  22. Who Captures Value in Global Supply Chains? Case Nokia N95 Smartphone By Jyrki Ali-Yrkkö; Petri Rouvinen; Timo Seppälä; Pekka Ylä-Anttila
  23. Market Integration and Technological Leadership in Europe. By Belderbos, Rene; Sleuwaegen, Leo; Veugelers, Reinhilde; Boiardi, Priscilla; Leten, Bart; Stroobants, Jesse
  24. Choosing between foreign investment and subcontracting: Strategies of Italian firms in Romania By Tattara, Giuseppe

  1. By: Hayakawa, Kazunobu; Yamashita, Nobuaki
    Abstract: This paper examines the effects of preferential trade agreements (PTAs) in facilitating international trade flows connecting production networks. We consider over 250 PTAs with trade flows distinguished into parts and components and final goods for the period 1979-2008. The gravity equation estimates suggest that the concurrent year effects of PTA formation on trade in parts and components are unseen, whereas PTAs have positive and pervasive effects on both types of trade flows 6 and 9 years after the PTA formation.
    Keywords: International trade, International agreements, Preferential trade agreements, Regional trade agreements, Expansion strategy of multinational enterprise, Gravity equation
    JEL: F14 F15 F53
    Date: 2011–02
  2. By: Giordano Mion; Luca David Opromolla
    Abstract: This paper investigates whether the arrival of managers with export experience, i.e. experience acquired through participation in the export activity of previous employers, is related to firms' international trade status and to what extent this relationship is of a causal nature. We construct a worker-firm matched panel dataset which enables us to track managers across different firms over time and observe firms' trading stance as well as a large set of workers' and firms' characteristics. Contrary to blue and white collars, we find that managers are paid a sizeable premium for export experience which has both a level and a trend component. Conditioning for the firm past trade status, we find that a one standard deviation increase in the firm's share of managers' with export experience corresponds to about 35% more chances of starting to export. The impact is stronger for larger firms and is roughly of the same order of magnitude of the firm productivity effect. On the contrary, export experience acquired by managers from previous employers positively affects the capacity to keep exporting in small firms only. To give a causality flavor to our findings, we use in a final step an IV strategy that mimics a random matching between managers with export experience and firms. IV estimations indicate that export experience matters even more for entry while it has no effect on exit.
    Keywords: Managers, worker mobility, trade status, wage premia, displacement, export experience
    JEL: F10 L25 J31 J60 M50
    Date: 2011–02
  3. By: Christodoulopoulou, Styliani
    Abstract: This paper examines empirically the effects of the WTO and RTA membership on the extensive and the intensive margins of trade. Using disaggregated data for a sample of 177 countries, the main findings of this paper are that WTO membership tends to increase the number of products traded between members (extensive margin), and tends to increase the average sales per product line (intensive margin). I further detect substantial heterogeneity when I examine these effects for various subsamples of the data (e.g. by the degree of product differentiation or the level of development of a country). This demonstrates that many of the aggregate effects estimated in the existing literature (e.g. Rose 2004) hide a substantial amount of variation in the WTO's effect on trade. Finally, accounting for multilateral resistance as in Anderson and van Wincoop (2003), I find that the WTO effect becomes insignificant, while the RTA membership boosts trade between members and between members and outsiders at least in the aggregate level.
    Keywords: WTO; Regional Trade Agreements; Extensive margin; Intensive Margin; Poisson Regression
    JEL: F15 F13
    Date: 2010–07–22
  4. By: Ahmed, Saira; Ahmed, Vaqar; Sohail, Safdar
    Abstract: This paper assesses the pre and post Free Trade Agreement (FTA) pattern in bilateral trade between Pakistan and Sri Lanka. Besides the usual direction of trade analysis we also use general and partial equilibrium approaches in order to evaluate the true potential of this FTA. Our results reveal an increase in welfare and efficiency for both countries. However export basket has not changed much since pre-FTA period. This calls for creating awareness about the FTA and putting in place a consultative mechanism with trade community that can identify the manner in which both countries can accrue maximum benefit from the free movement of tradable goods. Similar suggestions follow in our perception survey carried out for this study.
    Keywords: Free Trade Agreement; General Equilibrium
    JEL: F15 C68 F17
    Date: 2010–11
  5. By: Gustavsson, Patrik (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: Corruption is often portrayed as a barrier to trade and investment capable of altering international investment patterns. Here, we analyze how firms’ choice of country and the volume of offshored material inputs are affected by corruption in target economies. Taking stance from the gravity model of trade, the analysis suggests that corruption is a deterrent for offshoring. Firms avoid corrupt countries and, given that destination country has been chosen it reduces the volume of offshored inputs. The negative impact of corruption is largest in poor countries, and internationalized firms trading with many countries use their flexibility to avoid corrupt countries. Given the importance of these firms as international investors, this is yet another reason for why fighting corruption is important.
    Keywords: Corruption; Offshoring; Gravity; Firm level data
    JEL: F23 L24
    Date: 2010–12–01
  6. By: Mia Mikic; Elias Jakobson (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP))
    Abstract: This paper discusses the potential for cross-South Pacific trade between selected Southeast Asian and Latin American economies. The objective of this discussion is to identify obstales for more intensive trade between the observed countries. Firstly, the paper reviews trends in trade flows and trade patterns between the selected economies, and by using several trade performance indicators it finds the level of trade still relatively low. It then discusses the possible reasons for this state of affairs. It focuses on a review of tariffs, trading costs and other possible reasons for this state of affairs. It focuses on a review of tariffs, trading costs and other possible impediments to trade. Paper also considers how trade relations among these countries could be improved. It provides a background into the features of the trade agreements that have been signed among the countries belonging to these two sub-regions in an attempt to identify if any of them could be used as a "driver" for future integration.
    Keywords: ASEAN, Latin America, trade entropy, complementarity, trade agreements, cross-Pacific trade, noodle bowl
    JEL: F1
    Date: 2010–12
  7. By: José Pedro Pontes; Armando J. Garcia Pires
    Abstract: In a set-up with intermediate production, we analyze how a shipper's choice of transport technology, traditional versus modern, interacts with the mode of foreign expansion by an service firm, export versus foreign direct investment (FDI). In terms of the mode of foreign expansion by the service firm, we obtain that: due to trade in intermediate goods, trade and FDI can be complements; the export strategy dominates when the economies of scale at plant level are high and trade costs are low; the FDI strategy is preferable when market size is large and trade costs are intermediate. In what concerns the choice of transport technology by the shipper, we find that: the modern technology tends to be implemented in larger markets; economic integration can encourage the adoption of modern technology vis-à-vis the traditional one; the modern technology adoption is more likely for intermediate levels of transport costs. We then have that modern technology adoption usually occurs under the FDI strategy, since both emerge when trade costs are intermediate and market size is large.
    Keywords: Transport Technology, Foreign Direct Investment, Trade, Service Sector, Firm Location.
    JEL: F23 L12 R30 R40
    Date: 2011–01
  8. By: Chauffour, Jean-Pierre
    Abstract: The current political turmoil for more open and participative societies in many Arab countries coupled with the emergence of new growth poles around the world could create the conditions for a big push toward greater regional and global trade integration of the Arab world. Further integrating Arab countries among themselves and opening up the region to the rest of the world are two complementary avenues to improve market access, promote behind-the-border regulatory reforms, facilitate cooperation on regional public goods, foster the emergence of an"Arab factory"through regional supply chains and productions networks, and eventually create the conditions for more and better paid jobs for the growing Arab workforce. A more ambitious trade agenda in the context of the Pan-Arab Free Trade Area would be a good place to start. Although difficult and challenging, and requiring a good dosage of flexibility and variable geometry, such an agenda would consist of (1) completing the free movement of goods within the Pan-Arab Free Trade Area, notably through the elimination of unnecessary non-tariff barriers; (2) implementing a regional initiative to liberalize services trade, including identifying a number of pilot service sectors for early regional liberalization; and (3) strengthening the rules and discipline applicable to regional trade and other policies of common interest.
    Keywords: Free Trade,Trade Law,Emerging Markets,Trade and Regional Integration,Trade Policy
    Date: 2011–02–01
  9. By: Kaz Miyagiwa; Huasheng Song; Hylke Vandenbussche
    Abstract: We study the effect of contingency trade policy in a multi-country oligopoly model with and without R&D opportunities. We show that firms benefit from unilateral protection but initiate antidumping (AD) only against the targets domiciled in substantially smaller countries. Also, AD filings are more likely when firms face R&D opportunities. These results are consistent with recent empirical findings, namely, (1) actions are mostly between industrial and developing countries, (2) developing countries use AD to retaliate against industrial countries, and (3) AD is concentrated in R&D-intensive industries. Interestingly, intellectual property rights violations in developing countries have no connection to AD filings.
    Date: 2010–10
  10. By: Pflüger, Michael P. (University of Passau); Russek, Stephan (University of Passau)
    Abstract: The risk of default that business firms face is very significant and differs widely across countries. This paper explores the links between countries' business conditions and international trade embedment and the default risk at the country level from a theoretical point of view. Our main contribution is to set up a general equilibrium model which allows us to derive sharp predictions concerning how key factors which shape a country's business and trade environment impact on the default risk of firms which operate in these environments. The predictions are in accord with readily available data.
    Keywords: firm death, firm heterogeneity, business conditions and firm productivity, trade integration
    JEL: F12 F13 F15 L25
    Date: 2011–02
  11. By: Yanagawa, Noriyuki; Watanabe, Mariko
    Abstract: Recent empirical literature on trade credit found a negative correlation between the bargaining power of the supplier and the ratio of trade credit in a transaction. Our survey done in China along with our theoretical model shed light on the mechanism behind this correlation. Our model depict that the trade credit ratio is decreasing to bargaining power and increasing to enforcement power, sufficient cash in the hand of the buyer can expand trading volume. These were identified by structural estimation. Main findings are; an increase in economic activity can be effected by either an increase in the enforcement power of the seller or in the cash in hand of the buyer, and the two factor are substitutive of each other; the stronger the bargaining power of the seller is, the trading volume will shrink. The result implies that a policy that can improve enforcement power via a non-bargaining power factor such as an institution may increase the trade credit ratio and trading volume.
    Keywords: China, Corporate accounting, Industrial management, Trade credit, Enforcement power, Cash constraint, Bargaining, Competition in goods
    JEL: E41 G2 K0 M41 O5 O53 P31
    Date: 2011–02
  12. By: Anthony Creane; Kaz Miyagiwa
    Abstract: We examine a firm’s choice between exporting and foreign direct investment (FDI) under demand and cost uncertainty. FDI enables the foreign firm to meet shifting local demand more quickly, increasing profit. However, FDI means using local inputs, so when the foreign firm competes with the local firm, FDI correlates their costs, which proves harmful. We show that FDI is chosen when demand uncertainty is greater than cost uncertainty, and when the firms produce less similar products. When FDI is chosen, the local firm is harmed and host country welfare usually declines. These conclusions hold both in price and quantity competition.
    Date: 2010–10
  13. By: Alexandre Gazaniol (Université Paris Dauphine, LEDa UMR 225 DIAL, IRD); Frédéric Peltrault (Université Paris Dauphine, LEDa UMR 225 DIAL, IRD)
    Abstract: (english) This paper estimates the impact of initiating production abroad on firms’ home performance. The analysis covers French manufacturers over the 1996 – 2007 period, and uses propensity-score matching techniques to compare firms which start to invest abroad (“switchers”) to similar domestic firms. The main particularity of our work is to distinguish the impact of initiating production abroad by firm ownership: we separately investigate the performance effect for independent switchers, switchers that own affiliates in France, and French- and foreign-owned switchers. Our first general result is that going multinational has a positive impact on sales, value added, employment, exports and profitability at home. However, we also find evidence that this impact is not independent of ownership. First, firms at the head of business groups are more likely to go multinational, even after controlling for size, Total Factor Productivity (TFP) and industry. Second, we find that parent companies and independent firms do not benefit from improved performance when going multinational: this may reflect that these firms face higher fixed costs than do affiliates of business groups when investing abroad (lack of experience in foreign markets, managerial costs, monitoring and coordinating affiliates, developing and/or adapting support functions etc.). Affiliates of domestic French business groups significantly improve their performance when switching, whereas the performances of foreign-owned firms and affiliates of multinational French groups remain relatively stable. This could show that firms which are already part of multinational groups have little to gain from going multinational themselves, since their group already provides them with skills and network effects, the security of supplies, and knowledge of foreign markets. _________________________________ (français) Ce travail étudie l’impact de l’implantation à l’étranger sur les performances des entreprises françaises du secteur manufacturier au cours de la période 1996-2007. A l’aide d’une méthode d’appariement, les performances des firmes qui s’implantent pour la première fois sont comparées à celles des entreprises domestiques ayant des caractéristiques similaires. La particularité de notre travail est de caractériser l’effet de l’implantation à l’étranger selon l’appartenance à un groupe : nous étudions ainsi séparément l’effet sur les entreprises indépendantes, les entreprises françaises ayant une filiale en France et les entreprises filiales de groupes français et étrangers. L’étude montre que l’implantation à l’étranger a un impact positif en France sur le chiffre d’affaires, la valeur ajoutée, les effectifs, les exportations et la rentabilité. Cependant, il s’avère que le résultat dépend de l’appartenance à un groupe. Tout d’abord, les entreprises têtes de groupe ont une plus forte propension à s’implanter à l’étranger, une fois que l’on tient compte de la taille, de la productivité totale des facteurs (PTF) et du secteur. Ensuite, nous montrons que les têtes de groupes et les entreprises indépendantes n’améliorent pas leurs performances quand elles s’implantent à l’étranger. Ce résultat peut s’expliquer par le fait que ces entreprises supportent des coûts fixes d’implantation plus élevés que les filiales de groupe. Enfin, nous montrons que les entreprises françaises filiales de groupes français améliorent significativement leurs performances alors que celles des filiales de groupes étrangers restent relativement stables. Les entreprises déjà intégrées dans une multinationale pourraient obtenir des gains plus faibles de leur propre implantation à l’étranger dans la mesure où leur groupe leur offre déjà l’accès à un réseau international.
    Keywords: multinational, ownership, firm heterogeneity.
    JEL: D23
    Date: 2011–01
  14. By: John Gilbert (Department of Economics and Finance, Utah State University); Reza Oladi
    Abstract: We consider the potential influence of contributions from interest groups to political rivals in the voting behavior of US legislators on international trade policy issues. Our application addresses the determinants of the Permanent Normal Trade Relations with China decision, and focuses particular attention on the agriculture/agribusiness lobby. A simultaneous voting-net contributions model suggests that these contributions were very effective relative to organized labor and other corporate groups, despite their relatively small dollar value. Possible explanations arising from differences in targeting strategies are explored.
    Keywords: Trade policy, agricultural political economy, binary choice models, China
    JEL: D72
    Date: 2011–01–20
  15. By: Hayakawa, Kazunobu; Kimura, Fukunari; Lee, Hyun-Hoon
    Abstract: In this paper, we aim to identify the political and financial risk components that matter most for the activities of multinational corporations. Our paper is the first paper to comprehensively examine the impact of various components of not only political risk but also financial risk on inward FDI, from both long-run and short-run perspectives. Using a sample of 93 countries (including 60 developing countries) for the period 1985-2007, we find that among the political risk components, government stability, socioeconomic conditions, investment profile, internal conflict, external conflict, corruption, religious tensions, democratic accountability, and ethnic tensions have a close association with FDI flows. In particular, socioeconomic conditions, investment profile, and external conflict appear to be the most influential components of political risk in attracting foreign investment. Among the financial risk components, only exchange rate stability yields statistically significant positive coefficients when estimated only for developing countries. In contrast, current account as a percentage of exports of goods and services, foreign debt as a percentage of GDP, net international liquidity as the number of months of import cover, and current account as a percentage of GDP yield negative coefficients in some specifications. Thus, multinationals do not seem to consider seriously the financial risk of the host country.
    Keywords: Developing countries, Developed countries, Foreign investments, FDI, International business enterprises, Industrial management, Country risk, Political risk, Financial risk, Institution, MNEs
    JEL: F21 F23
    Date: 2011–02
  16. By: Jomo Kwame Sundaram; Oliver Schwank; Rudiger von Arnim
    Abstract: This paper critically reviews the impact of globalization on sub-Saharan Africa (SSA) since the early 1980s. The large gains expected from opening up to international economic forces have, to date, been limited, and there have been significant adverse consequences. Foreign direct investment in SSA has been largely confined to resource—especially mineral—extraction, even as continuing capital flight has reduced financial resources available for productive investments. Premature trade liberalization has further undermined prospects for the economic development of SSA as productive capacities in many sectors are not sufficiently competitive to take advantage of any improvements in market access.
    Keywords: Africa, Agriculture, Aid, Bretton Woods institutions, Development, FDI, Finance, Industry, Structural Adjustment, Trade
    JEL: O1 O2 O55
    Date: 2011–02
  17. By: Faqin Lin (School of Economics, University of Adelaide)
    Abstract: This paper uses a large sample of Chinese cross-section firm-level data with comprehensive information about labour quality to investigate the relationship between labour quality and FDI distribution in China. Using parametric, IV-GMM and non-parametric techniques, the author finds that labour quality measured by education level plays an important role on deciding the distribution of FDI but labour quality measured by working certificates lose their significance. The author also finds that labour quality has a more significant impact on other foreign investments than HMT invested firms and the impacts of labour quality on FDI is strongly uneven across industries and provinces.
    Keywords: education, foreign direct investment, labour quality
    JEL: F21 O18 O53
    Date: 2011–03
  18. By: Tiziano Squartini; Giorgio Fagiolo; Diego Garlaschelli
    Abstract: In this sequel to a companion paper, we complement our analysis of the binary projections of the International Trade Network (ITN) by considering its weighted representations. We show that, unlike the binary case, all possible weighted representations of the ITN (directed/undirected, aggregated/ disaggregated) cannot be traced back to local structural properties, which are therefore of limited informativeness. Our results highlight that any topological property representing only partial information (e.g., degree sequences) cannot in general be obtained from the corresponding weighted property (e.g., strength sequences). Therefore the expectation that weighted structural properties oer a more complete description than purely topological ones is misleading. Our analysis of the ITN detects indirect eects that are not captured by traditional macroeconomic analyses focused only on weighted rst-order country-specic properties, and highlights the limitations of models and theories that overemphasize the need to reproduce and explain such properties.
    Date: 2011–03–07
  19. By: Tiziano Squartini; Giorgio Fagiolo; Diego Garlaschelli
    Abstract: The international trade network (ITN) has received renewed multidisciplinary interest due to recent advances in network theory. However, it is still unclear whether a network approach conveys additional, nontrivial information with respect to traditional international-economics analyses that describe world trade only in terms of local (rst-order) properties. In this and in a companion paper, we employ a recently-proposed randomization method to assess in detail the role that local properties have in shaping higher-order patterns of the ITN in all its possible representations (binary/ weighted, directed/undirected, aggregated/disaggregated) and across several years. Here we show that, remarkably, all the properties of all binary projections of the network can be completely traced back to the degree sequence, which is therefore maximally informative. Our results imply that explaining the observed degree sequence of the ITN, which has not received particular attention in economic theory, should instead become one the main focuses of models of trade.
    Date: 2011–03–07
  20. By: Alex Dickson (Department of Economics, University of Strathclyde); Roger Hartley (Department of Economics, University of Manchester)
    Abstract: We study a strategic market game in which traders are endowed with both a good and money and can choose whether to buy or sell the good. We derive conditions under which a non-autarkic equilibrium exists and when the only equilibrium is autarky. Autarky is ‘nice’ (robust to small perturbations in the game) when it is the only equilibrium, and ‘very nice’ (robust to large perturbations) when no gains from trade exist. We characterize economies where autarky is nice but not very nice; that is, when gains from trade exist and yet no trade takes place.
    Keywords: Bilateral oligopoly, strategic market game, trade.
    JEL: C72 D43 D51 L13
    Date: 2010–02
  21. By: Hansson, Åsa (Department of Economics, Lund University); Olofsdotter, Karin (Department of Economics, Lund University)
    Abstract: This paper uses panel data on bilateral FDI flows in the European Union to empirically analyze the impact of labor and corporate taxations on FDI decisions. While the effect of corporate taxes on FDI is well documented, the impact of labor taxes on FDI has been neglected. This is surprising since labor taxation may influence FDI as well. The reason for this is that taxation of labor affects the production cost and the ability to attract and retain productive labor and ultimately the investment return. By employing a Heckman two-step estimation model, which controls for possible sample selection bias due to many zero bilateral observations, it is found that labor taxes do influence FDI decisions. The effect is significant both statistically and economically, although the magnitude is smaller than for corporate tax.
    Keywords: labor taxation; foreign direct investment
    JEL: F12 F15 F21 H71 H73
    Date: 2011–03–03
  22. By: Jyrki Ali-Yrkkö; Petri Rouvinen; Timo Seppälä; Pekka Ylä-Anttila
    Abstract: Available statistics tell us little about the economic consequences of increasing global dispersion of production processes. In order to shed light on the issue, we perform grass roots detective work to uncover the geography of value added in the case of a Nokia N95 smartphone circa 2007. The phone was assembled in Finland and China. In the case when the device was assembled and sold in Europe, the value-added share of Europe (EU-27) rose to 68%. Even in the case when it was assembled in China and sold in the United States, Europe captured as much as 51% of the value added, despite of the fact that it had little role in supplying the physical components. Our analysis illustrates that international trade statistics can be misleading; the capture of value added is largely detached from the physical goods flows. It is rather services and other intangible aspects of the supply chain that dominate. While final assembly – commanding 2% of the value added in our case – has increasingly moved offshore, the developed countries continue to capture most of the value added gener-ated by global supply chains.
    Keywords: global supply chains, international trade, value capture
    JEL: F F L L
    Date: 2011–02–28
  23. By: Belderbos, Rene; Sleuwaegen, Leo; Veugelers, Reinhilde; Boiardi, Priscilla; Leten, Bart; Stroobants, Jesse
    Abstract: This study traces and analyses the changes in firm and industry structure due to EU market integration and the integration of the EU in the global economy. It focuses on changes in competitiveness based on innovation and technology development. The study provides information on the production, technology structure and geographical distribution of leading European firms. A database with firm-level data has been established and complemented by estimates of indicators of industry structure, including the diversification and technological advancement of a firm's production, the intra-EU multinationality of firms, as well as the degree of concentration and geographical agglomeration of industries. An in-dept empirical analysis of the relationship between technological leadership and market leadership has been conducted. The results indicate an increasing importance of technology for production leadership. Firms with the strongest market positions combine a broader technology portfolio strategy, while ensuring a deeper technology position in the sector of dominance. Technology leadership has a strong impact on the production share that new entrants can attain. The study confirms a positive link between technology and market leadership growth.
    Date: 2010–02
  24. By: Tattara, Giuseppe
    Abstract: Vertical disintegration in most industries and the globalization of markets has led to significant changes in the pattern of international division of labour among manufacturing firms. At the same time increased competition from low cost producers, exchange rate constraints, the opening up of CEE countries have had huge consequences for the Italian industrial system. This paper deals with the Veneto footwear, furniture and refrigeraion industries and examines the effects of foreign direct investments and subcontracting in Romania. The reorganization of the division of labour, in the most dynamic suppliers induced a change in the “nature of subcontracting”, upgrading along the ladder of the value chain as more and more operations are offshored.
    Keywords: Foreign direct investment; International subcontracting;
    JEL: F32 D82
    Date: 2011

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