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on Technology and Industrial Dynamics |
| By: | Roman Stöllinger (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Abstract Manufacturing activity in the EU is increasingly concentrated in a Central European (CE) manufacturing core, implying divergent paths of structural change across Member States. This ‘manufacturing divide’ within Europe coincides with deepening economic integration in general and the emergence of global value chains (GVCs) in particular. Focusing on the manufacturing sector, this paper investigates the relationship between structural change and integration into GVCs in EU Member States over the period 1995-2011. The empirical findings suggest a non-linear relationship between the two phenomena Members of the CE manufacturing core benefit from participation in GVCs in terms of structural change towards manufacturing, whereas in other EU Member States GVC participation, if anything, accelerates the deindustrialisation process. |
| Keywords: | global value chains, structural change, manufacturing divide, European integration |
| JEL: | L16 F15 F62 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:127&r=tid |
| By: | Teresa C. Fort |
| Abstract: | This paper provides direct empirical evidence on the relationship between technology and firms’ global sourcing strategies. Using new data on U.S. firms’ decisions to contract for manufacturing services from domestic or foreign suppliers, I show that changes in firm use of communication technology between 2002 to 2007 can explain almost one quarter of the increase in fragmentation over the period. The effect of firm technology also differs significantly across industries; in 2007, it is 20 percent higher, relative to the mean, in industries with production specifications that are easier to codify in an electronic format. These patterns suggest that technology lowers coordination costs, though its effect is disproportionately higher for domestic rather than foreign sourcing. The larger impact on domestic fragmentation highlights its importance as an alternative to offshoring, and can be explained by complementarities between technology and worker skill. High technology firms and industries are more likely to source from high human capital countries, and the differential impact of technology across industries is strongly increasing in country human capital. |
| JEL: | F14 F23 L23 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22550&r=tid |
| By: | Gabor Bekes (Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Sciences and CEPR); Cecilia Hornok (Kiel Institute for the World Economy); Balázs Muraközy (Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Sciences) |
| Abstract: | We use a unique cross-section survey of manufacturing firms from four European countries (France, Germany, Italy, Spain) linked with balance sheet data to study the relationship between key aspects of globalization and firm-level markups. The main results are: (i) Exporting is positively correlated with markups; (ii) Importing intermediate inputs and outsourcing are also positively correlated with markups; (iii) Firms with affiliates have higher markups than other firms, while simply membership in a group or being foreign-owned seem to be less important; (iv) Perceived competition from low-cost markets is negatively correlated with markups; (v) Higher quality production and innovation, especially if it results in IP, has a strong positive relationship with markups; (vi) While these variables are correlated, they are significant in a joint model including all four groups, and `fully globalized' firms tend to charge around 100% higher markups than non-globalized firms. |
| Keywords: | markups, exporting, importing, FDI, innovation |
| JEL: | D22 D24 F14 L11 L60 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:1618&r=tid |
| By: | Lommatzsch, Kirsten; Silgoner, Maria; Ramskogler, Paul |
| Abstract: | It has been argued that the increasing importance of global value chains necessitates a modification of conventional competitiveness measures. We compile a broad dataset including value added trade, gross exports and conventional and value added based real exchange rates. To sharply focus on external competitiveness, a new price competitiveness indicator is introduced, the TWULC (Trade Weighted Unit Labour Cost indicator). It weights sector-specific cost trends according to sector shares in exports. Econometric tests for a panel of 38 countries show that the focus on value added trade generally improves the explanatory power of export equations. Value added exports’ sensitivity towards real exchange rates is up to four times higher than that of gross exports. Real effective ex-change rates focusing on exporting industries and on value added weights yield more robust results across the specifications, but do not systematically outperform the more conventional measures of price of cost competitiveness. JEL Classification: F14, J30 |
| Keywords: | competitiveness, external trade, labour costs |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20161936&r=tid |
| By: | Philip Gunby (University of Canterbury); Yinghua Jin; W. Robert Reed (University of Canterbury) |
| Abstract: | Foreign direct investment (FDI) has been linked to economic growth in a number of countries. Productivity spillovers at the firm level have been identified as a key element in the process by which FDI stimulates economic growth. Moreover, there is evidence of FDI-related productivity spillovers in China. Whether these spillovers have been of sufficient size to affect growth at the aggregate level, however, is an empirical question. We apply meta-analysis to the corresponding empirical literature to find an answer. Our main finding is that the effect of FDI on Chinese economic growth is much smaller than one would expect from a naïve aggregation of existing estimates. Publication bias and a profusion of estimates based on less preferred study and sample characteristics have served to inflate observed estimates. Once these effects are accounted for, the estimated effect of FDI on Chinese economic growth is reduced to statistical insignificance. This suggests that the cause(s) of the Chinese “economic miracle†likely lie elsewhere. |
| Keywords: | Meta-analysis, FDI, China, economic growth |
| JEL: | O11 O53 F21 |
| Date: | 2016–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:16/15&r=tid |
| By: | Pedro Mendi (Navarra Center for International Development); Rodrigo Costamagna (INALDE Business School, Universidad de la Sabana) |
| Abstract: | This paper studies the impact on innovation of competition against firms in the informal sector. Using the World Bank’s Enterprise Survey data from a sample of African and Latin American countries, we find that the marginal impact of informality on innovation by formal firms decreases with the intensity of competitive pressure from informal firms, consistent with an inverted-U relationship between propensity to innovate and competitive pressure from firms in the informal sector. |
| Date: | 2015–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:nva:unnvaa:wp10-2015&r=tid |
| By: | Koen Frenken |
| Abstract: | : It is argued that innovation policy based on notions of market failure or system failure is too limited in the context of current societal challenges. I propose a third, complexity-theoretic approach. This approach starts from the observation that most innovations are related to existing activities, and that policy’s additionality is highest for unrelated diversification. To trigger unrelated diversification into activities that contribute to solving societal challenges, government’s main task is to organize the process of demand articulation. This process leads to clear and manageable societal objectives that effectively guide a temporary collation of actors to develop solutions bottom-up. The combination of a broad coalition, a clear objective and tentative governance are the means to cope with the inherent complexity of modern-day innovation |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:uis:wpaper:1601&r=tid |
| By: | Edmans, Alex; Holderness, Clifford |
| Abstract: | This paper reviews the theoretical and empirical literature on the role of blockholders (large shareholders) in corporate governance. We start with the underlying property rights of public corporations; we discuss how blockholders are critical in addressing free-rider problems and why, like owners of private property in general, blockholders are likely to be active in firm governance. We then examine what distinguishes a blockholder from an ordinary shareholder and advocate additional definitions from the typical threshold of 5% ownership. We next present new evidence on the frequency and characteristics of blockholders in United States corporations. Then we develop a simple unifying model to present theories of blockholder governance through both voice (direct intervention) and exit (selling one's shares). We survey the empirical evidence on blockholder governance, emphasizing the empirical challenges in identifying causal effects involving blockholders. We highlight the lack of credible instruments for blockholders and argue that exogenous variation should not be a prerequisite for research---a narrow focus on identification may lead to a focus on identifying narrow questions. We emphasize the value of descriptive research with blockholders and how endogeneity concerns can be addressed with economic logic and by directly testing alternative explanations. We close with suggestions for future research. |
| Keywords: | activism; blockholders; exit; governance; Large shareholders; microstructure; property rights.; voice |
| JEL: | D72 D82 D83 G14 G32 G34 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11442&r=tid |