Tansnationals and foreign trade: Evidence from Brazil

A recursive model of exports and imports of manufactures, in which imports depend in part on exports, is estimated using data for a cross‐section of 17,053 industrial firms. In this sample, 652 firms are foreign‐owned. Explanatory variables include firm size, skill intensity, advertising and other variables in addition to foreign ownership. Foreign ownership has a large, independent effect on both export performance and import propensities, but foreign ownership in itself explains little of the relatively low export/import ratios registered by affiliates of transnationals.     

An interpretation of argentine economic growth since 1930∗Part I

This study uses pairing of Mexican‐owned manufacturing firms and firms with direct United States investment, to examine the effects of ownership structure on firms’ performance and sources of technology. Results suggest that in terms of profitability, growth and export performance the Mexican firms were competing successfully during the period 1966–73. Furthermore, the basis for this strong posture by the Mexican manufacturers was not due to a heavy reliance on foreign technology imported through formal channels, but rather is linked with internal innovative activity and the use of domestic consultants.     

Effective exchange rates for exports in Pakistan

Effective exchange rates for exports in Pakistan can be calculated which take into account the major export incentive measures in operation and their divergent treatment of specific exports. This quantification of export policies into an overall measure of the implicit (effective) foreign exchange rate structure permits an evaluation of the impact of export promotion measures on foreign exchange earning capacity. The major export incentive schemes were found to provide the highes’ subsidies to those exports with the highest total import components and the lowest relative earnings of net foreign exchange. Thus de velopment policy in some cases failed adequately to encourage these producers with relatively higher levels of domestic value‐added to export their products.     

Foreign trade regimes and the FDI–Growth Nexus: a case study of Thailand

This article examines the role of trade policy regimes in conditioning the impact of foreign direct investment (FDI) on growth performance in investment receiving (host) countries through a case study of Thailand. The methodology involves estimating a growth equation, which provides for capturing the impact of FDI interactively with economic openness on economic growth, using data for the period 1970–99. The results support the ‘Bhagwati’ hypothesis that, other things being equal, the growth impact of FDI tends to be greater under an export promotion (EP) trade regime compared to an import-substitution (IS) regime.     

Productivity performance and priorities for the reform of China's state‐owned enterprises

This study reports on the results of a survey of 300 state‐owned, collective and foreign‐funded industrial enterprises conducted in three of China's coastal provinces; Guangdong, Fujian and Shanghai‐shi in 1993.’ Its major focus and policy relevance is to identify which of China's recent enterprise, market and ownership reforms have been most effective in improving the productivity performance of China's state owned enterprises. The study concludes that productivity growth (measured by total factor productivity) has been significantly higher for non‐state‐owned than for state‐owned enterprises and for firms located in the special economic zones of Shenzhen and Xiamen and the open city of Guangzhou than for firms in the more centrally planned Shanghai. Export‐orientated enterprises also had higher total factor productivity growth than non‐export‐orientated ones. At a lower level of significance, enterprises that controlled their own decision‐making produced a lower proportion of output for the plan, procured a higher proportion of their investment finance from loans (rather than budgetary allocations) and achieved higher total factor productivity growth. Finally, labour‐intensive industries in general had higher total factor productivity growth than did capital‐intensive ones. A number of policy conclusions may be drawn from these results.     

How Responsive are Chinese Exports to Exchange Rate Changes? Evidence from Firm-level Data

This article examines the impact of exchange rate changes on Chinese firms’ decisions on export market entry and export share. Using a large dataset for Chinese firms in 2000–2006, we find that changes in exchange rate levels play a significant role on both export extensive and intensive margins of Chinese firms. Compared to studies using macro data, our firm-level analysis allows us to control for firm and industry heterogeneity. Firm size and location matter. We do not find a difference between foreign and domestic firms in responding to exchange rate changes. Industry heterogeneity is also found to be important.     

Political Instability and Export Performance in Sub-Saharan Africa

The political landscape of post-independent sub-Saharan Africa (SSA) has been one of rampant coups d'etat. Existing evidence suggests such elite political instability (PI) has been growth-inhibiting even when exports are accounted for. In the light of the increasing interest in the role of export-promotion strategies in fostering economic growth, however, the present paper examines the impact of PI on export performance in these economies. The paper explores the hypothesis that the lack of a stable political environment adversely influences export performance via competitiveness, and that PI may actually play a more crucial role in export than in overall GDP growth. Based on detailed data on the incidence of coups in 30 SSA countries, real export growth over 1967-1986 is regressed on a principal-component of the various forms of coup events - "successful" coups, abortive coups, and coup plots - as well as on export structure, terms of trade, production capacity, and exchange rate misalignment. The results support the above hypothesis of an adverse impact of PI on export growth, and further suggest that PI has been even more deleterious to exports than to overall GDP.     

MNE Affiliation,Firm Size and Exports Revisited: A Study of Information Technology Firms in India

In this study we argue that the export performance of affiliates of multinational enterprises (MNEs) in developing countries is determined differently from that of licensees of foreign firms or of domestic firms. Our empirical results for the information technology sector in India show that exports of MNE affiliates are greater when they have larger foreign equity stakes that bring more tacit knowledge transfer and complementary FDI advantages and when they import more explicit technology from the purchase of licences. Standard export determinants such as firm size and capital intensity do not matter for MNE affiliates, but they do for licensees and domestic firms.     

FDI Liberalisation,Firm Heterogeneity and Foreign Ownership: German Firm Decisions in Reforming India

The paper investigates the role of firm-level productivity and industry-level R&D for multinational enterprises' (MNEs') choice of undertaking foreign direct investment (FDI), and the share of ownership in foreign affiliates. Two firm-specific datasets on German MNEs with varying equity stakes in Indian affiliates are used to account for the two-step decision process. The paper also analyses how German firm decisions were affected by the liberalisation of FDI regulations in India. Results show remarkable differences between the selection and the ownership share equation, and also between the pre-reform and post-reform periods. The evidence clearly reveals the trade-offs involved in selective FDI approvals and foreign ownership restrictions.     

Tariffs and economic development: Some theoretical issues 1

There is evidence to suggest that in Brazil import substituting industrialization has brought an increased dependence on the foreign sector. Further growth is highly dependent upon the ability to increase exports, and economic policy exercises an important function in such export expansion. In an attempt to analyse the behaviour of manufactured exports, a regression model, complemented with in‐depth interviews with individual firms, is posited and tested with Brazilian data. In analysing policy variables and other determining factors in terms of their effects on manufactured export performance, it is found that exchange rate policy, tax incentives, LAFTA, and a recession‐boom effect have all played important roles in shaping Brazilian industrial export growth.     

Employment effects of output and technological progress in Malaysian manufacturing

A major factor contributing to the growth in industrial employment in Malaysia was the implementation of the export‐oriented industrialisation strategy. With the withdrawal of GSP privileges to the USA, the inevitable loss of comparative advantage in labour cost and the emergence of trading blocs, it is feared that the growth of the export‐oriented sectors in manufacturing will be impeded, causing a serious unemployment problem. This fear is compounded by the increasing shift to technology‐intensive methods of production which displace labour. This article shows that domestic demand and export expansion exert positive and almost equal influence on industrial employment. Any negative impact on employment due to a shortfall in exports could be neutralised if an appropriate choice of import‐substituting and export expansion policies is adopted. Displacement of labour due to the substitution effect of using technology‐ and capital‐intensive production is largely compensated for by the increase in labour utilisation due to the output effect of increased production for both the domestic and foreign markets.     

Trade Liberalisation and Export Performance in Selected Developing Countries

This article examines the impact of trade liberalisation on export growth for a sample of 22 developing economies. The research applies dynamic panel data models based on fixed-effects and generalised methods of moments (GMM) estimators. In addition, heterogeneous panels for the complete sample, as well as for different regions of the world, are estimated using a time-series/cross-section technique. The main findings are that trade liberalisation is a significant determinant of export performance, but its effect varies across continents. Export duties have a small detrimental effect on export growth, while relative price changes and world income growth have the expected signs.     

Foreign Ownership and Employment Growth in a Developing Country

Many developing countries would like to increase employment in the formal sectors. One way to accomplish this goal may be to encourage the entrance of foreign firms. We examine employment growth in Indonesian plants taken over by foreign owners from domestic ones. We also examine the effect of FDI during different trade regimes and the timing of employment effects following an acquisition. For plants that change the nationality of ownership, we find a strong effect of shifts from domestic to foreign ownership in raising the growth rate of employment, but no significant effects of shifts from foreign to domestic ownership.     

The cost efficiency of water utilities: when does public ownership matter?

This study explores the impact of different ownership types on the efficiency of water utilities. Theories and evidence have shown a puzzling relationship between ownership and performance. Moreover, relatively recent contributions (Andrews et al. 2011) have argued that this relationship can be further convoluted by the effect of organisational and environmental variables. The current study aims to contribute to this literature by providing some empirical evidence for Italy, by proposing a methodology that combines non-parametric efficiency estimation and cluster analysis. Our main findings indicate that privately owned utilities indirectly controlled by a public organisation reach the highest level of efficiency but, when size and geographical location enter the analysis, ownership has a stronger significant effect on efficiency, and mixed utilities gain higher cost efficiency. Therefore, we may conclude that administrative reforms about privatisation and the institutional setting should consider a set of variables that characterise each individual organisation.     

Employment Effects of FDI in Mexico's Non-Maquiladora Manufacturing

This paper analyses whether foreign direct investment (FDI) has contributed to employment generation in Mexico's non-maquiladora manufacturing sector. Drawing on highly disaggregated FDI and employment data, we estimate dynamic labour demand functions for blue and white collar workers, including FDI as well as its interaction with major industry characteristics. FDI has a significantly positive, though quantitatively modest impact on manufacturing employment in Mexico. This applies to both white collar and blue collar employment. The employment enhancing effects of FDI are larger in export oriented industries. In more capital-intensive industries, the employment effect of FDI remains positive for blue collar workers but not white collar ones.     

Privatisation in Developing Countries: A Review of the Evidence and the Policy Lessons

Privatisation is widely promoted as a means of improving economic performance in developing countries. However, the policy remains controversial and the relative roles of ownership and other structural changes, such as competition and regulation, in promoting economic performance remain uncertain. This article reviews the main empirical evidence on the impact of privatisation on economic performance in developing economies. The evidence suggests that if privatisation is to improve performance over the longer term, it needs to be complemented by policies that promote competition and effective state regulation, and that privatisation works best in developing countries when it is integrated into a broader process of structural reform.     

Financial Factors and Manufacturing Exports: Firm-Level Evidence From Egypt

This paper focuses on the effects of financial factors on manufacturing firms’ export participation in a panel of Egyptian manufacturing firms over the 2003–2008 period. Our main results show that financial constraints reduce export participation of Egyptian firms, while financial liquidity improves it. Moreover, financial constraints have a negative impact on alternative measures of export activity, namely, export intensity and the time the firm takes before starting to export. Consequently, adding to the scarce literature on developing countries, our results support an important impact of financial factors on Egyptian firms’ participation in international trade.     

‘Effective exchange rates for exports in Pakistan’ a comment

In his article ‘Effective Exchange Rates for Exports in Pakistan’ [1972], Walter Hecox has incorrectly implied that the ranking of export sectors by their net foreign exchange earnings yield a measure of their export efficiency. This note argues that the proper measures for export ranking is the domestic resource cost criterion, and that rankings by the two measures differ substantially.     

Openness and Growth: Re-Examining Foreign Direct Investment,Trade and Output Linkages in Latin America

The openness–growth connection is still an open question in the empirical literature. Although some studies have found that openness has a positive impact on economic performance, others have seriously questioned the significance of this result. The main point that we try to emphasise in this paper is that openness involves more than just trade liberalisation. The increasing importance of international capital flows and especially foreign direct investment (FDI) seems to be another relevant component of outward oriented policies. Therefore, by using quarterly data from the late seventies to 2000, we investigate the effects of liberalisation in Mexico, Brazil and Argentina by taking into account trade and FDI growth links. The results suggest that it is important to consider both exports and FDI to ascertain the benefits associated to the outward oriented strategies followed by these countries.     

ORGANIZATIONAL STATUS A PERFORMANCE: SUMMARY OF THE FINDINGS

Hypotheses derived from the public choice and other literatures on the relationship between ownership and performance were tested on ten UK organizations which had undergone status change, within the public sector or between the public and private sectors, in the last twenty years. Results on tests of performance in productivity, employment, and financial ratios against change in status, competition and internal management failed in most cases to support the thesis that change in ownership improves enterprise performance, even in its more sophisticated form where ownership change is assumed to be accompanied by increased competition and improved managerial incentives.