Showing papers by "Kiel Institute for the World Economy published in 2001"

Foreign Direct Investment, Agglomerations and Demonstration Effects: An Empirical Investigation

Abstract: Many previous studies have shown that the localisation of firms can be an important factor in attracting new foreign direct investment into a host country. What has been missing in this literature thus far, however, is an investigation into the reasons why industry clusters attract firms. We distinguish between 'efficiency agglomerations' as firms locating close to each other because they can increase their efficiency by doing so, and 'demonstration effects', whereby existing firms send signals to new investors as to the reliability of the host country and newly entering firms follow previous firms. In this Paper we try to disentangle these two effects, by examining the location of US and UK firms in Ireland. We calculate proxies for 'efficiency agglomerations' and 'demonstration effects' and include these proxies in an empirical model of the location decision of firms. For US firms, we find that both efficiency agglomeration and demonstration effects are important determinants of entry. For UK firms, however, the evidence is not as clear-cut.

Blessing or Curse? Domestic plants' survival and employment prospects after foreign acquisition

Abstract: This paper investigates whether the acquisition of a domestic establishment by a foreign owner has any effects, positive or negative, on the survival prospects and employment growth of that plant. The empirical analysis uses data from the Annual Respondents Database (ARD) for the UK electronics industry for the period 1980 to 1993. Estimating a standard hazard model including a dummy variable for the incidence of acquisition yields the result that foreign takeover reduces the liftetime of the acquired plant. Estimations of the determinants of employment growth in domestic plants provide some evidence that the incidence of takeover reduces employment growth, in particular for unskilled labour. Both survival and employment growth estimations do not appear to be subject to endogeneity problems.

Explaining firms export behaviour : the role of RD and spillovers

Abstract: We examine the importance of a firm's own R&D activity and intra-sectoral spillovers on the decision to export and the export intensity using firm level panel data for Spain for the period 1990 to 1998. Our results are in line with preceding findings on the role played by firm-specific variables such as age, firm size, productivity and workers' skills. In addition, we show that export and R&D spillovers, either from MNEs or domestic firms in the sector, have a different impact on Spanish and foreign firms, the latter generally benefiting from positive spillovers. Further evidence shows a larger marginal impact of R&D spillovers on export intensity of Spanish firms exporting to other OECD countries than those exporting to non-OECD nations.

International fragmentation and relative wages in the UK

Abstract: This paper re-examines the trade-based explanation of increased wage inequality in developed countries by focusing on international outsourcing It is the first detailed study to address the effects of outsourcing on labour markets in the UK In a recent paper, Feenstra and Hanson (1996) estimate the effect of international outsourcing on wage inequality in the US This paper extends the FH approach by using more detailed definitions of outsourcing and skill The analysis applies to UK manufacturing over the period 1982-1997 Extending the analysis to the 1990s is considered to be crucial as outsourcing is predominantly a phenomenon of the 1990s The econometric results suggest that technical change, import penetration and outsourcing all play an important role in explaining UK wage inequality Outsourcing may account for about half of the increase in domestic wage inequality

Foreign Direct Investment in Producer Services: Theory and Empirical Evidence

Abstract: This paper examines the pattern of foreign direct investment (FDI) in producer services. We develop a model of FDI in these services and test its predictions using panel data on U.S.FDI in 25 host countries from 1976 to 1995. We find evidence that, in addition to governmental and cultural barriers, producer-service firms may face informational barriers to entry into foreign markets. The presence of such barriers provides a possible explanation for the observation that producer-service FDI tends to follow FDI by downstream industries.

Deutsche Technologiepolitik auf neuen Pfaden

Abstract: Das Bundesministerium fur Bildung und Forschung geht seit Mitte der 90er Jahre neue Wege in der Technologieforderung, indem es die regionale Ebene in den Mittelpunkt technologiepolitischer Initiativen stellt. Als Prototypen der neuen Politik konnen der BioRegio-Wettbewerb und der InnoRegio-Wettbewerb gelten. In diesem Beitrag werden die beiden Prototypen der neuen Politik analysiert und miteinander verglichen und es werden konzeptionelle Starken und Probleme der regionenorientierten Innovationspolitik des Bundes herausgearbeitet.