progresso tecnologico distribuicao de renda e utilizacao da capacidade produtiva the paper presents a post keynesian growth model in which i the mark up rate varies in the long term due to a misalignment between the actual rate and the anticipated profit rate and ii the capital output ratio is not necessarily constant on the contrary it may shift as a result of the technical progress which according the harrod s typology can be neutral capital saving or capital intensive we demonstrate that the economic stability is only reached if the technical progress is neutral or capital intensive and the investiment is susceptible to fluctuations in the mark up rate after undergoing computer simulations we noticed that an endogenous transition from a wage led to a profit led accumulation regime is feasible furthermore we detected a tendency to the stabilization of the profit rate conditioned to a high savings out of profits ratio

global strategies multinational subsidiary roles and economic impact in scotland young s hood n and dunlop s 1988 global strategies multinational subsidiary roles and economic impact in scotland reg studies 22 487 497 this paper considers in a preliminary way the influence of mne global strategies on foreign subsidiary roles in scotland and from this some of the economic effects on the scottish economy are highlighted the study is based on a postal survey of mne subsidiaries in scotland the responses being analysed using the statistical techniques of cluster analysis and discriminant analysis despite the weaknesses of the former technique in particular the preliminary findings suggest substantial benefits to the economy from the one third of affiliates in the strategic independent product specialist categories as compared with the conventional branch plants rationalized manufacturers and miniature replica subsidiaries young s hood n et dunlop s 1988 strategies globales role des filiales des societes multi nationales et impact economique en ecosse

the spatial organization of multinational firms using six years of firm level data covering 224 regions of the enlarged european union we evaluate the importance to a firm of locating its activities production headquarters r d logistics and sales close together we find that after controlling for regional characteristics being closely located to a previous investment positively affects firm location choice however the impact of distance is dependent on the type of investment production or service the impact dies out faster for service activities finally we show that a surprisingly positive effect comes from locating a new production plant close to an existing production investment but in another country

manufacturing demand for business services in a core and peripheral region does flexible production imply vertical disintegration of business services o farrell p n moffat l a r and hitchens d m w n 1993 manufacturing demand for business services in a core and peripheral region does flexible production imply vertical disintegration of business services reg studies 27 385 400 this paper analyses the demand by manufactures in scotland and south east england for key strategic business services during the past three years the source of supply of the services used and the location of external suppliers for scottish and english manufacturers our evidence suggests that expansion of demand is the primary cause of increasing business service output and not restructuring strategies as predicted by the flexible firm model both externalization and internalization of business services are occurring simultaneously the net balance is consistent with a marginal trend towards vertical integration in manufacturing and a stronger one in business services o farrell p n moffat l a r et hitchens d m w n 1993 la demande de l industrie pour l

will the consumption externalities effects in the ramsey model please stand up abstract according to the prior literature in a ramsey model consumption externalities have no impact on steady state behavior once labor supply is exogenous in contrast this paper argues that in the presence of technical change consumption externalities always affect steady state behavior via their impact on the elasticity of marginal utility of consumption

borrowing constraints human capital accumulation and growth abstract borrowing constraints increase aggregate savings and therefore may increase growth this paper argues however that by reducing human capital accumulation borrowing constraints also have negative effects on growth these effects are discussed in an overlapping generations model with endogenous growth empirical evidence for oecd and developing countries lend support to the main predictions of the model

technological and organizational change in automobile production spatial implications 1 schoenberger e 1987 technological and organizational change in automobile production spatial implications reg studies 21 199 214 the origins and implications of recent technological and organizational changes in the automobile industry are examined the nature of competition in the industry is linked to the adoption of flexible automation technologies in production this it is argued may foster the spatial re integration of production in contrast to earlier decentralizing trends an effect that may be reinforced by the move to just in time principles of production organization implications for regional development are considered with cautions stressed concerning the meaning of spatial proximity and the firm s ability to construct agglomeration economies away from traditional industrial centres schoenberger e 1987 changements technologiques et organisationnels dans la production automobile implications spatiales reg studies 21 199 214 les origines et les implications des recents changem

industrialization under perfect foresight a world economy with a continuum of countries abstract a dynamic model of international trade with a continuum of countries is presented the terms of trade path each country takes as given are endogenous in the model countries differ by the rate of time preference and have populations of overlapping generations of labor industrialization is modeled as the reallocation of labor to the sector with external increasing returns the process of which is gradual due to a demographic constraint in a perfect foresight equilibrium countries with lower time preference industrialize and autarky policy is not effective for industrialization orbits may exist for countries with positive time preference journal of economic literature classification numbers d90 f10 f43 o14 o40

flexible specialisation the new competition and industrial districts flexible specialisation the new competition and industrial districts are concepts reviewed in this article to determine whether they can provide an alternative for the description of the industrial sector as a system of mass production the concepts mentioned are discussed and criticized in this article all three concepts stress the importance of a certain division of labour of interfirm relations of cooperation versus competition of technological development and innovation diffusion of flexibility the role of small enterprises and a local value system however a number of differences between the concepts are also highlighted as well as the problems to use them in empirical research it is concluded that the three terms are complementary and could be used in combination the flexible competitive districts would provide an alternative type of industrial organization somewhere between the large scale integrated enterprise and the atomized self contained individual firm the challenge lies in turning the positive theory into a normative one how can industrial development in eastern europe and third world countries be turned into the development of flexible competitive district which contribute significantly to the development of these countries and allow for an important role for micro small and medium enterprises it is argued that this can be done in the framework of urban and regional development policies but this requires a different role for the government and the provision of an adequate infrastructure

foreign and domestic investment regional development or crowding out driffield n and hughes d 2003 foreign and domestic investment regional development or crowding out reg studies 37 277 288 this paper tests at the regional and industry level the extent to which domestic investment is stimulated or crowded out by inward foreign direct investment the paper develops a model of domestic investment based on standard models drawn from macroeconomics and industrial economics the paper then goes on to show that at a general level the development or agglomeration hypothesis is confirmed that domestic investment is indeed stimulated by inward investment however there is also evidence that in certain regions inward investment has crowded out domestic investment the implications of this from the perspective of regional policy are briefly discussed driffield n et hughes d 2003 l investissement direct e tranger et l investissement interieur une question d ame nagement du territoire ou un effet d evincement reg studies 37 277 288 cet article cherche

public policies for local networks of innovators abstract a rich and heterogeneous literature has recently clarified the nature of agglomerations of small and medium sized companies industrial districts flexible manufacturing networks interacting in a territory and acting in the open market as efficient competitors against other forms of production organization such as the traditional vertically integrated firm their ability to adjust to uncertain external conditions depends on fthe common culture and diffuse knowledge of the area which is a sunk cost for those companies in a policy perspective the main question concerns the possibility of intervening in a specific context to stimulate the creation and growth of an agglomeration of companies i e to establish a clan of agents having a common interest in innovation technological knowledge will have to be provided as club good for the network there are three elements to be considered in designing such a policy 1 entry into admission and exit from exclusion the network 2 promotion of a positive selection process of innovators within the network 3 increasing the common knowledge and the specific learning characterizing the network the aim of public interventions undertaken in the various regions of europe but also in several experiments in the us can be seen as the constitution of collective agents or service centers sponsored by the local public authorities and enterpreneurial associations to manage collectively the cost of coordination of the entrepreneurial activities necessary for the formation and development of a local network of innovators the new industrial policy approach of the european community is explicitly oriented to supporting the local aggregation of new businesses through the promotion of integrated plans of local intervention

uniqueness and indeterminacy on the dynamics of endogenous growth abstract in this paper we study the dynamics of endogenous growth both in the model of lucas and in a generalization that incorporates a labor leisure choice we characterize the regions of the parameter space that give rise to unique equilibria as well as the regions that yield a continuum of equilibria with positive growth rates we find that such multiple equilibria exist for empirically very plausible parameters in particular when the lucas model is modified to incorporate endogenous labor journal of economic literature numbers e00 e3 o40

the green golden rule habit and anticipation of future consumption abstract we derive the green golden rule ggr in the habit formation hf and anticipation of future consumption afc frameworks since consumption is the key variable of ggr time non separabilities in preferences over consumption streams given by the afc and hf may have important impacts on the environment and sustainability we demonstrate that agents who smooth their consumption patterns according to the hf hypothesis are more likely to preserve the environment than those who anticipate future consumption or who do not so smooth consumption

the transition to flexible specialisation in the us film industry external economice the division of labour and the crossing of industrial divides there is increasing evidence that mass production methods are losing their dominance in the advanced industrial economies and that various forms of flexible production organization are on the rise the transition from mass production organization to flexible specialization is analyzed in detail through a case study of the film industry where it is shown that a system of production once based on product standardization high levels of vertical integration and stable oligopolistic market structures has after a period of vertical disintegration given way to a production system based on a deep division of labor between firms and high levels of flexibility in both product design and output levels the transition may be the result of increasing external economies of scale stemming from the development of the industry s social division of labor copyright 1989 by oxford university press

growth and the international transmission of business cycles two country single good real business cycle models predict that the cross country correlation of output is smaller than the cross country correlations of consumption and productivity in contrast to the evidence in historical samples the objective of this paper is to reproduce the observed empirical evidence in a two country real business cycle model with endogenous growth central features of the model include a nonmarket sector and international externalities in production the model generates realistic cross country correlations for output consumption and productivity with standard parameter values copyright 1996 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

corporate reorganization and the geography of services evidence from the motor vehicle aftermarket in the west midlands region of the uk marshall j n 1989 corporate reorganization and the geography of services evidence from the motor vehicle aftermarket in the west midlands region of the uk reg studies 23 139 150 research suggests that a corporate complex of administrative managerial and technical staff in the hinterland of capital cities underpins the spatial centralization of service activities in the economy there have been important changes in corporate structures during the last decade firms have reduced their in house provision of some services resorting to external contractors instead divisional and middle management activities have been rationalized and more autonomy delegated to lower levels in the corporate hierarchy using new technology firms have also expanded the range and quality of services provided in house this paper explores the geographical implications of these and other changes in business organization a case study of the motor vehicle aftermarket in the west midlands region of the uk suggests that sim

branch plants and the evolving spatial division of labour a study of material linkage change in the northern region of england phelps n a 1993 branch plants and the evolving spatial division of labour a study of material linkage change in the northern region of england reg studies 27 87 101 recent literature has suggested that manufacturing industry including that in peripheral regions is becoming more locally embedded as a result of processes of externalization and localized linkage formation this paper explores the hypothesis that branch plants have in terms of spatial patterns of material linkages become more locally embedded as a result of recent industrial restructuring evidence from a survey of manufacturing establishments in the northern region of england is used to explore hypotheses regarding the contribution of new greenfield investments and in situ restructuring to aggregate changes in spatial patterns of linkages the results suggests that despite processes of externalization northern region branch plants continue to be poorly integrated into the regional economy consequently it is argued that the cont

following or breaking regional development paths on the role and capability of the innovative entrepreneur structural change economic diversification and new path development feature prominently in scientific and policy debates against the backdrop of increasing specialization in the economy this paper reinterprets schumpeterian innovative entrepreneurship as a fundamental process that creates new connections between distinct fields of specialization thereby induces path breaking innovations and structural change it is argued that the transformation capability of innovative entrepreneurs rests essentially on their position s and networks within evolving innovation systems by focusing on micro level processes and transformation capability the paper complements the large body of work on structural barriers unintended consequences supporting institutional arrangements and policy implications are discussed

solving theoretical and empirical conundrums in international strategy research linking foreign entry mode choices and performance several theoretical and empirical developments in the literature on foreign entry mode and performance and on international strategy more generally were influenced or prefigured by brouthers 2002 jibs decade award winning paper regarding theory brouthers is an archetype of the integration of transaction cost and institutional perspectives i argue that it is also relevant to the growing literature that aims at synthesizing these and other perspectives methodologically brouthers 2002 contributed several uniquely direct and rich measures furthermore it not only displayed awareness of endogeneity specifically self selection issues but also was among the pioneers in the comparative analysis of governance choices for a given firm or transaction i elaborate on the promising if challenging use of such what if imputation to identify the impact of more or less well aligned choices overall i argue that such methodological advances cannot be decoupled from the conceptual advances that enable them and which they reinforce

relocation of headquarters and international taxation about 6 of multinationals relocated their headquarters to another country in the 1997 2007 period this paper presents empirical evidence on the role of taxes in these relocation decisions it considers a sample of 140 multinationals that relocated their headquarters over the past decade and compares them to a control group of 1943 multinationals that did not relocate it is found that the additional tax due in the home country upon repatriation of foreign profits has a positive effect on the probability of relocation the empirical results suggest that an increase in the repatriation tax by 10 percentage points would raise the share of relocating multinationals by 2 2 percentage points equivalent to an increase in the number of relocations by more than one third furthermore the presence of controlled foreign corporation legislation also has a positive effect on the number of relocations

assessing the impacts of foreign manufacturing on regional economies the cases of wales scotland and the west midlands brand s hill s and munday m 2000 assessing the impacts of foreign manufacturing on regional economies the cases of wales scotland and the west midlands reg studies 34 343 355 this paper examines the direct and indirect contributions made by foreign manufacturing companies to the regional economies of wales scotland and the west midlands survey data derived from foreign manufacturers in each region were used in conjunction with regional input output tables to assess the comparative contributions of defined foreign and domestically owned sectors to regional value added the analyses are a starting point for the more accurate targeting of regional resources to industry sectors in the respective regional economies brand s hills s et munday m 2000 evaluer les retombees de l industrie etrangere sur les economies regionales etude de cas du pays de galles de l ecosse et des west midlands reg studies 34 343 355 cet article cherche a examiner les roles direct et indirect joue par les en

income convergence within and between countries we study how trade changes the rate of income convergence within and between countries in a model of endogenous growth an externality in the production of human capital implies that inequality slows down growth under autarky eventually incomes converge raising the growth rate trade accelerates slows down growth and the rate of income convergence in the poor rich country in the long run trade ensures that countries grow at the same rate and that the ratio of their incomes tends to 1 trade pattern reversals are possible since the initially wealthy country may be overtaken by the poor country the purpose of this paper is to study how trade affects the pattern of income convergence within countries and between countries in an endogenous growth model moreover we analyze the related issue of how income inequality alters the effects of trade we use a dynamic 2 x 2 factor proportions model with endogenous growth to examine income convergence the factors of production are unskilled labor and human capital growth proceeds through the accumulation of human capital by agents who are differentiated by their stocks of human capital agents live a single period during which they spend resources in their descendants education the expenditure in a descendant s education enters the utility function of each agent in our model the accumulation of human capital is the result of both formal and informal processes the formal process corresponds to schooling and depends on parental expenditure in education the informal process of producing human capital corresponds to the education agents receive in their homes and through social interaction with neighbors and schoolmates in the informal process the first effect depends on the education of the parents while the second corresponds to an externality acting through the average level of human capital in society we begin our study by examining income convergence in a closed economy as the society s stock of human capital increases the relative price of the equitatively distributed factor unskilled labor goes up which tends to reduce long term inequality on the other hand rich agents spend a higher proportion of their income in education tending to raise inequality we derive a sufficient condition for the former effect to outweigh the latter effect that is for inequality to disappear in the

the rise and fall of unions in the united states abstract union membership in the united states displayed a shaped pattern over the 20th century while income inequality sketched a a model of unions is developed to analyze these facts there is a distribution of productivity across firms in the economy firms hire capital plus skilled and unskilled labor unionization is a costly process a union chooses how many firms to organize and the union wage simulation of the model establishes that skill biased technological change which affects the productivity of skilled labor relative to unskilled labor can potentially explain the observed paths for union membership and income inequality

income distribution and growth in east asia it is widely believed that the east asian economies performed exceptionally well not only in generating growth but also in keeping inequality low this study tries to answer the questions raised by the claims of exceptionality of income distribution in east asia central findings are that only japan korea and taiwan have legitimate claims to low inequality that the east asian economies distinguished themselves by their ability to translate high profit shares into high savings and investment rates and that low inequality and high profit shares coexisted primarily due to the unusually even distribution of wealth

refraining from imitation professional resistance and limited diffusion in a financial market why do some practices not spread although this is an important question for both diffusion theorists and those interested in institutional change we know surprisingly little about the limitations on diffusion because most diffusion studies sample on successful diffusion i address the question of why some practices fail to spread by introducing the concept of a deviance discount a deviance discount is a systematic downgrading of the observed adoption performance of controversial practices which limits the contagion of such practices i test and find qualitative and quantitative support for my thesis in the product introduction behavior of swedish mutual fund firms my findings hold implications for diffusion theory and theories of endogenous institutional change

cross border relocations of headquarters in europe this paper analyzes the relocations of both corporate and regional headquarters hq in a multi country setting on the basis of a dataset of 52 cross border hq relocations in europe during 1996 2006 we document an increasing trend toward relocation push and pull factors affecting hq location choice and catalyzing factors that affect the relocation decision high taxes and a high employment rate represent push factors that we find to increase the likelihood of hq relocation in particular at the mean rate of corporate tax a one percentage point increase in tax translates into a 6 8 increase in hq relocation likelihood in contrast central location and low taxes represent pull factors that increase the attractiveness of the hq location in terms of catalyzing factors we find that export oriented companies and regional hq have a higher tendency to relocate as a whole we extend the existing research by putting forward a conceptual framework of hq relocation decisions and by providing novel empirical evidence on the hq relocation phenomenon our findings contribute to an improved understanding of the determinants of corporate hq relocation decisions and provide important tax policy considerations for public policy decision makers in individual european countries and in the european commission

small firm growth in the uk regions 1994 1997 towards an explanatory framework h art m and m c g uinness s 2003 small firm growth in the uk regions 1994 1997 towards an explanatory framework reg studies 37 109 122 this paper examines the scale of regional variations in small firm growth in the united kingdom in manufacturing and services over the period 1994 97 an attempt is made to develop a theoretical framework to explain these variations and to provide an empirical test with the use of multivariate techniques the results demonstrate that particularly for the service sector the nature of the external business environment provides an important part of the explanation of the observed spatial variations in small firm growth for the period 1994 97 there were quite distinct processes at work in determining the spatial variation in growth rates for small firms in the manufacturing and service sectors this finding has important implications for interventions at regional and national level designed to enhance the fortunes of the small firms the manufacturing equation f

outsourcing r d and the pattern of intra metropolitan location the electronics industries of madrid the relationship between intra metropolitan location research and development r d and the outsourcing of production is analysed to determine differences in and the supportive character of intra metropolitan areas for high technology production madrid s electronics industries have shown a remarkable resilience in the face of extensive economic restructuring and the change in trade regimes that has accompanied continental integration much of the strength of the electronics sector may have been due to the metropolitan area s support for outsourcing and the creative specialisation that it facilitated the distribution of manufacturing establishments their local sourcing characteristics industrial district or agglomeration effects and the role of r d are evaluated to determine the intra metropolitan context of production extensive statistical analyses of the relationship between r d and productive performance with various indicators of capital costs revenues and scale are undertaken with estab

critical survey endogenous growth theory a critical assessment a critical assessment is made of endogenous growth theory from the perspective of recent developments within economics as a discipline these include its increasing mathematical formalisation its focus upon microfoundations the casual use of econometrics to test models and the incorporation of factors that have traditionally been outside mainstream economics it is found that the theory focuses upon market imperfections and technological progress in a variety of ways and reconstructs their impact upon the macroeconomy as a growth rather than as a level effect whilst the growth rate is endogenised this leads to the problem of multiple equilibria and extremely complex dynamics the generalisation from exogenous growth theory is however associated with even more extreme assumptions and analytical distance from the socioeconomic processes of growth itself copyright 2000 by oxford university press

the triple c approach to local industrial policy abstract in both developed and developing countries there is mounting evidence that clustering and networking help small and medium sized manufacturers to raise their competitiveness the role of public policy in this process is less clear the european experience suggests that local and regional government can play an important role equally if not more interesting experiences can be found in developing countries their analysis constitutes the core of this paper the lessons can be summarized as the triple c which stands for customer oriented collective and cumulative

from mass production to flexible specialization the sectoral and geographical extent of contract work in us manufacturing 1963 1997 e ssletzbichler j 2003 from mass production to flexible specialization the sectoral and geographical extent of contract work in us manufacturing 1963 1997 reg studies 37 753 771 over the last two decades much work in economic geography focused on a fundamental reorganization of capitalist production summarized as shift from fordist mass production to flexible specialization complementing this shift to flexible forms of production is the revival of interest in marshallian industrial districts characterized by geographically localized and tightly linked networks of small firms many a claim was based on anecdotal evidence in selected industries and regions in order to strengthen the importance of these results it is necessary to provide comprehensive empirical evidence across a broad range of sectors and regions this paper traces the key developments in economic geography and examines empirically the extent of flexible specialization in us manufacturing more specifically the paper focuses on

a rostovian model of endogenous growth and underdevelopment traps the paper presents a model which combines self sustained growth and underdevelopment traps into a common analytical framework we provide an analytical interpretations to rostow s observation that there is a decisive interval in the history of a society when growth becomes its normal condition and to the empirical evidence that some countries seem not to have achieved this stage yet the model exhibits aggregate non convexities and thresholds which separate a region where growth is solow type with convergence to a stationary steady state from a region where growth is romer type with endogenous self sustained growth in some critical stages of development there exist multiple equilibrium trajectories consistent with alternative sets of self fulfilling beliefs

collective efficiency growth path for small scale industry this study is concerned with the growth of small local industry in developing countries and explores one particular route for understanding and fostering such growth it focuses on the clustering of firms and the competitive advantage which they derive from local external economies and joint action captured in the concept of collective efficiency following a conceptual discussion the article explores the economic and institutional conditions which enhance or hinder collective efficiency this includes a case study which suggests that responding to opportunity and crisis requires shifting from mere reliance on external economies to joint action and from ascribed to earned trust

endogenous growth and intermediation in an archipelago economy a general equilibrium model based on the parable of an economy of many islands shows the market imperfections in the intermediation activity affect economic growth and possibly prevent take off into sustained growth the inhabitants of different islands accumulate heterogeneous assets and transportation type intermediation allows for better allocation of the productive resources the development process is accompanied by a reduction in intermediation costs which induces firms to adopt more efficient techniques and sustains economic growth a laissez faire economy suffers from two distortions the existence of market imperfections and a thick market externality

selling global buying local what determines the sourcing patterns of multinational plants in ireland hewitt dundas n andreosso o callaghan b crone m murray j and roper s 2005 selling global buying local what determines the sourcing patterns of multinational plants in ireland regional studies 39 225 239 multinational enterprises mnes have played an important if not crucial role in the recent development of the economy of ireland both north and south this paper compares the extent to which mne plants north and south are integrated into their host economies through local sourcing this is important both in terms of the direct effect on local demand and because local trading relationships provide a medium for technology transfer and supplier development levels of local sourcing north and south have diverged sharply over the last 15 years in the south local supply chains have grown stronger with mne plants now purchasing around 21 of their material inputs from within the country in the north by contrast local supply chain linkages have become weaker with only around 11 of mn

the changing corporate head office and its spatial implications aksoy a and marshall n 1992 the changing corporate head office and its spatial implications reg studies 26 149 162 a substantial body of literature suggests that during the 1980s large firms reorganized in response to volatility in product markets and in a search for new competitive advantage using evidence from a survey of twenty large firm head offices in great britain this paper examines the extent of large firm reorganization and its impact on regional economies it shows that associated with corporate restructuring employment in large firm head offices has declined substantially headquarters functions have been delegated to operating companies and contracting out has increased in a review of the geographical consequences of these changes which goes beyond the discussion of high tech complexes and industrial districts the paper suggests that reorganization is modifying rather than transforming patterns of spatial development in britain corporate restructuring is encouraging the dec

contrasting experience of recession and spatial restructuring british shipbuilders plessey and metal box peck f w and townsend a r 1984 contrasting experience of recession and spatial re structuring british shipbuilders plessey and metal box reg studies 18 319 338 trends in aggregate economic indicators in the recent recession conceal marked variations in the experience of different industrial corporations within the meso economic sector in the uk this paper demonstrates such variations by comparing the nature of employment decline in three major uk corporations british shipbuilders plessey and metal box despite similar employment profiles since 1977 these three corporations have experienced very different trends in output productivity and profitability suggesting that their respective job losses have occurred for different reasons the origins of these job losses are examined in detail concentrating in particular on the regional incidence of major redundancies and closures the conclusion summarizes the factors which influence job loss and suggests extending the analysis to wider groups of

spatial organization of firms the decision to split production and administration the research in this paper was conducted while the authors were special sworn status researchers of the us census bureau at the boston census research data center brdc research results and conclusions expressed are those of the authors and do not necessarily reflect the views of the census bureau the federal reserve bank of chicago or the federal reserve system this paper has been screened to insure that no confidential data are revealed support for this research from nsf award no 0111803 and 0427889 is gratefully acknowledged for helpful comments and discussions the authors thank robert porter editor thomas hubbard two anonymous referees and participants in seminars at the 2003 aea and rsai meetings the federal reserve bank of chicago and the center for economic studies all errors are ours

consumption commitments and habit formation we analyze the implications of household level adjustment costs for the dynamics of aggregate consumption we show that an economy in which agents have consumption commitments is approximately equivalent to a habit formation model in which the habit stock is a weighted average of past consumption if idiosyncratic risk is large relative to aggregate risk consumption commitments can thus explain the empirical regularity that consumption is excessively sensitive and excessively smooth findings that are typically attributed to habit formation unlike habit formation and other theories but consistent with empirical evidence the consumption commitments model also predicts that excess sensitivity and smoothness vanish for large shocks these results suggest that behavior previously attributed to habit formation may be better explained by adjustment costs we develop additional testable predictions to further distinguish the commitment and habit models and show that the two models have different welfare implications

factories or warehouses a welsh perspective on japanese transplant manufacturing munday m morris j and wilkinson b 1995 factories or warehouses a welsh perspective on japanese transplant manufacturing reg studies 29 1 17 critics of japanese direct manufacturing investment have argued that the japanese transplant manufacturing sector tms represents an attempt to circumvent trade barriers rather than a genuine globalization of japanese capital and that host regions will find themselves with warehouses or low value added final assembly plants rather than fully integrated manufacturing operations which will contribute significantly to the development of the local economy this paper presents a detailed study of the economic impact of japanese manufacturing in wales a region within the uk which has one of the highest concentrations of japanese manufacturing investment in europe it finds that there are some problems with japanese investment but although japanese companies do appear to operate their businesses in different ways to other inward investors many of these are be

flexible production and the transformation of industrial relations in the motion picture and television industry the authors trace the development of the motion picture and television production industry s three tier compensation scheme showing how incremental solutions to unanticipated problems broadly transformed labor relations by changing key institutional relationships this example they argue demonstrates that a fundamental transformation in the unionemployer relationship need not originate in high level strategic planning and may represent hope for the survival of collective bargaining in other industries

buyer supplier relations in industrial markets when do buyers risk making idiosyncratic investments it is well established that the existence of investments specific to a relationship influences the choice of governance structure including the use of contractual safeguards what is less well understood are the circumstances leading to the creation of those specific assets to begin with this paper explores the industrial buyer s motives to put itself at risk by making investments tangible and intangible which cannot be readily redeployed from one supplier to another using original data from a sample of 388 supply relationships involving all automakers in the u s and japan we examine features of the supply task the supplier and the supply environment which serve as motives to make supplier specific investments we also examine potential factors which facilitate the posting of specific assets as credible commitments to attenuate supplier opportunism we find that specific investments by buyers serve as a mechanism to 1 increase coordination when the manufacturing task is complex 2 buffer the buyer against technological uncertainty and 3 build close relationships when the requisite production skills are scarce the supply market is thin we find more specific investments in supply arrangements that are embedded in a broader business relationship we find fewer supplier specific investments in the japanese context finally we find that buyers focus their investments on lesser known low share component makers perhaps to capitalize on a unique focused supplier capability

the impact of a large multinational organization on a small local economy barrow m and hall m 1995 the impact of a large multinational organization on a small local economy reg studies 29 635 653 this paper is based on a research project undertaken for american express a m e x in brighton which aimed to identify the economic impact of american express on the local economy a research methodology is employed which inter alia utilizes concepts drawn from development economics notably economic linkages and enclave development adapted to the requirements of the project we use both quantitative data from the firm s payroll and suppliers databases and interview data from a variety of sources to make a judgement about the impact of the firm upon the locality we find there are both quantitative and qualitative links with the rest of the economy we try to measure both absolute and relative impacts of the firm by making use of different counter factual scenarios we find a generally beneficial effect of the firm upon the locality in contrast to a number of other st

broken chain agoa and foreign direct investment in the kenyan clothing industry drawing upon survey and interview research covering 23 of an estimated total of 35 clothing manufacturing establishments operating in kenya as well as interviews with the policy community this paper examines the local economic development impacts associated with the recent agoa prompted re birth of the clothing industry in kenya just after its recent high watermark in 2003 it provides evidence of the characteristics of these manufacturing establishments as well as evidence of the multiple and interconnected failures on the part of government parent companies agents and customers to promote the longer term sustainability of the industry as such it provides further case study evidence of africa s uniquely problematic incorporation into global commodity chains

the interplay between hq legitimation and subsidiary legitimacy judgments in hq relocation a social psychological approach this paper marks a departure from the focus on external stakeholders in much research on legitimacy and multinational corporations adopting a social psychological approach to study how mncs build internal legitimacy for controversial decisions with their subsidiaries we explore this through a longitudinal real time qualitative case study of a regional office relocation since office relocations represent rare yet significant strategic decisions we analyze the interplay between the legitimation strategies of senior managers and subsidiary legitimacy judgments based in instrumental relational and moral considerations and how the relationship between the two develops over time from this analysis we derive inductively a process model that reveals the dynamics of building internal legitimacy with subsidiaries and how an mnc moves on even in the absence of full legitimacy when dealing with controversial mnc decisions the model highlights two important dynamics the first is a dynamic between legitimation strategies and legitimacy judgments and how this is influenced by local subsidiary contexts the second is a temporal dynamic in how both the legitimation strategies and legitimacy judgments evolve over time our model contributes to research on legitimacy in mncs what we know about tensions that characterize mnc subunit relationships and research on headquarters relocation

public spending endogenous growth and endogenous fluctuations abstract this article studies indeterminacy and endogenous growth in a simple one sector model of capital accumulation endowed with inelastic labor supply in which the presence of public goods creates positive externalities both in the production and the consumption sectors because of increasing returns in the utility function the economy exhibits not only perpetual growth but also indeterminacy and therefore endogenous stochastic growth fluctuations the possibility of sunspot equilibrium growth paths is shown to be consistent with plausible parameter values journal of economic literatureclassification numbers e32 o41 h40

exploring the regional distribution of inbound foreign direct investment in the uk in theory and practice evidence from a five region study fallon g and cook m exploring the regional distribution of inbound foreign direct investment in the uk in theory and practice evidence from a five region study regional studies this paper examines the main factors that attract inbound foreign direct investment fdi at the uk regional level using econometric data from five sample uk regions the south east the west midlands the north west wales and scotland broadly representing the country s regional economic divide the findings indicate that regional and national but not european union level factors linked to several underlying strategic determinants help determine the regional distribution of inbound foreign direct investment and its inter regional variation the paper concludes that governmental policy makers at the national and regional levels can have an important role to play in drawing targeted foreign direct investment inflows to the uk regions fallon g et cook m examiner la distribution regionale de l ide au royaume uni en the

distribution aggregate demand and productivity growth theory and empirical results for six oecd countries based on a post kaleckian model empirical research based on the bhaduri marglin variant of the kaleckian model has recently shown that aggregate demand in many medium sized and large open economies tends to be wage led in the medium to long run even in a period of increasing globalisation in this paper we extend this type of analysis and integrate the effects on productivity growth theoretically and empirically productivity growth is introduced into the theoretical model making use of the verdoorn effect or of kaldor s technical progress function and hence of a positive relationship between gdp or capital stock growth and productivity growth further on a cost push or marx hicks effect and hence a positive impact of real wage growth or the wage share on productivity growth is taken into account in the empirical part we estimate productivity growth equations for six countries introducing these two effects finally economic policy conclusions are drawn

globalization of production and innovation how outsourcing is reshaping an advanced manufacturing area cusmano l mancusi m l and morrison a globalization of production and innovation how outsourcing is reshaping an advanced manufacturing area regional studies this paper investigates the determinants and the spatial and functional dimensions of firms outsourcing based on a large survey of manufacturing firms in lombardy italy the analysis shows that outsourcing is remarkably wide across sectors and has a clear regional dimension concerning highly skilled firms at most offshoring is still a minor fraction of the deverticalization process largely related to wider strategies of internationalization by foreign group subsidiaries at intermediate stages of the value chain the evidence suggests the regional system is inserting onto global knowledge networks but also points at the risk of branch plant effects in high technology segments cusmano l mancusi m l et morrison a la mondialisation de la production et de l innovation comment l approvisionnement a l exterieur reorganise une zone ind

a microeconomic mechanism for economic growth this paper constructs a dynamic general equilibrium model in which economic growth is explained by the evolution of the division of labor the relationships among the accumulation of human capital the evolution of the division of labor endogenous comparative advantage trade dependence the market structure and economic growth are investigated

the limits of trade policy reform in developing countries trade reform is now raising some new issues this paper deals with three sets of questions first how can trade reform be sustained can governments convince business labor or consumers that trade reform will be lasting so as to forestall possible adverse reactions that would jeopardize the sustainability of the reform second what role should trade reform play when it is implemented in the context of macroeconomic instability are there potential conflicts between the standard desiderata for trade reform and the requirements of macro stability finally should we be worried about the consequences of trade reform in the imperfectly competitive market environments that characterize the developing economies

labour market segmentation and workers careers the case of the italian knitwear industry this paper reports on empirical research into the labour market in the knitwear and ready to wear industry in the province of jvjodena emilia in particular it looks at the careers of three categories of workers homeworkers those employed on the production lines of larger firms and artisans 1 italy in common with many other industrialised capitalist countries has witnessed a growing decentralisation of production this tendency has been differently interpreted but a consensus is emerging that such developments are not evidence of economic backward ness 2 on the contrary an industrial structure consisting of firms of different size but with a large number of small and even microscopic enterprises is increasingly being recog nised as one possible avenue of economic development taking this for granted the aim of these notes is to investigate the structure of the labour market in a prosperous area typified by economic growth which has the small firm as its base element

anticipation and the valuation of delayed consumption this paper presents a model of intertemporal choice that incorporates savoring and dread i e utility from anticipat ion of delayed consumption the model explains why an individual with positive time preference may delay desirable outcomes or get unpleas ant outcomes over with quickly contrary to the prediction of convent ional formulations of intertemporal choice implications of savoring and dread for savings behavior empirical estimation of discount rate s and public policy efforts to combat myopic behavior are explored the model provides an explanation for common violations of the indepe ndence axiom as applied to intertemporal choice copyright 1987 by royal economic society

producer services trade and the social division of labour goe w r 1990 producer services trade and the social division of labour reg studies 24 327 342 several hypotheses have been advanced to explain the growth in employment and output of producer services industries in us metropolitan and regional economies one hypothesis contends that this growth is attributable to the increasing externalization of service activities by corporate managerial offices to independent producer services firms this has contributed to the growth of corporate complex agglomerations in urban regions manufacturing industries have traditionally been viewed as being the motivating force underlying this growth a second hypothesis contends that the growth of producer services industries is attributable to their evolution into basic industries and the growth of export trade this paper examines the validity of these hypotheses using data collected from a survey of business establishments in producer services industries located in the four metropolitan areas of the northeast regi

on endogenous growth with physical and human capital this paper presents a class of models in which agents may devote part of their nonleisure activities to going to school so as to increase the efficiency units of labor they supply to the firms and the wages they receive the interaction among the technology of human capital accumulation and agents preferences will determine endogenously the economy s rate of growth given a constant returns to scale technology for physical capital accumulation we characterize the set of steady states as a ray from the origin and show the global convergence of every off balanced path to some point on this ray further properties concerning the dynamic evolution of the state and control variables around the ray of steady states are also established our analysis is useful to understand the role played by the technologies of physical and human capital in the process of accumulation and to evaluate the impact of policies geared toward attaining higher levels of capital our results highlight the importance of human capital

unemployment and the real wage the economic basis for contesting political ideologies using the keynesian theory of effective demand this paper demonstrates how particular models such as that of cooperative capitalism enunciated by the left keynesian social democrats the marxian model of profit squeeze emphasizing distributive conflict and even the conservative model relying on supply side stimulus fit in as particular variants of a more general theoretical scheme through a reconstruction of the familiar is schedule the argument is weaved around the theme of the relations between unemployment and real wage in the context of both a closed and an open economy to explain the common macroeconomic basis of contesting ideologies copyright 1990 by oxford university press

networks versus vertical integration we construct a theory to compare vertically integrated firms to networks of manufacturers and suppliers vertically integrated firms make their own specialized inputs in networks manufacturers procure specialized inputs from suppliers that in turn sell to several manufacturers the analysis shows that networks can yield greater social welfare when manufacturers experience large idiosyncratic demand shocks individual firms may also have the incentive to form networks despite the lack of long term contracts the analysis is supported by existing evidence and provides predictions as to the shape of different industries

optimal public investments in education and endogenous growth optimal public investments in human capital through subsidizing private education or providing public education are considered in an endogenous growth model with externalities subsidizing private education stimulates growth improves welfare and has no distributional effect while reducing income inequality as in the literature public education hinders the growth of the average income unless externalities are strong enough and reduces the welfare of the median agent unless initial income inequality is sufficiently high societies with high income inequality may provide public education and will replace it with subsidized private education in some future periods as income converges copyright 1996 by the editors of the scandinavian journal of economics

anticipation of future consumption a monetary perspective we adapt the monetary model sidrauski 1967 to study the hypothesis of anticipation of future consumption we assume that anticipation of future consumption affects an agent s instantaneous utility and that all effects of future consumption on current well being are captured by the stock of future consumption monetary policy effectiveness is thereby reduced and a zero nominal lower interest rate and thus the friedman rule is destabilizing given this we can derive a just stable equilibrium nominal interest rate with matching definitions for inflation and monetary growth we demonstrate that these implied lower bounds match their historical analogues well

the role of headquarters subsidiary geographic distance in strategic decisions by spatially disaggregated headquarters various studies have explored how headquarters hq subsidiary geographic distance affects hq decisions about subsidiaries arguing that such distance causes some strategic options to be selected over others to limit ex post communication costs these studies have implicitly assumed that a multinational s hq is spatially concentrated even though multinationals have increasingly disaggregated their hq internationally we examine how such hq disaggregation changes the role that hq subsidiary geographic distance plays in hq decisions about subsidiaries we argue that hq disaggregation yields multiple hq subsidiary geographic distances all of which are a likely source of ex post communication costs and hence are likely to co determine hq decisions about subsidiaries we discuss several approaches for dealing with these multiple distances and recommend that the first best approach be adopted by future studies to avoid the biased geographic distance effects possibly present in prior studies

business service specialization and regional economic change perry m 1990 business service specialization and regional economic change reg studies 24 195 209 business services are experiencing rapid employment growth but there is uncertainty over the interpretation of this trend three surveys assess changes in the demand and supply of business services in the auckland region new zealand 1983 8 the data indicate that employment growth is real in that it is not caused by a transfer of activities that were formerly retained within other industries most manufacturing firms have adopted a pragmatic purchasing policy externalizing and internalizing services on an individual basis with increased internalization dominant for data processing and accountancy services a survey of business service suppliers indicates the greater importance of service exports demand from other services and product innovation as the basis for growth perry m 1990 la specialisation des services aux entrepri ses et l evolution regionale economique reg studies 24 195 209 les

macroeconomic structure endogenous technical change and growth this paper shows the relevance of the macroeconomic structure that governs short term changes in aggregate demand and income distribution in the determination of long term growth rates it develops a new growth model by introducing endogenous technical change into a keynesian marxist synthesis model of accumulation and distribution this model has multiple equilibria a high growth equilibrium that is stable if rising wage share leads to an increase in investment and real wages are somewhat rigid and a low growth equilibrium that is stable under opposite circumstances based on this result the paper discusses how institutions and history matter in long term growth copyright 1994 by oxford university press

the influence of hymer s dissertation on the theory of foreign derect investment the great contribution of stephen hymer s seminal dissertation 1960 was to escape from the intellectual straightjacket of neoclassical type trade and financial theory and move us towards an analysis of the multinational enterprise mne based upon industrial organization theory the magnitude of this breakthrough can be put into perspective by considering the state of the art when hymer wrote twenty five years ago in 1960 the prevailing explanation of international capital movements relied exclusively upon a neoclassical financial theory of portfolio flows in this frictionless world of perfect competition with no transaction costs capital moves in response to changes in interest rate or profit differentials see carl iversen 1936 according to this arbitrage theory capital is assumed to be transacted between independent buyers and sellers that is there is no role for the mne at the time there was no separate theory of foreign direct investment fdi the work did not even ask the question of why is there fdi despite the evidence of sectoral cross investments and the existence of large mnes with intra industry trade if anything the early work on fdi focused upon the where of investment in a particular nation or industry for example dunning 1958 was chiefly interested in explaining u s fdi in britain there was little interest in understanding the reasons for the mne or the nature of its operations the pioneering conceptual insight of hymer was to break out of the arid mold of international trade and investment theory and focus attention upon the mne per se this permits us to treat fdi as a modality by which firms extend their territorial horizons abroad the unique feature of fdi is a mechanism by which the mne maintains control over productive activities outside its national boundaries that is fdi means international production in this view fdi is more than a process by which assets or claims are exchanged internationally see robert aliber 1970 1983 hymer s great insight was in focusing attention upon the mne as the institution for international production rather than international exchange until hymer articulated the process of fdi as an international extension of industrial organization theory it was not possible to understand why the mne transfers intermediate products such as knowledge or technology among its units across different nations while still retaining property rights over such assets today it is widely recognized that the theory of fdi i e international production is primarily about the transfer of nonfinancial and ownershipspecific intangible assets by the mne which needs to appropriate and control the rate of use of its internalized advantage s see rugman 1981 david teece 1981 1982 richard caves 1982 and mark casson 1983 in this paper we first acknowledge hymer s contribution to the theory of fdi and then move on to reinterpret his dissertation in the light of the modern theory of the mne we tdiscussants raymond vernon harvard university robert z aliber university of chicago paul streeten boston university

escape from the usa government debt to gdp ratio country tax competitiveness and us oecd cross border m as statutory tax rates of a country do not reflect a country s true tax competitiveness we propose and show that government debt to gdp ratio govdebt of a country is a better proxy for its tax competitiveness using a comprehensive sample of 1 884 completed cross border acquisition transactions from the u s to other oecd countries we document that the u s target country govdebt difference is significantly and positively related to both deal announcement return and post deal tax saving of the acquirer the govdebt difference is also significantly and positively related to u s target country deal flow the findings remain robust when we control for the potential endogeneity of govdebt difference our findings strongly suggest that tax avoidance is an important driver of u s oecd cross border deal flow and it increases shareholder wealth for u s acquirers

endogenous fertility multiple growth paths and economic convergence abstract this paper extends the cass koopmans optimal growth model to allow for endogenous fertility choice it is shown that if agents choose their fertility rate then the net rate of return on capital marginal product of capital minus the population growth rate may not be monotonically decreasing in capital in this case multiple steady states and growth paths may emerge which can explain the persistent differentials in income between poor and rich countries as well as the existence of development miracles and disasters the paper provides also empirical evidence which supports the existence of multiple convergence groups and is consistent with the theoretical model

information costs and location of fdis within the host country empirical evidence from italy the literature on foreign direct investments fdis has analysed the location strategies of multinational enterprises across national borders but there have been few studies of location decisions by foreign investors within the borders of a single country the paper argues that the driving factors of these location choices have differing influences on indigenous and foreign investors specifically foreign investors suffer from a condition of adverse asymmetry in information costs compared to insiders thus foreign investors decisions on the location of their activities within a host country mainly reflect a rational responses to the existence of information costs

arm s length relationships we show that lowering the cost of acquisition of information that a principal obtains about the performance of an agent may make it more difficult for the principal to commit to threats hence it will weaken incentives and can therefore be counterproductive this phenomenon is explored in a framework where improving the quality of information makes a commitment not to renegotiate less credible applications to the theory of the firm are briefly explored

firm growth in industrial clusters of the united kingdom this article examines how firm growth is influenced by the strength of the industrial cluster in which the firm is located it presents econometric estimates of firm growth for 56 two digit industries in the uk in about half of these industries there is a positive and statistically significant association between firm growth and own sector employment significant associations between firm growth and other sector employment are less common but where these arise they are generally negative we find that a weak rule of thumb applies in most industries own sector effects are positive or insignificant while other sector effects are negative or insignificant cluster effects are strongest in manufacturing manufacturing related and infrastructure but weaker in services

supply chains material linkage and regional development the importance of economic linkage to regional development has been implicit in the variety of approaches that have been taken to analysing the development process despite this no mechanism exists which allows a general assessment of regional supply networks the paper provides one approach to this type of evaluation in uk regions focusing on the north west of england and taking uk input output tables as the basis of analysis sectoral linkages with supply potential are identified and their magnitude estimated the paper reveals both the scope for extending material linkages and generating employment in this region of the uk as well as confirming the important role played by manufacturing industries in intermediate supply chains

the uppsala internationalization process model revisited from liability of foreignness to liability of outsidership the uppsala internationalization process model is revisited in the light of changes in business practices and theoretical advances that have been made since 1977 now the business environment is viewed as a web of relationships a network rather than as a neoclassical market with many independent suppliers and customers outsidership in relation to the relevant network more than psychic distance is the root of uncertainty the change mechanisms in the revised model are essentially the same as those in the original version although we add trust building and knowledge creation the latter to recognize the fact that new knowledge is developed in relationships

factors governing the development of high tech industry agglomerations a tale of three cities glasmeier a 1988 factors governing the development of high tech industry agglomerations a tale of three cities reg studies 22 287 301 high tech industries are thought to precipitate structural change in local economies through the creation of backward and forward linkages and new firm spinoffs case studies of high tech firms and products indicate interindustry linkage development is closely associated with product type and organizational structure of firms three product configurations one of a kind customized and standardized generate differing levels of linkage and spinoff potential firms producing customized products with highly variable input structures and established subcontracting relationships are more amenable to linkage and spinoff creation than firms producing one of a kind or standardized products the potential for linked industry development is further diluted because the spatial expansion path of high tech firms has been through the creation of technical branch plants which a

analysis of a two sector model of endogenous growth with capital income taxation this paper addresses a two sector model of endogenous growth in which one sector produces final goods and the other produces new human capital both sectors employ human as well as physical capital under constant returns to scale technologies unlike existing studies of this type of model that have mostly concentrated on steady state analysis or on numerical simulations of calibrated models this paper presents an analytical argument concerning the dynamic behavior of the growth path and the effects of capital income taxation in and out of the steady growth equilibrium it is demonstrated that the dynamic behavior of the economy and some policy effects depend heavily upon the magnitude of factor intensity used in each production sector copyright 1996 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

rationality vs ignorance the role of mne headquarters in subsidiaries innovation processes it has been recognized that innovation processes in multinational enterprises mnes are largely context specific local activities carried out at the subsidiary level e g andersson forsgren holm 2007 asakawa 2001 birkinshaw hood 1998 doz prahalad 1981 ghoshal bartlett 1988 hedlund 1986 rugman verbeke 2001 as a consequence the ability of corporate headquarters hq to influence these widely dispersed processes has become a major issue in contemporary research on mnes what is the role of hq in these processes to what extent can it participate in and play an active role in specific innovation processes what are the performance implications when it gets involved these questions which have not yet established answers warrant further research in addition studies aimed at finding the answers have not yet debated the validity of alternative perspectives related to the knowledge asymmetry between the potential participants in innovation processes

tax rate uncertainty and the sensitivity of consumption to income in an overlapping generations model abstract a well documented feature of u s data is that the aggregate consumption is a smoother process than income an overlapping generations model with a time nonseparable utility function is developed to characterize the effect of income tax uncertainty on the degree of consumption smoothness the model predicts that an increased tax uncertainty combined with tax financed production externality makes the aggregate consumption smoother for a plausible range of intertemporal substitution in consumption a calibration experiment indicates that the observed long term smoothness of aggregate consumption is consistent with the model s predicted consumption process