the nexus between sectoral fdi and institutional quality empirical evidence from pakistan abstractthis study investigates short and long run bidirectional causality between institutional quality and sectoral level fdi in pakistan by using the ardl technique the results confirm that long run bidirectional causality exists between institutional quality and aggregate fdi the in depth sectoral level fdi analysis substantiates the presence of long run bidirectional causality between institutional quality and fdi in services and manufacturing sectors while no long run causality is observed between institutional quality and fdi inflows in primary sector furthermore the results in the study reveal short run bidirectional causality only between institutional quality and manufacturing fdi and report insignificant short run causal link between institutional quality and fdi in primary and services sectors the overall findings of the study suggest that in the long run institutional quality attract fdi and fdi inflows particularly to manufacturing and services sectors significantly enhance the qual

a method for solving general equilibrium models with incomplete markets and many financial assets abstract this paper presents a numerical method for solving stochastic general equilibrium models with dynamic portfolio choice the method can be applied to models with heterogeneous agents time varying investment opportunity sets and incomplete asset markets we illustrate the method using a two country model with production we check the accuracy of our method by comparing the numerical solution to a complete markets version of the model against its known analytic properties we then apply the method to an incomplete markets version where no analytic solution is available in all versions the standard accuracy tests confirm the effectiveness of our method

learning by doing the technology gap and growth in contrast with other trade and growth theories in previous literature the author resents a growth theory of trade induced learning other things being equal two conditions are essential for trade induced learning first both exports and imports are equally important sources and are mutually reinforced in intensifying the learning process moreover the nature or characteristics of these traded goods also influence the effect of learning second trade openness is a prerequisite but not a sufficient condition for rapid growth with whom one trades one s trading partner is a key factor in determining trade induced technology spillover and hence in affecting enduring growth therefore this trade induced learning theory provides abundant and testable implications for the empirical study of trade and growth copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

is the export led growth hypothesis valid for canada empirical evidence linking exports to economic growth has been mixed and inconclusive this study re examines the export led growth elg hypothesis for canada by testing for granger causality from exports to national output growth using vector error correction models vecm and the augmented vector autoregressive var methodology developed in toda and yamamoto 1995 application of recent developments in time series modelling and the inclusion of relevant variables omitted in previous studies help to clarify the contradictory results from prior studies on the canadian economy the empirical results suggest that a long run steady state exists among the model s six variables and that granger causal flow is unidirectional from real exports to real gdp jel classification f43 c32 est ce que l hypothese de la croissance engendree par les exportations est valide pour le canada les resultats empiriques des etudes tentant de montrer le lien entre les exportations et la croissance economique sont mixtes et ne contiennent pas de resultats concluants cet article re examine l hypothese dans le cas du canada en testant la causalitea la granger pour les exportations et la croissance du produit national en utilisant les modeles vecm et la methodologie var developpes par toda et yamamoto 1995 l application de certains developpements recents dans l analyse des series chronologiques et l inclusion de variables pertinentes omises dans les etudes anterieures aident a mettre de l ordre dans les resultats contradictoires des etudes anterieures portant sur l economie canadienne les resultats empiriques suggerent qu un regime permanent existe entre les six variables du modele et que la causalitea la granger est unidirectionnelle des exportations reelles vers le pib reel

revisiting the bright and dark sides of capital flows in business groups prior studies report that the business group structure and the associated intra group capital flows are prone to conflicts of interest between controlling shareholders and minority investors yet business group is a prevalent and stable structure around the globe particularly where capital markets are underdeveloped using data from china this paper empirically studies the trade off between the negative and positive roles played by intra group capital flows and tests the efficiency implications of such trade off we find that from the perspective of the whole group intra group capital flows are most efficient when the groups are least subject to conflicts of interest between controlling shareholders and minority shareholders and when they face strong external financing constraints

sugar and structural change in the cuban economy abstract diversification of the economy away from sugar was high among the economic priorities of the cuban revolutionary government in power since 1959 this essay explores whether sugar s role in the structure of the economy has in fact changed significantly in the last 25 years or so by examining three aspects of structural change specialization in production export concentration and effects of changes in world sugar market prices on economic growth the analysis suggests that policies of the revolutionary government have had a marginal impact in reducing sugar s role plans to increase sugar production and exports through the end of the century virtually assure that sugar will continue to play a predominant role in the economy

closing large open economy models abstract a large class of international business cycle models admits multiple locally isolated deterministic steady states if the elasticity of substitution between traded goods is sufficiently low i explore the conditions under which such multiplicity occurs and characterize the dynamic properties in the neighborhood of each steady state models with standard incomplete markets portfolio costs a debt elastic interest rate or an overlapping generations framework allow for multiple steady states if the model features multiple steady states under financial autarchy if the excess demand for the foreign traded good is increasing in the good s own price in a given steady state the equilibrium dynamics around this steady state are unbounded otherwise the dynamics are bounded and unique by contrast with uzawa type preferences the steady state is always unique and the associated equilibrium dynamics are always bounded and unique the same results obtain under complete markets

on the export led growth hypothesis the econometric evidence from china the export led growth hypothesis is tested by estimating an augmented growth equation on the basis of times series data from china the granger no causality procedure developed by toda and yamamoto journal of econometrics 66 1995 was applied to test the causality link between exports and economic growth in a var system three distinct features in this paper stand out compared to earlier studies on china first we have gone beyond the traditional two variable relationship by building a var model in the production function context to avoid a possible specification bias second we follow riezman whiteman and summers empirical economics 21 1996 to test the export led growth hypothesis while controlling for the growth of imports to avoid producing a spurious causality result third we test the sensitivity of causality test results under different lag structures along with the choice of optimal lags in particular the methodology developed by toda and yamamoto 1995 is expected to improve the stan

foreign investment and spillover efficiency in an underdeveloped economy evidence from the mexican manufacturing industry abstract in this paper we consider the question whether differences in technical efficiency of mexican plants in part derive from spillover efficiency associated with foreign direct investment we use labour productivity as a measure of technical efficiency and relate this to capital intensity labour quality and scale of production we measure the degree of competition by different concentration indices and the final factor determining efficiency is the presence of foreign subsidiaries if there is a positive relation between efficiency of domestic plants and the foreign participation of various industries we conclude that there is a spillover of technical efficiency the empirical evidence from the study indicates that this is the case

what does export diversification do for growth an econometric analysis it is frequently suggested that export diversification contributes to an acceleration of growth in developing countries horizontal export diversification into completely new export sectors may generate positive externalities on the rest of the economy as export oriented sectors gain from dynamic learning activities due to contacts with foreign purchasers and exposure to international competition vertical diversification out of primary into manufactured exports is also associated with growth since primary export sectors generally do not exhibit strong spillovers yet there have been remarkably few empirical investigations into the link between export diversification and growth this paper attempts to examine the hypothesis that export diversification is linked to economic growth via externalities of learning by doing and learning by exporting fostered by competition in world markets the diversification led growth hypothesis is tested by estimating an augmented cobb douglas production function on the bas

export led growth and structural change evidence from malaysia many studies have tried to establish the causal link between export expansion and economic growth this contribution is to recognize that structural changes will change the sources of growth and this will affect the export growth relationship a country case study approach is used focusing on malaysia a country with one of the world s highest sustained growth rates and a long history of commodity trade we use var analysis of malaysian quarterly trade and gdp growth from 1965 to 1996 trade data are disaggregated into primary and manufactures exports and causality tests are applied to the entire period as well as two subperiods 150 the 1965 1501980 period when policy emphasis was on import substitution and the 1981 1501996 period when policies favoured export led growth statistical tests confirm export led growth for the full period and for the period to 1980 but tests on the 1981 1501996 period show growth causing exports primary exports had a stronger direct impact on economic growth than manufactu

foreign owned insurer performance in the us property liability markets foreign owned property liability insurers have increased their market share in the us in the recent decades they may have achieved this by being more efficient by undercutting prices to attract away business from their domestic rivals or both we investigate return risk efficiency and determinants of efficiency performance of these insurers relative to their domestic competitors we find that these firms are less profitable and less efficient in terms of cost scale and revenue x efficiencies but more efficient in terms of cost x and revenue scale efficiencies overall the evidence shows that both of the aforementioned factors have contributed to their growth

export product diversification and co2 emissions contextual evidences from developing and developed economies abstract ascertaining cleaner production and sustainability is a major issue in the developed and developing world income and international trade are the predominant factors behind this this article explores the heterogeneous impacts of export product diversification extensive margin and intensive margins on the co2 emissions for developing and developed countries to this end the authors analyze the annual data of variables from 1971 to 2014 and employ unrestricted fixed effects and system gmm to solve the research problem the empirics suggest that all three indicators of export diversification significantly reduce co2 emissions in 63 developed and developing countries as a global sample the fixed effect models reveal that product diversification and intensive margin have a negative and significant impact in developed economies the negative impacts of product diversification show that economic sophistication is an important tool to reduce emissions further the chow test proved the statistical difference between developed and developing economies which contributes to policy recommendations based on the empirical outcomes the study suggests innovative policies for cleaner production and industrial manufacturing purposes making the policies more effective in achieving sustainable development goals sdgs

cross sectional estimation of fdi spillovers when fdi is endogenous ols and iv estimates for mexican manufacturing industries cross sectional estimates of foreign direct investment fdi spillovers are biased when the variable capturing the cross industry variation of foreign participation is endogenous to the estimated regression model in this article i introduce an original instrument for this problematic fdi variable capturing the general fdi intensity of manufacturing industries i use this instrument to estimate fdi externalities in a cross section of mexican manufacturing industries the main findings show that in contrast to the common criticism that ordinary least squares ols estimation produces an upward bias in the estimated fdi externality effect for the sample of mexican manufacturing industries ols estimation causes a downward bias controlling for the tendency among foreign manufacturing firms to gravitate towards low productivity industries the instrumental variable estimations provide robust evidence of significantly larger positive fdi spillover effects

the adoption of new technology by the farmers in taiwan this study addresses the technologies the farmers adopted their reasons for adopting these technologies and the result of adopting these technologies the design and strategy used to collect the data needed are both qualitative and quantitative farmers who practised traditional farming methods and those who adopted the new technologies were both given survey questionnaires and were interviewed the result of the study shows that the technologies applied by the farmers are the use of tractors in tilling the ground the use of machinery in planting the practice of irrigation and the use of a combination of organic and commercial fertilizers the reasons for the adoption of the latter are the availability of chemicals and the convenience of their use and this is used to enhance the growth of plants the results of the new technology adoption are high yields of produce production of hybrid crops and the saving of labour thus increasing the income of the farmers

technical inefficiency in manufacturing industries this article examines technical inefficiency of manufacturing industry in the united kingdom based on data for 19 023 establishments in 151 industries these data drawn from the annual census of production for 1977 have been used to estimate technical inefficiency in each industry by fitting translog stochastic frontier production functions and decomposing the residuals into two components one measuring inefficiency and the other unobservable random factors the work is the first step in a larger project to explain the sources of technical inefficiency and to compare efficiency between countries similar studies are currently taking place in australia the united states canada japan south korea and norway the first phase of estimation has been completed for the united states caves 1988 for the united kingdom green and mayes 1989 and australia harris 1989

manufactured exports and terms of trade of developing countries evidence from sri lanka terms of trade implications of diversification into manufactured exports in a traditional primary exporting country are examined in the light of the sri lankan experience over the past two decades the empirical analysis focuses on trends in both commodity and income terms of trade employing a methodology which takes care of the spurious regression problem the results suggest that contrary to the new terms of trade pessimism export diversification has brought about significant terms of trade gains for the sri lankan economy overall the study casts doubt on the robustness of results coming from analyses of price trends in aggregate manufactured exports and calls for systematic time profile analyses of the countries which have achieved significant export diversification in order to inform the policy debate

the impact of foreign direct investment on horizontal export diversification empirical evidence using data on stocks of foreign direct investment fdi from 131 countries spanning the years 1984 to 2004 and the number of products exported by each country we examine the effect of fdi on horizontal export diversification to quantify the effects we utilize parametric quantile and semi parametric econometric methods results from both approaches indicate that in general an increase in the stock of fdi enhances the horizontal diversification of exports the actual magnitude of the effect however varies greatly across countries depending on the existing stock of fdi and stage of diversification giving rise to an almost inverted u shaped relationship a further look at our results provides useful insights on the circumstances under which fdi may aid or inhibit the horizontal expansion of exports

privatization fdi inflow and economic growth evidence from china s provinces 1978 2008 china s economic growth over 1978 2008 is a miracle this article attempts to figure out and quantify the factors leading to this miracle it is generally believed that economic reform and opening up is the key to china s economic success but that is far from being exact and specific this study hypothesizes that privatization and foreign direct investment fdi inflow are the two key factors in this process we focus on identifying the exact specific and detailed mechanisms of privatization and fdi inflow in promoting economic growth especially from the provincial level then using a panel data covering 31 provinces of chinese mainland over 1978 2008 we find statistically significant evidence to support our hypotheses we predict that further economic growth depends on further privatization and opening up that is depends on denationalization of the economy

cuban planning in the mid 1980s centralization decentralization and participation abstract the paper examines the cuban planning system in the light of economic reforms in other state socialist countries investigating the advisability and feasibility of market type reforms in the current cuban context the cuban system remains highly centralized in spite of recent attempts to introduce more popular participation and make greater use of economic levers in the planning process but basic trends in and challenges facing the cuban economy in the 1980s may be strengthening the case for greater economic decentralization and expansion of markets

closing international real business cycle models with restricted financial markets abstract several authors argue that international real business cycle irbc models with incomplete financial markets offer a good explanation of the ranking of cross country correlations this conclusion is suspect because it is based on an analysis of the near steady state dynamics using a linearized system of equations the baseline irbc model with incomplete markets does not possess a unique deterministic steady state and as a result its linear system of difference equations is not stationary we show that the ranking of cross country correlations is robust to modifications that ensure a unique steady state and a stationary system of linear difference equations we find however that the modifications affect the quantitative predictions of the model

trade debt and the cuban economy abstract like many other latin american countries cuba pursued a strategy of debt led growth in the mid 1970s and sustained large balance of payments deficits with the west though external balance was restored by 1979 cuba faced a severe liquidity crisis in 1982 when short term loans were suddenly withdrawn this paper is a study of cuba s seemingly exceptional ability to decrease its foreign debt after 1980 meet interest payments on time and maintain an overall program of growth with equity a combination of implicit soviet trade subsidies and cuba s socialist polity and political economic control have apparently mitigated the constraints of the world capitalist system and fostered an alternative program to the current austerity measures of most of latin america

product diversification and stability of employment and sales first evidence from german manufacturing firms we use a unique rich newly built data set for german manufacturing enterprises to investigate the relationship between product diversification and the stability of sales and employment we find that contrary to portfolio theoretic considerations more diversified firms exhibit a higher variability of sales and employment however the effects are negligibly small from an economics point of view

foreign direct investment spillovers and technical efficiency in the indonesian pharmaceutical sector firm level evidence the spillovers of foreign direct investment fdi on domestic firms performances have been highly debated for many years this article contributes to this debate by analysing spillovers effects on technical efficiency of indonesian pharmaceutical sector using a unique unbalanced panel of highly disaggregated at five digit international standard industrial classification isic 210 firms over the period 1990 1995 1001 observations the stochastic production frontier spf and the data envelopment analysis dea based on malmquist productivity indices mpi have been used to test the spillovers effects of fdi on technical efficiency the empirical results from the spf show that foreign firms are more efficient than domestic competitors and the presence of the former increases the inefficiency of the latter similarly the results from the mpi demonstrate that fdi has a negative and significant impact on technical efficiency changes in domestic competitors but generate positive spillovers to domestic s

causal analyses between exports and economic growth in developing countries this study investigates the prima facie causal relationship between the exports and output growth in 30 developing countries over the period from 1960 to 1988 in a multivariate framework the information set considered for the output and exports models are domestic output exports labour and capital and exports domestic output exchange rate and foreign output respectively this study indentities a feedback prima facie causal relationship between exports and output growth in five countries export growth prima facie causes output growth in another six countries output growth prima facie causes export growth in a further eight countries and no causal relationship was observed between export growth and output growth in the remaining 11 countries we also found that in 15 countries the foreign exchange rate prima facie caused export growth and that in 12 countries world output caused export growth

is the export led growth hypothesis valid for australia the relationship between exports and output is examined using australian annual data over the period 1900 1993 cointegration and causality testing fails to detect the existence of a long run or short run relationship between the two variables these results are explained by restoring to the structural time series modelling approach which shows that while the output series exhibits cyclical variation the exports series does not have this property it is concluded that the export led growth hypothesis is not valid for australia

estimation of technical inefficiency in manufacturing industry an extension of the method of estimation of technical ineficiency is presented based on the stochastic production frontier approach a derivation of the estimation procedure is given and the technique applied at the industry level the choice of production function is considered and empirical results pertaining to australia and the uk are presented

want export diversification educate the kids first this paper uses bayesian model averaging to uncover the true determinants of export diversification among 36 potential factors and thus 236 potential models using data from 2001 to 2010 our results reveal two strong predictors primary school enrollment 99 7 posterior inclusion probability in the true model raises export diversification whereas the share of natural resources in gross domestic product 98 6 lowers diversification levels the importance of basic education coverage offers policymakers an opening toward diversifying exports at least in the long run this result is robust to accounting for the endogeneity of income levels by applying an instrumental variable bma method jel c11 f1 f34 o1 o2 o11

persistent wage dispersion and involuntary unemployment it is costly for firms offers to workers to be turned down both because firms must make additional offers and making offers is costly and because capital is underused or unused provided that workers apply to at least two firms for jobs there will be wage dispersion in equilibrium and some workers will randomly fail to receive any wage offers firms in the same industry with access to the same technology may nevertheless choose different levels of capital intensity firms using capital intensive technologies will pay higher wages

the validity of the elg hypothesis in the mena region cointegration and error correction model analysis the export led growth elg hypothesis is examined for nine middle east and north africa mena countries in three variable vector autoregressive and error correction models when considering total exports the results reject the elg hypothesis in almost all of these countries when only manufactured exports are examined no support is found for elg in countries with relatively low shares of manufactured exports in total merchandise exports but strong support in countries with relatively high shares these findings suggest that promoting exports may contribute to economic growth only after a certain threshold of manufactured exports has been reached

international business cycles with endogenous incomplete markets backus kehoe and kydland 1992 baxter and crucini 1995 and stockman and tesar 1995 find two major discrepancies between standard international business cycle models with complete markets and the data in the models cross country correlations are much higher for consumption than for output while in the data the opposite is true and cross country correlations of employment and investment are negative while in the data they are positive this paper introduces a friction into a standard model that helps resolve these anomalies the friction is that international loans are imperfectly enforceable any country can renege on its debts and suffer the consequences for future borrowing to solve for equilibrium in this economy with endogenous incomplete markets the methods of marcet and marimon 1999 are extended incorporating the friction helps resolve the anomalies more than does exogenously restricting the assets that can be traded

do tax cuts generate twin deficits a multi country analysis we study the eects of tax shocks on the budget and external deficits for 16 industrialized countries over the post 1975 period our structural approach is based on a tractable small open economy model where a tax cut generates a budget deficit in turn the budget deficit aects the external deficit by two distinct channels the demographic channel works through the overlapping generation structure of the model the forecasting channel works through the dynamic structure of the model our empirical analysis documents that tax shocks generate significant positive comovements between the budget and external deficits we also find that both the demographic and forecasting channels are important to explain the comovements

post reform industrial productivity performance of china new evidence from the 1985 industrial census data i introduction during the last decade china implemented a series of economic reforms that followed what many observers agreed was a period of stagnation in industrial productivity 1 the first wave of chinese economic reforms 1978 79 following the economic opening to the west under the four modernizations began after the third plenum of the eleventh central committee of the communist party of china announced a new policy of economic modernization in december 1978 a major goal of the new policy was to improve productivity toward this end the party would 1 allow the formation of private enterprises 2 permit state owned and collective enterprises to retain a portion of their profits 3 devolve a greater degree of decision making to factory managers and drastically reduce the scope of planning 4 introduce material incentives such as bonuses to labor and 5 place increased reliance on markets for inter industry resource allocation it is important to note that at this time in the early 1980s real reform was limited to the agricultural sector as discussed in perkins 1988 the second wave of reforms occurred in 1983 84 with the announcement of sweeping changes for the urban industrial sector these reforms included four major measures 1 a reduction in the number of leadership positions in enterprises 2 a further expansion of enterprise managers authority 3 the substitution of an income tax for remission of profits to the state and 4 removal of the ceiling on bonuses naturally it is important to know whether or not these reforms improved chinese industrial productivity since the early 1980s both chinese and western economists have conducted many empirical studies on china s post reform economic performance however the results from these studies are far from conclusive for example the world bank 1983 1985 field 1984 yeh 1984 chen 1986 chen and sang 1986 pan 1986 and tidrick 1986 have reported that input accumulation accounts for nearly all of output increases in industry as a whole in the early 1980s in particular tidrick 1986 found that china s performance has been extremely disappointing total factor productivity in the state owned industrial sector declined at an annual rate ranging from 0 10 percent to 1 20 percent for the period 1978 83 in contrast more recent studies such as those by kuan et al 1988 and jefferson 1988 have found that china s post reform industrial productivity was significantly improved most notably kuan et al 1988 found that chinese industrial productivity in the state owned sector grew at an average annual rate ranging from 2 7 to 3 1 percent for 1980 84 and from 15 3 to 18 2 percent for 1984 85 this difference in the findings reported in the literature is striking and requires further investigation one explanation is that the various studies are based on different data sets time periods models and data construction methods for example tidrick 1986 used aggregate time series data for state owned industry for the period 1952 83 while kuan et al 1988 used aggregate time series data including only independent accounting units within the state owned industrial sector for the period 1953 85 perkins 1988 reviewed china s overall post reform economic performance using data at the national level he found that during 1976 85 total factor productivity in china grew at an annual rate of 3 79 percent accounting for over 40 percent of china s net material product he concluded that reform and productivity growth thus led the way to higher overall growth and that agriculture and the collectively organized small scale industrial enterprises play an important role in the accelerated productivity growth of the reform periods perkins however hastened to point out that his conclusion is based on impressionistic evidence and is in no sense definitive and suggested that disaggregated data on outputs and inputs by sector or individual industries are required to identify those sectors that accounted for most of the rise in productivity perkins 1988 628

multinational experience and the creation of linkages with local firms evidence from the electronics industry the paper focuses on the nature and determinants of multinational firms creation of linkages with local firms with specific reference to the electronics industry the study of the recent evolution of international operations in this sector seems to highlight a relevant and somewhat generalisable pattern of industrial organisation and dynamics it is argued that the nature and intensity of multinational companies involvement into linkages with local counterparts are strongly influenced by a combination of factors that are partially inter dependent but still rely on different decision making centres on the one hand host countries long term investment policies in the field of human capital training and accumulation and on the other hand firms decisions to take roots in local contexts through the creation of foreign subsidiaries it is further suggested that human capital and subsidiaries will particularly favour the development of collaborative linkages with local firms compared to previous work of the authors on this subject this paper utilises an expanded and updated data set covering international operations of the top european and us electronics companies over the 1984 1995 period and attempts a more detailed and in depth analysis concerning the nature determinants and evolution in time of international growth strategies

export specialisation and local economic growth this paper aims to provide empirical evidence on whether export specialization or diversification is better for local economic growth using export data from 354 magisterial districts of south africa for 1996 and 2001 we estimate spatial growth regressions that include measures of the degree of export specialization and diversification overall exporting regions outperform other less or non exporting regions also we find that export specialisation rather than export diversification has been associated with local economic growth with specialization in mining and agriculture being especially beneficial our results support the view that specialization in a locality s area of comparative advantage is good for local economic development we also find that localities with higher initial levels of human capital and higher subsequent population growth performed better this is consistent with the belief that policies aimed at strengthening human capital and improving agglomeration economies will enhance local economic development

patience persistence and welfare costs of incomplete markets in open economies abstract we investigate the welfare implications of alternative financial market structures in a two country endowment economy model we obtain an analytic expression for the expected lifetime utility of the representative household when sovereign bonds are the only internationally traded asset and we compare this welfare level with that obtained under complete asset markets the welfare cost of incomplete markets is negligible if agents are very patient and shocks are not very persistent but this cost is dramatically larger if agents are relatively impatient and shocks are highly persistent for realistic cases in which agents are very patient and shocks are highly persistent the welfare cost of incomplete markets is highly sensitive to the specific values of these parameters

exports export composition and growth cointegration and causality evidence for malaysia this paper comprehensively tests the export led growth elg hypothesis for malaysia for the period 1955 90 using cointegration and causality testing based on hsiao s synthesis of the granger test and akaike s minimum final prediction error criterion the results provide support for the elg hypothesis aggregate exports granger cause real gdp and non export gdp this relationship is found to be driven by manufactured exports rather than by traditional exports

a new look at the benefits of diversification lessons from central america recent trends of export diversification in central america may lower foreign exchange earnings instability there four countries costa rica el salvador honduras and guatemala are analysed across a twenty year period the paper uses united nations commodity trade statistics to explain why costa rica and honduras have enjoyed greater earnings stability in recent years despite the fact that honduras has not greatly diversified its export products and markets despite the growth of new agricultural and manufacturing goods traditional primary products still dominate the countries export portfolios specific products within each of the four broad product category groups contribute to the varied country outcomes summary statistics from the united nations panel data suggest newer agricultural exports have not stabilized guatemalan and salvadoran export earnings while honduras has enjoyed relatively stable banana export revenues and costa rica has benefited from the smooth flow of microelectronic product

fdi trade and spillover efficiency evidence from china s manufacturing sector using firm data from the 1995 third industrial census of china this paper finds that the presence of foreign ownership has a positive and significant effect on domestic firms productivity moreover trading with more advanced countries helps china gain access to new technology and information which improves its productivity and enables it to compete in international markets it is found that china s imports from oecd and the four asian tigers and exports to oecd have positive effects on domestic firms productivity by dividing industries into high technology gap and low technology gap groups it is found that the spillover effects of fdi are larger for the low technology gap group than for the high technology gap group however the estimation results of the trade induced technology spillover effect support the technology gap learning theory and the significance of importing appropriate technology

exports and economic growth in industrialized countries the prima facie causal relationships between growth exports and factor inputs capital and labour are investigated in five industrialized countries germany itlay japan united kingdom and united states over the period 1960 87 by analysing a four variable vector autoregressive var model for each country our results indicate that germany and japan experienced export led growth reverse causality between exports and growth is found in the case of the us and uk while to causal relationship between exports and output is found for itlay

a new look at the effects of export instability on investment and growth abstract this paper is concerned with the effects of export instability on investment and growth it is shown that past cross sectional empirical studies on the effects of export instability either in prices or in value terms used an incorrect measure of instability that does not properly take account of the share of exports in gdp using a new instability index and a broad set of conditioning variables it is shown that export instability was positively associated with investment but negatively associated with growth in a large sample of countries during the period from the early 1970s to the mid 1980s

policy driven productivity in chile and mexico in the 1980 s and 1990 s abstract both chile and mexico experienced severe economic crises in the early 1980s but chilerecovered much faster than did mexico using growth accounting and a calibrated dynamicgeneral equilibrium model we conclude that the crucial determinant of this difference betweenthe two countries was the faster productivity growth in chile rather than higher investment oremployment our hypothesis is that this difference in productivity was driven by ealier policyreforms in chile the most crucial of which were in banking and bankruptcy procedures wepropose a theoretical framework in which government policy affects both the allocation ofresources and the composition of firms journal of economic literature classification codes e52 n6 o40 key words chile mexico growth accounting total factor productivity depression centro de economia aplicada universidad de chile santiago chile research department federal reserve bank of minneapolis minneapolis mn 55480 department of economics university of minnesota and national bureau of economic research department ofeconomics university of minnesota minneapolis mn 55455 and research department federal reserve bank of minneapolis and instituto de economia pontificia universidadcatolica de chile santiago chile respectively we thank the participants in the minneapolisfed s great depressions of the twentieth century project especially ed prescott for usefuldiscussions jim macgee provided invaluable research assistance bergoeing thanks the hewlettfoundation and kehoe and kehoe thank the national science foundation for research support the views expressed herein are those of the authors and not necessarily those of the federalreserve bank of minneapolis or the federal reserve system

a technique for obtaining improved proxy estimates of minimum optimal scale in the field of industrial organization the concept of economies of scale is of fundamental importance large minimum optimum scale mos 1 and significant unit cost reduction up to mos size together suggest the possibility of high industry concentration and significant barriers to entry 2 however a recent paper in this review caves shirazi and porter 1975 has pointed to the severe difficulties encountered by students of industrial organization in empirical analyses of these relationships the chief problem is that objective measures of mos i e engineering estimates 3 and of the cost disadvantage of suboptimal scale production are available for only a small minority of all u s manufacturing industries at say the 4 digit level since there are more than 400 such industries it is most unlikely that there ever will be much change in this situation this means that in large scale cross section statistical analyses various proxies for scale economy influences must be used this is also the case in other fields of economics in which the influence of industrial organization has been recently felt in the investigation of sectoral patterns of direct foreign investment and the commodity composition of international trade for example unfortunately little has been achieved in terms of the development of reliable proxies for scale economies or minimum optimal scale this relative poverty in the data seriously jeopardizes the empirical analyses undertaken in all the above mentioned fields the present paper is a first step at overcoming this deficiency it offers a critical analysis of the proxies currently in vogue and it suggests an alternative technique for generating estimates of mos that appear to be substantially superior to them

putting things in order trade dynamics and product cycles we develop a procedure to rank order objects using censored panel data sets we illustrate this by ranking countries and commodities using disaggregated american import data and find evidence that

manufacturing exports mining exports and growth cointegration and causality analysis for chile 1960 2001 this study examines the export led growth hypothesis using annual time series data from chile in a production function framework it addresses the problem of specification bias under which previous studies have suffered and focuses on the impact of manufactured and mining exports on productivity growth in order to investigate if and how manufactured and mining exports affect economic growth via increases in productivity the study uses johansen cointegration technique the estimation results can be interpreted as evidence of productivity enhancing effects of manufactured exports and of productivity limiting effects of mining exports

firm size and technical efficiency applications of production frontiers to indian survey data abstract this paper is an empirical investigation of the relationship between relative technical efficiency and firm size in four indian manufacturing industries a frontier translog production function is used to derive measures of technical inefficiency at the enterprise level given the properties of the estimated production frontier these indices of technical efficiency are also indices of total factor productivity tfp which is the single most widely accepted measure of productive efficiency variations in technical efficiency are correlated with several explanatory variables including size of firm firm size is found to be positively associated with relative productive efficiency in only one of the four industries

middle east and north africa countries agricultural export potentials under trade reforms middle east and north africa mena countries future stand in the world s economy depends to a large extent on the potentials of their agriculture to perform in a free trade world european union eu is the largest market for agricultural products of mena countries though new outlets and new partnerships can expand the market of their products enhancing agriculture s potentials safeguards the economy s general expansion and impede the flee of mena countries huge labour reserves to the developed world in this work introducing a few possible trade reforms a general equilibrium model is employed to assess the impacts upon region s export potentials and welfare changes selecting certain distinct scenarios from a wide spectrum of anticipated trade reforms and feeding them into the model insights on the direction of the expected changes and rough estimates of accrued benefits can be extracted the model results suggest that the region might benefit the most under special provisions for developing cou

patterns of cuban development the first twenty five years abstract this paper interprets the post 1959 evolution of cuban economic policymaking and performance as a function of the shifting and interacting domestic and foreign sources of surplus accumulation policy choices previously seen as strictly subjective such as the use of moral incentives in the late 1960s are attributed objective components the tensions between decentralization and centralization market and plan private and public agriculture and industry efficiency and equity are discussed in relation to domestic surplus generation the role of soviet aid commodity prices trading patterns and debt repayment are treated in analyzing foreign influences on surplus generation

near unit root small open economies abstract the marginal utility of wealth in incomplete markets small open economy models follows a unit root process i study the nonlinear properties of devices often used to remove the unit root and i find that they generate different dynamics when matching emerging markets models with endogenous discount factors reinforce consumption response to shocks and increase the countercyclicality of the trade balance to output ratio conversely models with debt frictions ameliorate the responses of consumption and trade balance hence to generate dynamics similar to those in emerging economies the debt frictions need to be small inducing a near unit root behavior in their euler equations this difference across models is hidden when matching developed economies because of consumption smoothing and the mild countercyclicality of the trade balance

the export skill content learning by exporting and economic growth abstract we empirically investigate whether countries export mix influences their economic growth using panel data from 86 countries covering the period between 1970 and 1990 we identify a statistically significant positive relationship between export skill content and economic growth the evidence supports the idea that after controlling for the levels of gdp per capita education openness to foreign trade and political and macroeconomic stability a higher export content of skill intensive goods generates higher per capita gdp growth rates

the spirit of capitalism and stock market prices in existing theory wealth is no more valuable than its implied consumption rewards in reality investors acquire wealth not just for its implied consumption but for the resulting social status max m weber 1958 refers to this desire for wealth as the spirit of capitalism the authors examine both analytically and empirically implications of weber s hypothesis for consumption savings and stock prices when investors care about relative social status propensity to consume and risk taking behavior will depend on social standards and stock prices will be volatile the spirit of capitalism seems to be a driving force behind stock market volatility and economic growth copyright 1996 by american economic association

variety complexity and economic development abstract we propose a combinatorial model of economic development an economy develops by acquiring new capabilities allowing for the production of an ever greater variety of products with an increasing complexity taking into account that economies abandon the least complex products as they develop over time we show that variety first increases and then decreases in the course of economic development this is consistent with the empirical pattern known as the hump our results question the common association of variety with complexity we further discuss the implications of our model for future research

the measurement and sources of technical inefficiency in the indonesian weaving industry production function models are estimated with a time series of cross section data on indonesian weaving establishments the sources of technical inefficiency are investigated three firm attributes are identified as being potentially related to firm efhciency tbey are firm ownership age and size the importance of these attributes as sources of inefficiency in the indonesian weaving industry is investigated and the implications of the find ings discussed

the cuban sugar export dependency question premises and controversy abstract controversy over the degree to which cuba has diversified its economy away from sugar monoculture typically pivots on statistical fluctuation in sugar export concentration or the sugar industry s share in the economy this note suggests that the controversy is somewhat moot in that if cuba were to achieve its sugar price and production goals sugar would be a greater component in the cuban economy because cuba has consistently fallen short of sugar price and production objectives statistically observed diversification is not sufficient evidence for a conclusion of successful movement away from monoculture

aggregate volatility and international dynamics the role of credit supply abstract changes in country specific aggregate volatility are positively correlated with the current account but negatively correlated with investment output and credit flows an international real business cycle model with time varying aggregate uncertainty through a precautionary savings channel can account for the positive correlation but implies counterfactual comovements for the other variables adding a credit supply channel with default and lenders exposed to aggregate risk allows the model to match all the facts higher volatility contracts credit supply and lowers investment and output the current account turns to a surplus because savings increase but also because investment collapses

interrelationship among foreign presence domestic sales and export intensity in chinese manufacturing industries abstractusing panel data on six chinese manufacturing industries over the period 2005 2007 this article explores the interrelationship among foreign presence domestic sales and export intensity of local firms we find that the domestic sales and exports are complementary for local firms in china s pharmaceutical industry whereas in the case of the textile transportation equipment beverage communication equipment and general equipment manufacturing industries domestic sales and exports are substitutes an increase in the average domestic sales increases foreign presence in all industries the same applies to an increase in the average export intensity an increase in the level of competition in china s textile industry increases the export intensity as well as domestic sales of local textile firms however an increase in the level of competition in the pharmaceutical industry leads to a very large decrease in export intensity of local pharmaceutical firms in the case of china s transportation equi

international real business cycles we ask whether a two country real business cycle model can account simultaneously for domestic and international aspects of business cycles with this question in mind we document a number of discrepancies between theory and data the most striking discrepancy concerns the correlations of consumption and output across countries in the data outputs are generally more highly correlated across countries than consumptions in the model we see the opposite

external asymmetries in the euro area and the role of foreign direct investment soon after the introduction of the common currency a divide emerged between two groups in the euro area one comprised of the north european countries achieving external surpluses and the other of the south european countries with large external deficits this paper shows that different patterns of foreign direct investment fdi inflows across the euro area countries contributed to this divergence our theoretical framework shows that if the economy is relatively capital intensive in the production of traded non traded output fdi will be channeled in greater proportions to the traded non traded sector thus improving deteriorating the trade balance focusing on ten euro area countries over the period 1980 2009 we establish a positive negative long run effect of fdi inflows on the trade balance in the north south in the north the positive effect stems from the traded sector fdi inflows that were significantly higher in comparison to the south both before and after the emu in contrast in the south the increased fdi inflows in the post emu era were dominated by investments in the non traded sector when industry level data are employed a positive negative long run effect of manufacturing non manufacturing fdi inflows on the trade balance in the north south is further established

on the north south trade in the americas and its ecological asymmetries there has been a long and intensive debate within the scientific community about the role of international trade in the development of countries during the last decades the focus of attention has moved from the pure economic level to the environmental aspects of international trade establishing a simplified system of north south trade for one reference period 2003 this paper attempts to test empirically the extent of potential asymmetries with regard to extracted material flows and contrasts the results with the economic benefits from trade in terms of value added the south is thereby represented by a selection of latin american countries brazil chile colombia ecuador and mexico the north comprises one of their main commercial partners the united states at the methodological level a multi regional input output analysis is used as the tool of investigation results generally support the hypothesis that the south was feeding the north s societal metabolism south north material exports were 1 6 times larger than north south material exports resulting in a net deficit for the south of 324 million tons moreover material intensity of exported commodities from the south was twice as high as that from the north it is worth highlighting however that part of the north south hypothesis fails for the sample of countries since the larger part of the economic surplus has remained in the south contrarily to what would have been expected