has government investment crowded out private investment in india pritha mitra in india the relationship between government investment and private investment is a controversial issue economic theory suggests that government investment financed by borrowing reduces the loanable funds available for private investment driving up interest rates and reducing the level of private investment if as keynesians argue the positive impact of increased government investment outweighs the negative impact of reduced private investment then economic growth will increase in the case of india government investment would add to the momentum of india s growth

does foreign aid increase private investment evidence from panel cointegration this article uses panel cointegration and causality techniques to examine the long run relationship between foreign aid and private investment our main result is that aid has a statistically significant negative effect on private investment this result is robust to outliers different measures and forms of aid sample selection and the sample period in addition we find that long run causality runs in both directions suggesting that an increase in aid reduces private investment and that in turn higher private investment leads to lower aid inflows

determinants of the structure of u s foreign trade 1958 1976 abstract the heckscher ohlin model with three direct factor inputs is borne out for u s net exports of manufactures in annual cross section regressions for 1958 1976 the coefficient on unskilled labor became significantly more negative over the period and there is evidence that the negative sign on physical capital may reflect the inclusion of natural resource industries further analysis based upon 1960 and 1970 census years suggests the importance as well of skill and technological variables calculations of the total factor requirements of u s trade uphold the leontief paradox for 1958 but not for 1972

sources of changes in factor intensity of trade the factor proportions hypothesis of trade theory has been the subject of a large number of empirical tests but few of them have analyzed the changes in the factor content of trade in a country over time or across countries this study analyzes the changes in factor intensity of trade in mexico japan korea taiwan and israel during the 1960s it traces back the changes in capital labor ratios in the production of exports and import substitutes to variations in the sectoral composition of trade changes in factor output ratios and changes in input output coefficients

asset price shocks financial constraints and investment evidence from japan this paper examines investment spending of japanese firms around the asset price bubble in the late 1980s and makes three contributions to our understanding of how stock valuations affect investment first corporate investment responds significantly to nonfundamental components of stock valuations during asset price shocks fundamentals matter less clearly the stock market is not a sideshow second the time series variation in the sensitivity of investment to cash flow is affected more by changes in monetary policy than by shifts in collateral values finally asset price shocks primarily affect firms that rely more on bank financing and not necessarily those that use equity markets for financing only the investment of bank dependent firms responds to nonfundamental valuations in addition the cash flow sensitivity of bank dependent firms with large collateral assets decreases when asset prices become inflated but increases dramatically when asset prices collapse and monetary policy tightens

aggregate implications of factor substitution in industrial processes abstract using a number of recently completed studies of the scope for factor substitution in industrial processes we estimate the total private benefits of systematic adoption cost minimizing technology as compared with capital intensive technology obstacles to the choice of such technology are examined and presented within a benefit cost framework the reasons for some of the current choices of technology are analyzed and policies necessary to alter these are suggested

empirical analysis of macroeconomic time series var and structural models abstract var and structural econometric models have complementary roles in the modelling of macroeconomic time series a constant parameter var provided it is statistically well specified constitutes a valid basis for testing hypotheses of dynamic specification exogeneity and a priori structure thus facilitating model evaluation as well as suggesting a potentially efficient model development strategy deterministic e g trends and regime shifts and stochastic e g integrated variables non stationarities are analysable within this framework and the johansen maximum likelihood procedure for cointegrated systems is used in an analysis of the determination of earnings prices productivity and unemployment in the u k

technology imports and their impacts on the enhancement of china s indigenous technological capability this article analyses the pattern of technology imports and its influences on china s indigenous technology indigenous technology consists of two dimensions technology generation measured by rd and application measured by output value of heavy industry and its export value respectively the analysis reveals increased reliance on foreign loans to finance technology imports diversified sources of supply and strong emphasis on the purchase of disembodied technology after the late 1970s based on time series data from 1960 to 1991 statistical evidence indicates that imported technology has significantly enhanced china s technological build up imported technology is positively correlated with both dimensions

testing the heckscher ohlin vanek theory with a natural experiment i use the historical episode of near elimination of commuting from the west bank into israel to test three key predictions of the heckscherohlinvanek model of trade and find strong support for them on the production side i use variation between districts and find that wage changes were not correlated with the size of the shock to the labour force factor price insensitivity and that districts that received larger influx of returning commuters shifted production more towards labour intensive industries rybczynski effect on the consumption side data are consistent with identical homothetic preferences which combined with the production results supports the heckscherohlinvanek theorem on the factor content of trade

a note on international trade and market structure as exports become an increasing part of industry sales the determinants of a firm s international position become increasingly important tests have supported single factors such as product life cycle lutz and green 1983 as well as multi factor models to explain the determinants of industry imports and exports stern and maskus 1981 harkness and kyle 1975 baldwin 1971 this study also presents a multi factor analysis of the determinants of u s trade patterns this study utilized the spi strategic planning institute data set which allows research at the business unit product line level results indicate that productivity and product development are the principal characteristics of high export percentage business units these findings are especially true for nonconsumer industries thus to the degree that business are concerned over the short term costs of product development direct or indirect for example insurance government aid may be required to promote u s export industries

productivity and technical choice applications to the textile industry abstract this paper analyzes past choices of technology and present levels of productivity in the philippines cotton spinning and weaving industries detailed engineering and economic information are used to assess the costs of alternative technologies to estimate levels of productivity relative to international standards of best practice and to analyze the sources of productivity short falls high costs of production are due both to inappropriate technological choices and to low productivity in the use of the technologies chosen the major sources of low productivity are lack of sufficient firm level specialization among product varieties and deficient firm level technological capabilities inadequate labor skills are not a major problem the discussion emphasizes the general applicability of the analysis wherever low productivity is likely to be a problem

measurement of the factor content of foreign trade with traded intermediate goods abstract in a recent article helpman 1984 develops readily testable bilateral restrictions in a model of international trade which preserves the spirit of heckscher ohlin trade theory important in any empirical exploration of the heckscher ohlin model is the decision of whether to employ direct or direct plus indirect calculations in determining the factor content of trade this paper extends helpman s analysis to a world of freely traded intermediate goods and shows that direct factor content calculations are the theoretically appropriate measure for use in evaluating these empirical implications of the heckscher ohlin model

comparative advantage in manufactured goods a re appraisal japanese input coefficients are used to investigate the pattern of comparative advantage in the exportation of manufactured products in a cross country framework estimates are made for the imports of manufactured products as well as for net exports also alternative techniques of estimation are utilized and an attempt to explain the residuals in the regression equations and to indicate the predictive power of these equations is made the paper shows that patterns of comparative advantage in manufactured goods can be explained by reference to commodity characteristics and country characteristics in turn intercountry differences in the extent of trade orientation the concentration of exports and foreign direct investment explain part of the residuals of the cross country regression equations finally it has been found that the method applied permits projecting the factor intensity of trade for individual countries

evidence on shifts in the determinants of the structure of u s manufacturing foreign trade 1958 76 this paper extends the analysis performed by stern and maskus s m 1981 of changes in the determinants of the structure of u s foreign trade over the period 1958 76 that paper s major purpose was to compare annual regressions of the factor content version of the heckscher ohlin model over a cross section of manufacturing industries thereby presenting systematic evidence on the structural determinants of u s trade at different points in time however by not pooling the cross sectional data over time s m failed to exploit a great deal of statistical information which could have been brought to bear on the questions under consideration the present paper corrects this deficiency by performing a pooled cross section and time series analysis of time related changes in both the factor content and technological content of u s manufacturing net exports over the period 1958 76 the paper is organized as follows in section ii some theoretical points are discussed with regard to model specification and the interpretation of time series regression coefficients which reflect the factor content of trade section iii presents a methodology for analyzing the existence of changes over time in the vector of regression coefficients which are estimated from a pooled data set and reviews the results of applying the methodology in section iv more specific claims about the pattern of these coefficient changes are made based upon statistical comparisons of the coefficients between pooled subperiods section v concludes with comments on factors which may underlie the observed changes ii notes on the specification of the models

textile manufacturing in eight developing countries does business environment matter for firm technical efficiency abstract production frontiers with technical inefficiency determinants are estimated using stochastic models for textile manufacturing in eight developing countries encompassing about 800 firms inefficiency determinants are considered either on an individual basis or in the form of composite indicators reflecting in house or managerial factors and various dimensions of the external environment although each of these two categories of factors is statistically significant the former proves more influential in the explanation of the difference in efficiency between firms simulations are then proposed to assess the efficiency levels that would occur if firms had the opportunity to produce in the most favourable productive environments

r d effort and us exports and foreign affiliate production of manufactures abstract this paper examines the relationship between us r d expenditures and the pattern of us manufacturing exports and foreign affiliate sales across industries and regions for the years 1966 and 1976 while differences in relative research capability between the united states and the rest of the world have narrowed over this period research effort still significantly explains the pattern of us sales in foreign markets for any region the export and foreign affiliate sales performance of research intensive industries exceeds that of non research intensive industries the relative performance of the formed is greater in regions with larger market size and high per capita income the analysis also reveals that over the time period studied the ratio of us exports to foreign affiliate sales has generally fallen for all industries and foreign markets these observations accord with a broad interpretation of the product cycle theory while the united states has lost its uniqueness as a location of innovation the ability to develop and market new products through r d expenditures is still a strong force behind its exports and sale abroad the decrease in exports relative to foreign affiliate sales may reflect a more rapid shift in comparative advantage in the production of such products to foreign locations hence the positive effect on us exports of development of any given new product may be becoming more short lived

an empirical estimate of the effects of labormarket distortions on the factor content of u s trade abstract this study deals with the effects of labor market distortions on the estimates of human capital used in studying u s trade flows the initial concern was that the levels of human capital attributed to highly concentrated and unionized industries might be erroneously high this could alter regression estimates not only of the effect of human capital on net exports but also of other coefficients in the equation the results of the analysis suggested however that when the possibility of distortions is taken into consideration the signs of the coefficients are unaltered although some change is evident in their magnitude

resource supplies and changing world agricultural comparative advantage abstract this paper advances consideration of the heckscher ohlin h o theory of comparative advantage to agriculture in a dynamic setting the dynamic relationship among trade flows resource supplies and factor contents is studied the view that special circumstances in the agricultural sector render the h o theory inapplicable as a guide to agricultural trade is challenged consistent with the h o theory the results suggest that changing world patterns of resource abundance are an important explanation of the evolving structure of world trade in agriculture commodities

scale factor intensity and efficiency an empirical study of the chinese coal industry this paper deals with the interrelationship among firm scale factor intensity and efficiency using the chinese industrial survey data in 1985 and stochastic frontier models according to empirical

research and development human capital and trade performance in technology intensive manufactures a cross country analysis abstract this paper comprises an extensive examination of the relationship between commonly utilized policy indicators of national technological capability and observed trade success in technology intensive manufactures across 52 countries in the 1980s a central focus is the relative performance of policy indicators which directly measure innovative activity such as patent output and expenditure and employed scientists and engineers in r d versus those measuring general efforts at increasing national levels of human capital the study design is guided by the inter country intrasectoral approach outlined by dosi et al 19 it emphasizes differences in trade performance based on the notion of international competitiveness but also compares results for conventional revealed comparative advantage indices the large number of countries included and the nature of the policy objectives adopted have necessitated a highly aggregated approach using nation wide attributes and trade in one broad technologyintensive sector as the measure of demonstrated international competitiveness simple correlation and multiple regression techniques are used to assess the association of four main sets of national attributes indicators of direct innovative activity general human capital development physical capital formation and natural resource endowment with technology intensive trade performance the empirical findings provide further support for the importance of national differences in technological capability as a determinant of structural and international competitiveness within the technology intensive sector of production they suggest that policy indicators measuring actual innovative activity and physical capital formation have a much closer link to technology intensive trade than the general educational effort or output indicators demand side measures which proxy the actual employment and application of resources for r d purposes demonstrate the strength of association required for reliable policy evaluation of real national differences in technological capability the poor performance of the general human capital supply variables highlights the need for a careful consideration of the optimality of the allocation of substantial levels of scarce national resources to broad based educational output a number of other significant results concerning the link between technology indicators technology intensive trade and economic performance are discussed

r d rivalry industrial policy and u s japanese trade the authors examine how the strategic aspect of japanese research and development expenditures and industrial policies affected u s japanese bilateral trade during the late 1970s and investigate which component of r d expenditures on process innovation product quality improvements new products and new technology or technology transfer proved to be most effective they find that while japanese r d expenditures have generally promoted japan s trade advantage certain components of r d have proved more effective than other the depreciation subsidy and special status with the ministry of international trade and industry is positively related to the japanese trade performance while legal cartelization status has not had any apparent effect copyright 1988 by mit press

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

determinants of efficiency in least developed countries further evidence from nepalese manufacturing firms using a translog stochastic production frontier and maximum likelihood econometric methods we estimate and model the determinants of firm level efficiency in the nepalese context our results are broadly in line with theoretical expectations we find that large firms are more efficient and that a higher capital intensity leads to inefficiency there is no statistical evidence to suggest that foreign participation leads to efficiency improvements also we do not observe any link between export intensity and efficiency improvement we find that higher protection leads to inefficiency overall our results suggest that an outward looking industrial strategy which relies on less intervention and permits the development of large scale industries is conducive to efficiency improvement in least developed countries ldcs like nepal

crowding out or crowding in public and private investment in india abstract this paper contributes to the debate on the relationship between public and private investment in india along the following dimensions first acknowledging major structural changes that the indian economy has undergone in the past three decades we study whether public investment in recent years has become more or less complementary to private investment in comparison to the period before 1980 second we construct a novel data set of quarterly aggregate public and private investment in india over the period 1996 2015 using investment project data from the capex cmie database third embedding a theory driven long run relationship on the model we estimate a range of structural vector error correction models svecms to re examine the public and private investment relationship in india identification is achieved by decomposing shocks into those with transitory and permanent effects our results suggest that while public investment crowds out private investment in india over the period 1950 2012 the opposite is true when we restrict the sample to post 1980 or conduct a quarterly analysis since 1996 this change can likely be attributed to the policy reforms which started during the early 1980s and gained momentum after the 1991 crisis

trade liberalization comparative advantage and scale economies stock market evidence from canada abstract the canada united states free trade agreement fta provides an excellent opportunity to analyze the impact of a comprehensive trade liberalization in this paper a stock market event study is employed to capture investors expectations about the consequences of this agreement for manufacturing firms in canada the primary question addressed is whether abnormal stock market returns corresponding to news about the fta are consistent with hypotheses based on comparative advantage and economies of scale the results indicate that both comparative advantage and scale economies played a role in determining investors perceptions of the impact of the fta