scholarly journals Learning by outward FDI: Evidence from Chinese manufacturing enterprises

2017 ◽  
Vol 64 (4) ◽  
pp. 401-421 ◽  
Author(s):  
Yaping Yang ◽  
Zhuhong Wu ◽  
Yutian Chen
Keyword(s):  
Advanced Technology ◽  
Learning Effects ◽  
Outward Fdi ◽  
Difference In Differences ◽  
Firm Level ◽  
Production Scale ◽  
Manufacturing Enterprises ◽  
Chinese Parent ◽  
Level Data ◽  
Significant Difference

Using firm-level data of Chinese manufacturing enterprises between 1998 and 2007, we investigate the existence and channels of ?learning by outward FDI?. Difference-in-differences estimation reveals that productivity of Chinese parent firms is significantly improved by their outward foreign direct investment and the learning effects form a ?V? shape in the following years. There is no significant difference in learning effects between state-owned enterprises and non-state-owned enterprises; neither do we find any evidence that investing in countries with advanced technology gives more learning effects. In addition, we find that learning effects mainly come from technology transfer, technology spillovers and an enlarged production scale.

scholarly journals Who Really Benefits from Consumption Tax Cuts? Evidence from a Large VAT Reform in France

2019 ◽  
Vol 11 (1) ◽  
pp. 38-63 ◽  
Author(s):  
Youssef Benzarti ◽  
Dorian Carloni
Keyword(s):  
Value Added ◽  
Consumption Tax ◽  
Difference In Differences ◽  
Firm Level ◽  
Employment Effects ◽  
Level Data ◽  
Price Effects ◽  
Firm Level Data ◽  
Material Goods ◽  
Firm Owners

This paper evaluates the incidence of a large cut in value-added taxes (VATs) for French sit-down restaurants in 2009. In contrast to previous studies, which only focus on the price effects of VAT reforms, we estimate the effects of the VAT cut on four groups: workers, firm owners, consumers, and suppliers of material goods. Using a difference-in-differences strategy on firm-level data, we find that: firm owners pocketed more than 55 percent of the VAT cut; consumers, sellers of material goods, and employees shared the remaining windfall with consumers benefiting the least; and the employment effects were limited. (JEL H22, H25, L83)

scholarly journals The Arrival of Fast Internet and Employment in Africa

2019 ◽  
Vol 109 (3) ◽  
pp. 1032-1079 ◽  
Author(s):  
Jonas Hjort ◽  
Jonas Poulsen
Keyword(s):  
Job Creation ◽  
Job Displacement ◽  
Difference In Differences ◽  
Firm Level ◽  
Positive Effects ◽  
Cable Network ◽  
Level Data ◽  
Employment Gain ◽  
Employment Rates ◽  
Fast Internet

To show how fast Internet affects employment in Africa, we exploit the gradual arrival of submarine Internet cables on the coast and maps of the terrestrial cable network. Robust difference-in-differences estimates from 3 datasets, covering 12 countries, show large positive effects on employment rates—also for less educated worker groups—with little or no job displacement across space. The sample-wide impact is driven by increased employment in higher-skill occupations, but less-educated workers’ employment gain less so. Firm-level data available for some countries indicate that increased firm entry, productivity, and exporting contribute to higher net job creation. Average incomes rise. (JEL F14, J23, J24, J63, L86, O15, O33)

scholarly journals Investing Overseas Without Moving Factories Abroad: The Case of Chinese Outward Direct Investment

2013 ◽  
Vol 30 (1) ◽  
pp. 85-107 ◽  
Author(s):  
Yiping Huang ◽  
Bijun Wang
Keyword(s):  
Direct Investment ◽  
Early Stage ◽  
Cost Advantage ◽  
Significant Cost ◽  
Firm Level ◽  
Manufacturing Enterprises ◽  
Level Data ◽  
Firm Level Data ◽  
Strategic Assets ◽  
Outward Direct Investment

Chinese outward direct investment (ODI) is unique in the sense that it starts in the early stage of economic development and does not move factories overseas. Empirical analyses using firm-level data confirm that the main purpose of Chinese ODI is to strengthen domestic production and productivity by acquiring strategic assets overseas. This Chinese style of ODI, which is different from Japanese efficiency-seeking ODI or American market-seeking ODI, is mainly underscored by significant cost advantage and abundant foreign exchange. We suggest that there might be a life cycle of ODI, which evolves from the Chinese style to the Japanese style and then to the American style as the economy develops. Following this proposition, we expect a major wave of ODI by Chinese small-sized and medium-sized manufacturing enterprises in the coming decade.

Outward Foreign Direct Investment, Restructuring and Performance Upgrading: Firm-level Evidence from Portugal

2020 ◽  
pp. 097215092091603
Author(s):  
Natália Barbosa
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Global Economy ◽  
Outward Foreign Direct Investment ◽  
Learning Effects ◽  
Micro Data ◽  
Outward Fdi ◽  
Export Intensity ◽  
Firm Level ◽  
And Performance

This article assesses the causal relationship between outward foreign direct investment (FDI) and various sides of firm performance, using micro data from Portuguese manufacturing firms during 2006–2014. To control for the possible endogeneity of outward FDI strategies, propensity score matching is combined with difference-in-difference approach. Our analysis shows that the learning effects for parent firms in Portuguese manufacturing depend on the underlying outward FDI strategy. The findings suggest that outward FDI could contribute to enhance firms’ productivity and their scale of operations. However, those learning effects seem to be mostly visible when firms engage in vertical outward FDI. Further, outward FDI, vertical or horizontal, appears to enhance the integration of Portuguese firms into the global economy through increased export intensity. From a managerial and policy perspective, the findings support the argument that outward FDI can indeed be at root of upgrading performance and firm’s restructuring in a small, open and peripheral economy such as Portugal.

scholarly journals INDUSTRIAL ESTATE, FIRMS’ PRODUCTIVITY, AND INTERNATIONAL TRADE RELATIONSHIP: THE CASE OF INDONESIAN MANUFACTURING FIRMS

2020 ◽  
Vol 14 (1) ◽  
pp. 121-146
Author(s):  
Fitria Faradila ◽  
Makoto Kakinaka
Keyword(s):  
Manufacturing Firms ◽  
Firm Level ◽  
Productivity Level ◽  
Entropy Balancing ◽  
Matching Methods ◽  
Export Activity ◽  
Industrial Estate ◽  
Level Data ◽  
Significant Difference ◽  
The Relationship

Abstrak Kawasan industri diyakini dapat mendukung perkembangan sektor industri di negara berkembang melalui fasilitas infrastruktur yang lebih baik, akses ke industri pendukung serta limpahan teknologi dan informasi. Ketiga faktor tersebut diperkirakan dapat mendorong produktivitas dan aktivitas ekspor perusahaan manufaktur di dalam kawasan industri. Berbagai penelitian terdahulu masih memberikan hasil yang beragam mengenai hubungan ketiga variabel ini. Oleh karena itu, penelitian ini bertujuan untuk mengidentifikasi hubungan antara kawasan industri dengan tingkat produktivitas dan kegiatan ekspor pada studi kasus perusahaan manufaktur di Indonesia. Penelitian ini memperkenalkan penggunaan dari entropy balancing, salah satu teknik matching methods dengan unit analisis level data perusahaan. Perbedaan jumlah observasi yang cukup signifikan antara perusahaan di dalam dan di luar kawasan industri memotivasi penggunaan teknik matching methods agar data penelitian menjadi seimbang. Treatment (perlakuan) dari penelitian ini adalah ketika perusahaan berada di kawasan industri. Terdapat dua variabel keluaran yakni tingkat produktivitas dan aktivitas ekspor. Hasil penelitian menunjukkan bahwa berada di Kawasan Industri mendorong tingkat produktivitas, namun gagal untuk mempromosikan kegiatan ekspor.   Abstract Many believe that the industrial estate could encourage the industrial sector in developing countries due to its better infrastructure, access to supporting industries, and the market as well as technology and information spillover. These factors could lead to a higher productivity level and export activities of manufacturing firms inside the industrial estate. Some previous studies still provide a mixed result regarding the relationship between these three variables. Thus, this paper contributes to the related study by examining the relationship between an industrial estate and both productivity level and export activity in the case of Indonesian Manufacturing Firms. The paper introduces the practice of entropy balancing, one of matching methods along with firm-level data as a unit of analysis. A significant difference in the number of observations between firms inside and outside the industrial estate motivates the usage of matching methods technique, so the data become balanced. The treatment is when the firms being in the industrial estate. There are two outcomes variables, which are productivity level and export activity. The result found that being industrial estate improves firms’ productivity, yet it fails to promote export activity. JEL Classification: L23, L52, L60

An unpleasant small-stock effect in manufacturing: the case of the dependent buyer

2016 ◽  
Vol 42 (10) ◽  
pp. 1017-1032
Author(s):  
Jennifer Itzkowitz ◽  
Anthony Loviscek
Keyword(s):  
Portfolio Construction ◽  
Firm Level ◽  
Significant Information ◽  
Content Type ◽  
Customer Base ◽  
Level Data ◽  
Significant Difference ◽  
Small Stock ◽  
Security Selection ◽  
Stock Effect

Purpose The purpose of this paper is to determine if there is a significant difference in the investment risks between small-cap manufacturers that heavily depend on one or a few buyers, referred to as “dependent-buyers,” and small-cap manufacturers that have a more diversified customer base. If there is a significant difference both statistically and economically, then investors need to be aware of the dependent-buyer effect in their security selection and portfolio construction efforts. Design/methodology/approach Using large samples of firm-level data from 2000 through 2011, the authors employ standard risk estimation modeling to compute βs, idiosyncratic risks, and total risks of both dependent-buyer firms and firms with a more diversified customer base. Findings The authors find that the βs, idiosyncratic risks, and total risks of dependent-buyer firms are much greater than that of firms not in dependent relationships. These differences are both statistically and economically significant. Research limitations/implications Buyer-supplier relationships can change quickly, and so a firm that has a diversified base in one period, for example, could be a dependent-buyer in the next period. Much depends on the reporting accuracy of firms and the ability of the securities exchange commission (SEC) to track the relationships. Practical implications First, the risk of individual small-cap stocks is likely to be greater than perceived from macro-level data, leading to the need for more securities if idiosyncratic risk is to be eliminated. Second, small-cap investors have the opportunity to enhance portfolio construction efficiency by referencing data published by the SEC. Third, most investors interested in small-cap manufacturing stocks should find it prudent to allocate a large percentage of their small-cap investments to an index fund. While this may sacrifice higher returns, it also reduces the probability of experiencing an unpleasant small-stock effect. Originality/value This is the first study to show that the difference in investment risks between small-cap manufacturers that depend on one or a few firms for their outputs and small-cap manufacturers that have a well-diversified customer base is statistically and economically significant, information that should be valuable to investors in their security selection and portfolio construction efforts.

scholarly journals The Dynamics of Offshoring and Institutions

2015 ◽  
Vol 15 (4) ◽  
pp. 1975-2016 ◽  
Author(s):  
Fredrik Heyman ◽  
Patrik Gustavsson Tingvall
Keyword(s):  
Institutional Quality ◽  
Learning Effects ◽  
Firm Level ◽  
Weak Institutions ◽  
Level Data ◽  
Market Experience ◽  
Internationalization Strategies ◽  
Source Countries ◽  
The Impact ◽  
The Relationship

Abstract Previous research has found that weak institutions can hamper investment and alter patterns of trade. However, little is known about the impact of institutional quality on offshoring. This lack of knowledge is surprising, given that offshoring has become an important part of many firms’ internationalization strategies. This study uses detailed firm-level data for the 1997–2005 period to examine the relationship between institutional quality in 113 source countries and offshoring by Swedish firms. The results suggest that weak institutions are negatively related to offshoring in general and to the offshoring of R&D- and relationship specificity-intensive inputs in particular. An analysis of learning effects suggests that the impact of weak institutions on the offshoring of relationship specificity-intensive inputs vanishes when firms return to countries from which they have previous market experience. Our results are robust to the use of various measures of institutional quality.

scholarly journals Outward FDI and Domestic Input Distortions: Evidence from Chinese Firms

2019 ◽  
Vol 129 (624) ◽  
pp. 3025-3057 ◽  
Author(s):  
Cheng Chen ◽  
Wei Tian ◽  
Miaojie Yu
Keyword(s):  
Multinational Corporations ◽  
Empirical Support ◽  
Manufacturing Firms ◽  
Private Firms ◽  
Outward Fdi ◽  
Firm Level ◽  
Chinese Firm ◽  
Level Data ◽  
Production Strategies ◽  
Firm Level Data

Abstract We examine how domestic distortions affect firms’ production strategies abroad by documenting two puzzling findings using Chinese firm-level data of manufacturing firms. First, private multinational corporations (MNCs) are less productive than state-owned MNCs, but they are more productive than state-owned enterprises overall. Second, there are disproportionately fewer state-owned MNCs than private MNCs. We build a model to rationalise these findings by showing that discrimination against private firms domestically incentivises them to produce abroad. The model shows that selection reversal is more pronounced in industries with more severe discrimination against private firms, which receives empirical support.

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