Bas Karreman

The geography of equity listing and financial centre competition in mainland China and Hong Kong

This study examines the changing competitiveness of financial centres in mainland China and Hong Kong based on the geography of equity listing of mainland Chinese firms. Pre-listing firm characteristics are used to explore firms’ motives for listing on a particular exchange and whether these motives have changed over time. The results show that Hong Kong’s prominence as an international financial centre is attracting the largest and, recently, also the best performing mainland Chinese state-owned enterprises to go public. Less differentiation exists between the competitiveness of Shanghai and Shenzhen, although the renewed strategy of the Shenzhen stock exchange to attract smaller firms appears to be successful.(This abstract was borrowed from another version of this item.)

Hit Where It Hurts: Cartel Policing Using Targeted Sales and Supply Embargoes

In this paper, we examine an asymmetric-punishment strategy that a large and newly identified cartel of retailers uses to police its upstream suppliers and members. The cartel punishes suppliers who violate vertical restraints and members who defect in the key regional or product market where it hurts them the most. The cartel organizes sales embargoes to punish its suppliers and supply embargoes to punish its members. Cartels can leverage the targeted punishment strategy to induce good behavior across multiple product, regional, and vertical markets. We examine several episodes in which the association of retail pharmaceutical traders in India, acting as a cartel, imposes sales embargoes on select pharmaceutical firms and supply embargoes on its members, and we find evidence consistent with targeted punishment. Our results support the theoretical view that growing buyer power in conjunction with vertical restraints facilitates collusion.

The functional and sectoral division of labour between Hong Kong and the pearl river delta: From complementarities in production to competition in producer services?

This study examines whether regional upgrading has affected the traditional division of labour between Hong Kong and the Pearl River Delta, as exemplified in the ‘front shop–back factory’ model. The location choices and investment characteristics of foreign multinational enterprises are used to derive the current status of sectoral and functional specialisation across the region and to explore the alleged competition over foreign direct investments in service functions. The results show that the complementary roles of Hong Kong and the Pearl River Delta, in terms of sectoral and functional specialisation, remain largely intact. However, Guangzhou and Shenzhen appear to compete with Hong Kong by advancing their own distinctive roles as attractive locations for low-end service functions.

Functional and Sectoral Division of Labour within Central and Eastern European Countries: Evidence from Greenfield FDI

In this paper, we analyse the sectoral and functional division of labour in Central and Eastern European (CEE) regions within the convergence debate. By analysing the investment decisions of multinational corporations in 49 NUTS 2 regions across six European CEE countries (Poland, Czech Republic, Slovakia, Hungary, Romania and Bulgaria), we show that capital city regions not only receive more greenfield FDI but also attract a larger variety of investments in terms of sectors and functions. Capital cities are more likely to host higher-end sectors and functions, which provides an explanation for the existing regional disparities within CEE countries. These results highlight the importance of functional and sectoral divisions of labour in the view of regional profiling and contribute to the recent EU Cohesion Policy debate.

Foreign Direct Investment, China and the World Economy

Industrial district theory has always suffered from the belated appearance of English versions of its seminal works. During the mid-1980s, the theory was offered to an international audience by PIORE and SABEL’s now famous The Second Industrial Divide (1984), which, however, concentrated on industry structure and performance aspects rather than on the territorial and spatial elements that represent the core of industrial district theory. The genuine nature of the theory had to wait until the new century before it was expounded at the international level by the collection of seminal papers in an edited book (BECATTINI, 2004). A Handbook of Industrial Districts – which is a very well-organized and structured collection of scientific works on the theory of industrial districts, and which range from theoretical aspects to empirical evidence and policy implications – entirely overcomes the above-mentioned limitation by devoting all its four parts, and even sections, to genuine theoretical, empirical and normative aspects. Especially, A Handbook highlights the outstanding merit of industrial district theory in being the first to give space an active role in economic development, thereby enriching the concept of agglomeration economies with social, psychological and cultural dimensions. The richness of items and the geographically wide coverage of A Handbook witness the fact that industrial district theory is now a well-established and wellknown approach to local development. Experiences drawn from both developed as well as developing countries (Sections 8 and 9) state that the clustering of specialized firms is a worldwide form of spatial organization of production, and that it is a reality that still holds and generates efficiency mechanisms in a period of globalization. I recommend reading this book. For scientists unfamiliar with the theory, A Handbook is a good opportunity to learn about its origins (Part 1), its intrinsic sociocultural aspects (Part 2), the empirical investigations conducted all over the world (Part 3), and the normative interventions that may stem from this approach, as well as its position in the global world (Part 4). For scientists already familiar with the theory, A Handbook offers an occasion for understanding the steps forward taken in recent years by the industrial district approach. In this regard, A Handbook furnishes clear explanations of the evolution of the concept of an industrial district; in fact, the ‘pure’ Marshallian industrial district consisting of a synthesis (an ‘interpenetration’, as advocated by Giacomo Becattini) of a cluster of firms and social embedding, with marked emphasis on the latter, is today difficult to identify. The new global value chains generated by decreasing transport and communication costs, and by increasing globalized production, impact on the spatial organization of production in industrial districts as well. A Handbook explains how different forms of firm clustering respond to the challenges of globalization in different ways. For scientists already familiar with the theory, A Handbook also explains how in recent years some of the main shortcomings of the approach pointed out by the literature have been addressed in an attempt to remedy them. A Handbook places pronounced emphasis on endogenous aspects, but without totally denying the exogenous and objective elements that accompany a development path, as it was envisaged by the first version of the theory. In particular, from the conceptual point of view, A Handbook examines the evolution of industrial districts in an era of globalization and the knowledge-based economy by taking a sort of dynamic approach to the industrial district paradigm. The necessary reinforcement of local know-how with external knowledge through ‘bridging actors’ (networking) able to find, read, understand and finally integrate external knowledge – an idea already put forward by a similar theory, that of the milieu innovateur (CAMAGNI, 1991) – finds a solid rationale in explaining the evolution of industrial districts. With regard to these new conceptual aspects, I strongly recommend reading the stimulating and well-written Introduction, which elegantly introduces the reader to A Handbook’s contents and aims, highlighting the conceptual novelties embedded in the theory. From the empirical point of view, A Handbook moves in two directions (Part 3) by investigating how local districts are identified in different countries, and how the positive effects of Marshallian economies can be measured using statistical tools and cross-section econometric analyses applied to either municipal-level data Regional Studies, Vol. 44.9, pp. 1301–1306, November 2010

Location Choices of Chinese Multinationals in Europe: The Role of Overseas Communities

abstract Overseas Chinese communities are an important determinant in the location choice of greenfield investments made by mainland Chinese multinational enterprises across European regions. Conceptually embedded in a relational approach, this effect is shown through an empirical analysis of an exhaustive set of investment projects across NUTS-1 regions in twenty-six European countries for the period 2003–2010. When controlling for endogeneity bias and the embeddedness of existing Chinese economic activity, we find that the importance of overseas communities in the location choices of Chinese firms is based on increased access to strategic information. Our results confirm that the relationship between the size of an overseas Chinese community and the probability of Chinese investment is stronger for communities hosting newer generations of Chinese migrants; in addition, they partially corroborate that this relationship is stronger when the education level of the community’s Chinese migrants is higher. Our findings are particularly robust in the context of knowledge-intensive sectors and high value-added functions.