Carlo Filippini

Two Theorems on Joint Production

The aim of this note is to present some new results in joint production models represented by linear equations.1 Necessary and sufficient conditions are derived for the existence of a semi-positive (positive) price vector and for a decreasing relation between profit and wage rates.2 As a corollary the presence of negative labour values and positive prices is explained and the scrap age of a machine determined.

Economic Integration in East Asia and Europe: Lessons from a Comparative Analysis

This paper compares the economic integration processes of the European Union and the East Asian nations and comments on the possible reciprocal lessons, if any, that can be drawn to smooth the future paths of the two groups. The most relevant lessons on the EU side rely on strong institutionalization, structural policies, and the monetary union. Lessons from East Asia can be found in regional production networks, trade patterns, and the recent developments in financial cooperation. Both entities are presently facing difficult challenges to progress and growth.

TRADE AND INVESTMENT IN THE RELATIONS BETWEEN THE EUROPEAN UNION AND THE PEOPLE’S REPUBLIC OF CHINA

Services are the fastest growing component of the import-export flows of developed countries. At the same time, they are the source of many disputes because of their nature, being often intangible, and non-excludable, with high value added. This is the case for service flows between China and the European Union (EU): they are relevant but the EU is concerned about the need to ‘level the playing field’. China’s WTO accession has eased some problems, but not solved them. The most relevant EU requests concern the intellectual property rights, counterfeit and pirated goods, and technology transfer. In addition to this, China has not yet implemented all its WTO accession obligations, e.g. in the financial sector. What follows is a detailed data analysis on service flows. It will comprise of, in particular, China-EU exchanges compared to world totals. Moreover, data over time, by EU country, and by sub-sector, will be analysed. Inward FDI has been liberalized in steps; it is amongst the main export drivers. It is an important vehicle for the technological upgrading of industrial sectors. The strict conditions imposed on foreign corporations have allowed China to acquire nearly up-to-date technologies, acting as a monopsonist with many suppliers. On FDI, the EU is further stressing a lack of reciprocity. Recently, Chinese outward FDI has been growing, due to very large Chinese foreign reserves, even though investment towards the EU remains modest. Last but not least, the chapter examines relevant data relating to European FDI in China – and Chinese FDI in the EU – over time, by EU country of origin, and by sector.

Small and Medium-Sized Enterprises (SMEs) in Italy and Japan

This chapter explains the relevance and importance of small and medium-sized enterprises (SMEs) for Italy and Japans economies and economic structures. While SMEs continue to be the backbone of the Italian and Japanese economies and societies, technological innovations, competition from emerging economies and the recent economic and financial crisis are putting SMEs under pressure to innovate and re-adjust their business strategies and planning. While Japan has been more successful than Italy in that respect, state support—both financial and administrative—for SMEs in Japan is well organized and coordinated between local and central administrative levels. Such support in Italy on the other hand is fragmented and hampered by a lack of efficient industrial policies, both on local and national levels. The tax burden for Japanese SMEs is relatively light creating incentives and conditions to generate employment, while the tax burden for Italy’s SMEs is heavy and responsible for the fact that SMEs are not growing in size and productivity. A static labour market together with a backward education system, a lack of skills and know-how will make sure that Italian SMEs continue to struggle in the years ahead.