Christine Oughton

Technology, Growth and Employment

The relationship between technology, productivity and employment is a complex one. Increased productivity can lead not just to increased market share, but through falling relative prices can help expand markets, and through product innovation can develop new markets. On the other hand, if demand and hence output does not expand in line with productivity, then an inverse relation between productivity and employment will result. The European Union seeks to improve living standards in Europe by boosting productivity, competitiveness and employment together. How, though, is this to be achieved? This paper looks at the effects on productivity of different forms of investment--in physical capital, in Research & Development, and in human capital. The paper also distinguishes between the high-tech and low-tech sectors. There does appear to be scope for boosting both productivity and employment, particularly in the high tech sectors. But to do so will require increased investment across all three categories--in machinery, in innovation and in people.

Comparative Corporate Governance: Beyond ‘Shareholder Value’

This paper serves as an introduction to the special issue on comparative corporate governance as well as providing a critical review of the literature on globalisation, comparative economic organisation and corporate governance systems. Despite the widespread rhetoric of global convergence and market-led institutional reform, we argue that national specificity and societal variance of institutional arrangements are still conspicuously resilient in reality and pertinent to issues of regulation, policy and business strategy. Our discussion focuses on the limitations of agency theory and its primary objective, shareholder value maximisation, on the one hand, and the determinants and consequences of institutional diversity across societies on the other. In particular, we suggest that the integration of the literature on employee participation and innovation systems into comparative institutional analysis will serve as a promising alternative to shareholder-centred theories and policy prescriptions while complementing the arguments based on legal and political origins of national systems. While the contributions to the special issue broadly share the basic tenets of our argument, they also address, in commendable rigour and depth, other issues, such as: trust and social relationships; societal and moral foundations of economic behaviour; institutional transferablity; and corporate control and power relations in society.

Globalisation and Economic Performance1

The 1990s witnessed unparalleled growth in flows of foreign direct investment (FDI). The average growth rate of inflows of FDI increased from 20 per cent per annum between 1990–1995 to 32 per cent per annum between 1996–99 and 44 per cent in 1998 (United Nations, 2000, Table 1.1). These dramatic increases in FDI inflows led to a doubling of the share of FDI inflows in domestic capital formation between 1990 and 1998 (United Nations, 2000, Table 1.2). Much of this activity was concentrated in the developed economies which accounted for 75 per cent of total FDI inflows in 1999 (United Nations, 2000, p. xvi) and most of the growth was due to international mergers and acquisitions (M&A) rather than greenfield investment. The significance of international M&A activity can be gauged by the fact that the value of international (M&As) transactions amounted to over 80 per cent of world FDI flows in 1999. The rapid growth in FDI and international M&As raise a number of questions about both the motivations for the growth in FDI and international M&As and their consequent effects on the economies of host countries. This paper aims to explore the factors underlying the growth in inward FDI in Europe and the US in the 1990s and its effects on employment and growth. Accordingly, the following section provides a brief overview of theories purporting to explain FDI and its effects. Section III provides empirical evidence on the impact of FDI on employment, while section IV outlines the main conclusions and policy implications.

China's State Energy Investment during 1991–2007: Investment Analysis and Policy Issues

Bo H., Zhang B., Oughton C., Yuan X. and Ma J. Chinas state energy investment during 1991–2007: investment analysis and policy issues, Regional Studies. This article examines Chinas state energy investment during 1991–2007 using provincial-level panel data. The analysis shows that Chinas state energy investment is (1) driven by demand for energy, (2) mostly unrelated to energy efficiency, (3) undertaken with the consideration of reducing negative externalities associated with energy production, (4) used by central government to subsidize some local governments, and (5) directed to heavy industries. Policy impacts (4) and (5) are more profound in provinces in which the states ownership of the provincial industry is high. In addition, results (4) and (5) are stronger at the earlier stage of Chinas domestic reform and before Chinas entry into the World Trade Organization (WTO), which suggests that these policy impacts weaken along with the progress of Chinas market transition. In sum, Chinas state energy investment responds to demand signals, but state ownership enables the government to implement its policy objectives, possibly at the cost of economic efficiency.