David Greenaway

Firm Heterogeneity, Exporting and Foreign Direct Investment

A rapidly expanding literature on firm heterogeneity and firm level globalisation strategies has developed over the last decade. There are new insights on why some firms export and others do not, why some firms fail to survive in export markets and some choose to produce overseas rather than export. This article provides a synthesis and evaluation of this literature. It reviews both new theories of firms in an open economy context and the extensive microeconometric evidence base, which has now developed. It highlights the implications of this evidence base for policy and includes an assessment of how the research agenda may evolve.

Vertical and Horizontal Intra-Industry Trade : A Cross Industry Analysis for the United Kingdom

A large theoretical literature has emerged directed at explaining the presence of intra-industry trade (IIT). One of the distinctions which comes out of these models is that between horizontal IIT (where goods are differentiated by attributes) and vertical IIT (where goods are differentiated by quality). In this paper horizontal and vertical IIT in U.K. trade are disentangled using a unit value dispersion criterion and a range of industry characteristics. The paper not only points up the relative importance of vertical and horizontal IIT in the United Kingdom, it also demonstrates how a failure to separate them out can impact on the interpretation of empirical results. Copyright 1995 by Royal Economic Society.

Trade liberalisation and growth in developing countries

Abstract Trade liberalisation in developing countries over the last 20 years has often been implemented with the expectation of growth being stimulated; yet the evidence on its growth enhancing effects is mixed. This paper argues that problems with mis-specification and the diversity of liberalisation indices used are in part responsible for the inconclusiveness. Using a dynamic panel framework and three different indicators of liberalisation, the paper finds that liberalisation does appear to impact upon growth, albeit with a lag. The evidence points to a J curve type response and this finding is robust to changes in specification, sample size and data period.

Country-specific factors and the pattern of horizontal and vertical intra-industry trade in the UK

Country-Specific Factors and the Pattern of Horizontal and Vertical Intra-Industry Trade in the UK. - A large number of empirical studies have investigated the relationship between country-specific factors and total intra-industry trade (IIT). One important shortcoming of this literature is that it ignores the distinction between horizontal and vertical IIT and ignores the fact that they may have different determinants. This paper disaggregates UK IIT into its horizontal and vertical components and, using bilateral trade data, estimates a series of models incorporating countryspecific variables. The results suggest that vertical IIT is more important in the UK than horizontal IIT and that the inter-country pattern of vertical IIT is systematically related to a range of explanatory variables.ZusammenfassungLänderspezifische Faktoren und das Muster des horizontalen und vertikalen intraindustriellen Handels des Vereinigten Königreichs. - In einer großen Zahl empirischer Studien wurde die Beziehung zwischen länderspezifischen Faktoren und dem gesamten intraindustriellen Handel (IIH) untersucht. Ein bedeutender Mangel dieser Studien ist, daß sie die Unterscheidung zwischen horizontalem und vertikalem IIH ebenso vernachlässigen wie die Tatsache, daß diese unterschiedliche Bestimmungsgründe haben können. Die Autoren zerlegen den britischen IIH in seine horizontalen und vertikalen Komponenten und schätzen unter Verwendung bilateraler Handelsdaten eine Reihe von Modellen, die länderspezifische Variable enthalten. Die Ergebnisse deuten darauf hin, daß der vertikale IIH für das Vereinigte Königreich wichtiger ist als der horizontale und daß das länderbezogene Muster des vertikalen IIH systematisch mit einer Reihe von erklärenden Variablen verbunden ist.

Who Benefits from Foreign Direct Investment in the UK

The presumed higher productivity of foreign firms and resulting spillovers to domestic firms has led governments to offer financial incentives to foreign firms. We investigate if there is any productivity or wage gap between foreign and domestic firms in the UK and if the presence of foreign firms in a sector raises the productivity of domestic firms. Our results indicate that foreign firms do have higher productivity than domestic firms and they pay higher wages. We find no aggregate evidence of intra-industry spillovers. However, firms with low productivity relative to the sector average, in low-skill low foreign competition sectors gain less from foreign firms. Copyright 2001 by Scottish Economic Society.

The impact of terms of trade and real exchange rate volatility on investment and growth in sub-Saharan Africa

Abstract Specialization in primary product exports reduces growth, but why? Adverse trends in, and the high variance of, primary product prices are possible explanations. The impact on investment and growth of the level and volatility of the terms of trade and the real effective exchange rate is estimated for a panel of 14 sub-Saharan African countries over 1980–1995. Growth is negatively affected by terms of trade instability, and investment by real exchange rate instability. Both growth and investment increase when the terms of trade improve and real exchange rate overvaluation is eliminated.

Funding Higher Education in the UK: The Role of Fees and Loans

Higher education has undergone considerable expansion in recent decades in a number of OECD countries. Expansion has been especially dramatic in the UK where aggregate student numbers have doubled in 20 years. However, over the same period, funding per student has halved in real terms. In the UK as well as in other countries, most notably Australia, innovation to diversify the funding base has taken place. This has included a limited role for fee contributions. This paper makes the case for much greater reliance on fee contributions from students, accompanied by a greater availability of income contingent loans.

What does liberalisation do for exports and growth

What Does Liberalisation Do for Exports and Growth? - This paper addresses the issues of whether exports and growth are related and whether any relationship appears to be affected by liberalisation. A production function approach using time series analysis is used to investigate both issues, for a sample of some 14 countries which have undergone liberalisation episodes. The results suggest that though exports and growth are positively related, the relationship does not appear to be a robust one. Moreover, it is a relationship which appears to be significantly affected by liberalisation in only a minority of cases.ZusammenfassungWie wirkt sich eine Liberalisierung auf Exporte und Wachstum aus? - Dieser Aufsatz befaßt sich mit der Frage, ob Exporte und Wachstum in einer festen Beziehung stehen und ob eine solche Beziehung durch Liberalisierung beeinflußt wird. Diese beiden Fragen werden mit Hilfe von Produktionsfunktionen in einer Zeitreihenanalyse untersucht, und zwar für 14 Länder, die eine Liberalisierung erlebt haben. Die Ergebnisse deuten darauf hin, daß Exporte und Wachstum zwar positiv korreliert sind, die Beziehung aber nicht robust ist. Außerdem scheint sie nur in sehr wenigen Fällen durch eine Liberalisierung signifikant beeinflußt worden zu sein.

An empirical assessment of the impact of trade on employment in the United Kingdom

Abstract A large number of studies have recently attempted to evaluate the impact of trade on employment, many relying on either the factor content or growth accounting approaches. With some notable exceptions, this work finds limited evidence of strong direct effects but stronger effects through induced productivity changes. This study models the effects of trade on employment in the UK in a dynamic labour demand framework, on a panel of 167 manufacturing industries. We find that when we introduce trade, increases in trade volumes, both in terms of imports and exports, cause reductions in the level of derived labour demand. When we disaggregate by origin of imports we find stronger effects in trade with the EU and US compared to trade with East Asia. This provides supportive evidence for the idea that trade affects x-inefficiency, with the strongest competition for UK manufacturers coming from producers in the EU and US.

Intellectual Property Rights and Economic Growth

Interest in links between protection of intellectual property and growth has been revived by developments in new growth theory and by the WTOs TRIPS Agreement. The relationship between the strength of a countrys intellectual property rights (IPRs) regime and rate of growth is ambiguous from a theoretical standpoint, reflecting the variety of channels through which technology can be acquired and their differing importance at different stages of development. We investigate the impact of IPR protection on economic growth in a panel of 79 countries using threshold regression analysis. We show that whilst the effect of IPR protection on growth depends upon the level of development, it is positively and significantly related to growth for low- and high-income countries, but not for middle-income countries. This suggests that, although IPR protection encourages innovation in high-income countries, and technology flows to low-income countries, middle-income countries may have offsetting losses from reduced scope for imitation. Copyright