Katharine Wakelin

Innovation and export behaviour at the firm level

This paper considers the role of innovation in determining export behaviour for a sample of UK firms. The sample includes firms which have had a major innovation; based on the SPRU survey of innovations, and are defined as innovating firms. The rest of the sample of made up of non-innovating firms which have not had a major innovation. Export behaviour is defined in a dual way; both as the probability of a firm exporting and the propensity to export of the exporting firms. The former is estimated using a Probit model, and the latter is treated as a truncated estimation. An empirical model of the determinants of export behaviour is estimated; including both firm specific and sector specific characteristics. The determinants are found to vary between innovating and non-innovating firms. Market characteristics appear to have more influence on the export behaviour of non-innovating firms; innovating firms rely more on firm characteristics. The paper concludes that the capacity to innovate changes the performance of the firm with respect to non-innovating firms.

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.

Productivity growth and R&D expenditure in UK manufacturing firms

This paper analyses the relationship between productivity growth and RD the relationship is no longer significant when sector fixed effects are included. To capture these sector effects, two spillover variables are included: the R&D expenditure of other firms in the same sector, and the weighted R&D expenditure of innovation-supplying industries. The former is found to play a large positive role in productivity growth, increasing it by around 1%, while no significant role is found for the latter. The variation in technological opportunity across sectors appears to play an important role in the efficacy of R&D expenditure.

Are there Regional Spillovers from FDI in the UK

One of the aims of attracting FDI to the UK through incentives is to improve regional development. Having firms locate in depressed regions, or regions with relatively low activity, will provide a direct impact in terms of employment and capital creation — assuming there were under-utilised resources prior to entry and a potential indirect effect via spillovers to local firms. A recent example of such intervention is the aid package given to Siemens to locate in the North East of England, an underdeveloped region with Assisted Area status. State investment included a

Investment Liberalization and International Trade

30 million grant which, along with other benefits, totalled

Trade, investment, migration and labour market adjustment

76 million (UNCTAD (1996)). The assumption behind such packages is that the long-term economic impact on the region will exceed the cost of the subsidies. We aim to examine whether spillovers from foreign to domestic firms occur at the level of the region. We look at whether domestic firms gain from foreign firms only if they locate in the same region, or whether all firms in a sector gain regardless of location.

Investment Liberalisation and International Trade

This Paper estimates the cross-price elasticity of exports with respect to investment costs for bilateral relations between 36 countries. We show that the effect of reducing foreign direct investment costs on exports depends on country characteristics and trade costs as predicted by the Markusen (1997, 2002) model. When countries differ in relative factor endowments and trade costs are low, investment liberalization stimulates exports, whereas when countries are similar in terms of relative factor endowments and size, and trade costs are moderate to high, investment liberalization reduces exports.

Host country effects of FDI in the UK: recent evidence from firm data

The International Economic Association Acknowledgements Notes on the Contributors List of Abbreviations and Acronyms Introduction: D.Greenaway, R.Upward & K.Wakelin Human Capital, Unemployment and Relative Wages in a Gobal Economy D.R.Davis & T.A.Reeve Competition, Trade and Wages J.P.Neary Fragmentation, Globalization and Labour Markets M.Burda & B.Dluhosch Globalization, Employment, and Income: Analyzing the Adjustment Process C.Davidson & S.Matusz Sectoral Adjustment and Labour Market Flows D.Greenaway, R.Upward & P.Wright What Drove Relative Wages in France? Structural Decomposition Analysis in a General Equilibrium Framework, 1970-1992 S.Jean & O.Bontout International Trade and Labour Market Adjustment in Developing Countries A.Fosu Internationalization of Japanese Manufacturing Firms and the Relative Demand for Skilled Labour K.Head & J.Ries Are the Regional Spillovers from Foreign Direct Investment in the UK? S.Girma & K.Wakelin Technology, Trade, Multinationals and Aggregate Employment: Evidence from UK Panel Date K.Taylor & N.Driffield The Employment and Wage Effects of Immigration: Trade and Labour Economics Perspectives N.Gaston & D.Nelson Index of Names Subject Index

Do domestic firms learn to export from multinationals

This paper estimates the cross-price elasticity of exports with respect to investment costs for bilateral relations between the US and 35 partner countries. We show that the relationship depends on country characteristics as predicted by the Markusen et al. (1996) model. When countries differ in relative factor endowments and trade costs are low, investment liberalisation stimulates exports, whereas when countries are similar in terms of relative factor endowments and size, and trade costs are moderate to high, investment liberalisation reduces exports.

Efficiency, Innovation and Exports

There has been a general increase in the share of trade in GDP over the last decade or so. In some developing countries this increase is fairly marked as a consequence of rapid liberalisation of areas of tradeable activity. With the exception of the US, the changes in industrialised countries have been more gradual and in many cases almost imperceptible. Yet over this same period there has been a major increase in public awareness of, and sensitivity to, ‘globalisation’. This is of course partly fashioned by the prominence given to a succession of public policy issues which are essentially open economy issues - ERM, EMU, Asian currency crises, transatlantic trade spats and so on. In addition, however, it is fashioned by the fact that trade ratios generally only focus on merchandise trade. They do not fully take into account services trade, or, more importantly, inward investment and international production. The growth in the latter has been especially important as a driver of globalisation, but as yet its effects are not well understood and even less well measured.