Kirit Vaidya

The impact of foreign direct investment on labour productivity in the Chinese electronics industry

Foreign direct investment (FDI) may have a positive impact on labour productivity in recipient industries through direct introduction of capital, technology and management skills and indirectly through spillover effects on domestic firms. This study uses a model intended to examine the overall effects of inward FDI in the Chinese electronics industry. Official data are used for 41 sub-sectors of the industry in 1996 and 1997 having differing levels of FDI. Labour productivity is modelled as dependent on the degree of foreign presence in the industry and other variables, namely capital intensity, human capital and firm size for scale factors. The econometric results suggest that foreign presence in the industry is associated with higher labour productivity.

Valuing transferred machine tool technology: Relating value to product attributes and preferences of acquirers

The value of technology and the appropriate form of transfer arrangement are important questions to be resolved when transferring technology between Western manufacturing firms and partners in industrialising and developing countries. This article reports on surveys carried out in the machine tool industries in the UK and China to establish the differences and similarities between owners and acquirers of technology regarding the relative importance of the factors they evaluate, and the assessments they make, when considering a technology transfer. It also outlines the development of a framework for technology valuation. The survey results indicate that the value of product technology is related to superior technical performance, especially on reliability and functionality, and the prospects of premium prices and increased sales of the technology transfer based machine tools. Access to markets is the main objective of UK companies, while Chinese companies are concerned about improving their technological capability. There are significant risks, especially related to performance in the market, and while owners and acquirers have benefited in the short term, the long term collaboration required for strategic benefits has been difficult to achieve because of the different priorities of the owners and the acquirers.

Is China's manufacturing sector becoming more high-tech? Evidence on shifts in comparative advantage, 1987-2005

Purpose – The paper assesses the extent to which China’s comparative advantage in manufacturing has shifted towards higher-tech sectors between 1987 and 2005 and proposes possible explanations for the shift. Design/methodology/approach – Revealed comparative advantage (RCA) indices for 27 product groups, representing high-, medium and low-tech sectors have been calculated. Examination of international market attractiveness complements the RCA analysis. Findings for selected sectors are evaluated in the context of other evidence. Findings – While China maintains its competitiveness in low-tech labour intensive products, it has gained RCA in selected medium-tech sectors (e.g. office machines and electric machinery) and the high-tech telecommunications and automatic data processing equipment sectors. Evidence from firm and sector specific studies suggests that improved comparative advantage in medium and high-tech sectors is based on capabilities developing through combining international technology transfer and learning. Research limitations/implications – The quantitative analysis does not explain the shifts in comparative advantage, though the paper suggests possible explanations. Further research at firm and sector levels is required to understand the underlying capability development of Chinese enterprises and the relative competitiveness of Chinese and foreign invested enterprises. Practical implications – Western companies should take account of capability development in China in forming their international manufacturing strategies. The rapid shifts in China’s comparative advantage have lessons for other industrialising countries. Originality/value – While RCA is a well-known methodology, its application at the disaggregated product group level combined with market attractiveness assessment is distinctive. The paper provides a broad assessment of changes in Chinese manufacturing as a basis for further research on capability development at firm and sector levels.

Transferring manufacturing technology in China:supplier perceptions and acquirer expectations

Results of complementary surveys of foreign and Chinese manufacturing enterprises with respect to their objectives and expectations regarding technology transfer into China show that the major strategic objective of foreign enterprises, to gain access to the Chinese market, fits well with Chinese enterprises’ main objective of improving domestic competitiveness but less well with that of accessing world markets through technology transfer. Foreign firms rate highly the capability of Chinese enterprises to learn new technologies and also find the Chinese macro environment for business favourable. The survey results provide information that will help managers with their negotiations on co‐operating with prospective partners for the transfer of technology as well as assisting policy makers who wish to facilitate more effective transfer arrangements.

Technology Transfer to the China Machine Tool Industry: The Need for a Technology Valuation Model

Due to its fast growth China is rapidly becoming a focus for globalized manufacturing strategies and is now one of the worlds largest markets for technology. The international transfer of manufacturing technology has also contributed significantly to the recent sharp increase in the rate of Chinas industrial development. The Chinese machine tool industry, for example, has exhibited an annual growth of more than 12% between 1980 and 1995 and is now one of the largest markets for machine tool technology. Technology transfer agreements are not motivated only by the willingness of foreign suppliers but also by the desire of Chinese enterprises to acquire technology. One of the major problems in technology transfer is how to establish the value of the technology. In many cases partnerships between foreign companies and Chinese enterprises fail to become established because the value of technology cannot be agreed by both sides. It is therefore important to establish a method for valuing transferred technology. This paper outlines the concept of a technology valuation model which is being developed using empirical data from the machine tool industry. It is based on research carried out in the UK and China, and draws on selected case studies of technology transfer in the machine tool sector supplemented by information obtained from questionnaire surveys carried out in both countries.

Healthcare finance in the Kingdom of Saudi Arabia: a qualitative study of householders’ attitudes

BackgroundThe public sector healthcare system in Saudi Arabia, essentially financed by oil revenues and ‘free at the point of delivery’, is coming under increasing strain due to escalating expenditure and an increasingly volatile oil market and is likely to be unsustainable in the medium to long term.ObjectivesThis study examines how satisfied the Saudi people are with their public sector healthcare services and assesses their willingness to contribute to financing the system through a national health insurance scheme. The study also examines public preferences and expectations of a future national health insurance system.MethodsA total of 36 heads of households participated in face-to-face audio-recorded semi-structured interviews. The participants were purposefully selected based on different socio-economic and socio-demographic factors from urban and rural areas to represent the geographical diversity that would presumably influence individual views, expectations, preferences and healthcare experiences.ResultsThe evidence showed some dissatisfaction with the provision and quality of current public sector healthcare services, including the availability of appointments, waiting times and the availability of drugs. The households indicated a willingness to contribute to a national insurance scheme, conditional upon improvements in the quality of public sector healthcare services. The results also revealed a variety of preferences and expectations regarding the proposed national health insurance scheme.ConclusionsQuality improvement is a key factor that could motivate the Saudi people to contribute to financing the healthcare system. A new authority, consisting of a partnership between the public and private sectors under government supervision, could represent an acceptable option for addressing the variation in public preferences.

Investigating the Willingness to Pay for a Contributory National Health Insurance Scheme in Saudi Arabia: A Cross-sectional Stated Preference Approach

BackgroundThe Saudi Healthcare System is universal, financed entirely from government revenue principally derived from oil, and is ‘free at the point of delivery’ (non-contributory). However, this system is unlikely to be sustainable in the medium to long term. This study investigates the feasibility and acceptability of healthcare financing reform by examining households’ willingness to pay (WTP) for a contributory national health insurance scheme.MethodsUsing the contingent valuation method, a pre-tested interviewer-administered questionnaire was used to collect data from 1187 heads of household in Jeddah province over a 5-month period. Multi-stage sampling was employed to select the study sample. Using a double-bounded dichotomous choice with the follow-up elicitation method, respondents were asked to state their WTP for a hypothetical contributory national health insurance scheme. Tobit regression analysis was used to examine the factors associated with WTP and assess the construct validity of elicited WTP.ResultsOver two-thirds (69.6%) indicated that they were willing to participate in and pay for a contributory national health insurance scheme. The mean WTP was 50 Saudi Riyal (US

International technology transfer and collaborative new product development:evidence and a case from the machine tool industry

13.33) per household member per month. Tobit regression analysis showed that household size, satisfaction with the quality of public healthcare services, perceptions about financing healthcare, education and income were the main determinants of WTP.ConclusionsThis study demonstrates a theoretically valid WTP for a contributory national health insurance scheme by Saudi people. The research shows that willingness to participate in and pay for a contributory national health insurance scheme depends on participant characteristics. Identifying and understanding the main influencing factors associated with WTP are important to help facilitate establishing and implementing the national health insurance scheme. The results could assist policy-makers to develop and set insurance premiums, thus providing an additional source of healthcare financing.

EEC energy policy and the UK:the Birmingham energy model

In recent years, it has become increasingly common for companies to improve their competitiveness and find new markets by extending their operations through international new product development collaborations involving technology transfer. Technology development, cost reduction and market penetration are seen as the foci in such collaborative operations with the aim being to improve the competitive position of both partners. In this paper, the case of technology transfer through collaborative new product development in the machine tool sector is used to provide a typical example of such partnerships. The paper outlines the links between the operational aspects of collaborations and their strategic objectives. It is based on empirical data collected from the machine tool industries in the UK and China. The evidence includes longitudinal case studies and questionnaire surveys of machine tool manufacturers in both countries. The specific case of BSA Tools Ltd and its Chinese partner the Changcheng Machine Tool Works is used to provide an in-depth example of the operational development of a successful collaboration. The paper concludes that a phased coordination of commercial, technical and strategic interactions between the two partners is essential for such collaborations to work.

The Regional Distribution of Foreign Direct Investment in China

This paper examines the implications of the EEC common energy policy for the UK energy sector as represented by a long-term programming model. The model suggests that the UK will be a substantial net exporter of energy in 1985 and will therefore make an important contribution towards the EECs efforts to meet its import dependency target of 50% or less of gross inland consumption. Furthermore, the UK energy sector could operate within the 1985 EEC energy policy constraints with relatively low extra cost up to the year 2020 (the end of the period covered by the model). The main effect of the constraints would be to bring forward the production of synthetic gas and oil from coal.