Laura N. Haar

Do patterns of trade and international competitiveness support the case for industrial policy

Although industrial policy is promoted as a means of achieving and preserving international competitiveness, the patterns of trade between countries are often ignored in both justifying industrial policies and measuring their impact. This paper examines the case for industrial policy using bilateral trade patterns over a 12-year period to measure changes in British industrial competitiveness. As Germany is widely portrayed as a model of industrial competitiveness, the research addresses the common view that Germany strengthened its leading position as an industrial European power, whereas UK is slowly falling behind because it lacks an active industrial policy. By studying competitiveness using various metrics related to export data, a more subtle and nuanced picture arises of what has happened to the UK vis-à-vis Germany with implications for policy-making. We analyse changes in the structural composition of British and German manufactured exports based on specific trade indices, including the revealed comparative advantage, the Grubel–Lloyd index, the marginal intra-industry index and factor intensity, calculated at industry and product level. The results have policy implications for how UK advances towards policy objectives of increasing exports to balance the economy, achieve sustainable growth and overcome the negative effects of the recent financial crisis.

Entry Modes and Firm Performance in a Transition Economy: Evidence from Inward FDI to Romania

The article analyzes the characteristics and performance of foreign direct investment (FDI) to Romania since the 1990s. We provide evidence for some of the commonly advanced propositions about FDI in transition economies, namely the selection of entry and firms’ performance over time and across economic sectors. Contrary to the FDI literature, multinational enterprises in Romania favored greenfield FDI over acquisitions, although this does not apply to oligopolistic and technology intensive industries. Specific relationships between the nationality of the investor, the location and the entry modes decisions are also analyzed. We observed that acquisitions exhibited higher profit margin and turnover compared to greenfield FDI.

Private Ownership versus Institutional Ownership: Exclusion Pricing of Initial Public Offerings

The authors examine the literature with respect to the pricing of initial public offerings and focus upon the relationship of pricing to the structure and conduct of the investment banking industry. Using a data base of all share offerings undertaken in the United States over a two and a half year period, the authors find that there is considerable evidence for the proposition that large, prestigious, and well capitalised investment banks tend to price their share offerings at a higher absolute level than those not meeting such characteristics. Using classical statistical methods, the authors find that the pricing strategy of investment banks is connected to their affiliation with investment funds and unit trusts. The motives for such pricing strategies, the authors argue, lie with the affiliation of investment banks with investment funds, suggesting that the pricing of new share offerings may be a means of excluding retail investors from participating in the strong returns such issues exhibit. The authors raise legal and regulatory implications of their findings in the context of the general consolidation observed within the investment banking industry.

European Energy Policy: Past and Present Challenges

Energy, in its various manifestations, has been at the heart of the European project from the start, as concerns about energy supply and security were the foundations of the European Union (EU). The European Coal and Steel Community (ECSC), proposed by French foreign minister Robert Schuman in 1950, was the precursor of the EU and its goals were economic regeneration, economic growth and rationalization of energy production, consumption and usage. The ECSC was joined by two other “communities”: the European Economic Community (EEC), focusing upon trade and tariffs between the countries of Europe, and the European Atomic Energy Community (EURATOM), concerned with peaceful development of atomic energy. It will be shown that energy policy reflected the priorities of the European Community and that, when compared to other areas of policy focus, crafting a common energy policy has deeply served the cause of economic and political integration.