Mauro Pisu

Industrial Linkages and Export Spillovers from FDI

In this paper we investigated the hypothesis of export spillovers from foreign multinationals to domestic firms using a data set of UK manufacturing firms from 1992 to 1999. Unlike previous studies we allow not only for the possibility of horizontal (i.e. intra-industry) and regional externalities, but also for vertical ones (i.e. inter-industry: forward and backward). Deploying the Heckman selection process we modelled the two decisions of whether to export or not, and how much to export, separately. The results indicate that the decision to start exporting is positively associated with the presence of foreign firms in the same industry and region; furthermore, export-oriented foreign affiliates seem to be the source of stronger export spillovers. The decision concerning how much to export is affected positively by foreign firms in downstream industries and by those in the same industry and region that do not export.

Exporting, Linkages and Productivity Spillovers from Foreign Direct Investment

In this paper we analyse productivity spillovers from foreign direct investment using firm level panel data UK manufacturing industries from 1992 to 1999. We investigate spillovers through horizontal, backward and forward linkages, distinguish spillovers from export oriented vs domestic market oriented FDI, and allow for differing effects depending on domestic firms’ export activities. The results suggest that the mechanisms through which spillovers affect domestic firms are very complex and that there are substantial differences in spillover benefits for domestic exporters and non-exporters, and from different types of inward investment.

Export destinations and learning-by- exporting : Evidence from Belgium

This paper evaluates the causal effects of exports to different destination countries using a comprehensive dataset on Belgian manufacturing firms from 1998 to 2005. Initial evidence suggests that, before export market entry, exporters to more developed economies have superior productivity levels than non-exporters and firms exporting to less developed countries. Moreover, they seem to experience higher productivity growth rates in the post-entry period, suggesting learning-by-exporting effects. However, applying matching methodology to formally evaluate the causal effects of export market entry on productivity reveals no such impact. Thus, the productivity advantage of firms exporting to developed countries appears to be driven solely by self-selection.

Barriers to Exporting: What are They and Who do They Matter to?

The international trade literatures on gravity modelling and firm‐level export behaviour have established that nontariff barriers are important impediments to international trade flows. In this paper, we provide fresh evidence on the actual barriers to exports firms face and how they vary with firm‐level characteristics. Our results indicate that the higher the export experience of firms the lower are the trade costs they face. These barriers are not related to other firm‐level characteristics, such as productivity and size, found by the literature to be associated with export market entry. Overall, these results suggest the existence of a process of learning to export whereby firms learn how to cope with export barriers through direct experience in export markets.

Job Creation, Job Destruction and Firms’ International Trade Involvement

One of the most important predictions made in the recent international trade literature based on heterogeneous firms concerns the within-industry job reallocation from firms not involved in international markets to those that are. This paper quantifies the extent of this reallocation using a data set of Belgian manufacturing firms from 1998 to 2004 having information on their international trading activities. The results suggest that at three-digit industry levels, the shifts in employment between firms having different trading status account for 6 to 30 percent of total job reallocation. This effect is stronger for large than for small firms.

Overseas Business Costs and Firm Export Performance

The recent microeconomic literature on international trade has highlighted the importance of firm characteristics and trade costs for exports. This study provides evidence on one type of those costs, the costs of doing business overseas, from a theoretical and empirical perspective. Controlling for firm- and industry-level covariates, we find that improvements in the business environment of foreign countries lead to an increase in the export intensity of exporters in the UK manufacturing sector and additional export market entry. Further investigation suggests that important determinants of foreign business costs include factors relating to legal structure, property rights, and business regulation.

Export Barriers: What are They and Who Do They Matter To?

The recent literature on firm exporting behaviour has established that both sunk-cost of exports and firm characteristics, such as size and productivity matter. In this paper we provide fresh evidence on the actual barriers to exporting firms face and how they vary with export experience and other firm-level characteristics. Our results indicate that the higher the export experience of firms the lower are trade costs. These barriers are not related to other firms-level characteristics such as, productivity and size, found by the literature to be associated with export market entry. Overall, these results suggest the existence of a process of learning to export whereby firms learn how to cope with export barriers through direct experience in export markets.

The returns to exporting: evidence from UK firms

The question of learning versus self-selection has dominated the micro-econometric literature on firm export decisions, without leading to any firm conclusions. In part this reflects the limited information content of the data typically used. In this paper we use survey data on UK firms to offer some new insights into this debate. Consistent with the literature we find that the impacts of exporting on the size of firms are strongest, but that productivity type impacts also occur. These effects are larger the higher the export intensity of firms and the shorter their export experience.

Overseas Trading Costs and Firm Export Performance

The recent micro economic literature concerning exports has highlighted the importance of firms characteristics and trade costs for export decisions. Although the presence of trade costs (i.e. sunk and variable costs) are essential to describe the different export choices firms with different level of productivity make, little is known about them. The previous literature has concentrated mainly on the tariff barriers exporting firms face. The aim of this study is to provide evidence on a different aspect of trade costs, those of overseas trading costs. Firstly, we model theoretically the effect of a reduction in the cost of doing business in foreign countries. Secondly, using a data set of UK manufacturing firms we test these predictions. Controlling for firm and industry level covariates we find that: 1) improvement in the business environment of foreign countries led to an increase in the export intensity of established exporters rather than additional export market entry; 2) the change in exports was almost exclusively explained by the reform took place within Europe; 3) multinationals responded disproportionately to these changes; 4) exports responded most to changes in the rules governing ownership, labour market regulation and international capital markets.

Acquisition FDI and the Export Intensity of Multinational Firms

This paper investigates the impact of acquisition FDI on exporting intensity in UK manufacturing. A quasi-likelihood estimation method is used, and the empirical estimates point to the following conclusions: (i) UK firms with higher exporting intensity are more likely to be foreign takeover targets; (ii) US acquired firms increase their exporting intensity, consistent with the idea that acquisition FDI is used as a platform for serving the wider EU market (iii) Firms acquired by European multinationals significantly decrease their export-orientation, suggesting targeting of the domestic market post-takeover; (iv) The exporting propensity of non-US and non-EU multinationals exhibits no significant change.