Yasuyuki Todo

Knowledge Spillovers from Foreign Direct Investment and the Role of Local R&D Activities: Evidence from Indonesia

A large number of studies have used firm‐level data to examine whether foreign direct investment (FDI) generates knowledge spillovers to domestically owned firms in less developed countries. However, the results are mixed. In this study, Indonesian plant‐level panel data are used to test whether the often‐ignored local R&D activities of foreign‐owned firms in the host country enhance knowledge spillovers from FDI. The analysis found positive spillovers from R&D‐performing foreign‐owned firms, while spillovers from non‐R&D‐performing foreign‐owned firms were absent.

Quantitative Evaluation of the Determinants of Export and FDI: Firm-Level Evidence from Japan

Using firm-level data for Japan, this paper examines the determinants of the export and foreign direct investment (FDI) decision. We contribute to the literature by employing a mixed logit model, i.e. a multinomial logit model with random intercepts and random coefficients, to incorporate any unobserved firm heterogeneity and by paying special attention to the quantitative significance of the determinants. We find that while the impact of productivity on the export and FDI decision is positive and statistically significant, it is economically negligible. The effect of firm size, credit constraints and information spillovers from experienced firms is also small in magnitude. A quantitatively dominant determinant of the export and FDI decision is instead the prior status of firms in terms of internationalisation. In addition, the use of the mixed logit model enables us to find a substantial role of unobserved firm characteristics in internationalisation of the firm. These findings suggest that entry costs to foreign markets, which substantially vary in size across firms, play an important role in the export and FDI decision. In addition, given that the negligible effect of productivity and the dominant effect of prior status appear to be more prominent in Japan than in some other countries, this study helps highlight the uniqueness of Japanese firms.

Knowledge Diffusion from Multinational Enterprises: The Role of Domestic and Foreign Knowledge-Enhancing Activities

Many existing works using firm-level data sets have examined whether or not knowledge spills over from MNEs to domestically owned firms in a less developed country, but the literature has not come to a general consensus on the presence of spillovers. A possible reason for the mixed results is that they do not adequately address domestic and foreign efforts for active diffusion. The present paper thus incorporates R&D activities and human resource development conducted by MNEs and domestic firms to investigate whether these activities enhance knowledge diffusion from MNEs, using establishment-level panel data for the Indonesian manufacturing sector. We find that R&D activities and human resource development conducted by MNEs stimulate knowledge diffusion from MNEs to domestic firms, while knowledge diffusion from MNEs without such activities is absent. Moreover, R&D activities by a domestic firm are also found to promote knowledge diffusion from MNEs to the firm, although this ... De nombreux travaux de recherche ont utilise des donnees au niveau des entreprises pour evaluer la diffusion de competences depuis les firmes multinationales vers les entreprises nationales dans les pays moins developpes. Cependant, ces travaux n’ont pas permis de degager un consensus sur l’existence ou non de retombees. Ces resultats contradictoires peuvent peut-etre s’expliquer par une mauvaise prise en compte des efforts de diffusion tant nationaux qu’etrangers. Ce Document technique inclut donc les activites de R&D et le developpement des ressources humaines inities par les multinationales et par les entreprises locales afin d’examiner si ces activites renforcent la diffusion du savoir a partir des multinationales. Pour ce faire, les auteurs ont utilise des donnees au niveau des entreprises du secteur manufacturier indonesien. Il en ressort que les activites des multinationales en R&D et developpement des ressources humaines favorisent la diffusion du savoir vers les ...

Roles of extension and ethno-religious networks in acceptance of resource-conserving agriculture among Ethiopian farmers

This article analyses roles of social and extension networks in adoption of resource-conserving practices among Ethiopian farmers. We gathered data from 297 randomly sampled households on their agricultural practices, social networks, access to the extension, and geographical location. After examining general determinants of practising resource-conserving agriculture, we employ a two-stage regression with full-maximum likelihood correction for selection bias to establish the roles of general social networks and external professionals in acceptance of conservation techniques. In accordance with previous research, probit regression in the first stage shows that the access to extension increases with farmers’ wealth and the size of their personal networks, and decreases with the distance of their households from village centres. However, after accounting for this unequal access to extension, the second-stage linear regression shows that regardless of education, wealth or geographical location, those whose religion and ethnicity match with their agent, report learning more about conservation from extension sources. Furthermore, farmers who are socially well connected within the community tend to be less receptive to agents’ recommendations regarding resource conservation. Dissemination policy of conservation agriculture should consider the ethnic and religious affinity between farmers and their extension agents. It also needs to pay more attention to socially and geographically isolated individuals.

The impact of a shade coffee certification program on forest conservation: A case study from a wild coffee forest in Ethiopia

In recent years, shade coffee certification programs have attracted increasing attention from conservation and development organizations. Certification programs offer an opportunity to link environmental and economic goals by providing a premium price to producers and thereby contributing to forest conservation. However, the significance of the conservation efforts of certification programs remains unclear because of a lack of empirical evidence. The purpose of this study was to examine the impact of a shade coffee certification program on forest conservation. The study was conducted in the Belete-Gera Regional Forest Priority Area in Ethiopia, and remote sensing data of 2005 and 2010 were used to gauge the change of forest area. Using propensity score matching estimation, we found that forests under the coffee certification program were less likely to be deforested than forests without forest coffee. By contrast, the difference in the degree of deforestation between forests with forest coffee but not under the certification program and forests with no forest coffee is statistically insignificant. These results suggest that the certification program has had a large effect on forest protection, decreasing the probability of deforestation by 1.7 percentage points.

Exploring dynamic mechanisms of learning networks for resource conservation

The importance of networks for social-ecological processes has been recognized in the literature; however, existing studies have not sufficiently addressed the dynamic nature of networks. Using data on the social learning networks of 265 farmers in Ethiopia for 2011 and 2012 and stochastic actor-oriented modeling, we explain the mechanisms of network evolution and soil conservation. The farmers’ preferences for information exchange within the same social groups support the creation of interactive, clustered, nonhierarchical structures within the evolving learning networks, which contributed to the diffusion of the practice of composting. The introduced methods can be applied to determine whether and how social networks can be used to facilitate environmental interventions in various contexts.

Poverty Reduction During the Rural-Urban Transformation: The Role of the Missing Middle

As countries develop, they undergo a structural transformation from agriculture to manufacturing and services as well as a spatial transformation from rural to urban. Historically, this process has been far from uniform across countries, with some fostering rural diversification out of agriculture and others undergoing rapid agglomeration in mega cities. This paper examines whether the nature of these transformations (rural diversification versus agglomeration in mega-cities) affects the rate of poverty reduction. Using cross-country panel data for developing countries spanning 1980-2004, it is found that migration out of agriculture into the missing middle (rural nonfarm economy and secondary towns ) is strongly associated with poverty reduction, while expansion of mega-cities is not. Migration to the missing middle leads to more inclusive growth patterns, while agglomeration in mega cities widens income inequality, even though it also generates faster economic growth, as predicted by the new economic geography. These findings bear on the longstanding debate about the appropriate balance of public investment in both portable (education, health) and non-portable (infrastructure) public goods across space.

Empirically consistent scale effects: An endogenous growth model with technology transfer to developing countries

Abstract Scale effects in endogenous growth models have been questioned by the fact that a remarkable increase in the number of scientists and engineers engaged in R&D in the postwar United States was indeed associated with a productivity slowdown. This paper, however, shows that this evidence could be reconciled with scale effects, once technology diffusion from technologically leading countries to followers by foreign direct investment (FDI) is incorporated into a standard model. If FDI requires scientists and engineers of advanced countries to adapt existing technologies to the local environment and to train local workers, the number of scientists and engineers would increase as the magnitude of technology diffusion expands. Also, the emergence of FDI as more profitable opportunities for scientists and engineers could lead to a domestic productivity slowdown in advanced countries.

The Revival of Scale Effects

Scale effects in growth, positive effects of the population size on per capita output growth, have been rejected by cross-country regressions. This paper, however, finds that long-run time-series data supports the effects. Moreover, although scale effects in growth seem to be inconsistent with the fact that a substantial increase in the R&D labor in the postwar United States did not raise its growth rate, the theoretical part of this paper proposes costly international knowledge diffusion as its possible reason, suggesting that growth did not improve most likely because additional R&D labor was devoted to knowledge diffusion, rather than innovation. Calibration analysis shows that the key variables predicted by the model are not very different from their actual values in the postwar United States.

Effects of Social Network Structure on the Diffusion and Adoption of Agricultural Technology: Evidence from Rural Ethiopia

This paper investigates the effects of social network structure on the diffusion of agricultural technologies using household-level panel data from Ethiopia. We correct for possible biases due to the endogeneity of social networks using a social experiment in which we provide mobile phones to randomly selected households. We find that the effect of social networks varies depending on the network structure and characteristics of the technologies considered. The diffusion of information on a simple technology is determined by whether farmers know an agricultural extension agent. However, the diffusion of information on a more complex technology is not promoted by simply knowing an extension agent but by knowing an agent that a particular household can rely on and by clustered networks in which most friends of the household are friends of each other. This finding suggests that knowing and understanding more complex technologies require strong external ties and flows of the same information from multiple sources.