Unlocking the Potential of Zambian Micro, Small and Medium Enterprises "Learning from the international best practices - the Southeast Asian Experience"

This paper examines the SMEs performance in Zambia and attempts to identify some practical lessons that Zambia can learn from Southeast Asian countries (with reference to Malaysia) in order to facilitate industrial development through unlocking the potential of its SMEs sector. Malaysia and Zambia were at the same level of economic development as evidenced by similar per capita incomes but Zambia has remained behind economically and its manufacturing sector has stagnated as if both countries did not have similar initial endowments. It therefore, becomes imperative that Zambia learns from such countries on how they managed to take-off economically with a focus on SME development. Training (education), research & development, market availability and technological advancement through establishment of industrial linkages coupled with cluster formation were some of the outstanding strategies identified that Zambia could use as a “key” to unlock its SMEs’ potential as it strives to meet the UN MDGs in particular halving its poverty levels by 2015 and also realizing its vision of becoming a middle income earner by 2030.

Linked versus Non-linked Firms in Innovation: The Effects of Economies of Network in Agglomeration in East Asia

This paper proposes a new mechanism linking innovation and network in developing economies to detect explicit production and information linkages and investigates the testable implications of these linkages using survey data gathered from manufacturing firms in East Asia. We found that firms with more information linkages tend to innovate more, have a higher probability of introducing new goods, introducing new goods to new markets using new technologies, and finding new partners located in remote areas. We also found that firms that dispatched engineers to customers achieved more innovations than firms that did not. These findings support the hypothesis that production linkages and face‐to‐face communication encourage product and process innovation.

Capability Matrix : A Framework for Analyzing Capabilities in Value Chains

This paper develops a Capability Matrix for analyzing capabilities of developing country firms that participate in global and national value chains. This is a generic framework to capture firm-level knowledge accumulation in the context of global and local industrial constellations, by integrating key elements of the global value chain (GVC) and technological capabilities (TC) approaches. The framework can visually portray characteristics of firms’ capabilities, and highlight a relatively overlooked factor in the GVC approach: local firms’ endogenous learning efforts in varieties of relationship with lead firms.

A two-dimensional analysis of the impact of outward FDI on performance at home: evidence from Japanese manufacturing firms

This paper empirically investigates two areas of changes in firm behavior and performance at home before and after investing abroad. The first change is dependent upon the type of foreign direct investment (FDI): horizontal FDI or vertical FDI. The second change is dependent upon the firm’s domestic activities: production activities or non-production activities. From a theoretical standpoint, the impact of outward FDIs differs not only by type, but according to the firm’s activities. By exploiting two types of firm-level data that enable us to distinguish between production and non-production activities, our paper provides a detailed picture of the intra-firm changes in behavior and performance that occur as a result of production globalization.

Economic restructuring and regional distrubution of enterprises in Vietnam

The change in the ownership structure of enterprises was one of the major features of the Vietnamese economy in the 2000s. Of the three sectors of state, private and FDI, the state sector, which employed the majority of enterprise workers at the beginning of the 2000s, became the smallest by the end of the decade. One of the factors contributing to such phenomenon was SOE restructuring. Earlier SOE restructuring in the early 1990s is said to have resulted in increased economic inequality among provinces. The purpose of this paper is to clarify the impact of the SOE restructuring and related changes in the ownership structure of enterprises on the regional distribution of economic activities in the 2000s.

Heterogeneous multinational firms and productivity gains from falling FDI barriers

During the past decade of declining FDI barriers, small domestic firms disproportionately contracted while large multinational firms experienced a substantial growth in Japan’s manufacturing sector. This paper quantitatively assesses the impact of FDI globalization on intra-industry reallocations and aggregate productivity. We calibrate the firm-heterogeneity model of Eaton, Kortum, and Kramarz (2011) to micro-level data on Japanese multinational firms. Estimating the structural parameters of the model, we demonstrate that the model can strongly replicate the entry and sales patterns of Japanese multinationals. Counterfactual simulations show that declining FDI barriers lead to a disproportionate expansion of foreign production by more efficient firms relative to less efficient firms. A hypothetical 20% reduction in FDI barriers is found to generate a 30.7% improvement in aggregate productivity through market-share reallocation.

Multiplant strategy under core-periphery structure

A typical implicit assumption on monopolistic competition models for trade and economic geography is that firms can produce and sell only at one place. This paper fallows endogenous determination of the number of plants in a new economic geography model and examine the stable outcomes of organization choice between single-plant and multi-plant in two regions. We explicitly consider the firms' trade-off between larger economies of scale under single plant configuration and the saving in interregional transport costs under multi-plant configuration. We show that organization change arises under decreasing transportation costs and observe several organization configurations under a generalized cost function.