Delegation to workers across countries and industries : social capital and coordination needs matter

The degree of delegating authority to non-managerial and non-supervisory workers substantially varies across countries and industries. By examining worker-level data from 14 countries, I empirically explain this variation by region-specific social capital that proxies workers' degree of self-centeredness and the industry-specific need for coordination. The empirical results of this study confirm the theoretical predictions by Alonso et al. (2008) for the first time: the negative association between coordination needs and decentralization is mitigated in regions with lower self-centeredness of workers. In particular, when self-centeredness of workers (respectively, need for coordination) is very low, the degree of delegation is always high regardless of the level of the need for coordination (self-centeredness of workers). Positive associations between delegation and its benefits, including job satisfaction, wages (proxy for higher productivity), and skill upgrading of workers, are also found. These results imply that people's degree of self-centeredness affects a country's economic development patterns by changing the degree of decentralization and its benefits.

Firm-level trade creation and diversion of regional trade agreements in Thailand

Using highly detailed import data for Thailand, this paper examines firm-level trade creation and diversion of regional trade agreements (RTAs). Specifically, by focusing on firm-product pairs in which firms import a particular product from non-members but not from RTA members in the initial year of our sample, we empirically investigate the start of imports from RTA members under RTA schemes and the cessation of imports from non-members at the firm-level. We find that firms are more likely to stop importing products with low RTA tariff rates or high most-favored-nation tariff rates from non-members and to start importing such products from RTA member countries. However, from the quantitative point of view, there are very few firms that switch import sources from non-members to RTA members when facing the introduction of RTA schemes.

Undermined climate policies : a study on the impact of regulatory and financial discrimination across heterogeneous firms in China

Firms in China within the same industry but with different ownership and size have very different production functions and can face very different emission regulations and financial conditions. This fact has largely been ignored in most of the existing literature on climate change. Using a newly augmented Chinese input–output table in which information about firm size and ownership are explicitly reported, this paper employs a dynamic computable general equilibrium (CGE) model to analyze the impact of alternative climate policy designs with respect to regulation and financial conditions on heterogeneous firms. The simulation results indicate that with a business-as-usual regulatory structure, the effectiveness and economic efficiency of climate policies is significantly undermined. Expanding regulation to cover additional firms has a first-order effect of improving efficiency. However, over-investment in energy technologies in certain firms may decrease the overall efficiency of investments and dampen long-term economic growth by competing with other fixed-capital investments for financial resources. Therefore, a market-oriented arrangement for sharing emission reduction burden and a mechanism for allocating green investment is crucial for China to achieve a more ambitious emission target in the long run.

Mapping agricultural value chains with international input-output data

In recent years, the analysis of trade in value added has been explored by many researchers. Although they have made important contributions by developing GVC-related indices and proposing techniques for decomposing trade data, they have not yet explored the method of value chain mapping—a core element of conventional value chain analysis. This paper introduces a method of value chain mapping that uses international input-output data and reveals both upstream and downstream transactions of goods and services induced by production activities of a specific commodity or industry. This method is subsequently applied to the agricultural value chain of three Greater Mekong Sub-region countries (i.e., Thailand, Vietnam, and Cambodia). The results show that the agricultural value chain has been increasingly internationalized, although there is still room for obtaining benefits from GVC participation, especially in a country such as Cambodia.

Economic impact of political protests (strikes) on manufacturing firms : evidence from Bangladesh

Political protests in the form of strikes, locally known as hartal, remain quite common in the Indian subcontinent countries. Such a form of protests is associated with mass movement, intended to cause a total shutdown of economic activities and often results in coercion, violence, and damage to both public and private properties. Utilizing the World Bank Enterprise survey data of 2007 and 2013 of Bangladesh, this study examines the impacts of hartals on manufacturing firms. We find that political protests significantly increase costs for firms. Using flexible cost function based on factor analysis we see that the factor-neutral effect of strikes is positive and statistically significant, showing evidence of a reduction in firm productivity due to hartals. However, we did not find any evidence for systematic factor re-optimization by firms – in response to political strikes – suggesting that firms do not reallocate factor shares to tackle uncertain and irregular shocks like hartals.

Productivity growth and the structure of production

In this study, interactions between potential hierarchical value chains existing in the production structure and industry-wise productivity growths are sought. We applied generalized Chenery-Watanabe heuristics for matrix linearity maximization to triangulate the input-output incidence matrix for both Japan and the Republic of Korea, finding the potential directed flow of values spanning the industrial sectors of the basic (disaggregated) industry classifications for both countries. Sector specific productivity growths were measured by way of the Trönquvist index, using the 2000-2005 linked input-output tables for both Japan and Korea.