Is Learning by Migrating to a Megalopolis Really Important? Evidence from Thailand

We examine the effects of learning by migrating on the productivity of migrants who move to a "megalopolis" from rural areas using the Thailand Labor Force Survey. The main contribution is to the development a simple framework to test for self-selection on migration decisions and learning by migrating into the urban labor market, focusing on experimental evidence in the observational data. The role of the urban labor market is examined. In conclusion, we find significant evidence for sorting: the self-selection effects test (1) is positive among new entrants from rural areas to the urban labor market; and (2) is negative among new exits that move to rural areas from the urban labor market. Further, estimated effects of learning by migrating into a "megalopolis" have a less significant impact. These results suggest the existence of a natural selection (i.e. survival of the fittest) mechanism in the urban labor market in a developing economy.

Export platform FDI and firm heterogeneity

This paper investigates theoretically and empirically firms' productivity ranking among traditional horizontal foreign direct investment (HFDI), pure platform FDI (PFDI), and complex platform FDI (CFDI). Using data on Japanese outward FDI, we define firms conducting HFDI or PFDI as those Japanese firms that maintain production affiliates only in the U.S. or Mexico, respectively. The firms for CFDI are defined as having production affiliates in both the U.S. and Mexico. The theoretical illustration shows that the CFDI firms should have the highest productivity when trade costs between the U.S. and Mexico are low. By carefully disentangling firms' self-selection effects from learning-by-investing effects, we find some evidence consistent with this hypothesis for a period of relatively low trade costs. Our results indicate the importance of trade costs in developing countries with neighboring markets in attracting foreign investment by highly productive multinational firms.

Impacts of FTA utilization on firm performance

The international export and investment activities of firms have been widely studied by scholars. In particular, prior studies have focused on two main hypotheses about firms engaged in international activities such as exporting and investing abroad; namely, self-selection of more productive firms into international activities and learning-by-doing international activities. This paper is the first study that explores these hypotheses in regard to firms’ use of free trade agreements (FTAs). We first estimate the propensity score for firms’ use of FTA schemes, and find that larger firms are more likely to participate. Then, by conducting matching analysis using the propensity scores, we find that the use of FTA schemes does not change employment in firms, but does result in more local inputs used and increased exports.

The emerging ASEAN approach to mutual recognition : a comparison with Europe, trans-Tasman, and North America

Existing studies on mutual recognition agreements (MRAs) are mostly based on the European experience. In this paper, we will examine the ongoing attempts to establish a mutual recognition architecture in the Association of Southeast Asian Nations (ASEAN) and seek to explain the region's unique approach to MRAs, which can be classified as a "hub and spoke" model of mutual recognition. On one hand, ASEAN is attempting to establish a quasi-supranational ASEAN-level mechanism to confer "ASEAN qualification" effective in the entire ASEAN region. On the other hand, ASEAN MRAs respect members' national sovereignty, and it is national authorities, not ASEAN institutions, who have the ultimate power to approve or disapprove the supply of services by ASEAN qualification holders. Such a mixed approach to mutual recognition can be best understood as a centralized mechanism for learning-by-doing, rather than centralized recognition per se.