Openness and economic growth

The themes of this thesis are that international trade and foreign direct investment (FDI) are closely related and that they have varying impacts on economic growth in countries at different stages of development. The thesis consists of three empirical studies. The first one examines the causal relationship between FDI and trade in China. The empirical study is based on a panel of bilateral data for China and 19 home countries/regions over the period 1984-98. The specific feature of the study is that econometric techniques designed specially for panel data are applied to test for unit roots and causality. The results indicate a virtuous procedure of development for China. The growth of China’s imports causes growth in inward FDI from a home country/region, which in turn causes the growth of exports from China to the home country/region. The growth of exports causes the growth of imports. This virtuous procedure is the result of China’s policy of opening to the outside world. China has been encouraging export-oriented FDI and reducing trade barriers. Such policy instruments should be further encouraged in order to enhance economic growth. In the second study, an extended gravity model is constructed to identify the main causes of recent trade growth in OECD countries. The specific features include (a) the explicit introduction of R&D and FDI as two important explanatory variables into an augmented gravity equation; (b) the adoption of a panel data approach, and (c) the careful treatment of endogeneity. The main findings are that the levels and similarities of market size, domestic R&D stock and inward FDI stock are positively related to the volume of bilateral trade, while the geographical distance, exchange rate and relative factor endowments, has a negative impact. These findings lend support to new trade, FDI and economic growth theories. The third study evaluates the impact of openness on growth in different country groups. This research distinguishes itself from many existing studies in three aspects: first, both trade and FDI are included in the measurement of openness. Second, countries are divided' into three groups according to their development stages to compare the roles of FDI and trade in different groups. Third, the possible problems of endogeneity and multicollinearity of FDI and trade are carefully dealt with in a panel data setting. The main findings are that FDI and trade are both beneficial to a country's development. However, trade has positive effects on growth in all country groups but FDI has positive effects on growth only in the country groups which have had moderate development. The findings suggest FDI and trade may affect growth under different conditions.

Effects of grain size and microstructure on threshold values and near threshold crack growth in powder-formed Ni-base superalloy

Threshold stress intensity values, ranging from ∼6 to 16 MN m −3/2 can be obtained in powder-formed Nimonic AP1 by changing the microstructure. The threshold and low crack growth rate behaviour at room temperature of a number of widely differing API microstructures, with both ‘necklace’ and fully recrystallized grain structures of various sizes and uniform and bimodal γ′-distributions, have been investigated. The results indicate that grain size is an important microstructural parameter which can control threshold behaviour, with the value of threshold stress intensity increasing with increasing grain size, but that the γ′-distribution is also important. In this Ni-base alloy, as in many others, near threshold fatigue crack growth occurs in a crystallographic manner along {111} planes. This is due to the development of a dislocation structure involving persistent slip bands on {111} planes in the plastic zone, caused by the presence of ordered shearable precipitates in the microstructure. However, as the stress intensity range is increased, a striated growth mode takes over. The results presented show that this transition from faceted to striated growth is associated with a sudden increase in crack propagation rate and occurs when the size of the reverse plastic zone at the crack tip becomes equal to the grain size, independent of any other microstructural variables.