Philosophy, theory, and practice of green operations management

This paper proposes a more profound discussion of the philosophical underpins of sustainability than currently exists in the MOT literature and considers their influence on the construction of the theories on green operations and technology management. Ultimately, it also debates the link between theory and practice on this subject area. The paper is derived from insights gained in three research projects completed during the past twelve years, primarily involving the first author. From 2000 to 2002, an investigation using scenario analysis, aimed at reducing atmospheric pollution in urban centres by substituting natural gas for petrol and diesel, provided the first set of insights about public policy, environmental impacts, investment analysis, and technological feasibility. The second research project, from 2003 to 2005, using a survey questionnaire, was aimed at improving environmental performance in livestock farming and explored the issues of green supply chain scope, environmental strategy and priorities. Finally, the third project, from 2006 to 2011, investigated environmental decisions in manufacturing organisations through case study research and examined the underlying sustainability drivers and decision-making processes. By integrating the findings and conclusions from these projects, the link between philosophy, theory, and practice of green operations and technology management is debated. The findings from all these studies show that the philosophical debate seems to have little influence on theory building so far. For instance, although ‘sustainable development’ emphasises ‘meeting the needs of current and future generation’, no theory links essentiality and environmental impacts. Likewise, there is a weak link between theory and the practical issues of green operations and technology management. For example, the well-known ‘life-cycle analysis’ has little application in many cases because the life cycle of products these days is dispersed within global production and consumption systems and there are different stakeholders for each life cycle stage. The results from this paper are relevant to public policy making and corporate environmental strategy and decision making. Most of the past and current studies in the subject of green operations and sustainability management deal with only a single sustainability dimension at any one time. Here the value and originality of this paper lies in its integration between philosophy, theory, and practice of green technology and operations management.

Determinants of inward investment in the UK, a panel analysis

This paper develops an inter-industry model of inward investment, using a fixed effects approach. This demonstrates that when inward investment is investigated in such a framework, previous findings, relating to the specification of measures of location advantage and ownership advantages no longer hold. This also shows that there are some industries that have attracted significant inward investment over time, and continue to do so, while others are noticeably less successful. Reasons for this, and potential policy measures are briefly discussed.

Technology sourcing versus technology exploitation:An analysis of US foreign direct investment flows

The traditional paradigm of foreign direct investment (FDI) suggests that FDI is undertaken principally to exploit some firm-specific advantage in a foreign country which provides a locational advantage to the investor. However, recent theoretical work suggests a model of FDI in which the motivation is not to exploit existing technological advantages in a foreign country, but to access such technology and transfer it from the host economy to the investing multinational corporation via spillover effects. This paper tests the technology sourcing versus technology exploiting hypotheses for a panel of sectoral FDI flows between the United States and major OECD nations over a 15 year period. The research makes use of Patel and Vega's (Research Policy, 28, 145-55, 1999) taxonomy of sectors which are likely a priori to exhibit technology sourcing and exploiting behaviour respectively. While there is evidence that FDI flows into the United States are attracted to R and D intensive sectors, very little support is found for the technology sourcing hypothesis either for inward or outward FDI flows. The results suggest that, in aggregate, firm-specific 'ownership' effects remain powerful determinants of FDI flows.

The impact of Foreign Direct Investment and trade openness on ICT expansion: A comparative analysis of Asia-Pacific and Middle Eastern countries

This study investigates the impact of foreign direct investment (FDI) inflow and trade openness on the expansion of information and communication technologies (ICTs) for the period of 1996 to 2005, in the Asia-Pacific and Middle East regions. The results of regression analyses conducted indicate that while dissimilarities exist among the countries included in this study in terms of their level of socio-economic and political development, factors such as trade openness, education and the growth of GDP had a positive impact on their ICT development. While FDI inflow had positive impact on the expansion of ICTs on Asia-Pacific countries its impact on Middle Eastern countries was not statistically significant. The study results also show that governmental intervention in economic activities has a negative impact on ICT expansion in both regions. In the Middle East, regional conflict imposes additional negative impact on FDI inflow and trade openness and consequently, ICT expansion. The regression results show that those countries that implemented liberalization of their ICT sector were able to not only reduce the digital divide with other developed countries, but also increase their operations in both local and global markets.

Economical analysis for investment on measuring systems

Metrology processes contribute to entire manufacturing systems that can have a considerable impact on financial investment in coordinate measuring systems. However, there is a lack of generic methodologies to quantify their economical value in today’s industry. To solve this problem, a mathematical model is proposed in this paper by statistical deductive reasoning. This is done through defining the relationships between Process Capability Index, measurement uncertainty and tolerance band. The correctness of the mathematical model is proved by a case study. Finally, several comments and suggestions on evaluating and maximizing the benefits of metrology investment are given.

On the search for spillovers from foreign direct investment (FDI) with spatial dependency

This paper examines various specifications that are used within the literature to test for spillovers from foreign direct investment (FDI). Analysis provides significant evidence of externalities from inward FDI, but it shows that these externalities are more localized than has previously been believed. Further, the results demonstrate that the econometric treatment of issues such as agglomeration, contiguity and spatial dependence significantly changes the conclusions regarding local and national spillovers from FDI, and productivity growth more generally.

The East Asian crisis and financing corporate investment:is there a cause for concern?

In view of limited empirical evidence concerning the microeconomic aspects of corporate financial problems in the East Asian countries in the 1990s, this paper analyses the financing pattern of corporate investment in Indonesia, Korea, Malaysia, and Thailand. The analysis is based on an unbalanced panel of listed firms during the period 1989–1997. By using firm size, retention practices, and leverage as three different indicators of financial constraint on firm investment, we have examined the role of various internal and external financing variables on corporate investment in the sample countries. Results indicate that a large number of sample firms depend on free cash flow, especially in Indonesia; there was also a steady increase in debt-equity ratio in all countries. There were signs of agency costs in the use of cash flow in Korea and Malaysia and also in the use of debt financing in Malaysia and Thailand. There was also sign of over-investment among the Thai firms during 1994–1997 though it appears very little if at all was done to redress it in time.

Wage spillovers, inter-regional effects and the impact of inward investment

This paper evaluates the extent of inter-industry and inter-regional wage spillovers across the UK. An extensive body of literature exists suggesting that wages elsewhere affect wage determination and levels of satisfaction, but this paper extends the analysis of wage determination to examine the effects of inward investment in the process. Thus far the specific effect of foreign wages on domestic wage determination has not been evaluated. We employ industry- and regional-level panel data for the UK, and contrast results from alternative approaches to space-time modelling. Each supports the notion that such wage spillovers do occur, though assumptions made concerning the modelling of spatial interaction are important. Further, such wage spillovers are more widespread for skilled than for unskilled workers and also lower in areas of high unemployment. © 2006 Regional Studies Association.

The impact of foreign direct investment on UK manufacturing: is there a profit squeeze in domestic firms?

This paper examines the extent to which foreign direct investment (FDI) in selected UK manufacturing sectors has an impact on reported profits in domestic firms. Foreign manufacturing firms are characterized by relatively high labour productivity and low wage shares. Entry by foreign firms not only impacts on domestic market shares, but also on domestic cost conditions. As a result, profitability in the indigenous sector may be reduced. There are a number of policy implications of this analysis which are explored.

The causal relationship between information and communication technology and foreign direct investment

This paper investigates the simultaneous causal relationship between investments in information and communication technology (ICT) and flows of foreign direct investment (FDI), with reference to its implications on economic growth. For the empirical analysis we use data from 23 major countries with heterogeneous economic development for the period 1976-99. Our causality test results suggest that there is a causal relationship from ICT to FDI in developed countries, which means that a higher level of ICT investment leads to an increase inflow of FDI. ICT may contribute to economic growth indirectly by attracting more FDI. Contrarily, we could not find significant causality from ICT to FDI in developing countries. Instead, we have partial evidence of opposite causality relationship: the inflow of FDI causes further increases in ICT investment and production capacity. © United Nations University 2006.

Foreign direct investment, access to finance, and innovation activity in Chinese enterprises

A recent, comprehensive database is used to investigate the link between inward foreign direct investment (FDI) and innovation activity in China. The results of the analysis suggest that private and collectively owned firms with foreign capital participation and those with good access to domestic bank loans innovate more than other firms do. Among enterprises not owned by the state, inward FDI at the sectoral level is positively associated with domestic innovative activity only among firms that engage in their own research and development or that have good access to domestic finance. At the sector level the effect of inward FDI into technology transfer is distinguished from the effect on domestic credit opportunities. FDI affecting credit is of little significance for state-owned enterprises and is independent of their access to finance. In contrast, better access to credit is an important channel through which FDI affects the innovation of domestic private and collectively owned enterprises.

Empirical analysis of human capital development and economic growth in Europe

Recent discussion of the knowledge-based economy draws increasingly attention to the role that the creation and management of knowledge plays in economic development. Development of human capital, the principal mechanism for knowledge creation and management, becomes a central issue for policy-makers and practitioners at the regional, as well as national, level. Facing competition both within and across nations, regional policy-makers view human capital development as a key to strengthening the positions of their economies in the global market. Against this background, the aim of this study is to go some way towards answering the question of whether, and how, investment in education and vocational training at regional level provides these territorial units with comparative advantages. The study reviews literature in economics and economic geography on economic growth (Chapter 2). In growth model literature, human capital has gained increased recognition as a key production factor along with physical capital and labour. Although leaving technical progress as an exogenous factor, neoclassical Solow-Swan models have improved their estimates through the inclusion of human capital. In contrast, endogenous growth models place investment in research at centre stage in accounting for technical progress. As a result, they often focus upon research workers, who embody high-order human capital, as a key variable in their framework. An issue of discussion is how human capital facilitates economic growth: is it the level of its stock or its accumulation that influences the rate of growth? In addition, these economic models are criticised in economic geography literature for their failure to consider spatial aspects of economic development, and particularly for their lack of attention to tacit knowledge and urban environments that facilitate the exchange of such knowledge. Our empirical analysis of European regions (Chapter 3) shows that investment by individuals in human capital formation has distinct patterns. Those regions with a higher level of investment in tertiary education tend to have a larger concentration of information and communication technology (ICT) sectors (including provision of ICT services and manufacture of ICT devices and equipment) and research functions. Not surprisingly, regions with major metropolitan areas where higher education institutions are located show a high enrolment rate for tertiary education, suggesting a possible link to the demand from high-order corporate functions located there. Furthermore, the rate of human capital development (at the level of vocational type of upper secondary education) appears to have significant association with the level of entrepreneurship in emerging industries such as ICT-related services and ICT manufacturing, whereas such association is not found with traditional manufacturing industries. In general, a high level of investment by individuals in tertiary education is found in those regions that accommodate high-tech industries and high-order corporate functions such as research and development (R&D). These functions are supported through the urban infrastructure and public science base, facilitating exchange of tacit knowledge. They also enjoy a low unemployment rate. However, the existing stock of human and physical capital in those regions with a high level of urban infrastructure does not lead to a high rate of economic growth. Our empirical analysis demonstrates that the rate of economic growth is determined by the accumulation of human and physical capital, not by level of their existing stocks. We found no significant effects of scale that would favour those regions with a larger stock of human capital. The primary policy implication of our study is that, in order to facilitate economic growth, education and training need to supply human capital at a faster pace than simply replenishing it as it disappears from the labour market. Given the significant impact of high-order human capital (such as business R&D staff in our case study) as well as the increasingly fast pace of technological change that makes human capital obsolete, a concerted effort needs to be made to facilitate its continuous development.

Intra-industry foreign direct investment, uneven development and globalization:the legacy of Stephen Hymer

This paper revisits the issue of intra-industry foreign direct investment (FDI). This issue was considered in Stephen Hymer's early work, but was not subsequently developed, and was largely ignored in the literature for some time. Using the example of the UK, this paper traces the patterns of intra-industry FDI, both across countries and industries, for both the manufacturing and service sectors. Despite the undoubted increase in the integration of goods and factor markets since the time of Hymer's writing, the analysis presented here shows that the pattern has changed little in the last 40 years. The paper then goes on to discuss the motives for intra-industry FDI, relating it to technology flows and factor cost differentials. Finally, we present some analysis relating intra-industry FDI to uneven development, both between developed and developing countries, and between regions of a developed country. It is clear that intra-industry FDI is still very much a developed country phenomenon, as Hymer suggested, with both developing countries and poorer regions of developed countries unlikely to reap any of the benefits. In this context, one-way and two-way FDI must be seen as different phenomena within the debate on globalisation. © The Author 2005. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved.

Linking FDI motivation and host economy productivity effects:conceptual and empirical analysis

We develop a taxonomy that relates foreign direct investment (FDI) motivation (technology- and cost-based) to its anticipated effects on host countries domestic productivity. We then empirically examine the effects of FDI into the United Kingdom on domestic productivity, and find that different types of FDI have markedly different productivity spillover effects, which are consistent with the conceptual analysis. The UK gains substantially only from inward FDI motivated by a strong technology-based ownership advantage. As theory predicts, inward FDI motivated by technology-sourcing considerations leads to no productivity spillovers.

Macro determinants of FDI inflows to Japan:an analysis of source country characteristics

This paper examines the source country determinants of FDI into Japan. The paper highlights certain methodological and theoretical weaknesses in the previous literature and offers some explanations for hitherto ambiguous results. Specifically, the paper highlights the importance of panel data analysis, and the identification of fixed effects in the analysis rather than simply pooling the data. Indeed, we argue that many of the results reported elsewhere are a feature of this mis-specification. To this end, pooled, fixed effects and random effects estimates are compared. The results suggest that FDI into Japan is inversely related to trade flows, such that trade and FDI are substitutes. Moreover, the results also suggest that FDI increases with home country political and economic stability. The paper also shows that previously reported results, regarding the importance of exchange rates, relative borrowing costs and labour costs in explaining FDI flows, are sensitive to the econometric specification and estimation approach. The paper also discusses the importance of these results within a policy context. In recent years Japan has sought to attract FDI, though many firms still complain of barriers to inward investment penetration in Japan. The results show that cultural and geographic distance are only of marginal importance in explaining FDI, and that the results are consistent with the market-seeking explanation of FDI. As such, the attitude to risk in the source country is strongly related to the size of FDI flows to Japan. © 2007 The Authors Journal compilation © 2007 Blackwell Publishing Ltd.