Three Essays on the Economics of International Migration [electronic resource].

requirements for Filipino performing artists, effectively closing this migration channel. I employ a difference-in-differences estimation strategy using the share of performing artists at baseline in each Philippine province as a continuous policy variable. International migration falls in response to the policy change by 1.2%. The effect on international migration is larger than the policy change itself would suggest, indicating the importance of spillovers across migrant occupations. Domestically, more children are employed, and adults are more likely to be unemployed or engaged in short-term work.

Conditional risk, return and contagion in the banking sector in Asia

This paper investigates risk and return in the banking sector in three Asian markets of Taiwan, China and Hong Kong. The study focuses on the risk-return relation in a conditional factor GARCH-M framework that controls for time-series effects. The factor approach is adopted to incorporate intra-industry contagion and an analysis of spillovers between large banks and small banks. Finally, the study provides evidence on these relations before and after the Asian financial crisis of 1997. The results are generally consistent across the markets and with expectations.

Efficiency effects of agricultural economics research in the United States

Allocations of research funds across programs are often made for efficiency reasons. Social science research is shown to have small, lagged but significant effects on U.S. agricultural efficiency when public agricultural R&D and extension are simultaneously taken into account. Farm management and marketing research variables are used to explain variations in estimates of allocative and technical efficiency using a Bayesian approach that incorporates stylized facts concerning lagged research impacts in a way that is less restrictive than popular polynomial distributed lags. Results are reported in terms of means and standard deviations of estimated probability distributions of parameters and long-run total multipliers. Extension is estimated to have a greater impact on both allocative and technical efficiency than either R&D or social science research.

Modelling foreign direct investment in China

This thesis consists of three empirical and one theoretical studies. While China has received an increasing amount of foreign direct investment (FDI) and become the second largest host country for FDI in recent years, the absence of comprehensive studies on FDI inflows into this country drives this research. In the first study, an econometric model is developed to analyse the economic, political, cultural and geographic determinants of both pledged and realised FDI in China. The results of this study suggest that China's relatively cheaper labour force, high degree of international integration with the outside world (represented by its exports and imports) and bilateral exchange rates are the important economic determinants of both pledged FDI and realised FDI in China. The second study analyses the regional distribution of both pledged and realised FDI within China. The econometric properties of the panel data set are examined using a standardised 't-bar' test. The empirical results indicate that provinces with higher level of international trade, lower wage rates, more R&D manpower, more preferential policies and closer ethnic links with overseas Chinese attract relatively more FDI. The third study constructs a dynamic equilibrium model to study the interactions among FDI, knowledge spillovers and long run economic growth in a developing country. The ideas of endogenous product cycles and trade-related international knowledge spillovers are modified and extended to FDI. The major conclusion is that, in the presence of FDI, economic growth is determined by the stock of human capital, the subjective discount rate and knowledge gap, while unskilled labour can not sustain growth. In the fourth study, the role of FDI in the growth process of the Chinese economy is investigated by using a panel of data for 27 provinces across China between 1986 and 1995. In addition to FDI, domestic R&D expenditure, international trade and human capital are added to the standard convergence regressions to control for different structural characteristics in each province. The empirical results support endogenous innovation growth theory in which regional per capita income can converge given technological diffusion, transfer and imitation.

The impact on domestic productivity of inward investment in the UK

One of the basic tenets of UK industrial policy, that attracting inward investment into the UK stimulates domestic productivity growth, is examined. A model of productivity growth is developed for the indigenous sector of UK manufacturing, linking domestic productivity growth to theoretical explanations of inward investment. The paper demonstrates that inward investment does stimulate productivity growth in the domestic sector of around 0.75 per cent per annum. However, this cannot be attributed to investment or output spillovers, but is a result of the productivity advantage exhibited by the foreign firms.

FDI and the labour market: a review of the evidence and policy implications

This paper presents a series of results concerning the labour-market impact of inward foreign direct investment (FDI) in the UK. The paper demonstrates that one of the crucial impacts of FDI is to increase wage inequality and the use of relatively more skilled labour in the domestic firms. This result is found to be a combination of two effects. First, the entry by a multinational enterprise (MNE) increases the demand for skilled workers in an industry or region, thus increasing wage inequality. Second, technology spillovers occur from foreign to domestic firms. As a result of these spillovers, relative demand for skilled workers increases in the domestic firms, further contributing to aggregate wage inequality and skill upgrading. The paper also considers how FDI impacts upon skill shares by productivity differentials between foreign and domestic firms. Finally, the policy implications of this are discussed, from the perspective of regional development, and the likely effectiveness of attracting FDI to reduce structural unemployment.

Finance and firm export in China

Using a rich panel data set, we provide a rigorous analysis of the relationship between access to external finance, foreign direct investment and the exports of private enterprises in China. We conclude that, in order to foster the exports of indigenous enterprises, the elimination of financial discrimination against private firms is likely to be a more effective policy tool than the reliance on spillovers from multinational firms. © 2007 Blackwell Publishing Ltd.

FDI, linkages and the efficiency of state-owned enterprises in China

As China seeks to consolidate its position as an emerging global economic power, reforming the largely inefficient state-owned enterprises (SOEs) presents a major challenge. Using a comprehensive micro data set, we investigate whether SOEs in China have benefited from the managerial, technical and organisational skills possessed by multinational firms operating in the economy, and conclude that the evidence in favour of positive spillovers is not overwhelming. Limited regional linkages and low level of absorptive capacity are found to be the main reasons for this disappointing performance. Policy makers involved in the reform of SOEs should ensure that managers have the right incentives to make long-term investment in absorptive capacity development.

What does endogenous growth theory tell about regional economies? Empirics of R&D worker-based productivity growth

What does endogenous growth theory tell about regional economies? Empirics of R&D worker-based productivity growth, Regional Studies. Endogenous growth theory emerged in the 1990s as ‘new growth theory’ accounting for technical progress in the growth process. This paper examines the role of research and development (R&D) workers underlying the Romer model (1990) and its subsequent modifications, and compares it with a model based on the accumulation of human capital engaged in R&D. Cross-section estimates of the models against productivity growth of European regions in the 1990s suggest that each R&D worker has a unique set of knowledge while his/her contributions are enhanced by knowledge sharing within a region as well as spillovers from other regions in proximity.

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.

An ex ante evaluation framework for the regional benefits of publicly supported R&D projects

This paper draws on the knowledge-base implicit in ex post evaluations of publicly funded R&D and other related conceptual and empirical studies to suggest a framework for the ex ante evaluation of the regional benefits from R&D projects. The framework developed comprises two main elements: an inventory of the global private and social benefits which might result from any R&D project; and, an assessment of the share of these global benefits which might accrue to a host region, taking into account the characteristics of the R&D project and the region's innovation system. The inventory of global benefits separately identifies private and social benefits and distinguishes between increments to public and private knowledge stocks, benefits to R&D productivity and benefits from commercialisation. Potential market and 'pure' knowledge spillovers are also considered separately. The paper concludes with the application of the framework to two illustrative case studies. © 2003 Elsevier B.V. All rights reserved.

The return of the Prince of Denmark: a survey on recent developments in the economics of innovation

It is well known that innovation is the engine that drives the growth machine of modern capitalist economies. Therefore, not surprisingly, substantial attention has been devoted by economists to the process behind the production of innovations. Three areas have recently emerged as relevant in the field. These are: the impact of spillovers on productivity; the different forms of R&D cooperation and the role of patents in fostering innovations when these are cumulative. In this paper I summarise the relevant literature in these three areas by discussing where the current literature stands and what are its future developments.

The leverage effect in the UK stock market

This study seeks to explain the leverage in UK stock returns by reference to the return volatility, leverage and size characteristics of UK companies. A leverage effect is found that is stronger for smaller companies and has greater explanatory power over the returns of smaller companies. The properties of a theoretical model that predicts that companies with higher leverage ratios will experience greater leverage effects are explored. On examining leverage ratio data, it is found that there is a propensity for smaller companies to have higher leverage ratios. The transmission of volatility shocks between the companies is also examined and it is found that the volatility of larger firm returns is important in determining both the volatility and returns of smaller firms, but not the reverse. Moreover, it is found that where volatility spillovers are important, they improve out-of-sample volatility forecasts. © 2005 Taylor & Francis Group Ltd.

Externality effects of information and communication technologies across country Borders

As information and communications technology (ICT) involves both traditional capital and knowledge capital, potential spillovers through various mechanisms can occur. We posit that ICT capital may boost productivity growth, not only in the home country, but also in other countries. In this paper, we provide empirical evidence of such spillovers using panel data on 37 countries from 1996 to 2004. Our results support the existence of ICT spillovers across country borders. Furthermore, we find that developing countries could reap more benefits from ICT spillovers than developed countries. This is particularly important for policy decisions regarding national trade liberalization and economic integration. Developing economies that are more open to foreign trade may have an economic advantage and may develop knowledge-intensive activities, which will lead to economic development in the long run.

Technology flows, outsourcing and productivity:an analysis of UK trade and FDI

By engaging in trade and foreign direct investment (FDI) with foreign partners, a country can access the R&D and related knowledge stocks of other countries (by accident or by design) and so benefit from those stocks of knowledge at a cost lower than that which would be incurred by developing the knowledge internally. This should lead to beneficial ‘spillover’ effects on the productivity of domestic firms. However, the literature on technology spillovers from trade and FDI is ambiguous in its findings. This may in part be because of the assumption in much of the work that trade and FDI flows are homogeneous in their determinants and thus in their effects. We develop a taxonomy of trade and FDI determinants based on R&D intensity and unit labour cost differentials, and test for the presence of spillovers from inward investment and imports on an extensive sample of UK manufacturing plants. We find that both trade and FDI have measurable spillover effects, but the size of these effects varies depending on the technological and labour cost differentials between the UK and its trading partners. There is therefore an identifiable link between the determinants and effects of trade and FDI which the previous literature has not explored. We also find that absorptive capacity matters for spillovers from FDI, but not from trade. Overall, these findings suggest that the productivity effects of FDI are largely restricted to plants with high absorptive capacity, while the productivity effects of imports occur largely among higher-technology plants regardless of their absorptive capacity.