Has Low Productivity Constrained Competitiveness of African Firms? : Comparison of the Firm Performances with Asian Firms

It has been argued that poor productive performance is one of critical sources of stagnation of the African manufacturing sector, but firm-level empirical supports are limited. Using the inter-regional firm data of the garment industry, technical efficiency and its contribution to competitiveness measured as unit costs were compared between Kenyan and Bangladeshi firms. Our estimates indicated that there is no significant gap in the average technical efficiency of the two industries despite conservative estimation, although unit costs greatly differ between the two industries. Higher unit cost in Kenyan firms mainly stems from high labour cost, while impact of inefficiency is quite small. Productivity accounts little for the stagnation of garment industry in several African countries.

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.

Transport modal choice by multinational firms : firm-level evidence from Southeast Asia

We examine transport modal decision by multinational firms to shed light on the role of freight logistics in multinational activity. Using a firm-level survey in Southeast Asia, we show that foreign ownership has a significantly positive and quantitatively large impact on the likelihood that air/sea transportation is chosen relative to truck shipping. This result is robust to the shipping distance, cross-border freight, and transport infrastructure. Both foreign-owned exporters and importers also tend to use air/sea transportation. Thus, our analysis presents a new distinction between multinational and domestic firms in their decision over transport modes.

Parameterization of applied general equilibrium models with flexible trade specifications based on the Armington, Krugman, and Melitz models

This paper explains how the Armington-Krugman-Melitz supermodel developed by Dixon and Rimmer can be parameterized, and demonstrates that only two kinds of additional information are required in order to extend a standard trade model to include Melitz-type monopolistic competition and heterogeneous firms. Further, it is shown how specifying too much additional information leads to violations of the model constraints, necessitating adjustment and reconciliation of the data. Once a Melitz-type model is parameterized, a Krugman-type model can also be parameterized using the calibrated values in the Melitz-type model without any additional data. Sample code for the General Algebraic Modeling System (GAMS) has also been prepared to promote the innovative supermodel in the AGE community.

Outward FDI from developing countries : a case of Chinese firms in South Africa

Outward foreign direct investment (FDI) from developing countries is increasing. In the research on FDI, it has been considered that only competitive and productive firms can invest in foreign countries. However, since the differences in competitiveness and productivity between multinational enterprises (MNEs) from developed and developing countries have not been explicitly investigated, we cannot say whether MNEs from developing countries can or cannot survive in competition with MNEs from developed countries as well as against competitive and productive indigenous firms in host countries. To examine the activities of MNEs from developing countries, this study investigates Chinese firms in South Africa. It reveals that in order to compensate for the weak brand recognition of Chinese products and to expand sales, Chinese firms have mainly been making products that are sold under the brand names of indigenous South African firms. Chinese firms have expanded their business in South Africa relying on the business resources of indigenous firms in the host country. This indicates that business with indigenous firms is significant for MNEs from developing countries in boosting competitiveness.

Promoting institutional connectivity in the Asia Pacific region : a study of supply chain and trade in services

This paper analyzes "institutional connectivity", or the degree of seamless trade in services centering on the distribution sector. Foreign equity participation in mode 3 (commercial presence) of trade in services and business firms’ investment performance has been studied closely. Net economic benefits of transparent institutional connectivity in the wholesale sector have also been revealed statistically in the case of Japan’s bilateral FTAs with other APEC members. Given these results, APEC could work on establishing its own harmonized "service trade commitment table" with only the foreign capital participation as its simple policy restriction. This would surely enhance an APEC-wide, institutional supply chain connectivity.

Neutrality in the choice of number of firms or level of fixed costs in calibrating an Armington-Krugman-Melitz encompassing module for applied general equilibrium models

This paper shows how an Armington-Krugman-Melitz encompassing module based on Dixon and Rimmer (2012) can be calibrated, and clarifies the choice of initial levels for two kinds of number of firms, or parameter values for two kinds of fixed costs, that enter a Melitz-type specification can be set freely to any preferred value, just as the cases we derive quantities from given value data assuming some of the initial prices to be unity. In consequence, only one kind of additional information, which is on the shape parameter related to productivity, just is required in order to incorporate Melitz-type monopolistic competition and heterogeneous firms into a standard applied general equilibrium model. To be a Krugman-type, nothing is needed. This enables model builders in applied economics to fully enjoy the featured properties of the theoretical models invented by Krugman (1980) and Melitz (2003) in practical policy simulations at low cost.

The innovation process of a privately-owned enterprise and a state-owned enterprise in China

This study compares the innovation process of a privately-owned enterprise and a state-owned enterprise in China using their patent data. Huawei and ZTE were selected for this study because they experienced the same historical environment in the same industry from the same region in China leaving their owner types as their critical difference. This study investigates the difference in the innovation process in R&D between a privately-owned and a state-owned enterprise by analyzing (1) domestic and international patent application pattern, (2) co-application and co-applicants, (3) knowledge accumulation inside Huawei and ZTE, and (4) knowledge spillover to domestic and foreign firms.

Knock-out mutants from an En-1 mutagenized Arabidopsis thaliana population generate phenylpropanoid biosynthesis phenotypes

A collection of 8,000 Arabidopsis thaliana plants carrying 48,000 insertions of the maize transposable element En-1 has been generated. This population was used for reverse genetic analyses to identify insertions in individual gene loci. By using a PCR-based screening protocol, insertions were found in 55 genes. En-1 showed no preference for transcribed or untranscribed regions nor for a particular orientation relative to the gene of interest. In several cases, En-1 was inserted within a few kilobases upstream or downstream of the gene. En-1 was mobilized from such positions into the respective gene to cause gene disruption. Knock-out alleles of genes involved in flavonoid biosynthesis were generated. One mutant line contained an En-1 insertion in the flavonol synthase gene (FLS) and showed drastically reduced levels of kaempferol. Allelism tests with other lines containing En-1 insertions in the flavanone 3-hydroxylase gene (F3H) demonstrated that TRANSPARENT TESTA 6 (TT6) encodes flavanone 3-hydroxylase. The f3h and fls null mutants complete the set of A. thaliana lines defective in early steps of the flavonoid pathway. These experiments demonstrate the efficiency of the screening method and gene disruption strategy used for assigning functions to genes defined only by sequence.

Activation of Both MAP Kinase and Phosphatidylinositide 3-Kinase by Ras Is Required for Hepatocyte Growth Factor/Scatter Factor–induced Adherens Junction Disassembly

Hepatocyte growth factor/scatter factor (HGF/SF) stimulates the motility of epithelial cells, initially inducing centrifugal spreading of colonies followed by disruption of cell–cell junctions and subsequent cell scattering. In Madin–Darby canine kidney cells, HGF/SF-induced motility involves actin reorganization mediated by Ras, but whether Ras and downstream signals regulate the breakdown of intercellular adhesions has not been established. Both HGF/SF and V12Ras induced the loss of the adherens junction proteins E-cadherin and β-catenin from intercellular junctions during cell spreading, and the HGF/SF response was blocked by dominant-negative N17Ras. Desmosomes and tight junctions were regulated separately from adherens junctions, because they were not disrupted by V12Ras. MAP kinase, phosphatidylinositide 3-kinase (PI 3-kinase), and Rac were required downstream of Ras, because loss of adherens junctions was blocked by the inhibitors PD098059 and LY294002 or by dominant-inhibitory mutants of MAP kinase kinase 1 or Rac1. All of these inhibitors also prevented HGF/SF-induced cell scattering. Interestingly, activated Raf or the activated p110α subunit of PI 3-kinase alone did not induce disruption of adherens junctions. These results indicate that activation of both MAP kinase and PI 3-kinase by Ras is required for adherens junction disassembly and that this is essential for the motile response to HGF/SF.

Complex promoter and coding region β2-adrenergic receptor haplotypes alter receptor expression and predict in vivo responsiveness

The human β2-adrenergic receptor gene has multiple single-nucleotide polymorphisms (SNPs), but the relevance of chromosomally phased SNPs (haplotypes) is not known. The phylogeny and the in vitro and in vivo consequences of variations in the 5′ upstream and ORF were delineated in a multiethnic reference population and an asthmatic cohort. Thirteen SNPs were found organized into 12 haplotypes out of the theoretically possible 8,192 combinations. Deep divergence in the distribution of some haplotypes was noted in Caucasian, African-American, Asian, and Hispanic-Latino ethnic groups with >20-fold differences among the frequencies of the four major haplotypes. The relevance of the five most common β2-adrenergic receptor haplotype pairs was determined in vivo by assessing the bronchodilator response to β agonist in asthmatics. Mean responses by haplotype pair varied by >2-fold, and response was significantly related to the haplotype pair (P = 0.007) but not to individual SNPs. Expression vectors representing two of the haplotypes differing at eight of the SNP loci and associated with divergent in vivo responsiveness to agonist were used to transfect HEK293 cells. β2-adrenergic receptor mRNA levels and receptor density in cells transfected with the haplotype associated with the greater physiologic response were ≈50% greater than those transfected with the lower response haplotype. The results indicate that the unique interactions of multiple SNPs within a haplotype ultimately can affect biologic and therapeutic phenotype and that individual SNPs may have poor predictive power as pharmacogenetic loci.