Productivity and labour demand effects of inward and outward FDI on UK industry

We relate the technological and factor price determinants of inward and outward FDI to its potential productivity and labour market effects on both host and home economies. This allows us to distinguish clearly between technology sourcing and technology exploiting FDI, and to identify FDI which is linked to labour cost differentials. We then empirically examine the effects of different types of FDI into and out of the United Kingdom on domestic (i.e. UK) productivity and on the demand for skilled and unskilled labour at the industry level. Inward investment into the UK comes overwhelmingly from sectors and countries which have a technological advantage over the corresponding UK sector. Outward FDI shows a quite different pattern, dominated by investment into foreign sectors which have lower unit labour costs than the UK. We find that different types of FDI have markedly different productivity and labour demand effects, which may in part explain the lack of consensus in the empirical literature on the effects of FDI. Our results also highlight the difficulty for policy makers of simultaneously improving employment and domestic productivity through FDI.

Determinants and impacts of inward FDI in Japan

The research consists of three empirical studies. The first examines how source country characteristics affect the aggregate FDI inflows in the Japanese economy during the period of 1989-2002. Our results demonstrate that the stable investment climate of the home country is an essential factor indicating FDI inflows to Japan. By contrast, the export performance of the source country is negatively correlated with FDI inflows, indicating that international trade and FDI are substitutes. The second study identifies the determinants of foreign penetration across Japanese manufacturing sectors at the three-digit level during the period of 1997-2003. More importantly, this study examines the moderating effects of keiretsu affiliations on the relationship between various sectoral characteristics and foreign participation. The evidence of both horizontal and vertical keiretsu impacts on foreign penetration depends on not only different proxy measures used for inward FDI, but also on the level of technological sophistication in given sectors. In general, our results demonstrate that horizontally linked keiretsu are positively associated with foreign productions in knowledge-intensive sectors. By contrast, this effect becomes a significant entry barrier to foreign employment in low-tech sectors. The final study evaluates the impacts of a foreign presence on the productivity of Japanese manufacturing firms over the period of 1997-2003. Our results suggest that spillover effects largely differ according to the level of absorptive capacity of indigenous firms.

Bridging the gap? Corruption, knowledge and foreign ownership

We argue that in addition to host corruption per se, as accounted for by the existing literature, an explanation of inter-country variation in FDI needs to account for the distance between the host and home corruption, which we call relative corruption. We use a large matched home-host firm-level panel data-set for 1998-2006 from CEE transition countries. Year-specific selectivity corrected estimates suggest that, ceteris paribus, higher relative ‘grand’ corruption lowers foreign ownership as the returns to investment tends to be lower in more corrupt environment. However, after controlling for the selectivity bias, knowledge-intensive parent firms are found to hold controlling ownership, as the difficulty of successful joint venture looms large in more corrupt environment. Results are robust to alternative specifications.

Direction of outward FDI of EMNEs:evidence from the Indian pharmaceutical sector

This article seeks to add to the small but growing literature of emerging-market multinational enterprises (EMNEs). Using two linked large firm-level databases, it seeks to explore the determinants of outward investment of Indian pharmaceutical companies, distinguishing between developed- versus developing-country destinations. It specifically examines the impact of two firm-level characteristics that embody “non-OLI” [ownership, location, and internalization] firm-specific capabilities of EMNEs. The finding of this study is that family firms are keen on investing in other developing countries but much less so in developed countries. However, international linkages in the form of foreign investors offset this.

The multinational enterprise as a source of international knowledge flows:Direct evidence from Italy

This paper examines the determinants of technology transfer between parent firms and their international affiliates, and of knowledge spillovers from those affiliates to host-country firms. Using a unique data set of foreign multinational enterprise (MNE) affiliates based in Italy, we find that affiliate investment in R&D and investment in capital-embodied technology plays a significant role in determining the nature of intra-firm technology flows. However, the basis for any spillovers arising from MNE affiliates does not originate from codified knowledge associated with R&D, but rather from the productivity of the affiliate.

Investment liberalisation, technology take-off and export markets entry:does foreign ownership structure matter?

Before and after its accession to the WTO in 2001, China has undergone a far-reaching investment liberalisation. As part of this, existing restrictions on foreign ownership structure and mandatory export and technology transfer requirements imposed on foreign firms have been lifted in a number of industries. Against this background we identify the causal effects of foreign acquisitions on export market entry and technology take-off and evaluate whether the level of foreign ownership plays a role in stimulating these changes. Using doubly robust propensity score reweighted bivariate probit regressions to control for the selection bias associated with firm level foreign acquisition incidences, we uncover strong but heterogeneous positive effects on export activity for all types of foreign ownership structure. We also find that minority foreign owned acquisition targets experience higher likelihood of R&D, providing evidence that joint ventures can contribute positively to China's "science and technology take-off".

Heat treatment of a direct composite resin: influence on flexural strength

The purpose of this study was to evaluate the flexural strength of a direct composite, for indirect application, that received heat treatment, with or without investment. One indirect composite was used for comparison. For determination of the heat treatment temperature, thermogravimetric analysis (TGA) and differential scanning calorimetry (DSC) were performed, considering the initial weight loss temperature and glass transition temperature (Tg). Then, after photoactivation (600 mW/cm² - 40 s), the specimens (10 x 2 x 2 mm) were heat-treated following these conditions: 170ºC for 5, 10 or 15 min, embedded or not embedded in investment. Flexural strength was assessed as a means to evaluate the influence of different heat treatment periods and investment embedding on mechanical properties. The data were analyzed by ANOVA and Tukey's test (α = 0.05). TGA showed an initial weight loss temperature of 180ºC and DSC showed a Tg value of 157°C. Heat treatment was conducted in an oven (Flli Manfredi, Italy), after 37°C storage for 48 h. Flexural strength was evaluated after 120 h at 37°C storage. The results showed that different periods and investment embedding presented similar statistical values. Nevertheless, the direct composite resin with treatments presented higher values (178.7 MPa) compared to the indirect composite resin (146.0 MPa) and the same direct composite submitted to photoactivation only (151.7 MPa). Within the limitations of this study, it could be concluded that the heat treatment increased the flexural strength of the direct composite studied, leading to higher mechanical strength compared to the indirect composite.

Brazilian foreign policy: Old and new paths as regards institutional aspects, multilateralism and foreign policy towards the South

This paper emphasizes the important changes in Brazilian foreign policy after Luiz Inacio Lula da Silva took tip the power in 2002. The paper defends the idea that it is not possible to argue that there were deep changes in comparison to Cardoso's administration. However, evidence shows that new things are happening as regards the design of a more active and clear foreign action line which led to institutional changes and to more incisive multilateral paths. This results both from the political profile of the direct operators of foreign policy and the aims of lite presidential diplomacy, The hypothesis dealt with on this paper consists on the fact that Lula's administration has not fully broken with the old administration practices, however the aims of global and regional integration are being plotted more clearly and with a higher degree of activism. This becomes clear in three aspects of the Brazilian foreign policy: the institutional framework, the practice of multilateralism and the foreign policy towards the South, the three topics analyzed in this paper.

Social welfare with a foreign competitor

In this paper, we consider a mixed market in which a state-owned welfare-maximizing public (domestic) firm competes against a profit-maximizing private (foreign) firm. We suppose that the domestic firm is less eflScient than the foreign firm. However, the domestic firm can lower its marginal costs by conducting cost-reducing R&D investment. We examine the impacts of entry of a foreign firm on decisions upon cost-reducing R&D investment by the domestic firm and how these affect the domestic welfare.

Privatization and entry of a foreign firm with demand uncertainty

We investigate the effects of trade with a foreign firm and privatization of the domestic pubUc firm on an incentive for the domestic firm to reduce costs by undertaking R&D investment, under demand uncertainty. We suppose that the domestic firm is less efficient than the foreign firm. However, the domestic firm can lower its marginal costs by conducting cost-reducing R&D investment. We examine the impacts of entry of a foreign firm, and the effects of demand uncertainty, on decisions upon cost-reducing R&D investment by the domestic firm and how these affect the domestic welfare.

Avaliação da eficiência energética e optimização de uma unidade de trigeração

Portugal é um país dependente da energia do exterior, devido à elevada percentagem de consumo de energia a partir de fontes primárias, como por exemplo o gasóleo. Para colmatar este cenário, têm vindo a criar-se incentivos para o uso de energias renováveis e para intensificação de medidas de eficiência energética, como os sistemas de cogeração, de forma a tornar os processos industriais nacionais mais autónomos e mais competitivos. O presente trabalho, centra-se na determinação do potencial térmico disponível na central de trigeração da empresa Monteiro, Ribas-Indústria, SA, com a finalidade de identificar a quantidade de energia não utilizada, com vista ao aproveitamento dessa mesma energia nos processos mais problemáticos da empresa. Verificou-se que a água líquida era a fonte de maior energia não aproveitada, representando cerca de 30%, relativamente à energia disponível na água de refrigeração que é de 1890 kW. Assim, perante este facto, fez-se um estudo em dois setores autónomos da empresa, o setor dos revestimentos e o setor dos componentes técnicos da borracha. Pretendeu-se propor medidas para melhorar os seus processos produtivos, aproveitando essa energia. Para o efeito foi projetado um permutador de calor de placas com necessidade energética de 131,4 MWh, no setor dos revestimentos e um permutador compacto no setor de produção de placas de borracha, necessitando de uma energia de 335,2 MWh. Face à energia disponível na central de trigeração, de 161,9 MWh, verifica-se que esta apenas poderá ser aproveitada no setor dos revestimentos. Para tornar este objetivo real, a empresa Monteiro, Ribas- Indústria, SA necessitaria de efetuar um investimento no total de 49.390€. Além disso, foi contabilizado o rendimento das caldeiras da central térmica e da cogeração, ambas pelo método direto, apresentando estas os valores de 72% e 42%, respectivamente.

Innovation assessment of a Portuguese railway branch of a foreign multinational - a case study

Paper developed for the unit “Innovation Economics and Management” of the PhD programme in Technology Assessment at the Universidade Nova de Lisboa in 2009-10 under the supervision of Prof. Maria Luísa Ferreira

Value creation in the nursing home real estate investment market - A case study

The underlying thesis examines the value drivers of direct investments in nursing home real estate in Germany. A survey among investors and operators is conducted in order to identify significant value drivers. Moreover, based on survey results, a framework for assessing German nursing home real estate is developed. This is applied in a case-study about the set-up of a nursing home value-add fund which will demonstrate the value creation process of redeveloping an existing nursing home real estate portfolio. Through a concluding analysis the sources of value creation, sensitivities and future prospects of direct investing into German nursing home real estate are concluded.

Strategic investment and international outsourcing in unionised oligopoly

We critically consider the conventional belief that the attractiveness of international outsourcing lies in cheaper labour costs overseas and that it offers a means to ‘escape’ the power of unions. We develop an oligopoly model in which firms facing unionised domestic labour market choose between producing an intermediate in-house or outsourcing it to a non-unionised foreign supplier that makes a relationship specific investment in developing the intermediate. We show that outsourcing typically results in higher wages and does not always reduce marginal costs. Trade liberalisation favours outsourcing particularly for the relatively less efficient firms.

Negative investment in China: financing constraints and restructuring versus growth

This paper attempts to address a puzzle in China’s investment pattern: despite high aggregate investment and remarkable economic growth, negative net investment is commonly found at the microeconomic level. Using a large firm-level dataset, we test three hypotheses to explain the existence and extent of negative investment in each ownership group: what we term the efficiency (or restructuring) hypothesis, the (lack of) financing hypothesis, and the (slow) growth hypothesis. Our panel data probit estimations shows that negative investment by state-owned firms can be explained mainly by inefficiency: owing to over-investment or mis-investment in the past, these firms have had to restructure and to get rid of obsolete capital in the face of increasing competition and hardening budgets. The financing explanation holds for private firms, which have had to divest in order to raise capital. However, rapid economic growth weighs against both effects in all types of firms, with a larger impact for firms in the private and foreign sectors. A tobit model, estimated to examine the determinants of the amount of negative investment, yields similar conclusions.