International and intranational technological spillovers and productivity growth in China

Technological spillovers from foreign direct investment (FDI) have been regarded as a major source of technical progress and productivity growth. This paper explores the role of international and intranational technological spillovers from FDI in technical change, efficiency improvement, and total factor productivity growth in Chinese manufacturing firms using a recent Chinese manufacturing firm-level panel data set over the 2001–05 period. International industry-specific research and development (R&D) stock is linked to the Chinese firm-level data, international R&D spillovers from FDI and intranational technological spillovers of R&D activities by foreign invested firms in China are examined as well. Policy implications are discussed.

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.

Variation in hypothallus width and the growth of the lichen Rhizocarpon geographicum (L.) DC.

Variations in hypothallus width were studied in relation to radial growth in the lichen Rhizocarpon geographicum (L.) DC. in South Gwynedd, Wales, UK. Variations were present both within and between thalli and in successive three-month growth periods, but there was no significant variation associated with thallus size. In individual thalli, there were increases and reductions in hypothallus width in successive three-month growth periods attributable to hypothallus growth and changes at the margin of the areolae. Total radial growth over 18 months was positively correlated with initial hypothallus width. These results suggest: 1) individual thalli of similar size vary considerably in hypothallus width, 2) fluctuations in the location of the margin of the areolae in successive three month periods is an important factor determining this variability, 3) hypothallus width predicts subsequent radial growth over 18 months, and 4) variation in hypothallus; width is a factor determining between thallus variability in radial growth rates in yellow-green species of Rhizocarpon.

Military spending and economic growth in South Africa

This paper undertakes an empirical analysis of the economic effects of military spending on the South African economy. It estimates a neo-classical model common in the literature at the level of the macroeconomy and at the level of the manufacturing sector. An attempt is made to improve upon the model by allowing the data to determine the dynamic structure of the model through an ARDL procedure. No significant impact of military spending is found in aggregate, but there is a significant negative impact for the manufacturing sector. This suggests that the cuts in domestic military procurement that have occurred since 1989 could lead to improved economic performance in South Africa through their impact on the manufacturing sector.

Matrix changes induced by transglutaminase 2 lead to inhibition of angiogenesis and tumor growth

Administration of active TG2 to two different in vitro angiogenesis assays resulted in the accumulation of a complex extracellular matrix (ECM) leading to the suppression of endothelial tube formation without causing cell death. Matrix accumulation was accompanied by a decreased rate of ECM turnover, with increased resistance to matrix metalloproteinase-1. Intratumor injection of TG2 into mice bearing CT26 colon carcinoma tumors demonstrated a reduction in tumor growth, and in some cases tumor regression. In TG2 knockout mice, tumor progression was increased and survival rate reduced compared to wild-type mice. In wild-type mice, an increased presence of TG2 was detectable in the host tissue around the tumor. Analysis of CT26 tumors injected with TG2 revealed fibrotic-like tissue containing increased collagen, TG2-mediated crosslink and reduced organized vasculature. TG2-mediated modulation of cell behavior via changes in the ECM may provide a new approach to solid tumor therapy.

Excess leverage and productivity growth in emerging economies:is there a threshold effect?

This paper studies the relationship between leverage and growth, focusing on a large sample of firms in emerging economies of central and eastern Europe (CEE). Contrary to the general wisdom, we find that deviation from optimal leverage, especially, excess leverage is common among firms in many CEE countries. Using firm-level panel data from a group of transition countries, the paper provides support to the hypothesis that leverage positively affects productivity growth but only below an endogenously determined threshold level.

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.

Cost economies, efficiency and productivity growth in the Chinese banking industry:evidence from a quarterly panel dataset

This article examines cost economies, productivity growth and cost efficiency of the Chinese banks using a unique panel dataset that identifies banks' four outputs and four input prices over the period of 1995-2001. By assessing the appropriateness of model specification, and making use of alternative methodologies in evaluating the performance of banks, we find that the joint-stock commercial banks outperform state-owned commercial banks in productivity growth and cost efficiency. Under the variable cost assumption, Chinese banks display economies of scale, with state-owned commercial banks enjoying cost advantages over the joint-stock commercial banks. Consequently, our results highlight the ownership advantage of these two types of banks and generally support the ongoing banking reform and transformation that is currently taking place in China.

Better means more:property rights and high-growth aspiration entrepreneurship

This paper contrasts the determinants of entrepreneurial entry and high-growth aspiration entrepreneurship. Using the Global Entrepreneurship Monitor (GEM) surveys for 42 countries over the period 1998-2005, we analyse how institutional environment and entrepreneurial characteristics affect individual decisions to become entrepreneurs and aspirations to set up high-growth ventures. We find that institutions exert different effects on entrepreneurial entry and on the individual choice to launch high-growth aspiration projects. In particular, a strong property rights system is important for high-growth aspiration entrepreneurship, but has less pronounced effects for entrepreneurial entry. The availability of finance and the fiscal burden matter for both.

Privatisation, corporate control and employment growth:evidence from a panel of large Polish firms, 1996-2002

Using data on Polish firms this paper examines the relationship between corporate control structures, sales growth and the determinants of employment change. Privatised and de novo firms are the main drivers of employment growth; in the case of de novo firms, it is foreign ownership which underpins the result. Being privatised has a positive impact on employment but this is concentrated within a range of 3–6 years after privatisation. There are no systematic differences in employment response to negative sales growth across the ownership categories. Employment in state firms is less responsive to positive sales growth. From these results we infer that the behaviour of state firms is affected by both insider rent sharing and binding budget constraints.

Inherited labour hoarding, insiders and employment growth:panel data results : Poland, 1996-2002

Using panel data pertaining to large Polish (non-financial) firms this paper examines the determinants of employment change during the period 1996-2002. Paying particular attention to the asymmetry hypothesis we investigate the impact of own wages, outside wages, output growth, regional characteristics and sectoral affiliation on the evolution of employment. In keeping with the 'right to manage' model we find that employment dynamics are not affected negatively by alternative wages. Furthermore, in contrast to the early transition period, we find evidence that employment levels respond to positive sales growth (in all but state firms). The early literature, (e.g. Kollo, 1998) found that labour hoarding lowered employment elasticities in the presence of positive demand shocks. Our findings suggest that inherited labour hoarding may no longer be a factor. We argue that the present pattern of employment adjustment is better explained by the role of insiders. This tentative conclusion is hinged on the contrasting behaviour of state and privatised companies and the similar behaviour of privatised and new private companies. We conclude that lower responsiveness of employment to both positive and negative changes in revenue in state firms is consistent with the proposition that rent sharing by insiders is stronger in the state sector.

Privatisation, corporate control and employment growth:evidence from a panel of large Polish firms, 1996-2002

Using panel data on large Polish firms this paper examines the relationship between corporate control structures, sales growth and the determinants of employment change during the period 1996-2002. We find that privatised and de novo firms are the main drivers of employment growth and that, in the case of de novo firms, it is foreign ownership which underpins the result. Interestingly, we find that being privatised has a positive impact on employment growth but that this impact is concentrated within a range of three to six years after privatisation. In contrast with the findings of earlier literature, we find evidence that there are no systematic differences in employment response to negative sales growth across the ownership categories. On the other hand, employment in state firms is less responsive to positive sales growth. From these combined results we infer that the behaviour of state firms is constrained by both insider rent sharing and binding budget constraints. Consistent with this, we find that privatised companies, three to six years post-privatisation, are the firms for whom employment is most responsive to positive sales growth and as such, offer the best hope for rapid labour market expansion.