Direct and Indirect Measures of Capacity Utilization: A Nonparametric Analysis of U.S. Manufacturing

We measure the capacity output of a firm as the maximum amount producible by a firm given a specific quantity of the quasi-fixed input and an overall expenditure constraint for its choice of variable inputs. We compute this indirect capacity utilization measure for the total manufacturing sector in the US as well as for a number of disaggregated industries, for the period 1970-2001. We find considerable variation in capacity utilization rates both across industries and over years within industries. Our results suggest that the expenditure constraint was binding, especially in periods of high interest rates.

Regional Integration and Industrial Location in a Landlocked Spatial Economy

Regional integration proposals often require agreements between countries that differ in geographic size, resource endowments, transportation assets, technologies, and product quality. In this asymmetric setting, questions arise about the potential for mutual gains and the distribution of benefits among industries and workers in each country. This paper examines how regional integration between a small landlocked country and a large neighboring country--with a unique port facility that both nations must use to export goods--affects the wage and location decisions of firms, the allocation of labor, the welfare of each country's workers and firms, and aggregate measures of economic welfare in each country and the region. A simulated spatial labor market model is used to explore the economic effects of various stages of regional integration. Beginning with autarky as a benchmark case, we consider two forms of regional integration: partial mobility (mobile labor with geographically restricted firms); and full mobility (mobile labor and firms) with convergence of production technologies and product quality.

OCCUPATIONAL CAUSES OF LUNG CANCER IN NEW MEXICO'S ANGLOS AND HISPANICS

Although, elevated risk for lung cancer has been associated with certain industries and occupations in previous studies, the lack of cigarette smoking information in many of these investigations resulted in estimates that could not be adjusted for the effects of smoking. To determine lung cancer risk due to occupation and smoking, for New Mexico's Anglos and Hispanics, a population-based case-control study was conducted. Incident cases diagnosed 1980-1982, and controls from the general population, were interviewed for lifetime occupational and smoking histories. Specific high risk industries and occupations were identified in advance and linked with industrial and occupational codes for hypotheses-testings. Significantly elevated risks were found for welders (RR = 3.5) and underground miners (RR = 2.0) with adjustment for smoking. Because shipbuilding was the industry of employment for only five of the 18 cases who were welders, exposures other than asbestos could be causal agents. Among the underground for only five of the 18 cases who were welders, exposures other than asbestos could be causal agents. Among the underground miners, uranium, copper, lead and zinc, coal, and potash mining industries were represented. Low prevalence of employment in some of the industries and occupations of interest resulted in inconclusive results. ^

ENVIRONMENTAL EXPOSURES AND LUNG CANCER RISK AMONG WOMEN IN HARRIS COUNTY, TEXAS, 1977-1980 (OCCUPATION, SMOKING, BYSTANDER)

Excessively high, accelerating lung cancer rates among women in Harris County, Texas, prompted this case-comparison study. Objectives were to compare patterns of employment, indirect exposures, and sociodemographic variables of lung cancer cases with comparison subjects (compeers) after standardizing for possible confounders, such as age and cigarette smoking. Lung cancer cases were microscopically confirmed, white, Harris County residents. Compeers, chosen from Medicare records and Texas Department of Public Safety records, were matched on gender, race, age, resident and vital status. Personal interviews were conducted with study subjects or next-of-kin. Industries and occupations were categorized as high risk, based on previous studies.^ Almost all cases (95.0%) and 60.0% of compeers smoked cigarettes. The odds ratio for lung cancer and smoking is 13.9. Stopping smoking between ages 30-50 years carries a lower risk than stopping at age 58 or more years. Women's employment in a high risk industry or occupation results in consistently elevated, smoking-adjusted odds ratios. Frequency and duration of employment demonstrate a moderate dose-response effect. A temporal association exists with employment in a high risk occupation during 1940-1949.^ No increased risk appeared with passive smoking. Husband's employment in a construction industry or a structural occupation significantly increased the smoking-adjusted odds ratios among cases and compeers (O.R. = 2.9, 2.2). Smoking-adjusted odds ratios increased significantly when women had resided with persons employed in cement (O.R. = 3.2) or insulation (O.R. = 5.5) manufacturing, or a high rise construction industry (O.R. = 2.4). A family history of lung cancer resulted in a two-fold increase in smoking-adjusted odds ratios. Vital status of compeers affected the odds ratios.^ Work-related exposures appear to increase the risk of lung cancer in women although cigarette smoking has the single highest odds ratio. Indirect exposure to certain employment also plays a significant role in lung cancer in women. Investigations of specific direct and indirect hazardous exposures in the workplace and home are needed. Cigarette smoking is as hazardous for women as for men. Smoking should be prevented and eliminated. ^

Modernización estatal y regulación económica en provincias vitivinicultoras. Mendoza, 1936-1946

Las políticas implementadas en el país para superar las consecuencias de la crisis de 1930 se manifestaron, en el caso de las actividades agrarias y agroindustriales, en medidas de regulación de la producción y el comercio. La entidad creada para ocuparse de la vitivinicultura fue la Junta Reguladora de Vinos que comenzó a operar a partir de 1935. Al mismo tiempo que se ponían en ejecución las disposiciones emanadas de ese organismo nacional, las autoridades provinciales de la región productora arbitraban diversas prácticas destinadas a paliar las aristas más agudas de la crisis y a reposicionar a la agroindustria en el ámbito local y el mercado nacional. En la provincia de Mendoza las autoridades provinciales instrumentaron, a partir de 1936, algunas normativas destinadas a modernizar el aparato estatal en un intento de lograr mayor eficiencia en la aplicación de las políticas de regulación y de adecuar la maquinaria gubernamental a las exigencias de la nueva etapa. La creación de un organismo dedicado específicamente a la elaboración de estadísticas y a la investigación económica, en el marco del ministerio de economía provincial fue la medida más importante en este aspecto, mientras otras disposiciones contemporáneas intentaban encontrar en el fomento del turismo una alternativa complementaria de la tradicional actividad vitivinícola.

Modernización estatal y regulación económica en provincias vitivinicultoras. Mendoza, 1936-1946

Las políticas implementadas en el país para superar las consecuencias de la crisis de 1930 se manifestaron, en el caso de las actividades agrarias y agroindustriales, en medidas de regulación de la producción y el comercio. La entidad creada para ocuparse de la vitivinicultura fue la Junta Reguladora de Vinos que comenzó a operar a partir de 1935. Al mismo tiempo que se ponían en ejecución las disposiciones emanadas de ese organismo nacional, las autoridades provinciales de la región productora arbitraban diversas prácticas destinadas a paliar las aristas más agudas de la crisis y a reposicionar a la agroindustria en el ámbito local y el mercado nacional. En la provincia de Mendoza las autoridades provinciales instrumentaron, a partir de 1936, algunas normativas destinadas a modernizar el aparato estatal en un intento de lograr mayor eficiencia en la aplicación de las políticas de regulación y de adecuar la maquinaria gubernamental a las exigencias de la nueva etapa. La creación de un organismo dedicado específicamente a la elaboración de estadísticas y a la investigación económica, en el marco del ministerio de economía provincial fue la medida más importante en este aspecto, mientras otras disposiciones contemporáneas intentaban encontrar en el fomento del turismo una alternativa complementaria de la tradicional actividad vitivinícola.

Modernización estatal y regulación económica en provincias vitivinicultoras. Mendoza, 1936-1946

Las políticas implementadas en el país para superar las consecuencias de la crisis de 1930 se manifestaron, en el caso de las actividades agrarias y agroindustriales, en medidas de regulación de la producción y el comercio. La entidad creada para ocuparse de la vitivinicultura fue la Junta Reguladora de Vinos que comenzó a operar a partir de 1935. Al mismo tiempo que se ponían en ejecución las disposiciones emanadas de ese organismo nacional, las autoridades provinciales de la región productora arbitraban diversas prácticas destinadas a paliar las aristas más agudas de la crisis y a reposicionar a la agroindustria en el ámbito local y el mercado nacional. En la provincia de Mendoza las autoridades provinciales instrumentaron, a partir de 1936, algunas normativas destinadas a modernizar el aparato estatal en un intento de lograr mayor eficiencia en la aplicación de las políticas de regulación y de adecuar la maquinaria gubernamental a las exigencias de la nueva etapa. La creación de un organismo dedicado específicamente a la elaboración de estadísticas y a la investigación económica, en el marco del ministerio de economía provincial fue la medida más importante en este aspecto, mientras otras disposiciones contemporáneas intentaban encontrar en el fomento del turismo una alternativa complementaria de la tradicional actividad vitivinícola.

Trade Credits under Imperfect Enforcement: A Theory with a Test on Chinese Experience

It is widely recognized that trade credit is an important financial mechanism, particularly in developing economies and transition economies where institutions are weak. This paper documents theoretical analysis and empirical accounts on what facilitates an effective supply of trade credit based on original surveys conducted in P.R. of China. Our theory predicts that trade volume and trade credit are increasing function of cash held by the buyer and enforcement technology of the seller. Furthermore, if the state sector’s enforcement technology is high, it has positive external effect to expand the volumes of trade credit and trades in the whole economy. From the data, we found that government made active commitment in enforcement of trade credit contract and the government owned firms are main supplier and receivers of trade credit, which suggest that enforcement by government and state sector were effective against presumptions in the previous literatures.

Effectiveness and Challenges of Three Economic Corridors of the Greater Mekong Sub-region

Since the Greater Mekong Sub-region (GMS) program began in 1992, activities have expanded and flourished. The three economic corridors are composed of the East-West, North-South, and Southern; these are the most important parts of the flagship program. This article presents an evaluation of these economic corridors and their challenges in accordance with the regional distribution of population and income, population pyramids of member countries, and trade relations of member economies.

Interindustrial Structure in the Asia-Pacific Region: Growth and Integration, by Using 2000 AIO Table

Over the past 20 years Asian countries have achieved a certain degree of economic growth and at the same time deepened spatial interdependence. In January 2006, IDE completed the 2000 Asian International Input-Output Table, which covers eight major East Asian countries/regions as well as Japan and the United States. Given the dynamic changes in the economies of East Asia, this paper attempts to summarize the characteristics and their patterns of change in industrial structures and trade structures of the countries/regions in the Asia-Pacific region from the three viewpoints of time, space, and industry, by using the AIO table for 1985, 1990, 1995, and 2000.

Financial Aspects of Transactions with FDI: Trade Credit Provision by SMEs in China

This paper will document financial aspects of transactions, and trade credit supply behavior with FDI among small and medium-sized enterprises(SMEs) based on two original surveys, conducted in four cities in China in 2003. The survey was designed to capture the nature of inter-firm transactions, trade credit and other financial conditions. Literature on FDI mainly refers to technology transfer, employment or investment. This paper focuses on the role and significance of FDI in the supply of trade credit due to its trade credit enforcement technology. Yanagawa, Ito and Watanabe [2006] developed a model which indicates that when a seller has higher enforcement technology or a buyer has richer liquidity, both trade credit and transaction volume will be increased. In this paper, we confirmed that FDI and G contributed to the provision of trade credit and had a positive external effect on trade credit enforcement towards China’s economy. (1) Sales towards FDI customers have the power to increase the trade credit ratio,even when controlling other factors such as choice of payment instrument, competitiveness, and expost default management. This implies that FDI does provide trade credit, not only because it has superior liquidity, but because it is also superior in terms of enforcement of trade credit repayment.(2) Cash constraints of the buyer influence the decisions concerning trade credit provided by the seller, as a model in Yanagawa, et al. [2006] predicted, and this implies that strategic default is a serious concern among SMEs in China. (3) Spillover effect exists in payment enforcement technology in transactions with FDI customers.

Clothing Export from sub-Saharan Africa : Impact on Poverty and Potential for Growth

Increases in clothing exports after 2000 signaled the first incidence of large-scale manufacturing exports from sub-Saharan Africa. Using firm-level information, this paper explores the potential of clothing exports for poverty reduction and further growth as seen in other low income countries. It shows that the garment exporting industries in Kenya and Madagascar have contributed poverty reduction in the short term by providing mass employment for female and less educated workers with wages beyond the poverty line. However, the long-term impact is not certain. High production costs and limited development of local firms weaken potential for further growth in the competitive world market. Upgrading of the market and improvement of efficiency are required to remain competitive for African industries, and governmental support for local participation are needed to facilitate technology transfer.

Trade of Heilongjiang Province (China) with Russia

Local trade between the Far East region of the USSR and the Northeast region of the People’s Republic of China started in 1957, arranged by the public trade organizations in the respective borderlands. Heilongjiang Province of China has been the main actor in trade with the Far East region of the USSR, and more recently, Russia. After 1957, Heilongjiang Province’s trade with the Russian Far East developed rapidly until 1993, except a period of interruption (1967-1982). Thereafter, the Heilongjiang Province’s trade with the Russian Far East underwent a stagnation period (1994-1998), a recovery period (1999-2001), a rapid development period (2002-2007) and a period of change of tendencies and radical decrease (2008-2009). Heilongjiang Province’s trade with the Russian Far East consists of three main forms: general trade, Chinese-style border trade (Bianjing Trade which includes Bianjing Small Trade and trade between private persons (Hushi Trade)) and Travel Trade. The rapid increase of Heilongjiang Province’s trade with the Russian Far East from 2002 to 2007 is mainly attributable to the increase in the export of ordinary consumer goods, especially textile clothing and footwear, and to Bianjing Small Trade.

Chapter 8 Location Choice of Japanese Multinationals: Country Characteristics or Region Characteristics?

In the present global era in which firms choose the location of their plants beyond national borders, location characteristics are important for attracting multinational enterprises (MNEs). The better access to countries with large market is clearly attractive for MNEs. For example, special treatments on tariffs such as the Generalized System of Preferences (GSP) are beneficial for MNEs whose home country does not have such treatments. Not only such country characteristics but also region characteristics (i.e. province-level or city-level ones) matter, particularly in the case that location characteristics differ widely between a nation's regions. The existence of industrial concentration, that is, agglomeration, is a typical regional characteristic. It is with consideration of these country-level and region-level characteristics that MNEs decide their location abroad. A large number of academic studies have investigated in what kinds of countries MNEs locate, i.e. location choice analysis. Employing the usual new economic geography model (i.e. constant elasticity of substitution (CES) utility function, Dixit-Stiglitz monopolistic competition, and ice-berg trade costs), the literature derives the profit function, of which coefficients are estimated using maximum likelihood procedures. Recent studies are as follows: Head, Rise, and Swenson (1999) for Japanese MNEs in the US; Belderbos and Carree (2002) for Japanese MNEs in China; Head and Mayer (2004) for Japanese MNEs in Europe; Disdier and Mayer (2004) for French MNEs in Europe; Castellani and Zanfei (2004) for large MNEs worldwide; Mayer, Mejean, and Nefussi (2007) for French MNEs worldwide; Crozet, Mayer, and Mucchielli (2004) for MNEs in France; and Basile, Castellani, and Zanfei (2008) for MNEs in Europe. At the present time, three main topics can be found in this literature. The first introduces various location elements as independent variables. The above-mentioned new economic geography model usually yields the profit function, which is a function of market size, productive factor prices, price of intermediate goods, and trade costs. As a proxy for the price of intermediate goods, the measure of agglomeration is often used, particularly the number of manufacturing firms. Some studies employ more disaggregated numbers of manufacturing firms, such as the number of manufacturing firms with the same nationality as the firms choosing the location (e.g., Head et al., 1999; Crozet et al., 2004) or the number of firms belonging to the same firm group (e.g., Belderbos and Carree, 2002). As part of trade costs, some investment climate measures have been examined: free trade zones in the US (Head et al., 1999), special economic zones and opening coastal cities in China (Belderbos and Carree, 2002), and Objective 1 structural funds and cohesion funds in Europe (Basile et al., 2008). Second, the validity of proxy variables for location elements is further examined. Head and Mayer (2004) examine the validity of market potential on location choice. They propose the use of two measures: the Harris market potential index (Harris, 1954) and the Krugman-type index used in Redding and Venables (2004). The Harris-type index is simply the sum of distance-weighted real GDP. They employ the Krugman-type market potential index, which is directly derived from the new economic geography model, as it takes into account the extent of competition (i.e. price index) and is constructed using estimators of importing country dummy variables in the well-known gravity equation, as in Redding and Venables (2004). They find that "theory does not pay", in the sense that the Harris market potential outperforms Krugman's market potential in both the magnitude of its coefficient and the fit of the model to be estimated. The third topic explores the substitution of location by examining inclusive values in the nested-logit model. For example, using firm-level data on French investments both in France and abroad over the 1992-2002 period, Mayer et al. (2007) investigate the determinants of location choice and assess empirically whether the domestic economy has been losing attractiveness over the recent period or not. The estimated coefficient for inclusive value is strongly significant and near unity, indicating that the national economy is not different from the rest of the world in terms of substitution patterns. Similarly, Disdier and Mayer (2004) investigate whether French MNEs consider Western and Eastern Europe as two distinct groups of potential host countries by examining the coefficient for the inclusive value in nested-logit estimation. They confirm the relevance of an East-West structure in the country location decision and furthermore show that this relevance decreases over time. The purpose of this paper is to investigate the location choice of Japanese MNEs in Thailand, Cambodia, Laos, Myanmar, and Vietnam, and is closely related to the third topic mentioned above. By examining region-level location choice with the nested-logit model, I investigate the relative importance of not only country characteristics but also region characteristics. Such investigation is invaluable particularly in the case of location choice in those five countries: industrialization remains immature in those countries which have not yet succeeded in attracting enough MNEs, and as a result, it is expected that there are not yet crucial regional variations for MNEs within such a nation, meaning the country characteristics are still relatively important to attract MNEs. To illustrate, in the case of Cambodia and Laos, one of the crucial elements for Japanese MNEs would be that LDC preferential tariff schemes are available for exports from Cambodia and Laos. On the other hand, in the case of Thailand and Vietnam, which have accepted a relatively large number of MNEs and thus raised the extent of regional inequality, regional characteristics such as the existence of agglomeration would become important elements in location choice. Our sample countries seem, therefore, to offer rich variations for analyzing the relative importance between country characteristics and region characteristics. Our empirical strategy has a further advantage. As in the third topic in the location choice literature, the use of the nested-logit model enables us to examine substitution patterns between country-based and region-based location decisions by MNEs in the concerned countries. For example, it is possible to investigate empirically whether Japanese multinational firms consider Thailand/Vietnam and the other three countries as two distinct groups of potential host countries, by examining the inclusive value parameters in nested-logit estimation. In particular, our sample countries all experienced dramatic changes in, for example, economic growth or trade costs reduction during the sample period. Thus, we will find the dramatic dynamics of such substitution patterns. Our rigorous analysis of the relative importance between country characteristics and region characteristics is invaluable from the viewpoint of policy implications. First, while the former characteristics should be improved mainly by central government in each country, there is sometimes room for the improvement of the latter characteristics by even local governments or smaller institutions such as private agencies. Consequently, it becomes important for these smaller institutions to know just how crucial the improvement of region characteristics is for attracting foreign companies. Second, as economies grow, country characteristics become similar among countries. For example, the LCD preferential tariff schemes are available only when a country is less developed. Therefore, it is important particularly for the least developed countries to know what kinds of regional characteristics become important following economic growth; in other words, after their country characteristics become similar to those of the more developed countries. I also incorporate one important characteristic of MNEs, namely, productivity. The well-known Helpman-Melitz-Yeaple model indicates that only firms with higher productivity can afford overseas entry (Helpman et al., 2004). Beyond this argument, there may be some differences in MNEs' productivity among our sample countries and regions. Such differences are important from the viewpoint of "spillover effects" from MNEs, which are one of the most important results for host countries in accepting their entry. The spillover effects are that the presence of inward foreign direct investment (FDI) aises domestic firms' productivity through various channels such as imitation. Such positive effects might be larger in areas with more productive MNEs. Therefore, it becomes important for host countries to know how much productive firms are likely to invest in them. The rest of this paper is organized as follows. Section 2 takes a brief look at the worldwide distribution of Japanese overseas affiliates. Section 3 provides an empirical model to examine their location choice, and lastly, we discuss future works to estimate our model.

Domestic, vertical, and horizontal multinationals : a general equilibrium approach using the "knowledge capital model"

One of the key factors behind the growth in global trade in recent decades is an increase in intermediate input as a result of the development of vertical production networks (Feensta, 1998). It is widely recognized that the formation of production networks is due to the expansion of multinational enterprises' (MNEs) activities. MNEs have been differentiated into two types according to their production structure: horizontal and vertical foreign direct investment (FDI). In this paper, we extend the model presented by Zhang and Markusen (1999) to include horizontal and vertical FDI in a model with traded intermediates, using numerical general equilibrium analysis. The simulation results show that horizontal MNEs are more likely to exist when countries are similar in size and in relative factor endowments. Vertical MNEs are more likely to exist when countries differ in relative factor endowments, and trade costs are positive. From the results of the simulation, lower trade costs of final goods and differences in factor intensity are conditions for attracting vertical MNEs.