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.

Approaches to issues of job regulation. A study at branch level in a white collar, public sector trade union. Available in 2 volumes.

This study examines the internal dynamics of white collar trade union branches in the public sector. The effects of a number of internal and external factors on branch patterns of action are evaluated. For the purposes of the study branch action is taken to be the approach to issues of job regulation, as expressed along the five dimensions of dependence on the outside trade union, focus in issues adopted, initiation of issues, intensity of action in issue pursuit and representativeness. The setting chosen for the study is four branches drawn from the same geographical area of the National and Local Government Officers Association. Branches were selected to give a variety in industry settings while controlling for the potentially influential variables of branch size, density of trade union membership and possession of exclusive representational rights in the employing organisation. Identical methods of data collection were used for each branch. The principal findings of the study are that the framework of national agreements and industry collective bargaining structures are strongly related to the industrial relations climate in the employing organisation and the structures of representation within the branch. Where agreements and collective bargaining structures formally restrict branch job regulation roles, there is a degree of devolution of bargaining authority from branch level negotiators to autonomous shop stewards at workplace level. In these circumstances industrial relations climate is characterised by a degree of informality in relationships between management and trade union activists. In turn, industrial relations climate and representative structures together with actor attitudes, have strong effects on all dimensions of approach to issues of job regulation.

Energy efficient radio access architectures for green radio:large versus small cell size deployment

In this paper new architectural approaches that improve the energy efficiency of a cellular radio access network (RAN) are investigated. The aim of the paper is to characterize both the energy consumption ratio (ECR) and the energy consumption gain (ECG) of a cellular RAN when the cell size is reduced for a given user density and service area. The paper affirms that reducing the cell size reduces the cell ECR as desired while increasing the capacity density but the overall RAN energy consumption remains unchanged. In order to trade the increase in capacity density with RAN energy consumption, without degrading the cell capacity provision, a sleep mode is introduced. In sleep mode, cells without active users are powered-off, thereby saving energy. By combining a sleep mode with a small-cell deployment architecture, the paper shows that the ECG can be increased by the factor n = (R/R) while the cell ECR continues to decrease with decreasing cell size.

Exchange rate exposure:do size and foreign operations matter?

Purpose – The purpose of this paper is to examine the effect of firm size and foreign operations on the exchange rate exposure of UK non-financial companies from January 1981 to December 2001. Design/methodology/approach – The impact of the unexpected changes in exchange rates on firms’ stock returns is examined. In addition, the movements in bilateral, equally weighted (EQW) and trade-weighted and exchange rate indices are considered. The sample is classified according to firm size and the extent of firms’ foreign operations. In addition, structural changes on the relationship between exchange rate changes and individual firms’ stock returns are examined over three sub-periods: before joining the exchange rate mechanism (pre-ERM), during joining the ERM (in-ERM), and after departure from the ERM (post-ERM). Findings – The findings indicate that a higher percentage of UK firms are exposed to contemporaneous exchange rate changes than those reported in previous studies. UK firms’ stock returns are more affected by changes in the EQW, and US$ European currency unit exchange rate, and respond less significantly to the basket of 20 countries’ currencies relative to the UK pound exchange rate. It is found that exchange rate exposure has a more significant impact on stock returns of the large firms compared with the small and medium-sized companies. The evidence is consistent across all specifications using different exchange rate. The results provide evidence that the proportion of significant foreign exchange rate exposure is higher for firms which generate a higher percentage of revenues from abroad. The sensitivities of firms’ stock returns to exchange rate fluctuations are most evident in the pre-ERM and post-ERM periods. Practical implications – This study provides important implications for public policymakers, financial managers and investors on how common stock returns of various sectors react to exchange rate fluctuations. Originality/value – The empirical evidence supports the view that UK firms’ stock returns are affected by foreign exchange rate exposure.

Vertical intra-industry trade and the EU accession: The case of Hungarian agri-food sector

The aim of this paper is to examine the relationship between the factor endowment and the pattern of intra-industry trade. Our empirical analysis relates to Hungary’s intra-industry trade in agri-food products with 26 member states of the EU over the period 1999-2010. Estimations reject the comparative advantage explanation of vertical intra-industry trade and provide partial support the prediction of Flam and Helpman model. Findings highlight that nature of factor endowments play also important role in explanation of vertical intra-industry trade. Other variables like market size and distance confirm the theoretical expectations. In addition, trade with new member states positively, whilst the EU accession ambigouosly influence the share of vertical IIT.

Intra-industry agri-food trade of the Baltic Countries

The article analyses patterns and country-specific determinants of the Baltic Countries agri-food trade with the European Union. Literature focusing on the country-specific determinants of vertical and horizontal intra-industry trade is rather limited and those analysing agricultural (or agri-food) trade are extremely rare. Therefore, the paper seeks to contribute to the literature by covering latest theory and data available on the topic to provide up to date results and suggestions. Moreover, it seeks to identify the determinants of horizontal and vertical intra-industry trade of the Baltic Countries after EU accession. Results suggest that agri-food trade of these countries is mainly inter-industry in nature but intra-industry trade is dominated by vertical elements. Results verify that determinants of horizontal and vertical IIT differ and suggest that economic size is positively, while factor endowments and distance are negatively related to both sides of IIT. However, the relationship between IIT and FDI is ambiguous.

A horizontális és vertikális ágazaton belüli agrárkereskedelem meghatározó tényezői az EU új tagországaiban (Determinants of horizontal and vertical intra-industry agri-food trade in the new EU member-states)

Az ágazaton belüli kereskedelem egyre komolyabb szerepet tölt be a nemzetközi kereskedelemben, mind ez idáig azonban kevés mezőgazdasági témájú elemzés készült e témában. A cikk célja a horizontális és vertikális ágazaton belüli agrárkereskedelem meghatározó tényezőinek azonosítása az új tagországok és az EU–27 közötti kereskedelemben 1999–2010 között. Ehhez a szerző statikus és dinamikus panelmódszereket alkalmaz különböző specifikációkkal. Eredményei szerint a tényezőellátottság a horizontális ágazaton belüli kereskedelemmel negatív, míg a vertikálissal pozitív kapcsolatban áll. Az országok mérete az ágazaton belüli kereskedelem mindkét oldalával pozitívan, míg a távolság negatívan korrelál. Az eredmények azt is kimutatják, hogy az ágazaton belüli kereskedelem mértéke nagyobb, ha egy új tagország a kelet-közép-európai régióba exportál, és az is világossá vált, hogy az EU-csatlakozás pozitívan hatott az ágazaton belüli kereskedelemre, jelezve a gazdasági integráció kereskedelemösztönző szerepét. _____ Intra-industry trade (IIT) has a growing role in international trade, although the number of papers on its agricultural aspects is limited. This article identifies the determinants of horizontal and vertical intra-industry agri-food trade between new member-states (NMS) and the EU27 in 1999-2010, by applying to panel data static and dynamic models with different specifications. The results show that factor endowments are negatively related to agri-food horizontal intra-industry trade (HIIT), but positively to vertical intra-industry trade (VIIT). Economic size is positively and significantly related to both, while distance and IIT are found to be negatively related. This also suggests that HIIT and VIIT are greater if an NMS exports agri-food products to another NMS, while EU accession has had positive and significant impacts on both HIIT and VIIT, which suggests that economic integration fosters IIT.

Investigating the effect of geographical distances and cultural proximity on the Hungarian wine trade

Wine is a very special product from an economic, cultural, and sociological point of view. Wine culture and wine trade play an important role in Hungary. The effect of cultural and geographical proximity on international trade has already been proven in the international trade literature. The size of bilateral trade flows between any two countries can be approximated by the gravity theory of trade. The gravity model provides empirical evidence of the relationship between the size of the economies, the distances between them, and their trade. This paper seeks to analyse the effect of cultural and geographical proximity on Hungary’s bilateral wine trade between 2000 and 2012, employing the gravity equation. The analysis is based on data from the World Bank WITS, WDI, as well as CEPII, and WTO databases. I apply OLS, Random Effects, Poisson, Pseudo-Poisson-Maximum-Likelihood and Heckman two stage estimators to calculate the gravity regression. The results show that in the case of Hungary, cultural similarity and trade liberalisation have a positive impact, while geographical distance, landlockedness, and contiguity have a negative impact on Hungarian wine exports.

Country-specific determinants of horizontal and vertical intra-industry agri-food trade: the case of Bulgaria and Romania

The article analyses patterns and country-specific determinants of agri-food trade of Bulgaria and Romania with the European Union. As literature focusing on agricultural aspects of the topic is limited, the paper seeks to contribute to the literature by providing up to date results and suggestions as well as by identifying the determinants of horizontal and vertical intra-industry trade of the Bulgaria and Romania after EU accession. Results suggest that intra-industry agri-food trade is mainly of vertical nature, referring to trade of different quality products. Results verify that determinants of horizontal and vertical IIT are similar and suggest that economic size and FDI are positively, while factor endowments and distance are negatively related to both sides of IIT. Results are mainly in line with the majority of empirical literature in the field.

A földrajzi távolság, a kulturális hasonlóság és a szabadkereskedelem hatása a borkereskedelemre = Effects on the global wine trade of geographical distance, cultural and linguistic similarity, and free trade

A globalizálódó világgazdaságban a vezető bortermelő országok egyre jelentősebb borkereskedelmet bonyolítanak le egymás között. Míg Európában a fogyasztók egyre kevesebb bort vásárolnak, addig Amerikában és Ázsiában a bor iránti kereslet folyamatosan bővül: a borkereskedelem földrajzi átrendeződése zajlik. A kulturális hasonlóság és a földrajzi távolság kereskedelemre gyakorolt hatását gyakran a kereskedelemelméletek gravitációs modelljével elemzik. E tanulmány azt vizsgálja, hogy a fő borexportáló országok közötti földrajzi távolság, kulturális hasonlóság és szabadkereskedelem milyen hatással van a nemzetközi borkereskedelemre, annak költségeire. A regressziós becslés eredményei alátámasztják, hogy a borkereskedelem költségei alacsonyabbak, ha a kereskedelmi partnerek kulturálisan hasonlók, földrajzilag közel helyezkednek el egymáshoz, vagy van tengeri kikötőjük, tagjai a WTO-nak, illetve ha kötöttek egymással regionális kereskedelmi megállapodást. Ezenkívül megállapítható, hogy az angolszász, a latin-amerikai és az európai kulturális klaszterek elsősorban egymással kereskednek. A kutatás számos kulturális változó alkalmazásával és több ökonometriai modell, illetve becslési eljárás nagymintás tesztelésével gazdagítja a szakirodalmat. ____ In a globalizing world, major wine-producing countries export considerable quantities to the global wine market and turn over a notable trade, but in what happens European wine regions differ markedly from the New World. Here major wine producers suffered a remarkable fall in domestic wine consumption in recent decades, while New World wine producers increased their production potential and generated new foreign demand. The changes have been joined by geographical relocation of wine consumption and exports. The gravity equation can be derived from demand-side or supply-side theory-consistent estimation methods that suggest relationships between the size of the economies, geographical distances, cultural similarities, and size of their trade. The paper analyses the effects of cultural and geographical proximity, free trade, and linguistic similarity on bilateral trade in the main wine-producing countries, using a cross-section gravity model for 2012. The results suggest that larger countries export more wine, while transport costs rise in line with geographical distance and are higher for landlocked trading partners. Wine export costs are lower if trading partners are culturally similar, share a dominant religion, or are both WTO members with regional trade agreements. Anglo-Saxon, Germanic, Latin American and Latin European countries mainly trade wines within their groups. The paper looks to extend the number of trading partners, investigate the effect of language clusters, and confirm that the results are robust by different econometric methodologies.

Patterns and Drivers of the Agri-Food Intra-Industry Trade of European Union Countries

This paper investigates the drivers of agri-food intra-industry trade (IIT) indices in the European Union (EU-27) member states during the period from 2000–2011. The increased proportion of IIT in matched two-way agri-food trade of the EU-27 member states is consistent with economic integration and economic growth. When export prices were at least 15% higher than the import prices, high-vertical IIT, increased for most member states. This finding suggests that quality improvements occurred when comparing agri-food exports to similar imports of agri-food products. The IIT indices for both horizontal and vertical IIT are positively associated with higher economic development levels, new EU membership and EU enlargement. Additionally, as higher levels of economic development decreases, the size of the economy and marginal IIT increases the effects of agri-food trade liberalization on the costs of the labor market adjustment. Understanding how improvements in agri-food trade quality impact agribusiness and managerial competitiveness reveal significant policy implications.

Three essays on trade and investment

From H. G. Johnson's work (Review of Economic Studies, 1953–54) on tariff retaliation, the questions of whether a country can win a “tariff war” and how or even the broader question of what will affect a country's strategic position in setting bilateral tariff have been tackled in various situations. Although it is widely accepted that a country will have strategic advantages in winning the tariff war if its relative monopoly power is sufficiently large, it is unclear what are the forces behind such power formation. The goal of this research is to provide a unified framework and discuss various forces such as relative country size, absolute advantages and relative advantages simultaneously. In a two-country continuum-of-commodity neoclassical trade model, it is shown that sufficiently large relative country size is a sufficient condition for a country to choose a non-cooperative tariff Nash equilibrium over free trade. It is also shown that technology disparities such as absolute advantage, rate of technology disparity and the distribution of the technology disparity all contribute to a country's strategic position and interact with country size. ^ Leverage effect is usually used to explain the phenomenon of asymmetric volatility in equity returns. However, leverage itself can only account for parts of the asymmetry. In this research, it is shown that stock return volatility is related to firms’ financial status. Financially constrained firms tend to be more sensitive to the return changes. Financial constraint factor explains why some firms tend to be more volatile than others. I found that the financial constraint factor explains the stock return volatility independent of other factors such as firm size, industry affiliation and leverage. Firms’ industry affiliations are shown to be very weak in differentiating volatility. Firm size is proven to be a good factor in distinguishing the different levels of volatility and volatility-return sensitivity. Leverage hypothesis is also partly corroborated and the situation where leverage effect is not applicable is discussed. Finally, I examined the macroeconomic policy's effects on overall market volatility. ^

Trade, justice, and the politics of difference: Small developing states in the World Trade Organization

The purpose of this research project was to investigate two distinct types of research questions – one theoretical, the other empirical: (1) What would justice mean in the context of the international trade regime? (2.Using the small developing states of the Commonwealth Caribbean as a case study, what do Commonwealth Caribbean trade negotiators mean when they appeal to justice? Regarding the first question, Iris Young's framework which focuses on the achievement of social justice in a domestic context by acknowledging social differences such as those based on race and gender, was adopted and its relevance argued in the international context of interstate trade negotiation so as to validate the notion of (size, location, and governance capacity) difference in this latter context. The point of departure is that while states are typically treated as equals in international law – as are individuals in liberal political theory – there are significant differences between states which warrant different treatment in the international arena. The study found that this re-formulation of justice which takes account of such differences between states, allows for more adequate policy responses than those offered by the presumption of equal treatment. Regarding the second question, this theoretical perspective was used to analyze the understandings of justice from which Commonwealth Caribbean trade negotiators proceed. Interpretive and ethnographic methods, including participant observation, interviews, field notes, and textual analysis, were employed to analyze their understandings of justice. The study found that these negotiators perceive such justice as being justice to difference because of the distinct characteristics of small developing states which combine to constrain their participation in the international trading system; based on this perception, they seek rules and outcomes in the multilateral trade regime which are sensitive to such different characteristics; and while these issues were examined in a specific region, its findings are relevant for other regions consisting of small developing states, such as those in the ACP group.

Age models, accumulation rates, and grain size distributions of sediment cores from the northern subtropical Atlantic

The terrigenous sediment proportion of the deep sea sediments from off Northwest Africa has been studied in order to distinguish between the aeolian and the fluvial sediment supply. The present and fossil Saharan dust trajectories were recognized from the distribution patterns of the aeolian sediment. The following timeslices have been investigated: Present, 6,000, 12,000 and 18,000 y. B. P. Furthermore, the quantity of dust deposited off the Saharan coast has been estimated. For this purpose, 80 surface sediment samples and 34 sediment cores have been analysed. The stratigraphy of the cores has been achieved from oxygen isotopic curves, 14C-dating, foraminiferal transfer temperatures, and carbonate contents. Silt sized biogenic opal generally accounts for less than 2 % of the total insoluble sediment proportion. Only under productive upwelling waters and off river mouths, the opal proportion exceeds 2 % significantly. The modern terrigenous sediment from off the Saharan coast is generally characterized by intensely stained quartz grains. They indicate an origin from southern Saharan and Sahelian laterites, and a zonal aeolian transport in midtropospheric levels, between 1.5 an 5.5 km, by 'Harmattan' Winds. The dust particles follow large outbreaks of Saharan air across the African coast between 15° and 21° N. Their trajectories are centered at about 18° N and continue further into a clockwise gyre situated south of the Canary Islands. This course is indicated by a sickle-shaped tongue of coarser grain sizes in the deep-sea sediment. Such loess-sized terrigenous particles only settle within a zone extending to 700 km offshore. Fine silt and clay sized particles, with grain sizes smaller than 10- 15 µm, drift still further west and can be traced up to more than 4,000 km distance from their source areas. Additional terrigenous silt which is poor in stained quartz occurs within a narrow zone off the western Sahara between 20° and 27° N only. It depicts the present dust supply by the trade winds close to the surface. The dust load originates from the northwestern Sahara, the Atlas Mountains and coastal areas, which contain a particularly low amount of stained quartz. The distribution pattern of these pale quartz sediments reveals a SSW-dispersal of dust being consistent with the present trade wind direction from the NNE. In comparison to the sediments from off the Sahara and the deeper subtropical Atlantic, the sediments off river mouths, in particular off the Senegal river, are characterized by an additional input of fine grained terrigenous particles (< 6 µm). This is due to fluvial suspension load. The fluvial discharge leads to a relative excess of fine grained particles and is observed in a correlation diagram of the modal grain sizes of terrigenous silt with the proportion of fine fraction (< 6 µm). The aeolian sediment contribution by the Harmattan Winds strongly decreased during the Climatic Optimum at 6,000 y. B. P. The dust discharge of the trade winds is hardly detectable in the deep-sea sediments. This probably indicates a weakened atmospheric circulation. In contrast, the fluvial sediment supply reached a maximum, and can be traced to beyond Cape Blanc. Thus, the Saharan climate was more humid at 6,000 y B. P. A latitudinal shift of the Harmattan driven dust outbreaks cannot be observed. Also during the Glacial, 18,000 y. B. P., Harmattan dust transport crossed the African coast at latitudes of 15°-20° N. Its sediment load increased intensively, and markedly coarser grains spread further into the Atlantic Ocean. An expanded zone of pale-quart sediments indicates an enhanced dust supply by the trade winds blowing from the NE. No synglacial fluvial sediment contribution can be recognized between 12° and 30° N. This indicates a dry glacial climate and a strengthened stmospheric circulation over the Sahelian and Saharan region. The climatic transition pahes, at 12, 000 y. B. P., between the last Glacial and the Intergalcial, which is compareable to the Alerod in Europe, is characterized by an intermediate supply of terrigenous particles. The Harmattan dust transport wa weaker than during the Glacial. The northeasterly trade winds were still intensive. River supply reached a first postglacial maximum seaward of the Senegal river mouth. This indicates increasing humidity over the southern Sahara and a weaker atmospheric circulation as compared to the glacial. The accumulation rates of the terrigenous silt proportion (> 6 µm) decrcase exponentially with increasing distance from the Saharan coast. Those of the terrigenous fine fraction (< 6 µm) follow the same trend and show almost similar gradients. Accordingly, also the terrigenous fine fraction is believed to result predominantly from aeolian transport. In the Atlantic deep-sea sediments, the annual terrigenous sediment accumulation has fluctuated, from about 60 million tons p. a. during the Late Glacial (13,500-18,000 y. B. P, aeolian supply only) to about 33 million tons p. a. during the Holocene Climatic Optimum (6,000-9,000 y. B. P, mainly fluvial supply), when the river supply has reached a maximum, and to about 45 million tons p. a. during the last 4,000 years B. P. (fluvial supply only south of 18° N).

Grain size distribution and bulk chemistry of eolian dust

Atmospheric dust samples collected along a transect off the West African coast have been investigated for their physical (grain-size distribution), mineralogical, and chemical (major elements) composition. On the basis of these data the samples were grouped into sets of samples that most likely originated from the same source area. In addition, shipboard-collected atmospheric meteorological data, modeled 4-day back trajectories for each sampling day and location, and Total Ozone Mapping Spectrometer aerosol index data for the time period of dust collection (February-March 1998) were combined and used to reconstruct the sources of the groups of dust samples. On the basis of these data we were able to determine the provenance of the various dust samples. It appears that the bulk of the wind-blown sediments that are deposited in the proximal equatorial Atlantic Ocean are transported in the lower level (>~900 hPa) NE trade wind layer, which is a very dominant feature north of the Intertropical Convergence Zone (ITCZ). However, south of the surface expression of the ITCZ, down to 5°S, where surface winds are southwesterly, we still collected sediments that originated from the north and east, carried there by the NE trade wind layer, as well as by easterly winds from higher altitudes. The fact that the size of the wind-blown dust depends not only on the wind strength of the transporting agent but also on the distance to the source hampers a direct comparison of the dust's size distributions and measured wind strengths. However, a comparison between eolian dust and terrigenous sediments collected in three submarine sediment traps off the west coast of NW Africa shows that knowledge of the composition of eolian dust is a prerequisite for the interpretation of paleorecords obtained from sediment cores in the equatorial Atlantic.