"The trauma of competition": the entry of Air Products Inc. into the industrial gases business in Britain and continental Europe 1947-1970

The British Oxygen Company (BOC) had a virtual monopoly on the supply of industrial gases (e.g. oxygen and acetylene) on the British market through the 1950s, when it was finally challenged by an American-based company, Air Products. Air Products Limited (APL) was able to undercut BOCs position, overcoming high barriers to entry to gain significant market share in this sector, which shares some features of network industries. Factors in this success included conditions imposed by the Board of Trade, APL’s innovations, BOC’s slow response, and favourable market conditions. APL’s success had implications for the internationalisation of the industrial gases industry

The impact of Kazakhstan accession to the World Trade Organization : a quantitative assessment

In this paper the authors use a computable general equilibrium model of the Kazakhstan economy to assess the impact of accession to the World Trade Organization (WTO), which encompasses (1) improved market access; (2) Kazakhstan tariff reduction; (3) reduction of barriers against entry by multinational service providers; and (4) reform of local content and value-added tax policies confronting multinational firms in the oil sector. They assume that foreign direct investment in business services is necessary for multinationals to compete well with Kazakstan business services providers, but cross-border service provision is also present. The model incorporates productivity effects in both goods and services markets endogenously, through a Dixit-Stiglitz framework. The authors estimated the ad valorem equivalent of barriers to foreign direct investment based on detailed questionnaires completed by specialized research institutes in Kazakhstan. They estimate that Kazakhstan will gain about 6.7 percent of the value of Kazakhstan consumption in the medium run from WTO accession and up to 17.5 percent in the long run. They estimate that the largest gains to Kazakhstan will derive from liberalization of barriers against multinational service providers, but the other three elements of WTO accession that the authors model all contribute positively to the estimated gains. Piecemeal sensitivity analysis shows that qualitatively the results are robust, but there are four parameters in the model that significantly affect the estimated magnitude of the gains from WTO accession.Economic Theory&Research,Transport Economics Policy&Planning,Free Trade,ICT Policy and Strategies,Investment and Investment Climate

An Overview and Examination of the Indian Services Sector

India’s service sector has grown rapidly since the 1990s. Domestic demand for services has increased as incomes have risen, triggering the expansion of industries such as banking, education, and telecommunications. Exports have also increased rapidly, led by information technology and business process outsourcing (IT-BPO). India’s ability to offer low-cost, high-quality IT-BPO services has made it a world leader in this industry. However, employment in services has not grown as quickly as output. The majority of India’s jobseekers are low-skilled, but demand for workers is growing fastest in higher-skill industries. The supply of highly-skilled workers has not kept pace with demand, causing wages to increase faster for these workers than for lower-skilled ones. India’s government has supported the growth of service industries through a mix of deregulation, liberalization, and incentive programs, such as the Software Technology Parks of India. Nevertheless, burdensome regulations, poor infrastructure, and foreign investment restrictions continue to affect service firms’ ability to do business. USITC analysis suggests that additional liberalization would lead to an increase in India’s imports of services

U.S. Multinational Services Companies: Effects of Foreign Affiliate Activity on U.S. Employment

This working paper examines the effect that U.S. services firms’ establishment abroad has on domestic employment. Whereas many papers have explored the employment effects of foreign direct investment in manufacturing, few have explored the effects of services investment. We find that services multinationals’ activities abroad increase U.S. employment by promoting intrafirm exports from parent firms to their foreign affiliates. These exports support jobs at the parents’ headquarters and throughout their U.S. supply chains. Our findings are principally based on economic research and econometric analysis performed by Commission staff, services trade and investment data published by the Bureau of Economic Analysis, and employment data collected by the Bureau of Labor Statistics. In the aggregate, we find that services activities abroad support nearly 700,000 U.S. jobs. Case studies of U.S. multinationals in the banking, computer, logistics, and retail industries provide the global dimensions of U.S. MNC operations and identify domestic employment effects associated with foreign affiliate activity in each industry

International Success of British Companies

This paper examines the international success of British companies in a matrix combining global market share and international revenues. We identify those industry segments in which British companies are most successful internationally, and also investigate whether these are attractive industries in terms of profitability and growth. We find that the industries with the largest global market shares for British companies are Mining, Casinos (and Gaming), Oil Companies (Major), Distillers & Brewers, and Water Utilities. Four of the top ten might be considered to be “sin” industries. The industries with the highest international revenues are Precious Metals, Pharmaceuticals, Industrial (Diversified), Oil Companies (Secondary), and Mining. We also find that virtually all of the largest British firms average over a 10% global market share, in the “British Winners” segment of our matrix. However, we find the second measure, the extent of internationalization, to be ambiguous. The manufacturing (product-based) firms tried to be highly internationalized, as they compete globally, but the largest British services firms (financials, retailers) tend to have low internationalization, and therefore appear to benefit from a still somewhat regulated home market. In addition, British companies have done a good job of building up global market shares in higher growth industries. We provide recommendations for managers as to how British companies with different combinations of global market share and extent of internationalisation can improve their positions. Our methodology can also be applied to analyzing companies from other nations.

New Trends in Development of Services in the Modern Economy

The services sector strategic development unites a multitude of economic and managerial aspects and is one of the most important problems of economic management. Many researches devoted to this industry study are available. Most of them are performed in the traditional aspect of the voluminous calendar approach to strategic management, characteristic of the national scientific school. Such an approach seems archaic, forming false strategic benchmarks. The services sector is of special scientific interest in this context due to the fact that the social production structure to the services development model attraction in many countries suggests transition to postindustrial economy type where the services sector is a system-supporting sector of the economy. Actively influencing the economy, the services sector in the developed countries dominates in the GDP formation, primary capital accumulation, labor, households final consumption and, finally, citizens comfort of living. However, a clear understanding of the services sector as a hyper-sector permeating all spheres of human activity has not yet been fully developed, although interest in this issue continues to grow among many authors. Target of strategic management of the industry development setting requires substantive content and the services sector target value assessment

Protection and trade in services : a survey

Until recently, trade in services was mostly ignored by iinternational economists, reflecting a perception that services were nontradable. This has never been true. Transportation and travel, for example, have always been important economic activities. In 1995, services trade climbed to a 20-percent share of global trade -no doubt an underestimate, as the most dynamic component of trade in services is telecommunications, which is not being properly captured in conventional balance of payment statistics. The authors survey the literature on trade in services, focusing on thepolicies used to restrict such trade, the gains from liberalization, and the institutional mechanisms adopted in pursuit of liberalization. They argue that technological progress (which makes services more tradable) and iinternational trade negotiations are likely to keep liberalization of trade in services a high-profile policy issue. They suggest that research focus on developing better estimates of the welfare costs of protectionism in the service sector. This will require quantifying barriers to the international exchange of services.Environmental Economics&Policies,Health Economics&Finance,Payment Systems&Infrastructure,Economic Theory&Research,Decentralization,Health Economics&Finance,ICT Policy and Strategies,Knowledge Economy,Environmental Economics&Policies,Economic Theory&Research