The role of the multinational firms on the producer services sector: repercusions for peripheral regions.

The spatial polarisation of services is one of the explanations for present regional disparities. A new international division of labour based on Business Services has appeared, in which multinational firms play an important role. This paper aims to examine the repercussions of the behaviour of firms in the advanced business services (ABS) sector on peripheral regions. Particularly, we analyse the case of Andalusia – a region situated in a “central area”, the European Union, but characterised as peripheral-. Using direct research – interviews carried out with a representative sample of enterprises -, we study the impact of these multinational firms, not only from the point of view of the companies which offer these services in Andalusia, but also from the point of view of demand – enterprises which use these services -. Multinational firms Business advanced services Peripheral regions Uneven regional development Andalusia

Endogenous competences and linkages development

In this paper we analyze empirically the influence of firms’ endogenous competences in the existence, quality and results of the linkages between firms and different types of agents. Using survey data from 170 firms belonging to the steel making and automotive production networks in Argentina, we show that the level of endogenous competences influences the linkages’ quality, objectives and results. Higher level of competences generates more virtuous linkages and influences the objectives that firms are after when interacting. Without certain minimum competences, firms only relate commercially and do not form links aimed to exchange knowledge or innovate. Better standing in terms of competences positively affects the probability of being involved in technological transfer agreements and cooperation agreements aimed at innovation. Being involved in useful interations requires previous competences, defining a vicious circle that calls for public intervention and policy implementation.Linkages; Networks; Endogenous Capacities

Influential Article Review -How Vietnam Can Succeed in FDIs

This paper examines investments. We present insights from a highly influential paper. Here are the highlights from this paper: Foreign direct investment (FDI) enterprises are playing a key role in Vietnam’s economy. By the end of 2016, there are more than 21,398 FDI projects in force, with the total registered capital of nearly 293 billion USD. One hundred six countries and territories have invested in 19 industries in 68 provinces and cities of Vietnam. These investments have added a large amount of capital to the economy, which has basically been used effectively, contributing to the economic growth of Vietnam. In this context, the study focuses on the analysis of statistical data from 1988 to 2016 on the sources of funds, the number of projects, the invested sectors, and countries invested in Vietnam; research also includes three main factors that affect the quality of FDI attraction in Vietnam, namely resources, infrastructure, and other support policies. In this study, the support policy factor is thought to have the greatest impact. In addition to the use of statistical techniques, quantitative research is also applied to three data analysis techniques, including descriptive statistics, scale reliability analysis, and regression analysis, to verify the hypothesis. Policy implications are also proposed in this study to improve the quality of FDI attraction in Vietnam in the coming years. For our overseas readers, we then present the insights from this paper in Spanish, French, Portuguese, and German

La inserción territorial de las empresas multinacionales en los países de Europa Central : el papel de la estrategia gobal

A finales de los años ochenta, los países de Europa Central y Oriental (PECO), en el marco de su transición sistémica, iniciaron un proceso de reintegración en la economía mundial. En vistas a las dificultades de inserción por la vía tradicional de las exportaciones, este objetivo condujo a una política de apertura a la inversión extranjera directa (IED) dado que además, entre las diversas formas que el capital exterior puede tomar, la IED parece ser la que mayor capacidad reestructuradora tiene para la economía receptora. Nuestra hipótesis es que los efectos que la IED puede generar sobre los tejidos productivos locales sólo pueden ser entendidos teniendo en cuenta las nuevas estrategias globales implementadas por las empresas multinacionales. Analizamos nuestra hipótesis en el caso de tres países de Europa Central (Hungría, República Checa y Polonia), aquellos que han recibido la mayor cantidad de IED de la región. ______________________________________Since the end of the 1980’s, Central and Eastern European countries (CEECs) have had the strategy of enhancing their integration into the world- wide economy. In view of the difficulties facing insertion via the traditional method of exports, this objective has taken place along with a policy of open- ness towards foreign direct investment (FDI), since the various forms that external capital can take, FDI seems to be that which has the greatest restructuring ability for the receptor economy. Our hypothesis is that the effects that the FDI may have on the fabric of local production, can only be understood by bearing in mind the global strategy employed by multinational companies (MNC). We analyse our hypothesis in the case of three Central European Countries (Hungary, Czech Republic and Poland), which have received the main amount of the FDI in the region

Labor Market Integration between Northern Mexico and Southern United States: an empirical investigation.

In this paper, the analysis of co-dependence between the US and Mexico labor markets is carried out by estimating the cyclical component of California’s and Texas’ manufacturing employment and four US Border Mexican cities through the Hodrick-Prescott filter. We estimated the smoothing parameter following a calibration technique proposed by Guerrero et al (2001) which allows us to obtain the best linear unbiased estimator of the trend component. Our analysis suggests that after 1994 there has been greater labor market integration between Mexico’s northern region and US’ southern region. This greater integration has implied a change in the nature of the short term relationship of manufacturing employment between Mexico and the US. The change is also significant on the relationship between Mexican real wages and US employment.Vertical FDI, Labor market integration, Hodrick-Prescott filter,Latin America, US-Mexico border

Infrastructure and the Location of Foreign Direct Investment A Regional Analysis

In the 1990’s, Argentina became a top destination for FDI to developing countries. The geographical distribution of FDI inflows was, however, highly uneven. In parallel, the spatial allocation of public infrastructure greatly mirrored these regional disparities. What were the determinants of FDI location? What was the role of public infrastructure? This paper attempts to answer these questions using spatial econometric techniques for a panel of regional and FDI data of the Argentine provinces. Results suggest that space matters for FDI location, indicating some competition effects in FDI inflows between neighbouring provinces. Paved roads seem also matter but other proxies of infrastructure do not seem to be that important. According to our results, a 10% increase in paved roads per capita augments FDI between 17% and 33% in the average host regional economy. Extending the network of paved roads in neighbouring regions would increase FDI between 12% and 14% but results are not robust.Foreign Direct Investment, Infrastructure, Spatial Econometrics, Economic Geography

Regional Labor Market Integration: Northern Mexico and Southern USA

In this paper, the analysis of co-dependence between the US and Mexico labor markets is carried out by estimating the cyclical component of California’s and Texas’ manufacturing employment and four US Border Mexican cities through the Hodrick-Prescott filter. We estimated the smoothing parameter following a calibration technique proposed by Guerrero et al (2001) which allows us to obtain the best linear unbiased estimator of the trend component. Our analysis suggests that after 1994 there has been greater labor market integration between Mexico’s northern region and US’ southern region. This greater integration has implied a change in the nature of the short term relationship of manufacturing employment between Mexico and the US. The change is also significant on the relationship between Mexican real wages and US employment.Labor Market Integration, US-Mexico border, Hodrick-Prescott filter

The new triangular relationship between the US, China, and Latin America: the case of trade in the autoparts-automobile global value chain (2000-2019)

During 2000-2019, the autoparts-automobile global value chain (AAGVC) underwent significant structural changes from a number of perspectives: micro, meso, or inter-firm relations, macroeconomic, and territorial shifts. This document will focus on recent trade debates on the "new triangular relationship" between the US-China and Latin America and the Caribbean (LAC), and Mexico, and specifically on trade in the AAGVC during 2000-2019. In addition to the discussion on global value chains (GVCs) and its implications, the document analyses in detail qualitative and quantitative global changes in the AAGVC and specifically in US imports during 2000-2019, highlighting the performance of Mexico and China in trade, tariffs, and transportation costs. Conclusions include a set of future research topics

Reallocation of Resources within the National Productive System in Bolivia: A View from the Perspective of Tradable and Non-Tradable Goods

This paper explores Bolivia’s current unemployment situation taking into account the reallocation of resources within the aggregate supply. The origin of this internal imbalance is due to negative impacts of external real exchange rate (RER) shocks, as well as to changes in the destination of foreign direct investment (FDI) among different sectors of the economy. The model used to explain the imbalance is based on the Dependent Economy theoretical framework, in which production in a small open economy is disaggregated into tradable and non-tradable goods. Under this production scheme, any RER movement in terms of appreciation or depreciation produces a displacement of resources, either along the production possibilities frontier or through the unemployment zone. After demonstrating that the RER suffered an important appreciation in 1997, a model of the aggregate-supply function is constructed considering two variable outputs (tradable and non-tradable goods) and two variable inputs (capital and labor), suggesting in the end the existence of a slow restructuring process at the expense of unemployment of the labor force.Inter-sector labor mobility, Internal balance, Tradable-Nontradable (TNT) model

The role of the multinational firms on the producer services sector: repercusions for peripheral regions

The spatial polarisation of services is one of the explanations for present regional disparities. A new international division of labour based on Business Services has appeared, in which multinational firms play an important role. This paper aims to examine the repercussions of the behaviour of firms in the advanced business services (ABS) sector on peripheral regions. Particularly, we analyse the case of Andalusia – a region situated in a “central area”, the European Union, but characterised as peripheral-. Using direct research – interviews carried out with a representative sample of enterprises -, we study the impact of these multinational firms, not only from the point of view of the companies which offer these services in Andalusia, but also from the point of view of demand – enterprises which use these services -. Multinational firms Business advanced services Peripheral regions Uneven regional development Andalusi