The Role of Financial Constraints in Determining Export Status

In spite of the mounting evidence on the advantages of exporters over firms focused solely on their domestic markets, the source of these differences is yet to be explained. The present contribution analyzes the role of financial constraints as one of the key factors determining firm export status. Through a survey of existing literature and an empirical analysis of Slovenian manufacturing firms the role of financial constraints that limit foreign market access to only a subset of the firms is revealed. It is shown that financial constraints, even when other factors are explicitly considered, determine the firms that will be able to enter into foreign markets and financially constrained firms end up exporting less frequently and smaller quantities than could otherwise be expected

Does a foreign subsidiary's network status affect its innovation activity? Evidence from post-socialist economies

A detailed questionnaire survey among 809 foreign subsidiaries in five post-socialist economies (East Germany, Poland, Romania, Slovenia and Croatia) is used to study determinants of innovation activity of foreign subsidiaries. Survey data comprise traditional firm innovation activity determinants and indicators of a foreign subsidiary status. Our findings demonstrate that foreign subsidiaries are relatively independent as far as innovation activity is concerned, while at the same time subsidiaries with better access to foreign parent companies R&D results are more likely to innovate. Important differences, however, are found in factors that determine product and process innovation: (i) subsidiaries that invest more in R&D exhibit higher probability for product but not for process innovation; (ii) acquisition of external knowledge and company size have significant and positive impact on on process innovation only, (iii) transfer of responsibilities from headquarters to subsidiaries and foreign investor being a MNE is conducive to process innovation; (iv) marketseeking motivation of foreign investors has a negative impact on product innovation status; (v) higher age of subsidiary is positive for its process innovation, i.e. a foreign investor needs some time to initiate innovation activities in a subsidiary.Una minuciosa encuesta realizada a 809 filiales en cinco economías post-socialistas (Alemania Oriental, Polonia, Rumania, Eslovenia y Croacia) ha servido de base para estudiar los factores determinantes de la actividad innovadora de las filiales extranjeras. Los datos de la encuesta incluyen los determinantes tradicionales de la actividad innovadora de las empresas así como los indicadores del estatus de la filial extranjera. Nuestros resultados demuestran que las filiales extranjeras son relativamente independientes en cuanto a su actividad innovadora, mientras que al mismo tiempo las filiales con un mejor acceso a los resultados de I+D de las empresas matrices son más propensas a innovar. Se encuentran, sin embargo, importantes diferencias en los factores que determinan los productos y los procesos de innovación: i) las filiales que más invierten en I + D presentan mayor probabilidad para la innovación en productos, pero no en los procesos; ii) la adquisición de conocimientos externos y el tamaño de la empresa tienen un impacto significativo y positivo únicamente en el proceso de innovación; (iii) la transferencia de responsabilidades desde la sede a las filiales y el hecho de que el inversor extranjero sea una empresa multinacional contribuye a la innovación de procesos; (iv) la motivación de búsqueda de mercados por parte de los inversores extranjeros tiene un impacto negativo sobre el nivel de innovación de productos; (v) una mayor antigüedad de la filial es positiva para su proceso de innovación puesto que un inversor extranjero necesita algún tiempo para iniciar las actividades de innovación en una filial.Empresas transnacionales, inversión directa, redes, actividad innovadora, economias postsocialistas, Transnational firms, direct inversion, networks, innovation activity, post-socialist economies.

The role of regional economic integrations for trade margins: A case of Croatia

Cilj ovog rada je istražiti razvoj intenzivnih i ekstenzivnih trgovinskih marži na razini proizvod-država za slučaj Hrvatske od 2000. do 2012. godine. Hipoteza istraživanja je da će liberalizacija trgovine, potaknuta sklapanjem regionalnih trgovinskih sporazuma, imati heterogene učinke na različite skupine proizvoda, uz indirektne učinke na nacionalno blagostanje. Koristi se statički i dinamički gravitacijski model koji se primjenjuje na panel podatke koji obuhvaćaju preko 90% ukupne trgovine u promatranom razdoblju. Ocjene gravitacijskog modela pokazuju da, iako su SAA i CEFTA sporazumi imali pozitivne učinke na intenzivne i ekstenzivne trgovinske marže, posebice na izvoz i uvoz potrošačkih proizvoda, učinci na trgovinu intermedijarnim i kapitalnim dobrima su relativno ograničeni. To ukazuje da su navedeni sporazumi imali snažniji učinak na zadovoljenje potreba potrošača, a ne na porast učinkovitosti domaćeg trgovinskog sektora. Pri usporedbi rezultata učinaka sporazuma koristeći dinamički model, jasan je snažniji utjecaj SAA sporazuma na potrošačka dobra, dok su učinci CEFTA sporazuma ujednačeni za sve skupine dobara. Zaključak je da bi se, u srednjem roku, nositelji hrvatske vanjske politike trebali izboriti za preferencijalni status Hrvatske na CEFTA tržištu, uzimajući u obzir njegovu važnost za hrvatsko gospodarstvo.The goal of this investigation is to research the development of intensive and extensive trade margins on product-country level data for Croatia during the period 2000–2012. Hypothesis of our paper is that RTAs-induced trade liberalization will have heterogeneous effects on particular product groups with indirect implications on national welfare. Static and dynamic gravity trade models are used on panel data accounting for over 90% of total trade during the observed period. Estimations of the trade gravity model and trade margins showed that while SAA and CEFTA arrangements positively affected different measures of intensive and extensive trade margins, specially exports and imports of consumption products, effects on trade in intermediate and capital goods were relatively subdued. This suggests a tendency for market-seeking rather than efficiency-seeking behaviour of Croatia’s trade sector. When comparing the results for two trade agreements using dynamic model, we find that SAA primarily affected trade in consumption goods while effects of CEFTA are more evenly dispersed across different product groups. Main conclusion of the paper is that Croatia’s policy makers should try to keep the preferential status of Croatia within the CEFTA market in the medium term, focusing on the Croatian econom

UNEMPLOYMENT AND SELF-CONCEPT

The article analyses the position of the unemployed in the labour market, primarily relationship between self-concept and self-esteem of workers and their motivation to seek work. The current crisis dramatically worsened labour market situation, making employment almost impossible for many, primarily the vulnerable groups (older, women). Survey data used in cluster analysis reveal that the unemployment is related to self-concept, but besides unemployment also other factors, primarily age, and sex matter. Also, the reactions of people to unemployment conditional on their self-concept differ

On the Value System as a Precondition for Sustainability: An Overview of Preliminary Survey Results for Slovenia

The Brundtland report (1987) defi ned sustainable development as a form of development which “meets the needs of the present without compromising the ability of future generations to meet their own needs’’. Given that the concept of sustainable development closely links the desire for the development of a harmonious society aimed at higher welfare, social cohesion and environmental protection, it requires a shift in values of the society; a shift towards more aware, compashionate, better human. This further requires a shift in consumption and production patterns. We examine the readiness of Slovenian population to support the implementation of more sustainable patterns by examining their values system. The survey based analyis stems from the theoretical concept of happiness, a stream of economics, beginning in the 1970s with the Easterlin paradox. In the article we effectively demonstrate that Slovenian population is in many aspects very traditional. Given that the value system of the general public drives the politicians, this can act as a strong driver towards or against implementation of changes that would support sustainability

Functional Upgrading and Productivity Growth of Multinational Subsidiaries in European Transition Economies

With economic transformation and European integration Central and Eastern European countries (CEECs) have been inserted into European and global production networks. The literature on global value chains (GVCs) suggests that firms’ performance in terms of value creation and capture crucially depends upon their ability to ‘upgrade’. Apart from product and process upgrading this refers to ‘functional upgrading’ i.e. the changing portfolio and nature of business functions executed by firms within the GVC. In principal this should hold also for multinational affiliates. They participate in GVCs through vertically integrated and specialized forms of organization. Their ability to upgrade is closely linked with their position, mandate and power asymmetries within the multinational network. Recent case study evidence documents functional upgrading in multinational subsidiaries located in CEECs. Yet, their ability to increase value capture through these processes has been contested. This paper tests the relationship between functional upgrading and productivity growth of multinational subsidiaries. We exploit a unique firm level dataset that matches state-of-the-art survey-based business function indicators with times-series accounting data for a representative sample of multinational subsidiaries in selected CEECs. The estimation results indicate that functional upgrading has a positive effect on foreign subsidiaries’ average productivity growth. The effect is higher for subsidiaries with more recent entries of foreign investors. This finding is robust to different measures for functional upgrading. The positive effect of functional upgrading seems to be mainly confined to foreign subsidiaries in manufacturing industries