Competition and product mix adjustment of multi-product exporters: Evidence from Belgium. National Bank of Belgium Working Paper No. 298

This paper studies the effects of competition in a destination market on the product sales distribution of Belgian multi-product firms using the framework of Mayer et al. (2014). We show that in high competition markets multi-product firms export relatively more of their core products thus skewing the sales distribution towards the best-performing varieties of the firm. A calibrated fit indicates that the general productivity effects that are associated with this skewness reaction are potentially large as firms adjust their production process to accommodate the increased demand for its core products. The skewness effect of high competition markets is only observed for products that the firm eventually drops, underlining the importance of the product extensive margin adjustment. The effect is not limited to manufacturing firms, but also extends to intermediaries in trade and is shown to depend on the type of good that is exported

What drives labor market polarization in advanced countries? The role of China and technology

This article explores the effects of offshoring, technology, and Chinese import competition on labor market polarization in European countries. We find that polarization occurs mostly as a result of polarization within individual industries, while the reallocation of employment away from less polarized industries toward more highly polarized industries contributed only about one-third of the total change. We find that both technological change and Chinese net import competition contributed to labor market polarization, but that they did so in distinct ways. In European manufacturing industries, ICT adoption explains a third of within-industry polarization, while Chinese net import competition contributed to a much smaller extent. The process of between-industry polarization is driven by widespread deindustrialization and servitization in developed countries. We find that Chinese net import competition explains about a fifth of the employment decline in lowly polarized manufacturing industries and was thus an important driver of the reallocation of labor within economies away from lowly polarized manufacturing industries. We present tentative evidence that employment grew faster in initially highly polarized service industries. Moreover, these industries appear unaffected by their indirect input-output-exposure to Chinese net import competition, while this was not the case for initially lowly polarized service industries. While polarization patterns in different European labor markets show considerable heterogeneity, labor market institutions seem to be insufficient to explain these cross-country differences

Near-zero-waste processing of low-grade, complex primary ores and secondary raw materials in Europe: technology development trends

With an increasing number of low-grade primary ores starting to be cog-effectively mined, we are at the verge of mining a myriad of low-grade primary and secondary mineral materials. At the same time, mining practices and mineral waste recycling are both evolving towards sustainable near-zero-waste processing of low-grade resources within a circular economy that requires a shift in business models, policies and improvements in process technologies. This review discusses the evolution towards low-grade primary ore and secondary raw material mining that will allow for sufficient supply of critical raw materials as well as base metals. Seven low-grade ores, including primary (Greek and Polish laterites) and secondary (fayalitic slags, jarosite and goethite sludges, zincrich waste treatment sludge and chromium-rich neutralisation sludge) raw materials are discussed as typical examples for Europe. In order to treat diverse and complex low-grade ores efficiently, the use of a new metallurgical systems toolbox is proposed, which is populated with existing and innovative unit operations: (i) mineral processing, (ii) metal extraction, (iii) metal recovery and (iv) matrix valorisation. Several promising novel techniques are under development for these four unit-operations. From an economical and environmental point of view, such processes must be fitted into new (circular) business models, whereby impacts and costs are divided over the entire value chain. Currently, low-grade secondary raw material processing is only economic and environmentally beneficial when the mineral residues can be valorised and landfill costs are avoided and/or incentives for waste processing can be taken into account

Competition and product mix adjustment of multi-product exporters: Evidence from Belgium

This paper studies the effects of competition in a destination market on the product sales distribution of Belgian multi-product firms using the framework of Mayer et al. (2014). We show that in high competition markets multi-product firms export relatively more of their core products thus skewing the sales distribution towards the best-performing varieties of the firm. A calibrated fit indicates that the general productivity effects that are associated with this skewness reaction are potentially large as firms adjust their production process to accommodate the increased demand for its core products. The skewness effect of high competition markets is only observed for products that the firm eventually drops, underlining the importance of the product extensive margin adjustment. The effect is not limited to manufacturing firms, but also extends to intermediaries in trade and is shown to depend on the type of good that is exported.nrpages: 35status: publishe

A Critical Revision of the Competition Effects on Multi-product Exporters

This paper analyzes how competition in the destination market affects the product sales distribution of a multi-product exporter using the Mayer et al. (2014) framework. Their model links a relative increase of the sales of the best performing products of a firm induced by competition in a foreign destination market to productivity gains for the domestic economy in which they produce. The empirical evidence in this paper corroborates the existence of a statistical link between the economic size of a destination market and the shape of the product sales distribution in Belgian firms, in line with the predictions of the Mayer et al. framework. While the calibrated potential productivity effects are within the range of those presented in the literature, the paper analyzes several empirical frailties that indicate that the domestic economy is unlikely to gain much from this competition effect. The statistical link is shown to be substantially weakened once one only considers the products a firm produces itself. Moreover, the paper accounts for the fact that the size and geography of a destination market might not be perfect measures to capture competition. When import competition from Asian countries is used as an alternative proxy for competition in the destination market, the effect is again weakened. Finally, the statistical link is shown to be closely associated to product switching at the firm level, highlighting problems with the workings of the model. On the basis of this evidence, it is argued that the productivity gain from trade is likely modest and hides several complexities.status: Published onlin

De terugverdieneffecten van een lastenverlaging op arbeid

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What Drives Labor Market Polarization in Advanced Countries? The Role of China and Technology

This paper explores the effects of offshoring, technology and Chinese import competition on labor market polarization in European countries. We find that polarization occurs mostly as a result of polarization within individual industries, while the reallocation of employment away from less polarized industries towards more highly polarized industries contributed only about one third of the total change. We find that both technological change and Chinese net import competition contributed to labor market polarization, but that they did so in distinct ways. In European manufacturing industries, ICT adoption explains a third of within-industry polarization, while Chinese net import competition contributed to a much smaller extent. The process of between-industry polarization is driven by widespread deindustrialization and servitization in developed countries. We find that Chinese net import competition explains about a fifth of the employment decline in lowly-polarized manufacturing industries and was thus an important driver of the reallocation of labor within economies away from lowly polarized manufacturing industries. We present tentative evidence that employment grew faster in initially highly polarized service industries. Moreover, these industries appear unaffected by their indirect IO-exposure to Chinese net import competition, while this was not the case for initially lowly polarized service industries. While polarization patterns in different European labor markets show considerable heterogeneity, labor market institutions seem to be insufficient to explain these cross-country differences.status: Published onlin

What drives labor market polarization in advanced countries? The role of China and technology

This article explores the effects of offshoring, technology, and Chinese import competition on labor market polarization in European countries. We find that polarization occurs mostly as a result of polarization within individual industries, while the reallocation of employment away from less polarized industries toward more highly polarized industries contributed only about one-third of the total change. We find that both technological change and Chinese net import competition contributed to labor market polarization, but that they did so in distinct ways. In European manufacturing industries, ICT adoption explains a third of within-industry polarization, while Chinese net import competition contributed to a much smaller extent. The process of between-industry polarization is driven by widespread deindustrialization and servitization in developed countries. We find that Chinese net import competition explains about a fifth of the employment decline in lowly polarized manufacturing industries and was thus an important driver of the reallocation of labor within economies away from lowly polarized manufacturing industries. We present tentative evidence that employment grew faster in initially highly polarized service industries. Moreover, these industries appear unaffected by their indirect input-output-exposure to Chinese net import competition, while this was not the case for initially lowly polarized service industries. While polarization patterns in different European labor markets show considerable heterogeneity, labor market institutions seem to be insufficient to explain these cross-country differences.JEL J24 - Human Capital; Skills; Occupational Choice; Labor ProductivityJ21 - Labor Force and Employment, Size, and StructureO33 - Technological Change: Choices and Consequences; Diffusion ProcessesM55 - Labor Contracting DevicesJ23 - Labor Demandstatus: publishe

Economische analyse van de Waarborgregeling

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Determinanten van locatiebeslissingen en duurzame groei van ondernemingen

In dit rapport geven we een beknopt literatuuroverzicht van de belangrijkste factoren die de vestigingskeuze van ondernemingen bepalen. Hierbij bekijken we tevens welke determinanten delocalisatie beïnvloeden en hoe het beleid kan bijdragen tot een verankering van ondernemingen en duurzame ondernemingsgroei. We behandelen achtereenvolgens (i) directe buitenlandse investeringen, (ii) internationale handel, (iii) loonkosten, (iv) regulering, (v) hoge groei ondernemingen, (vi) instellingen en (vii) de nieuwe economische geografie, (viii) regionale clustering en (ix) globalisering. Tabel 1 geeft een overzicht van de factoren, de gehanteerde referenties, het geografische toepassingsgebied en de overeenstemmende STORE-VIVES studies en andere literatuur dienaangaande.status: publishe