Multi-Product Firms and Exporting: A Developing Country Perspective

In this paper, we shed additional light on the complex relationship between multinational enterprises (MNEs), exporting and economic development by making a distinction between single and multi-product firms. As far as we are aware, the export behavior of foreign firms in a multi-product setting has not previously been considered for a developing country. Using firm-level data for Thailand we show that the number of goods produced causes a much larger variation in exports volumes than in total production. Whilst the number of products exported and the total volume exported is positively correlated we find, in contrast to US studies, a surprising negative correlation between the number of products produced and the volume of production. We then go on to investigate for the first time the characteristics of multi-product firms and the number of products they produce and find the distinction between foreign owned and domestic firms as well as between foreign exporters and foreign non-exporters is important. The presence of foreign firms producing single products solely for the domestic market as well as those producing many products for export demonstrates the diversity of behavior of foreign firms in developing countries and emphasises that a foreign presence may not be as beneficial as policy makers are led to believe.Multinationals, Firm characteristics, Multi-product, Exports

Firm Heterogeneity and Export Participation: A New Asian Tiger Perspective

This paper investigates the relationship between firm heterogeneity and a firm’s decision to export, using the annual survey of Thai manufacturing firms from 2001 to 2004. A significant contribution of this paper is that we are, for the first time, able to break down FDI by country of origin to observe whether the behavior of MNEs differs by region of origin. We find that entry sunk costs and firm characteristics are important factors in explaining a firm’s decision to export. Another important determinant is the ownership structure of the firm, with foreign owned firms having a higher probability of exporting than domestically owned firms although this differs across country of ownership with potentially important policy implications. Export platform FDI is used to explain the behavior of foreign firms that invest in Thailand. Using three measures of total factor productivity, we also find that highly productive firms self-select into the export market. The implication for governments of developing countries is the need to think carefully about how and to whom they target their inward FDI policies as a means of growth. The heterogeneous behavior of multinationals from different nations means that policies targeting specific regions or countries may be preferable to general tax concessions or the implementation of special economic zones that are open to all.FDI, exports, firm heterogeneity, development

Growth, Foreign Direct Investment and the Environment: Evidence from Chinese Cities

In this paper we investigate the relationship between economic growth and industrial pollution emissions in China using data for 112 major cities between 2001 and 2004. Using disaggregated data we separate FDI inflows from Hong Kong, Macao and Taiwan from those of other foreign economies. We examine four industrial water pollution indicators (wastewater, chemical oxygen demand, hexavalent chromium compounds, and petroleum-like matter) and four industrial air pollution indicators (waste gas, sulphur dioxide, soot and dust). Our results suggest that most air and water emissions rise with increases in economic growth at current income levels. The share of total output produced by firms from Hong Kong, Macao and Taiwan has a positive effect on emissions although this effect is only significant for three industrial water pollution emissions. The share of total output produced by firms from other foreign economies can be beneficial, detrimental or neutral, depending on the pollutants considered. --FDI,economic growth,pollution,cities

A Tale of Two Cycles: Co-Fluctuations Between UK Regions and the Euro Zone

We examine the patterns and determinants of business-cycle correlations among eleven UK regions and six euro-zone countries over the 1966-1997 period, using GMM to allow for sampling error in comparing estimated correlations. The British business cycle is found to be persistently out of phase with that of the main euro-zone economies, and the trend is towards lower correlations. We detect only minor cyclical heterogeneity among UK regions. Differences in sectoral specialisation drive some of the asymmetry in GDP fluctuations, but they do not appear significant in explaining the observed reduction in UK-EU business-cycle correlations over time.business cycles; co-fluctuations; UK regions; European monetary union; optimum currency areas

The 2010 MW 6.8 Yushu (Qinghai, China) earthquake: constraints provided by InSAR and body wave seismology

By combining observations from satellite radar, body wave seismology and optical imagery, we have determined the fault segmentation and sequence of ruptures for the 2010 Mw 6.8 Yushu (China) earthquake. We have mapped the fault trace using displacements from SAR image matching, interferometric phase and coherence, and 2.5 m SPOT-5 satellite images. Modeling the event as an elastic dislocation with three segments fitted to the fault trace suggests that the southeast and northwest segments are near vertical, with the central segment dipping 70° to the southwest; slip occurs mainly in the upper 10 km, with a maximum slip of 1.5 m at a depth of 4 km on the southeastern segment. The maximum slip in the top 1 km (i.e., near surface) is up to 1.2 m, and inferred locations of significant surface rupture are consistent with displacements from SAR image matching and field observations. The radar interferograms show rupture over a distance of almost 80 km, much larger than initial seismological and field estimates of the length of the fault. Part of this difference can be attributed to slip on the northwestern segment of the fault being due to an Mw 6.1 aftershock two hours after the main event. The remaining difference can be explained by a non-uniform slip distribution with much of the moment release occurring at depths of less than 10 km. The rupture on the central and southeastern segments of the fault in the main shock propagated at a speed of 2.5 km/s southeastward toward the town of Yushu located at the end of this segment, accounting for the considerable building damage. Strain accumulation since the last earthquake on the fault segment beyond Yushu is equivalent to an Mw 6.5 earthquake

Hurricanes, fertility, and family structure:a study of early 20th century Jamaica

This study investigates the impact of hurricanes on fertility and the role of family structure in early 20th century Jamaica. Importantly, this was a time period in which there were no storm warnings or other formal disaster mitigation policies in place, allowing one to arguably identify the causal effect of storms on births without any policy interference. To this end, historical hurricane tracks and an exhaustive register of births are used to create a parish level monthly data set on births and hurricane destruction for the period 1901 to 1929. The regression analysis reveals that hurricanes impact excess births for close to 2 years after the event, with the average damaging storm causing a reduction in births of around 13%. Most of the negative effect is due to lower post-storm fertility rather than a fall in births by women affected while pregnant. There is no evidence that the fall in births was driven by fertile females dying as a result of the hurricane. Similarly, there was no discernible differential impact between single mother and two parent registered births, where the impact on the latter appears to be driven by non-marital conjugal unions

The electric vehicle revolution: critical material supply chains, trade and development

The emergence of a mass market for electric vehicles (EVs) offers development opportunities for countries that have abundant resources of cobalt, nickel, lithium, copper, aluminium and manganese. Not surprisingly, developing countries have proposed ambitious plans to expand production of these raw materials. However, an observation from the resource curse literature is that strong institutions are required if they are to mitigate the risk of poorly directed, often excessively procyclical, investment, not least because of the complexity, opacity and price volatility of many raw materials utilised by global EV value chains. This paper examines the outlook for EV demand and associated raw material usage paying attention to the drivers and sensitivities required to assess and track future market transformations. These end use shifts are then placed in the context of the broader supply chain adjustments and trends shaping the demand. For resource exporters, adapting to structural change will require fiscal, regulatory, environmental and institution reforms designed to capture shifting patterns of resource wealth in a way which takes appropriate account of comparative advantages in specific value chains and mitigates adverse environmental and social consequences from their extraction and processing

Environmental Outsourcing

Recent years have witnessed a dramatic increase in the number of firms shifting stages of their production processes overseas. In this paper we investigate whether firms outsource the dirtier stages of production to minimise domestic environmental regulation costs - a process broadly consistent with the pollution haven hypothesis. We develop a theoretical model of environmental outsourcing that focuses on the roles played by firm size and productivity, transport costs and environmental regulations. We test the model's predictions using a firm-level data set for Japan. We find evidence of an 'environmental outsourcing' effect although this is mitigated by transport costs and other factors related to dirty good production.