International Competitiveness: is the reduction of wages a solution? An evolution for the Portuguese case

The purpose of this paper is to analyse, for the case of Portugal, the effectiveness of a wage reduction - a current proposal since 2011 to help the country to reverse the high public and external debts - in promoting the efficiency and the international competitiveness of the economy. A static multi-sector and single-country general equilibrium model is used and data is collected from GTAP7 Data Base. The model allows the measurement of changes by sector. The simulations performed show that extending the reduction of wages already deployed by the government in the public sector to the private one leads to a positive impact on employment (both skilled and unskilled labour), production and volume of exports in all sectors except those that are R&D intensive, characterized by a low weight in the Portuguese economy. However it is possible that the positive results in terms of external competitiveness are not sustainable as the impact on productivity is negative, albeit small, for most sectors. There is also reasons for concern regarding the observed deterioration of the trade balance of most sectors, the exception being the traditional labour intensive sectors that show good prospects in this respect

What determines the export performance? A comparative analysis at the world level

We use constant market share (CMS) analysis to measure the variations in the market share of 82 of the world’s principal exporting countries between 1995/97 and 2005/07. The results of this analysis serve to stress the importance of competitiveness in explaining export performance. Furthermore, the existence is observed of a spatial tendency, reflected in the fact that countries that are geographically close to each other tend to display a similar behavior with regard to market share evolution and the components into which the variation is broken down.constant market share, competitiveness, export performance, international trade. Classification- C43, F10, F14.

Determinant factors of structural similarity at the regional level: evidence from Portugal

There is scant evidence on the determinant factors of structural similarity between geographical spaces; moreover, it has been produced considering only the national level. The present study provides evidence on this topic at the regional level, based on the analysis of 275 Portuguese counties. The results obtained confirm the importance of several explanatory factors, suggesting that the structural similarity between Portuguese counties increases with geographical proximity, the existence of a shared boundary, the similarity of factor endowments in terms of physical and human capital and the similarity in terms of economic centrality and market dimension. Key words: productive structure, Portugal, structural similarity, factor endowments, economic geography

Determinants of the pattern of horizontal and vertical intra-industry trade: what can we learn from Portuguese data?

We rely on vertical and horizontal differentiation models to study the cross-industry and cross-country determinants of Portuguese intra-industry trade in 1997. We identify distinct factors for each type and the comparative advantage explanation for the vertical case. To confirm the robustness of the results we use alternative measures for a continuous dependent variable and re-estimate all equations with a Probit model. The probabilistic model takes into account the fact that we expect a relation between the existence of the explanatory variables and the existence of the phenomenon, but the way some of the factors impact is not a priori known.horizontal intra-industry trade; vertical intra-industry trade; Portugal.

Regional Integration and Internal Economic Geography - an Empirical Evaluation with Portuguese Data

The effects of the reduction of international trade costs on the internal economic geography of each country have been very scarcely studied in empirical terms. With data for Portugal since its adhesion to the European Union, we test the hypotheses put forward by the new economic geography concerning the evolution of the spatial concentration of the manufacturing industry as a whole and of the different industries individually considered. We consider alternative concentration concepts and data disaggregated both at the level of NUTS III (28 regions) and concelhos (275 regions). Results show a dispersion of total industry as a consequence of the reduction of international trade costs, in line with Krugman and Elizondo (1996)’s prediction. Individual industries show a similar tendency, in contrast with the theoretical hypothesis.trade liberalization; industrial location; Portugal.

Does the location of manufacturing determine service sectors’ location choices? Evidence from Portugal

Considering the case of Portugal over the period 1995-2000, this paper analyses whether the location of market services is explained by the geographical proximity of the industrial sectors that use these services as intermediate inputs. A rather detailed level of regional disaggregation is used, namely the county level (275 counties). This influence is confirmed by the results of some location indices and by the regressions made for each sector. An alternative spatial unit is also used, consisting of the county itself combined with those with which it shares boundaries, showing the relevance of the level of regional disaggregation for the results obtained.Services, Manufacturing Industry, Location of Economic Activity, Portugal.

Does the location of manufacturing determine service sectors’ location choices? Evidence from Portugal

Considering the case of Portugal over the period 1995-2000, this paper analyses whether the location of market services is explained by the geographical proximity of the industrial sectors that use these services as intermediate inputs. A rather detailed level of regional disaggregation is used, namely the county level (275 counties). This influence is confirmed by the results of some location indices and by the regressions made for each sector. An alternative spatial unit is also used, consisting of the county itself combined with those with which it shares boundaries, showing the relevance of the level of regional disaggregation for the results obtained. Key words: services, manufacturing industry, location of economic activity, Portugal

Determinant Factors of FDI Spillovers – What Do We Really Know?

Empirical evidence about FDI spillovers to domestic firms has provided mixed results. This global evaluation has recently been complemented with the analysis of the factors that determine the existence, dimension and sign of FDI spillovers. We survey the arguments that support these factors and analyze the empirical evidence already produced. FDI spillovers depend on many factors, frequently with an indeterminate effect. Absorptive capacity of domestic firms and regions are a precondition for incorporating the benefits of FDI spillovers. Concerning the remaining factors, the results suggest opposite effects or, in some cases, are still insufficient to legitimate decisive conclusions.productivity; spillovers; FDI; determinant factors.