Effects of Foreign Direct Investment on Firm-level Technical Efficiency: Stochastic Frontier Model Evidence from Chinese Manufacturing Firms

It has been recognized that multinational corporations can spill over to non-affiliated firms in host economies. Existing studies of foreign direct investment (FDI) and productivity growth often assume firms are perfectly efficient. Our paper relaxes this assumption and explores how FDI affects a firm’s technical efficiency improvement as well as its technical progress in a stochastic frontier model. The stochastic frontier model estimates a firm’s production frontier given a set of production inputs. The deviation of a firm’s actual output level from its maximum level of output is defined as technical inefficiency. Using data from more than 12,000 Chinese manufacturing firms, we find that FDI in a firm\u27s own industry (horizontal FDI) does not necessarily improve the firm’s technical efficiency. However, firms with a larger absorptive capacity tend to benefit more from horizontal FDI than others. We also find that foreign presence in a firm’s downstream industries helps improve the firm’s technical efficiency, while foreign presence in upstream industries does not. In addition, a generalized Malmquist index decomposition shows that foreign affiliates achieve a higher productivity growth than domestic firms mainly through a faster improvement in technical efficiency rather than through technical progress

Rational Speculative Bubbles in the US Stock Market and Political Cycles

This paper tests the existence of rational speculative bubbles during Democratic and Republican presidential terms, which has not been systematically researched in existing studies. With monthly real returns on equally-weighted and value-weighted portfolios in the U.S. from January 1927 to December 2012, we find that there are rational speculative bubbles under Republican Presidents but not under Democratic Presidents. Our results are robust to different specifications

Public Policies and Public Resale Housing Prices in Singapore

In Singapore, the public resale housing market is an active second-hand housing market, whereby previously subsidised new public housing units were being transacted at market prices. In contrast to the private housing price determinants that have been identified in the international literature, the prices of public resale housing in Singapore are largely determined by public policies rather than by economic variables. This paper provides some empirical evidence on how and to what degree public housing policies affected the price dynamics of public resale housing in Singapore during the 1990s. The findings have additional implications of the wider consequences of public policies on the prices of private housing units.Public, resale, housing, policies, prices, Singapore

Information Diffusion in a Cobweb World

Based on an assumption of one-way learning, Granato and Wong (2004) consider a framework with two groups of agents, Group L and Group H, where Group L is less attentive and uses the expectations of the more or highly attentive Group H to update their forecasts. The paper shows the boomerang effect, which is defined as a situation where the inaccurate forecasts of a less attentive group confound a more attentive group\u27s forecasts. This extended paper relaxes the one-way learning assumption and investigates the case that both groups are learning from each other, i.e., dual learning. Simulations suggest that a boomerang effect still exists. Surprisingly, although the highly attentive group has a full set of information to make forecasts, they still learn from Group L. The reason is that Group H adjusts their forecasts because there is available information in Group L\u27s forecast measurement error

Inward FDI, Remittances, and Out-migration

In this study, we look at the relationship between remittances received at home, inward Foreign Direct Investment (FDI) and out-migration of individuals with different levels of education. Using the bilateral international migration data in 1990 and 2000, we find that inward FDI tends to deter the out-migration of individuals with secondary and tertiary education, but has no significant impact on the out-migration of individuals with primary education. In addition, remittances received at home induce the out-migration of individuals with primary education, but not the out-migration of individuals with secondary and tertiary education. The stock of existing migrants in a foreign country encourage future out-migration regardless of migrants’ levels of education

Has SARS Infected the Property Market? Evidence From Hong Kong

This paper uses the 2003 Hong Kong Severe Acute Respiratory Syndrome (SARS) epidemic as a natural experiment to investigate how housing markets react to extreme events. A panel data set of large-scale housing complexes (estates) is used to exploit the cross-sectional variation in the spread of SARS to estimate the effect of the disease on real estate prices and sales. SARS risk is measured by: (1) the estate-level SARS infection rate, (2) news reports, and (3) government announcements of infections. The average price declines by 1–3 percent if an estate is directly affected by SARS, and by 1.6 percent for all estates as a result of the outbreak of the disease. A back-of-the-envelope calculation of the expected price fall under the rational asset-pricing model implies that the economic value of life consistent with the SARS-related price movement was less than $1 million. This low figure contrasts with the predictions of overreaction from psychological and behavioral economics theories. An analysis of transaction volume suggests that the absence of price overreaction is likely to be related to housing market characteristics, including transaction costs, credit constraints and loss aversion

Individual Attitudes toward the Impact of Multinational Corporations on Domestic Businesses: How Important are Individual Characteristics and Country-Level Traits?

We study the importance of individual characteristics and national factors influencing individual attitudes towards the impact of multinational corporations on local businesses. Our sample includes more than 40 000 respondents in 29 countries from the 2003 National Identity Survey conducted by the International Social Survey Programme. We find that individual demographic factors and socioeconomic status, such as gender, age, income and education, are strong predictors of their attitudes. For example, income and education are positively associated with favourable attitudes towards the impact of multinational corporations (MNCs) on local businesses while age is negatively associated with individual attitudes towards MNCs. In addition, hierarchical ordered logit model results show that approximately 8% of total variations in individual attitudes around our sample mean are not explained by differences in personal traits. Instead, they are due to country-level heterogeneity such as, but not limited to, different degrees of openness or different aggregate income

Healing Through Caring and Knowledge-Making in Everyday Food Practices Among LGBTQ+ Black, Indigenous, People of Colour

Three different models are used in this study to understand how everyday food practices carry healing potential through the interwoven process of caring and knowledge-making. Daily food practices reflect a mixture of tradition and modernity— borne out of our roots and our contexts. Anzaldúa’s (1987) Borderland Theory helps us understand how this mixture is made by people who straddle two borders or worlds and contest those confines. Chavez-Dueñas et al.’s (2019) HEART model names strengthening our cultural and familial traditions and roots as part of the broader processes of building cultural consciousness and connection, and engaging in collective healing. Finally, Galliher et al.’s (2017) Integrated Identity Development maps our identities and deep interconnectedness with one another, observed in daily food behaviours like cooking, eating, and sharing. This study uses food photos and interviews of 14 Black, Indigenous, People of Color (BIPOC) individuals, who are Lesbian, Gay, Bisexual, Transgender, Queer (LGBTQ+) from United States and Canada, to explore how they heal, learn, and make meaning of their food practices. Participants photographed food moments across two weeks, brought these photos during a semi-structured interview at four weeks, and responded to a follow-up after eight months. Participants’ daily food moments reflected their personal, social, and cultural contexts. Individually, participants shared definitions of healing, and intentionality and gratitude as important wellness attitudes. They experienced caring and connection through social aspects of sharing and receiving food, particularly individualizing food to express care and connecting to a sense of togetherness. Participants connected to food on a cultural level by engaging with values such as resourcefulness and marking special occasions. Participants experienced food’s historical memory by connecting with ancestry, land, and the sacred, acknowledging oppression, and creating memories. Lastly, food is a landscape of contradictory notions of authenticity and hybridity, and an arena to develop new family traditions, given caregivers’ roles as knowledge keepers. Seven participants endorsed increased mindfulness around food practices and seven participants reported increased awareness and connection to their background, loved ones, and communities at the eight-month follow-up. Deepening our knowledges about our home and remaining flexible with tradition helps us keep intergenerational teachings

Is SARS a Poor Man\u27s Disease? Socioeconomic Status and Risk Factors for SARS Transmission

This paper investigates the link between various risk factors, including socioeconomic status (SES), and the spread of Severe Acute Respiratory Syndrome (SARS) in Hong Kong in 2003. A comprehensive data set compiled by the author shows a negative and significant correlation between SARS incidence and various measures of income, but not years of education, unlike previous studies on other health conditions. The income-SARS gradient can be accounted for by controlling for pre-SARS housing values but not an array of measurable living conditions. Areas with more white-collar workers experienced a higher incidence rate, largely driven by the share of service and sales workers, after controlling for SES. These results have implications for the understanding of the SES-health link in the context of a contagious disease, the potential causality of the SES-SARS relationship and for future SARS containment strategies

Has SARS Infected the Property Market? Evidence from Hong Kong

natural experiment, housing markets, adverse shocks