Crisis and protection in the automotive industry : a global value chain perspective

In this paper the authors apply global value chain (GVC) analysis to recent trends in the global automotive industry, with special attention paid to government interventions triggered by the recent economic crisis. The authors first highlight some of the defining characteristics of GVCs in this important industry, especially the unusually strong regional structure of production and sales. National political institutions create pressure for local content, which drives production close to end markets, where it tends to be organized nationally or regionally. They then examine policy reactions to the recent economic crisis, and provide some discussion of the government interventions in the industry. The authors end with a number of policy conclusions that highlight the likely impact of the interventions on the evolution GVCs and the growth of the industry in developing countries.Markets and Market Access,Economic Theory&Research,Labor Policies,Water and Industry,Debt Markets

Effects of the crisis on the automotive industry in developing countries : a global value chain perspective

This paper applies global value chain analysis to study recent trends in the global automotive industry. The authors pay special attention to the effects of the recent economic crisis on the industry in developing countries. The principal finding is that the crisis has accelerated pre-crisis trends toward greater importance of the industry in the South. More rapid growth of car ownership is the impetus, but the co-location and close interaction of suppliers and lead firms in this industry is an important catalyst. Opportunities to move up in the value chain for suppliers in emerging economies have proliferated and are likely to become even stronger now that an increasing number of new models are developed specifically for markets in developing countries. The co-location of assembly and parts plants in national and regional production systems has largely confined the impact of sales declines during the crisis to each country/region. In addition, the different development strategies followed by countries like Mexico, China, and India are slowly converging as their industries gain size and independence.Markets and Market Access,Microfinance,Labor Policies,Economic Theory&Research,Debt Markets

Rethinking the import-productivity nexus for Italian manufacturing

We provide evidence on the firm level productivity effects of imports of intermediates. By exploiting a large panel of Italian manufacturing firms, we are able to separately explore the role of importing from high and low income countries. Importing does not permanently affect the firm productivity growth. This finding holds both when we test for the import entry by means of Propensity Score Matching techniques and when we analyse the import intensity within a dynamic panel data model framework. On the contrary, we confirm the existence of self-selection into importing. Also, our evidence supports the learning-by-exporting effects in Italian manufacturing and we prove that this result is robust to the control of firm import activity

Revisiting the causal effects of exporting on productivity: Does price heterogeneity matter?

In most empirical studies that establish the export-productivity relationships, output is measured in values rather than in quantities. This makes it difficult to distinguish between productivity and within-firm changes in price that could occur following exposure to international markets. Using detailed data on quantity and prices from Ethiopian manufacturing firms in the period 1996-2005, this paper distinguishes efficiency from revenue based productivity and examines what this means for the estimated relationship between exporting and productivity. The main results show that exporters are more productive than non-exporters in terms of revenue based productivity and this is explained by both self-selection and learning effects. However, when correcting for price heterogeneity, exporters appear to be similar to non-exporters both before and after export entry. Overall, the results suggest that the increase in firm-level productivity following entry into foreign markets is associated with changes in prices as opposed to productive efficiency