Export, foreign direct investment, and local content requirement

Local content requirement (LCR) is a popular government policy in developing countries to regulate foreign direct investment. We establish a model with heterogeneous multinational firms and show that (a) the LCR policy affects the firms' modes of entry to a new market, with FDI being more likely to be adopted when there are lower LCRs, and (b) when facing the same LCR, a less efficient firm is more likely than a more efficient firm to adopt the FDI mode. Furthermore, we investigate the design of an optimal LCR policy. Two types of FDI benefits are considered, and two types of LCR policy are compared. © 2001 Elsevier Science B.V. All rights reserved.postprin

Labor training and foreign direct investment

The Conference proceedings' website is located at http://www.etsg.org/ETSG2012/Programme/ETSG2012%20Preliminary%20Programme,%2029%20August%202012.htmEvidence shows that most foreign direct investment (FDI) flows from developed to developed countries (North-to-North) in skilled-labor-intensive industries. This paper builds a model which incorporates labor training to the proximity-concentration tradeoffs to analyze multinationals’ entry mode to a foreign country. Production requires both skilled labor and unskilled labor. A multinational taking FDI needs to provide training to some workers in the host country to equip them with skills which are specific to the firm’s production. Labor training and skill specificity leads to contract friction. We show that in skilled-labor-intensive industries, FDI increases with the host country’s economic development level; but in unskilled-labor-intensive industries, the reverse is true. This paper provides a theoretical explanation to the empirical findings on the prevalence of North-to-North FDI in skilled-labor-industries and North-to-South FDI in unskilled-labor-intensive industries.postprin

Who invests more in advanced abatement technology? Theory and evidence

postprin

Who invest more in advanced abatement technology: theory and evidence

Parallel Sessions 9 - Technological Change and the Environment: TheoryThe Conference programme's website is located at http://www.webmeets.com/wcere/2014/prog/We study firm investment in abatement technology under a heterogeneous firm framework and find that abatement technology investment increases (decreases) as firm productivity increases if investment and productivity are complements (substitutes). Under linear demand, firms' abatement investments exhibit an inverted-U shape with respect to firms' productivity, which is in contrast to results in existing studies. In response to tightened environmental regulations, more-productive firms raise their respective investments in abatement technology, whereas less-productive firms do the opposite; Pollution emission intensity of a firm decreases with productivity level. The key theoretical predictions are confirmed by empirical tests using Chinese data.postprin

Regulation, Innovation, And Firm Selection: The Porter Hypothesis Revisited

Session ID 28: Natural Resource Markets and Environmental RegulationOrganized by the Industrial Organization SocietyThe Porter Hypothesis (PH) posits that well-designed environmental regulations can stimulate innovation, which may lead to efficiency gains or even profit increase for the regulated firms. Extant theoretical works examining the PH neglect two important aspects in their models and analyses: firm heterogeneity and general equilibrium. In this study, we revisit the PH by incorporating these two features in our model and analysis. We show that the PH holds for high-capability firms, but not for low-capability firms. Although heterogeneous responses exist in innovation investment, the average industry productivity increases

Foreign acquisitions, ownership changes, and exports

We develop a three-country model to examine the effects of foreign acquisitions on the decision of target firms to export (to a third market). We show that foreign acquisitions may raise or reduce the targets’ probability to export (extensive margin), depending on whether the targets have exports before the acquisitions. Due to ownership changes in the target firms, three possible channels through which the acquirers (new owners) alter the targets’ (previous owners) export decision are identified: fixed-cost jumping, technology transfer, and global market reorganization. We then use firm-level data of foreign acquisitions on Chinese firms from 2000 to 2006 to test the main predictions of the model. We find evidence that foreign acquisitions raise (reduce) the Chinese target firms’ probability of exporting to a third market if the targets do not (do) have exports to that market before the acquisitions. Technology transfer is not observed. Evidence implies that fixed-cost jumping is used to raise the targets’ export extensive margin, while global market reorganization is a key motive for the acquirers to reduce the targets’ export extensive margin.postprin

Entry, reputation and intellectual property rights enforcement

We examine how reputation concerns induce a multinational to partly withhold its entry into a developing country under weak intellectual property rights (IPR) enforcement. Equilibrium IPR violations are shown to arise only in the presence of such concerns. Holding constant a multinational's incentive to innovate, better IPR enforcement encourages entry but reduces social welfare. The multinational's incentive to innovate may be inversely U-shaped in the strength of IPR enforcement. If timed properly, however, stronger IPR enforcement can foster innovation without compromising social welfare. Testable implications concerning observable IPR violations are derived.postprin

The Kuroshio Extension : a leading mechanism for the seasonal sea-level variability along the west coast of Japan

Author Posting. © The Author(s), 2009. This is the author's version of the work. It is posted here by permission of Springer for personal use, not for redistribution. The definitive version was published in Ocean Dynamics 60 (2010): 667-672, doi:10.1007/s10236-009-0239-9.Sea level changes coherently along the two coasts of Japan on the seasonal time scale. AVISO satellite altimetry data and OFES (OGCM for the Earth Simulator) results indicate that the variation propagates clockwise from Japan's east coast through the Tsushima Strait into the Japan/East Sea (JES) and then northward along the west coast. In this study, we hypothesize and test numerically that the sea level variability along the west coast of Japan is remotely forced by the Kuroshio Extension (KE) off the east coast. Topographic Rossby waves and boundary Kelvin waves facilitate the connection. Our 3-d POM model when forced by observed wind stress reproduces well the seasonal changes in the vicinity of JES. Two additional experiments were conducted to examine the relative roles of remote forcing and local forcing. The sea level variability inside the JES was dramatically reduced when the Tsushima Strait is blocked in one experiment. The removal of the local forcing, in another experiment, has little effect on the JES variability. Both experiments support our hypothesis that the open-ocean forcing, possibly through the KE variability, is the leading forcing mechanism for sea level change along the west coast of Japan.This work was conducted when Chao Ma was a visiting graduate student at WHOI. His visit has been supported by China Scholarship Council and WHOI Academics Office. This study has been supported by WHOI’s Coastal Ocean Institute, the National Basic Research Program of China 2005CB422303 and 2007CB481804), the International Science and Technology Cooperation Program of China (2006DFB21250), the Natural Science Foundation of China (40706006) , and the Ministry of Education’s 111 Project (B07036). Lin was supported by the Program for New Century Excellent Talents in University (NECT-07-0781)

Oldest known pantherine skull and evolution of the tiger

The tiger is one of the most iconic extant animals, and its origin and evolution have been intensely debated. Fossils attributable to extant pantherine species-lineages are less than 2 MYA and the earliest tiger fossils are from the Calabrian, Lower Pleistocene. Molecular studies predict a much younger age for the divergence of modern tiger subspecies at <100 KYA, although their cranial morphology is readily distinguishable, indicating that early Pleistocene tigers would likely have differed markedly anatomically from extant tigers. Such inferences are hampered by the fact that well-known fossil tiger material is middle to late Pleistocene in age. Here we describe a new species of pantherine cat from Longdan, Gansu Province, China, Panthera zdanskyi sp. nov. With an estimated age of 2.55–2.16 MYA it represents the oldest complete skull of a pantherine cat hitherto found. Although smaller, it appears morphologically to be surprisingly similar to modern tigers considering its age. Morphological, morphometric, and cladistic analyses are congruent in confirming its very close affinity to the tiger, and it may be regarded as the most primitive species of the tiger lineage, demonstrating the first unequivocal presence of a modern pantherine species-lineage in the basal stage of the Pleistocene (Gelasian; traditionally considered to be Late Pliocene). This find supports a north-central Chinese origin of the tiger lineage, and demonstrates that various parts of the cranium, mandible, and dentition evolved at different rates. An increase in size and a reduction in the relative size of parts of the dentition appear to have been prominent features of tiger evolution, whereas the distinctive cranial morphology of modern tigers was established very early in their evolutionary history. The evolutionary trend of increasing size in the tiger lineage is likely coupled to the evolution of its primary prey species