The effect of import competition on firm productivity and innovation: does the distance to technology frontier matter?

How does foreign competition affect growth and innovation in China? Using our unique measures of proximity of Chinese firms and industries to the world technology frontier, we find that despite vast sectoral heterogeneity, Chinese manufacturing industries have undergone rapid technological upgrading over the period of 2000–06. The distance to the world production frontier of firms and industries plays an important role in shaping the nexus between the competition pressure from foreign imports and domestic firms' growth and innovation behaviour. Our results support the theoretical predictions of Aghion et al. (2005, The Quarterly Journal of Economics, pp. 701–728) that import competition stimulates the domestic firms' productivity growth and R&D expenditure if firms and their industries are close to the world frontier, but discourages such incentives for laggard firms and industries. The two forces highlighted by the model operate for imports under the ordinary-trade regime, for collective and private firms, and for imports originated from high-income countries. Our findings are robust after controlling the influence of foreign investment, the reverse causality of regressors and the short-term business cycle fluctuations

Does High-tech Export Cause More Technology Spillover? Evidence from Contemporary China

This paper attempts to investigate whether high-tech product export causes more technology spillover compared with traditionally primary manufactured goods export.A generalized multi-sector spillover model is presented to involve the causations of export composition and technology spillover, which is based on two distinctive approaches of measuring technology spillover: “between-spillover” and “within-spillover”. The empirical estimation is conducted with a panel analysis involving 31 provinces in China over the period of 1998-2005. Although high-tech export sectors involve a higher productivity compared with other sectors, this productivity advantage in high-tech export sectors does not cause technology spillover towards both domestic sectors and other export sectors. Therefore, this paper suggests that technology spillover of export mainly takes place in traditional export sectors rather than high-tech export sectors.Export Composition; High-tech Export; Technology Spillover; Multi-sector Spillover Model

Stationarity analysis of macroeconomic variables in ASEAN - Pacific region and their implication for trade and industrial development

The countries in the ASEAN-Pacific region sharply show a strong upward trend in many aspects of their macroeconomic performance. However, exogenous international shocks can displace a developing country from its long-run stationary growth path. This paper attempts to investigate the existence of Endogenously Determined Structural Breaks of several aspects of economic development by using time series annual data during the period from 1960s to 2000s for countries in ASEAN-Pacific Region—Korea, Singapore, Thailand, Malaysia, Philippines and Indonesia. The paper will concentrate on three different models—Additive Outlier Model, Innovational Outlier I Model and Innovational Outlier II Model to scrutinize the existence of potential structural break points in the trend. The paper considers four main indicators of macroeconomic development—Real GDP, Trading Openness, Structure on Investment and Financial Growth,. The purpose of this paper is to demonstrate whether those potential structural break points did affect the long-run growth in the trend of time series in the ASEAN-Pacific Region. According to empirical estimation and regression, most of the results demonstrate three possible structural break points in this region: around 1979 (oil crisis), around mid-1980s (economic recession), and around 1997 (financial crisis). It shows through econometric methods that the long-run stationarity of macroeconomic development in most selected countries is not affected by these potential structural break points. Since this is mainly due to the successful adjustment of economic policies, especially for trading and financial sectors, the positive adjustments of policies in trading and financial sectors have been able to maintain long-run sustained growth of macroeconomic development in ASEAN-Pacific regions. This paper concludes that the symbiotic relationship between macro and micro economic variables has worked well in the region allowing for sustained growth in spite of exogenous shocks and structural breaks

Regulation through revelation:The effect of pollution monitoring on labour demand

For any environmental regulation to be effective it requires adequate monitoring and enforcement. This paper aims at studying the causal effects of a real-time pollution monitoring programme on the level of firms’ employment. Employing entropy balancing on a unique firm-level dataset, we find that the enhanced regulatory monitoring has a significant and robust positive impact on the employment of monitored firms. Further investigations suggest that positive employment effects are primarily driven by changes in capital investment and subsequent output increase. Our results are independent from ownership and other energy policies during the same period. The study sheds new light into the benefits of regulatory monitoring and enforcement activities

Foreign entry liberalization and export quality: evidence from China

This paper examines the impact of foreign entry deregulation in China on the export price and quality of manufacturing firms through input-output linkage. We create a unique dataset describing the extent of regulatory control over foreign entry across approximately 900 industries covering all primary, manufacturing and services sectors. Results suggest foreign entry deregulation encourages firms to improve product quality and increase export prices. Deregulation in the manufacturing sectors has more impact on downstream export price and quality, compared with services sectors. Moreover, firms having larger imported inputs benefit more from foreign entry deregulation. These effects are robust to alternative specifications

The effect of foreign entry regulation on downstream productivity: Microeconomic evidence from China

We examine the cross‐industry influence of foreign entry regulation (based on a novel measure) on the productivity outcomes of downstream firms through the input‐output linkages in China. In contrast to the significant liberalization in the manufacturing sector, restrictions on the services sector remained stringent over period of 1997‐2007. We find a powerful depressant effect of foreign entry barriers imposed on the upstream manufacturing and services industries on the productivity of downstream manufacturers, and the effect depends on a number of industry‐ and firm‐specific features. Our research calls for further investment liberalization (particularly in the services sector) in China