Has China de-industrialised other developing countries?

China's opening to trade is interpreted as a shift in world average factor endowments, which altered the comparative advantage of other countries. In the rest of the world on average, this shift reduced the ratio of labour-intensive manufacturing to primary production by 7-10% for output and 10-15% for exports. China's impact is clearest on East Asian countries: in other developing regions, it was swamped by other causes of structural change. The de-industrialising effect was significant, but not big enough to be a serious threat to growth or equity in most other developing countries

Power, Ideology, and Global Development: On the Origins, Evolution and Achievements of the United Nations Conference on Trade and Development

UNCTAD was created in 1964 as a forum for strategic thinking about international trade and development issues and for identifying mutually beneficial opportunities for policy coordination and international co-operation with the participation of both developing and industrialized countries. The history of UNCTAD, with its successes and failures, therefore, is closely intertwined with the history of ideas on trade and development and the interplay of political power and ideological manipulation in international trade and development policy making. This paper focuses on the intellectual traditions in economics which underpinned the formation of UNCTAD and examines the way such intellectual traditions have informed – both in method and substance – the subsequent thinking and research output by the institution and helped define its objectives. It compares UNCTAD’s methods and research output on a number of international development issues with the positions taken by other international institutions. These findings are used to reflect on the ideological element in development economics thinking

Competing for a duopoly : international trade and tax competition

Oligopoly is empirically prevalent in the industries where MNEs operate and national governments compete with fiscal inducements for their FDI projects. Despite this, existing formal treatments of fiscal competition generally focus on the polar cases of perfect competition and monopoly. We consider the competition between two potential host governments to attract the investment of both firms in a duopolistic industry. Competition by identical countries for a monopoly firm's investment is known to result in a 'race to the bottom' where all rents are captured by the firm through subsidies. We demonstrate that with two firms, both are taxed in equilibrium, despite the explicit non-cooperation between governments. When countries differ in size, a single firm will be attracted to the larger market. We explore the conditions under which both firms in the duopoly co-locate and when each nation attracts a firm in equilibrium. Our results are consistent with the observed stability of effective corporate tax rates in the face of ongoing globalization, and our analysis readily generalizes to many specifications with oligopoly in the product markets

Institutional reform and FDI decision in transition economies: a qualitative study of Syria

The article considers the impact of institutional reform on the decision of foreign enterprises and foreign entrepreneurs to directly invest in the transition economy of Syria. It responds to the calls for more open research design that can go beyond the borders of the quantitative findings of previous econometric research by adopting a qualitative research strategy. The results reveal that institutional reforms enhanced Syria’s attractiveness to foreign direct investment. Institutional barriers proved to be less daunting to foreign investors whose backgrounds were culturally similar to that of Syria and/or already had experience in Syria or in a similar type of economy. The impact of background similarity and previous experience in similar contexts appeared to be less important when the foreign investor was a multinational enterprise than for individual entrepreneur. Moreover, these factors also appeared to be less important for large enterprises compared to small enterprises

Market familiarity and the location of South and North MNEs

We use a systematic empirical analysis of the determinants of South-South (SS) and North-South (NS) foreign direct investment (FDI) as a canvas to explore how multinational enterprises’ (MNEs) location decisions are shaped by better acquaintance with a foreign market resulting from bilateral ties, experience of international expansion, and knowledge of how to deal with poor governance. We find that these various aspects of market familiarity, which can interact together, are important to explain and differentiate the location behaviors of South MNEs (S-MNEs) and North MNEs (N-MNEs) in developing countries

The Need for Economic Cooperation among Developing Countries

SUMMARY The resolution on ECDC at UNCTAD V was one of the more positive achievements of the Conference. The various proposals which have been made for promoting ECDC are described, in particular the improvement of trading arrangements, and monetary and financial cooperation among ldcs. A number of UNCTAD sectoral studies have examined the current level of dependence of ldcs on dcs, defined as the extent of control of dc interests over production and trade. The results of studies of six products (bananas, tobacco, cotton, electrical goods, shipping and insurance) are described. They show that levels of dependence in this composite sense are very high, as well as demonstrating the need for CSR. This suggests that the constraints in the form of dc vested interests that will have to be faced by ldcs are severe. There is a strong case for setting up an ‘organisation for Southern economic cooperation and development’ as the institutional means to help overcome this kind of trade dependence. RÉSUMÉ La nécessité de la coopération économique entre les pays en développement La résolution de la cinquième CNUCED sur la coopération économique entre les pays en développement fut l'une des réalisations les plus utiles de la Conférence. Les diverses propositions avancées pour favoriser cette coopération y sont décrites, notamment celles concernant l'amélioraiton des arrangements commerciaux et la coopération financière et monétaire entre les PVD. Plusieurs études sectorielles de la CNUCED ont calculé le niveau actuel de dépendance des PVD à l'égard des pays développés, en fonction du degré de contrôle par les instances des pays développés de la production et du commerce des PVD.. L'article décrit ensuite les résultats des études de six secteurs (bananes, tabac, coton, produits électriques, transport maritime et assurances). Ils indiquent que le degré de dépendance en ce sens est très élevé et donnent à penser que les contraintes que représentent les intérêts des pays développés pour les PVD et auxquelles ils devront faire face sont très lourdes, Il faudrait établir une ‘organisation pour la coopération et le développement économiques du Sud’ pour surmonter ce type de dépendance commerciale. RESUMEN La necesidad de la cooperación económica entre los países en vías de desarrollo La resolución sobre cooperación económica entre los países en vías de desarrollo adoptada en la UNCTAD V fue uno de los éxitos más positivos de la conferencia. Se describen las diversas propuestas que se hicieron para fomentar dicha cooperación económica, especialmente el mejoramiento de las disposiciones comerciales, y la cooperación financiera y monetaria entre los países menos desarrollados. En varios estudios de sector de la UNCTAD se ha examinado el actual nivel de dependencia de los países menos desarrollados en los desarrollados, determinado como da amplitud del control de los intereses de los países desarrollados sobre la producción y el comercio. Se describen los resultados de los estudios sobre seis productos (plátanos, tabaco, algodón, productos eléctricos, navegación y seguros). Confirman que los niveles de dependencia en su sentido complejo son muy elevados, demostrándose al mismo tiempo la necesidad de una autodependencia colectiva. Esto sugiere que son muy graves las presiones que se presentan en forma de los intereses creados de los países desarrollados con los que tendrán que enfrentarse los menos desarrollados. Parece haber más que suficiente justificación para establecer una ‘organización para la cooperación y desarrollo económicos meridionales’, como los medios institucionales para contribuir a superar este tipo de dependencia comercial

The spatial organization of multinational firms

Using six years of firm-level data covering 224 regions of the enlarged European Union, we evaluate the importance to a firm of locating its activities (production, headquarters, R&D, logistics and sales) close together. We find that, after controlling for regional characteristics, being closely located to a previous investment positively affects firm location choice. However, the impact of distance is dependent on the type of investment (production or service). The impact dies out faster for service activities. Finally, we show that a surprisingly positive effect comes from locating a new production plant close to an existing production investment, but in another country

The new resilience of emerging and developing countries: systemic interlocking, currency swaps and geoeconomics

The vulnerability/resilience nexus that defined the interaction between advanced and developing economies in the post-WWII era is undergoing a fundamental transformation. Yet, most of the debate in the current literature is focusing on the structural constraints faced by the Emerging and Developing Countries (EDCs) and the lack of changes in the formal structures of global economic governance. This paper challenges this literature and its conclusions by focusing on the new conditions of systemic interlocking between advanced and emerging economies, and by analysing how large EDCs have built and are strengthening their economic resilience. We find that a significant redistribution of ‘policy space’ between advanced and emerging economies have taken place in the global economy. We also find that a number of seemingly technical currency swap agreements among EDCs have set in motion changes in the very structure of global trade and finance. These developments do not signify the end of EDCs’ vulnerability towards advanced economies. They signify however that the economic and geoeconomic implications of this vulnerability have changed in ways that constrain the options available to advanced economies and pose new challenges for the post-WWII economic order