FDI Technology Spillovers and Wages

This study distinguishes multinational firm (MNE) technology-spillover from learning effects. Whenever learning takes time, the model predicts that foreign investors deduct the economic value of learning from wages of inexperienced workers and add it to experienced ones to prevent them from moving to local competitors. Hence, the national wage bill is unaffected by the presence of MNEs. In contrast to learning, technology spillover effects occur whenever a worker with MNE experience contributes more to local firms’ than to MNEs’ productivity. In this case, experienced MNE workers are hired by indigenous firms and the host country obtains a welfare gain from the presence of MNEs. Implications of this model for the empirical findings of the MNE wage premium and the empirical FDI technology spillover literature are also discussed.FDI, foreign takeover, cross-border M&A, FDI technology spillover

Nonequilibrium in a low power arcjet nozzle

Emission spectroscopy measurements were made of the plasma flow inside the nozzle of a 1 kW class arcjet thruster. The thruster propellant was a hydrogen-nitrogen mixture used to simulate fully decomposed hydrazine. The 0.25 mm diameter holes were drilled into the diverging section of the tungsten thruster nozzle to provide optical access to the internal flow. Atomic electron excitation, vibrational, and rotational temperatures were determined for the expanding plasma using relative line intensity techniques. The atomic excitation temperatures decreased from 18,000K at a location 3 mm downstream of the constrictor to 9,000K at a location 9 mm from the constrictor, while the molecular vibrational and rotational temperatures decreased from 6,500K to 2,500K and from 8,000K to 3,000K, respectively, between the same locations. The electron density measured using hydrogen H line Stark broadening decreased from about 10(exp 15) cm(-3) to about 2 times 10(exp 14) cm(-3) during the expansion. The results show that the plasma is highly nonequilibrium throughout the nozzle, with most relaxation times equal or exceeding the particle residence time

Are Cardiovascular Diseases Bad for Economic Growth?

We assess the impact of cardiovascular disease (CVD) mortality on economic growth, using a dynamic panel growth regression framework taking into account potential endogeneity problems. We start from a worldwide sample of countries for which data was available and detect a non-linearity in the influence of working age CVD mortality rates on growth across the per capita income scale. We then split the sample (according to the resulting income threshold) into low- and middle-income countries on one hand, and high-income countries on the other hand. In the latter sample we find a robust negative contribution of increasing CVD mortality rates on subsequent five-year growth rates. Not too surprisingly, we find no significant impact in the low- and middle-income country sample.cardiovascular disease, growth empirics, dynamic panel data estimator

For Whom is MAI? A theoretical Perspective on Multilateral Agreements on Investments

Why do we observe some LDCs objecting the prospect of a Multilateral Agreement on Investment (MAI), although they have been keen to liberalize investment in preferential agreements in recent years? In this paper, we analyse the issue of MAI implementation and assess the welfare consequences of such kind of agreements. In our model, participation to MAI involves a trade-off between less rent extraction from multinational firms (MNEs) and more abundant FDI in‡ows. At equilibrium, either all countries enter MAI, or all countries stay out, or only some of them enter. Coordination problems may induce multiple equilibria: the three types of equilibria may coexist. So, the implementation of MAI may depend not only on structural factors but also on the general ”political climate”. When all countries join MAI, world welfare is maximized because this minimizes the hold-up problem faced by MNEs and stimulates investment. However, in an asymmetric world, welfare gains are not guaranteed for all countries.Foreign Direct Investment, International Agreements, Incomplete

The Veblen-Gerschenkron Effect of FDI in Mezzogiorno and East Germany

The presence of foreign multinational enterprises (MNEs) should benefit local economies. In particular if MNEs are particularly productive compared to domestic firms they may promote learning and catch-up of local firms. Such channel of spillovers from MNEs to local firms is known as the Veblen Geschenkron effect. Rather than the overall density of MNE in a region or sector, it is their productivity advantage on the local firm to determine the positive effect on domestic productivity growth.We test this hypothesis using firm level data for German and Italian company for the 90''s. and we find evidence of a significant and robust Veblen-Gerschenkrion effect. The initial total factor productivity advantage of MNEs on local firm acts as a stimulus for productivity growth of local firms in the same region.FDI, Spillovers, Productivity