Turkish Performance in Exporting Manufactures: A Comparative Structural Analysis

This paper considers the prospects for Turkish manufactured exports, now dominated by simple labour-intensive products. The importance to Turkey of diversifying its export base has risen with its EU free trade agreement, where it has advantages in labour-intensive exports but where special preferences will vanish soon. As a high wage economy, Turkey has to compete with low-wage countries in simple, low technology products. As a technologically lagging economy, it has to compete against high technology European firms. Both are difficult, as there remain important structural deficiencies in Turkish competitiveness. Strategic implications are drawn in the conclusions.

Implications Of Cross-Border Mergers and Acquisitions By TNCs in Developing Countries: A Beginner's Guide

International mergers and acquisitions have become the preferred mode of overseas investment by multinational companies, accounting for the bulk of FDI in the developed world and for increasing shares in the developing world. However, many governments express concern about this mode of MNC entry, preferring 'greenfield' investments to the takeover of national firms. This paper provides an overview of the main economic costs and benefits that may be involved and argues that M&As do have costs but these may be over-stated.

REINVENTING INDUSTRIAL STRATEGY: THE ROLE OF GOVERNMENT POLICY IN BUILDING INDUSTRIAL COMPETITIVENESS

As liberalization and globalization gather pace, some developing countries cope well but the majority do not. Diverging industrial competitiveness is one of the causes of the growing disparities in income: the potential that globalization offers for industrial growth is being tapped by a relatively small number of countries, while liberalization is driving the wedge between them and laggards deeper. This paper examines two approaches to this problem: neoliberal and structuralist. The neoliberal approach is that the best strategy for all countries and in all situations is to liberalize. Integration into the international economy, with resource allocation driven by free markets, will let them realise their .natural. comparative advantage, optimize dynamic advantage and yield the maximum attainable growth. No government intervention can improve upon this but will only reduce welfare. The structuralist approach puts less faith in free markets and more in the ability of governments to mount interventions effectively. It questions the theoretical and empirical basis for the argument that untrammelled market forces account for the industrial success of the East Asian Tigers (or the presently rich countries). Accepting the mistakes of past strategies and the need for greater openness, it argues that greater reliance on markets also needs a more proactive role for the government. The paper reviews the nature of current globalization and evidence on the growing divergence in competitive performance in the developing world. It goes on to consider the case for industrial policy, arguing that interventions are necessary to overcome market failures in building the capabilities required for industrial development. The approach adopted draws on evolutionary theories of technical change as applied to development in the technological capability approach. The paper then describes the strategies adopted by the Asian Tigers to build industrial competitiveness, pointing out the pervasiveness of selective interventions and significant strategic differences between them. The paper concludes with lessons for other developing countries: the kinds of industrial policy needed in the current international setting are clearly different from the traditional forms of inward-looking industrialisation strategies of the early post-war era, but globalization and technical change do not eliminate the need for intervention. On the contrary, given path dependence, cumulativeness and agglomeration economies, they increase the need. There is therefore a compelling need to reconsider the rules of the game constraining the exercise of industrial policy, and for international assistance in designing and implementing appropriate policies.

Selective Industrial and Trade Policies in Developing Countries: Theoretical and Empirical Issues

This paper analyses the case for selective industrial and trade policies in Africa, drawing upon the lessons of East Asia. It reviews the theoretical arguments for government intervention in the context of technological learning, and relates this to the new environment of rapid technical change and globalisation of production. It also considers the risks of government failure in mounting selective policies, and concludes that the degree of selectivity has to be much less than in East Asia. The case for selective policies nevertheless remains strong, if Africa is to make any industrial progress.

Comparing National Competitive Performance: An Economic Analysis of World Economic Forum's Competitiveness Index

Developing country policy makers worry about national competitiveness and closely watch indices ranking international competitive performance. This paper analyzes from the development economics perspective if competitiveness is a legitimate policy concern, and if the leading indices deserve the attention they get. It assesses the best known index, from the World Economic Forum, and finds grave deficiencies. The WEF definitions are too broad, the approach biased, the methodology flawed and inconsistent, and many measures vague, redundant or wrongly calculated. It concludes that competitiveness indices have weak theoretical and empirical foundations and may be misleading for analytical and policy purposes.

National strategies for technology adoption in the industrial sector: Lessons of recent experience in the developing regions

human development, technology

Social Capital and Industrial Transformation

This paper is an exploration of the social capital needs of industrial development. 'Social capital' attracts considerable attention in socio-political analysis and we are beginning to see its application to development economics. There has not, as far as I know, been any attempt to apply it to the determinants of successful industrialisation in the developing world. This essay is a preliminary sketch of the concepts rather than a report on research findings or a complete analysis with specific policy recommendations. Nevertheless, it illustrates the value and significance of bringing social capital concepts to bear on specific aspects of development

Industrial Success And Failure In A Globalizing World

Globalization is a pervasive influence on industrialization in the developing world. As the embodiment of technological progress and more open markets, it offers huge productive benefits to developing countries. However, its effects are very uneven. It is driving a growing wedge between the (relatively few) successful countries and the (large mass of) others. The wedge is not a temporary one, a 'J-curve' that will reverse itself if countries persist with liberalization. It reflects underlying structural factors that are very difficult to alter in the short to medium term. Because of cumulativeness in these structural factors, divergences are likely to carry on growing unless measures are undertaken to reverse them. Development policy has to address these growing structural gaps and to reverse or relax the stringent rules of the game that constrain the use of (previously successful) industrial policy. Such successful industrial policies have taken many different forms and countries have to choose combinations that suit the demands of current globalization.

The Employment Impact Of Globalisation In Developing Countries

The relationship between globalization and employment is of growing significance to policy makers in developing countries, but is surprisingly difficult to analyse theoretically and empirically. 'Globalization' means different things to different analysts and it is so multi-faceted that its effects are difficult to isolate and evaluate. Received trade theory does not provide a clear guide to its employment effects and in its most commonly used version it assumes away many factors that affect employment during globalization. Much finally depends on the ability of each country to cope with the liberalised trade, investment and technology flows that globalization implies. As this ability varies widely across the developing world - and is continuing to diverge between countries - it appears that no generalisation about the globalization-employment relationship is possible.

Export Performance and Competitiveness in the Philippines

After decades of weak growth, Philippine manufactured exports have performed impressively in recent years, better than those of most other South East Asian economies. This paper examines the sources of Philippine export dynamism and asks whether the current pace of growth is sustainable. It finds that the competitive base is very narrow, dominated by one product group and, within that, one product (semiconductors). This is a fast growing, high technology product, with great potential for future growth and spillovers; however, Philippines specialises in low-end final assembly and testing, where it is vulnerable to competitive entry and technological change. The paper ends with policy implications.