published_or_final_version / Economics and Finance / Doctoral / Doctor of Philosophy

Numerous empirical studies have shown the difficulties associated with the transmission of knowledge and the limitations of its diffusion process. What are the implications of these difficulties and limitations to international economics? This dissertation deals with this question by looking at how productive knowledge plays a role in the evolution of the comparative advantage of nations and the international expansion of multinational corporations. The first chapter finds that a country is 65% more likely to start exporting a good that is being exported by any of its geographic neighbors, consistently with evidence on the limited geographic patterns of knowledge diffusion. The second chapter finds that migrants, serving as carriers of productive knowledge, play a role in explaining the appearances of new export industries in both their sending and receiving countries. In particular, in terms of their ability to induce exports in the average country, an increase of only 65,000 people in the stock of migrants is associated with about 15% increase in the likelihood of adding a new product to a country's export basket. The figure becomes 15,000 for skilled migrants. The third chapter looks at how the barriers to knowledge transmission within the firm limit the horizontal expansion of multinational corporations. The findings suggest that multinational corporations are, on average, about 12% less likely to horizontally expand a sector that is one standard deviation above the mean in the knowledge intensity scale.

This thesis investigates the role of institutions and firm behaviours in international trade. Chapter 1 estimates a dynamic general equilibrium model of entry, exit, and endogenous productivity growth. Productivity is endogenous both at the industry level (firms enter and exit) and at the firm level (firms invest in productivity-enhancing activities). Three key findings emerge. First, there is no evidence of learning by exporting: the observed positive correlation between exporting and productivity operates entirely via the impact of exporting on productivity-enhancing investments. Restated, exporting decision raises productivity, but only indirectly by making investing in productivity more attractive. Second, there is evidence of learning by producing multiple products: product-mix raises productivity directly in addition to the investment channel. Third, there are strong complementarities among the product-mix, exporting and investment decisions. Finally, we simulate the effects of reductions in foreign tariffs. This increases exporting, investing, and wages. Productivity rises at the economy-wide level both because of the between firm reallocation effect and because of within firm increases in productivity. Chapter 2 incorporates credit constraints into amodel of global sourcing and heterogeneous firms. Following Antras and Helpman(2004), heterogeneous firms decide whether to source inputs at arm’s length or within the boundary of the firm. Financing of fixed organizational costs requires borrowing with credit constraints and collateral based on tangible assets. The party that controls intermediate inputs is responsible for these financing costs. Sectors differ in their reliance on external finance and countries vary in their financial development. The model predicts that increased financial development increases the share of arm’s length transactions relative to integration in a country. The effect is most pronounced in sectors with a high reliance on external finance. Empirical examination of country-industry interaction effects confirms the predictions of the model. Chapter 3 examines whether financial development facilitates economic growth by estimating the effect of financial development on reducing the costs of external finance to firms. The data reveal substantial evidence of decreasing returns to the benefit of financial development in industries that are more dependent on external finance and countries with less financial frictions.

This thesis investigates the role of institutions and firm behaviours in international trade. Chapter 1 estimates a dynamic general equilibrium model of entry, exit, and endogenous productivity growth. Productivity is endogenous both at the industry level (firms enter and exit) and at the firm level (firms invest in productivity-enhancing activities). Three key findings emerge. First, there is no evidence of learning by exporting: the observed positive correlation between exporting and productivity operates entirely via the impact of exporting on productivity-enhancing investments. Restated, exporting decision raises productivity, but only indirectly by making investing in productivity more attractive. Second, there is evidence of learning by producing multiple products: product-mix raises productivity directly in addition to the investment channel. Third, there are strong complementarities among the product-mix, exporting and investment decisions. Finally, we simulate the effects of reductions in foreign tariffs. This increases exporting, investing, and wages. Productivity rises at the economy-wide level both because of the between firm reallocation effect and because of within firm increases in productivity. Chapter 2 incorporates credit constraints into amodel of global sourcing and heterogeneous firms. Following Antras and Helpman(2004), heterogeneous firms decide whether to source inputs at arm’s length or within the boundary of the firm. Financing of fixed organizational costs requires borrowing with credit constraints and collateral based on tangible assets. The party that controls intermediate inputs is responsible for these financing costs. Sectors differ in their reliance on external finance and countries vary in their financial development. The model predicts that increased financial development increases the share of arm’s length transactions relative to integration in a country. The effect is most pronounced in sectors with a high reliance on external finance. Empirical examination of country-industry interaction effects confirms the predictions of the model. Chapter 3 examines whether financial development facilitates economic growth by estimating the effect of financial development on reducing the costs of external finance to firms. The data reveal substantial evidence of decreasing returns to the benefit of financial development in industries that are more dependent on external finance and countries with less financial frictions.

This dissertation investigates the effects of foreign direct investment (FDI) and international trade on firm level decisions and examines the effect of policy changes on aggregate productivity and welfare in open economies. The first two chapters build an open economy model of FDI and trade where heterogeneous firms make simultaneous foreign investment and export decisions. The theoretical model is estimated using Indonesian manufacturing data. The estimated model is then used to perform a variety of counterfactual experiments to assess the positive and normative effects of international barriers to trade and FDI. I find that the impact of FDI on aggregate productivity is at least three times the impact of international trade on aggregate productivity. The third chapter, co-authored with Hiroyuki Kasahara, investigates whether importing intermediate goods improves plant performance. While addressing the issue of simultaneity between productivity shocks and the decision to import intermediates, we estimate the impact of the use of foreign intermediates on plants' productivity using plant-level Chilean manufacturing panel data. We find that by importing foreign intermediates, manufacturing plants can improve productivity. / Thesis (Ph.D, Economics) -- Queen's University, 2008-06-20 10:21:01.069

<p>Diss. (sammanfattning) Stockholm : Handelshögsk.</p>

This paper investigates the impacts of non-traditional exports on household outcomes in rural Zambia. Traditionally, Zambia has been an exporter of copper and only recently has the increase in agricultural exports been observed. Potential products include cotton, tobacco, fruits, vegetables, food processing, and textiles. International markets for these nontraditional exports have generated new opportunities for vulnerable and poor households. While the current literature focuses more on the income dimension of adjustment, in this paper we explore non-monetary outcomes as well. Concretely, we study the impacts of export opportunities on income, child health and education in rural households. We find positive income differentials of households involved in market agriculture over subsistence agriculture. While we find that children living in households involved in cotton tend to show better longrun anthropometric outcomes, no systematic differences are observed in households engaged in other agricultural activities. Finally, we find that households in market agriculture tend to educate their children more than households in subsistence. There is some evidence that boys are benefited more than girls.

This dissertation investigates the determinants of China's exports and regional economic growth, the direction of causality between foreign direct investment (FDI) and exports; and convergence analysis among Chinese provinces. The study firstly discusses the evolutional process of China's foreign trade regime through comparing the strategies and policies before 1978 with those after 1978. It is emphasised that the export-promotion development policies result in the recent basic export patterns and characteristics. Furthermore, the study reviews the existing literature on exports, FDI, and convergence/growth determinants in the case of China. The empirical work comprises three parts. Firstly, fixed-effects ordinary least squares (OLS) and random-effects generalised least squares (GLS) panel data estimators are applied to test the determinants of provincial exports from 1994 to 2003. It is found that FDI, geographical location, investment in manufacturing innovation, and human capital have significant influences on regional export performance. Secondly, the augmented Dickey-Fuller (ADF) tests are carried out to test stationarity and the Granger causality tests are conducted to test the causal direction between FDI and exports, based on monthly national data from January, 2002 to June, 2006. The empirical results indicate that there is a one-way complementary causal link from FDI inflows to China's export flows. Thirdly, three methods, beta convergence, sigma convergence, and Markov Chain analysis, are used to do convergence debate among China's regions and the standard OLS cross-section and random-effects GLS panel data are applied to test the conditional convergence. The results suggest that the convergence hypothesis does not hold in China between 1994 and 2003 and there is a sign of conditional convergence, conditioning the explanatory variables such as exports, human capital, and population growth. / Thesis (Ph.D. (Economics))--North-West University, Potchefstroom Campus, 2007.

This dissertation investigates the determinants of China's exports and regional economic growth, the direction of causality between foreign direct investment (FDI) and exports; and convergence analysis among Chinese provinces. The study firstly discusses the evolutional process of China's foreign trade regime through comparing the strategies and policies before 1978 with those after 1978. It is emphasised that the export-promotion development policies result in the recent basic export patterns and characteristics. Furthermore, the study reviews the existing literature on exports, FDI, and convergence/growth determinants in the case of China. The empirical work comprises three parts. Firstly, fixed-effects ordinary least squares (OLS) and random-effects generalised least squares (GLS) panel data estimators are applied to test the determinants of provincial exports from 1994 to 2003. It is found that FDI, geographical location, investment in manufacturing innovation, and human capital have significant influences on regional export performance. Secondly, the augmented Dickey-Fuller (ADF) tests are carried out to test stationarity and the Granger causality tests are conducted to test the causal direction between FDI and exports, based on monthly national data from January, 2002 to June, 2006. The empirical results indicate that there is a one-way complementary causal link from FDI inflows to China's export flows. Thirdly, three methods, beta convergence, sigma convergence, and Markov Chain analysis, are used to do convergence debate among China's regions and the standard OLS cross-section and random-effects GLS panel data are applied to test the conditional convergence. The results suggest that the convergence hypothesis does not hold in China between 1994 and 2003 and there is a sign of conditional convergence, conditioning the explanatory variables such as exports, human capital, and population growth. / Thesis (Ph.D. (Economics))--North-West University, Potchefstroom Campus, 2007.

Thesis (Ph.D.)--Victoria University (Melbourne, Vic.), 2008.