Search results

The purpose of this paper is to address how firms adapt their product and geographic diversification as a response to foreign rivals penetrating their domestic market by adopting a behavioral perspective to understand firm-level strategic responses to foreign entry.

The study proposes that strategic responses to foreign entry selected by domestic incumbents have both a framing component and a related, strategic choice component, with the latter including changes in product and geographic market diversification (though other more business strategy-related responses are also possible, e.g. in product pricing and marketing). This study tests a set of hypotheses building on panel data of large US firms.

The study finds, in accordance with our predictions, that domestic incumbents reduce their product and geographic diversification when facing an increase in import penetration. However, when increased market penetration by foreign firms takes the form of FDI rather than imports, the corporate response appears to be an increase in product and geographic diversification, again in line with our predictions.

The study develops a new conceptual framework that is grounded in prospect theory, but builds on recent insights from mainstream international strategic management studies (Bowen and Wiersema, 2005; Wiersema and Bowen, 2008).

The purpose of this paper is to extend recent literature regarding the effects of competition on racial earnings by examining the effects of global competition on racial wages of union and non‐union workers of different skill levels. Additionally, it is intended that inference be drawn regarding whether global competition is a viable means to eliminate racial wage discrimination.

This paper utilizes quantile regression to examine the effect of global competition on the racial wage gap of workers in high‐ and low‐concentration industries at different points along the earnings distribution. Additionally, the analysis utilizes the highest level of import penetration in each industry over the sample period to examine whether global competition is a viable means to eliminate racial wage discrimination.

In concentrated industries, non‐union whites at most skill levels receive a substantial wage premium compared with their black counterparts. Further, imports reduce racial earnings inequality by significantly decreasing the wages of low‐ and medium‐skill non‐union whites. However, imports cannot mitigate racial earnings discrimination for non‐union workers at most skill levels.

These findings suggest that, if market forces cannot alleviate racial wage discrimination, government anti‐discriminatory policies may be a necessary measure.

No previous study has examined the effect of global competition on the racial wage gap of workers of different skill levels. Further, no study has empirically tested whether international competition is a viable means to eliminate racial wage discrimination.

This paper sets out to present the determinants of firm exit at the micro firm‐level of Slovenian manufacturing derived from the results of pooled and panel probit models.

Empirical research is conducted on the basis of the Slovenian firm registry data which include virtually all the firms in manufacturing. This data set is complemented with sector level trade data to investigate import competition. A representative panel data set of Slovenian manufacturing firms is used to estimate pooled and panel probit models focusing on the effect of firm specific characteristics, domestic sector and import competition, and financial variables on firm exit. The results of the analysis are compared with research for other countries.

The econometric results show a consistently positive, highly significant effect of import competition offsetting the impact of domestic competition on firm exit. Firm's export orientation, capital intensity, innovation expenditures, firm profitability and sector's real sales growth reduce exit, while private ownership and lower firm cost efficiency increase it.

The uniqueness of this paper is twofold. It is one of the first empirical studies to conduct an in‐depth analysis of market dynamics and the determinants of firm exit at the firm level for transition countries, and the first one for Slovenia. The study applies a comprehensive research model to virtually all the Slovenian manufacturing firms and provides valuable insights into the relationship between firm exit and firm specific characteristics, competition and finance.

The purpose is to establish the impact of trade on manufacturing employment in South Africa.

Two techniques, the Pooled Mean Group (PMG) and the Dynamic Common Correlated Effects (DCCE), are applied on a panel dataset comprising 26 three-digit manufacturing industries with data observed between 1970 and 2016.

The impact of trade on employment is miniscule at best and insignificant at worst once the study controls for cross-sectional dependency. This is true for both skilled and unskilled workers. Employment of skilled workers is explained by remuneration while employment of unskilled workers is explained by output dynamics.

Trade is widely attacked for causing labour market disruption through job losses. This hypothesis is not supported by data for South Africa as no link is confirmed between trade and employment of skilled and unskilled workers.

Estimating the trade and employment link for skilled and unskilled workers while controlling for both endogeneity and cross-sectional dependency.

In 1978 Jackson and Al‐Douri published a paper which analysed aggregate demand for clothing in the UK in the period 1964–74. This paper has three aims: —to update the analysis in the case of the UK — in particular to cover the two recent recessionary periods —to extend the analysis to a second country — Sweden —to draw comparative marketing lessons from the experiences of the two economies. It is a particularly appropriate time to conduct the analysis because of the important changes taking place in the trading environment in the 1990s which are foreshadowed by events in Sweden and in view of the impact two recessions have had on the demand for clothing since 1978.

Welcome to the new section of the Journal entitled News and Views. This section will include practitioner papers, news, events, conference reports, calls for papers, trend summaries, statistics, working papers etc. Submissions are invited from both academic and industry sources.

The purpose of this paper is to quantify how the People’s Republic of China’s (PRC) export volume affects the anti-dumping (AD) petitions filed by its major trading partners against the country.

Focusing on the AD petitions at the Harmonized System (HS) Code eight-digit level and the PRC’s exports at the HS two-digit level to its major trade partners during the financial crisis, we construct three instrument variables for export volume within HS two-digit level variation in the variables. These instruments – documents required, time taken and container charges incurred for goods traded across borders – represent trade costs obtained from World Bank’s Doing Business Project. We find rising exports from the PRC lead to rising AD petitions against the country.

Instrumental variable estimates indicate that a 1 percentage point rise in the PRC’s export volume raises the number of AD petitions against the country by about 0.25 percentage points, and the probability of receiving AD petitions by 3.5 per cent. These estimates are about 10 times larger than that found in ordinary least square regressions.

Their quantitative significance underlines why it is important to consider the issue of export endogeneity in the estimation, and that the failure of the current trade statistics to account for the true value-added of traded goods particularly disadvantaged the PRC given its position as the factory of the world.

Purpose – This chapter analyzes the effects that the international integration of product markets induced by globalization exerts on the direction of technological change at the industry level.

Methodology/approach – In order to do so it elaborates an interpretative framework that complements the classical inducement hypotheses with the Schumpeterian literature and the localized technological change approach, putting forward the hypothesis that technological change is biased by the dynamics of both factor and product markets. We argue and show that not only the changing levels of input costs but also the changing prevalence of product and process innovations affect the direction of technological change: specifically when product innovations prevail technological change is skill-biased, while when process innovations play a major role innovation is capital intensive.

Findings – Following this perspective we analyze the interindustrial variance of the output elasticities of labor of the main advanced economies in recent years and claim that such heterogeneity can be understood as the result of differentiated innovative reactions of firms to changes induced by the globalization of the markets: fast-growing sectors innovate mainly through (skilled) labor-augmenting technological change, while mature industries rely more on capital-enhancing innovations. The empirical evidence supports our hypotheses and shows that the variance of the output elasticity of labor in a panel data estimate across 17 manufacturing sectors in 16 OECD countries from 1995 to 2006, is significantly and positively associated with the rates of growth of employment, wage levels and their rates of increase, and R&D intensity.

Originality/value of paper – By investigating the variance of output elasticities at the industry level the chapter provides new insights within the literature focused on the bias of technological change.

The benefits of trade liberalization on upskilling and skill-based wage premiums for high-skilled workers have recently been questioned in policy circles, in part because of rising income inequality and populist movements in developed economies such as the USA. The purpose of this paper is to determine the effects of trade liberalization on the relative supply and demand for skills.

Through the systematic review of the literature on trade and skill acquisition, this paper isolates a total of 25 articles published over the past two decades.

Key findings demonstrate the importance of the relative development of the trading partner, with more developed countries experiencing higher upskilling, while less developed countries experience deskilling. Technology, geographic level of analysis, sector and gender were also found to be important influences on human capital acquisition associated with international trade.

Overall, the authors find support for the idea that trade with developing countries places pressure on low-skill jobs in developed countries but increases the demand for educated workers. The implications of shifts in skills for public policy-making and in terms of the skill premium on wages are discussed.