Review of World Economics

Driffield, Nigel

doi: 10.1007/BF02707263pmid: N/A

Inward Investment, Industry Concentration and the Speed of Adjustment. — The paper develops a model of concentration, based on the standard literature of concentration determination, which is then estimated using a frontier approach within a panel framework. Such a model provides an estimate of the lower bound of concentration in the industry, based on observed industry level characteristics. The paper then develops a model of concentration change, which shows that foreign penetration acts to reduce concentration levels, and also acts to increase the rate at which the industry moves towards this equilibrium. Finally, the importance of this deviation, in terms of explaining foreign penetration is explored.

Brülhart, Marius

doi: 10.1007/BF02707264pmid: N/A

Evolving Geographical Concentration of European Manufacturing Industries. — This paper analyzes the geographical concentration of 32 manufacturing sectors over the 1972–1996 period for 13 European countries. Concentration has increased continuously over the sample period in employment terms, while remaining roughly unchanged in export terms. On average, increases in concentration were stronger prior to the launch of the Single Market than afterwards. The sectors most sensitive to the Single Market however, showed an acceleration in concentration after 1986. There is also evidence that low-tech industries are the most strongly concentrated, and that center-periphery gradients across countries are losing importance for industrial location in the EU.

Baltensperger, Ernst; Jordan, Thomas; Savioz, Marcel

doi: 10.1007/BF02707265pmid: N/A

The Demand for M3 and Inflation Forecasts: An Empirical Analysis for Switzerland. — This paper argues that money should continue to play an important role in monetary policy even if a central bank pursues a strategy based on inflation forecasts. Within the context of an error correction model, the paper delivers empirical evidence that both the growth rate of the monetary aggregate M3 and the size of excess M3 incorporate useful information with regard to future inflation in Switzerland. This evidence strongly suggests that money should remain an important indicator for monetary policy.

Butter, F.; Koopman, S.

doi: 10.1007/BF02707266pmid: N/A

Interaction between Structural and Cyclical Shocks in Production and Employment. — A major aim of recent empirical modelling of the business cycle is to identify the relative importance of aggregate supply and demand shocks. This paper uses the methodology of unobserved (or structural) components time series models for the identification of technology and demand shocks in a two-equation system of structural labour productivity and industrial output. It allows us to introduce the correlation between the structural and cyclical shocks such that the mutual dependency of these shocks can be estimated explicitly. The data is quarterly time series of labour productivity in industry and industrial output for Germany, the Netherlands, the United Kingdom and the United States. Our results show that the covariance of the dynamics of structural and cyclical shocks appears to be important in these countries.

Becchetti, Leonardo; Santoro, Maria

doi: 10.1007/BF02707267pmid: N/A

The Determinants of Small and Medium-Sized Firm Internationalization and Its Relationship with Productive Efficiency. — The creation of sale structures abroad (CSSA) is an intermediate stage in the process of internationalization when firms are small and foreign direct investment entail high sunk costs. This paper finds that ownership concentration (technological innovation, size, and age) negatively (positively) affects the CSSA decision and that, after controlling for the effect of access to foreign markets under the form of exports, CSSA firms are significantly more efficient than the control sample when efficiency is measured with a stochastic frontier approach. Ownership concentration seems to have two offsetting effects on efficiency: it increases participation to profits and therefore incentives to perform well, while it leads controlling shareholders to underinvest in risky ventures (such as internationalization).

Nielsen, Chantal; Anderson, Kym

doi: 10.1007/BF02707268pmid: N/A

Global Market Effects of Alternative European Responses to Genetically Modified Organisms. — Current debates about genetically modified organisms (GMOs) in agriculture reveal substantial differences in the perception of the associated risks and benefits. Genetically modified crop varieties allegedly provide farmers with agronomic benefits, but environmental, health and ethical concerns are also being raised. This paper discusses the ways in which the emergence of GMOs could lead to trade disputes between Western Europe and the United States. It then uses an empirical model of the global economy to quantify the effects on production, prices, trade patterns and national economic welfare of specific policy and consumer responses to GMOs in Western Europe.

Pfaffermayr, Michael

doi: 10.1007/BF02707269pmid: N/A

For a high-wage country like Austria, it is commonly expected that growing employment in foreign affiliates substitutes jobs at home. This paper provides a simple framework for estimating the determinants of relative labor demand (abroad in relation to that at home) bilaterally. It is based on the relationship of (dis)economies and transportation costs under the hypothesis that goods trade is an imperfect substitute for foreign production in the case of horizontal investments, while with respect to vertical investments, goods trade is solely dependent on relative market size. The estimates are based on bilateral industry-level data on foreign affiliates and the domestic activities of Austrian manufacturing firms, covering the period 1990–1996, the 10 most important host countries and 7 industrial sectors.

SchÄfer, Wolf; Karsten, Junius; Sesselmeier, Werner; Burgtorf, Ulrich

doi: 10.1007/BF02707270pmid: N/A

doi: 10.1007/BF02707271pmid: N/A