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Foreign Markets (foreign + market)
Selected AbstractsDeterminants and effects of foreign direct investment: evidence from German firm-level data*ECONOMIC POLICY, Issue 41 2005Claudia M. Buch SUMMARY FDI Firm-level evidence Foreign direct investment is an essential aspect of ,globalization' yet its empirical determinants are not well understood. What we do know is based either on poor data for a wide range of nations, or good data for the US and Swedish cases. In this paper, we provide evidence on the determinants of the activities of German multinational firms by using a newly available firm-level data set from the Deutsche Bundesbank. The specific goal of this paper is to demonstrate the relative role of country-level and firm-level determinants of foreign direct investment. We focus on three main questions: First, what are the main driving forces of German firms' multinational activities? Second, is there evidence that sector-level and firm-level factors shape internationalization patterns? Third, is there evidence of agglomeration effects in the foreign activities of German firms? We find that the market access motive for internationalization dominates. Firms move abroad mainly to gain better access to large foreign markets. Cost-saving motives, however, are important for some manufacturing sectors. Our results strongly suggest that firm-level heterogeneity has an important influence on internationalization patterns , as stressed by recent models of international trade. We also find positive agglomeration effects for the activities of German firms that stem from the number of other German firms that are active on a given foreign market. In terms of lessons for economic policy, our results show that lowering barriers to the integration of markets and encouraging the formation of human capital can promote the activities of multinational firms. However, our results related to the heterogeneity of firms and agglomeration tendencies show that it might be difficult to fine-tune policies directed at the exploitation of synergies and at the creation of clusters of foreign firms. , Claudia M. Buch, Jörn Kleinert, Alexander Lipponer and Farid Toubal [source] The limits to the growth of multinational firms in a foreign marketMANAGERIAL AND DECISION ECONOMICS, Issue 8 2003Danchi Tan Theories of growth for firms have suggested that slow managerial growth is a major constraint why firms cannot grow faster. This paper is built on such a view and explores the factors that may influence the growth rate of Japanese firms in a given US industry. It is found that Japanese firms that allocated more internal and international managerial resources (proxied by expatriates) to their US operations tended to achieve higher growth rates. Japanese firms that were geographically diversified and those that spread their international investment projects evenly over time also achieved higher growth rates. Copyright © 2003 John Wiley & Sons, Ltd. [source] Batch process and transfer decisions in foreign market: a real options modelAPPLIED STOCHASTIC MODELS IN BUSINESS AND INDUSTRY, Issue 2 2003Chin-Tsai Lin Abstract This investigation extends the constant elasticity of substitution (CES) batch process production model of Lin et al. (J. Management syst. 2002; 9: 173) for an uncertain exchange rate by considering an export-oriented manufacturer who can decide to switch freely between domestic and foreign locations. The export-oriented manufacturer is risk averse and has rational expectations. As the entry cost declines, the export-oriented manufacturer's entry trigger for the CES production function increases for transferring from a domestic and to a foreign location. Additionally, the manufacturer's exit trigger for CES production function increases for transferring from a foreign and to a domestic location. Moreover, the exit cost resembles the entry cost. Copyright © 2002 John Wiley & Sons, Ltd. [source] The euro and the competitiveness of European firmsECONOMIC POLICY, Issue 57 2009Gianmarco I.P. Ottaviano SUMMARY EMU and competition Much attention has been paid to the impact of a single currency on actual trade volumes. Lower trade costs, however, matter over and beyond their effects on trade flows: as less productive firms are forced out of business by the tougher competitive conditions of international markets, economic integration fosters lower prices and higher average productivity. We assess the quantitative relevance of these effects calibrating a general equilibrium model using country, sector and firm-level empirical observations. The euro turns out to have increased the overall competitiveness of Eurozone firms, and the effects differ along interesting dimensions: they tend to be stronger for countries which are smaller or with better access to foreign markets, and for firms which specialize in sectors where international competition is fiercer and barriers to entry lower. , Gianmarco I.P. Ottaviano, Daria Taglioni and Filippo di Mauro [source] Determinants and effects of foreign direct investment: evidence from German firm-level data*ECONOMIC POLICY, Issue 41 2005Claudia M. Buch SUMMARY FDI Firm-level evidence Foreign direct investment is an essential aspect of ,globalization' yet its empirical determinants are not well understood. What we do know is based either on poor data for a wide range of nations, or good data for the US and Swedish cases. In this paper, we provide evidence on the determinants of the activities of German multinational firms by using a newly available firm-level data set from the Deutsche Bundesbank. The specific goal of this paper is to demonstrate the relative role of country-level and firm-level determinants of foreign direct investment. We focus on three main questions: First, what are the main driving forces of German firms' multinational activities? Second, is there evidence that sector-level and firm-level factors shape internationalization patterns? Third, is there evidence of agglomeration effects in the foreign activities of German firms? We find that the market access motive for internationalization dominates. Firms move abroad mainly to gain better access to large foreign markets. Cost-saving motives, however, are important for some manufacturing sectors. Our results strongly suggest that firm-level heterogeneity has an important influence on internationalization patterns , as stressed by recent models of international trade. We also find positive agglomeration effects for the activities of German firms that stem from the number of other German firms that are active on a given foreign market. In terms of lessons for economic policy, our results show that lowering barriers to the integration of markets and encouraging the formation of human capital can promote the activities of multinational firms. However, our results related to the heterogeneity of firms and agglomeration tendencies show that it might be difficult to fine-tune policies directed at the exploitation of synergies and at the creation of clusters of foreign firms. , Claudia M. Buch, Jörn Kleinert, Alexander Lipponer and Farid Toubal [source] Determinants of Investor Demand for Cross-Listed FirmsFINANCIAL MARKETS, INSTITUTIONS & INSTRUMENTS, Issue 3 2010George Athanassakos G11; G12; G15 By focusing on the decisions of investors to invest in cross-listed stocks, this paper presents new evidence on why we observe striking differences in the percentage of trade in foreign markets for cross-listed stocks. With a large sample of Toronto Stock Exchange (TSX) stocks cross-listed in the U.S. and Canada, we document the effect of investor recognition and risk characteristics on the distribution of trading volume. Firms that are more visible to American investors are traded more heavily in the U.S. At the same time, firms that offer diverse risk characteristics are attractive to Americans. While investors understand the benefits of international diversification, as they are attracted to stocks that are different (e.g., the stock of small firms with few assets in the U.S.), they also seek stocks that provide them with high returns. [source] MUEBLES RÚSTICOS IN MEXICO AND THE UNITED STATESGEOGRAPHICAL REVIEW, Issue 3 2002Article first published online: 21 APR 2010, JOHN HARNER ABSTRACT. Sales of muebles rústicos, or rustic wooden furniture made in Mexico, have grown rapidly in the United States since 1994. Analysis of the recent rise of the industry tracks manufacturing and marketing methods in major production areas of Mexico. Consumer taste for "authentic" handmade goods of simple design and the vogue of the "Santa Fe" style across the American Southwest mesh with Mexican producers' need to seek foreign markets during an economic crisis. Changing style preferences, along with the furniture's handcrafted appearance, its competitive cost, and the makers' flexible production methods, are reasons for the increased popularity of this folk commodity. [source] BILATERALISM AND FREE TRADE,INTERNATIONAL ECONOMIC REVIEW, Issue 3 2006Sanjeev Goyal We study a setting with many countries; in each country there are firms that can sell in the domestic as well as foreign markets. Countries can sign bilateral free-trade agreements that lower import tariffs and thereby facilitate trade. We allow a country to sign any number of bilateral free-trade agreements. A profile of free-trade agreements defines the trading regime. Our principal finding is that, in symmetric settings, bilateralism is consistent with global free trade. We also explore the effects of asymmetries across countries and political economy considerations on the incentives to form trade agreements. [source] Revisiting Oligopolistic Reaction: Are Decisions on Foreign Direct Investment Strategic Complements?JOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 3 2002Keith Head Knickerbocker (1973) introduced the notion of oligopolistic reaction to explain why firms follow rivals into foreign markets. We develop a model that incorporates central features of Knickerbocker's story,oligopoly, uncertainty, and risk aversion,to establish the conditions required to generate follow-the-leader behavior. We find that rival foreign investment will make risk-neutral firms less inclined to move abroad once its rivals have done so. We show that Knickerbocker's prediction relies on risk aversion and derive an expression for the minimum amount of risk aversion needed to generate oligopolistic reaction. [source] Overcoming informal trade barriers among Japanese intermediaries: An attitudinal assessmentAGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 1 2005Kenneth C. Gehrt Access to foreign markets is increasingly critical to the U.S. as global competition increases. Past efforts by the U.S. to penetrate the Japanese market have often focused on overcoming formal trade barriers including tariffs, quotas, and product standards. Although this form of intervention has enjoyed success, limited effort has been devoted to analyzing informal trade barriers. This study examines informal trade barriers in terms of the attitudes of Japanese distributors toward U.S. products. The study focuses on a product-market for which Japan is the leading single-country importer for the U.S.: fruit. Recent inroads into the Japanese market by other countries have eroded the position of the U.S. This erosion will continue unless U.S. exporters can develop appropriate strategies based on sound market intelligence. © 2005 Wiley Periodicals, Inc. Agribusiness 21: 53,63, 2005. [source] An economic analysis of California raisin export promotionAGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 2 2003Harry M. Kaiser The effectiveness of the California raisin industry's export promotion programs in Japan and in the United Kingdom is addressed in this article. An econometric import demand equation was estimated for each of the two foreign markets. The results indicate that the export promotion programs have increased the demand for California raisins in both Japan and the United Kingdom. The benefit-cost ratios for the Japanese and the United Kingdom markets were computed to be 5:1 and 15:1, respectively; indicating that the benefit of export promotion in terms of expanding export revenue was greater than the cost of the programs. Optimality analysis suggest that, while the current export promotion spending level in Japan is about optimal, the industry should explore the option of investing more money in its export promotion activities in the United Kingdom. [EconLit citations: Q130: Agricultural Markets and Marketing; Cooperatives; Agribusiness; Q170: Agriculture in International Trade; Q180: Agricultural Policy; Food Policy.] © 2003 Wiley Periodicals, Inc. Agribusiness 19: 189,201, 2003. [source] Do Firms Increase Productivity in Order to Become Exporters?,OXFORD BULLETIN OF ECONOMICS & STATISTICS, Issue 5 2009Ricardo A. López Abstract Recent studies find that exporters are more productive than non-exporters and that entry into exporting does not increase firms' productivity. Thus, firms self-select into foreign markets. This paper examines productivity before entry into exporting. Using Chilean plant-level data, we find that productivity and investment increase before plants begin to export. Moreover, productivity of entrants to exporting, but not that of non-exporters and exporters, increases in response to increases in foreign income, before entry but not after that. The results suggest that the productivity advantage of future exporters may be the result of firms increasing their productivity in order to export. [source] The role of international design orientation and market intelligence in the export performance of US machine tool companiesR & D MANAGEMENT, Issue 2 2000Alan MacPhersonArticle first published online: 17 DEC 200 This paper looks at the role of product design in the export performance of US manufacturing firms in the machine tool (MT) industry. Evidence from a survey of 173 MT companies points to stronger export results among firms that initiate the design process with respect to the needs of foreign buyers. In contrast, firms that enter foreign markets with products that were originally designed for domestic clients typically exhibit weaker export sales. Firms in the latter category spend less on market intelligence than their more internationally-oriented counterparts. For both groups of firms, however, a common finding is that recent interest in export expansion has been driven by rising import penetration (loss of domestic market share). The paper concludes with a brief discussion of the implications of the empirical results for future research on export marketing. [source] EXPORTING AND PRODUCTIVITY: A FIRM-LEVEL ANALYSIS OF THE TAIWAN ELECTRONICS INDUSTRYTHE DEVELOPING ECONOMIES, Issue 3 2003Chih-Hai YANG Based on the panel data of Taiwanese electronics firms, this paper explores the relationship between exporting and productivity. Contemporaneous levels of exports and productivity are indeed positively correlated. The causality tests show causality from productivity to exporting and vice versa, implying that self-selection and learning-by-exporting effects coexist in the Taiwan electronics industry, while the learning-by-exporting effect is less supported. Exporting also has a positive impact on the productivity growth of firms, while the effect diminishes gradually after entering foreign markets. Decomposing the productivity growth shows that the reallocation effect accounts for only 20 per cent compared to the own-effect share of 80 per cent, which is mostly contributed by firms that continually export. [source] Small business responsibility in developing countries: a threat or an opportunity?BUSINESS STRATEGY AND THE ENVIRONMENT, Issue 1 2005Ralph Luken Many developing country small and medium sized enterprises (SMEs) that are exporters see themselves facing a dilemma. They do not know how to respond to the rising social and environmental requirements of global buyers and supply chains and fear that were they to do so they would lose their competitive edge. However, they are aware that if they do not meet these requirements, they will not be able to access new foreign markets and may lose the contracts they already have. To investigate whether practical methods exist for resolving this dilemma, the United Nations Industrial Development Organization (UNIDO) carried out a one year project with 22 SMEs in four Asian countries. The results suggest that well targeted, enterprise-specific efforts to meet corporate social responsibility (CSR) requirements can make a positive contribution to both short-term profitability and longer-term competitiveness. The ,business case' for CSR appears strongest in the environmental area, but measures in that area can act as a ,starter motor' for tackling more systemic ,social' problems. Furthermore, tackling social issues at the workplace can feed back positively to improve the sustainability of the environmental improvement measures. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment. [source] Adoption of Food Safety and Quality Controls: Do Firm Characteristics Matter?CANADIAN JOURNAL OF AGRICULTURAL ECONOMICS, Issue 3 2007Evidence from the Canadian Food Processing Sector This study explores the association between the adoption of food safety and quality assurance practices in the Canadian food processing sector and firm characteristics. A conceptual model is developed recognizing that the relative importance of a firm's incentives to adopt enhanced food safety and quality assurance practices is influenced by the firm's characteristics and activities. Binomial logit models are estimated to explore the association between adoption of various combinations of food safety and quality assurance practices including hazard analysis and critical control point (HACCP). The findings show that the adoption of food safety and quality practices varies widely between individual firms according to, among others, firm size, country of ownership and control, level of innovativeness, level of export orientation, forms of food safety inspection, and the subsector in which the firm operates. Incentives of being able to access foreign markets play an important role in influencing HACCP adoption. La présente étude analyse le lien entre l'adoption de pratiques visant la salubrité et l'assurance de la qualité des aliments au sein de l'industrie canadienne de la transformation et les caractéristiques des entreprises. Nous avons élaboré un modèle conceptuel reconnaissant que l'importance relative des incitatifs qui motivent une entreprise à adopter des pratiques améliorées en matière de salubrité et d'assurance de la qualité des aliments est influencée par les caractéristiques et les activités de l'entreprise. Nous avons estimé des modèles logit binomiaux pour examiner le lien entre l'adoption de diverses combinaisons de pratiques visant la salubrité et l'assurance de la qualité des aliments, y compris les systèmes HACCP (analyse des risques et maîtrise des points critiques). Les résultats ont montré que l'adoption de ces pratiques variait considérablement d'une entreprise à l'autre en fonction, entre autres, de la taille de l'entreprise, du pays de propriété et de contrôle, du degré d'innovation, du degré de vocation exportatrice, des programmes d'inspection de la salubrité des aliments et du sous-secteur dans lequel une entreprise évolue. La perspective de pénétrer les marchés étrangers joue un rôle important dans l'adoption de systèmes HACCP. [source] Pricing to Market Behavior by Canadian and U.S. Agri-food Exporters: Evidence from Wheat, Pulse and ApplesCANADIAN JOURNAL OF AGRICULTURAL ECONOMICS, Issue 2 2003Richard Carew A fixed-effects model to control for time variation in marginal costs is employed to pinpoint evidence of price discriminatory behavior of Canadian and U.S. exporters of agri-food products. We test for evidence of pricing to market behavior and whether price discrimination or commodity/country characteristics may provide a plausible explanation. A distinguishing feature of our approach is to examine the time-series properties of the data by the conventional augmented Dickey-Fuller and recently developed panel unit root test. The panel data set employed in this paper consists of annual exchange rates and export prices for three agri-food products (wheat, pulse and apples) exported by Canada and the U.S. in foreign markets during 1980,98. Our fixed-effects model suggests that U.S. exporters are sensitive to exchange rate changes, while Canadian exporters in most cases raised price markups in response to a depreciated currency in overseas markets. The results highlight the differences in pricing policy that both countries employ to merchandise agri-food products in export markets. Les auteurs ont recouru à un modèle à effets fixes pour contrôler la fluctuation des coûts marginaux dans le temps et montrer que les exportateurs canadiens et américains de produits agroalimentaires se comportent différemment dans l'établissement des prix. Ils ont tenté de vérifier si ce comportement varie avec les cours en vigueur sur le marché et essayé d'établir s'il s'explique par une discrimination au niveau des prix ou par les paramètres propres au produit ou au pays. Une particularité de cette approche est qu'elle tient compte des propriétés historiques des données en recourant à la version augmentée du test classique de Dickey Fuller et au tout nouveau test de racine unitaire reposant sur les panels. Le jeu de données recueillies par panel dont les auteurs se sont servis comprend le taux du change annuel et le prix d'exportation de trois produits agroalimentaires (blé, légumineuses à graine et pommes) que le Canada et les États-Unis ont écoulés sur les marchés étrangers entre 1980 et 1998. Le modèle à effets fixes laisse croire que les exportateurs américains sont sensibles au taux du change alors que, dans la plupart des cas, leurs homologues canadiens majorent les prix davantage consécutivement à une dépréciation des devises à l'étranger. Les résultats font ressortir les divergences entre les politiques de fixation des prix qu'emploient les deux pays pour écouler leurs produits agroalimentaires sur les marchés étrangers. 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