Transnational corporations and the geographical transfer of localised technology: a multi-industry study of foreign affiliates in Sweden

Based on unique firm-level data from 323 majority-owned foreignaffiliates (MOFAs) located in West Sweden in the beginning of2000, we show that foreign-located affiliates of transnationalcorporations (TNCs) generate technological competencies, bothinternally as well as through organised cooperation with externalbusiness partners in the host country. This seems true not onlyfor manufacturing affiliates, but also for wholesale affiliatessupplying industrial products, as well as professional serviceaffiliates providing technical services. In addition, all threecategories of affiliates are engaged in ‘dynamic technologicalintegration’, i.e. a geographical transfer to parent andsister firms of technological competence that MOFAs have developedin cooperation with external business partners in Sweden. Thisindicates that not only the technological competence of MOFAsthemselves, but even the geographical context in which theyare embedded is a relational asset that is crucial for the overalltechnological competitiveness of TNCs. Above all, technological linkages were established with hostcountry customers. Important technological linkages were establishedboth with local business partners in West Sweden, as well asbusiness partners in the Rest of Sweden. Using a logistic regression analysis, we found that technologicalintegration is especially associated with affiliates operatingin competitive host country clusters, indicating that a largepool of indigenous technological competence acts as an importantpull-factor for inward asset-seeking FDI. However, technologicallinkages between foreign TNCs and host country partners doesnot come automatically, instead they need substantial and long-terminvestments in personal and non-personal resources.     

Organising regional production networks in Southeast Asia: implications for production fragmentation, trade, and rules of origin

The globalisation of economic activities has fundamentally reshapedthe relationships between production and trade. The cross-borderproduction activities of transnational corporations (TNCs) havenot only deepened spatial divisions of labour, but also complicatedour understanding of international trade patterns. The developmentof intricate regional production networks by global corporationshas major implications for production fragmentation, internationaltrade, and rules of origin in the global economy. Empiricallygrounded in a study of regional production networks controlledby Singapore-based TNCs, this paper aims to make a modest contributionto the emerging literature on production fragmentation and rulesof origin. Based on an analysis of empirical data from a surveyof 63 parent Singapore-based manufacturing TNCs that have cross-borderoperations in Southeast Asia, I found that their spatial productionfragmentation is rather limited. Most of their Southeast Asiansubsidiaries cater to local markets, or manufacture components/partsfor the regional production facilities of their major globalcorporation customers. I also consider the implications forbusiness strategies and public policies in relation to productionfragmentation and rules of origin in Southeast Asia.     

AGGLOMERATION AND TRADE: STATE‐LEVEL EVIDENCE FROM U.S. INDUSTRIES*

ABSTRACT This paper investigates the connection between economic agglomeration and trade patterns within the United States at the industry level. On the consumption side, industry‐ and state‐specific international imports and elasticities of substitution are shown to be systematically connected to consumption agglomeration effects, while on the production side, industry‐ and state‐specific international exports and intermediate input trade are shown to be systematically connected to production agglomeration and specialization effects. Industry structures play an important role in the determination and magnitude of these effects.     

FOREIGN DIRECT INVESTMENT AND URBAN CONCENTRATIONS: UNBUNDLING SPATIAL LAGS*

ABSTRACT Foreign direct investment (FDI) is seen as a way to import technology and catch up with economic leaders. It is therefore important to understand why some countries attract more investments by multinationals than others. We expand the set of common determinants of FDI with urban agglomerations and ask the question whether the accessibility of market potential and the number of potential investment locations, in the shape of urban concentrations, matters, since the importance of urban agglomeration economies for FDI has not been investigated before. We show that countries with several medium‐sized cities attract more foreign investment, especially if they are close to main agglomerations, but too much concentration (primacy) reduces the inflow of FDI. Moreover, we unbundle spatially lagged FDI by including spatial lags of the determinants of FDI. It is important to disentangle such third‐country effects in order to understand how FDI flows depend on the complex ways in which multinationals fragment sales and production across countries. Using a panel of U.S. affiliates’ sales in foreign countries between 1984 and 1998, we find evidence that cities are important drivers of FDI. Furthermore, third‐country effects suggest that horizontal and complex forms of FDI coexist.     

Region‐specific determinants of the foreign direct investment in China

This study revisits region‐specific determinants of foreign direct investment (FDI) in Eastern, Central, and Western China using econometric and spatial analyses. It uses a data set covering 31 Chinese provinces and autonomous regions spanning the period 2005–15, together with panel data regression. Our statistical results show that in Eastern China, FDI is significantly associated with bilateral trade, orientation towards the service industry, industrialisation level, and availability of strategic assets in the region. In Central China, FDI is mainly pulled by availability of the domestic market and strategic assets in the region. In Western China, FDI inflows are mainly determined by natural resource endowment, industrialisation level, and regional innovation and production effectiveness in information and communication technology industries. Our analysis also reveals the impact of FDI in China's regional development and its capacity to hollow out the three Chinese macro‐regions. Our findings for China lead us to suggest that those governments seeking to attract FDI should not solely rely on it to facilitate local economic development and should make use of local circumstances in combination with FDI to boost their economies.     

Foreign Direct Investment and Regional Export Performance in China

This paper investigates the impact of foreign direct investment (FDI) on the export performance of China at the provincial level. First, it presents a theoretical discussion of the impact of FDI on foreign trade, and then an empirical study of the impact of FDI on the export performance of regions in Chin. It has been found that the impact of FDI on exports differs across three macro-regions in China. The effect is stronger in the coastal region than in the inland regions. Although FDI shows a positive and significant impact on exports from the central region, its impact on the western region is found to be insignificant.     

A Flexible Mathematical Programming Model to Estimate Interregional Input–Output Accounts*

Abstract. This study implements and tests a mathematical programming model to estimate interregional, interindustry transaction flows in a national system of economic regions based on an interregional accounting framework and initial information of interregional shipments. A national input–output (IO) table, regional data on gross output, value‐added, exports, imports, and final demand at sector level are used as inputs to generate an interregional IO account that reconciles regional economic statistics and interregional transaction data. The model is tested using data from a multiregional global IO database and shows remarkable capacity to discover true interregional trade patterns from highly distorted initial estimates.     

The Ins and Outs of Iranian Industrial Resilience under Sanctions

This paper draws on export data from four of Iran’s key trade partners—the European Union, China, the United Arab Emirates (UAE), and Turkey—to examine the robust and positive correlations between the export of parts and machinery to Iran and Iran’s industrial output, as measured by production index data published by the Central Bank of Iran for industrial enterprises with over 100 employees. The period of analysis is 2000 to 2017. It may seem intuitive that the output of Iranian manufacturers depends on the ability of companies to source intermediate goods such as parts and machinery. However, the imposition of sanctions on Iran is shown to have temporarily decoupled the relationship between European industrial exports to Iran and the Iranian industrial production index—the index remained stable even as European exports fell. An analysis of trade data for the other three trade partners included in this study quantitatively substantiates reports noting that in order to sustain the industrial production index, Iran engaged in processes that can be collectively described as “import reflection.” This entails substituting European intermediate inputs with Chinese inputs while also circumventing sanctions pressures on trade by sourcing European inputs via re‐export from the UAE and Turkey. These processes were fundamental to Iran’s economic resilience in the face of multilateral sanctions and have played a central role in Iran’s defense of its industrialized economy and particularly its non‐oil exports as the administration of US President Donald Trump pursues a new unilateral campaign of “maximum pressure” sanctions.     

Unravelling the Relationships between Used‐Clothing Imports and the Decline of African Clothing Industries

African clothing industries have declined since the implementation of economic liberalization policies in the early 1980s whilst used‐clothing imports to Africa have increased. The general effects of economic liberalization on African clothing industries are well documented, although little research has been conducted on the particular impact of increased imports of second‐hand clothes on the local manufacturing sectors. Whether these two processes are causally related is difficult to determine due to limitations in official data sets. In this article, the used‐clothing trade is explored in detail and a broad range of cultural and local economic processes are investigated. Trends such as declining local purchasing power and the opening of African markets to cheap new clothing imports, as well as imports of used‐clothing, are examined, along with the converse boost to African clothing export production resulting from preferential trade agreements in the 2000s. With respect to the differential legal and illegal imports of second‐hand clothing to selected African countries, it is demonstrated that official trade data sets often fail to capture the nuances of contemporary social and economic processes.     

The history men. The historical profession in England since the Renaissance

This study of port cities, focusing on those on the Atlantic facade of France, argues that their economic significance cannot be understood within the canons of an insular French, or even European history. They were often case studies of the more general phenomenon of the early globalisation of Europe. In particular, navigation, fishing, trade, and colonisation, depended not only on the seas and the port but also on the agrarian hinterlands. They were often determinative of national imperial expansion. Thus, the success of exports and imports were not necessarily judged on Atlantic crossings but rather on the supply and demand of national or European economies. Commerce did not end on the seashore, in a port, or even in a contraband network, but often deep within a nation's hinterlands.     

Determinants of Trade Orientation in Less Developed Countries

The success of East Asian Newly Industrializing Countries often has been attributed to their outward-oriented trade strategies. Cross-national analysis of trade orientation reveals that the degree of export-oriented industrialization (measured as manufacturing exports as a percentage of gross domestic product) is associated closely with relative factor endowments. While Singapore and Taiwan are more outward oriented than expected by the cross-national norm, Hong Kong is less outward oriented than expected.     

Foreign Direct Investment and State Export Performance

Since the early 1980s, there has been widespread debate over the impacts of rising levels of inward foreign direct investment (FDI) on the U.S. economy. A frequently noted, but little studied, issue within the debate is the impact of FDI on U.S. foreign trade, and particularly, on the foreign trade of U.S. regions. This study assesses the effects of FDI on the manufacturing export performance of U.S. states during the period from 1980 to 1991. Results indicate that increased levels of FDI are positively related to future improvements in state manufacturing export performance.     

Forging Environmentalism: Justice,Livelihood and Contested Environments. Joanne Bauer,ed.

A senior Japanese authority on the Russian economy and its energy sector addresses the country's exposure to the so-called Dutch disease, suggesting that Russia did suffer from the potentially ruinous overdependence on oil and gas exports. The author argues, however, that the symptoms of the disease were actually not severe, attributing his interpretation to: (1) drastic decline of noncompetitive domestic manufacturing industries in the 1990s, which prompted a huge inflow of imports in the 2000s, but left competitive manufacturing enterprises in a position to survive; (2) extraordinary oil price increases in the 2000s, which significantly raised household and business incomes, creating augmented demand for products of domestic origin; (3) large differences between Russian and world prices of oil and gas, which functioned as subsidies for domestic manufacturing; and (4) massive intervention in foreign exchange markets by the Central Bank of Russia, which restricted the growth of imports and thus strengthened the surviving domestic manufacturing enterprises.     

Not Sustainable: India's Trade and Current Account Deficits

India's trade balance and current account have shown persistent deficits for a major part of its post‐independence period. Since the mid‐2000s, trade deficits have increased perilously, with a sharp rise in both oil and non‐oil imports. India has relied on services exports, remittances and capital inflows to offset trade deficits and sustain the current account deficit. This article examines the sustainability of relying on capital inflows, remittances and services exports to sustain these persistent trade and current account deficits. It argues that all three sources entail elements of fragility. The recent global economic slowdown, economic recessions in the United States and Europe, slow economic recovery, low growth forecasts and possibility of a secular slowdown in the United States and Europe raise questions about whether services exports and remittances can continue to generate sufficient earnings to offset trade deficits. Relying on capital inflows also carries risks of financial fragility, with short‐term capital inflows and external commercial borrowings becoming more prominent in the Indian economy.     

The Spatial Organization of Bone Crafting During the Middle and Late Mesolithic at Ringsjöholm and Strandvägen in Sweden

This paper focuses on the spatial distribution of bone tool production waste from two Mesolithic sites in Sweden, Ringsjöholm and Strandvägen, with well-preserved faunal remains including bone and antler artifacts. Local production on both sites has generated a variety of identifiable waste products deriving from complete chains of production, including unmodified bones, debitage and finished products. Identified categories include: blanks, removed epiphyses, bone flakes, and preforms. Identification of species shows that antler and bone from red deer were the preferred raw materials. Spatial statistical analyses confirm that different stages of bone tool production were organized within separate areas of the sites and that larger items were discarded in the water along the shorelines. Interestingly, blanks and preforms seem to have been stored under water for future use and demarcated clusters of bone flakes in association with dwellings represent “bone knapping floors” where production was more intense than in other areas.     

The brave new world of services-led growth

Two important trends will strongly influence growth in emerging economies: one is the increasing role of services as drivers displacing manufacturing that has hitherto been the principal engine of growth in advanced and developing economies alike; the second is the parallel rise of trade in services both directly and embodied in products. The paper shows how the competitiveness and profitability of firms is becoming closely linked to the quality and innovativeness of services, and how the bundling of services with manufactures is the key to earning high returns over the longer term. Between 25 and 40 percent of value added in manufacturing is now in the form of services with high-end manufacturing becoming increasingly services-intensive. The future therefore, seems to lie in the cultivation of product-services systems that harness the full potential of manufacturing and associated pre- and post-production services such as design, R&D, marketing, and post-sale maintenance, especially of sophisticated equipment. The policy implications for emerging economies such as Russia, India, and China are manifold; e.g. for workforce skill development; for innovation systems (the nature of innovation and the orientation of R&D); for the contribution of capital to growth in a services-centered economy; for the maximizing of productivity gains from tradable and non-tradable services, which have been productivity laggards in the past; and for the creation of a facilitating institutional environment.     

China's Exports and Imports of Agricultural Products under the WTO

An American economic geographer specializing in the agricultural sector of China's economy presents a study of that country's trade in agricultural products. The paper is focused on patterns of change in the regional distribution of agricultural and aquacultural exports and imports before and after China's accession to the World Trade Organization in 2001. Drawing on research during the course of a field trip in July 2008 and utilizing data compiled by China's Customs Bureau, the author provides a comprehensive assessment of the country's trade with 10 major world regions through the year 2007. Journal of Economic Literature, Classification Numbers: F14, F40, O13, Q17. 1 figure, 4 tables, 32 references.     

How green is the valley? Foreign direct investment in two Norwegian industrial towns

Since the early 1900s, foreign direct investments (FDIs) have greatly affected Norwegian society, especially peripheral communities. This article analyses how transnational corporations (TNCs) use territory down to the local level, and how this complex relationship between firms and spaces is shaped by attributes related to the TNC and the characteristics of the local economy. An extensive literature discusses different types of effects and spillovers, such as vertical supply linkages and spin-offs, but theoretical explanations of outcomes are more difficult. The literature links positive as well as negative outcomes to local conditions and to the investment motives of the entity making the FDI, but says little about how these vary with types of business, communities and national economies, and how these interactions generate different outcomes. We conclude that FDIs have different abilities to transform an area. We argue that FDI can trigger path-dependent dependency when it is dominated by economic capital and path-dependent development when it consists of a balance of economic capital, social networks and knowledge. This variation in the effects of FDI is illustrated by an empirical analysis of two industrial towns in Western Norway, one with natural resources and the other with intangible technology resources.     

中国电子机械制造业出口产品贸易网络研究——基于产品内分工与贸易视角

在区分中间/最终产品、一般/加工贸易后，描述了中国电子机械制造业出口产品贸易网络，并探讨了出口经验和产品关联如何影响企业进入网络从事出口和拓展优势贸易伙伴。结果表明：①出口地、目的国、出口地-目的国维度出口经验和产品关联可以显著地促进4种电子机械制造业产品企业进入特定贸易网络进行出口。②在位出口企业扩展优势伙伴方面，出口地-目的国维度出口经验对4种企业均有促进作用；目的国出口经验、出口地产品关联的促进作用集中在中间产品企业；出口地出口经验则集中在一般贸易企业。     

国内区域贸易、国际贸易与国家竞争力

大国国内区域贸易与国际贸易关系主要表现在两个方面:一是国内区域贸易与国际贸易存在一定程度上的相互替代的关系;二是国内区域贸易与国际贸易存在相互促进的关系,发展国内区域贸易能提升大国在国际经济中的竞争力。