The Global Economic Crisis and Foreign Investment in Russia from the EU: Empirical Evidence from Firm-Level Data

This paper empirically examines the impact of the recent global economic crisis on foreign investment from EU countries in Russia by estimating a location choice model for foreign firms' entry in Russian regions for the period 1997-2011. It also examines the relative importance of various determinants of location choice on the redistribution of foreign-owned firms among Russian regions before and after the crisis. Strong evidence during the post-crisis period (2008-2011) of a decrease in market-seeking foreign investment in manufacturing and resource-seeking foreign investment in trade is examined not only in light of the crisis but also (in the latter case) within the context of the new Russian law for foreign investment in strategic industries, which went into effect in 2008.     

Forest transition theory and the reforesting of Scotland

During the 20th century, the forest area in Scotland expanded threefold, after many centuries of decline. Similar trends of forest expansion following deforestation have operated in many other developed countries. The passage from net deforestation to net reforestation is defined as the forest transition, and over the last few years a body of theory relating to its drivers has evolved. The case of Scotland is considered in order to contribute to this growing body of theory.     

Revisiting the South Korean developmental state after the 1997 financial crisis

This study reassesses the conventional wisdom surrounding the developmental state of South Korea (hereafter Korea) since the 1997 Korean financial crisis. The conventional wisdom is that, as a result of the continued structural reforms prompted by the crisis, the Korean developmental state, inherently characterised by active or direct state intervention, strong economic and industrial policies, the chaebol-oriented economic policy, and labour exclusion, has finally begun to dissolve in earnest. In this study, we have considered whether that is really the case and also which theoretical implications can be drawn from this consideration. Analysis of the Korean developmental state following the 1997 crisis has indicated that, quite contrary to conventional wisdom, the developmental state has continued to prevail as a core policy framework of the Korean administrations even after the crisis. There is no doubt that the continued structural and market reform after the crisis certainly undermined the Korean developmental state to a certain degree, but that does not mean the beginning of the end of the Korean developmental state at all. For much evidence strongly indicates that the Korean developmental state still remains intact and strong despite the structural reforms, on account of the successive Korean governments’ assiduous and deliberate efforts to maintain and reinforce it. Even after the crisis, the Kim Dae-Jung and post-Kim regimes have hardly abandoned many of their market interventionist policies. Such market interventionist policies, which were routinely practised under the military regime in the 1960s and 1970s, diametrically contravene the argument that the Korean developmental state has begun to dissolve as a result of structural reform after the 1997 crisis. Contrary to conventional wisdom, the Korean developmental state persists as usual. All this information, then, suggests that path dependence is in action in the case of the Korean developmental state, and this suggests a further hypothesis that the Korean developmental state is very likely to persist in the future as well, despite increasing globalisation pressure, given the strong path dependence.     

Arthur Schnitzler’s Professor Bernhardi — Antisemitism on the Stage and in Reality

Abstract

Professor Bernhardi was one of Schnitzler’s most successful plays, and at the same time, a key document in the development of his Austrian-Jewish identity. The central conflict in the play is not, as often assumed, that of science against religion, but rather that between the critically minded individual and those who submit to a political or religious programme. The figure of Bernhardi reflects Schnitzler’s own position on the Jewish identity crisis, which may be termed ‘enlightened apolitical individualism’. In addition to his experiences working in his father’s clinic, Schnitzler drew inspiration for the plot from sources that are cited here for the first time.     

The Impact of Global Financial Crisis on the Mechanism of Economic Growth in Russia

A noted specialist on the Russian economy presents an assessment of the impact of the global financial crisis on the mechanism of the country's economic growth. Focusing on the demand side of the economic ledger, the author explores the question of whether Russia will be able to re-attain the high economic growth rates of the period from 2000 to 2007 after recovering from the crisis. The paper analyzes the sharp drop in production in 2008 and the first quarter of 2009, attributing most of the damage to liquidity problems and declines in the price of oil. Empirical evidence is based primarily on data collected by the author from the Central Bank of Russia and the country's federal bureau of statistics (Rosstat). Journal of Economic Literature, Classification Numbers: E010, E200, E660, F210, G010. 11 figures, 3 tables, 29 references.     

China's Shoe Manufacturing and the Wenzhou Model: Perspectives on the World's Leading Producer and Exporter of Footwear

A U.S.-based geographer and specialist on China advances his research on industrial districts and regional development by presenting a 2008 study of shoe manufacturing in Wenzhou (a major center in the world's largest footwear producing and exporting country). More specifically, the author examines how the model of economic development pioneered in Wenzhou (the Wenzhou model) has been transformed in an effort to meet the challenges posed by the global economy. He argues that the scaling up of Wenzhou's footwear industry, through the expansion of sales networks and factories across China and abroad, indicates that other adaptable city regions can overcome similar obstacles. The author challenges both the New Regionalism literature focused on local institutions and assets, as well as perspectives that overemphasize the benefits of globalization and global production networks. Journal of Economic Literature, Classification Numbers: O100, O140, O180. 2 figures, 3 tables, 60 references.     

China's Exchange Rate Controversy: A Balanced Analysis

A noted American authority on China's economy and monetary policy presents a statistical as well as theoretical analysis of a variety of perspectives on the controversy surrounding China's currency, basing his paper on both. The author provides the historical background and comprehensive summaries, focusing on different viewpoints about whether China's currency is undervalued, and thus may contribute to global imbalances. In the paper, he divides observers involved in the controversy into two main camps, namely the ones who find China's trade balances to be sensitive to price effects through exchange rate adjustments and those who emphasize other factors as bearing the responsibility for China's large surpluses, including the U.S. credit bubble emerging before the global financial crisis, as well as a version of Dutch disease.     

Noril'sk Nickel: A Global Company?

Two specialists on Russia's minerals industries examine the evidence supporting the argument that the Russian mining conglomerate Noril'sk Nickel can be viewed as a global company. Included among the criteria they assess are the geographic dispersion of the company's markets and operations, the diversified and multinational character of its ownership, whether it has matched the performance standards set by its major international competitors, and the effect of the company's ownership presence on the management style of its foreign operations. A particular focus is on how an ongoing conflict between two major Russian oligarch shareholders (Vladimir Potanin and Oleg Deripaska) has shaped Noril'sk Nickel's ownership and management structure, which is characterized by the continued (background) presence of the state, the lack of any organized policy for training a multinational management cohort, and the absence of a major block of foreign shareholders. In the end, they conclude that Noril'sk Nickel is not a genuinely global but rather a Tier-1 Russian company, albeit one with a global scale of operations.     

Bank Liquidity Creation in Russia

Two EU-based senior economists analyze the contribution of bank liquidity creation to the Russian economy, as well as changes in creation of liquidity occurring during the global financial crisis. Applying the methodology of Berger and Bouwman's (2009) study of U.S. banking to a rich panel dataset for Russian banks for the period 1999-2009, the authors compute three alternative measures of bank liquidity creation. They find evidence of increased creation of liquidity in real terms over the period and also determine that state-controlled (versus private) banks and Russia's largest banks (versus intermediate-size and small banks) contributed most to liquidity creation (lower in Russia than in the U.S.). Their findings suggest that consolidation of the Russian banking sector may prove more instrumental in increasing liquidity creation than privatization per se.     

Climbing the Ladder? High-Technology Export Performance in Emerging Europe

A British economist examines the development of high-technology industrial exports across the emerging Europe region over the past two decades. After arguing that the development of high-technology capabilities is a key component of economic development, he presents an original index of high-technology industrial export performance that is used to describe patterns of high-technology exports across emerging Europe. When these developments are placed in comparative perspective, it becomes evident that although the countries of emerging Europe have made considerable progress in increasing across-product sophistication of exports and in increasing across-product diversification, most have been less successful in improving levels of within-product sophistication. For emerging Europe and other low- to middle-income countries elsewhere, this will remain a key challenge for the future.