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This study empirically examines the ripple effect of demand shocks on upstream suppliers in global value chains (GVCs). Specifically, we investigate how changes in US imports from China alter China’s imports of intermediate inputs in machinery industries from Japan, South Korea, and Taiwan. To address the simultaneity bias in this input-output linkage, we use the Trump tariffs in an episode of the US–China trade war as an instrument for US import demand from China. The analysis of China’s monthly imports from the three supplier economies during 2018-2019 finds evidence of negative tariff spillover via GVCs: the decrease in China’s output exports to the US caused by the Trump tariffs reduced China’s input imports from supplier economies. Also, this adverse ripple effect was the most significant in Taiwan, where multinational enterprises use China as an export platform, amplifying the adverse demand shock.

This study examines the effect of the 2010 tax credit reform, which reduced the tax credit rate, on firms' R&D in Taiwan. The empirical results suggested that the tax credit rate reduction has no overall negative effects on firms' R&D expenditure. By contrast, firms were observed to increase their expenditure on R&D. R&D tax credit recipients increased their R&D expenditure more than those who did not use the R&D tax credit. Moreover, we found a considerable difference in the treatment effects of the policy reform on R&D between R&D‐intensive and less R&D‐intensive firms. (JEL H21, H25, O31, O32, O38)

University–industry R&D collaboration is a key driver of participating firms’ technological capability. However, there is still debate on the determinants of a firm’s innovation performance, especially in relation to the characteristics of collaboration and organizational slack. We lay the foundation for our theoretical framework by establishing testable hypotheses on the effects of the characteristics of university–industry collaboration and organizational slack on the innovation performance of participating firms. Based on a panel data of 2914 firm-year cases for the top 200 U.S. R&D firms, estimates obtained from quantitative techniques produce consistent results and support our predictions. Collaboration breadth, network centrality, unabsorbed slack, collaboration experience and collaboration proactiveness are associated with innovation performance. Moreover, a firm’s higher absorbed slack exerts a negative influence on innovation performance. The managerial implications and future research directions are discussed.

This paper examines the impacts of foreign entrants and international trade on potential entrants in Vietnam. Based on a discrete entry model, estimates show that foreign direct investment (FDI) stimulates more domestic entrants in the short run, while the aggregate effect of FDI varies across FDI types. Horizontal FDI tends to have no impact on local start‐ups while vertical FDI is found to have a positive impact on the inflow of domestic entry for only the backward linkage and not for the forward linkage. Moreover, industries with more exports accommodate more domestic entrants, whereas imports tend to deter domestic start‐ups.

This paper investigates the determinants of China’s arms transfers by focusing on the roles of political factors and energy resource acquisition. Using Stockholm International Peace Research Instit...

This study evaluates technological catch-up in the electronics industry by Chinese indigenous firms compared with foreign firms operating in the country. We make use of firm-level data for the period 2001–2012, a period during which the Chinese government encouraged engagement with foreign partners and entry into the global supply chain in hopes of fostering technology transfer. We apply data envelope analysis to estimate group technology frontiers for private, state, and foreign firms, and decompose total factor productivity growth into technological change and technical efficiency change. The picture that emerges is one of mixed success. Indigenous firms on the cutting edge have pushed their group productivity frontier outward at a rapid pace even as the broad mass of indigenous firms has slipped further inside this expanding frontier. For private firms as a whole, the strongest period for technological catch-up was the mid-2000s, with progress relative to the foreign standard slowing again after that. Achievement has been greatest in sub-industries at the lower end of the technological ladder (e.g., appliances) and less notable at the upper end (e.g., computers). Evidence of a contribution by research and development and by worker training is found only beyond a cumulative threshold and for firms advantaged by location or joint venture partnership.

This study examines the impact of gender workforce composition on firm productivity. Using a large sample of Chinese manufacturing firms and conditional on human capital-related controls, we find that firms with a greater share of female workers demonstrate lower productivity. However, our results suggest that increasing the fraction of highly educated female workers significantly improves firm performance. This effect is evident for all private firms regardless of their trade orientation and foreign firms undertaking purely domestic sales. However, the effect does not exist in the case of state-owned and export-oriented foreign enterprises. Compared with medium-sized and large firms, small firms benefit more from gender diversity at high education level. Finally, the share of highly talented female workers indicates better firm performance in more feminized industries.

This study explores the determinants of firm growth in China. In this era of liberalization and globalization, investigating how firms’ size, age, exports, and foreign ownership jointly influence firm growth is essential. Based on a nationally representative firm-level panel dataset for the 2001–2007 period, our results reveal that exporters and foreign-owned enterprises (FOEs) exhibit higher growth rates than their respective counterparts. Crucially, small exporters experience higher growth than larger exporters, whereas large FOEs grow faster than their smaller counterparts. The role of export premiums in enhancing growth is observed for firms of all sizes and age groups, and the positive influence of foreign ownership on growth is only evident for small, medium, and young firms. Finally, we find that domestic firms, particularly small and young local firms, enjoy a larger export premium than FOEs.

This paper examines the dynamics of the productivity gaps across Indonesia, Vietnam, and China. Based on establishment-level panel datasets in the textile and electronics industries for the period 2000–2007, empirical results obtained from the meta-frontier approach show that there is a technological falling-behind rather than catching-up between Indonesia and China, as well as between Vietnam and China. This widening gap is witnessed in both the labor-intensive textile industry and the capital-intensive electronics industry, because China has experienced faster productivity growth and has upgraded its technological frontier after joining the World Trade Organization (WTO) in 2001. A comparison of the two latecomers finds that Indonesia firms exhibit better productivity performance than do Vietnamese firms.

This study investigates the research and development (R&D) and patenting activities of foreign firms in China. Utilizing a panel dataset of Japanese affiliates during the period 2001–2007, we first examine the determinants of R&D activity and find that local market-oriented firms place more emphasis on R&D, whereas process export-oriented firms are less likely to conduct R&D. Affiliates within a large business group that has more affiliates have a higher propensity to undertake R&D. Using only firms with positive R&D expenditures, we next estimate the patent production function. Results indicate that the patent elasticity of R&D for Japanese affiliates is high, suggesting that they are more productive on patent production than other firms. Moreover, local market-oriented firms do need more patents to protect their products, whereas scientific firms demonstrate a lower willingness to register patents in China.

Exporters demand relatively high-quality labor to confront fierce competition in the international markets. The extant literature documents the fact that exporters generally require more skilled workers than non-exporters. However, whether this pattern prevails in China has not yet been well-explored. This study examines the relationship between exports and the demand for skilled labor in China, with a focus on the role of foreign ownership and export type. Using a nationally representative firm-level dataset for 2002–2004, our results indicate that exporters utilize a lower share of skilled labor than non-exporters in contrast to the existing evidence. This finding holds for both foreign-invested enterprises and domestic firms, while it applies only to processing exporters. Similar results were obtained using matched samples using the propensity score matching technique. These results suggest that the main mechanism underlying the link between exports and skilled labor demand is China's exploitation of their comparative advantage in unskilled labor-intensive production.

This paper analyzes productivity growth and its sources in the Indonesian manufacturing sector during the post‐Asian financial crisis period. Based on a plant‐level panel dataset over the period 2001–9, we find meager total factor productivity (TFP) growth in this country's manufacturing industries, merely achieving average annual growth of 0.03%, while TFP growth varies significantly across industries. Further decomposition suggests the need to effectively allocate resources across industries in order to promote aggregate productivity. Moreover, aggregate productivity growth coming from the total reallocation effect remains quite low, lending no support to the structural‐bonus hypothesis. Overall, TFP growth is mainly contributed by incumbents firms, whereas the contribution by firm mobility was larger in some years.

This study examines the effects of firm heterogeneity on foreign‐owned enterprises’ (FOEs) choices regarding serving the local market, undertaking assembly exports or undertaking ordinary exports. It also investigates the effects of serving these markets on productivity. Using a detailed firm–transaction level matched data set of FOEs in China covering 2000–07, the first‐stage estimation of propensity score matching (PSM) method reveals that less productive FOEs tend to undertake assembly exports, and this effect is particularly relevant to those located in inland regions. By contrast, more productive FOEs are likely to serve domestic markets or undertake ordinary exports. Other firm characteristics also exhibit diverse influences on market choices. Export‐oriented FOEs, particularly those undertaking assembly exports, experience lower productivity growth than that of local market‐oriented FOEs. This suggests that the effects of local market competition do result in substantial enhancement of the productivity of FOEs in China. This pattern is mainly exhibited by FOEs in inland regions, whereas FOEs undertaking ordinary exports in coastal regions might have somewhat higher total factor productivity (TFP) growth than their local market‐oriented counterparts. Among export‐oriented FOEs, exporting more product value—whether assembly or ordinary exports—has a positive influence on productivity.

This study investigates the effect of labour unions on productivity across various types of firm ownership in China. Using a panel dataset of Chinese manufacturing firms covering 2004–2007 and employing propensity score matching techniques, we find that unions have a negative impact on labour productivity and total factor productivity. From a dynamic viewpoint, unionisation has an initially positive or nonsignificant association with productivity, but then has a significant negative effect in subsequent years for both foreign‐owned enterprises and private firms. A strong and negative productivity effect is consistently observed for state‐owned enterprises.

This paper examines whether and how heterogeneity in exports affects firms’ innovations in China. Using comprehensive transaction-level trade data from China Customs to construct various dimensional measures exports, empirical results obtained from a matched firm-transaction panel data find that exports overall have a positive impact on promoting innovations in terms of R&D and new product sales. The innovation-enhancing effect of exports depends on the heterogeneity in exports. Firms with greater varieties of exports, more market diversification, and higher export quality are associated with a higher R&D propensity and more new product sales, while process exports are found a negative association with innovations.

Purpose This study aims to investigate the determinants of own-branding strategy and whether branding contributes to higher profitability among industrial firms. Building a strong brand can be a source of competitive advantage. However, brands may not be equally important to all firms, especially in the business-to-business (B2B) context. Design/methodology/approach This study develops and empirically tests a conceptual model by considering the endogenous choice of branding strategy in the relationship between branding and financial performance. A large, nationally representative dataset from Taiwan, consisting of 13,098 manufacturing firms, is used. Findings The present study suggests that larger, younger, more innovative and export-oriented firms have a higher propensity to develop their own brands. E-commerce usage is shown to be the strongest predictor of the decision to brand. The positive effect of branding on profitability is evident for small- and medium-sized enterprises (SMEs), but not for large firms. Originality/value Research integrating the perspectives of the decision to brand and branding effectiveness is scant. The methodology used in this study makes a theoretical contribution to the link between branding and firm performance. The findings indicate that large firms have more advantages for building their own brands, yet SMEs stand to gain more financially from branding relative to their large counterparts. This provides the important implication that SMEs benefit from building a strong brand in the B2B context.

This paper examines the influences of spatial and research and development (R&D) agglomerations on firm R&D behaviour. Analysis of firm-level data from China’s electronics industry reveals that both spatial and R&D agglomerations are positively related to R&D, highlighting the importance of network effects of agglomeration. Multinational enterprises invest less in R&D compared with domestic firms, because they tend to allocate R&D activity to the parent firm, leaving their Chinese affiliates to focus on manufacturing. No significant difference in R&D investment is observed between state-owned enterprises and private firms in China. These findings are confirmed through various robustness checks.

In order to provide healthcare to low-income people, especially those living in rural areas, the Thai government introduced its Universal Coverage Scheme (UCS) in 2001–2002, becoming one of the first low- and middle-income countries to do so. We employ a difference-in-difference-in-difference (DDD) approach to examine whether UCS effectively reduces out-of-pocket healthcare expenditure across income levels and regions. The empirical results note a significant reduction in medical expenditure for the post-UCS period in outpatient as well as inpatient expenditures. The impact of UCS on the difference in medical expenditure between the treated and control groups varies across regions, while there is no significant difference across income level groups. Thus, by helping to pay an affordable copayment for ambulatory care, UCS has overall softened the high medical costs and provides accessible medical resources for poor regions and middle-income people.

This paper examines the duration of intermediate goods imports and its determinants for Japanese affiliates in China. In addition to product characteristics, we consider also the influences of affiliate and parent firm characteristics, as well as regional agglomeration. Based on a unique parent?affiliate?transaction matched panel dataset over the 2000?2006 period, we adopt a discrete-time hazard model to conduct empirical estimations. Results show that products with a higher upstreamness index, differentiated goods, and process-trade goods are less likely to be substituted for local procurement. Firms located in agglomerated regions with more foreign affiliates tend to shorten the duration of imports from their home country. In terms of parent-firm characteristics, multinational enterprises that have many foreign affiliates or greater foreign production experience continue to import intermediate goods for a longer duration.

The establishment of science parks is a vital strategy to develop high-tech industries and facilitate innovations in China. The success of a science park depends heavily on its supportive environment, suggesting that it is hard to replicate everywhere, while China has established many science parks across regions in the past decade. This study evaluates the degree of misallocation in research and development (R&D) and its determinants across science parks in China. Based on an unbalanced panel data of 145 science parks for the period 2007–2014, we find that the overall R&D efficiency has decreased sharply since 2011 when China began to initiate many new science parks. The newly constructed science parks exhibit a lower R&D efficiency than their incumbent parks, suggesting a considerable misallocation in R&D resource caused by expanding science parks everywhere. We further investigate the determinants of R&D misallocation and find that park characteristics and environmental characteristics matter. Parks which are larger, older, and having a higher human quality experience a lower R&D misallocation. Parks with closer R&D collaboration with universities or research institutes, particularly with universities, exhibit a lower R&D misallocation.

Vietnam enacted the Enterprises Act in 1999, leading to a sharp increase in the number of registered enterprises. Meanwhile, foreign direct investment (FDI) into the country continued to increase in the 2000s. Thus, this paper examines the location choice of multinational and local firms in Vietnam. We adopt the mixed logit model to conduct an empirical analysis of the possible interaction of neighbouring regions and attracting FDI. Using firm-level data for the period 2000–2005, the results show that most provincial characteristics exert similar influences on foreign and domestic entrants, except for wage rates, which exhibit an opposing effect. The agglomeration of FDI entices foreign and domestic firms to locate in the same region, whereas the agglomeration of local firms is less relevant to the location choice of all firms. The spatial interdependence effect of attracting investment is particularly relevant to local entrants. Provinces with more foreign (domestic) firms reveal a complementary (competition) effect on the attractiveness of their neighbouring provinces.

This paper examines the interrelations among ownership, trade, and firm productivity in Vietnam, a developing transition economy. Based on a firm-level panel data for the period 2000–2008, the empirical results show that foreign-owned enterprises (FOEs) experience higher productivity than do their domestic counterparts, whereas private firms (POEs) are not expected to outperform state-owned enterprises (SOEs) in productivity. Trade executes a productivity-enhancing effect for Vietnamese firms, but this effect only applies for FOEs and POEs, and not for SOEs. Vietnam access to the WTO produces tough competition and improves SOEs’ productivity. Various robustness checks support our findings.

By employing firm-level export data in China, this paper empirically examines the effect of liberalization of services foreign direct investment (FDI) on exporting firms’ quality upgrading. To evaluate its relative effectiveness, we also examine other kinds of trade policies, including tariffs in export destination countries and input and output tariffs in China. With China's accession to the World Trade Organization in December 2001, these trade policies changed substantially during our sample period of 2000–06. Empirical results showed that easing the restrictiveness of services FDI resulted in raising export product quality, mainly for foreign-owned enterprises. More than any other trade policy, we found that reduced input tariffs contributed to raising export product quality.

Using a matched firm-transaction dataset on the electronics industry in China, we provide one of the first attempts to examine whether foreign direct investment (FDI) has direct impacts on the export prospects of domestic firms, in terms of export variety and unit price. Using measures of multinational presence constructed at region and industry levels, our results reveal little evidence of multinational spillovers arising from an increase in the export variety of domestic firms. The growing presence of multinational firms has a strongly negative association with the export unit value of domestic firms, suggesting that exposure to multinational firms may intensify the competition in the product market and force local firms to offer lower-value products in the international markets. This adverse influence is mainly driven by processing trade as opposed to ordinary trade, with private firms being less affected by export spillovers than state-owned enterprises. We also find that the productivity of firms can mitigate the negative effect of the exposure to multinational firms on the unit value of exports.

This study examines the determinants of China’s outward direct investment (ODI) between 2003 and 2009. We first analyse the structure and dynamics of ODI. We propose three testable hypotheses including technology sourcing, resource seeking, and political linkage. Various estimates show that technology sourcing is supported moderately, whereas resource seeking serves one of primary driving forces. Crucially, the motive of political linkage is significantly related to ODI and it is particularly relevant to developing destinations. This finding indicates that China tends to invest in developing countries with high political risk, which is in contrast with the prediction of the FDI theory. Furthermore, a developing country with high political risk seems to be the favoured destination for China’s ODI to acquire technologies and resources.

This study empirically investigates how uncertainty and specific investment determine contract duration. Using detailed individual labor contracts of Major League Baseball players, the empirical estimations find that, given that players are more risk-averse than clubs, contract length exhibits a positive relationship with the level of productive uncertainty. This implies that the risk-sharing hypothesis dominates the competing hypothesis of efficient production in individual labor contracts. Moreover, contract length is positively related to specific investment, highlighting that the prediction of the transaction cost theory also holds on individual labor contracts.

This study examines how R&D specialization within the manufacturing sector affects productivity growth, constructing various measures of R&D specialization using a concentration index and industrial classification. Based on 11 member countries of the Organization for Economic Co-operation and Development (OECD) for the period from 1981 to 2000, the results obtained based on the fixed-effect panel data model with cross-sectional dependence indicate that concentrating suitable R&D resources within a few industries tends to promote productivity growth. Moreover, this positive effect is relevant to concentrating on development-oriented industries or process innovation-oriented industries.