Regional Assessment of Openness and Productivity Spillovers in China from 1979 to 2006: A Space-Time Model

This study investigates the impact of inward foreign direct investment (FDI) flows and international trade on labour productivity in 30 Chinese provinces over the period 1979-2006. Since China launched the “open door” policy in 1978, the country has been attracting a growing share of FDI flows and its international trade has been expanding considerably. China’s accession into the WTO in 2001 has also started a new era in its integration into the world economy. In this paper, we model labour productivity as dependent on FDI, foreign trade and other traditional variables such as capital intensity, infrastructure and human capital development. Our empirical analysis improves the existing wide literature by taking into account spatial effects and potential econometric issues they imply. Using recently developed spatial data analysis tools, we explore the pattern, (weather it be negative or positive) and the extent of spatial interaction of labour productivity between regions. Thereby, we extend previous research by testing the explanatory power of additional variables such as spatially lagged independent and dependent variables. The explicit consideration of spatial dependence in the modelling scheme provides us a better understanding of the regional spillovers process. Our results indicate a general trend of spatial autocorrelation in labour productivity during the study period. Put differently, in China, the productivity of a given region is highly determined by those of surrounding regions. In addition, our empirical outcomes yield support for positive and significant impacts of FDI and foreign trade on labour productivity. Furthermore, in China, FDI and trade exhibit a positive spatial pattern and give rise to interregional productivity spillovers among provinces. These findings are robust to a number of alternative spatial weighting matrix specifications.

A Fresh Scrutiny on Openness and Per Capita Income Spillovers in Chinese Cities: A Spatial Econometric Perspective

This paper investigates openness and per capita income spillovers over 367 Chinese cities in the year 2004. Per capita income is modelled as dependent on investment, physical and social infrastructure, human capital, governmental policies and openness to the world. Our empirical analysis improves substantially the previous research in several respects: Firstly, by extending the data set to prefecture-level, it tackles the aggregation bias. Secondly, the introduction of recently developed explanatory spatial data analysis (ESDA) and spatial regression techniques allows to address misspecification issues due to spatial dependence. Thirdly, the endogeneity problem in the regression is taken into consideration through the use of generalised method of moments (GMM) estimator. Our major findings are in Chinese cities, physical and social infrastructure development, human capital and investment could be recognised as major driving sources of per capita income (i), whereas, the government expenditure ratio exerts a negative impact on per capita GDP level (ii). Our empirical findings also yield evidence on the existence of FDI and foreign trade spillovers in China (iii). These findings are robust to a number of alternative spatial weighting matrix specifications.

Total Factor Productivity Growth in Chinese Industry: 1952-2005

This paper presents a timely assessment of Chinese industrial productivity performances over the period 1952-2005. The total factor productivity (TFP) growth analysis is based on a Cobb-Douglas specification with aggregated annual data set. This study tackles some theoretical and methodological issues raised by critics of previous studies. First of all, the use of economic tools allows us to relax some restrictive hypothesis of the neoclassical growth framework such as competitive market behaviour, constant returns to scale production technology and Hicks neutral technological change. In addition, our TFP growth estimates are adjusted for business fluctuations. The paper also deals with the autocorrelation issue prevailing in most previous studies. Our major findings are: (i) In Chinese industry, between 1952 and 2005 capital accumulation has been the main engine of economic takeoff. (ii) During the post-reform period, TFP growth contributed significantly to economic growth. (iii) TFP gains have exhibited a sharply increasing pattern since the late 1980’s, along with the accelerated integration of China into the world economy.

Performance Analysis of Optimum Zero-Forcing Beamforming with Greedy User Selection

In this letter, an exact performance analysis is presented on the sum rate of zero-forcing beamforming with a greedy user scheduling algorithm in a downlink system. Adopting water-filling power allocation, we derive a compact form for the joint probability density function of the scheduled users' squared subchannel gains when a transmitter with multiple antennas sends information to at most two scheduled users with each having a single antenna. The analysis is verified by numerical results.Comment: 4 pages, 2 figure

Les investissements directs étrangers entraînent-ils des effets de débordement vers les pays en développement ?

Au cours des deux dernières décennies, le volume des investissements directs étrangers (IDE) à destination des pays en voie de développement (PVD) s’est accru de manière considérable. Désormais, les gouvernements des PVD inscrivent manifestement les IDE au coeur de leurs stratégies de développement, et ce, pour plusieurs raisons : l’impact positif sur la croissance économique, l’apport des ressources financières, la création d’emplois et les effets de débordements qu’ils engendrent sur les entreprises locales. Cette synthèse de la littérature sur les IDE et les retombées positives qu’ils entraînent dans les pays d’accueil permet de faire le point sur les principales controverses sur le sujet. Notre analyse fait ressortir que les capacités d’absorption technologique et d’innovation du pays hôte sont cruciales pour tirer le meilleur parti de la présence des firmes étrangères.

Audience costs and reputation in crisis bargaining

In crisis bargaining literature, it is conventional wisdom that the ability of generating higher audience costs is an advantage for a leader of a state. However, empirical studies show that democratic states use this mechanism only occasionally. This paper formally shows that higher audience costs may be good or bad depending on (1) the benefit-cost ratio of the crisis, (2) initial probability of resolve, and (3) how fast states generate audience costs with time. In particular, if the value of the prize over the cost of attacking is low or the initial probability of resolve is high enough, then having greater ability to generate audience costs may undermine democratic states' diplomatic success

Regional dynamics of economic performance in the EU: To what extent spatial spillovers matter?

This paper investigates the main determinants of economic growth in the European Union from a regional perspective. The analysis is based on a recently available dataset from the European Cluster Observatory covering 253 European regions over the period 2002-2008. In addition to the traditional determinants of regional growth (such as investment, human capital developments, innovation and infrastructure endowment), the growth analysis accounts for spatial effects related to the existence of externalities from neighbouring regions. The spatial Durbin fixed-effect panel specification captures spatial feedback effects from the neighbours through spatially lagged dependent and independent variables. Social-economic environment and traditional determinants of growth are found to be significant. In particular, investment, infrastructure and human capital endowment, accessibility and innovation capacity explain both growth dynamics and cross regional differences. We do not find evidence of convergence among regions over the study period. By contrast, we detect a regional cluster in the core of Europe specialised in activities with high growth potential. Our findings confirm the significance of spatial spillovers. Specifically, business investment and skilled workforce migration have a positive ? direct and indirect ? impact on economic growth of the European regions

Searching for a bargain: power of strategic commitment

This paper shows that in a multilateral bargaining setting where the sellers compete a la Bertrand, a range of prices that includes the monopoly price and 0 are compatible with equilibrium, even in the limit where the reputational concerns and frictions vanish. In particular, the incentive of committing to a specific demand, the opportunity of building reputation about inflexibility, and the anxiety of preserving their reputation can tilt players' bargaining power in such a way that being deemed as a tough bargainer is bad for the competing players, and thus, price undercutting is not optimal for the sellers