Analysis of statements made in favour of and against the adoption of competition law in developing and transition economies
Franz Kronthaler, Johannes Stephan, Frank Emmert
IWH-Sonderhefte,
No. 1,
2005
Abstract
The paper is concerned with documenting and assessing statements made by policy-makers, opinion formers, and other stakeholders in favour and against the adoption of competition laws with particular reference to transition and developing countries which have not yet enacted these kind of laws. For example, claims that competition enforcement might reduce the inflow of foreign direct investment, or that other policies are successfully used as substitutes for competition law, are assessed. In a first step, the method of generalized analysis structures the list of statements around core issues of common features to make them accessible to further interpretation and assessment. The paper shows that some claims are in fact country or region specific, and specific to the development level of the respective countries. In a second step, the core issues are assessed according to economic and legal criteria. Since the analysis focuses on transition and developing countries, the criteria for economic assessment are predominantly economic growth and development issues, but also include the economic coherency of a set of claims submitted by stakeholders in a given country. The criteria for legal assessment include whether claims are problematic in light of WTO-principles, or are even born out of a political objective which is incompatible with the spirit, if not the letter of WTO-rules.
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Technology spillovers from foreign investors in transition economies - are the effects still expected?
Jutta Günther
Economic and business review,
No. 1,
2005
Abstract
While it is widely acknowledged that there is a technology transfer from parent companies to foreign subsidiaries in central East European countries, there is no clear cut evidence for technology spillovers in favour of domestic companies so far. The paper presents a theoretical framework for how spillover mechanisms are turned into a reality and outlines empirical findings on technology spillovers for transition economies based on a comprehensive literature review. Against the background of an empirical qualitative study, the paper provides firm level explanations for the obvious lack of technology spillovers. Policy oriented issues will be discussed in the conclusions.
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Analysis of statements made in favour of and against the adoption of competition law in developing and transition economies
Johannes Stephan, Franz Kronthaler, Frank Emmert
One-off Publications,
No. 9,
2005
Abstract
The paper is concerned with documenting and assessing statements made by policymakers, opinion formers, and other stakeholders in favour and against the adoption of competition laws with particular reference to transition and developing countries which have not yet enacted these kind of laws. For example, claims that competition enforcement might reduce the inflow of foreign direct investment, or that other policies are successfully used as substitutes for competition law, are assessed. In a first step, the method of generalized analysis structures the list of statements around core issues of common features to make them accessible to further interpretation and assessment. The paper shows that some claims are in fact country or region specific, and specific to the development level of the respective countries. In a second step, the core issues are assessed according to economic and legal criteria. Since the analysis focuses on transition and developing countries, the criteria for economic assessment are predominantly economic growth and development issues, but also include the economic coherency of a set of claims submitted by stakeholders in a given country. The criteria for legal assessment include whether claims are problematic in light of WTO-principles, or are even born out of a political objective which is incompatible with the spirit, if not the letter of WTO-rules.
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Investment, Financial Markets, New Economy Dynamics and Growth in Transition Countries
Albrecht Kauffmann, P. J. J. Welfens
Economic Opening Up and Growth in Russia: Finance, Trade, Market Institutions, and Energy,
2004
Abstract
The transition to a market economy in the former CMEA area is more than a decade old and one can clearly distinguish a group of relatively fast growing countries — including Estonia, Poland, the Czech Republic, Hungary and Slovenia — and a majority of slowly growing economies, including Russia and the Ukraine. Initial problems of transition were natural in the sense that systemic transition to a market economy has effectively destroyed part of the existing capital stock that was no longer profitable under the new relative prices imported from world markets; and there was a transitory inflationary push as low state-administered prices were replaced by higher market equilibrium prices. Indeed, systemic transformation in eastern Europe and the former Soviet Union have brought serious transitory inflation problems and a massive transition recession; negative growth rates have continued over many years in some countries, including Russia and the Ukraine, where output growth was negative throughout the 1990s (except for Russia, which recorded slight growth in 1997). For political and economic reasons the economic performance of Russia is of particular relevance for the success of the overall transition process. If Russia would face stagnation and instability, this would undermine political and economic stability in the whole of Europe and prospects for integrating Russia into the world economy.
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Technology spillovers through foreign direct investment. An empirical investigation on the example of Hungarian industry
Jutta Günther
Schriften des IWH,
No. 14,
2003
Abstract
With the beginning of transition in Central East European countries, foreign direct investment increased strongly whereby foreign subsidiaries transfer modern production technology and management know-how. However, it has remained an open question, how far domestic enterprises also benefit from these developments via technology spillovers. The study points out theoretically possible channels of technology spillovers and empirically investigates the significance, scope and influencing factors of the various spillovers channels on the example of Hungarian industry. The findings show that there are hardly any spillover effects in Hungarian industry so far. Major reasons for that are the strong technological disparities between foreign subsidiaries and domestic firms as well as the lack of labor mobility from foreign to domestic enterprises.
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EU Accession Countries’ Specialisation Patterns in Foreign Trade and Domestic Production - What can we infer for catch-up prospects?
Johannes Stephan
IWH Discussion Papers,
No. 184,
2003
Abstract
This paper supplements prior analysis on ‘patterns and prospects’ (Stephan, 2003) in which prospects for the speed of future productivity growth were assessed by looking at the specialisation patterns in domestic production. This analysis adds the foreign trade sphere to the results generated in the prior analysis. The refined results are broadly in line with the results from the original analysis, indicating the robustness of our methods applied in either analysis. The most prominent results pertain to Slovenia and the Slovak Republic. Those two countries appear to be best suited for swift productivity catch-up from the viewpoint of sectoral specialisation. Poland and Estonia exhibit the lowest potentials. Only for the case of Poland would results suggest bleak prospects.
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EU Eastern Enlargement and Structural Change: Specialization Patterns in Accession Countries and Economic Dynamics in the Single Market
Albrecht Kauffmann, P. J. J. Welfens, A. Jungmittag, C. Schumann
Diskussionsbeiträge des Europäischen Instituts für Internationale Wirtschaftsbeziehungen (EIIW), Bergische Universität Wuppertal, Nr. 106,
No. 106,
2003
Abstract
This paper analyses key issues of structural change and specialization patterns in the economies of an enlarged European Union. In all transition countries we observe a shift from the agricultural and industrial sector towards the service sector in terms of employment and productivity; however, in some countries a reindustrialisation drives is observed in a late transition stage. While some countries namely the Czech Republic, Hungary, Slovakia, Poland, Estonia and Slovenia, have improved their productivity especially in medium-technology-intensive industries and may advance on the technological ladder, others remain unchanged and seem to get locked in labour-intensive industrial sectors. In the context of EU-enlargement, we expect trade creation – going along with a rise of intra-industry trade – and higher FDI-activities. Countries will have to adjust along the logic of comparative advantage, however, technological upgrading and human capital formation are fields in which government can stimulate the direction of comparative advantage. According to the Gerschenkron-hypothesis the accession countries have an “advantage of backwardness. Since accession countries have a low R&D-GDP ratio in the early transition stage rising government expenditures on research and development plus higher education is crucial. We expect the EU-15 countries in general to benefit from enlargement but gains will be asymmetric across countries: economic geography matters. Austria, Germany, the Scandinavian countries, the Netherlands, Italy and France are likely to profit more than the other members of EU-15. Germany and Austria additionally play a particularly crucial role as origins of FDI. Future research should focus on the speed and the scope of structural adjustment.
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Vertical and horizontal patterns of intra-industry trade between EU and candidate countries
Hubert Gabrisch
IWH-Sonderhefte,
No. 2,
2003
Abstract
Trade between the European Union (EU) and the Transition Economies (TE) is increasingly characterised by intra-industry trade. The decomposition of intra-industry trade into horizontal and vertical shares reveals predominantly vertical structures with decisively more quality advantages for the EU and less quality advantages for TE countries whenever trade has been liberalised. Empirical research on factors determining this structure in a EU-TE framework lags behind theoretical and empirical research on horizontal and vertical trade in other regions of the world. The main objective of this paper is therefore to contribute to the ongoing debate on EU-TE trade structures by offering an explanation of vertical trade. We utilise a cross-country approach in which relative wage differences, country size and income distribution play a leading role. We find first that relative differences in wages (per capita income) and country size explain intra-industry trade when trade is vertical and completely liberalised, and second that cross-country differences in income distribution play no explanatory role. We conclude that EU firms have been able to increase their product quality and to shift low-quality segments to TE countries. This may suggest a product-quality cycle prevalent in EU-TE trade.
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Intra-industry trade and the productivity gap in the enlarged EU
Hubert Gabrisch
Wirtschaft im Wandel,
No. 16,
2002
Abstract
Trade between the European Union (EU) and the Transition Economies (TE) is increasingly characterised by intra-industry trade. The decomposition of intra-industry trade into horizontal and vertical shares reveals predominantly vertical structures with decisively more quality advantages for the EU and less quality advantages for TE countries whenever trade has been liberalised. Sizeable foreign direct investment did obviously not reduce the superiority of producers in the EU in terms of technology, capital and human capital. The productivity gap between the EU and TE countries remains. EU firms have been able to increase their product quality and to shift low-quality segments of production to TE countries. This may suggest a product-quality cycle prevalent in EU-TE trade. The testing of this model confirms the assumptions.
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Hardly any technology spillovers from supplier contacts of foreign subsidiaries in Hungary
Jutta Günther
Wirtschaft im Wandel,
No. 13,
2002
Abstract
“Almost no technology spillovers via supplier contacts of foreign subsidiaries in Hungary“ Transition economies in the process of catching-up expect that interactions between modern equipped foreign subsidiaries and backward local companies lead to technology spillovers, especially via supplier contacts. The explorative empirical study shows, however, that linkages between foreign subsidiaries and local firms do hardly exist. First, this is due to the fact that the foreign affiliates largely stick to suppliers in their home countries. Second, the technological disparities between foreign subsidiaries and local firms - the so-called dual structure of economy - hinders cooperation in the field of supplier contacts.
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