Heterogeneous FDI in Transition Economies – A Novel Approach to Assess the Developmental Impact of Backward Linkages
Axèle Giroud, Björn Jindra, Philipp Marek
World Development,
Nr. 11,
2012
Abstract
Traditional models of technology transfer via FDI rely upon technology gap and absorptive capacity arguments to explain host economies’ potential to benefit from technological spillovers. This paper emphasizes foreign affiliates’ technological heterogeneity. We apply a novel approach differentiating extent and intensity of backward linkages between foreign affiliates and local suppliers. We use survey data on 809 foreign affiliates in five transition economies. Our evidence shows that foreign affiliates’ technological capability, embeddedness and autonomy are positively related to knowledge transfer via backward linkages. In contrast to what is widely assumed, we find a non-linear relationship between extent of local sourcing and knowledge transfer to domestic suppliers.
Artikel Lesen
Challenging the Production Function Approach to Assess the Developmental Effects of FDI
N. Driffield, Björn Jindra
European Journal of Development Research,
Nr. 1,
2012
Abstract
From a theoretical point of view, it is traditionally assumed that foreign firms possess a centrally accumulated firm-specific technological advantage over domestic firms (see, for example, Findlay, 1978; Dunning, 1979). Given a sufficient level of absorptive capacity and human capital, domestic firms in host economies are able to benefit from various externalities stimulated by the presence of foreign firms.
Artikel Lesen
Internationalisation Theory and Technological Accumulation - An Investigation of Multinational Affiliates in East Germany
Björn Jindra
Studies in Economic Transition, London,
2012
Abstract
The integration of post-communist countries into the European and global economy after 1990 has led to a renewed interest in the role of multinational enterprises (MNEs) in economic restructuring and technological development. This book explains the expansion of MNEs into a transition economy from the technology accumulation perspective. Key assumptions of the technological accumulation approach towards firms' internationalisation are tested, using the examples of foreign and West German MNEs in East Germany. The effects of technological externalities on MNE location choice are analysed, in addition to an exploration of the factors driving the location of foreign affiliates' research and development (R&D) and innovation activities. The book provides a novel and comprehensive empirical approach to assess the developmental role of MNEs, deriving significant economic policy implications for transition and emerging economies.
Artikel Lesen
The Technological Role of Inward Foreign Direct Investment in Central East Europe
Johannes Stephan
The Technological Role of Inward Foreign Direct Investment in Central East Europe,
2011
Abstract
Foreign direct investment (FDI) assumed a prominent role in Central East Europe (CEE) early on in the transition process. Foreign investors were assigned the task of restructuring markets, providing capital and knowledge for investment in technologically outdated and financially ailing firms.
Artikel Lesen
Crises, rescues, and policy transmission through international banks
Claudia M. Buch
Bundesbank Discussion Paper 15/2011,
2011
Abstract
The World Financial Crisis has shaken the fundamentals of international banking
and triggered a downward spiral of asset prices. To prevent a further meltdown of
markets, governments have intervened massively through rescues measures aimed at recapitalizing banks and through liquidity support. We use a detailed, banklevel dataset for German banks to analyze how the lending and borrowing of their foreign affiliates has responded to domestic (German) and to US crisis support schemes. We analyze how these policy interventions have spilled over into
foreign markets. We identify loan supply shocks by exploiting that not all banks
have received policy support and that the timing of receiving support measures
has differed across banks. We find that banks covered by rescue measures of the
German government have increased their foreign activities after these policy
interventions, but they have not expanded relative to banks not receiving support.
Banks claiming liquidity support under the Term Auction Facility (TAF) program
have withdrawn from foreign markets outside the US, but they have expanded
relative to affiliates of other German banks.
Artikel Lesen
Size, Productivity, and International Banking
Claudia M. Buch, C. T. Koch, Michael Koetter
Journal of International Economics,
Nr. 2,
2011
Abstract
Heterogeneity in size and productivity is central to models that explain which manufacturing firms export. This study presents descriptive evidence on similar heterogeneity among international banks as financial services providers. A novel and detailed bank-level data set reveals the volume and mode of international activities for all German banks. Only a few, large banks have a commercial presence abroad, consistent with the size pecking order documented for manufacturing firms. However, the relationship between internationalization and productivity also yields two inconsistencies with recent trade models. First, virtually all banks hold at least some foreign assets, irrespective of size or productivity. Second, some fairly unproductive banks maintain commercial presences abroad.
Artikel Lesen
Government Banking in Russia: Magnitude and New Features
Andrei Vernikov
IWH Discussion Papers,
Nr. 13,
2011
Abstract
State-controlled banks are currently at the core of financial intermediation in Russia. This paper aims to assess the magnitude of government banking, and to reveal some of its special features and arrangements. We distinguish between directly and indirectly state-controlled banks and construct a set of bank-level statistical data covering the period between 2000 and 2011. By January 2011 the market share of state-controlled banks reached almost 54 percent of all bank assets, putting Russia in the same league with China and India and widening the gap from typical European emerging markets. We show that direct state ownership is gradually substituted by indirect ownership and control. It tends to be organized in corporate pyramids that dilute public property, take control away from government bodies, and underpin managerial opportunism. Statecontrolled
banks blur the borderline between commercial banking and development
banking. Dominance of public banks has a bearing on empirical studies whose results might suggest state-owned banks’ greater (or lesser) efficiency or competitiveness compared to other forms of ownership. We tend to interpret such results as influenced by the choice of indicator, period of observations, sample selection, etc., in the absence of an equal playing field for all groups of players. We suggest that the government’s planned retreat from the banking sector will involve non-core assets mainly, whereas control over core institutions will just become more subtle.
Artikel Lesen
MNE’s Regional Location Choice - A Comparative Perspective on East Germany, the Czech Republic and Poland
Andrea Gauselmann, Philipp Marek, J. P. Angenendt
IWH Discussion Papers,
Nr. 8,
2011
publiziert in: Empirica
Abstract
The focus of this article is the empirical identification of factors influencing Foreign Direct Investment (FDI) in transition economies on a regional level (NUTS 2). The analysis is designed as benchmark between three neighboring post-communist regions, i.e. East Germany, the Czech Republic and Poland. Their different transition paths have not only resulted in economic differences. We can also observe today that the importance of pull factors for FDI varies significantly across the regions. This analysis shows that in comparison with Poland and the Czech Republic, East Germany’s major benefit is its purchasing power, its geographical proximity to West European markets, and its modern infrastructure. Furthermore, the analysis suggests that intra-industry linkages such as specialization and agglomeration economies are relevant factors for the location decision of foreign investors. This result can help to explain the regional divergence of FDI streams in transition economies.
Artikel Lesen
Competition, Risk-shifting, and Public Bail-out Policies
Reint E. Gropp, H. Hakenes, Isabel Schnabel
Review of Financial Studies,
Nr. 6,
2011
Abstract
This article empirically investigates the competitive effects of government bail-out policies. We construct a measure of bail-out perceptions by using rating information. From there, we construct the market shares of insured competitor banks for any given bank, and analyze the impact of this variable on banks' risk-taking behavior, using a large sample of banks from OECD countries. Our results suggest that government guarantees strongly increase the risk-taking of competitor banks. In contrast, there is no evidence that public guarantees increase the protected banks' risk-taking, except for banks that have outright public ownership. These results have important implications for the effects of the recent wave of bank bail-outs on banks' risk-taking behavior.
Artikel Lesen
Stock Market-Induced Currency Crises: A New Type of Twins
Stefan Eichler, Dominik Maltritz
Review of Development Economics,
Nr. 2,
2011
Abstract
This paper explores the link between currency crises and the stock market in emerging economies. By integrating foreign stock market investors in a currency crisis model, we reveal a new fundamental inconsistency as a potential crisis trigger: since emerging economies' stock markets often have high returns, whereas central bank reserves grow slowly or decline, the amount of reserves foreign investors can deplete when selling their stocks and repatriating the proceeds grows over time and is considerably higher than funds that have been invested in the stock market. Capital withdrawals of foreign stock market investors can trigger currency crises by depleting central bank reserves, particularly in successful countries with booming stock markets and large foreign investment.
Artikel Lesen