Barriers to Internationalization: Firm-Level Evidence from Germany
IAW Discussion Paper No. 52,
Exporters and multinationals are larger and more productive than their domestic
counterparts. In addition to productivity, financial constraints and labor market
constraints might constitute barriers to entry into foreign markets. We present new
empirical evidence on the extensive and intensive margin of exports and FDI based on detailed micro-level data of German firms. Our paper has three main findings. First, in line with earlier literature, we find a positive impact of firm size and productivity on firms’ international activities. Second, small firms suffer more frequently from financial constraints than bigger firms, but financial conditions have no strong effect on internationalization. Third, labor market constraints constitute a more severe barrier to foreign activities than financial constraints. Being covered by collective bargaining particularly impedes international activities.
Eastern Germany in the process of catching-up: the role of foreign and Western German investors in technological renewal
Eastern European Economics,
Foreign direct investment as a means to support system transformation and the ongoing process of catching-up development has caught researcher’s attention for a number of Central and Eastern European countries. Not much research, however, has been carried out for East Germany in this respect although FDI plays an important role in East Germany too. Descriptive analysis by the use of unique survey data shows that foreign and West German affiliates perform much better with respect to technological capability and labor productivity than domestic companies in East Germany. The results of the regression analysis, however, show that it is not the status of ownership as such that forms a significant determinant of innovativeness in East Germany but rather general firms specific characteristics attached to it such as firm size, export-intensity, technical state of the equipment, and R&D activities. Due to the fact that foreign and West German affiliates perform better with respect to exactly all of these characteristics, they can be considered as a means to support the process of technological renewal and economic development.
A Glimpse on Sectoral Convergence of Productivity Levels
This paper examines the presence of sectoral convergence of labor productivity between 14 OECD countries. Using the OECD International Sectoral Data Base (ISDB), the paper looks at the developments within 12 distinct sectors during the period 1970-1995. The change of the coefficients of variance suggests that there is strong sectoral convergence within most service sectors while the evidence of convergence for Manufacturing as well as for Communication is rather weak. These findings are in line with most studies undertaken on this subject so far. It is concluded that economic theories at hand to explain growth and convergence (or divergence respectively) are of different importance for the sectors concerned. While models of the New Growth Theory seemed to be useful to explain growth mechanisms within Manufacturing and Communication, traditional models seemed to apply to most other sectors.
Labor Market Analysis and Public Policy: The Case of Morocco
World Bank Economic Review,
This article uses detailed industry and household data to understand why Morocco's labor market performed poorly in 1985–95. The data indicate that marked structural changes and weak demand in the product market were responsible. This article makes two contributions to the literature. The first is specific: it underscores that the demand for labor is a derived demand and that the performance of the product market is an important determinant of the performance of the labor market. The second is more general: it demonstrates that this kind of microeconomic analysis, using data sets that are often available in developing countries, can inform policy design.