Who leads regional industrial dynamics? “New industry creators” in Chinese regions

Recent evolutionary economic geography studies have argued that regional diversification emerges as a path‐dependent process, as regions often branch into industries that are related to its industrial structure. However, it is less clear who are creating new industries and under what regional conditions. This research seeks to fill this gap and identify “new industry creators” in regional industrial diversification. We differentiate two types of new industry formation—path‐breaking and path‐dependent—and examine whether some new industry creators are more path‐breaking than others, by incorporating two factors that have been largely overlooked in recent literature on technological relatedness—firm heterogeneity and regional institutions. Based on a firm‐level data set of China’s manufacturing industries, this paper shows that path‐breaking and path‐dependence coexist. Empirical results confirm that firm heterogeneity and regional institutions not only affect the firms’ capabilities in creating new industries, but also encourage/discourage firms to be adventurous and path‐breaking. This research implies that lagging regions can catch up with developed regions by coordinating regional resources and adjusting local institutional arrangements to attract more path‐breaking firms.     

Renewing Canada's Manufacturing Economy: A Regional Comparison, 1973‐1996

ABSTRACT Regional economies are continually undergoing adjustment as their firm populations react to changing tastes, technologies, and the challenges of outside competition. Adjustment typically takes place as the stock of jobs is renewed in each industry. This micro‐dynamic process of renewal has a substantial impact on the structure of national and regional economies. The primary objective of this paper is to measure the degree of renewal within the Canadian manufacturing economy as whole and within individual provinces. Using a longitudinal micro‐data set—which covers the population of manufacturing plants in Canada from 1973 to 1996—the study shows that the manufacturing sector experienced considerable job renewal. Two‐thirds of jobs in 1996 were newly created since 1973. There was considerable variation in provincial renewal rates. A decomposition analysis suggests this variation is not purely an artifact of the types of industries found in provinces, but reflects other characteristics of provincial economies.     

Globalization and Regional Change in the U.S. Furniture Industry

ABSTRACT Furniture manufacturing has experienced rapid globalization in recent years. This is mainly the result of global production networks established by large manufacturers and retailers seeking to reduce costs in a highly competitive environment. The industry's globalization has been facilitated by technological innovations and the global reduction of trade and investment barriers. In the U.S., furniture‐producing regions are experiencing tumultuous change. Growing numbers of firms are outsourcing production to China, which is now responsible for about half of all U.S. furniture imports. Employment levels have plummeted. However, an analysis of spatial patterns of employment, output, and capital investment in U.S. furniture manufacturing shows that regional change is not uniform. Southern regions characterized by larger firms specializing in wooden case goods production have been especially vulnerable to job loss.     

Human capital agglomeration,institutional barriers,and internal migration in China

This paper investigates how human capital agglomeration interplays with institutional factors to affect migration destination choice in China. Over the last decades, China has experienced massive internal migration, substantial human capital investment, and the relaxation of its hukou system, thus providing us with a valuable opportunity to examine the role of human capital externality in migration choice. Based on rich data on province-to-province migration flows for different education and hukou groups, we find that migrants in China, especially highly educated and urban-to-urban migrants, have a strong preference to move to provinces with a high agglomeration of human capital. Further examination reveals that low-skilled migrants in China are less likely to benefit from human capital agglomeration because of their lower ability to overcome hukou restrictions. Our findings raise the concern that labor migration under the skill-biased hukou system would enlarge China's regional disparities in human capital and economic development.     

Redefining “Offshore” in Latin America

Offshoring and outsourcing are two terms—often used interchangeably—that comprise an essential element of the modern post‐industrial global economy. Analysis of this phenomenon in the United States is often framed in the light of job loss and economic decline relating to the manufacturing or low‐end services sectors, but this paper will revisit the traditional offshore industry—that of offshore finance and offshore financial centers (OFCs) and compare OFC offshoring with traditional offshoring in Latin America. This paper argues that some similarities are evident when comparing OFC offshoring with traditional offshoring but many differences exist. Using the framework or “lens” of politics certain OFC offshoring issues and tensions with the onshore world relating to unfair tax competition, money laundering, sovereignty, secrecy, regulation, trust, and reputation are analyzed and are shown to be more onerous, tense and different from those occurring in the mainstream offshoring/outsourcing world. In addition, using the “lens” of cyberspace and e‐commerce, and a case study of the Cayman Islands and the Bahamas, this paper argues that the creation of an electronic infrastructure in the OFC offshoring world is as necessary as in the onshore world, but the actors and institutions creating and promoting such infrastructures are different. Future work could pursue more reputable and comparative data gathering to further more rigorous statistical modeling of the relationships both between OFCs as they compete for offshore capital, and between offshore and onshore as the onshore world seeks to further lift the veil of offshore financial opacity, particularly related to issues of money laundering.     

Evolutionary Economic Geography for OFCs: Do Political Ties to the Onshore Reduce Capital Inflow Volatility?

This paper analyses the structural change in small‐island economies—sometimes labeled offshore financial centers (OFCs)—that have seen wealth‐generating activities through offshore financial services decrease in value since 2008. At the same time, OFCs have come under increasing scrutiny from supranational organizations such Organization for Economic Co‐operation and Development and European Union for perceived unfair tax practices and money laundering activities. Some OFCs have proactively adjusted to this sea change by broadening the economic base through development of new offshore business activities such as e‐gaming, film industry, and niche manufacturing. Most have increased co‐operation with onshore regulatory bodies to promote service and product legitimacy. Econometric analysis explores the assertion that OFCs that do not have a political link to the onshore may be exposed to greater capital inflows volatility than OFCs that have such a link. Case study analysis using the theoretical lens of evolutionary economic geography illustrates that a small OFC is creating spatialities of economic novelty by adapting economic development strategies deployed during the successful development of the center prior to the recent recession. Our findings reveal the importance of political links to the onshore to reduce capital inflow volatility and the importance of local public–private interaction to legitimize post‐recession development.     

NAFTA and Industrial Adjustment: A Specific-Factors Model of Production

The North American Free Trade Agreement (NAFTA) will continue to attract political debate as U.S. manufacturing industries adjust in the face of increased import competition and export opportunities. This study applies the specific factors model of production to manufacturing industries in Alabama to examine the pending adjustment. As industrial prices change, there will be small output adjustments in the short run and downward pressure on the wages of production workers. Projected changes in industrial investment will lead to substantial long-run output adjustments.     

Creating a Brand of Project Management Enterprise

With the mixing of internal and international markets, many excellent foreign project management companies will invest in China. Facing the increasingly drastic competition of project management market, China's project management enterprise must catch the opportunity, accepting the challenge and creating a brand. In this paper, the present situation and problems of creating a brand of project management enterprise in China are analyzed. It brings forward the ways of creating management enterprise brand through intensifying consciousness of brand, building up a conception of brand capital, strengthening the construction of enterprise, improving consciousness of service, managing strictly and canonically, enhancing the service and improving staff training, setting up advanced management strategy and enhancing competition of enterprise.     

我国养殖大黄鱼的出口竞争力分析

本文通过对我国大黄鱼产业出口现状的描述,揭示了大黄鱼出口市场的基本特征：由于我国大黄鱼养殖产地集中,出口省份也较为集中,并且面临着严峻的贸易壁垒。同时,文章通过运用出口竞争力指标,对几个省份的大黄鱼出口优、劣势作出了分析。并提出了积极寻找新型出口方式、拓展出口市场、加强出口产品的多样化以及合理规避贸易壁垒等建议,以实现大黄鱼出口利润的稳步增长。     

Evaluation of government‐supported provincial innovation competitiveness—Evidence from China

Government support plays a crucial role in enhancing regional innovation capabilities and creating distinctive innovation clusters. Using the innovation competitiveness indicators of the 31 provinces in China, this paper examines the provincial government collaboration and innovation competitiveness values through Super‐SBM data envelopment analysis and analytic hierarchy process. Then, the particle swarm optimization (PSO) algorithm is employed to relate government collaboration to innovation competition and cooperation among provinces in hope of exploring the developmental trends of innovation cluster optimization. Research findings show that only 25.8% of the provincial government support proves effective for regional innovation, and the competitiveness values of the provinces are generally low and need to be improved. By incorporating the role of government support into the innovation competition and cooperation among provinces, there has been a tendency of innovation activities clustering in innovative regions and three major clusters have formed. The trend of clustering will continue to evolve outwards so that the overall innovation level of China would be enhanced.     

Global production networks,the developmental state and the articulation of Asia Pacific economies in the commercial aircraft industry

Abstract: Asia Pacific economies – particularly Japan, South Korea, China and Singapore – play a large and growing role in the commercial aircraft industry, despite the fact that the region has no major independent plane‐maker. Instead, Asia has secured a significant position in the increasingly elaborate global production networks of Boeing and Airbus. The wider Asian significance in those networks has been fostered not only by the region's deep capital and human resource assets but also by the catalytic actions of developmental states in the region. Moreover, decades of rapid air traffic growth have made Asia a crucial market for Boeing and Airbus. In response, the American and European giants have been compelled to outsource more of their business to Asia in order to win sales and to design new airliners tailored to the needs of Asian customers. Together, the increased importance of Asia in both the design and the manufacture of commercial aircraft point to a future in which Asia will capture an ever‐larger share of the value created in one of the world's most technologically sophisticated and strategically significant industries.     

Does Commuting Reduce Wage Disparities?

ABSTRACT This paper shows that in the Baltic countries, commuting reduces urban‐rural wage and employment disparities and increases national output. To quantify the effect of commuting on wage differentials, two sets of earnings functions are estimated (based on Estonian, Latvian, and Lithuanian Labor Force Surveys) with location variables (capital city, rural, etc.) measured at the workplace and at the place of residence. We find that the ceteris paribus wage gap between capital city and rural areas, as well as between capital and other cities is significantly narrowed by commuting in some cases but remains almost unchanged in others. Different outcomes are explained by country‐specific spatial patterns of commuting, educational and occupational composition of commuting flows, and presence or absence of wage discrimination against rural residents in urban markets. A treatment effects model is used to estimate individual wage gains to rural—urban or inter‐city commuting; these gains are substantial in most but not all cases. Wage effects of commuting distance, as well as impact of education, gender, ethnicity, and local labor market conditions on the commuting decision are also explored.     

Maquiladoras and U.S.‐Bound Migration in Central Mexico

Over the past one and a half decades, smaller cities and nonmetropolitan areas in Mexico have attracted manufacturing plants, led by the export manufacturing sector. Maquiladoras in particular are increasingly locating their plants in such places in the “deep interior” Mexico—outside of the border states. Using 1980 and 1990 Mexican census data for 19 growth centers and 27 high‐emigration municipios (counties) in Central Mexico, this paper suggests that foreign‐owned assembly (maquiladora) jobs decentralized significantly over the 1980s, locating closer to emigrant municipios. An examination of 17 emigrant municipios in the industrialized states of Jalisco and Guanajuato found that an emigrant municipio's accessibility to maquiladora jobs, and jobs indirectly related to maquiladora growth, was positively related to its overall employment growth, which was, in turn, negatively related to its U.S. migration rate over the decade. Although the migration reduction inherent in these relationships is relatively small, it could be accelerated by U.S. and Mexican policies giving incentives for more peripheral locations of export‐oriented and other manufacturing.     

The Innovativeness and Heterogeneity of Foreign‐Invested High‐Tech Companies in Shanghai

China has taken a foreign direct investment‐based approach toward increasing its capital and knowledge base, and developing into an innovative economy. However, little quantitative evidence exists about the factors that drive innovations of foreign‐invested enterprises (FIEs) there. This paper uses survey data from high‐technology firms in Shanghai to discuss factors affecting their innovativeness. It takes the concepts of absorptive capacity, export orientation, and innovation‐related cooperation as a starting point. It highlights how the interplay of strategies and resources affects innovativeness and heterogeneity of FIEs. The most innovative FIEs are endowed with a strong human capital base and R&D activities, which at the same time target export markets and whose cooperative partners involve firms other than their parent company. The results underline the necessity to differentiate between the different types of FIEs when examining their innovativeness.     

State Characteristics and the Locational Choice of Foreign Direct Investment: Evidence from Regional FDI in Mexico 1989–2006

ABSTRACT Despite the growing importance of foreign direct investment (FDI) in the Mexican economy, statistical evidence on the determinants of the regional distribution of foreign‐owned firms is seriously limited. In this paper, empirical findings are presented from a variety of econometric models that identify several regional characteristics influencing the locational choice of FDI. The main findings are threefold. First, several locational factors appear to be potentially important; these include regional demand, wages, schooling, infrastructure, and agglomeration economies. Second, the effect of agglomeration economies stems from several sources. In particular, the regional presence of agglomerations of manufacturing activity and of foreign‐owned manufacturing firms both have an independent positive effect on the locational decision of new FDI. Third, the locational process of maquiladora firms differs from the locational process of overall FDI. The actual findings suggest that regional demand and infrastructure, as suggested above, are not important locational factors for export‐oriented firms. Furthermore, whereas agglomeration economies from manufacturing and the presence of existing FDI attract new maquiladora investment, the presence of a regional agglomeration of services deters the location of new maquiladora firms. Finally, agglomeration economies appear to be more important in the locational process of maquiladora firms.     

Local Embeddedness,Market Focus,and Productivity: Evidence of Taiwanese Manufacturing MNE Subsidiaries in China

There has been considerable literature discussing the characteristics and importance of location‐specific factors in the context of Foreign Direct Investment (FDI), but very little literature linking location‐specific factors to productivity. This study explores, for each location‐specific factor, the relationship between the degree of local embeddedness and the labor productivity. We contribute to the body of literature on location‐specific factors by arguing that market focuses play a pivotal role in determining the impact of local embeddedness on productivity. Based on their strategic choices, we categorize Taiwanese manufacturing multinational enterprise (MNE) subsidiaries in China into two groups: the local‐market‐focus group and the export‐market‐focus group. The paper fits the Ordinary Least Squares (OLS) regression models to the export‐market‐focus group and the local‐market‐focus group separately. For these two groups, each local‐embeddedness variable exerts different effect on labor productivity. Results also suggest that local‐market‐focus FDI is more affected by the host country's local business environment than is export‐market‐focus FDI. Although this study cannot represent all foreign companies in China, its dynamism offers a rich context in which to explore a deeper understanding of foreign companies' business activities in China.     

Innovation Ideas and Regional Characteristics: Product Innovations and Export Entrepreneurship by Firms in Swedish Regions

ABSTRACT This paper focuses upon the ways in which characteristics of regions in regards to knowledge sources, communication opportunities, and absorptive capacity influence the development of innovation ideas among existing and potential entrepreneurs. We formulate a model where entrepreneurs or innovating firms introduce new products in a quasi‐temporal setting. Market conditions are characterised by monopolistic competition between varieties belonging to the same product group, in which there is entry and exit of varieties. A stochastic process is assumed to generate new innovation ideas as time goes by, and a firm (entrepreneur) who receives such an idea has to transform the idea to an innovation, which in the model is specified as a particular variety combined with a specific destination market. The theoretical model is used as a reference when formulating two regression models, with which we estimate how a set of regional characteristics are associated with the likelihood of innovation ideas across Swedish local labour market regions. In one model, we examine the emergence of new export varieties, and in the second model, we investigate the appearance of new export firms. Results are consistent with the assumption that knowledge and information flows have a positive influence on the frequency of arrival of innovation ideas to firms.     

Social dialogue and industrial relations in South Korea: Has the tripartite commission been successful?

This paper analyses the sweeping changes in industrial relations in South Korea that have taken place since democratisation in 1987, which gave workers the right to organise themselves, and critically reviews the development of social dialogue since the financial crisis of 1997. A number of international labour specialists have maintained that social dialogue plays an important role in enhancing economic restructuring and the stability of industrial relations in order to compete in a global economy. Contrary to the positive assessment of social dialogue, the paper argues that the Korean Tripartite Commission has not reduced the antagonism between unions and employer organisations due to the influence of embedded, state‐led economic development. The financial crisis of 1997 merely provided a catalyst to propel the ‘historic compromise’ of February 1998, without creating effective institutional arrangements to maintain social dialogue. It is worth noting that the uncertainty of social dialogue results from the inability of the Korean Tripartite Commission to encourage employers and workers to trade off wage restraint for job security in the context of a lack of social welfare protections. The paralysed Korean Tripartite Commission provides fertile ground for reflecting on the complex relationship between social dialogue and institutional arrangements.     

Comparative Analysis of the Total Factor Productivity of Manufacturing in Northeast Asian Metropolitan Areas

We compare and analyze the total factor productivity of the manufacturing industries in the major metropolitan areas of South Korea, China, and Japan. This study can contribute to the economic cooperation among these countries by analyzing their productivity growth and evaluating their relative competitiveness. Statistical data from manufacturing industries are used to analyze five metropolitan areas. The manufacturing industries are classified into 10 sectors, and two different time periods (before and after 1997, when the foreign currency crisis began in Korea) are examined. The results in terms of the development and competitiveness of the manufacturing industries in Korea, China, and Japan will be useful in establishing promotional strategies.     

Investment,Capital Stocks and the Age of Capital in U.S. Regions

ABSTRACT This paper outlines a conventional method of constructing regional capital stocks using investment and depreciation data. The method was used to estimate annual capital stocks for twenty (two-digit SIC) manufacturing industries in the nine census regions of the US. between 1955 and 1989. The novelty of the paper is the disaggregated capital stock data generated. Those data reveal that the industrial distribution of capital is becoming increasingly similar among regions of the U.S. They also show the familiar snowbelt-sunbelt shift of manufacturing capacity. Statistical tests establish that the redistribution of regional net capital stocks between 1955 and 1989 is significant in sixteen of twenty industries and that in ten of these sectors the most pronounced shifts in capacity occurred before the early 1970s. As investment moved away from the old manufacturing heartland, the age of capital in the mid Atlantic and east north central states increased and the age structure of capital stocks became relatively youthful in the west. Age pyramids reveal that regional variations in the age distribution of capital and the average age of capital were greater in 1989 than in 1955. Models of embodied technological change claim that the age of capital is a useful surrogate of best-practice technology.