Search

Begin New Search Topic Industrial Policy

191. Firm Sizes: Facts, Formulae and Fantasies

Author:
Robert L. Axtell
Publication Date:
02-2006
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
Recently discovered facts concerning the size distribution of U.S. firms are recapitulated—in short, these sizes are closely approximated by the Zipf distribution, a Pareto (power law) distribution with exponent of unity. Interesting consequences of this result are then developed, having primarily to do with formulae for the distribution's moments, and difficulties of reasonably characterizing a 'typical' firm. Then, a leading candidate explanation for these data—the Kesten random growth process—is assessed in terms of its realism vis-á-vis actual firm growth. Insofar as it has fluctuations that are quite different in character from actual firm size variability, the Kesten and related stochastic growth processes qualify more as fables of firm growth than as credible explanations. Finally, new explanations of the facts are proposed by considering firms to be partitions of the set of all workers. Assuming all partitions to be equally likely, the observed distribution of firm sizes is hypothesized to be the distribution of block sizes in the most likely partitions. An alternative derivation of this distribution as a constrained optimization problem is also described. Given that these calculations involve unimaginably vast magnitudes, it seems just short of fantastic to consider them relevant empirically.
Topic:
Development, Economics, and Industrial Policy
Political Geography:
United States

192. The Vital Center: A Federal-State Compact to Renew the Great Lakes Region

Author:
Britany Affolter-Caine and Justin Austin
Publication Date:
10-2006
Content Type:
Policy Brief
Institution:
The Brookings Institution
Abstract:
The Great Lakes region of the United States is a unique economic, social, and cultural area made up of all or part of 12 states, including the western portions of New York, Pennsylvania, and West Virginia; northern Kentucky; all of Ohio, Indiana, Michigan, Illinois, and Wisconsin; and eastern Minnesota, Iowa, and Missouri. Home to 97 million people, this region is defined by a shared geography and natural resources, a dynamic political and economic history, and strong principles of social organization that together have shaped its growth and development. One of the largest industrial production centers and consumer marketplaces in the world, this highly urbanized “mega-region” is a vital global hub of economic activity and growth.
Topic:
Development, Economics, and Industrial Policy
Political Geography:
United States, New York, North America, Pennsylvania, Ohio, Wisconsin, Illinois, Indiana, Michigan, West Virginia, North Kentucky, East Minnesota, Iowa, and Missouri

193. Why do some countries produce so much more output per worker than others?

Author:
Camelia Minoiu and Emmanuel Pikoulakis
Publication Date:
10-2006
Content Type:
Working Paper
Institution:
Institute for Social and Economic Research and Policy at Columbia University
Abstract:
To explain differences in output per worker across countries, we test for the workings of a learning-by-doing hypothesis and the hypo thesis that the effectiveness of human capital depends on the laws and institutions that promote workplace practices that allow skills to develop. The quality of laws and institutions in the workplace is measured by an index of economic security (ESI). We find that ESI is a good proxy for human capital whilst educational attainment is not. We also find that countries with high ESI use more effectively the skills of the workforce and are better at exploiting profitable opportunities in capital markets.
Topic:
Development, Economics, Industrial Policy, International Trade and Finance, Markets, and Political Economy

194. European Chemical Policy and the United States: The Impacts of REACH

Author:
Rachel Massey, Frank Ackerman, and Liz Stanton
Publication Date:
09-2006
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
The European Union is moving toward adoption of its new Registration, Evaluation and Authorization of Chemicals (REACH) policy, an innovative system of chemicals regulation that will provide crucial information on the safety profile of chemicals used in industry. Chemicals produced elsewhere, such as in the United States, and exported to Europe will have to meet the same standards as chemicals produced within the European Union. What is at stake for the U.S. is substantial: we estimate that chemical exports to Europe that are subject to REACH amount to about $14 billion per year, and are directly and indirectly responsible for 54,000 jobs. Revenues and employment of this magnitude dwarf the costs of compliance with REACH, which will amount to no more than $14 million per year. Even if, as the U.S. chemicals industry has argued, REACH is a needless mistake, it will be far more profitable to pay the modest compliance costs than to lose access to the enormous European market.
Topic:
Government, Industrial Policy, and International Trade and Finance
Political Geography:
United States and Europe

195. Feeding the Factory Farm: Implicit Subsidies to the Broiler Chicken Industry

Author:
Elanor Starmer, Timothy A. Wise, and Aimee Witteman
Publication Date:
06-2006
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
Since the passage of the 1996 Farm Bill, the U.S. market prices of soybeans and corn have dropped 21% and 32%, respectively. These commodities are sold on the market at a price below what they cost to produce. If U.S. agricultural policies contribute to this trend, then they do so to the benefit of commodity purchasers, particularly the industrial operations that use the commodities as raw material inputs. Corporate-owned livestock operations are a case in point. This paper focuses on the broiler chicken industry, which, in the United States, is fully industrialized and vertically integrated. We compare the average costs of production for broiler feed components—corn and soybean meal—with market prices, and then use these cost-price margins to estimate the amount broiler companies save by being able to purchase feed at a price below production costs. We find that the broiler industry gained monetary benefits averaging $1.25 billion per year between 1997 and 2005 when, following the passage of the 1996 Farm Bill, market prices dropped far below production costs. In contrast, broiler industry gains from low market prices averaged a much smaller $377 million per year between 1986 and 1996. We conclude that the corporate broiler industry is a major winner from changes to U.S. agriculture policy that have allowed feed prices to fall. This finding is not significantly altered when we adjust our calculations to account for the overvaluation of agricultural land, nor does it appear to reverse under future cost/price scenarios. As policymakers turn their attention to the 2007 Farm Bill, they would do well to examine the ways in which agribusiness firms in general, and industrial livestock operations in particular, benefit from policies ostensibly designed to support family farmers. Current U.S. farm policies may be driving industrialization in the livestock production system if they give factory operations the appearance of being more cost efficient than diversified, independent operations that grow their own feed.
Topic:
Agriculture, Government, and Industrial Policy
Political Geography:
United States

196. Financing SMEs and Entrepreneurs

Publication Date:
11-2006
Content Type:
Working Paper
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Small and medium-sized enterprises (SMEs) are the backbone of all economies and are a key source of economic growth, dynamism and flexibility in advanced industrialised countries, as well as in emerging and developing economies. SMEs constitute the dominant form of business organisation, accounting for over 95% and up to 99% of enterprises depending on the country. They are responsible for between 60-70% net job creation in OECD countries. Small businesses are particularly important for bringing innovative products or techniques to the market.
Topic:
Development, Economics, Industrial Policy, and Markets

197. Scorecard on Corporate Governance in East Asia

Author:
Stephen Y.L. Cheung and Hasung Jang
Publication Date:
12-2006
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The far reaching economic effects of the 1997 Asian financial crisis underscore the importance of structural reforms in the governance of the East Asian business sector. This paper measures the progress of corporate governance reforms in nine East Asian economies towards the guidelines established by the Pacific Economic Cooperation Council (PECC), as revealed empirically through two surveys. The first survey is a stock-taking exercise to take note of on-going reforms in corporate governance rules and regulations, while the second covers perceptions of the implementation and enforcement of corporate governance rules as seen by fund managers and analysts. This study indicates a divergence between the regulatory environment and market perceptions of corporate governance practices in the countries sampled. The survey results also show that, although the nine economies do not differ significantly in the corporate governance rules and regulations they have put in place, there is a significant difference in terms of market perceptions of their corporate governance practices. More than an academic exercise, this study is meant to share the experiences of corporate governance reform among East Asian economies.
Topic:
Economics, Government, and Industrial Policy
Political Geography:
Israel, East Asia, and Asia

198. Re-conceptualising the Military-Industrial Complex: A General Systems Theory Approach

Author:
Adrian Kuah
Publication Date:
01-2006
Content Type:
Working Paper
Institution:
Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:
This paper examines the prevailing model by which the interplay between defence establishments and defence industries–the military-industrial complex–has been understood, focusing primarily on the defence industrial base. It argues that give global change drivers such as the end of the Cold War and the concomitant reduction in the geostrategic threat level, as well as defence globalization, post-industrialism and the revolution in military affairs (RMA), the old model has ceased to have utility for both researchers and policymakers. Instead, this paper suggests an approach that goes beyond conventional economic analyses and draws on organization theory to develop a dynamic model that better reflects the current realities in defence industrial sector. This paper articulates what a general systems conception of the defence industrial system might consist in, and highlight its potential in informing the defence industrial policy process as well as agenda for future research.
Topic:
International Relations, Defense Policy, Development, and Industrial Policy

199. Russia's Challenges as Chair of the G-8

Author:
Anders Åslund
Publication Date:
03-2006
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
On January 1, Russia became the chair of the Group of Eight (G-8), the exclusive group of the biggest industrial democracies. This chairmanship raises many eyebrows. Russia was originally included in the G-8 to help lock in its democratic reforms, 1 but Russia is no longer even semidemocratic. Last year, US senators John McCain and Joseph Lieberman sponsored a resolution urging President Bush to work for the suspension of Russia's membership until the Russian government accepted and adhered to “the norms and standards of free, democratic societies as generally practiced by every other member nation of the Group of 8 nations.” Jeffrey Garten ( Financial Times , June 28, 2005) has called Russia's chairmanship “farcical,” saying, “Two trends are changing the world for the better—freer markets and democratization. . . . But, alone among the summit member Russia is moving in the opposite direction. . . . Moscow's leader - ship of the G-8 reduces the credibility and the relevance of the group to zero.”
Topic:
International Relations, Democratization, and Industrial Policy
Political Geography:
Russia, Europe, and Asia

200. Firm Structure, Multinationals, and Manufacturing Plant Deaths

Author:
J. Bradford Jensen and Andrew B. Bernard
Publication Date:
09-2006
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Plant shutdowns shape industry productivity, the dynamics of employment, and industrial restructuring. Plant closures account for more than half of gross job destruction in US manufacturing. This paper examines the effects of firm structure on US manufacturing plant closures. Plants belonging to multi-plant firms and those owned by US multinationals are less likely to exit. However, the superior survival chances are due to the characteristics of the plants rather than the nature of the firms. Controlling for plant and industry attributes, we find that plants owned by multi-unit firms and US multinationals are much more likely to close.
Topic:
Economics, Human Welfare, and Industrial Policy
Political Geography:
United States