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31. Structural Change and the Growth of Industrial Sectors: Empirical Test of a GPT Model

Author:
Fulvio Castellacci
Publication Date:
10-2008
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
This paper investigates the empirical relevance of a model of structural change and the growth of industrial sectors. The model analyses the process of diffusion of general- purpose technologies (GPTs) and how this affects the dynamic performance of manufacturing and service industries. The empirical analysis studies the dynamics and the determinants of labour productivity growth of a large number of sectors in 18 OECD countries over the period 1970-2005. The results of dynamic panel data and cross-sectional analysis provide support for the empirical validity of the model. Industries that are close to the core of the emerging GPT based on information and communication technologies (ICTs) are characterized by greater innovative capabilities and have recently experienced a more dynamic performance. Relatedly, countries that have been able to shift their industrial structure towards these high-opportunity manufacturing and service industries have grown more rapidly.
Topic:
Development, Economics, Globalization, and Industrial Policy

32. Regional Inequality and Convergence in Europe, 1995 – 2005

Author:
Arne Melchior
Publication Date:
11-2008
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The paper presents new results on within-country regional inequality in per capita income for 36 countries during 1995-2005; focusing on Europe but with some non-European countries included for comparison. In 23 of the 36 countries there was a significant increase in regional inequality during the period, and in only three cases there was a reduction. Regional inequality increased in all countries of Central and Eastern Europe, while for most Western European countries there was little change. For the EU-27 as a whole, there was a modest increase in within-country regional inequality, but convergence across countries. The latter effect was quantitatively more important, so on the whole there was income convergence in the EU-27, especially after 2000. Regional inequality is particularly important for some large middle-income countries such as China, Russia and Mexico. In such countries there may however be considerable price differences across regions, and the use of common price deflators for the whole country may lead to a biased assessment of regional inequality.
Topic:
Economics, Political Economy, Social Stratification, and Sociology
Political Geography:
Russia, China, Europe, and Mexico

33. East-West Integration and the Economic Geography of Europe

Author:
Arne Melchior
Publication Date:
12-2008
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
Implementation of the European internal market and East-West integration has been accompanied by a dramatic change in the spatial distribution of economic activity, with higher growth west and east of a longitude degree through Germany and Italy. In the east, income growth has been accompanied by increasing regional disparities within countries. We examine theoretically and empirically whether European integration as such can explain these developments. Using a numerical simulation model with 9 countries and 90 regions, theoretical predictions are derived about how various patterns of integration may affect the income distribution. Comparing with reality, we find that a reduction in distance-related trade costs combined with east-west integration is best able to explain the actual changes in Europe's economic geography. This suggests that the implementation of the European internal market or the Euro has “made Europe smaller”. In Central Europe, the dominance of capital regions tends to eliminate east-west growth differences inside countries. There is no convincing support for the hypothesis that European integration had adverse effects on non-members.
Topic:
Economics, Markets, and Political Economy
Political Geography:
Europe

34. The Internationalization of Firms in the Service Industries: Channels, Determinants and Sectoral Patterns

Author:
Fulvio Castellacci
Publication Date:
12-2008
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The paper presents the results of a new survey on the international activities of Norwegian enterprises in various service industries. The survey focuses on three main internationalization channels: international sales, international cooperation and R outsourcing. The empirical analysis studies the relevance of these channels, and investigates the related strategies, objectives and determinants. International sales and collaborations emerge as the two most relevant channels, whereas the scope for R outsourcing seems to be far more limited. The analysis of the determinants of international activities suggests three main results: (1) the innovative capability of firms matters for their international performance; (2) the various internationalization channels seem to be complement, rather than substitute, strategies to compete in foreign markets; (3) sectoral specificities greatly affect firms' internationalization strategies and performance.
Topic:
Economics, International Trade and Finance, and Markets
Political Geography:
Europe

35. Governance Indicators: A guided Tour

Author:
Per Botolf Maurseth
Publication Date:
12-2008
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
In recent years, countries' governance has been paid increasing attention. At the same time, the availability of governance indicators has also increased. Such indicators are used by investors, aid donors and researchers. This paper reviews some commonly used governance indicators. Their construction and their usefulness are discussed. It is con-cluded that governance indicators are a useful tool for evaluating countries' performance, but that they should be complemented with other sources of information.
Topic:
Development, Economics, Humanitarian Aid, Post Colonialism, and Foreign Aid
Political Geography:
United States

36. Who Buys Whom in International Oligopolies with FDI and Technology Transfer?

Author:
Leo A. Grünfeld and Francesca Sanna-Randaccio
Publication Date:
01-2008
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
Under what conditions will a technology leader from a small country acquire a laggard from a large country, and vice versa? We answer this question with a two-firm two-country Cournot model, where firms enter new markets via greenfield FDI or acquisition. The model takes into account both technological and market size asymmetries, and allows for M transaction costs, like corporate finance and legal fees. We show that to be the acquirer, a firm from a small country needs not only a strong technological lead but also the ability to exploit it on a global scale, which requires low international technology transfer costs. Moreover, we find that a multilateral greenfield investment liberalization may actually increase the incentives for foreign acquisitions. The effect of such liberalization on the nationality of the acquirer depends largely on the extent of the technology gap.
Topic:
Economics, International Trade and Finance, Markets, and Science and Technology

37. Aid for Trade and the Post-Washington Confusion

Author:
Arne Melchior
Publication Date:
01-2007
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The paper examines the rationale for”aid for trade” (AfT), starting with a review of developments in the field and institutions involved. A statistical analysis attempts to trace for which countries there has not been a positive relationship between trade and development. The results indicate that for 40 countries, representing 2/3 of the world population, there has been a positive relationship between trade openness and growth. The relationship has however been negative for 15 countries representing 3% of the world population, and not so clear for the rest (around 100 countries, covering 30% of the world population). For the negative cases, the” problems with trade” are the same as the” problems with growth”, so AfT should be granted in conjunction with help for economic development in general. AfT related to supply-side limitations should be given not only to the LDCs (Least Developed Countries); other classifications in fact serve better in order to trace those with the greatest need for AfT.
Topic:
Development, Economics, Humanitarian Aid, and International Trade and Finance
Political Geography:
Washington

38. Geographical spread of corruption: Policies, institutions and cross-country economic interaction. Part I: Issues, theory

Author:
Jens Chr.1 Andvig
Publication Date:
05-2006
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The international aspects of corruption have received considerable attention in both research and policy: What determines whether a country is highly corrupt or not? Most research has sought to answer this question by considering each country as reflecting the same kind of mechanism explaining both the high and low outcomes. In this paper some of the theoretical explanations suggested in the literature are reviewed at the same time as it suggests how the question needs to be rephrased if each country's corruption rate is influenced by an internationally open economic system.
Topic:
International Relations, Corruption, Economics, and International Political Economy

39. As safe as the Bank? Houshold financial behavior and economic reasoning in post-soviet Russia

Author:
Nils August Andresen
Publication Date:
01-2006
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
This study examines the financial behaviour of Russian households from the collapse of communism to the financial melt down in August 1998. By transforming savings into investment, financial intermediaries are important to economic growth. In post-Soviet Russia, financial intermediaries were increasingly unable to attract new household savings, as people turned to foreign currency. What determined the allocation of household savings? The study considers the three main alternatives households could turn to: The state savings bank; commercial financial companies; and foreign currency, mainly dollars.
Topic:
Development and Economics
Political Geography:
Russia and Soviet Union

40. The Norwegian Import Regime for Agriculture

Author:
Arne Melchior
Publication Date:
09-2005
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
Norway maintains one of the highest levels of protection for agriculture in the OECD, but the tariff structure is not so transparent due to the extensive use of specific tariffs, i.e. tariffs expressed in NOK/kg or the like. In this paper, we use world market prices and Norwegian import prices to calculate ad valorem equivalents of specific tariffs. This shows that 28% of the tariff lines in agriculture are above 100%, and 10% are above 300%. The average of MFN applied tariffs is in the range 73-103%, depending on the calculation method. Protection is somewhat lower (54-74%) for goods exported by developing countries. While the Least Developed Countries have zero tariffs, other developing countries obtain 10-15% tariff reductions under the GSP system of tariff preferences. Tariff rate quotas provide some increase in market access. Protection of grains and feedstuff raises the forage costs in agriculture, and especially feedstuffs are important in the exports of developing countries.
Topic:
Agriculture, Economics, and International Trade and Finance
Political Geography:
Europe and Norway