L60 - Industry Studies: Manufacturing: GeneralReturn

Production in Turkey has a high dependence on imported inputs. Therefore, the policy aiming at increasing exports through the depreciated national currency leads to different results depending on the degree of dependence on imported inputs. In this context, this study econometrically analyses increases in exports of manufacturing and service industries which have different levels of imported input dependence. The analysis findings indicate that national currency depreciation leads to competitive effects in the manufacturing industry, but not in the service sector. The effect of labour costs, on the other hand, is much lower in the manufacturing industry than in services. In addition, we found that the unit value index of crude material imports has a significant negative impact on the sectoral competitiveness of the manufacturing industry. In contrast, changes in import prices seem to have no significant impact on service exports.

We analyze how efficiency of firms in the Czech Republic is affected by their size, age, competition, capital structure, ownership types, and global financial crisis. We employ the stochastic frontier approach, use a large and detailed dataset, and cover time span 2001-2012. While effects of firm characteristics are small, the effects of ownership are economically substantial. We show that majority owners are most contributive with respect to firm's efficiency when compared to other categories we analyze. Minority owners with legally grounded power are able to impose significant efficiency improvement. The effect of the foreign ownership is strongest when foreign owners control firms with less than majority of voting power. Minority owners sharing the control do not seem to contribute to efficiency. The impact of crisis is not balanced but can be regarded as marginally positive in general. The firms' characteristics change only a little. In contrast, worsening impact of the crisis is evidenced for controlling ownership categories. Minority owners exhibit a limited disciplining effect to improve efficiency after the crisis, though.

This paper analyzes the technological efficiency of companies in the European Union (EU). Our extensive database covers more than 4 million firm/year observations from many EU countries including both manufacturing and service sectors in 2001-2007. Methodologically we apply a model of a stochastic production productivity frontier. We show that: the economic signifikance of company age is negligible, the higher the debt the greater the efficiency, bigger companies are less efficient, and a medium-level concentration of the market benefits companies. Majority ownership, in contrast, does not lead to higher efficiency, but a combination of majority and minority ownership has a positive disciplinary influence leading to higher efficiency. As to the origins of ownership, it does not seem that foreign-(co-)owned companies imply greater efficiency in old European countries, whereas foreign ownership is a significant driver of efficiency in new EU members through FDI.

We employ a large panel data set and analyze efficiency in the Czech firms during 1998-2007. We investigate how their efficiency evolves over time and how it is affected by ownership structures. Methodologically we employ a panel version of a stochastic production frontier model. We distinguish several categories of the ownership concentration by domestic owners and through foreign direct investments (FDI). Our results show that concentrated and foreign ownership impact efficiency positively in general. This results confirm benefits of the foreign direct ownership on the microeconomic level. Further, we show cases when majority ownership does not necessarily constitute improvements in efficiency. We also analyze effect of ownership coalitions and bring detailed new evidence on how ownership structures and industry sectors affect firms' efficiency.

This paper attempts to contribute to the analysis of links between state aid and competitiveness of manufacturing industries during 1998-2002. Statistical source on subsidies include all subsidies to capital gathered on enterprise level by Czech Statistical Office. The enterprise data have been aggregated by economic activity on 3digit level and competitiveness was defined as adjusted market shares of 3digit industries. Competitiveness on domestic markets is defined as the share of industry output sold on domestic market on the total domestic demand and competitiveness on the European market is defined as the share of industry export to EU market on the total European demand. In the first step we described subsidies to manufacturing industries and we aimed to answer the question what industries get the subsidies. In the second step we identified competitive industries on domestic and foreign markets. In the core part we analyzed links between subsidies and competitiveness of manufacturing industries in both static as well as dynamic perspective based on correlations. Our analysis confirmed that state subsidies are allocated to industries that have a strong position on the domestic markets and that state subsidies are not related to the competitiveness improvement.

The competitive ability of the processing industry in the SR occurs most often in classical types of production characterised by lower level of added value. Commodities with a low added value participate in worsening the balance of trade of the SR. The high export demand of industrial production also contributes to it. The changes in branch structure of processing industry of the SR are continuously reflected in a change of foreign trade structure. Its orientation is on the products less demanding and primarily on raw materials and energetic sources. In spite of this there is visible the tendency to be focused on exports in lower added value products in Slovak processing industry. The worsening of Slovak processing industry status is visible in the commodities where the export is confronted with new industrialized countries production (mainly in textile industry) but also with countries so-called "mono-cultural" (food, drinks, tobacco). In the given examples there is a strong tendency in the SR to lower the trade volume with these commodities. The analysis results show the increase of traffic means in Slovak foreign trade. Automobile industry is coming to the top and it has become the basic branch of the Slovak industry. The trend of development is from one point of view positive not only from the point of view of volume but also from the investment structures from the side of big investors. But on the other hand the SR has become, by this development, more sensible to fluctuation on the world markets. Processing industry is behind in its competitive ability in comparison with high-tech branches. The causes of it are low expenditures for research and development that should be used in these branches and they subsequently cause the low level of creating the level of added value. Marked falling behind in competitive ability of these branches is shown in their low shares in a foreign trade.

Paper focuses on foreign direct investment (FDI) in manufacturing in the Czech Republic, Hungary, Poland and Slovakia (CECs), where FDI penetration jumped to remarkable high levels in recent years. Foreign investment enterprises are more profitable, export oriented and technologically superior compared to domestic companies. FDI is perceived as a main channel of technology transfer and potential source of spillovers in host economy, though, estimates of technology transfer show mixed picture in the CECs. FDI spurs restructuring and productivity growth in foreign investment enterprises but FDI rather crowds-out domestic companies as spillovers are confirmed only to domestic companies with sufficient technological absorptive capacity. Paper concludes with some policy implications regarding FDI promotion and innovation policy.

Trade performance of EU-candidate countries in 1996 - 2000 is assessed in terms of specialization deepening and widening. The process of technology catching-up is analyzed from quantitative and qualitative aspects. The former stresses the tendency towards increasing geography and product concentration, which brings higher sensitivity to industry specific external demand shocks, the latter points to the limited skills and technology intensities within the segments of international production value chains located in the EU-candidate countries. The remarkable technology catch-up visible in trade statistics therefore mostly relies on external sources of knowledge and technology, as the innovation capacity in transition economies remains low. Without an adequate development of national knowledge and technology base the potential of qualitative spillovers accompanying FDI remains limited and the (cost-based) comparative advantage turns out to be rather short-lived.