Effect Of Foreign Competition Research Articles

The Effect of Foreign Competition on Related Diversification and Performance

This study examines whether foreign competition affects related diversification. To obtain exogenous variation in product market competition, I exploit a quasi-natural experiment provided by large currency appreciation that occurred between 2005 and 2010 in the manufacturing sector of commodity-exporting countries. This paper examines the impact of a significant real appreciation of the Colombian Peso in the 2000s at the product-firm level. A currency appreciation shock affects a firm through two different channels: (1) Firms adjust their product portfolio by reducing sales and dropping products affected by an appreciation shock; (2) firms are more likely to add products when they have higher levels of relatedness to the core products under competitive pressure. These findings provide the first evidence on how foreign competition affect corporate diversification at the product level.

The Effect of Foreign Competition on Family Labour Allocation

The Effect of Foreign Competition on Family Labour Allocation

Impact of institutional reforms and industry structural factors on market returns of emerging market rivals during acquisitions by foreign firms

This paper seeks to understand the joint impact of institutional reforms and industry structural factors on market returns earned by rivals in an emerging market during foreign acquisitions. We use a sample of 238 foreign acquisitions in India during the period 2004–2013 and find empirical evidence to support the notion that institutional reforms, foreign competition and business group competition positively impact the market returns of the rivals of acquired firms. Additionally, we find that the effects of foreign competition and business group competition on rivals’ market returns are shaped by the degree of institutional reforms in the industry, indicating that firms’ market returns in emerging markets during foreign acquisitions can be better understood through the incorporation of the joint role of industry structural factors and institutional reforms.

The Relationship between Foreign Competition and Innovation Activities Based on Quantile Regression

This article uses quantile regression to shed light on the complex relationship between foreign competition and innovation activities. Quantile regression is more powerful than classical linear regression since quantile regression can produce estimates for all conditional quantiles of the distribution of the innovation activities variable, whereas classical linear regression only estimates the conditional mean effects. The empirical evidence shows that the effect of foreign competition on make innovation activities is different across the conditional quantiles of the distribution of innovation activities, something classical linear regression would leave unidentified. This finding suggests that estimating the quantile effect of innovation activities variable can well be more insightful than effect. Additionally, this article finds a U-shaped relationship between foreign competition and make innovation activities.

Globalization and the Provision of Incentives Inside the Firm: The Effect of Foreign Competition

This paper studies the effect of changes in foreign competition on the structure of compensation and incentives of U.S. executives. We measure foreign competition as import penetration and use tariffs and exchange rates as instrumental variables to estimate its causal effect on pay. We find that higher foreign competition leads to more incentive provision in a variety of ways. First, it increases the sensitivity of pay to performance. Second, it increases whithin-firm pay differentials between executive levels, with CEOs typically experiencing the largest wage increases, partly because they receive the steepest incentive contracts. Finally, higher foreign competition is also associated with a higher demand for talent. These results indicate that increased foreign competition can explain some of the recent trends in compensation structures.

Globalization and the Provision of Incentives Inside the Firm: The Effect of Foreign Competition

This paper studies the effect of changes in foreign competition on the structure of compensation and incentives of U.S. executives. We measure foreign competition as import penetration and use tariffs and exchange rates as instrumental variables to estimate its causal effect on pay. We find that higher foreign competition leads to more incentive provision in a variety of ways. First, it increases the sensitivity of pay to performance. Second, it increases whithin-firm pay differentials between executive levels, with CEOs typically experiencing the largest wage increases, partly because they receive the steepest incentive contracts. Finally, higher foreign competition is also associated with a higher demand for talent. These results indicate that increased foreign competition can explain some of the recent trends in compensation structures.

Globalization and the Provision of Incentives inside the Firm: The Effect of Foreign Competition

This paper studies the effect of changes in foreign competition on the structure of compensation and incentives of U.S. executives. We measure foreign competition as import penetration and use tariffs and exchange rates as instrumental variables to estimate its causal effect on pay. We find that higher foreign competition leads to more incentive provision in a variety of ways. First, it increases the sensitivity of pay to performance. Second, it increases whithin-firm pay differentials between executive levels, with CEOs typically experiencing the largest wage increases, partly because they receive the steepest incentive contracts. Finally, higher foreign competition is also associated with a higher demand for talent. These results indicate that increased foreign competition can explain some of the recent trends in compensation structures.

The Effect of Foreign Competition on Forecasting Bias

The Effect of Foreign Competition on Forecasting Bias

Globalization and the Provision of Incentives Inside the Firm: The Effect of Foreign Competition

Globalization and the Provision of Incentives Inside the Firm: The Effect of Foreign Competition

Manufacturing Employment and Imports: Low-Wage Country Imports Versus Overall Imports

This paper analyzes the effects of imports on employment in the US manufacturing sector in the 1980s and 1990s, focusing on the 'technique' effect of foreign competition on employment. This effect represents within industry changes in labor demand that may arise as domestic producers shift towards more capital intensive production methods in the face of growing imports. I estimate separate effects for production, non-production and total employment. Using the Arellano-Bond estimator, the results show that imports were negatively correlated with total employment in the 1980's, while in the 1990's non low-wage imports had a negative impact on non-production employment.

Further evidence on the effect of foreign competition on industry level wages

This paper has examined the impact of trade changes on industry level wage outcomes in a bargaining framework. The results suggest that on average increases in trade, whether emanating from imports or exports, serve to decrease wage changes. This evidence is consistent with the view that foreign trade acts to moderate demand for an industry’s output and hence to discipline wage setting and is consistent with what Konings and Vandenbussche (1995) reported for UK manufacturing.

The effect of foreign competition on UK employment and wages: Evidence from firm-level panel data

The Effect of Foreign Competition on UK Employment and Wages: Evidence from Firm-Level Panel Data. —This paper contributes to the sparse empirical literature on the effects of foreign competition on domestic employment and wages. The authors estimate a structural labour demand equation on UK firm-level panel data between 1982 and 1989 and several wage equations. When they restrict the sample to the manufacturing sector only, they find for the unionized firms that foreign competition has a negative effect on both wages and on employment. However, when UK manufacturing firms face only a few rivals, foreign competition has a positive effect on wages, but no effect on employment.

The effect of foreign competition in prices and quantities on the employment in import-sensitive U.S. industries

This article estimates the effect of foreign competition in prices and for market share on the employment in five import-sensitive U.S. industries. It starts with a model where the dominant domestic firm sets the price to achieve a particular output target. Actual output and labor demand differ from target because of unexpected movements in the fringe foreign supply curve. Estimation reveals that foreign competition in price and quantity is a more important determinant of domestic employment than is foreign competition in price alone. But, trade protection is not an implication of these results because the effect of domestic variables, such as intermediate input costs and fluctuations in demand, are much more important determinants of domestic employment in these industries.

Import Competition and the Profitability of United Kingdom Manufacturing Industry

THIS paper examines the effect of import competition on the profitability of a cross-section of 32 manufacturing industries in the United Kingdom. The research originates from a chapter of the author's doctoral dissertation, completed in I976, and the main results from that are reported in Section II. As a check on robustness, the hypotheses advanced in the dissertation are retested with more recent data (section IV). A more substantial extension of the earlier research concerns the treatment of seller concentration. Initially, variables for seller concentration turned out to be non-significant. Some recent research has, however, suggested that the effect of foreign competition on profitability is evident only in those industries where seller concentration is high so that the competition among domestic producers is weak. This suggestion is examined in section III.1