Export-oriented Manufacturing Sector Research Articles

ICT System for 14.0 Adoption: Comparative Study to Assess the Readiness in Manufacturing MSMEs

One of India’s fastest-growing industries is the manufacturing sector centered on exports. Additionally, it has a greater impact on the economic development of India. Technology in the export-oriented manufacturing sector makes a significant contribution to the rise in productivity, which also boosts profits. The study’s major goal is to learn more about the adoption of the 14.0 ICT system by manufacturing enterprises with reference to MSMEs and to evaluate its efficacy. In order to gather information for this goal, a survey approach was used, with the dimensions of ICT infrastructure, ICT hardware, software, and information systems, as well as people and human resource factors, as the instruments. Multiple regression and descriptive statistics were used to evaluate the data on a sample size of 7 businesses from the Pondicherry region. The conclusion is that firms have a significant gap in their ICT preparedness in terms of ICT infrastructure, ICT hardware, software, and information systems, and this must be treated seriously by the businesses if technology advancement is to continue in the future.

An input\u2013output analysis of unit labour cost developments of the German manufacturing sector since the mid-1990s

According to empirical studies, a statistically significant factor for German exports success is high cost (or price) competitiveness. Studies by Deutsche Bundesbank recommend correcting the nominal effective exchange rate by broad cost (or price) indicators (Deutsche Bundesbank, 1998, 2016a). This would call for total economy unit labour costs. In contrast to these findings, Dustmann et al. (2014) suggest using refined unit labour costs for the exporting manufacturing sector only, corrected for inputs from other sectors and from abroad in an Input–Output (IO) analysis framework. According to these authors’ novel calculation, the export-oriented manufacturing sector of Germany experienced a decrease in unit labour costs by 25% between the mid-1990s and 2007. We try to replicate their findings. Following standard approaches in calculating sectoral unit labours costs, correcting for inputs from other sectors and from abroad, and using consistent input–output data from the Federal Statistical Office and from the World Input–Output Database, nominal unit labour costs of the manufacturing sector did not decrease over the period of analysis, and developed similarly to total unit labour costs. The similarity to total economy costs is also confirmed for a more recent period. In contrast to these authors’ claim, our findings are in line with recommendations of Deutsche Bundesbank for using total economy unit labour costs.

Countermeasures against economic crisis from COVID-19 pandemic in China: An analysis of effectiveness and trade-offs

The effectiveness of different countermeasures to economic crisis from the public health emergency is still inadequately understood. We establish an illustrative scenario, specifying the shocks of COVID-19 pandemic and countermeasures applying a general equilibrium model to analyze the effectiveness of countermeasures with a particular focus on trade-offs in the impacts of monetary and fiscal policies. We find that both monetary and fiscal countermeasures could effectively mitigate the economic damages to GDP and employment. However, they would also produce adverse side-effects such as an increase in consumer price by 1.05% and 0.57%, respectively, and a decline in exports by 2.61% and 1.05%, respectively. Monetary policies would exacerbate the damages to external demand by supply-side shocks of the pandemic, but they are more suitable for mitigating demand-side shocks. While fiscal policies would benefit nearly all producing sectors, monetary policies would mainly affect export-oriented manufacturing sectors negatively.

Belt and Road in Ethiopia and China’s African Ambition

China–Ethiopia economic cooperation in the period of 2000–2020 is marked by the convergence between the industrial policy of Ethiopia, the orientations of the Forum on China–Africa Cooperation (FOCAC), and the infrastructure development strategy which is the cornerstone of China’s Belt and Road Initiative (BRI). China, the largest foreign investor in Ethiopia during this period, has had a major role in terms of investment and financing in the energy sector and the transportation infrastructure: Addis Ababa Airport, roads, railway, seaport terminal, and gas pipeline. The flagship project — the Addis Ababa–Djibouti Railway — connecting Addis Ababa to Djibouti City and Djibouti’s Doraleh Container Terminal, inaugurated in 2018, provided landlocked Ethiopia with a good connection between the hinterland and the seaport: the economic corridor accounts for more than 95% of Ethiopia’s foreign trade. The development of Ethiopian Industrial Parks on the model of Chinese Special Economic Zones (SEZs) was the second pillar of the strategy of development of an export-oriented manufacturing sector. Chinese companies operating in Ethiopian Industrial Parks in the textile and leather industries have been pioneering this activity contributing to Ethiopia’s participation in the Global Value Chains (GVCs). Ethiopian government is also planning the development of agro-industrial parks specialized in added-value agricultural products such as coffee or cut flowers exported to Europe via Addis Ababa Airport and Ethiopian Airlines Cargo. Ethiopia’s main challenges in that direction are the necessity to go up the value chain to further penetrate European markets and, most likely, to identify the products or services which could be integrated into the African markets in the new context of the African Continental Free Trade Area (AfCFTA) agreement that entered into force in January 2021.

Firm Productivity, Technological Heterogeneity and Endogenous Exports

Exporters tend to be more productive than non-exporting firms, and uncovering the extent of these productivity differentials as well as causes thereof has long been one of the core topics in the literature. This paper focuses on the issues pertaining to robust empirical modeling of the intricate endogenous relationship between the firm’s export behavior and its productivity. I provide a new synthesized (nonparametric) methodology for the structural control-function-based identification of unobserved firm productivity in the presence of (i) endogenous self-selection into export markets, (ii) dependence of productivity evolution on the firm’s past export experiences and (iii) potential technological heterogeneity in the production of for-export and for-domestic-sale outputs. The model offers a useful addition to the toolkit of practitioners interested in studying the nexus between firm productivity and export behavior. I showcase the proposed methodology by applying it to the firm-level data on China’s apparel industry, one of the country’s most export-oriented manufacturing sectors, during the 1999–2006 period.

Effects of Foreign Direct Investment and Trade on Labor Productivity Growth in Vietnam

Among developing Asian countries that have accelerated their integration with the global economy, Vietnam has achieved remarkable economic development. Vietnam’s development strategy prioritizing the promotion of trade and foreign direct investment (FDI) resulted in the rapid transformation of its industrial structure from an agro-based one to one led by the export-oriented manufacturing sector in the past three decades. Given the importance of labor productivity growth on the structural transformation, the study examined the effects of FDI and trade on labor productivity growth in Vietnam in the long run and short run. The study employed the autoregressive distributed lag (ARDL) model of analysis using data from 1990 to 2017. The ARDL model analysis revealed that FDI, capital goods import, and export unanimously contributed to the labor productivity growth in the long run, while the impact in the short run remained ambiguous. The results confirm the theoretical framework augmenting the positive relationship that exists between FDI and trade and labor productivity growth. Vietnam’s experience is expected to provide an important lesson to other developing countries.

The Feminization of Employment through Export-Led Strategies: Evidence from Viet Nam.

The early successful experiences of the East Asian NICs confirmed the role of exports as an engine of growth. Surprisingly, most of the earlier studies omit one important empirical fact, namely that the feminization of work contributed significantly to their rapid industrialization. Feminist trade theories argue that export-oriented development strategies have so far been exploitative of cheap female labour in the South. As globalization gathers pace, an increasing number of women in Developing Countries (DCs) have been absorbed into labour-intensive, export-oriented manufacturing sectors. However, the structural changes that go hand in hand with export promotion, as well as the international environment the South faces today, have dramatically modified the inner drives behind the phenomenon. This paper reviews the salient mechanisms at work through a structuralist approach of gender. By examining women’s labour force participation rate in Viet Nam, we show how patterns of gender relations stemming from structural characteristics, as well as social and institutional practices, is related to export-oriented industrialization.

Strukturni problemi finansiranja privrednog rasta Republike Srbije

Changing the model of economic growth, based on the dynamic increase in investments in the export oriented manufacturing sector, imposed a need to re-examine the structure of the sources of financing and the efficiency of the financial system of the Republic of Serbia. In the focus of the country's economic policy, domestic sources of financing for growth and solving structural problems of their functioning must be found. Domestic savings, although small and insufficient, are not used in accordance with development priorities. Foreign direct investments, both by volume and by their structure, have not, in accordance with expectations, provided high and stable growth and change in the structure of commodity exports, towards a higher share of products based on innovation and knowledge.

Labor Regimes, Global Production Networks, and European Union Trade Policy: Labor Standards and Export Production in the Moldovan Clothing Industry

abstractThis article examines the relations between workplace and local labor regimes, global production networks (GPNs), and the state-led creation of expanded markets as spaces of capitalist regulation through trade policy. Through an examination of the ways in which labor regimes are constituted as a result of the articulation of local social relations and lead-firm pressure in GPNs, the article examines the limits of labor provisions in European Union trade policy seeking to ameliorate the worst consequences of trade liberalization and economic integration on working conditions. The article takes as its empirical focus the Moldovan clothing industry, the leading export-oriented manufacturing sector in the country. Trade liberalization has opened up a market space for EU lead firms to contract with Moldovan-based suppliers, but in seeking to regulate labor conditions in the process of trade liberalization, the mechanisms in place are not sufficient to deal with the consequences for workers’ rights and working conditions. Indeed, when articulated with national state policy formulations seeking to liberalize labor markets and deregulate labor standards, the limits of what can be achieved via labor provisions are reached. The EU’s trade policy formulation does not sufficiently take account of the structural causes of poor working conditions. Consequently, there is a mismatch between what the EU is trying to achieve and the core labor issues that structure social relations in, and labor regimes of, low-wage labor-intensive clothing export production for EU markets.

The elusive quest for high income status—Malaysia and Thailand in the post-crisis years

Both Malaysia and Thailand were seen to be part of the miracle growth economies of East Asia and fast moving into high income status in the early 1990s. Following the Asian Financial Crisis (AFC) of the mid 1990s, both countries have observed prolonged growth slowdowns. In this paper, we offer a political economy explanation of the growth slowdown in Malaysia and Thailand in their post AFC phases. We argue that the nature of the political settlement in these two countries determined a growth strategy that was predicated on offering open deals in the export-oriented manufacturing sector that were accessible to most firms, while at the same time, offering closed deals to politically connected firms in the natural resource and services sectors. As the political settlement moved to a vulnerable authoritarian one in both countries, such a dualistic deals strategy became patronage based over time and detrimental to growth.

Foreign Competition and Income Distribution in Canada: A Dynamic Microsimulation CGE Model Analysis

In this study we assess the impact of increased foreign competition on labour markets and income distribution in Canada, using a newly developed dynamic microsimulation computable general equilibrium (CGE) model. The main findings of the simulations conducted are that the decline in world prices of imports and exports of the manufacturing products during the 2000s induces small increases in low-income rates and inequality in the short run as well as contractions in the export-oriented manufacturing sectors. In the long run, however, it enhances capital accumulation, particularly in the primary and service sectors, increases real GDP and reduces low-income rates, especially among families with two persons or more.

Competitiveness by Design: An Institutionalist Perspective on the Resurgence of a “Mature” Industry in a High-Wage Economy

In the midst of the widespread, long-term economic downturn throughout the Canadian manufacturing landscape, the contract (or office) furniture sector has demonstrated resilience and vibrancy. The study reported here investigated the institutional foundations of innovation and competitive advantage in this dynamic, design-led, export-oriented manufacturing sector. It connects to ongoing work in economic geography and the social sciences to enhance economic geographers’ understanding of the role of institutions in shaping the practices of firms and competitive outcomes and seeks to advance a more agency-centered institutionalist economic geography. The study focused on three dimensions of industrial practices: (1) the use of training and investments in technology, (2) the nature of employment relations, and (3) the use of design. The analysis reveals that the most globally competitive firms operating in a Canadian institutional context prosper by learning a set of production practices and the value of design-intensive products from the embodied knowledge of their founders, who have lived, studied and worked in high-wage, coordinated market economies of continental Europe. The ability of these entrepreneurs to transfer industrial knowledge from continental Europe to Canada has had direct benefits for learning and innovation processes that are critical to the synthetic knowledge base of this sector. The empirical analysis entails a sector wide survey questionnaire (N = 220) as well as 55 in-depth interviews with senior managers, production workers, and designers from a subset of leading firms.

Sexual Divisions of Labor in Export-Oriented Manufacturing Sectors: The Reconstruction of Gender and the Urbanization of Production in the Global South

The feminization of labor in parallel with the feminization of poverty in poor countries is a controversial topic in the field of development, especially with regards to foreign-owned export-oriented manufacturing sectors (FEMS). This paper offers a critique of the dominant argument that the introduction or expansion of a poor county’s FEMS will positively affect the status of women, thereby stimulating sustainable human development. I argue that intersecting oppressions (i.e. female, poor, immigrant, rural, dark skinned) are exploited and exaggerated in order to achieve economic interests. International development groups such as the World Bank have labeled FEMS in poor countries as opportunities for women to increase their independent earning power and socioeconomic status. This is based on the logic that gender equality—a factor believed to stimulate development—is only achieved through access to the formal labor sector and independent capital earnings. However, this neglects the underlying fact that for FEMS to be economically sustainable, gender inequality, as well as global economic inequality, must remain unchanged. In addition to this critique, this paper attempts to answer the following questions: What are the different ways in which poor women in the Global South are impacted by the influx of export-oriented manufacturing industries? How is gender constructed and utilized within these industries’ managerial policies? What are the ensuing effects of this on the labor force?

The factor content of Chinese trade

This article demonstrates that the growth of China's exports in recent years is consistent with the Heckscher–Ohlin–Vanek (HOV) prediction of the factor content of trade based on international differences in factor endowments, after adjusting for substantial differences in factor-specific productivity. A comparison of the Organisation for Economic Co-Operation and Development input–output data in the year 2000 shows that China's labor productivity relative to the United States is the lowest in a sample of 33 diverse countries, although China's capital is more productive than US capital. This in turn demonstrates the importance of a factor-specific rather than factor-neutral productivity adjustment common in much of the HOV literature. The use of value-added data to measure factor usage helps to correct for unobserved differences in factor qualities and differences in productivity across sectors, as is demonstrated for China. China's low average labor productivity reflects the structure of the Chinese economy where most employment is still in the inefficient agriculture and service sectors, with only 11% of employment in the more modern export-oriented manufacturing sector. Due to a trade surplus, China exports both labor and capital but Leamer's (The Journal of Political Economy 1980;88: 495–503) test for trade-revealed factor abundance confirms that China is labor abundant even after substantial factor-specific productivity adjustments.

The “difference between heaven and earth”: Urban–rural disparities in well-being in China

Although China is a rapidly developing nation, rural–urban disparities in well-being remain large, and perhaps have become larger than in the early years of the Communist period because the urban sector has benefited from China's transition to a market economy much more than has the rural sector; or perhaps have become smaller as earning opportunities in the export-oriented manufacturing sector have increased for those from rural origins. Economic disparities are exacerbated by institutional arrangements that have created a two-class society based on registration (hukou) status with sharp rural–urban distinctions in the public provision of schooling, health care, housing, and retirement benefits. Indeed, it is fair to say that China built an urban welfare state on the backs of the peasants.Using data from two national probability sample surveys, one carried out in 1996 and one in 2008, this paper describes trends in various aspects of inequality for three groups, identified at age 14: those with rural registration and rural residence; those with rural registration and urban residence; and those with urban registration. The specific outcomes considered are education, occupational position, earnings, family income, material well-being, and perceptions regarding whether life has improved. The paper shows that a rising tide lifts all boats. That is, there has been across-the-board improvement in almost all aspects of life in China measured here, but for most measures the size of the rural–urban gap has remained relatively constant over a 60-year period.

Does Exporter Turnover Contribute to Aggregate Productivity Growth? Evidence from Malaysian Manufacturing

Malaysia’s economic success is to a significant extent underpinned by its export-oriented manufacturing sector. The sector has a large foreign presence, with MNCs attracted by the open trade and investment regime, and FDI-friendly policies. Using unpublished manufacturing census data for 2000 and 2005, we apply the methodology by Foster et al. (1998) to decompose productivity growth. The analysis shows that exporters were more productive than domestic-oriented establishments, and were distinctly more competitive. The empirical evidence also shows that establishment turnover is important in boosting productivity growth. In particular, we find that turnover of exporters made a larger contribution to aggregate productivity growth compared with domestic-oriented establishments during the period from 2000 to 2005. Surviving establishments (those that operated in both years), on the other hand, made a negative contribution. It is noteworthy that entrants to export markets were more productive than surviving non-exporters and even surviving exporters. Exiters from export markets or ‘export failures’, on the other hand, were less productive than continuing exporters. Given the importance of turnover to productivity growth, the government should ensure unrestricted entry to the export sectors for both foreign and domestic investors. Continuing with pro-FDI policies is also important, given the keener global competition.

Determinants of, and the Relationship Between FDI and Economic Growth in Bangladesh

Inward FDI to the middle-income countries has the evidence as a major stimulus to the economic growth; conventionally at export-oriented manufacturing sector. In point of fact, basic macro fundamentals like as growth of gross domestic capital formation, foreign reserve, infrastructure etc. accelerates the FDI inflows. This study reviews the long-run trend on the time scale of FDI to Bangladesh over the period 1975- 2006 and major factors determining foreign companies' decisions to invest, in associated with economic growth. Contents of the paper describe the theoretical development and extensive literature review to find out the appropriate variables to deter the foreign direct investment from time series data. On the basis of intricate link between foreign direct investment and growth, all explained determinants enhance the facilitation, turnover, and return in FDI concentrated sectors that promote long-term sustainable growth with specific shortcomings, directly or indirectly, in our labor-intensive economic activity. Reduced government’s ineffectiveness along with supporting policy framework makes Bangladesh as an attractive destination of FDI, that has a positive spillover and significant impacts affect over time through dynamic effects on economic growth.

Innovations in Trade Union Approaches in Malaysia’s Garment Industry

AbstractWomen workers employed in the export-oriented manufacturing sector in Malaysia have traditionally had poor access to representation by trade unions for two reasons. Firstly, government rules and regulations have prevented sectoral trade unions from representing large sections of the workforce, and secondly, unions themselves have not considered women their primary constituency. As a result, non-governmental organisations (NGO), rather than trade unions, have played an important role in educating women workers about their rights since the 1980s. In the garment industry in recent years, NGO activism has precipitated a change in the trade unions’ focus towards women workers in general, and towards female overseas migrant workers in particular. Where once unions viewed migrant workers as undermining the wages and conditions of Malaysian workers, they now assert their right to equality in the workplace. This paper explores the context in which NGOs became involved in union-like activities and unions’ responses to that involvement.

Market, government and Malaysia's new economic policy

Leading economic institutions such as the World Bank have argued that liberalisation holds the key to growth, poverty alleviation and redistribution. Even recent efforts to model increasing returns within the framework of new growth theories have not resulted in prescriptions for stronger roles for governments. The fast-growing Southeast Asian economies are still being used to demonstrate causation between liberalisation, and growth, poverty alleviation and redistribution. Using Malaysia as an example, this paper argues that growth, poverty alleviation and redistribution in the country was achieved under circumstances of both interventionist policies as well as market coordination. Throughout the New Economic Policy (NEP) period (1970‐90), strong incentives were offered to both the import-substitution and exportoriented manufacturing sectors, and the state made strong forays into the market to redress poverty and inequality. The paper also argues that poorly coordinated government intervention generated substantial unproductive rent seeking.

Exports and success in German manufacturing

Exports and Success in German Manufacturing. - While Germany has a very open, export-oriented manufacturing sector, there has been little research on the role of exporting in German firms’ performance. This paper documents the significant differences between exporters and non-exporters and attempts to identify the sources of these disparities. Exporters are much larger, more capital-intensive, and more productive than non-exporters. However, the bulk of the evidence suggests that these performance characteristics predate the entry into export markets. The authors find no positive effects on employment, wage or productivity growth after entry. The authors’ results provide evidence that success leads to exporting rather than the reverse.