Foreign Competition Research Articles

The COVID-19 pandemics and import demand elasticities: evidence from China’s customs data

We study China’s import demand elasticities using HS 8-digit customs data on China’s provincial imports during January 2019 to March 2021. It is found that both direct bilateral exchange rate elasticity and third-country exchange rate elasticity are affected by (1) policies that these Asian economies adopted to alleviate the adverse impacts of the COVID-19 pandemic and (2) the degree of concentration of exporters exporting a certain product to a certain Chinese provincial market. It is found that economic support policies will lower the bilateral exchange rate elasticity of trade flows, or even alter the sign of the bilateral exchange rate elasticity of China’s imports. Besides, the economic support policies can alleviate the pressure of foreign competition on exporters and make the exporters more resilient to the impacts of foreign competitors’ exchange rate depreciation. In contrast, the degree of market concentration of exporters in a certain provincial market affects the exchange rate and the third-country exchange rate elasticity differently. A higher market concentration lowers the bilateral exchange rate elasticity of trade flows but magnifies the impact of foreign competitors’ currency depreciation on exporters. These results are robust to alternative modes of trade, regional heterogeneity, product heterogeneity, various measures of policy responses to the pandemic, and alternative database.

Foreign Competition along the Quality Ladder

Abstract We document that firms with low prices are more impacted by low-cost competition. To explain this pattern, we propose an empirical model of trade with random-coefficient demand and endogenous product quality. Unlike commonly used demand systems (e.g., constant elasticity of substitution, nested logit), this model generates rich substitution patterns and implies an ‘escape-competition’ effect: in response to low-cost competition, firms have an incentive to upgrade their product quality. The estimation of the model reveals significant heterogeneity in consumer preferences. Counterfactual experiments suggest that the ‘China shock’ was significantly more damaging to firms at the bottom of the price distribution, and that quality upgrading had a limited role at mitigating the shock.

Critical globalisation: Productive capacity and capital productivity in the United States, 1945–2020

AbstractWe study the dynamics of the profit rate of United States (US) non-financial resident firms between 1945 and 2020. The 1970s entailed the abandonment of industrial policy and the liberalisation and globalisation of markets. This left the US-resident productive sector at the mercy of an unstoppable growth of imports. These imports helped to contain inflation but cornered the US domestic market, which negatively affected the profit rate of non-financial resident firms. The increasing foreign competition forced US-resident firms to invest and increase their productive capacity. Such increasing productive capacity demanded higher market shares; however, US-resident firms continued to lose domestic and foreign markets. This explains the fall in the degree of productive capacity utilisation, capital productivity, and ultimately, the rate of profit since the 1980s.

CHALLENGES AND PROSPECTS OF HARMONIZATION OF GEORGIAN CUSTOMS LEGISLATION WITH THE EUROPEAN UNION

Aleko Meladze
 E-mail: aleko.meladze@bsu.edu.ge
 PhD Students,Batumi Shota Rustaveli state University
 Batumi, Georgia
 https://orcid.org/0000-0002-5781-2371
 
 Abstract: The article discusses some current issues of the customs system and customs policy of Georgia, which are based on its historical excursion. The paper aims to study such important aspects of the implementation of the customs policy in Georgia, which serve to deal with the modern challenges of protecting the domestic market from foreign goods competition and stimulating exporters, for which the issues of harmonizing the customs system and customs legislation of Georgia with the customs system and customs legislation of the European Union are very important. Since the day of gaining independence, Georgia has recognized the European course of economic development, and accordingly, the main vectors of the formation of the customs system, customs policy and customs legislation were implemented taking into account the experience of the EU countries. The formation of the customs system is a difficult and complex process, for which the development of a perfect legal framework regulating the customs system has a special role. The goal of harmonizing Georgia's customs legislation with the European Union is based on real economic results. The study of the current situation and the analysis of statistical data reveal that the measures implemented for the approximation of the customs legislation with the European Union do not bring results. The reason for saying this is provided by the statistical data on the current state of trade relations between Georgia and the EU countries presented in the paper and the dynamics of the last period, according to which no positive trends in this direction can be observed. The paper offers recommendations and proposals that, along with the changes in legal norms, will contribute to the deepening of trade relations with the European Union and the strengthening of economic ties.

The impact of automation on labour market outcomes in emerging countries

AbstractThe labour market effects of automation have gained significant attention from scholars and policymakers. Concerns about negative effects are important in emerging countries, where a rapid acceleration of robot adoption and an increasing involvement in global value chains have been observed in recent years, with the subsequent increase in exposure to foreign competition. This paper estimates the effect of local and foreign robots on labour market outcomes and labour shares using a panel dataset composed of 16 sectors and ten emerging countries from 2008 to 2014. The endogeneity of robots' adoption is addressed with an instrumental variables approach and using a shift‐share index of exposure to foreign robots. The main results for all sectors show that foreign robot adoption has negatively affected employment in emerging countries. When exploring sectoral heterogeneity, we find that the foreign robots' negative effect on employment has occurred in many sectors, being more prominent in those with higher exposure to foreign robots. Moreover, we found small and negative inter‐sectoral spillover effects of local robots on employment and wages. Finally, the results also show that the labour share is affected in some sectors of emerging countries by both the use of local and foreign robots.

Optimal privatisation, and optimum-welfare and maximum-revenue tariffs

We examine the effect of privatisation on the priority of the maximum-revenue tariff and the optimum-welfare tariff in an international mixed oligopoly with foreign competition and optimal privatisation. We demonstrate that when the marginal cost of the domestic privatised firm is high enough, the optimum-welfare tariff will exceed the maximum-revenue tariff. Moreover, due to the higher tariff rate that leads to the high degree of privatisation, the optimum-welfare tariff generates greater optimal privatisation than the maximum-revenue tariff does. Lastly, when the gap between the number of domestic private firms and that of their foreign counterparts becomes larger, the optimum-welfare tariff will exceed the maximum-revenue tariff.

36 Beyond Environmentally Adapted, Towards Ecologically Purposed: Sheep Production in the Us West

Abstract Consumer demand for sheep products is robust, the annual consumption of U.S. lamb is steadily rising, and the number of U.S. sheep farms is increasing. Nevertheless, the U.S. sheep industry continues to lose market share to foreign competitors and the breeding ewe inventory has declined 30% since 2002. This decline has been more drastic in the upper U.S. Mountain West states, where ewe inventories have declined 37% compared with the national average decline of 26%. This is problematic given the Mountain West generates one-third and one-half of the total U.S. lamb crop and wool revenue, respectively. This depopulation trend indicates obstacles unique to the Mountain West, which are not experienced elsewhere in the nation. Mountain West sheep production systems depend on both private and public rangelands for grazing, which must co-exist with many other goals for public lands, including species conservation and critical wildlife habitat. Extensive conversion of native rangeland to croplands, rural housing, and degraded grasslands has simultaneously resulted in a substantial loss of wildlife habitat, thus creating competing ideologies for how remaining rangelands should be managed. Accordingly, public land management agencies are constantly pressured to change land management plans to accommodate public agendas aimed at restricting or halting livestock grazing on public lands with the assumption wildlife habitat will automatically improve. Such exclusion of grazing from public lands has negatively impacted operational capacity of sheep ranches, thus posing serious threats to the U.S. sheep industry and its contributions towards national food security, rural communities, and rangeland conservation. Therefore, to maintain grazing access to public lands, sheep producers and land managers urgently need tools (e.g., management, genetic) to optimize both conservation and production outcomes synergistically. However, ecological and sheep genetic outcomes have thus far been considered separate rather than integrated goals. Traditional genetic improvements in sheep production are focused strictly on the sheep without regard to the ecological outcome. In other words, the “ecosystem” is only considered to achieve profitable production within that environment. With this in mind, can sheep research move beyond the traditional focus of “environmentally adapted” flocks to “ecologically purposed” flocks? We propose that heritable ecologically focused traits can be identified and used to complement the overall sheep genetic improvement goals of the industry while creating precision-based solutions for sustainable habitat management, such as mitigating catastrophic wildfire risk, halting noxious weed invasion, and shaping vegetative structure of native plant communities towards desirable rangeland and conservation goals. We believe such outcomes extend beyond shaping public opinion about sheep grazing but also towards introducing novel value-based marketable products from the sheep industry.

Research on the path of high-quality development of China’s foreign trade in the context of ARDL-based model

Abstract To explore the path of high-quality development of China’s foreign trade, this paper selects four dimensions of foreign trade foundation, foreign trade competitiveness, foreign trade performance level and foreign trade sustainability based on the characteristics of comparability and strong operability and establishes the evaluation system of foreign trade level by using the improved entropy weight TOPSIS. Based on the evaluation results, the impact of the RMB exchange rate on China’s import and export trade is explored based on the autoregressive distributed lag model, and the lagged residual term of ARDL is modified in combination with the ECM model, which is set for the import direction and export direction respectively. The impact of exchange rate level change on all three types of enterprises has a significant change process, especially for exporting foreign-funded and other types of enterprises. Among them, the coefficient LnY of the export equation for foreign-owned enterprises fluctuated between 2.1 and 2.5 in 2018, and LnReer fluctuated between -1.8 and -1.2.

Promotion of Fashion Brands in the Russian Market in the Absence of Foreign Competitors (on the Example of the Lime Clothing Brand)

Various trends are transforming the organizational, consumer and methodological landscape of enterprises whose activities relate to the fashion industry. The relevance of the chosen research topic is due to changes in the strategies currently used in this area, which is associated with the current geopolitical situation, as well as with the dominance of the trend of humanity (empathy) in strategic branding. The purpose of the study was to identify the features of promoting fashion brands on the Russian market in the absence of foreign competitors using the example of the LIME clothing brand, which is among the most popular (over 100 stores in Russia and the CIS countries). The methods of analysis and synthesis, abstraction, generalization, comparison, and questionnaire survey were used in the course of the work. The authors concluded that the effectiveness of brand development depends both on the right strategic decisions and on understanding the characteristics of the target audience, real-time communications with customers and prompt response to their requests through the use of high-tech strategic planning tools, in particular, personalized value propositions. Based on the research, recommendations have been developed for the promotion of Russian fashion brands in modern conditions, which can find practical application.

THE HONEY MARKET IN POLAND IN THE YEARS 2016-2021

The honey market is vital due to many aspects. The article discusses selected figures characterising Poland's honey market, especially from the supply side. The analysis of data from 2016-2021 indicates an increase in beekeepers and bee colonies. However, this does not translate into increased production, mainly dependent on climatic conditions. An important feature is the small number of professional apiaries. In addition, there is solid foreign competition, as evidenced by the prevalence of honey imports over exports.

Kang Youwei and Italy in the beginning of the 20th century: comprehension of the politics of the west by the traditional confucian thinker

The article deals with the theoretical treatises written by Kang Youwei (1858 — 1927) in exile and devoted to the understanding of Western social and political reality from the standpoint of a bearer of traditional Chinese culture and Neo-Confucian philosophy. First of all, these are “Travelogue to Italy” (Yidali youji, 1904) and “Impartial Words on Republicanism” (Gonghe pingyi, 1918). Kang Yuwei’s thinking is characterized by attention to the Confucian binary opposition si — gong (private — general), which he transferred to both civilizational development and international politics. In other words, the Western path of development, which consist national imperialist states based on economic, social and foreign policy competition and individualism (“private”), was opposed to the monolithic ancient China, whose society and politics are based on the principles of “community” and unity. Kang Youwei perceived the political reality of Western countries from the standpoint of traditional Chinese historiography, which was intended to serve as a base of positive and negative precedents for use by the ruler in the name of the common good and the harmonization of society. In Kang Youwei’s system of historical views, modern Italy and Germany were very important for illustrating the principle of consolidation of political entities and the merging of small and weak states into large empires. Methodologically, this was formalized as the assignment of Germany, Italy and China to the same ontological category (tong lei).

Firms Financial Inclusion and Export Performance: Evidence from Manufacturing Sector Firms in Pakistan

Financial inclusion of firms is crucial to create jobs, boost economic growth, and promote sustainable development. The study examines how financial inclusion affects enterprise export performance based on access to finance ratios. The study analyses the effects of firms’ financial inclusion determinants and macro environment factors on firms’ export values. The data comes from Pakistan’s manufacturing sector covering 400 firms listed on Pakistan Stock Exchange from 1999-2021. Driven by the nature of the data, the Method of Moment Quantile Regression is employed to assess the below and above mean regression estimations, and a two-step system GMM approach is used to address endogeneity concerns. The results of the study are robust against different specifications. The study reveals that assets positively impact a firm’s export performance, emphasising the importance of asset investment for foreign market competition. Asset tangibility negatively impacts export performance, except for low-gearing corporations, and fixed assets dominate. A balanced asset mix is crucial for improving exports. Debt-to-equity ratios, except for high-gearing firms, boost export performance, but domestic firms with high leverage ratios are more likely to fail. To avoid excessive leverage risks, firms must balance debt and equity. Diversifying the asset mix to include liquid and intellectual property can boost export success. Gearing affects export performance differently depending on a firm’s debt levels. Low-geared enterprises can leverage assets and debt to boost exports, while high-geared enterprises may be financially constrained and face challenges from excessive debt. Therefore, enterprises must carefully examine their gearing levels and make informed decisions on optimising their asset composition for optimal export performance. The study also opens up the possibility of further research on the role of exchange rates and firms’ investment in line with export performance.

Firms Financial Inclusion and Export Performance: Evidence from Manufacturing Sector Firms in Pakistan

Financial inclusion of firms is crucial to create jobs, boost economic growth, and promote sustainable development. The study examines how financial inclusion affects enterprise export performance based on access to finance ratios. The study analyses the effects of firms’ financial inclusion determinants and macro environment factors on firms’ export values. The data comes from Pakistan’s manufacturing sector covering 400 firms listed on Pakistan Stock Exchange from 1999-2021. Driven by the nature of the data, the Method of Moment Quantile Regression is employed to assess the below and above mean regression estimations, and a two-step system GMM approach is used to address endogeneity concerns. The results of the study are robust against different specifications. The study reveals that assets positively impact a firm’s export performance, emphasising the importance of asset investment for foreign market competition. Asset tangibility negatively impacts export performance, except for low-gearing corporations, and fixed assets dominate. A balanced asset mix is crucial for improving exports. Debt-to-equity ratios, except for high-gearing firms, boost export performance, but domestic firms with high leverage ratios are more likely to fail. To avoid excessive leverage risks, firms must balance debt and equity. Diversifying the asset mix to include liquid and intellectual property can boost export success. Gearing affects export performance differently depending on a firm’s debt levels. Low-geared enterprises can leverage assets and debt to boost exports, while high-geared enterprises may be financially constrained and face challenges from excessive debt. Therefore, enterprises must carefully examine their gearing levels and make informed decisions on optimising their asset composition for optimal export performance. The study also opens up the possibility of further research on the role of exchange rates and firms’ investment in line with export performance.

FOREIGN TRADE AND COMPETITIVENESS OF RASPBERRY OF THE REPUBLIC OF SERBIA AND SELECTED COUNTRIES

The subject of this study is the analysis of foreign trade and competitiveness of raspberries from Serbia and selected major producers and exporters (Poland and Ukraine), as well as from neighboring countries where raspberries play an increasingly important role in production and export (Bosnia and Herzegovina and Bulgaria), in the period 2010- 2021. The aim of the paper is to examine the competitive position of raspberries from Serbia and selected countries on global market and to give insight into changes between countries regarding competitiveness of raspberries. The results show that Serbia and Poland are leaders in the global market of frozen raspberries. Frozen raspberries from Serbia, Ukraine and Bulgaria are quality competitive, while Polish raspberries are competitive in price. The decrease in competitiveness of the leading countries on global market of frozen raspberries is noticeable, while the greatest increase in competitiveness was achieved in Ukraine.

How Foreign Ownership and Competition Affect the Credit Growth of Commercial Banks: Evidence from A Transitional Economy

This study examines the relationship between foreign ownership and market competition, proxied by bank market power, affecting the credit growth of 32 commercial banks in Vietnam from 2010 to 2020. The Random Effects Model and the Dynamic System Generalized Method of Moments were used to analyze an unbalanced panel of 278 annual observations. The findings report that foreign ownership reduces credit growth, with each percentage increase in foreign ownership reducing credit growth by 0.74%. The results indicate an inverse U-shaped relationship between competitive advantage and credit growth, with a turning point of 0.46. The main findings were found to be robust after employing an alternative market power proxy. The study recommends that bank managers and policymakers limit foreign ownership and control commercial banks’ market power to promote sustainable credit growth.

Comparison of the Efficiency of Overcoming the Crisis of Russian and Foreign Oil and Gas Companies

The purpose of the study was to evaluate the performance of large domestic and foreign oil and gas companies based on a factor analysis of the return on equity in the context of financial and economic crises. The relevance of the topic is due, on the one hand, to the leading role of the oil and gas industry in the Russian economy, and, on the other hand, to the need develop modern tools for the assessment and prediction of the performance of companies and comparison of the results of economic activity with those of foreign competitors. The object of the study was the financial performance of the largest domestic and foreign vertically integrated oil and gas companies. The subject of the study is the methods of deterministic factor analysis for assessing indicators in the oil and gas sector. The paper analyzes the main empirical indicators that reflect the degree of efficiency, justifies the choice of the profitability indicator of own assets as the main indicator for research in the oil and gas industry, analyzes approaches to assessing the contribution of various factors to the final efficiency. Methods of classification, decomposition, statistical, comparative and factor analysis were used. A five-factor DuPont decomposition of the return on equity was carried out, and the key factors affecting the efficiency of companies were identified: tax burden coefficient, percentage burden coefficient, return on sales, asset turnover ratio, financial leverage ratio. Using the LMDI‑1 model, the impact of changes in economic factors on changes in the efficiency of companies in 2013–2017 and 2018–2021 was assessed. It was concluded that domestic companies, on average, slightly outperformed foreign ones in terms of the considered efficiency indicator and coped better with the consequences of financial and economic crises in the periods under review. At the same time, domestic companies have a higher value of the tax burden coefficient with lower values of assets turnover and financial leverage.

The Role of Innovation Pressure from Domestic and Foreign Competitors on Firm Internationalization

The Role of Innovation Pressure from Domestic and Foreign Competitors on Firm Internationalization

The Nexus between Foreign Competition and Buying Innovation: Evidence from China’s High-Technology Industry

This study aims to investigate how international competition impacts innovation activities in the high-technology industry in China. A panel data analysis was conducted using a representative sample of high-tech industries in China from 2010 to 2017. Econometric methods were used to identify patterns and trends in the data, and quantile regression was utilized to explore the delicate connection between international competition and innovation efforts. The statistical analysis indicates that the effect of international competition on innovation activities differs through dependent quantiles of the innovation range; this effect was neglected by a standard linear regression model. The study found a U-shaped connection between foreign competition and innovation, except for at the quantile (Q = 0.01), which was negative. Foreign competition was found to be a critical factor influencing the strength of innovation activities in the high-tech industry in China. This research suggests that the extent of foreign competition has a bearing on the industry’s capacity to lead in innovation. This study is unique in that it addresses the influence of international competition on industry-level innovation accomplishments in a big rising country, such as China. The study also highlights the importance of evaluating the quantile effect of the variable on innovative activities, which was more informative than estimating the mean effect. The study’s limitation lies in the reliance on secondary data sources, which may not be as comprehensive as primary data. The research’s implications suggest that policymakers should pay attention to the impact of foreign competition on innovation activities and implement policies that foster innovation in the high-tech industry in China.

Алгоритм обработки информации для прогнозирования развития технологий на примере теле- и радиовещания

Today, many Russian companies working in the field of software development for television and radio broadcasting can extract the necessary data on trends in their field of activity by analyzing information received from foreign competitors, for example, studying specialized popular science literature posted on the official websites of foreign competitors, when analyzing information obtained from exhibitions and presentations. However, the opportunity to comprehensively analyze the novelties of foreign developers patented in the world patent databases will give Russian companies competitive advantages in the formation of strategic development plans. It is proposed to develop a patent landscape based on the data of the global patent array (in English) in the field of television and radio broadcasting, analyze patent trends and predict the development of technologies in this area. The novelty of the developed method for predicting the development of technologies lies in the cooperation of USPTO (USA) patent clustering methods based on the international patent classification and forecasting technological trends using the generated time series. The developed method is implemented in Python; in parallelizing the process of parsing patents, the Multiprocessing library was used, Statsmodels was used to analyze data and carry out the forecasting process, and Matplotlib was used to visualize data. The MySQL database management system was chosen to organize information storage. There were processed 28,591 patents, the process of forecasting the development of television and radio technologies was tested based on the constructed time series in the interval of 2015–2020.

The institutional impact on the digital platform ecosystem and innovation

PurposeThe digital platform (DP) develops through a network capability that combines technological infrastructure and resources to provide goods or services. This article investigates how institutions influence the development of the DP entrepreneurship ecosystem (EE) in a developing economy context.Design/methodology/approachAn exploratory qualitative approach based on interviews with 33 DP business executives in Nigeria was the chosen research method. The interview method took the form of face-to-face, telephone and zoom video meetings, depending on the respective preferences of the participants. The research philosophy is based on interpretivism. Hence, the collected data were analyzed thematically and interpreted to make sense of the business executives' perspectives about the DP landscape as well as its institutional enablers and barriers.FindingsThe findings reveal institutional elements that are either too underdeveloped or weak to nurture an effective DP system resulting in high cost of doing business. A key cultural challenge is obtaining an honest workforce and managers. Also, there is lack of effective policies, weak regulation, multiple taxation and foreign competition, which affects local digital firms. Although cultural diversity has several merits, differences in cultural values and languages create marketing and promotion challenges. Moreover, the low level of digital literacy between Generation Z, Millennials and others, such as Baby Boomers and Generation X, poses a significant challenge concerning customer segmentation.Research limitations/implicationsResearch on digital technologies, the complexity of platform architectures and institutional logic has attracted interest in recent years. This article explored the institutional logic influencing the development of DP ecosystem (providing knowledge about EE in a developing world context). Despite the institutional challenges, there are multiple opportunities for Nigerian DP sector to flourish in the fast-growing economy.Originality/valueThe value of this article is related to how micro-, meso- and macro-institutional forces combine to support or become barriers to the development of the DP ecosystem, especially in developing economies where digitalization is creeping into every business sector and society.