Trade

Large and expanding flows of goods across borders are one of the core features of globalization. This article surveys the literature on the causes and effects of these international trade flows. It examines first the underlying economic drivers of these flows, next the ways in which geography, geopolitics, and trade policy shape the costs and uncertainty firms face in making their export decisions, and lastly the self-perpetuating but inequality-creating impact of international trade flows on domestic politics. The article points out both existing connections and opportunities for further integration between the literatures in international political economy, economics, and comparative politics.

Recruiting strategic human capital from MNCs—Does hiring MNC managers enable exporting in domestic firms?

Exporting is a central growth strategy for most firms and managers with international experience are instrumental for export decisions. We suggest that such managers can be hired from Multinational Corporations (MNCs). We integrate theory from strategic human capital research into models explaining export decisions. We theorize that hiring managers from MNCs increases the odds of domestic firms to start exporting and this effect depends on the similarities between hiring firms and MNCs. We hypothesize that young firms will benefit comparatively less from hiring MNC managers. In contrast, firms with internationally diverse workforces and with high degrees of hierarchical specialization will benefit the most from hiring MNC managers. We test and support these hypotheses for 474,926 domestic firms in Sweden, which we observe between 2007 and 2015.

Automatic information retrievement for exporting services: First project findings from the development of an AI based export decision supporting instrument

On the servitization journey, manufacturing companies complement their offerings with new industrial and knowledge-based services, which causes challenges of uncertainty and risk. In addition to the required adjustment of internal factors, the international selling of services is a major challenge. This paper presents the initial results of an international research project aimed at assisting advanced manufacturers in making decisions about exporting their service offerings to foreign markets. In the frame of this project, a tool is developed to support managers in their service export decisions through the automated generation of market information based on Natural Language Processing and Machine Learning. The paper presents a roadmap for progressing towards an Artificial Intelligence-based market information solution. It describes the research process steps of analyzing problem statements of relevant industry partners, selecting target countries and markets, defining parameters for the scope of the tool, classifying different service offerings and their components into categories and developing annotation scheme for generating reliable and focused training data for the Artificial Intelligence solution. This paper demonstrates good practices in essential steps and highlights common pitfalls to avoid for researcher and managers working on future research projects supported by Artificial Intelligence. In the end, the paper aims at contributing to support and motivate researcher and manager to discover AI application and research opportunities within the servitization field.

Foreign Direct Investment and Export Decisions of Vietnamese Enterprises

This research quantifies the impact of foreign direct investment (FDI) on the export decisions of Vietnamese enterprises. To control the problem of sample selection bias, this study employs the Heckman model (1979) estimated for two equations on export participation and rate. Unlike previous researches, which mainly rely on one single proxy of FDI, this research adopts sensititivy analysis through the estimation of a model with two representative variables for FDI. It is indicated that FDI has a positive impact on the export decisions of Vietnamese enterprises. Nonetheless, FDI has an insignificant effect on the export rate of Vietnamese enterprises.

Exporting Without Direct Access to International Markets

In the literature on exports, the question of why some firms decide to export and why others decide to focus on the domestic market has only received fragmented and different answers. The only overemphasized factor, productivity, seems to be a dead end when empirical evidence is given for high productivity firms which decide to remain in the domestic market. This is mainly due to the ignorance of the role of the firm in international trade by the majority of the literature. In this empirical research, the aim of the author is to test the impact of legal, institutional, and financial conditions on the firm decision to export based on the Enterprise Survey by the World Bank for the Turkish Cypriot people, which remained out of the international community for 57 years, where Turkey emerged as its access point to international markets. Hence, the study contributes to the existing literature on export development by highlighting the obstacles in front of the export decisions of firms and addressing a hitherto not addressed case in international economics.

Exports of Spanish manufacturing firms and financial constraints

We investigate the role of financial constraints on firms’ exporting behavior, including firms’ export decision, export intensity, firms starting to export decision, and exports persistence. Our financial constraints variable is a synthetic variable that summarizes information on different dimensions such as total assets, profitability, liquidity, solvency, repaying ability, and (new in this type of analyses) the cost of external financing. Using data on Spanish manufacturing for the period 1992–2014, we find evidence supporting that financial health is relevant to explain small and medium-sized enterprises (SMEs) exporting decisions and starting to export decisions but not those of large firms. Financial health does not seem to affect large firms’ export intensity and the results of the impact of financial health on SMEs export intensity are not conclusive. Nevertheless, financial health is a determinant of export persistence of large firms and SMEs. JEL CLASSIFICATION: F14; G32; L60; C35

Development of State Space Models with Weather as Exogenous Input for Sugarcane Yield Prediction in Haryana

Parameter constancy is a fundamental issue for empirical models to be useful for forecasting, analyzing or testing any theory. Unlike classical regression analysis, the state space models (SSM) are time varying parameters models as they allow for known changes in the structure of the system over time and provide a flexible class of dynamic and structural time series models. The work deals with the development of state space models with weather as exogenous input for sugarcane yield prediction in Ambala and Karnal districts of Haryana. The state space models with weather as exogenous input using different types of growth trends viz., polynomial splines; PS(1), PS(2) and PS(3) have been developed however PS(2) with weather input was selected as the best suited model for this empirical study. Timely and effective pre-harvest forecast of crop yield helps in advance planning, formulation and implementation of policies related to the crop procurement, price structure, distribution and import-export decisions etc. These forecasts are also useful to farmers to decide in advance their future prospects and course of action. The sugarcane yield forecasts based on state space models with weather input showed good agreement with state Department of Agriculture and Farmers’ Welfare yield(s) by showing nearly 4 percent average absolute relative deviations in the two districts.