As a result of COVID-19, the export of medical goods has been subject to various global restrictions. Consequently, several countries have increased the supply of medical goods to alleviate the effects of this health crisis. This study entails a theoretical and empirical analysis of the effects of such remedial measures. To this end, we have utilized a consistent conjectural variation in a three-country model entailing firms competing in two reciprocal markets in Cournot. When the restrictions are unilateral, the number of medical goods available in the exporting country tends to increase, culminating in better management of the pandemic. In contrast, bilateral restrictions typically reduce the total output of medical goods; therefore, they are inappropriate in a pandemic situation.
{"title":"Export Restrictions and COVID-19","authors":"Mamadou Thiam, Jean-Claude Kouakou Brou, Benur Andrade Varela","doi":"10.11130/jei.2021.36.4.519","DOIUrl":"https://doi.org/10.11130/jei.2021.36.4.519","url":null,"abstract":"As a result of COVID-19, the export of medical goods has been subject to various global restrictions. Consequently, several countries have increased the supply of medical goods to alleviate the effects of this health crisis. This study entails a theoretical and empirical analysis of the effects of such remedial measures. To this end, we have utilized a consistent conjectural variation in a three-country model entailing firms competing in two reciprocal markets in Cournot. When the restrictions are unilateral, the number of medical goods available in the exporting country tends to increase, culminating in better management of the pandemic. In contrast, bilateral restrictions typically reduce the total output of medical goods; therefore, they are inappropriate in a pandemic situation.","PeriodicalId":45678,"journal":{"name":"Journal of Economic Integration","volume":"1 1","pages":""},"PeriodicalIF":1.2,"publicationDate":"2021-12-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42846157","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-15DOI: 10.11130/jei.2021.36.4.607
Mohamedou Nasser dine, Tengku Munawar Chalil
This study examines how backward linkages (foreign value added [FVA] exports) and domestic value-added (DVA) exports impact industry-level labor productivity and employment in Japan by estimating a static and dynamic panel model using data drawn from the World Input-Output Dataset and Socio-Economic Accounts. We find that the domestic content of trade is a key driver of productivity and employment in Japan for all industries, while backward linkages lead to declining productivity and foster labor displacement. A sectoral analysis reveals that productivity benefits most of the backward linkages and domestic value-added exports in the manufacturing industry but weakens as the backward linkages increase in the service industry. We find that the DVA exports variable promotes employment, whereas the FVA variable displaces it.
{"title":"Impact of Backward Linkages and Domestic Contents of Exports on Labor Productivity and Employment: Evidence from Japanese Industrial Data","authors":"Mohamedou Nasser dine, Tengku Munawar Chalil","doi":"10.11130/jei.2021.36.4.607","DOIUrl":"https://doi.org/10.11130/jei.2021.36.4.607","url":null,"abstract":"This study examines how backward linkages (foreign value added [FVA] exports) and domestic value-added (DVA) exports impact industry-level labor productivity and employment in Japan by estimating a static and dynamic panel model using data drawn from the World Input-Output Dataset and Socio-Economic Accounts. We find that the domestic content of trade is a key driver of productivity and employment in Japan for all industries, while backward linkages lead to declining productivity and foster labor displacement. A sectoral analysis reveals that productivity benefits most of the backward linkages and domestic value-added exports in the manufacturing industry but weakens as the backward linkages increase in the service industry. We find that the DVA exports variable promotes employment, whereas the FVA variable displaces it.","PeriodicalId":45678,"journal":{"name":"Journal of Economic Integration","volume":" ","pages":""},"PeriodicalIF":1.2,"publicationDate":"2021-12-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45498183","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-30DOI: 10.11130/JEI.2021.36.3.339
G. Zestos, Yixiao Jiang, Clifton Painter
This study investigates the determinants of German and Japanese exports in a comparative fashion. By estimating an autoregressive distributed lag model for each country, we find that the income elasticity of Japanese exports is three times as large as that of Germany’s exports. This relative insensitivity to external demand explains why Germany has maintained its export growth whereas Japanese exports started to stagnate after the global financial crisis. Because Germany adopted the euro in 1999, it was able to maintain large trade surpluses. If Germany had instead kept the Deutsche Mark (DM), the DM would have appreciated owing to the Central Bank of Germany’s consistent preference for a tight monetary policy, and Germany’s trade surpluses would have dissipated. A sharp increase in Japanese foreign direct investment after 2011 has also played a role in reducing Japanese exports after the global financial crisis.
{"title":"Determinants of German and Japanese Exports: A Comparative Study","authors":"G. Zestos, Yixiao Jiang, Clifton Painter","doi":"10.11130/JEI.2021.36.3.339","DOIUrl":"https://doi.org/10.11130/JEI.2021.36.3.339","url":null,"abstract":"This study investigates the determinants of German and Japanese exports in a comparative fashion. By estimating an autoregressive distributed lag model for each country, we find that the income elasticity of Japanese exports is three times as large as that of Germany’s exports. This relative insensitivity to external demand explains why Germany has maintained its export growth whereas Japanese exports started to stagnate after the global financial crisis. Because Germany adopted the euro in 1999, it was able to maintain large trade surpluses. If Germany had instead kept the Deutsche Mark (DM), the DM would have appreciated owing to the Central Bank of Germany’s consistent preference for a tight monetary policy, and Germany’s trade surpluses would have dissipated. A sharp increase in Japanese foreign direct investment after 2011 has also played a role in reducing Japanese exports after the global financial crisis.","PeriodicalId":45678,"journal":{"name":"Journal of Economic Integration","volume":"36 1","pages":"339-371"},"PeriodicalIF":1.2,"publicationDate":"2021-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47391041","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-30DOI: 10.11130/JEI.2021.36.3.409
Filip Tereszkiewicz
This study aims to analyze the correlation between radical-left Euroskeptic (RLE) activity and European Union (EU) trade policy by focusing on the Transatlantic Trade and Investment Partnership (TTIP). At the beginning of TTIP negotiations, the agreement was not high on political agendas and was not a major concern within European society. Thus, its salience was low. This initial lack of interest stemmed from the fact that the TTIP, as an economic and technical issue, did not draw public attention. This study shows that RLEs profoundly affected public opinion on the TTIP by increasing its salience during the European parliamentary elections in 2014 in France and Germany. Second, RLEs involved social actors and non-governmental organizations in anti-TTIP campaigns and channeled European anxieties into the STOP TTIP European Citizens’ Initiative. Third, RLEs used this proposed agreement between the EU and the United States to increase polarization within European society and ideological cleavages within the European Parliament. Finally, we can assume that an anti-TTIP campaign promoted by radical-right Euroskeptics would have had different drivers. Thus, my findings have implications for understanding the correlation between RLE activity and the politicization of EU trade policy, and they suggest some avenues for future research.
{"title":"The Politicization of European Union Trade Policy: Radical-Left Euroskeptic Opposition to the Transatlantic Trade and Investment Partnership","authors":"Filip Tereszkiewicz","doi":"10.11130/JEI.2021.36.3.409","DOIUrl":"https://doi.org/10.11130/JEI.2021.36.3.409","url":null,"abstract":"This study aims to analyze the correlation between radical-left Euroskeptic (RLE) activity and European Union (EU) trade policy by focusing on the Transatlantic Trade and Investment Partnership (TTIP). At the beginning of TTIP negotiations, the agreement was not high on political agendas and was not a major concern within European society. Thus, its salience was low. This initial lack of interest stemmed from the fact that the TTIP, as an economic and technical issue, did not draw public attention. This study shows that RLEs profoundly affected public opinion on the TTIP by increasing its salience during the European parliamentary elections in 2014 in France and Germany. Second, RLEs involved social actors and non-governmental organizations in anti-TTIP campaigns and channeled European anxieties into the STOP TTIP European Citizens’ Initiative. Third, RLEs used this proposed agreement between the EU and the United States to increase polarization within European society and ideological cleavages within the European Parliament. Finally, we can assume that an anti-TTIP campaign promoted by radical-right Euroskeptics would have had different drivers. Thus, my findings have implications for understanding the correlation between RLE activity and the politicization of EU trade policy, and they suggest some avenues for future research.","PeriodicalId":45678,"journal":{"name":"Journal of Economic Integration","volume":"36 1","pages":"409-436"},"PeriodicalIF":1.2,"publicationDate":"2021-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43880501","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-30DOI: 10.11130/JEI.2021.36.3.437
S. Thangavelu, D. Narjoko, S. Urata
This study examines the impact of the Association of Southeast Asian Nations (ASEAN)-Australia- New Zealand Free Trade Agreement (AANZFTA) on Australian trade with a particular focus on imports from ASEAN member countries to Australia. We examine the AANZFTA’s utilization by ten ASEAN countries at the six-digit trade classification level from 2012 to 2016 using Australian customs data. We implement Ando and Urata’s (2018) and Hayakawa et al.’s (2014) framework of free trade agreement (FTA) utilization based on preferential tariff margins. We also account for overlapping FTAs that are likely to impact the AANZFTA’s utilization. The results indicate that preferential tariff margins positively impact FTA utilization. However, the results also indicate that the AANZFTA’s utilization rate across ASEAN countries is low relative to Australia’s bilateral FTAs with Malaysia, Thailand, and Singapore. We also find evidence that co-sharing rules of origin positively impact FTA utilization.
{"title":"Impact of FTA on Trade in ASEAN and Australia Using Customs Level Data","authors":"S. Thangavelu, D. Narjoko, S. Urata","doi":"10.11130/JEI.2021.36.3.437","DOIUrl":"https://doi.org/10.11130/JEI.2021.36.3.437","url":null,"abstract":"This study examines the impact of the Association of Southeast Asian Nations (ASEAN)-Australia- New Zealand Free Trade Agreement (AANZFTA) on Australian trade with a particular focus on imports from ASEAN member countries to Australia. We examine the AANZFTA’s utilization by ten ASEAN countries at the six-digit trade classification level from 2012 to 2016 using Australian customs data. We implement Ando and Urata’s (2018) and Hayakawa et al.’s (2014) framework of free trade agreement (FTA) utilization based on preferential tariff margins. We also account for overlapping FTAs that are likely to impact the AANZFTA’s utilization. The results indicate that preferential tariff margins positively impact FTA utilization. However, the results also indicate that the AANZFTA’s utilization rate across ASEAN countries is low relative to Australia’s bilateral FTAs with Malaysia, Thailand, and Singapore. We also find evidence that co-sharing rules of origin positively impact FTA utilization.","PeriodicalId":45678,"journal":{"name":"Journal of Economic Integration","volume":"36 1","pages":"437-461"},"PeriodicalIF":1.2,"publicationDate":"2021-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41909282","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-30DOI: 10.11130/JEI.2021.36.3.462
Son Tung Ha, T. Pham, T. Nguyen
We examine the stock market performance of Vietnam’s listed firms in response to the country’s approval of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Employing an event study methodology, we first calculate the abnormal returns of all listed Vietnamese firms around the CPTPP’s approval date. Then, we attempt to link these abnormal returns to firms’ characteristics. We find evidence that the announcement of the CPTPP’s approval is associated with positive abnormal returns for Vietnam’s listed firms. We also find considerable heterogeneity in the magnitude and pace of the impacts of the CPTPP’s approval on market returns across Vietnam’s two stock exchanges. However, we fail to reject the null hypothesis that the market did not react to the CPTPP’s approval at the sectoral level.
{"title":"Stock Market Reactions to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership’s Approval: Evidence from Vietnam","authors":"Son Tung Ha, T. Pham, T. Nguyen","doi":"10.11130/JEI.2021.36.3.462","DOIUrl":"https://doi.org/10.11130/JEI.2021.36.3.462","url":null,"abstract":"We examine the stock market performance of Vietnam’s listed firms in response to the country’s approval of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Employing an event study methodology, we first calculate the abnormal returns of all listed Vietnamese firms around the CPTPP’s approval date. Then, we attempt to link these abnormal returns to firms’ characteristics. We find evidence that the announcement of the CPTPP’s approval is associated with positive abnormal returns for Vietnam’s listed firms. We also find considerable heterogeneity in the magnitude and pace of the impacts of the CPTPP’s approval on market returns across Vietnam’s two stock exchanges. However, we fail to reject the null hypothesis that the market did not react to the CPTPP’s approval at the sectoral level.","PeriodicalId":45678,"journal":{"name":"Journal of Economic Integration","volume":"36 1","pages":"462-490"},"PeriodicalIF":1.2,"publicationDate":"2021-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44713111","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-30DOI: 10.11130/JEI.2021.36.3.491
Jieun Choi, Emiko Fukase, Albert G. Zeufack
This study uses detailed manufacturing census panel data for 2000 to 2014 to explore the relationship between Ethiopian firms’ global value chain (GVC) participation and markups. We find that GVC firms, defined as firms involved in both exporting and importing intermediate inputs, tend to have lower markups relative to non-trading firms and firms that are involved only in material imports. Moreover, the more intensely a firm is integrated into a GVC (measured by the share of export value added and imported inputs in total sales), the lower its markup is. Finally, we explore competition effects at the industry level and find that firms operating in industries with a relatively high GVC presence and suppliers selling inputs to such industries tend to have lower markups owing to horizontal competition and backward linkages, respectively. All of these findings suggest that GVC participation is associated with greater competition for Ethiopian firms.
{"title":"Global Value Chain Participation, Competition, and Markups: Evidence from Ethiopian Manufacturing Firms","authors":"Jieun Choi, Emiko Fukase, Albert G. Zeufack","doi":"10.11130/JEI.2021.36.3.491","DOIUrl":"https://doi.org/10.11130/JEI.2021.36.3.491","url":null,"abstract":"This study uses detailed manufacturing census panel data for 2000 to 2014 to explore the relationship between Ethiopian firms’ global value chain (GVC) participation and markups. We find that GVC firms, defined as firms involved in both exporting and importing intermediate inputs, tend to have lower markups relative to non-trading firms and firms that are involved only in material imports. Moreover, the more intensely a firm is integrated into a GVC (measured by the share of export value added and imported inputs in total sales), the lower its markup is. Finally, we explore competition effects at the industry level and find that firms operating in industries with a relatively high GVC presence and suppliers selling inputs to such industries tend to have lower markups owing to horizontal competition and backward linkages, respectively. All of these findings suggest that GVC participation is associated with greater competition for Ethiopian firms.","PeriodicalId":45678,"journal":{"name":"Journal of Economic Integration","volume":"36 1","pages":"491-517"},"PeriodicalIF":1.2,"publicationDate":"2021-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45245185","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-30DOI: 10.11130/JEI.2021.36.3.372
Etienne Farvaque, Muhammad Azmat Hayat, Ifrah Siddique
We analyze the persistence of the major determinants of distrust toward the European Union (EU) and pro-Brexit voting attitudes of citizens of the United Kingdom. Looking both backward and forward, our analysis confirms that Euroscepticism is deep-rooted, although the data reveal differences across different parts of the country. We observe no major transformation in the favor of the EU over the last two decades or in the post-referendum period. We also carry out an age-period-cohort analysis by interacting age and cohort effects with time to analyze the evolution of individual preferences. We find that an aging population will promote Eurosceptic assertiveness. We then implement a demographic forecasting analysis to predict whether the level of distrust of older cohorts can be offset by differing attitudes among younger cohorts in the future. On the contrary, we find that demographic trends will tend to strengthen distrust in the EU.
{"title":"A Momentary Lapse of Reason? Assessing the Pre- and Post-Brexit Preferences of UK Citizens","authors":"Etienne Farvaque, Muhammad Azmat Hayat, Ifrah Siddique","doi":"10.11130/JEI.2021.36.3.372","DOIUrl":"https://doi.org/10.11130/JEI.2021.36.3.372","url":null,"abstract":"We analyze the persistence of the major determinants of distrust toward the European Union (EU) and pro-Brexit voting attitudes of citizens of the United Kingdom. Looking both backward and forward, our analysis confirms that Euroscepticism is deep-rooted, although the data reveal differences across different parts of the country. We observe no major transformation in the favor of the EU over the last two decades or in the post-referendum period. We also carry out an age-period-cohort analysis by interacting age and cohort effects with time to analyze the evolution of individual preferences. We find that an aging population will promote Eurosceptic assertiveness. We then implement a demographic forecasting analysis to predict whether the level of distrust of older cohorts can be offset by differing attitudes among younger cohorts in the future. On the contrary, we find that demographic trends will tend to strengthen distrust in the EU.","PeriodicalId":45678,"journal":{"name":"Journal of Economic Integration","volume":"36 1","pages":"372-408"},"PeriodicalIF":1.2,"publicationDate":"2021-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46107781","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-05-31DOI: 10.11130/JEI.2021.36.2.262
P. Lombaerde, Dominik Naeher, Takfarinas Saber
This study proposes a new method to evaluate the composition of regional arrangements focused on increasing intraregional trade and economic integration. In contrast to previous studies that take the country composition of these arrangements as given, our method uses a network clustering algorithm adapted from the machine-learning literature to identify, in a data-driven way, those groups of neighboring countries that are most integrated with each other. Using the obtained landscape of regional integration clusters (RICs) as a benchmark, we then apply our method to critically assess the composition of real-world customs unions (CUs). Our results indicate a considerable variation across CUs in terms of their distance to the RICs emerging from the clustering algorithm. This suggests that some CUs are relatively more driven by “natural” economic forces, as opposed to political considerations. Our results also point to several testable hypotheses related to the geopolitical configuration of CUs.
{"title":"Regional Integration Clusters and Optimum Customs Unions: A Machine-Learning Approach","authors":"P. Lombaerde, Dominik Naeher, Takfarinas Saber","doi":"10.11130/JEI.2021.36.2.262","DOIUrl":"https://doi.org/10.11130/JEI.2021.36.2.262","url":null,"abstract":"This study proposes a new method to evaluate the composition of regional arrangements focused on increasing intraregional trade and economic integration. In contrast to previous studies that take the country composition of these arrangements as given, our method uses a network clustering algorithm adapted from the machine-learning literature to identify, in a data-driven way, those groups of neighboring countries that are most integrated with each other. Using the obtained landscape of regional integration clusters (RICs) as a benchmark, we then apply our method to critically assess the composition of real-world customs unions (CUs). Our results indicate a considerable variation across CUs in terms of their distance to the RICs emerging from the clustering algorithm. This suggests that some CUs are relatively more driven by “natural” economic forces, as opposed to political considerations. Our results also point to several testable hypotheses related to the geopolitical configuration of CUs.","PeriodicalId":45678,"journal":{"name":"Journal of Economic Integration","volume":" ","pages":""},"PeriodicalIF":1.2,"publicationDate":"2021-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44837650","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-05-31DOI: 10.11130/JEI.2021.36.2.227
Bopith Bun
Financial constraints have been a significant obstacle to firms operating in developing countries. Prior studies show that foreign direct investment (FDI) helps to ease credit constraints for domestic firms. However, they only account for horizontal FDI spillovers. This paper therefore investigates both horizontal and vertical FDI spillovers using firm-level data from Cambodia, Lao PDR, and Myanmar (CLM). The key findings of this paper are threefold. First, FDI inflows lessen the financial constraints faced by local firms through partnership or joint venture. Second, an increasing share of FDI in horizontally and vertically related industries raises higher credit constraints for domestic firms. Third, the crowding-out effect of FDI is not uniform across domestic firms of different sizes. Therefore, policymakers should be aware of these possible negative spillovers and formulate policy to maintain FDI inflows while also ensuring the growth and survival of domestic firms.
{"title":"Foreign Direct Investment and Financial Constraints: Firm-Level Evidence from Cambodia, Lao PDR, and Myanmar","authors":"Bopith Bun","doi":"10.11130/JEI.2021.36.2.227","DOIUrl":"https://doi.org/10.11130/JEI.2021.36.2.227","url":null,"abstract":"Financial constraints have been a significant obstacle to firms operating in developing countries. Prior studies show that foreign direct investment (FDI) helps to ease credit constraints for domestic firms. However, they only account for horizontal FDI spillovers. This paper therefore investigates both horizontal and vertical FDI spillovers using firm-level data from Cambodia, Lao PDR, and Myanmar (CLM). The key findings of this paper are threefold. First, FDI inflows lessen the financial constraints faced by local firms through partnership or joint venture. Second, an increasing share of FDI in horizontally and vertically related industries raises higher credit constraints for domestic firms. Third, the crowding-out effect of FDI is not uniform across domestic firms of different sizes. Therefore, policymakers should be aware of these possible negative spillovers and formulate policy to maintain FDI inflows while also ensuring the growth and survival of domestic firms.","PeriodicalId":45678,"journal":{"name":"Journal of Economic Integration","volume":"36 1","pages":"227-261"},"PeriodicalIF":1.2,"publicationDate":"2021-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46019923","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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