Climbing the Rungs of the Quality Ladder: FDI and Domestic Exporters in Romania

Bajgar, Matej; Javorcik, Beata Smarzynska

doi:10.2139/ssrn.3486189

Cited by 8 publications

(11 citation statements)

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“…These results are essential for policymakers wishing to upgrade exports, as they quantify the potential benefits of policies promoting foreign direct investment, mainly when focused in sectors that supply inputs to domestic firms. This study is most closely related to Bajgar and Javorcik (2020) who find a positive relationship between the quality of products exported by Romanian firms and foreign affiliate presence in the upstream (input‐supplying) industries and to a lesser extent in downstream (input‐sourcing) industries and the same industry. Other evidence from Mexican manufacturing plants (Aitken et al ., 1997) and Chinese firms (Swenson, 2008) show that the presence of multinationals is associated with an increase in the likelihood of exporting for domestic firms, while Chen and Swenson (2007) also find an increase in unit value in export transactions in China.…”

Section: Introductionsupporting

confidence: 65%

Does FDI in Upstream and Downstream Sectors Facilitate Quality Upgrading? Evidence from Russian Exporters*

Poupakis

2021

Oxf Bull Econ Stat

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This study examines whether foreign direct investment inflows facilitate upgrading of export quality in host countries. The analysis focuses on the Russian Federation and uses customs data merged with firm-level information from ORBIS. The results show a positive relationship between the quality of products exported by domestic firms and the presence of foreign affiliates in the upstream (input-supplying) industries. This relationship is present irrespective of export destination or FDI origin. The results are robust to using different proxies to measure product quality.JEL Classification numbers: F14, F23, O24. *I am grateful to Beata S. Javorcik for her support and helpful guidance throughout this project. I am also thankful to Maurizio Bussolo, Arti Grover, and Denis Medvedev who helped at various stages of this project, to Guillermo Arenas for sharing the customs data, and to the World Bank for its financial support. The findings, interpretations, and conclusions expressed in this paper do not necessarily represent the opinions of the World Bank Group, its management or its Executive Directors. I would also like to thank Ana P. Fernandes, Alvaro Gonzalez, Christopher D. Miller and Farshad R. Ravasan for helpful comments on the draft. All errors are my own.1 For instance, Javorcik, Keller and Tybout (2008) report that small Mexican producers meet with their input suppliers (usually foreign affiliates) every 6 months to learn about the possibilities of upgrading their products. Suppliers provide the necessary inputs and often prepare a new formula for the product based on these inputs.

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Section: Introductionsupporting

confidence: 65%

Does FDI in Upstream and Downstream Sectors Facilitate Quality Upgrading? Evidence from Russian Exporters*

Poupakis

2021

Oxf Bull Econ Stat

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“…Indeed, the pandemic has highlighted the importance of supply chain robustness and resilience, and reopened the question of reshoring, nearshoring, and regionalization of value chains. Some economists foresee more unexpected shocks and argue for an increasing emphasis on holding more inventory, diversifying suppliers, and shortening supply chains (Javorcik 2020). Others recommend that firms "aggressively evaluate near-shore options and increase proximity to customers" (Betti and Hong 2020).…”

Section: Covid-19 Is Unlikely To Significantly Change Global Value Chainsmentioning

confidence: 99%

“…1. For examples of these effects, see Arnold and Javorcik (2009), Bajgar and Javorcik (2020), Buelens and Tirpak (2017), Djankov and Hoekman (2000), Javorcik (2004), Javorcik and Li (2013), and . 2.…”

Section: Notesmentioning

confidence: 99%

“…The COVID-19 outbreak has highlighted the importance of supply chain robustness and resilience and reopened the debate on reshoring, nearshoring, and GVC regionalization. On one hand, some economists foresee more unexpected shocks and argue for a rethinking of GVC strategies, with an emphasis on holding more inventory, diversifying suppliers, and shortening supply chains (Javorcik 2020). The World Economic Forum (2020a) has recommended that firms "aggressively evaluate…”

Section: Global Value Chain Adjustmentsmentioning

confidence: 99%

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An Investment Perspective on Global Value Chains

Qiang¹,

Liu²,

Steenbergen³

2021

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for their invaluable comments and suggestions. The authors particularly appreciate the guidance and support of Caroline Freund, Global Director of Trade, Investment and Competitiveness at the World Bank.The team thanks the following programs and donors for making this report possible through their financial contributions: the Improving Business Environment for Prosperity (IBEP) program, with support from the UK Prosperity Fund managed by the Foreign, Commonwealth and Development Office (FCDO); and the Competitive Industries and Innovation Program (CIIP), with support from the European Union and the governments of Austria, Norway, and Switzerland.The team is also grateful to the many reviewers who provided thoughtful insights and guidance at both the concept and decision stages.

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“…These results are important for policy makers wishing to upgrade exports, as they quantify the potential benefits of policies promoting foreign direct investment, particularly when focused in sectors that supply inputs to domestic firms. This study is most closely related to Bajgar and Javorcik (2020) who find a positive relationship between the quality of products exported by Romanian firms and foreign affiliate presence in the upstream (input-supplying) industries and to a lesser extent in downstream (input-sourcing) industries and the same industry. It is also related to the cross-country analysis of Harding and Javorcik (2012), which finds that sectors targeted by national investment promotion efforts tend to subsequently increase the unit values of exports, as well as to the work of Aitken et al (1997), Chen and Swenson (2007), and Swenson (2008) The rest of the paper is organized as follows.…”

Section: Introductionmentioning

confidence: 59%

Are Inflows of FDI Good for Russian Exporters?

Poupakis¹

2020

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The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

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Climbing the Rungs of the Quality Ladder: FDI and Domestic Exporters in Romania

Cited by 8 publications

References 0 publications

Does FDI in Upstream and Downstream Sectors Facilitate Quality Upgrading? Evidence from Russian Exporters*

Does FDI in Upstream and Downstream Sectors Facilitate Quality Upgrading? Evidence from Russian Exporters*

An Investment Perspective on Global Value Chains

Are Inflows of FDI Good for Russian Exporters?

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