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Browsing Papers by Author "Abraham, Filip"

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    FDI spillovers in the chinese manufacturing sector: evidence of firm heterogeneity
    (Centre for Economic Policy Research, 2007-11) Abraham, Filip; Konings, Jozef; Slootmaekers, Veerle
    We use a new longitudinal data set of more than 15,000 Chinese manufacturing plants to show that the direct and indirect effects of foreign direct investment on measured firm level productivity depend on a number of firm specific features and institutional factors. We find that domestic firms engaged in a joint-venture with a foreign partner are on average more productive, as well as exporting plants and plants located in special economic zones. In addition, domestic firms benefit from horizontal spillovers from foreign firms on average. However, these spillovers depend on the structure and origin of ownership as well as on specific characteristics of the special economic zones. First, spillovers are less likely to occur from fully foreign owned firms than from joint-ventures. Second, spillovers from foreign direct investment originating from oversees Chinese (Hong Kong, Macau and Taiwan) are stronger than from the rest of the world. Third, spillovers are higher in the special economic zone aimed at attracting foreign capital to fasten the development of China’s own high tech industries.
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    Staying home or moving away? The effect of restructuring on employment in multinational enterprises
    (Algemeen secretariaat – Steunpunt beleidsrelevant Onderzoek Fiscaliteit & Begroting, 2012-01) Abraham, Filip; Goesaert, Tim; Konings, Jozef
    This paper analyzes the geographic dispersion of employment restructuring in multinational enterprises, where we distinguish between headquarters and geographically dispersed affili- ates. To this end, we use data of 255 Belgian parents and 1,887 affiliates between 1996 and 2005. We show that for multinational enterprises that restructure headquarters have superior employment performance than their affiliates. This effect seems to be stronger for vertically integrated firms, which is consistent with theories of imperfect information and increased agency costs. We also show that proximity matters: restructuring hurts the most the further the affiliate is located from the headquarter. This effect is consistent with the monitoring difficulties that are associated with vertical FDI firms and with the role of social network effects.
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    The effect of globalization on union bargaining and price-cost margins of firms
    (LICOS Centre for Institutions and Economic Performance, 2007-01) Abraham, Filip; Konings, Jozef; Vanormelingen, Stijn
    In recent years, Europe has witnessed an accelerated process of economic integration. Trade barriers were removed, the euro was introduced and ten new member states have joined the European Union. This paper analyzes how this process of increased economic integration has affected labor and product markets. To this end, we use a panel of Belgian manufacturing firms to estimate price-cost margins and union bargaining power and show how various measures of globalization affect them. Our findings can be summarized as follows: On average, firms set prices about 30% above marginal costs, but there is substantial variation across sectors, with the lowest mark-up around 19% and the highest around 52%. In addition, we find evidence that unions bargain over both wages and employment. We estimate an index of bargaining power, which reflects the fraction of profits that is passed on to workers into higher wages. Depending on the sector, this fraction varies between 6% and 18% and it increases with the markups of firms. Finally, we find that globalization puts pressure on both markups and union bargaining power, especially when there is increased competition from the low wage countries. This suggests that increased globalization is associated with a moderation of wage claims in unionized countries, which should be associated with positive effects on employment.