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How Does Globalization Affect Industrial Competitiveness?

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  • KEVIN HONGLIN ZHANG

Abstract

Industrial competitiveness (IC), reflecting a country's ability to produce and export manufactures competitively, is closely associated with economic growth. How does globalization affect IC? While the topic is of great importance, empirical studies on the issue in the literature have been limited. This article attempts to close the gap by estimating the role of foreign direct investment (FDI) and international trade with cross‐country data in 1985 and 1998. Taking advantage of a recently constructed IC index, we estimate several regression models of effects of FDI and trade on industrial performance. Results suggest that FDI and trade have a positive impact on IC, and increasing integration with the world economy through FDI and trade contributes to better industrial performance. (JEL F02, F10, F21, L60)

Suggested Citation

  • Kevin Honglin Zhang, 2010. "How Does Globalization Affect Industrial Competitiveness?," Contemporary Economic Policy, Western Economic Association International, vol. 28(4), pages 502-510, October.
    • Handle: RePEc:bla:coecpo:v:28:y:2010:i:4:p:502-510
    DOI: 10.1111/j.1465-7287.2009.00153.x
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    2. Luh, Yir-Hueih & Jiang, Wun-Ji & Huang, Szu-Chi, 2016. "Trade-related spillovers and industrial competitiveness: Exploring the linkages for OECD countries," Economic Modelling, Elsevier, vol. 54(C), pages 309-325.

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    More about this item

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F10 - International Economics - - Trade - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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