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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) Copyright (c) 2010 Western Economic Association International.

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
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    References listed on IDEAS

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    1. Denny Lewis-Bynoe & Jennifer Griffith & Winston Moore, 2002. "Trade Liberalization And The Manufacturing Sector: The Case Of The Small Developing Country," Contemporary Economic Policy, Western Economic Association International, vol. 20(3), pages 272-287, July.
    2. Markusen, James R. & Venables, Anthony J., 1999. "Foreign direct investment as a catalyst for industrial development," European Economic Review, Elsevier, vol. 43(2), pages 335-356, February.
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    4. John Weiss & Hossein Jalilian, 2004. "Industrialization in an age of globalization: some comparisons between East and South East Asia and Latin America," Oxford Development Studies, Taylor & Francis Journals, vol. 32(2), pages 283-307.
    5. Robert C. Feenstra, 1998. "Integration of Trade and Disintegration of Production in the Global Economy," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 31-50, Fall.
    6. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-563, July.
    7. Harvey Cutler & Terutomo Ozawa, 2007. "The Dynamics Of The "Mature" Product Cycle And Market Reycling, Flying-Geese Style: An Empirical Examination And Policy Implications," Contemporary Economic Policy, Western Economic Association International, vol. 25(1), pages 67-78, January.
    8. Amann, Edmund, 2002. "Globalisation, industrial efficiency and technological sovereignty: Evidence from Brazil," The Quarterly Review of Economics and Finance, Elsevier, vol. 42(5), pages 875-888.
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    Cited by:

    1. 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.

    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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