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HOW DOES GLOBALIZATION AFFECT INDUSTRIAL COMPETITIVENESS?
Author(s) -
ZHANG KEVIN HONGLIN
Publication year - 2010
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.2009.00153.x
Subject(s) - foreign direct investment , globalization , economics , index (typography) , international economics , international trade , affect (linguistics) , economic integration , investment (military) , empirical research , economic globalization , macroeconomics , politics , market economy , linguistics , philosophy , epistemology , world wide web , computer science , political science , law
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)