Firms
and Markets: From Local to Global
[British Association for the Advancement of Science:
Economics Section Presidential Session]
Wednesday, September 7, 2005
A one-day conference to be held at
Trinity College Dublin as part of the 2005 Festival of Science of the BA, the
British Association for the Advancement of Science.
Among the most visible
manifestations of globalisation are the increasing importance of multinational firms and the continued
process of opening up new markets to international competition. These
developments offer enormous opportunities to countries at lower levels of
development to move rapidly up the value chain. However, doubts remain as to
whether such a strategy can provide a basis for continued growth, given
increased competition from low-wage and low-tax countries. To understand these
issues requires new theory and better empirics, both of which have been the
subject of exciting recent developments in international trade theory, which
seem set to reshape that discipline.
This meeting will bring together some of the leading practitioners in
the field to debate the progress that has been made so far and the agenda for
future research.
The theme of the conference relates
directly to current policy debates in Ireland. Ireland has been one of the most
successful countries in pursuing a pro-globalisation strategy in recent years. However, Irish
policy makers are concerned at how to consolidate the gains from rapid growth
in the 1990's and how to help indigenous firms achieve the same success in the
global economy which foreign-owned firms have enjoyed.
The conference will be addressed by:
Pol Antras (Harvard University), Carsten Eckel (University of Göttingen),
Elhanan Helpman (Harvard University and Tel Aviv University), Ronald W. Jones
(University of Rochester), Dalia Marin (University of Munich), Peter Neary
(University College Dublin and President, BA Economics Section, 2005) and
Stephen Redding (London School of Economics).
The conference is being held in association
with the 2005 European Trade Study Group Conference, which will take place at
University College Dublin on the three days immediately following this event
(Thursday 8 to Saturday 10 September 2005). (See http://www.etsg.org
for details.) Both conferences are organised by the Geary Institute at University College
Dublin: contact peter.neary@ucd.ie or geary@ucd.ie. Local arrangements
for the BA conference will be handled by the Institute for International
Integration Studies (IIIS) at Trinity College Dublin: see Practical
Information below.
9.00
Conference opening
9.10-10.50: Session 1
J. Peter Neary (University College
Dublin and President, BA Economics Section)
“From Local to
Global: Firms and Markets in International Trade”
Carsten
Eckel (University of Göttingen)
“Globalisation
and Culture: An Economist's Perspective”
10.50-11.20: Coffee
11.20
p.m.-1.00 p.m.: Session 2
Dalia Marin (University of Munich)
“The
New Corporation in the World Economy”
Stephen Redding (London School of Economics)
“Heterogeneous
Firms and Trade”
1.00-2.30
p.m.: Lunch
2.30-4.10
p.m.: Session 3
Ronald W. Jones (University of Rochester)
“The Recent
Outsourcing Controversy”
Pol Antras (Harvard University)
“Offshoring
in a Knowledge Economy”
4.10-4.40
p.m.: Coffee
4.40-5.30
p.m.: Session 4
Elhanan Helpman (Harvard
University and Tel Aviv University)
“Organizations
and International Trade”
“From Local
to Global: Firms and Markets in International Trade”
Globalization
gives firms new opportunities to expand in export markets, but also exposes
them to tougher competition in their home markets. This talk reviews recent
work which explores the implications of this double-edged development, and
provides an introduction to the different approaches to be presented in this
conference. Among the issues to be discussed are the role of international
competition in eroding domestic market power; the implications of globalization
for production patterns and international specialization; and the causes and
consequences of foreign direct investment, which requires us to distinguish
between “greenfield” investments and cross-border mergers and acquisitions.
“Globalisation
and Culture: An Economist's Perspective”
Critics of
globalisation claim that international trade destroys cultural diversity and
reduces the choices available to local consumers. This talk reviews some of
these arguments and provides new insights on the role of advertising and
R&D and on adjustment processes by multi-product firms in the global
economy. By demonstrating that calls for "cultural protectionism" are
not justified, this presentation addresses an issue of widespread public interest.
Background paper 1; Background paper 2
“The New Corporation in the World Economy”
Many
experts view globalization as the emergence of a ‘new corporation’ with flatter
more decentralized corporate hierarchies and with talent as the new stakeholder
in the firm. In this presentation I will show how these phenomena can be
explained by introducing the theory of the firm into international trade
theory.
“Heterogeneous
Firms and Trade”
This talk
surveys recent theoretical and empirical research emphasizing the importance of
heterogeneity across firms in understanding economies’ response to
international trade. Exporting firms are systematically larger and more
productive than non-exporting firms. Following trade liberalization, low
productivity firms exit while high productivity firms expand and account for an
increasing share of industry output. These heterogeneous firm responses
generate aggregate productivity gains and provide a new source of gains from
trade.
Presentation;
Background Paper
“The Recent
Outsourcing Controversy”
A recent article by Paul Samuelson in the Journal of Economic Perspectives has
stirred up controversy both professionally and in the popular media (e.g. the New
York Times). Samuelson was correct in pointing out that increased
globalization can well harm some countries that are linked via world trading
networks. What is also the case, however, is that scenarios in which a
country loses an export industry entirely as a consequence of technology
transfer to developing countries may end up raising incomes in that country,
serving as an example of the subtle ways in which the law of comparative
advantage operates.
“Offshoring
in a Knowledge Economy”
A number of
recent technological and institutional developments have blurred the borders
between national labor markets and have allowed for the formation of
international teams within multinational firms or via international outsourcing.
The traditional vertical division of labor within a team, whereby some low
skill agents (workers) undertake routine tasks and some high skill agents
(managers) specialize in knowledge intensive tasks, can now take place across
countries. In this talk, I will review some theoretical and empirical work that
analyzes the consequences of this phenomenon for the organization of work and
the structure of wages in the world economy.
“Organizations
and International Trade”
A better
understanding of foreign trade is derived from the integration of the theory of
economic organizations into trade theory. I will discuss these insights in my
lecture.
Local arrangements for the
conference are being handled by the Institute for International Integration
Studies (IIIS) at Trinity College Dublin. See their web site for further
details.
ETSG:
European Trade Study Group