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 firstname.lastname@example.org or email@example.com. 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)
Carsten Eckel (University of Göttingen)
11.20 p.m.-1.00 p.m.: Session 2
Dalia Marin (University of Munich)
Stephen Redding (London School of Economics)
1.00-2.30 p.m.: Lunch
2.30-4.10 p.m.: Session 3
Ronald W. Jones (University of Rochester)
Pol Antras (Harvard University)
4.10-4.40 p.m.: Coffee
4.40-5.30 p.m.: Session 4
Elhanan Helpman (Harvard University and Tel Aviv University)
“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.
“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.
“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.