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Browsing OU - Faculty and Staff Publications by College/Department "College of Arts and Sciences::Department of Economics"
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Item Open Access An empirical assessment of the effects of trade in innovative tasks on innovation output(2015-08-24) Tabrizy, Saleh S.Multinational firms are increasingly sending their innovative tasks abroad. This article examines whether offshoring research and development, design, and engineering activities provides any gains in terms of firm‐level innovation output. The effects of trade in innovative tasks on the probability of firms being innovative and the share of innovative product sales in total turnover are examined using an instrumental variable approach. The data in use come from a recent survey, which provides cross‐section observations for more than 14,750 firms in seven European countries. The results suggest that those firms that offshore their innovative activities are 60% more likely to successfully innovate. Also, offshoring innovative activities increases the share of innovative product sales in total turnover up to 35%. Furthermore, firms in this sample appear to gain from trade in innovative tasks when such trade is in product innovation but not when such trade is in process innovation. This is a postprint of the published article.Item Open Access Exchange Rates and Trade Balances: Effects of Intra-Industry Trade and Vertical Specialization(2020-08) Neumann, Rebecca; Tabrizy, Saleh S.To examine how changes in relative national prices affect trade flows, this study estimates the impact of changes in industry-specific effective real exchange rates on industry-level trade balances, exports, and imports. We analyze the variations in industry-specific intra-industry trade and vertical specialization, which may both govern the long-run relationship between real exchange rates and trade flows. We employ sample information from 13 manufacturing industries across five Asian countries from 2001 to 2015. Rather than country-level aggregate measures, we use disaggregated industry-specific real exchange rates, which provide better measures of relative national prices and may help to uncover different responses that are masked by aggregate data. Fixed-effect estimations reveal that greater price competitiveness, as measured by depreciation in industry-specific effective real exchange rates, increases industry-level trade balances. We find that the elasticity of industry-level trade balances with respect to industry-specific real exchange rates declines as vertical specialization increases. There is also some limited evidence that this elasticity increases as intra-industry trade increases. Taken together, our findings suggest that global supply chains are more important than intra-industry trade in examining the response of trade balances to real exchange rate changes. Importantly, these heterogeneous impacts imply that policies regarding exchange rate management may be of limited potency and will affect different industries in different ways. This is a postprint of the published articleItem Open Access Industrial research and development and real exchange rate depreciation in a small open economy(2020-01-24) Tabrizy, Saleh S.To examine how changes in relative national prices affect innovation input, this paper studies the impact of changes in industry‐specific effective real exchange rates on industrial R&D expenditures in Korea. In particular, it explores the heterogeneous responses of industries with different export intensities. Employing dynamic panel data estimation techniques, the results suggest that among industries with medium levels of export intensity a lagged depreciation in industry‐specific effective real exchange rate leads to a decline in contemporaneous industry‐level R&D expenditures. However, this adverse effect is insignificant for industries that either mostly serve the domestic markets or that are heavily engaged in foreign markets. This is a postprint of the published article.Item Open Access Is ‘no news’ really ‘good news’? Country visibility and FDI location choice(2017-06-29) Adams, Laurel; Neumann, Rebecca; Tabrizy, Saleh S.In choosing where to invest, firms seek out information on a set of possible locations. Information asymmetries may make country visibility particularly important in decisions to locate investment abroad. We develop a country visibility index based on international news stories in The Economist, and show that broad country visibility is at least as important in attracting foreign direct investment (FDI) as other specific investment promotion activities or proxies for information frictions. Controlling for standard gravity model determinants of FDI, we find that greater visibility of developing countries, in particular lower middle- and low-income countries, increases the investment that they receive from US multinational corporations. This is a postprint of the published article.Item Open Access Political Agreements and Exporting Activities: An Empirical Assessment of the Effects of the JCPOA Agreement on Iran’s Exports(2020-08) Dadpay, Ali; Tabrizy, Saleh S.Conflicts hinder international trade. Political agreements that restrain conflicts and remove sanctions may contribute positively to exporting and importing activities. In this study, we examine the effects of the Joint Comprehensive Plan of Action, commonly known as Iran Nuclear Deal, on Iran’s non-oil exports. Employing a dynamic panel model, we find a significant increase in the growth rate of industry-level exports following the removal of nuclear-related sanctions, resulting from this political agreement. In particular, the exports of industries that have relatively low shares in Iran’s non-oil exports grow significantly faster than industries with relatively high shares in those exports. Our findings suggest that even a short-lived political agreement could have significant positive effects on exporting activities in middle-income countries. This is a postprint of the published article.Item Open Access Productivity and offshoring innovative activities(2016-03-24) Tabrizy, Saleh S.Recent studies suggest that firms may gain from global sourcing of innovative activities. Yet, only a small number of firms offshore their R&D, design, and engineering tasks. To explain this selection pattern, this paper examines the heterogeneity in total factor productivity among a large group of European firms. The results suggest that those firms that offshore their innovative activities tend to be more productive than domestic firms, exporters, and other multinational corporations. This finding implies that firms with superior productivity are more likely to exploit the global task distribution in innovative activities, which may provide an explanation for why such low participation is observed in the data. This is a postprint of the published article.