International Business
This document summarizes a presentation on firm heterogeneity, exporting, and foreign direct investment (FDI). It includes an executive summary highlighting the importance of international trade, productivity uncertainty, firm entry and exit, and the relationships between productivity, exporting, and FDI. The introduction discusses the aims, problem statement, and rationale of the research, which examines how changes in exporting costs or FDI affect production patterns across industries and countries. The literature review covers the main variables and theories discussed in previous research, including the relationship between productivity, exchange rates, agglomeration, policy changes, exporting, and establishing overseas production facilities. The methodology section outlines statistical tests used in prior studies, including KS tests of stochastic dominance, OLS, and matched
International Business
- 1. International Business Presentation Presented to: Maam Khansa Zaman Date: 7th May, 2013
- 2. Topic: Firm Heterogeneity, Exporting and FDI Group Members: 1- Umar Farooq Ali 2- Bilal Ahmed Hashmi 3- Tayyab Ali Baig
- 3. If two persons share 100$ each, they will only have 100$ with both of them. But if two persons share one good thought, they both will have two good thoughts each
- 4. Executive Summary Importance of international trade. Productivity uncertainty. Firm s Entry/exit. Relations between productivity, exporting and FDI Future predictions.
- 5. Introduction Aim of research To understand the 2 dimensions 1. Cross-border trade 2. Cross-border investment Problem statement How changes to the cost of exporting or foreign direct investment(FDI) changes production patterns within industries and across countries. Rationale of research The underlying concept behind this study was to see how productivity of a firm decides whether to export or not. A combination of sunk cost and heterogeneity is the underlying characteristics. Types of research: qualitative or quantitative This research is basically qualitative because of being constructive, naturalistic and interpretive.
- 6. Literature review Main theme regarding variables This article is divided in 5 sections having variables which shows different relations. In section 2, the relation between productivity (DV) and exchange rate, agglomeration and changed policy environment (IVs) are discussed. In section 3, the relation between productivity (DV) and exporting and establishing production facilities overseas (IVs) are discussed. Theory building of variable This theory was triggered by empirical observation of Bernard and Jensen (1995). Later on Melitz (2003), helpman (2004) provided different ways to think upon firm heterogeneity and participation in international markets.
- 7. Literature review (cont.) Research model
- 8. Methodology In this article, the methodology used is the same as in the past conducted researches and studies based on which this theory is generated. Some of the tests used to find the desired results are listed as follows. KS test of stochastic dominance. OLS. Matched D-I-D. These methodologies by different researchers with different samples were used around the globe in different time periods of 20th century.
- 11. Conclusion Firms who exports are more productive. Both firms (exporters and non-exporters) co-exist in the same environment. Direct linkage between production and exporting. FDI also plays role in the increase productivity on the principle of cross-border investment.