Helge Zille defends his PhD thesis
Title: "The Political Economy of Interstate Conflicts and Industrial Development".
Time and place: 23 June 2022 at 14:00 in CSS 26.2 21. Participation by Zoom: https://ucph-ku.zoom.us/j/9536476672, passcode: 1234
An electronic copy of the thesis can be obtained here: email@example.com
Professor Tony Addison, Department of Economics, Universitey of Copenhagen, Danmark (chairman)
Professor Carol Newman, Trinity College, Dublin
Associate Professor Brian McCaid, Wilfred Laurier University, Canada.
This PhD thesis consists of three self-contained chapters within the fields of international and development economics.
Chapter 1: The Role of Labor Composition and Quality in Determining the Productivity-Wage Gap: Evidence from Industrial Zones in Myanmar – with John Rand, Finn Tarp, and Neda Trifković
The first chapter uses a large nationally representative survey of private manufacturing enterprises to estimate productivity and wage gains associated with industrial zones in Myanmar. Moreover, we investigate the contribution of the industrial zones in facilitating agglomeration and human capital returns to firms and workers. Our results show that being located in an industrial zone is associated with higher value added per worker, but this is not entirely reflected in worker wages. Productivity gains related to agglomeration and hiring of trained workers are larger in industrial zones than elsewhere. While increasing the share of women workers can lead to short-term productivity losses, our estimates show that worker wages improve in firms with a higher share of women workers. Our results highlight the role of labor force quality and composition in affecting the firm performance, but also illustrate that the benefits from industrial zones extend beyond agglomeration, bringing out the advantages of planned industrial zones as opposed to relying on innate industrial clustering.
Chapter 2: Brothers in Arms, Brothers in Trade? Measuring the Effect of Violent Conflicts on Trade with Third-Party Countries
The second chapter contributes to the old and ongoing discussion about the relationship between violent conflicts and international trade. Empirical research in the 1990s and early 2000s has established that violent interstate conflicts harm international trade. While most of this literature dates back at least 10 to 20 years, the effect of interstate conflicts on trade with third-party countries has been neglected for most of the time in the literature. In this chapter, I attempt to fill this gap. A period of 46 years is covered in the analysis, using more than 500 thousand dyad-year observations. The third-party country dimension is derived from a triadic data set, which covers all possible country-triad combinations for the studied period. I find that violent interstate conflicts reduce trade with third-party countries, and that they cause a shift in trade towards allied countries and away from the enemy’s allies. Countries increase imports from members of the same security alliance by between 1 and 4 percent, and trade more with countries that have the same enemies by between 5 and 7 percent. They reduce trade with the formal allies of their enemies by between 9 and 14 percent. This negative trade shifting effect is further amplified by the size of the respective conflict country. This chapter contributes to the literature on conflict and trade in two ways: First, by adding to the scarce literature introducing a third-country dimension into standard gravity models and into the literature on conflict and trade. And second, by showing the importance of a spatially dynamic perspective on interstate conflicts.
Chapter 3:The Ownership of Pioneer Firms: The Role of State-Owned and Multinational Enterprises in Industrial Diversification in Vietnam – with Bjørn Bo Sørensen, Henrik Hansen, and John Rand.
In the third chapter, we study the ownership of pioneer firms that establish market activities in provinces where such activities did not previously exist. Using the Vietnamese Enterprise Survey (2001-2017), which allows us to track close to one million formal firms over time, we explore whether Vietnam’s remarkable industrial diversification during the past two decades was driven by state-owned, multinational, or domestic and privately owned enterprises (SOEs, MNEs, or PDEs). We document significantly higher ownership-specific pioneering frequencies in SOEs and MNEs compared to PDEs, also after controlling for a broad spectrum of observable characteristics. Using a simple conceptual framework, we attribute these differences to variations in access to capital, knowledge of firm- and industry productivity, and firm-specific strategies and policy objectives. Second, we investigate the dynamic employment effects in industries pioneered by different firms. We find a large employment premium in MNE-pioneered industries. The premium is driven entirely by employment in pioneering MNEs and other MNEs following the pioneer in subsequent years. In contrast, there is no employment premium in industries pioneered by SOEs relative to PDEs. Pioneering SOEs are systematically larger than pioneering PDEs, but this direct employment effect is counterbalanced by less employment in PDEs and MNEs in SOE-pioneered industries in the long run.