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Holger Görg

Kiel Institute for the World Economy, Kiel Centre for Globalization

Holger Görg is Professor of International Economics at the University of Kiel, Head of the Research Center “International Trade and Investment” at the Kiel Institute for the World Economy (IfW), and Director of the Kiel Centre for Globalization (KCG). He is also affiliated with the Tuborg Centre for Globalisation and Firms at Aarhus University, GEP at Nottingham University and IZA. Before joining Kiel in 2008 he was on the staff at the University of Nottingham, the University of Ulster at Jordanstown and University College Cork. He completed a Ph.D. in Economics at Trinity College Dublin. His research interests are in empirical international trade and industrial organisation focusing in particular on the activities of multinational companies, foreign direct investment, and international outsourcing. Holger Görg has also worked as Consultant for, among others, The World Bank, European Commission, UNIDO, UN Economic Commissions for Europe and Africa, and various governments.
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Fostering Inclusive and Sustainable Global Value Chains: The Role of the G20
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Friends like this: The impact of the US–China trade war on global value chains

This paper considers the indirect impact the recent tariff increases between the United States and China can have on third countries through links in global supply chains. We combine data from input–output relationships, imports and tariffs, to calculate the impact of the tariff increases by both the United States and China on cumulative tariffs paid by third countries. We show that the tariff hikes increase cumulative tariffs for other countries and thus hurt trade partners further downstream in global supply chains. We also show that this is particularly important for tariff increases on Chinese imports in the United States. These are likely to be used as intermediates in production in the United States, which are then re‐exported to third countries. The most heavily hit third countries are the closest trade partners, namely the EU, Canada and Mexico. We estimate that the tariffs impose an additional burden of around 500 million to 1 billion US dollars on these countries. China's tariffs on US imports have less of an effect.

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Risk, resilience and recalibration in global value chains

Current global value chains are highly efficient, specialized and interconnected, but also highly vulnerable to global risks. The COVID-19 pandemic has been a stark demonstration of this point, causing supply-side disruptions in the first quarter of 2020, as China and other Asian economies were hit by the outbreak of the virus which eventually spread globally, leading to business closures around the world. The ensuing supply chain breakdown prompted policymakers in many countries to address the need for economic self-sufficiency, along with strategies to better deal with global risks, even at the expense of the efficiency and productivity gains that globalization has brought.

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Which boats are lifted by a foreign tide? Direct and indirect wage effects of foreign ownership

The attraction of foreign direct investment (FDI) is considered to be of particular importance for emerging economies because it represents a channel through which international convergence in standards of living may be achieved. One important effect of FDI is its impact on wages, both within the targeted firm (direct) and the local firms within the same geographic region and sector (indirect). In this paper, we investigate the question whether multinational enterprises (MNEs) raise or lower wages directly and indirectly, both theoretically and empirically. Importantly, the magnitude of these changes may depend on how many firms in the sector are already foreign-owned. Generally, the effect of MNEs on wages has not been studied as intensively in the international business (IB) literature as other aspects of FDI, and ours is the first article to specifically investigate the moderating effect of variation in foreign employment shares across industry–province cells (clusters). Using Chinese data on 146,199 firms, we estimate the direct wage effect of foreign ownership to be positive and to increase with the employment share of foreign-owned firms. We also find that the indirect effect on domestic wages varies with the foreign share and may even turn negative.

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Corporate Social Responsibility in Global Supply Chains: Deeds Not Words

The disconnect between the lofty aspirations of firms claiming Corporate Social Responsibility (CSR) and their shortcomings in practice have caused some observers to question its usefulness. The fallout from events like the Rana Plaza catastrophe has highlighted some of these shortcomings—namely, deficiencies in how multinational enterprises (MNEs) transact with suppliers in developing countries. Specifically, our paper aims to investigate whether or not MNEs behave hypocritically by examining the alignment of CSR to business practices in MNE affiliates in developing countries. To answer this question, we apply standard ordinary least squares (OLS) techniques to data for over 1000 MNEs that claim to have a CSR ethos. We find that CSR-active enterprises report significantly higher worker wages, ceteris paribus. Local African suppliers benefit from CSR through knowledge transfer, but only when MNEs make tangible investments in supplier development.

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Vertical integration and supplier finance

This paper studies access to finance by suppliers that are linked to a multinational enterprise. The theoretical framework consists of a property rights model featuring suppliers that are either vertically integrated or sell to the multinational at arm's length, which in turn affects the availability of different sources of credit. Integrated suppliers are predicted to cover a relatively larger share of their costs using internal sources, consisting of initial wealth plus funds from the multinational parent. In addition, due to the diminished dependence on external funds (local bank credit), integrated suppliers' funding shares are less responsive to changes in their home country's level of financial development. We test the model's predictions using firm survey data from over 50 developing and emerging countries and find broad support.

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