The NBER's Program on Productivity met in Cambridge on March 4. Research Associates Ernst R. Berndt of MIT and Wolfgang Keller of the University of Texas organized this program:

Anusha Chari and Paige P. Ouimet, University of Michigan. and Linda L. Tesar, NBER and University of Michigan, "Acquiring Control in Emerging Markets: Evidence from the Stock Market" Discussant: Lee G. Branstetter, NBER and Columbia University

Mary Hallward-Driemeier and Giuseppe Iarossi, The World Bank, and Kenneth L. Sokoloff. NBER and University of California. Los Angeles, "Exports and Manufacturing Productivity in East Asia: A Comparative Analysis with Firm-Level Data" Discussant: Eli Berman, NBER and University of California. San Diego

Barbara M. Fraumeni and Lawrence R. McNeil, Bureau of Economic Analysis, "International Spillovers and the R&D Satellite Account" Discussant: Ernst R. Berndt

Johannes Van Biesebroeck, NBER and University of Toronto, "Cross-Country Conversion Factors for Sectoral Productivity Comparisons" Discussant: Robert E. Lipsey, NBER and Queens College

Diego Comin, NBER and New York University, and Bart Hobijn, Federal Reserve Bank of New York, "Neoclassical Growth and the Adoption of Technologies" (NBER Working Paper No. 10733) Discussant: Peter Howitt, NBER and Brown University

Chiara Criscuolo and Jonathan E. Haskel, University of London, and Matthew J. Slaughter, NBER and Dartmouth College, "Why are Some Firms More Innovative? Knowledge Inputs. Knowledge Flows, and the Rote of Global Engagement" Discussant: Amil Petrin, NBER and University of Chicago

When firms from developed markets acquire firms in emerging markets, market-capitalization-weighted monthly joint returns show a statistically significant increase of 1.8 percent. Panel data estimations of Chari, Ouimet, and Tesar suggest that the value gains from cross-border M&A transactions stem from the transfer of majority control from emerging-market targets to developed market acquirers--joint returns range from 5.8 percent to 7.8 percent when majority control is acquired. Announcement returns for acquirer and target firms estimate the distribution of gains and, on average, show a statistically significant increase of 2.4 percent and 6.9 percent, respectively. The evidence suggests that the stock market anticipates significant value creation from cross-border transactions that involve emerging market targets leading to substantial gains for shareholders of both acquirer and target firms.

Hallward-Driemeier, Iarossi, and Sokoloff use new plant-level data from East Asian countries to explore patterns of manufacturing productivity. Domestically-owned firms that export and firms with foreign ownership are significantly more productive than those that produce solely for domestic consumption--and the productivity gaps are larger the less developed the local market. The possible endogeneity of export orientation is addressed using characteristics at the time of establishment as instruments. It is not simply that more productive firms self-select into exporting; rather, firms that explicitly target export markets make systematically different decisions regarding investment, training, technology and inputs, and thereby raise their productivity.

The Bureau of Economic Analysis (BEA) has initiated a National Science Foundation (NSF) funded project to produce an official BEA/NSF R&D Satellite Account (R&DSA). McNeil and Fraumeni present a possible trade-based methodology for estimating cross-border R&D spillovers, which reflects an important component of the overall project, because spillovers may be formally integrated into the official BEA/NSF R&DSA. Beginning with Coe and Helpman (1995), they evaluate four methodologies used to estimate the impact of international R&D spillovers on economic growth. They select Xu and Wang (1999) as the most appropriate model for calculating net outward spillovers.

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