I. Introduction, 456. —II. Input-output model tracing the impact of changes in the prices of imports on the prices of domestic products, 457.— III. Application of this model to Colombia, 458. — IV. Conclusion, 461.

Introduction, 604. —I. India's loss in expanding world markets, 606. — II. Empirical evidence that this declining market share was caused by an increase in the price of Indian exports relative to competitors' prices, 608. — III. Policies adopted by the Indian government to achieve goals with higher priority than export promotion, 611. — IV. Policy implications of the historical analysis if the Indian government should adopt a more vigorous export promotion policy, 617. —Appendix, 619.

D ESPITE failure of rich countries to grant any new tariff preferences to less developed countries (LDC's) 1960's, export earnings of manufactures by LDC's grew by more than 10 per cent per year during decade.' This phenomenon seems related to !the expansion of multinational firm. Scattered bits of evidence suggest that a large fraction of exports of manufactures from LDC's are accounted for by such firms. Between 1965 and 1968 annual exports from LDC's by foreign affiliates of United States manufacturing firms rose from 700 million dollars to 1.4 billion dollars.2 Between 1957 and 1966 Latin America's annual exports of manufactures rose from 709 million dollars to 1,613 million dollars, and subsidiaries of United States firms accounted for 65 per cent of this increase of 804 million dollars.3 IBM is said to have been largest single exporter of manufactures from both Argentina and Brazil 1969.4 As is well known, there is a large amount of literature on question of impact on currently less developed countries of large increase their exports of primary products during 19th century. We do not have much evidence on impact of contemporary investment by foreign manufacturing firms LDC's.5 The Pearson Commission (1969, p. 104) said in absence of detailed empirical studies, it is difficult to pass a definitive verdict on precise size of contribution which foreign investment has made to development. 6 Vernon (1971, p. 181), discussing extent to which foreign firms introduce into developing countries production techniques that are excessively capital intensive, says the actual facts are, as usual, obscure. There are no comprehensive data on degree to which multinational enterprises adapt their production processes to conditions of less-developed countries, and scarcely any data on comparative adaptive actions of local competitors. The next two sections present data on a sample of Japanese and United States firms South Korea, and final section discusses benefits and costs to South Korea of these foreign investments.

We do not find the relatively large prediction errors for all the regressions tested in 1965-IV surprising since the HWI rose an unprecedented 40 points from 1965-III to 1966-1, and other measures Rfi p1a1tSin., kbt, 1,,zr -nkaA,t,q npont,d t.0njrwor heating. In this same period, the nonfarm job openings series of the Bureau of Employment Security also increased dramatically, as did new hires in manufacturing. (Possibly there is a greater impact of the industrial cycle on the nonindustrial job market than has been previously recognized.) Moreover, the build-up of conventional type arms for Vietnam which got underway at the same time resulted in a shift of procurements from the West Coast to the Great Lakes and New England regions, which together have a heavier weight in the HWI.8 Tltis inip-esJing, tlit evem cru&de measures of tob vacancies may be quite sensitive indicators of pressures in the labor market. Certainly, job vacancy measures, when analyzed with care, deserve much more attention than they have received in the past.

Citations are given to show that since 1888 some people have understood the idea of effective tariffs. For fourteen studies on twenty-six countries done during the last five years, one finds a rank correlation of .95 between the height of a nation's average effective tariff and the height of the nation's average nominal tariff. Looking at the effective tariff and the nominal tariff for various industries within a country, one finds both a significant regression between them and a rank correlation between them of over .70 for twenty-three of the twenty-six countries. I speculate on reasons for these results.

Journal Article Employment and Industrialization: Comment Get access Benjamin I. Cohen, Benjamin I. Cohen Harvard University Search for other works by this author on: Oxford Academic Google Scholar Nathaniel H. Leff Nathaniel H. Leff Harvard University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 81, Issue 1, February 1967, Pages 162–164, https://doi.org/10.2307/1879682 Published: 01 February 1967