|
on South East Asia |
| By: | Sumner La Croix (Department of Economics, University of Hawaii at Manoa) |
| Abstract: | This paper briefly discusses three case studies (Choi and Tcha 2005; Lin 2005; Motohashi 2005) of responses by small and medium-size manufacturing enterprises (SMEs) in Korea, Taiwan, and Japan to the rising tide of imports from China in their product markets. They find vastly different responses in each country, with some firms relocating plants to mainland China; others exiting affected product markets; and some maintaining home country production by moving up the product ladder and using new production technologies. This paper conjectures that outmoded production technologies may underpin the exit of Japanese SMEs from these product markets; considers the impact that potential impact of Chinese imports on Korea’s attachment to a market economy; and finds that Taiwan’s SME investments in mainland China have substantial political as well as economic roots. The long-run response by Northeast Asian SMEs to Chinese competition will, in all three countries, be closely tied to SME development (via in-house or cooperative R&D) or acquisition of rights to new products and technologies. I conclude that a better understanding of the public and private institutions structuring SME contracting vis-a-vis R&D projects and technology acquisition is vital to each country’s development of effective policy responses to the meteoric rise of China. |
| Keywords: | Globalization, SMEs, creative destruction, exports, imports, entry, exit |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:200603&r=sea |
| By: | Richard Bird (Andrew Young School of Policy Studies); Christine C.P.Wong (University of Washington) |
| Abstract: | We argue in this paper that unless China begins to tackle more systematically the serious problems that have emerged in the finances of its various levels of sub-national government the problems to which the present unsatisfactory system give rise will over time increasingly distort resource allocation, increase distributional tensions, and slow down the impressive recent growth of the Chinese economy. Despite the lack of solid and reliable information on the size and nature of China’s real fiscal system, we show that the evidence available is generally consistent with this pessimistic reading. China’s fiscal and – in time – economic future thus rests to some extent on reforms to key aspects of its fiscal system, especially its intergovernmental finances. Moreover, a more consistent and purposive framework to this complex of problems seems needed. Given the scale and scope of China’s underlying public finance problems, the ‘reactive gradualism’ evidenced in recent ad hoc reforms to this or that piece of the fiscal system has, we suggest, run its course. |
| Keywords: | Chima. Sun-national government, Fiscal system, China's fiscal system |
| Date: | 2005–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper0520&r=sea |
| By: | Tangjun Yuan |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:hst:hstdps:d05-144&r=sea |
| By: | Bingqin Li |
| Abstract: | This paper demonstrates that urban social exclusion in China does not only include restricted participation by the ¿underclass¿ in urban life, but also the deprivation of certain political, social and economic rights. In addition, the paper describes how the character of urban social exclusion has changed over time. The author also examines the social exclusion of rural workers living and working in urban areas. The paper concludes by arguing that urban social exclusion in China needs coordinated reforms that target the whole set of problems in the urban ¿underclass¿ lacking political rights, social protection and economic opportunities. |
| Keywords: | social exclusion, urban China, rural to urban migrants |
| JEL: | J43 R23 I30 |
| Date: | 2004–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:082&r=sea |
| By: | Ralph Paprzycki |
| Abstract: | Having historically received very little foreign direct investment, Japan has experienced a substantial increase in such inflows in recent years. This paper analyzes the impact of the growing presence of foreign firms on the Japanese economy through detailed case studies on the automobile, finance, and health care industries. The wholesale & retail and the telecommunications sector are also briefly examined. The case studies show that in the sectors considered, foreign firms in one way or another are contributing to a greater degree of competition, are exposing domestic firms to global best practice, and are increasing the range of products and services available in Japan. In many of the sectors, they are also contributing to changes in industry structure and employment practices. The case studies thus illustrate that foreign direct investment - even at its present levels, which, although large by Japanese standards, are still low in international comparison - can be an important catalyst for change and hence help to reinvigorate the Japanese economy. |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:hst:hstdps:d05-141&r=sea |
| By: | Tangjun Yuan |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:hst:hstdps:d05-142&r=sea |
| By: | Junmin Wan (Osaka School of International Public Policy, Osaka University) |
| Abstract: | I estimated inter-brand cigarette demands with nicotine, tar content and policy event information in Japan during 1950-84. The demand for all brands increased but the demand for plain (non-filter) brands decreased due to the dissemination ofgA Note about Health Damage from Smoking h in 1964. The demand for all brands increased but the demand for high-nicotine brands decreased due to the disclosure of nicotine and tar content in 1967 and the labeling warnings in 1972, however consumers had still preferred high-nicotine brands after 1972. Contrastively, the demand for high-tar brands increased in 1967 but decreased in 1972, and consumers had switched to prefer low-tar brands after 1972. Disclosure did not reduce the intake of nicotine but reduced the intake of tar, accordingly disclosure may benefit consumers by reducing the health risk as tar causes cancers. In line with changes in inter-brand demands, the monopolistic firm discontinued old products with poorer quality (plain, high-tar) but provided new better ones (filter-tipped, low-tar). |
| Keywords: | disclosure, nicotine, tar, cigarette, inter-brand, panel estimation, difference in difference |
| JEL: | I18 D12 D82 |
| Date: | 2004–06 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:0413r&r=sea |
| By: | Peter Skott (University of Massachusetts Amherst); Takeshi Nakatani (Kobe University) |
| Abstract: | This paper uses a modified Harrodian model to understand both the long period of rapid Japanese growth and the recent period of stagnation. The model has multiple steady-growth solutions when the labour supply is highly elastic, and government intervention, we argue, took the Japanese economy onto a high-growth trajectory. Labour constraints began to ap- pear around 1970, and a combination of high saving rates and slow popu- lation growth account for the stagnation of the 1990s. This combination produces a structural liquidity trap and threatens the sustainability of at- tempts to ensure near full employment through fiscal policy or by running a persistent trade surplus. JEL Categories: E12, E63, O53 |
| Keywords: | Japan, growth, stagnation, liquidity trap, public debt, multiple equilibria |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2006-04&r=sea |
| By: | Jorge Martinez-Vazquez (Andrew Young School of Policy Studies); Mark Rider (Andrew Young School of Policy Studies) |
| Abstract: | Although there are obvious differences in the political systems of China and India, there are surprising similarities in their respective approaches to decentralization. Both countries face similar design issues with their intergovernmental systems, such as the lack of clear expenditure assignments, high transfer dependency, low revenue autonomy, and soft budget constraints. As a result, in both countries there is a lack of aggregate fiscal discipline among sub-national governments, and the quality of sub-national government service delivery is poor. Poor service delivery and the lack of fiscal discipline threaten the ability of both countries to sustain high rates of economic growth. |
| Keywords: | China, India, Fiscal Decentralization, Economic Growth, Intergovernmental fiscal |
| Date: | 2005–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper0519&r=sea |
| By: | Bingqin Li; David Piachaud |
| Abstract: | Despite prolonged economic growth, poverty has become a more notable and noted feature of Chinese society. The paper examines three phases of development since the foundation of the People's Republic: the central planning era (1949 -1978); the pro-urban growth model (1978 - 1999); and more recent changes (1999 - 2004). For each phase the nature of the economic and social policies are described and the effects on poverty and inequality are examined. The limitations of a social policy that is subservient to the economic strategy are considered. The alternative of a model of social development based on the livelihood approach is analysed and its potential to reduce poverty and inequality are considered. |
| Keywords: | poverty, inequality, social policy, China, livelihoods, social development |
| JEL: | I3 |
| Date: | 2004–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:087&r=sea |
| By: | Hongbin Li; Junsen Zhang; Yi Zhu |
| Abstract: | This paper measures the effect of China's one-child policy on fertility by exploring the natural experiment that has been created by China's unique affirmative birth control policy, which is possibly the largest social experiment in human history. Because the one-child policy only applied to Han Chinese, but not to ethnic minorities, we construct a differences-in-differences estimator to identify the effect of the policy on fertility. Such a natural experiment is a rare opportunity, whether for the analysis of the effect on fertility or for the analysis of economics in general. Using two rounds of the Chinese Population Census, we find that the one-child policy has had a large effect on fertility. The average effect on the post-treatment cohorts on the probability of having a second child is as large as -11 percentage points. We also find that the magnitude is larger in urban areas and for more educated women. Our robustness tests suggest that our differences-in-differences estimates of the effect of the one-child policy are not very likely to be driven by other policy or socio-economic changes that have affected the Han and the minorities differently. |
| JEL: | J13 J15 J18 O10 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:chk:cuhkdc:00019&r=sea |
| By: | Yukako Murakami |
| Abstract: | This paper investigates whether differences in productivity explain why some Japanese manufacturing firms sell only in the domestic market, while others serve foreign markets, either through exports, overseas production, outsourcing or licensing. Using firm level data, it is shown empirically that the productivity of multinational firms differs significantly from that of firms that sell only in the domestic market. It shows therefore that the heterogeneous productivity levels explain the channels of multinational enterprises. |
| Keywords: | FDI, exports, outsourcing, licensing, TFP |
| JEL: | F2 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:hst:hstdps:d05-138&r=sea |
| By: | Soyoung Kim; Jong-Wha Lee; Kwanho Shin |
| Abstract: | We examine the degree of regional vs. global financial integration of East Asian countries in three ways; (1) comparing the size of cross-border assets such as securities and bank claims (2) estimating the gravity model of bilateral financial asset holdings (3) estimating consumption risk sharing model. The results suggest that East Asian financial markets, particularly compared to the European ones, are relatively less integrated with each other than to global markets. We also find relatively more evidence of regional financial integration in bank claim markets than portfolio asset markets. The low financial integration within East Asia is attributed to the low incentives for portfolio iversification within the region, the low degree of development and deregulation of financial markets, and the instability in monetary and exchange rate regime. |
| URL: | http://d.repec.org/n?u=RePEc:iek:wpaper:0602&r=sea |
| By: | Donald Clarke; Peter Murrell (Department of Economics, University of Maryland); Susan Whiting |
| Abstract: | This paper surveys China's legal system in the economic reform era. We analyze the role of law in the economy, assessing whether China's formal legal system contributed to those expectations of stable and predictable rights of property and contract that are prerequisites for growth. The paper begins by detailing legal developments. The relationship between legal and economic development was bidirectional - a coevolutionary process. We then examine three spheres of activity - property rights, agreements to trade, and corporate governance - asking whether law plays an important role, how that role has changed, and what the current problems are. Common themes arise. First, there have been profound changes, with law playing an increasingly important role. Second, formal legal institutions have not made a critical contribution to China's remarkable economic success. This latter conclusion leaves open the question of which mechanisms generated the necessary expectations of reasonable returns from decentralized economic activity. We briefly reflect on mechanisms other than law that might have produced such expectations, for example, the role of local Communist Party officials. However, lack of empirical information suggests this is a topic for future research. |
| Keywords: | China, institutions, law, property rights, contracts, corporate governance |
| JEL: | P20 P26 P30 P37 N45 K00 K20 K40 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:umd:umdeco:clarke_murrell_whiting&r=sea |
| By: | Osamu Saito; Tokihiko Settsu |
| Abstract: | In the latter half of the Tokugawa period economic growth, however sluggish its pace was, took place in the form of rural industrialisation and the expansion of inter-regional trade. This paper addresses the following questions: how capital was mobilised for such rural-centred growth in production and commerce, and how the quasi-capital markets worked in both the Osaka economy and in the countryside, with special reference to trends in interest rates over time, in a pre-modern setting of market segmentation. The paper will argue that although Tokugawa Japan's formal institutions were far from ideal, the credit systems did function as quasi-capital markets reasonably well within each commercial network formed through relational contracting, and that for the Smithian process of early modern growth to work, inter-regional competition mattered more than institutional maturity of the nation's market environment. |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:hst:hstdps:d05-139&r=sea |
| By: | Satoru Kanoh; Chakkrit Pumpaisanchai |
| Abstract: | The literature referring to the credit slowdown has been plagued by the identification problem of whether a decline in a bank's credit is derived from the demand or the supply side. This paper proposes an original approach in directly estimating the credit demand and the credit supply from survey data. Using the TANKAN and the recently published Senior Loan Officer survey data, the paper demonstrates that the observed lending amount did not change much during the period of study; however, the observed lending amount deviated, as one might expect, from the estimated credit demand and credit supply for every firm size. This credit mismatch presents evidence of credit market imperfections and is of interest for further investigation as a possible explanation of firms' liquidity constraints and banks' lending mechanisms. |
| Keywords: | Credit demand, Credit supply, Survey data, Japanese Economy |
| JEL: | C42 C51 E10 O53 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:hst:hstdps:d05-137&r=sea |
| By: | Yukako Murakami; Kyoji Fukao |
| Abstract: | Firstly, this paper shows that before M&A the foreign firms value the facility and scale economy in target firms which have greater capital stock and sales in the host country. Secondly, out-in M&A firms acquired by foreign firms saw an improvement in their business efficiency after the acquisition. This finding suggests that out-in M&As involve a transfer of business resources or technological knowledge that help to further lift the efficiency of firms. |
| Keywords: | FDI, Total Factor Productivity, Merger and acquisition, Selection Hypothesis, Spillover |
| JEL: | F1 F2 O3 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:hst:hstdps:d05-143&r=sea |
| By: | Rene Belderbos; Kyoji Fukao; Tomoko Iwasa |
| Abstract: | A considerable share of R&D investment is due to multinational firms that simultaneously operate R&D bases at home and abroad. The existing empirical literature on R&D investment has however ignored the possibility that domestic and foreign R&D investments are simultaneously decided. In this paper, we draw on the technological opportunity, appropriability, and demand framework suggested by Cohen and Klepper (1996) to develop a simple model of foreign and domestic R&D investment. We test the model's predictions concerning the ratio of foreign to domestic R&D investment on a sample of 146 Japanese multinational firms' R&D investments in Japan and the United States in 1996. The empirical results confirm that the foreign R&D ratio depends on relative technological opportunities, relative demand conditions, and a proxy for firm-level R&D productivity. When differentiating between research and development activities, foreign research is driven by technological opportunity and foreign development by the demand factor, as expected. |
| Keywords: | R&D, multinational firms, Foreign Direct Investment |
| JEL: | F23 O32 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:hst:hstdps:d05-140&r=sea |
| By: | Chong Huang; Hongbin Li; Pak Wai Liu; Junsen Zhang |
| Abstract: | In interpreting the positive relationship between spousal education and one's earnings, economists have two major hypotheses: cross-productivity between couples and assortative mating. However, no prior empirical study has been able to separate the two effects. This paper empirically disentangles the two effects by using twins data that we collected from urban China. We have two major innovations: we use twins data to control for the unobserved mating effect in our estimations, and we estimate both current and wedding-time earnings equations. Arguably, the cross-productivity effect takes time to be realized and thus is relatively unimportant at the time of the wedding. Any effect of spousal education on wedding-time earnings should more likely be the mating effect. We find that both cross-productivity and mating are important in explaining the current earnings. Although the mating effect exists for both husbands and wives, the cross-productivity effect only runs from Chinese husbands to wives. We further show that the cross-productivity effect is realized by increasing the hourly wage rate rather than working hours. |
| JEL: | J31 O15 P20 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:chk:cuhkdc:00020&r=sea |
| By: | Jong-Wha Lee; Warwick J. McKibbin; Yung Chul Park |
| Abstract: | This paper explores the causes of the transpacific trade imbalances using an empirical global model. It also evaluates the impact of various policies to reduce these imbalances. We find the fundamental cause of trade imbalance since 1997 is changes in saving-investment gaps, attributed to the surge of the U.S fiscal deficits and the decline of East Asia's private investment after the 1997 financial crisis. Our simulation results show that a revaluation of East Asia's exchange rates by 10 percent (effectively a shift in monetary policy) cannot resolve the imbalances. We find East Asia's concerted efforts to stimulate aggregate demand can have significant impacts on trade balances globally, but the impact on the US trade balance is not large. US fiscal contraction is estimated to have large impacts on the US trade position overall and on the bilateral trade balances with East Asian economies. These results suggest that in order to improve the transpacific imbalance, acroeconomic adjustment will need to be made on both sides of the Pacific. |
| URL: | http://d.repec.org/n?u=RePEc:iek:wpaper:0601&r=sea |
| By: | Marcos Chamon; Michael Kremer |
| Abstract: | This paper considers the long-run evolution of the world economy in a model in which countries' opportunities to develop depend on their trade with advanced economies. Trade opportunities in turn depend on the relative population of the advanced and developing world. As developing countries become advanced, they further improve the trade prospects for the remaining developing countries. As long as the population growth differential between developing and advanced countries is not too large, the rate at which countries transition to prosperity accelerates over time. However, if population growth differentials are large relative to the transition rate, the world economy converges to widespread prosperity if and only if the proportion of the world population in advanced countries is above a critical level. In our baseline calibration the world economy is below that critical level, but further declines in population growth in the developing world or rapid growth in China would bring it above that threshold. Even then, the share of the world population living in developing countries would decrease very slowly. Substantial narrowing of population growth differentials, increases in the transition rate or the rapid development of India could bring the world economy to a trajectory of accelerating development. |
| JEL: | J11 F43 O41 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12038&r=sea |
| By: | van der Mensbrugghe, Dominique; Martin, Will; Anderson, Kym |
| Abstract: | This paper provides new estimates of the global gains from multilateral trade reform and their distribution among developing countries in the presence of trade preferences. Particular attention is given to agriculture, as farmers constitute the poorest households in developing countries but are the most assisted in rich countries. The latest GTAP database (Version 6.05) and the LINKAGE model of the global economy are used to examine the impact first of current merchandise trade barriers and agricultural subsidies, and then of possible reform outcomes from the WTO ' s Doha Development Agenda. The results suggest moving to free global merchandise trade would boost real incomes in Sub-Saharan Africa proportionately more than in other developing countries or high-income countries, despite a terms of trade loss in parts of that region. Net farm incomes would rise substantially in that and other developing country regions, thereby alleviating rural poverty. A Doha partial liberalization could move the world some way toward those desirable outcomes, but more so the more developing countries themselves cut applied tariffs, particularly on agricultural imports. |
| Keywords: | Agribusiness,Free Trade,Economic Theory & Research,Country Strategy & Performance,Trade Policy |
| Date: | 2006–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3848&r=sea |
| By: | Yuyu Chen; Hongbin Li |
| Abstract: | In this paper, we examine the effect of maternal education on the health of young children by using a large sample of adopted children from China. As adopted children are genetically unrelated to the nurturing parents, the educational effect on them is most likely to be the nurturing effect. We find that the mother's education is an important determinant of the health of adopted children even after we control for income, the number of siblings, health environments, and other socioeconomic variables. Moreover, the effect of the mother's education on the adoptee sample is similar to that on the own birth sample, which suggests that the main effect of the mother's education on child health is in post-natal nurturing. Our work provides new evidence to the general literature that examines the determinants of health and that examines the intergenerational immobility of socioeconomic status. |
| JEL: | I12 I21 O15 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:chk:cuhkdc:00021&r=sea |
| By: | Christos Koulovatianos; Carsten Schröder; Ulrich Schmidt |
| Abstract: | Different family types may have a fixed flow of consumption costs, related to subsistence needs. We use a survey method in order to identify and estimate such a fixed component of spending for different families. Our method involves making direct questions about the linkup between aggregate disposable family income and well-being for different family types. Conducting our survey in six countries, Germany, France, Cyprus, China, India and Botswana, we provide evidence that fixed costs of consumption are embedded in welfare evaluations of respondents. More precisely, we find that the formalized relationship between welfare-retaining aggregate family incomes across different family types, suggested by Donaldson and Pendakur (2005) and termed “Generalized Absolute Equivalence Scale Exactness,” is prevalent and robust in our data. We use this relationship to identify subsistence needs of different family types and to calculate income inequality. |
| JEL: | I31 I32 C42 D31 D12 D63 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:vie:viennp:0602&r=sea |
| By: | Simon Burgess; Ruth Lupton; Deborah Wilson |
| Abstract: | We provide evidence on the extent of ethnic segregation experienced by children across secondary schools and neighbourhoods (wards). Using 2001 Schools Census and Population Census data we employ the indices of dissimilarity and isolation and compare patterns of segregation across nine ethnic groups, and across Local Education Authorities in England. Looking at both schools and neighbourhoods, we find high levels of segregation for the different groups, along with considerable variation across England. We find consistently higher segregation for South Asian pupils than for Black pupils. For most ethnic groups children are more segregated at school than in their neighbourhood. We analyse the relative degree of segregation and show that high population density is associated with high relative school segregation. |
| Keywords: | education, sorting |
| JEL: | J7 J16 J42 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:101&r=sea |
| By: | Ken Heydon |
| Abstract: | La conférence ministérielle de l’OMC qui s’est tenue en décembre 2005 à Hong Kong a permis quelques avancées du Programme de Doha pour le développement, mais il reste beaucoup à faire, en particulier pour fixer les modalités des négociations sur l’agriculture et sur l’accès aux marchés pour les produits non agricoles, et pour donner plus d’épaisseur à l’AGCS. En outre, les progrès réalisés sont à nuancer, qu’il s’agisse de la réponse apportée aux préoccupations des producteurs africains de coton ou de l’amélioration de l’accès aux marchés pour les produits des pays les moins avancés. Compte tenu de ce qu’il reste à accomplir, il n’est pas certain que les nouvelles échéances fixées seront respectées ni que le Programme de Doha pour le développement sera achevé en temps voulu. Un ralentissement de la dynamique de libéralisation multilatérale peut avoir de nombreuses conséquences ; les analyses réalisées par l’OCDE montrent que l’ampleur des opportunités perdues pourra être considérable et que le système commercial multilatéral risque d’être soumis à des tensions systémiques. Les pays en développement seraient alors parmi les principaux perdants. Pour aller de l’avant, il faudra envisager les politiques commerciales dans un contexte plus large au niveau intérieur, en reconnaissant que l’ouverture du marché est plus efficace lorsqu’elle est appuyée par des politiques macroéconomiques solides, des marchés de l’emploi souples, une culture de la concurrence et des institutions fortes. En se plaçant dans cette perspective, il est possible de promouvoir la réforme des échanges en l’envisageant comme un outil indispensable de la croissance et du développement plutôt que comme une concession. |
| Keywords: | croissance, marché du travail, développement, libéralisation, services, agriculture, ajustement structurel, facilitation des échanges, régionalisme, coton, marchandises, négociation des modalités, macroéconomique, obstacles aux échanges |
| Date: | 2006–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:27-fr&r=sea |
| By: | Kalpana Kochhar; Utsav Kumar; Raghuram Rajan; Arvind Subramanian |
| Abstract: | India seems to have followed an idiosyncratic pattern of development, certainly compared to other fast-growing Asian economies. While the emphasis on services rather than manufacturing has been widely noted, within manufacturing India has emphasized skill-intensive rather than labor-intensive manufacturing, and industries with typically higher average scale. We show that some of these distinctive patterns existed even prior to the beginning of economic reforms in the 1980s, and argue they stem from the idiosyncratic policies adopted soon after India's independence. We then look to the future, using the growth of fast-moving Indian states as a guide. Despite recent reforms that have removed some of the policy impediments that might have sent India down its distinctive path, it appears unlikely that India will revert to the pattern followed by other countries. |
| JEL: | O14 O53 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12023&r=sea |
| By: | Khan, Faruk A. |
| Abstract: | This paper asks whether new technological capacity for producing and exporting additional products provides incentives for greater capital accumulation, without being fully reflected in a higher rate of total factor productivity (TFP) growth. Using a highly disaggregated data set of each country ' s trade flows into the United States, the author constructs a direct and independent measure of technological improvements for each country over time based on the number of new product varieties exported to the United States. The author shows, in a panel data setting, that acquiring the technological capacity for producing new products stimulates more rapid capital accumulation in developing countries, even after holding fixed the rate of TFP growth. His findings provide evidence against the alternative view that technological improvements are essentially unimportant: a view based on the findings of Young (1995) and others that instances of spectacular economic growth have been associated with unspectacular rates of TFP growth. The author provides a model to show how an expansion in the technological capacity for producing additional products can lead to more rapid factor accumulation, without necessarily improving measured TFP. His findings suggest that while rapid accumulation of physical and human capital may have characterized the East Asian growth experience, these gains were stimulated by stellar improvements in technological capacity. |
| Keywords: | Economic Theory & Research,Economic Growth,Markets and Market Access,Investment and Investment Climate,Inequality |
| Date: | 2006–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3846&r=sea |
| By: | Carmen Rienhart |
| Abstract: | The literature on capital controls has (at least) four very serious apples-to-oranges problems: (i) There is not unified theoretical framework to analyze the macroeconomic consequences of controls; (ii) there is significant heterogeneity across countries and time in the control measures implemented; (iii) there are multiple definitions of what constitutes a "success" and (iv) the empirical studies lack a common methodology -- furthermore these are significantly "overweighter" by a couple of country cases (Chile and Malaysia). In this paper, we attempt to address some of these shortcomings by: being very explicit about what measures are construed as capital controls. Also, given that success is measured so differently across studies, we sought to "standardize" the results of over 30 empirical studies we summarize in this paper. The standardization was done by constructing two indices of capital controls: Capital Controls Effectiveness Index (CCE Index), and Weighted Capital Control Effectiveness Index (WCCE Index). The difference between them lies only in that the WCCE controls for the differentiated degree of methodological rigor applied to draw conclusions in each of the considered papers. Inasmuch as possible, we bring to bear the experiences of less well known episodes than those of Chile and Malaysia. |
| JEL: | F21 F31 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11973&r=sea |