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on South East Asia |
| By: | Richard Podpiera; Lamin Leigh |
| Abstract: | The recent wave of foreign investment in China's banks and the prospects of further opening of the banking sector under the WTO agreement suggest that foreign banks are likely to play an increasingly important role in China. This paper takes stock of the involvement of foreign banks in the Chinese banking sector in the perspective of international experience. While in most other countries foreign bank entry took the form of direct takeover or majority shareholding, foreign investments in China's banks have been minority shareholdings with very limited management involvement. The paper concludes that China appears to be well positioned to benefit from further opening of the banking sector to foreign investors. International experience suggests that greater competition from and participation of foreign banks can in general bring important benefits if appropriate incentives and sufficient opportunities are created. |
| Keywords: | Foreign investment , China , banks , WTO , banking reforms , Foreign investment , China , Banks , Bank reforms , World Trade Organization , |
| Date: | 2007–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:06/292&r=sea |
| By: | Jaewoo Lee; Joshua Aizenman |
| Abstract: | The sizable hoarding of international reserves by several East Asian countries has been frequently attributed to a modern version of monetary mercantilism-hoarding international reserves in order to improve competitiveness. From a long-run perspective, manufacturing exporters in East Asia adopted financial mercantilism-subsidizing the cost of capital- during decades of high growth. They switched to hoarding large international reserves when growth faltered, making it harder to disentangle the monetary mercantilism from a precautionary response to the heritage of past financial mercantilism. Monetary mercantilism also lowers the cost of hoarding through its short-term boost to external competitiveness, but may be associated with negative externalities leading to competitive hoarding. |
| Keywords: | Mercantilism , cost of capital , competitive real depreciations , self insurance , precautionary hoarding , |
| Date: | 2006–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:06/280&r=sea |
| By: | Jahangir Aziz |
| Abstract: | This paper uses the standard one-sector neoclassical growth model to investigate why China's consumption has been low and investment high. It finds that the low cost of capital has been quantitatively an important factor. Theory predicts that the price of capital may have been significantly distorted in the 1990s and 2000s. The distortion could have been caused by nonperforming loans, borrowing constraints, and uncertainty over changes in government guidance in bank lending. If China is to rebalance growth towards relying more on consumption and less on exports and investment, banking sector reforms and financial market development could, therefore, turn out to be key. |
| Keywords: | Business cycle accounting , rebalancing growth , financial distortions , Economic growth , China , Economic policy , Bank reforms , Financial sector , Capital markets , Capital , Consumption , Investment , Exports , Economic models , |
| Date: | 2007–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:06/291&r=sea |
| By: | Coulibaly, Souleymane |
| Abstract: | Many recent papers have pointed to ambiguous trade effects of developing regional trade agreements (RTAs), calling for a reassessment of their economic merits. The author focuses on seven such agreements currently in force in Sub-Saharan Africa (ECOWAS and SADC), Asia (AFTA and SAPTA) and Latin America (CACM, CAN, and MERCOSUR), estimating their impacts on their members ' trade flows. Instead of the usual dummy variables for RTAs, he proposes a variable taking into account the number of years of membership. He then combines a gravity model with kernel estimation techniques to capture the non-monotonic trade effects while imposing minimal structure on the model. The results indicate that except for SAPTA, these RTAs have had a positive impact on their members ' intra-trade over the estimation period (1960-99). AFTA seems to be the most successful among them, with an estimated positive impact on its members ' imports from the rest of the world (hence no trade diversion), but its impact on their exports to the rest of the world is rather limited. During its first 10 years of existence, ECOWAS appears to have had a positive impact on its members ' imports from the rest of the world (hence no trade diversion), but this positive impact vanished over time. SAPTA ' s negative impact on its members ' intra-trade is probably an implicit effect of the India-Pakistan tensions over the estimation period. |
| Keywords: | Free Trade,Trade Law,Trade Policy,Economic Theory & Research,Trade and Regional Integration |
| Date: | 2007–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4220&r=sea |
| By: | OGAWA Kazuo; Elmer STERKEN; TOKUTSU Ichiro |
| Abstract: | Based on a matched sample of Japanese small firms and main banks, we investigate bank-firm relationships in the early 2000s. We obtain some remarkable new findings. First, small firms have multiple bank relationships even though they have their main bank relations. Second, firms tied with financially weak main banks increase their number of bank relations to diversify liquidity risk. Third, the duration of a main bank relation has a positive effect on the number of bank relations. This is interpreted as either a reputation effect or firms' counterbalance actions against the monopoly power of main banks. To go further into this issue, we examine the effects of a main bank relation on the design of loan contracts. We find that firms with fewer bank relations tend to pledge personal guarantees to their main banks and are charged a higher interest rate. Our evidence lends support for the hypothesis of monopoly exploitation by main banks. |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:07027&r=sea |
| By: | KITANO Taiju; OHASHI Hiroshi |
| Abstract: | This paper examines the effect of U.S. safeguard on motorcycle imports in the period from 1983 to 1987. After receiving the temporary protection with the maximum tariff of more than 45%, Harley Davidson drastically recovered its sales. The paper conducts structural analyses of the motorcycle market, and finds that the safeguard contributed merely a fraction of Harley Davidson's profit. This finding is primarily due to small cross-price elasticity of demand between American and Japanese motorcycle models. |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:07026&r=sea |