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on South East Asia |
| By: | Kentaro Iwatsubo; Kazuyuki Inagaki |
| Abstract: | This paper investigates stock market contagion between U.S. and Asian markets. To distinguish between contagion and fundamentals-based stock price comovement, we use NYSE-traded stocks issued by Asian firms. Among the results, first we find that the empirical results show significant bilateral contagion effects in returns and return volatility. Second, contagion effects from U.S. market to Asian markets are stronger than in the reverse direction, indicating that the U.S. market plays a major role in the transmission of information to foreign markets. Third, the intensity of contagion was significantly greater during the Asian financial crisis than after the crisis. |
| Keywords: | Asian financial crisis; ADRs; EGARCH; Contagion |
| JEL: | F37 G15 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2006-14&r=sea |
| By: | Kyoji Fukao; Keiko Ito; Shigesaburo Kabe; Deqiang Liu; Fumihide Takeuchi |
| Abstract: | This paper analyzes the degree and the current status of localization of Japanese affiliates in China. For this purpose, we (1) compare the localization (measured in terms of the number of expatriates, local sales, local procurement, and local management) of Japanese and U.S. affiliates in China and other major regions; (2) analyze the impact of localization on the profitability of Japanese affiliates in China and in other major regions; and (3) conduct a detailed investigation of inter-firm transactional relationships in China between automobile manufacturers and parts suppliers. We find that compared with U.S. affiliates, Japanese affiliates tend to be less localized. Using a comprehensive affiliate-level panel data set on Japanese multinationals and concentrating on China, we then examine the effect of localization quantitatively and find that Japanese affiliates with higher procurement ratios and/or local CEOs and procurement managers enjoyed high profits. Next, turning to the factors determining trading relationships between assemblers and suppliers of different nationalities in China, our analysis suggests that even when taking various control variables into account, such as suppliers’ productivity level and the distance between assembler and supplier, the transactional relationships of Japanese suppliers are more limited than those of suppliers of other nationalities. Moreover, Japanese automobile assemblers do not choose suppliers based on their current labor productivity level and transactional relationships between assemblers and suppliers are more closed in the case of Japanese firms than in the case of firms of other nationalities. On the other hand, we find that auto parts suppliers dealing with Japanese assemblers see their productivity grow faster regardless of the supplier’s nationality. The results indicate that Japanese assemblers may well be choosing business partners which they expect to realize sustainable productivity increases in the future rather than focusing on present productivity levels. This finding provides evidence of business practices based on a long-term perspective characteristic of Japanese enterprises. |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2006-16&r=sea |
| By: | Fukunari Kimura |
| Abstract: | Southeast Asia is truly a unique area in that it deeply gets involved with sophisticated international production networks extended to the whole East Asia. This chapter provides an overview on the current status of economic analysis on this issue, placing its emphasis on the newly developed fragmentation theory approach. The two-dimensional fragmentation model is introduced and employed for disentangling the mechanics of production networks as well as the spatial structure of networking in East Asia. Profound policy implication for further activating production networks and economic development in Southeast Asia and other less developed countries is also discussed. |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2007-8&r=sea |
| By: | Spiros Bougheas (University of Nottingham); Paul Mizen (University of Nottingham); Cihan Yalcin (University of Nottingham) |
| Abstract: | This paper provides a theoretical model of an open economy credit channel including currency mismatch and financial fragility where exporting firms have access to international credit but non-exporting firms do not. It considers the post-crisis outcome which is predicted to be dramatically different for exporters/ non-exporters. We examine firms¡¦ access to external finance in four Asian economies after 1997 using a large panel of balance sheet data. Our paper demonstrates that firm heterogeneity is critical to understanding the open economy credit channel effects post-crisis since smaller and less profitable firms are indeed less likely to obtain credit than larger, export-oriented firms. |
| Keywords: | Credit Channel, External Finance, Asian Crisis |
| JEL: | E32 E44 E51 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:hkm:wpaper:082007&r=sea |
| By: | Yin-wong Cheung (University of California, Santa Cruz); XingWang Qian (UUniversity of California, Santa Cruz) |
| Abstract: | Motivated by the observed international reserve hoarding behavior in the post-1997 crisis period, we explore the Mrs Machlup¡¦s wardrobe hypothesis and the related keeping up with the Joneses argument. It is conceived that, in addition to psychological reasons, holding a relatively high level of international reserves reduces the vulnerability to speculative attacks and promotes growth. A stylized model is constructed to illustrate this type of hoarding behavior. The relevance of the keeping up with the Joneses effect is examined using a few plausible empirical specifications and data from ten East Asian economies. Panel-based regression results are suggestive of the presence of the Joneses effect; especially in the post-1997 crisis period. Individual economy estimation results, however, show that the Joneses effect varies across economies. |
| Keywords: | Demand for International reserves, Excessive International reserve Accumulation, Speculative Attack, Keeping Up with the Joneses |
| JEL: | F3 F4 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:hkm:wpaper:132007&r=sea |
| By: | Masaharu Hanazaki; Qun Liu |
| Abstract: | This paper investigates the mechanisms that ?firms use to get state favors. We focus on a less well studied but common mechanism: business owners seeking election to top office. Using Thailand as a research setting, we fi?nd that business owners who rely on government concessions or are wealthier are more likely to run for top office. Once in power the market valuation of their ?firms increases dramatically. Surprisingly, the owners' political power does not change their fi?rms' fi?nancing strategies. Instead, we show that business owners in top office use their policy decision powers to implement regulations and public policies favorable to their fi?rms. Such policies hinder not only domestic competitors but also foreign investors. As a result, connected fi?rms are able to seize more market share. |
| Keywords: | Trade credit, Bank-firm relationship, Unlisted firms |
| JEL: | G32 E22 O53 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2006-12&r=sea |
| By: | Joseph K.W. Fung (Hong Kong Baptist University); Haynes H.M. Yung (Open University of Hong Kong) |
| Abstract: | This is an examination of the intraday trading activities of index stocks on the common expiration day of index derivatives. In Hong Kong, index futures and index options use an Asian-style settlement procedure. All contracts are settled against the estimated average settlement (EAS) price, which is the arithmetic average of the underlying cash index taken every five minutes on the expiration day. Trading volume and total trade count on the expiration day are found to both be higher than normal. Most important, trading intensifies in terms of both volume and frequency at times close to the five-minute time marks. Significant order imbalance and price reversal patterns are not found. That there is no systematic order imbalance pattern explains the absence of a price reversal pattern. |
| Keywords: | Asian-style settlement, index derivatives, expiration-day effects. |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:hkm:wpaper:012007&r=sea |
| By: | Pierre L. Siklos (Wilfrid Laurier University); Diana N. Weymark (Vanderbilt University) |
| Abstract: | This paper applies a new measure of the effectiveness of sterilized interventions to data for 16 economies. The measure is defined as the difference between ex ante(xaEMP) and ex post exchange market pressure(xpEMP). xaEMP is calculated on the basis of a counterfactual that no intervention takes place and this is the rationally expected policy. xpEMP is the degree of exchange market pressure that remains based on the actual intervention policy in place. Based on a sample of 12 emerging markets, and Hong Kong, Korea, Japan, and Singapore, we conclude that sterilized interventions have persistent exchange rate effects. However, we also show empirically that this success also took place during a period of substantial growth in foreign exchange reserves. |
| Keywords: | exchange market pressure, foreign exchange intervention, emerging markets |
| JEL: | F31 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:hkm:wpaper:142007&r=sea |
| By: | Hun-Chang Lee |
| Abstract: | This paper compares the economic development of Korea and Japan during the past three millennia. In particular, it examines why, although the Korean economy was more advanced from around the six century B.C. to around the sixth century A.D., Japan subsequently surpassed Korea in terms of economic development and the gap continued to widen during the Tokugawa period (1603–1867). It is argued that until the eleventh century, the economic gap between Korea and Japan can be largely explained by geography, while from the twelfth to the seventeenth century, differences in institutions, systems of economic integration, and human capabilities – all shaped by a divergence in political systems – played a key role in Japan’s catch-up with Korea. |
| Keywords: | pre-modern Korea, pre-modern Japan, per capita GDP, catch-up, geography, institutions, human capabilities, system of economic integration, “small world economy” |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2006-15&r=sea |
| By: | Pramuan Bunkanwanicha; Yupana Wiwattanakantang |
| Abstract: | This paper investigates the mechanisms that ?firms use to get state favors. We focus on a less well studied but common mechanism: business owners seeking election to top office. Using Thailand as a research setting, we fi?nd that business owners who rely on government concessions or are wealthier are more likely to run for top office. Once in power the market valuation of their ?firms increases dramatically. Surprisingly, the owners' political power does not change their fi?rms' fi?nancing strategies. Instead, we show that business owners in top office use their policy decision powers to implement regulations and public policies favorable to their fi?rms. Such policies hinder not only domestic competitors but also foreign investors. As a result, connected fi?rms are able to seize more market share. |
| Keywords: | Trade credit, Bank-firm relationship, Unlisted firms |
| JEL: | G15 G34 G38 K23 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2006-10&r=sea |
| By: | Sinchul Jang |
| Abstract: | Korea introduced industrial accident insurance (IACIS) in 1964, medical insurance (MIS) in 1977, pension insurance (NPS) in 1988 and employment insurance (EIS) in 1995. In line with Korea’s economic development, social insurance coverage has grown rapidly, and contribution coverage rates now generally exceed 80% for regular workers. However, the four social insurance systems developed separately. The main split in contribution collection methods has been between the insurances under the Ministry of Labour (EIS and IACIS) and those under the Ministry of Health and Welfare (MIS and NPS), although there are also some differences between MIS and NPS. About 50% of the staff in each system has been engaged in collection activities... <BR>La Corée a créé l?assurance pour les accidents du travail (IACIS) en 1964, l?assurance médicale (MIS) en 1977, l?assurance retraite (NPS) en 1988 et l?assurance emploi (EIS) en 1995. En tandem avec le développement économique du pays, la couverture de la protection sociale a rapidement augmenté et les taux de cotisation dépassent désormais 80% pour les travailleurs "réguliers" (fixes). Pourtant les quatre systèmes d?assurance sociale se sont développés séparément. La principale scission en ce qui concerne les méthodes de collecte des cotisations a été entre les assurances sous le Ministère du Travail (EIS et IACIS) et celles sous le Ministère de la Santé et du Bien-être (MIS et NPS), bien qu?il existe également certaines différences entre le MIS et le NPS. Environ 50% du personnel dans chaque système est engagé dans les activités de collecte... |
| Keywords: | Korea, Corée |
| JEL: | H26 H53 J41 J81 |
| Date: | 2007–08–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:55-en&r=sea |
| By: | Finn Roar Aune, Klaus Mohn, Petter Osmundsen and Knut Einar Rosendahl (Statistics Norway) |
| Abstract: | Increased focus on shareholder returns, capital discipline and return on capital employed (RoACE) caused a slowdown in investment rates and production growth among international oil companies around the turn of the century. Focusing on supply side dynamics of the oil market, we explore a hypothesis that the restructuring in the international oil industry towards the end of the 1990s had long-lived effects on OPEC strategies – and on oil price formation. Based on a partial equilibrium model for the global oil market, we examine the effects of the industry restructuring on oil supply and oil prices, compared with a counterfactual reference scenario characterised by industrial stability and unchanged price ambitions within OPEC. A key result is that important factors behind the currently high oil price can be traced back to the industrial restructuring and to the Asian economic crisis. This suggests that temporary economic and financial shocks may have a long-term impact on oil price formation. |
| Keywords: | Oil market; investment behaviour; market power; equilibrium model |
| JEL: | G31 L13 Q41 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:511&r=sea |
| By: | Jordan Siegel; Felix Oberholzer-Gee |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2006-19&r=sea |