Measuring the Real and Financial Connectedness of Selected African Economies with the Global Economy

We examine the real and financial connectedness of selected African economies with the global economy using a network approach. We find that the connectedness of African economies with the global economy is quite sizable, with the global financial crisis increasing the connectedness measures above their pre‐crisis levels. The results show that U.S., EU and Canada dominate Africa's equity markets, while China, India and Japan dominate Africa's real activities. Our results suggest that African economies are predominantly small open economies, deeply interconnected but systemically unimportant and vulnerable to headwinds emanating from the dominant economies in the overall global economy.     

Competition principles and policy in the APEC: How to proceed and link with WTO

There is a growing consensus that competition‐oriented policy framework would be instrumental in achieving the Bogor goal of trade and investment liberalization by 2010/2020. As of now, only eight economies have the experience of operating competition policy for more than a decade. Many emerging economies of the APEC have only begun to introduce competition policy. The Auckland APEC Leaders Meeting of 1999 adopted the APEC competition principles. It is a significant step forward, but more hard work lies ahead: the issue of developing specific and concrete work program to implement the competition principles within the APEC and how to put competition policy in the much broader context of a multilateral trading system. The paper maps out a specific strategy to move the competition policy agenda forward at the APEC and how to link to the WTO and identifies the sources of such value‐added and makes a proposal in order to best utilize them.     

Cross-border portfolio investment in the APEC region

This paper aims to establish a firm understanding of the structure and determinants of bilateral portfolio investment among APEC economies. The paper demonstrates that APEC membership has a significantly positive relationship with financial transactions among members. That is, as compared with non-members, APEC member economies purchase more equities and long-term bonds from other APEC member economies. However, the APEC membership effect is not uniform: the positive effect of APEC membership is mainly due to the overshadowing role of East Asian countries. This finding is especially evident for equities, rather than for long-term bonds. This paper also shows that a large part of the regional financial market integration in the APEC region is due to strong linkages of intra-regional goods trade in the region.     

Services Trade Liberalisation Strategies for APEC Member Economies

A tribute to a member of our team
The work on measuring restrictions on trade in services would not have been possible without Kaleeswaran Kalirajan. KK, as he was known, was an extremely talented and energetic econometrician who worked tirelessly to develop new methodologies to measure the price and cost effects of restrictions on trade in services. KK died unexpectedly in 2003. He, and his pioneering contribution to this work, will not be forgotten.
APEC member economies are moving forward with liberalising their services markets. They have agreed to free and open trade and investment by 2020. In achieving this goal, APEC member economies can benefit greatly from understanding the effects of removing certain types of restrictions. This article brings together, for the first time, comprehensive measures of restrictions on trade in services and their liberalisation effects. APEC member economies can use these measures and analysis to devise strategies to pursue further services trade liberalisation.     

Asian Economic Community: intra-community macro-and-micro-economic parameters

In the absence of economic regionalization, the paradigm of globalization is likely to be operationally dysfunctional. In the contemporary world economy, a small subset of sovereign nation state economies commands hugely much larger shares of world output and trade while an overwhelmingly large number of such sovereign economies has their respective shares of world output and trade rather very marginal. Regionalization can help regional economic unions/communities enjoy competitive shares of world output and trade and thus become competitive actors in the inter-regional competitive world market, contributing to the success of globalism. Inadequacy of the post-WWII infrastructure for the global free market economy and the success of EU and the Euro-regime are noted. The 21-member APEC has been exposed to the great geographical divide of the Pacific Ocean, underscoring the fact that the divide of the Atlantic Ocean made the map of Europe differentiated from the Americas. Lessons from EU and the Euro-regime are noted. Based on an extensive empirical analyses of relative shares of world output and trade, the case for Asian Economic Community (AEC) has been presented. The model of 3 plus 5, three economies in Northeast Asia and five in Southeast Asia, may be the step one for the AEC.     

Regional cooperation and the environment: Do “dirty” industries migrate?

Regional Cooperation and the Environment: Do “Dirty” Industries Migrate? — This article develops an alternative method to investigate trade in embodied environmental factor services (EEFS) and applies it to bilateral trade between APEC economies. The issue of regional cooperation and the environment is addressed by investigating trade in EEFS between APEC economies in the last three decades. We observe a ‘cascading’ pattern in net exports of EEFS between East Asian economies. However, we do not observe a similar pattern in the trade between North American economies. The results should be interpreted with caution since the application of US sectoral pollution intensity data to other countries may lead to biased estimation of trade in EEFS.     

APEC跨境无纸贸易发展模式研究

APEC各经济体由于政策、经济、法律和技术等原因,在无纸贸易实施及对电子商务的认识和发展上存在差异,因此探讨APEC经济体无纸贸易的发展模式,以激发经济体在无纸贸易服务中的比较优势,加速服务资源的整合与共享,就成为推进亚太地区无纸贸易发展,实现亚太地区贸易便利化的关键问题。     

The transition of postwar Asia-Pacific trade relations

The purpose of this paper is to examine the feature and the transition of trade relations in the Asia-Pacific region during the post-World War II period. The paper employs the gravity model with some regional dummy variables to estimate trade flows among 80 economies through temporal cross-section data analysis, for every five-year-term from 1960 to 1995. Its main findings are the following: First, ASEAN has had no effect of its own on promoting trade among its member countries. Second, the volume of trade among EAEC has been at a high level compared with the hypothetical trade level since 1960. Third, the amount of trade between EAEC economies and other APEC countries has been growing throughout the postwar period. Fourth, there has been close trade relations among APEC economies plus some other Asian countries.     

A Review of Cross-border Mergers and Acquisitions in APEC

In parallel with global trends, cross-border mergers and acquisitions (M&As) have increased dramatically in the APEC economies especially since the mid 1990s. The rapid increase in cross-border M&As in the world in general and in the APEC economies in particular is driven by a combination of factors, including the liberalisation of trade and investment regimes, the deregulation of the services sector, the privatisation of state-owned enterprises, and the relaxation of controls over cross-border M&As. The role of APEC developing economies in cross-border M&As has been increasing, especially since the late 1990s.     

Regional Trade Agreements in East Asia: Will They Be Sustainable?*

By assessing the sustainability of regional trade agreements (RTAs) for East Asia, we quantitatively evaluate the likely impact of proposed East Asian RTA strategies on the East Asian economies and the world economy with respect to consumption, production, volume of trade and terms of trade effects by applying a multi‐country and multi‐sector computable general equilibrium model. These strategies include: (i) the ASEAN Free Trade Area (AFTA: a being‐left‐alone strategy); (ii) an ASEAN Hub RTA (a hub‐and‐spoke type of overlapping RTA strategy); (iii) the AFTA versus a China–Japan–Korea RTA (a duplicating or competing RTA strategy); and (iv) an ASEAN+3 RTA (an expansionary RTA strategy). We find that an expansionary ASEAN+3 RTA could be a sustainable policy option because the members’ gains would be significantly positive, with more equitably distributed gains between members than when using other strategies. The effect on world welfare would also be positive and the negative effect on nonmembers would not be very strong. More interestingly, if the East Asian countries cooperate with Pacific Basin countries to form an APEC‐level RTA, such as a free trade area of the Asia‐Pacific, the extension of the regional trade bloc might be considered a more desirable policy option than the proposed East Asian RTAs for East Asian economies, even though countries excluded from the free trade area of the Asia Pacific are worse off.     

Analysis on CO2 Emissions Transferred from Developed Economies to China through Trade

Based on a global input–output model, this paper investigates the CO₂ emission transfer between China and developed economies through trade. The results show that approximately 15–23 percent of China's production‐based emissions during 1995–2009 were induced by the production of goods and services satisfying final demand in developed economies. Decomposition of emission transfers shows that trade of intermediate products played a significant role in emission transfer from developed economies to China. Most developed economies have consumption‐based emission responsibilities that are higher than their production‐based responsibilities, whereas China's consumption‐based responsibility is significantly lower than its production‐based responsibility. We argue that a fair and efficient carbon accounting approach should take CO emission transfers from developed economies to developing economies into consideration. It is important that China and its developed trade partners cooperate in reducing emission transfers.     

APEC贸易投资自由化领域的茂物目标评估分析

2010年APEC13成员参加了茂物目标评估,文章就评估的四个领域,即关税、非关税、服务贸易、投资进行了分析,阐明了参加评估的成员在推进自由化中取得的成就,指出了今后继续推进自由化的具体领域。     

APEC2009年重要议题进展及展望

在分析2009年APEC重要议题进展基础上,参考2010年上半年APEC召开的一系列会议议题,结合2010年国际社会关注的热点问题,对2010年APEC部长会议及领导人非正式会议主题进行展望,认为会议关注的焦点可能会集中在财政政策的实施、茂物目标、经济增长新策略和区域经济一体化等方面。     

The impact of information and communication technology on international trade in fruit and vegetables in APEC

The global food marketing network is being constantly reshaped, providing opportunities and challenges for information and communication technology (ICT) to develop and improve international trade in food products. A gravity model of international trade is employed to see if ICT positively affects bilateral international trade in fruit and vegetables between member Asia‐Pacific Economic Cooperation (APEC) economies. We examine if the use of the Internet, mobile telephones, and fixed telephone lines determine the value of bilateral trade. Empirical results for the importance of ICT differ markedly between importing activities and exporting activities in the international value chain of fruit and vegetables in APEC countries. Changes in ICT levels in the import sector of the value chain have no effect on international trade in fruit and vegetables. However, in the export sector, growth in some ICT products has significant positive effects on trade in fruit and vegetables between APEC countries. Surprisingly, the strongest impact was discerned for the traditional form of ICT, fixed telephone lines, but this impact probably reflects the fact that fixed telephone lines are a proxy variable for the general level of infrastructure development. Of the two digital ICTs, mobile telephony and the Internet, only the Internet had a significant impact on trade levels. The further development of the Internet and its diffusion should make exporters in APEC countries more competitive in the fruit and vegetables value chain, and boost their trade values in these products.     

Did APEC's Trade Facilitation Action Plans deliver the goods?

This paper uses new data to examine whether APEC achieved its aim of reducing trade transaction costs by 10% over the 2002–2010 period. An inversion of the familiar gravity model makes it possible to infer trade costs based on the observed pattern of trade and production across economies. Analysis of trade costs calculated in this way shows that although intra- and extra-APEC trade costs fell during the sample period, they did not do so substantially more quickly than elsewhere in the world. Indeed, the region taken as a whole did not meet the 10% reduction goal. However, a considerable number of individual economies not only met the goal, they greatly exceeded it. Consistent with their outward oriented development strategies and leverage of global and regional value chains, some APEC economies saw very rapid falls in their trade costs over the 2002–2010 period, Viet Nam being a standout performer. Overall, about one third of the forum's membership for which consistent data are available met or exceeded the 10% reduction goal. APEC's two Trade Facilitation Action Plans can therefore be seen as having had mixed records of success.     

Nonparametric Evaluation of Economies of Scope in the Context of Technical Efficiency: The Case of Rice and Vegetable Farms in Korea

This paper provides a nonparametric evaluation of economies of scope in the context of technical efficiency allowing for non‐convexity, with an application to Korean rice and vegetable farms. Relying on non‐parametric‐free disposal hull and data envelopment analysis approaches and input–output data for rice and vegetable farms from the Korea Farm Household Economy Survey data collected in 2007, this article examines technical inefficiency and its decomposition under non‐convexity and convexity. Empirical measures of technical inefficiency and its decomposition results are provided, with a focus on a component of technical inefficiency associated with economies of scope (i.e. diversification benefits) under non‐convexity in production technology. The decomposition measures of technical inefficiency include pure technical inefficiency, size inefficiency and diversification inefficiency. The results provide empirical evidence supporting size‐dependent diversification strategies, where benefits of diversification are larger for small farms on average compared to those of large farms.     

Pacific Economic Co-operation:

The rapid growth of East Asian exports in the 1980s led to rising trade tensions. Trading partners, especially in the USA and Europe, tended to overlook the substantial growth of East Asia's imports (especially raw materials and capital equipment), focusing only on its capture of market shares in products for which US and EC manufacturers no longer held a comparative advantage. There is considerable interest in economic regionalism, raising concern about the division of the world economy into discriminatory trade blocs. In most economies around the Pacific, there is wide appreciation of the region's overwhelming interest in the maintenance of an open world trading system based on the non-discrimination principle of the GATT. Among initiatives for bilateral and regional trade liberalization in recent years, the Asia Pacific Economic Co-operation (APEC) forum offers perhaps the best prospect of co-operative promotion of these objectives. APEC, established in 1989, already includes fifteen economies from both sides of the Pacific accounting for over half of world production. APEC's guiding principles stipulate that co-operation should be outward-looking, building consensus on a gradually broader range of economic issues. This paper proposes four pragmatic options in areas for useful co-operation:

• ? Improving market access by reducing barriers to trade, such as the heavy protection of some parts of Northeast Asian agriculture, and of textiles and some other manufactures in major OECD countries.
• ? Reducing uncertainty about future market access: for example, agreement to streamline dispute settlement procedures could reduce resort to arbitrary or discriminatory measures to deal with trade tensions.
• ? Reducing physical bottlenecks , such as shortfalls in infrastructure, ranging from harbours to telecommunications, which impede trade in goods and also in services such as tourism.
• ? Harmonizing domestic legislation and rules , such as those relating to safety, quality and environmental standards.

It will not be easy to realize the economic gains from nondiscriminatory trade liberalization. But progress should be possible in some sectors where complementarity among APEC economies is obvious, as in mineral processing, where original reasons for protection have been weakened by changing circumstances, and where natural resource endowments and transport costs limit effective competition from outside the region. Regional initiatives will need to be non-discriminatory in order to avoid creating needless divisions in the world trading system. Preferential or discriminatory trading arrangements that fragment the multilateral world trading system constitute a threat to the Pacific region's economic prosperity. In contrast, this paper recommends an evolutionary approach: seeks early consensus on less contentious issues in order to build the sense of trust required for more effective future co-operation among economies on both sides of the Pacific, without discrimination against economies outside the region.     

Efficiency change and growth in productivity: the Asian growth experience

This paper focuses on identifying the sources of productivity growth in ten Asian economies including China, Japan, the NIEs and the ASEAN-4. We calculate productivity growth and its components using distance-function-based Malmquist productivity indexes following Färe, Grosskopf, Norris, and Zhang (1994a). Hong Kong and Singapore are found to have the capabilities to shift the grand frontier of the APEC economies. But the productivity divergence might have occurred since the 70’s. The FDI contributes to the Asian growth either through catching-up or through technological innovations when a sufficient learning capacity is available in the host economy.     

Are Indian Subcontinent remittance markets connected to each other?

Indian subcontinent countries are some of the largest exporters of labor, and thus, largest receivers of remittances. Having many characteristics in common, their labor markets may be connected due to labor substitution and complementarity. We study the interactions of remittance inflows into India, Pakistan, Bangladesh and Sri Lanka via the Diebold-Yilmaz method. We find a low degree of spillovers across countries. In other words, the dynamics of remittance inflows in each country are largely explained by internal factors, not due to spillovers from other countries. That indicates that international remittance inflows in countries in the Indian Subcontinent that we consider in this study are essentially independent. We also find that the dynamic connectedness tends to fall over time in the aftermath of the 2008–2010 financial crisis, which is reversed after 2014. The initial decline probably happened due to the recovery in the labor receiving economies whereas the increase after 2014 probably reflects the jitters felt in all economies. We conclude that spillover of four countries’ remittance inflows is time-varying.     

The impact of ‘stop‐go’ demand management policy on Britain's consumer durables industries, 1952–65

This article examines the impacts of British government ‘stop‐go’ policy on domestic sales of consumer durables over the period 1952–65, via hire purchase restrictions and punitive Purchase Tax rates. Our analysis includes a general review of contemporary evidence regarding the impacts of these measures, a more detailed study of the television sector, and time‐series econometric analysis for both televisions and a representative high‐ticket labour‐saving consumer durable: washing machines. We find that the restrictions had devastating impacts on Britain's consumer durables industries, preventing firms from fully exploiting economies of scale, reducing output growth and international competitiveness, and eroding industrial relations. Government officials were aware of these problems, but considered them a price worth paying to facilitate moves towards sterling convertibility and the re‐establishment of the City as a leading financial and trading centre.