ASIAN BUSINESS CYCLE SYNCHRONIZATION

This paper develops a multilevel structural factor model to study international output comovement and its underlying driving forces. Our method combines a structural vector autoregression with a multilevel factor model, which helps us understand the economic meaning of the estimated factors. Using quarterly data of real GDP growth covering 9 emerging Asian economies and G‐7 countries, we estimate a global supply factor, a global demand factor, and group supply and demand factors for each group of the economies. We find that although the role of the global factors has intensified over the past 15 years for most of the economies, output fluctuations in Asia have remained less synchronized with the global factor than those in the industrial countries. The Asian regional factors have become increasingly important in tightening the interdependence within the region over time. Therefore, although emerging Asian economies cannot ‘decouple’ completely from the advanced economies, they have, nonetheless, sustained a strong independent cycle among themselves. We also find that synchronized supply shocks contributed more to the observed synchronization in output fluctuations among the Asian economies than demand shocks. This points to the role of productivity enhancement and transmission of other supply shocks through, for example, vertical trade integration, rather than dependence on external demand, as the primary source of business cycle synchronization in emerging Asia.     

Why the Tigers Roared: Capital Accumulation and the East Asian Miracle

Recent growth accounting studies of Hong Kong, Singapore, Taiwan and South Korea have found that the Solow residuals in these economies were relatively small. Given the high capital contributions, these results are often interpreted as evidence that factor accumulation, savings and investment were the principal cause of the East Asian miracle. This paper develops an alternative method of analysing these data, combining growth accounting methods with the linearized neoclassical growth model of Mankiw et al. (1992). The method explicitly quantifies the extent to which increases in productivity, as measured by the Solow residual, induced capital accumulation in these economies. It shows that in Hong Kong, Taiwan and South Korea, productivity growth contributed between half and two-thirds of the growth in GDP per worker over a 20-year period.     

Openness,productivity and growth in the APEC economies

The 1980s and 1990s have witnessed the emergence of many Asian economies as important traders in the world. How has openness to trade and investment affected productivity and growth performance in those economies? This question is often tackled with the traditional growth regression method. However, the findings in the existing literature are still inconclusive. This paper proposes an alternative approach which is employed to examine the impact of openness on the sources of productivity and growth in the APEC economies. Specifically, the proposed technique distinguishes technological progress (innovation) from efficiency changes (catch-up) and attempts to isolate the influences of openness on these two distinct factors. The findings in this study may help gain fresh insight into the relationship between openness and productivity and growth performance in the APEC economies.First revision received: July 2001/Final revision received: May 2003The author thanks two anonymous referees for very helpful comments.     

The Asian Miracle and Modern Growth Theory

The article argues that the rapid growth in a number of Asian economies that occurred between 1960 and 1996 was accompanied by a major change in the structure of their economies including shifts in the size of firms and the sectors of specialisation. These changes were a fundamental component of the growth process. While capital accumulation was an important source of growth, its productive assimilation was a critical component of the success of these economies. Estimates of the contribution of total factor productivity to aggregate growth that neglect these phenomena may lead to erroneous estimates.     

Total‐Factor Energy and Emission Efficiencies of ASEAN and Other Asian Economies

This research uses the slack‐based measure data envelopment analysis to compute the energy and emission efficiencies of Association of Southeast Asian Nations (ASEAN) and other Asian economies during the 2001–2017 period, employs the Malmquist productivity index to check for the main source of efficiency score changes due to technical changes, and then applies panel Tobit regressions to determine the factors explaining the efficiencies. Our empirical results show that the energy efficiency scores of ASEAN economies had been catching up to other Asian economies after the Global Financial Crisis, whereas the emission efficiency scores of various ASEAN economies had been falling behind other Asian economies over the same period. The main source of efficiency score changes over time is efficiency changes and not technical changes. Decreases in the fossil fuel ratio of net electricity generation and the secondary industry ratio within total industry improve both lead to improvements in energy and emission efficiencies.     

PRODUCTIVITY GROWTH IN LATIN AMERICA OVER THE LONG RUN

The low pace of Latin American productivity growth in recent decades, despite extensive economic reforms, has yet to be understood in a longer‐run context where factors such as demographic changes, structural shifts, and investment levels can be taken fully into account. The OxLAD database provides comparable sectoral output and workforce series over 1900–2000 for the six leading economies in the region for the first time. Our analysis of this new dataset shows that: intersectoral resource reallocation reduced aggregate productivity growth in all three periods; total factor productivity growth was low throughout the century, and even negative in the closing three decades; and thus factor accumulation—investment in fixed capital and skilled labor—was the main source of productivity growth in Latin America during the twentieth century.     

Asian economic success and Latin American failure in the 1980s: new analyses and future policy implications

A striking feature of the world economy during the last decade has been the collapse of economic growth in Latin America whilst industrialization and development have proceeded apace in the Asian countries. This paper, firstly, reviews and assesses alternative hypotheses concerning Asian economic success and the Latin American failure during the 1980s. Secondly, it examines the related question of the long-term development strategies followed by the outstandingly successful east Asian economies. The paper arrives at rather different analyses and policy conclusions on these issues from those of the international financial institutions and the mainstream economists.     

A simple model of emerging market portfolio structure

Many emerging market economies have experienced large buildups of foreign exchange rate reserves over the last decade. Much of the contemporary discussion of this phenomenon has focused on this reserve growth as the consequence of exchange rate policies which have maintained fixed pegs to the US dollar. By contrast, this paper focuses on emerging market reserve choice as a consequence of portfolio diversification, applied to the experience of Asian economies. While Asian economies have become significant gross creditors in bonds and other fixed income assets, their liability position in equity and FDI assets has also grown significantly. This suggests that a full understanding of the reserve growth episode must be seen as part of an overall model of portfolio choice. The paper constructs a model of the interaction between an emerging market and an advanced economy in which an optimal general equilibrium portfolio structure implies that emerging market economies simultaneously build up a stock of foreign exchange rate reserves while receiving FDI flows from the advanced economy. The model can provide a reasonable quantitative account of the recent Asian experience.     

Accounting for Gender in Asian Economic Growth

Absent from the important debate on the determinants of rapid Asian growth is the role of gender inequality. This paper argues that gender wage inequality has stimulated growth, with Asian economies that disadvantaged women the most growing the fastest from 1975 to 1990. Low female wages have spurred investment and exports by lowering unit labor costs, providing the foreign exchange to purchase capital and intermediate goods which raise productivity and growth rates. These results contrast with recent studies that argue income equality at the household level contributed favorably to Asian growth by reducing political conflict. The divergent findings can be explained by the fact that gender norms and stereotypes that convince women to accept their low status curb labor and political unrest, stimulating investment. The results indicate that which group bears the burden of inequality in the process of economic growth matters.     

International status seeking, trade, and growth leadership

Abstract .  We study a two-country endogenous growth model where the utility of agents in developing countries is affected by consumption gaps with advanced economies. International status seeking tends to revert growth differentials in favour of the developing country. Preferences with endogenous status desire generate convergence in growth rates in the presence of structural gaps and convergence in income levels if productivity differences disappear. This process is driven by declining terms of trade and faster capital accumulation of the status seeker. The model predictions are shown to be consistent with the stylized facts that characterized the growth performance of East Asian economies.     

Re-visiting the Savings-Led Growth Hypothesis and Its Stability in East Asian Economies

The causal relationships between savings and economic growth have been given special attention because it has significant implication on policy-making. Nevertheless, the direction of causality remains unclear as previous studies failed to provide persuasive evidence to support the savings-led growth hypothesis. Therefore, the primary aim of this study is to empirically re-investigate the savings–growth nexus in selected East Asian economies. It covers the quarterly sample period from 1970:Q1 to 2011:Q4. Our empirical results reveal that savings, economic growth and some other variables are cointegrated in these economies. Additionally, the causality results exhibit that the causal effect from savings to economic growth is stable over the period of analysis. Therefore, the probability of success in boosting economic growth through any policy action to induce greater savings is the greatest in the case of East Asian economies.     

Productivity drivers of infrastructure companies: Network industries utilizing economies of scale in the digital era

What drives the productivity dynamics of infrastructure companies? Using a panel of firms in 14 countries, we study total factor productivity (TFP) enhancers of utility and network services companies. We find that moving TFP closer to the technological frontier drives productivity growth at higher speeds in Asian countries than in European countries. We also find that financial leverage exerts a positive effect on TFP growth for larger infrastructure firms and that more financially developed countries utilize economies of scale through better use of financial resources. Large utility and transportation companies display a higher rate of TFP growth, indicating that a competition policy to encourage M&As would be prudent for the utility/transportation sectors to maximize economies of scale. In contrast, we find diseconomies of scale for energy companies in some countries. Moreover, young network firms improve TFP growth faster than their peers in countries with fewer product market regulations. Therefore, policies should remove entry barriers while facilitating the departure of old and low-productivity firms from network markets. Finally, policymakers should offer well-targeted fiscal incentives for intangible investments to boost TFP because the accumulation of intangible assets such as digital technology promotes more scale economies through network effects.     

Productivity growth in British manufacturing: spatial variation in the role of scale economies,technological growth and industrial structure

This paper investigates the role of scale economies, technological growth and industrial structure in creating spatial variation in manufacturing labour and Total Factor (TFP) productivity in Britain. Separate estimates of a translog specification are presented for British manufacturing firms located in defined areas of the country over the period 1994–1998. The results show that TFP change due to scale economies and technological growth has been of much less important in influencing the output growth of manufacturing firms than input growth or industrial structure. Regarding the components of TFP, technological growth has been the dominant force at play. The analysis of average labour productivity identifies shifts to other factors of production and industrial structure as being the main determinants of change, scale economies appear to have had a marginal role. The results identify spatial patterns indicating that more favourable locational effects arise for firms in areas adjacent to large urban centres, rather than for those located within cities, on the extreme periphery of the urban hinterland, or in rural areas and smaller towns.     

东亚美元本位、浮动恐惧和原罪

概要亚洲金融危机以前 ,包括中国在内的东亚国家———除了日本———都把本国的货币与美元挂钩。为了避免进一步的混乱 ,国际货币基金组织曾建议这些国家的汇率应该进一步自由浮动。可是 ,我们的分析表明 ,到目前为止 ,美元在东亚国家的货币篮子里依然占据绝对比重 ,也就是说 ,东亚国家的汇率制度基本上又回到了危机以前。到 2 0 0 2年 ,每一个东亚国家货币对美元的每日波幅已经非常微小 ,以至于可以忽略不计。同时 ,大多数东亚国家迅速积累了作为“战争基金”的官方外汇储备 ,这预示着汇率稳定将从每日延续到每月和每个季度。从“原罪”(…     

Is more mobility good?: Firm mobility and the low wage–low productivity trap

This paper explores the possibility that unregulated FDI flows are causally implicated in the decline in labor productivity growth in semi-industrialized economies. These effects are hypothesized to operate through the negative impact of firm mobility on worker bargaining power and thus wages. Downward pressure on wages can reduce the pressure on firms to raise productivity in defense of profits, contributing to a low wage-low productivity trap. This paper presents empirical evidence, based on panel data fixed effects and GMM estimation for 37 semi-industrialized economies that supports the causal link between increased firm mobility and lower wages, as well as slower productivity growth over the period 1970–2000.     

中国经济之强劲增长:对东亚的寓意

中国的崛起对东亚经济产生了深刻影响.不仅中国在东北亚的近邻通过贸易和投资从中国的开放政策中获益,而且那些曾经与中国争夺国外直接投资(FDI)和出口市场的东盟国家也开始从中国的经济增长中得到好处.中国作为世界经济增长的发动机之一已经对其东亚邻国产生了积极影响.通过"东盟+3"方案,特别是始于2002年的"中国?东盟"自由贸易协定,中国为东亚地区经济一体化提供了新的动力,从而为东亚经济增长发挥着日益重要的地缘政治和地缘经济作用.     

International spillovers,productivity growth and openness in Thailand: an intertemporal general equilibrium analysis

Thailand has experienced economic growth well above world averages from 1960 to the recent crisis. While the controversy over Thailand and East Asian growth has discussed the role of capital accumulation versus productivity, we analyze the general equilibrium interaction between productivity and investment in an intertemporal growth model. The high growth is understood as a prolonged transition path with gradual tariff reduction and endogenous productivity driven by foreign spillover feeding capital investment. Counterfactual analyses show how protection would have reduced growth with productivity and investment slowdown, while shock liberalization would have raised immediate growth with faster convergence to steady state.     

Entrepreneurial Skills,Technological Progress,and Firm Growth*

Using cross-country establishment-level data, I show that employment profiles over a firm's life cycle are flatter in fast-growing economies than in slow-growing economies. The difference in average employment over the firm's life cycle increases with plant age. I propose a frictionless overlapping-generations model with exogenous technological progress. Firm productivity also depends on entrepreneurs’ skills. Entrepreneurs can increase their skills over their life cycle, but the growth of the vintage component of younger cohorts’ skills is higher in fast-growing economies than in slow-growing economies. This model is able to explain most of the differences observed in the sample between fast-growing and slow-growing economies.     

INTERNATIONAL STUDIES OF FACTOR INPUTS AND TOTAL FACTOR PRODUCTIVITY: A BRIEF SURVEY

This paper summarizes the results of several studies on total factor productivity of twenty-five countries over the period 1950–1965. Some methodological issues which underlie the derivation and calculation of the familiar partial and total factor productivity indices are discussed. Though evidence on labor productivity for a large number of countries is presented and discussed, the main thrust of the discussion is in terms of the determinants of total factor productivity. The quantitative and qualitative contributions of labor and capital to growth of income are assessed with special attention to the contrasting patterns of these contributions among developed and developing economies. The problems of acceleration and retardation of the growth rate of some economies are considered and possible explanations are offered. Variations in the magnitude and sectoral distribution of the growth rates in several countries over this period are examined. Finally, areas for further research in comparative economic growth are suggested.     

Entrepreneurship culture,total factor productivity growth and technical progress: Patterns of convergence towards the technological frontier

A firm's set of knowledge processes may be affected by the entrepreneurial culture of the country in which it is located. Total factor productivity, mainly associated with technical progress, accounts for most differences over time and across countries. In the present work we examine the determinants of total factor productivity growth in 26 OECD countries between 1965 and 2010, breaking them down into changes in technical efficiency and shifts in technology over time. Using the US as the technology frontier, different patterns of productivity growth emerge between world technology leaders and countries with low initial levels of productivity. Whereas changes in efficiency seem to be the main result of the evolution in the stock of knowledge in technologically dependent economies, suggesting that less advanced economies can benefit from their relative backwardness, domestic research effort appears to be a relevant factor for technology leaders.