THE FIFTH ASIAN DRAGON: SOURCES OF GROWTH IN GUANGDONG, 1979–1994

This paper presents a growth accounting exercise to uncover the sources of spectacular growth in the Guangdong Province in China, the so-called "Fifth Dragon" in Asia, for the post-open-door period 1979–1994. A large fraction of Guangdong's output growth cannot be attributed to the growth in its capital and labor inputs. Of the unexplained residuals, foreign direct investment is a significant growth-spurring engine while export expansion is not. In this sense, China's open door policy did not generate export-led growth although it did stimulate capital accumulation through the importation of foreign capital.
"East Asia has a remarkable record of high and sustained economic growth. From 1965 to 1990 the twenty-three economies of East Asia grew faster than all other regions of the world…. Most of this achievement is attributable to seemingly miraculous growth in just eight economies: Japan; the 'Four Tigers' —Hong Kong, the Republic of Korea, Singapore, and Taiwan, China; and three newly industrializing economies (NIEs) of Southeast Asia, Indonesia, Malaysia, and Thailand…."     

发展战略、自生能力和经济收敛

从理论上说通过较快的资本积累和从发达国家引进技术,欠发达国家可以缩小与发达国家的收入差距。然而,这样的经济收敛仅仅发生于东亚少数几个经济。我认为:一个经济的产业和技术结构是由其要素禀赋结构所内生决定的。一个发展中国家的政府所采取的发展战略是决定收敛是否会发生的重要因素。假如发展中国家的政府选择优先发展和这个经济的要素禀赋所决定的比较优势不相符合的产业和技术结构,在一个竞争的市场中,优先发展部门内的企业将缺乏自生能力。为了使缺乏自生能力的企业能够被建立起来并生存,政府将必须扭曲利率、汇率和其他价格并用行政手段配置资源来补贴或保护这些企业。市场的作用会受到抑制,寻租行为将会盛行.结果,这个经济的发展绩效会很差,收敛也就不会发生。只有当发展中国家的政府以比较优势作为产业发展的基本准则时,这个经济才会有运行良好的市场,才能易于从发达国家引进技术,维持高的资本积累率,达到要素禀赋结构的快速升级并实现收敛。根据跨国经验数据回归分析所得到的结果证实,在产业和技术选择上遵循或违背比较优势原则是一个国家能否成功实现收敛的重要决定因素。所以,一个发展中国家的政府应该以要素禀赋结构的升级为目标,改善市场的作用,鼓励企业在做产业和技术选择时充分利用这个经济的比较优势。     

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.     

Diminished Returns? Growth and Investment in East Asia

This paper investigates the investment-led growth hypothesis for the newly industrialized economies of East Asia. Using numerical simulations and a neoclassical model, it is shown that the revolution in investment rates only explains about 30 per cent of the growth of GDP per worker. In contrast, productivity growth and improvements in labour quality, explain around half the growth of GDP per -worker. This reflects the effects of productivity growth on capital accumulation. Contrary to recent growth-accounting studies, the results suggest that understanding the sources of productivity growth in East Asia will provide the most useful lessons for other developing economies.     

Removing foreign direct investment's exchange rate risk in developing economies: the case for a foreign exchange custodian board

This paper proposes a system design (foreign exchange custodian board) that may stimulate foreign direct investment (FDI) in developing economies through the removal of foreign investors' exchange rate risk in investment outlay. For any expected distribution of exchange rate on any interval around the starting exchange rate, there exists a non-negative custodian service charge that both the developing economy and foreign investors can benefit from the proposed system. When the increase in domestic factors' value added caused by FDI is sufficiently large, the developing economy will benefit even in the absence of any custodian service charge.     

Strengthening Intellectual Property Rights in Asia: Implications for Australia

Asian developing economies are both the greatest target of pressure for stronger intellectual property rights (IPRs) and the region of most significant change. These countries have enacted numerous improvements in their laws. I discuss how higher standards might affect economic activity in East Asia and Australia and the importance of adopting mechanisms for ensuring that they promote effective competition.
Stronger standards in the region could affect the Australian economy in a number of ways. More rapid Asian growth should increase the demand for Australian exports, perhaps by as much as $350 million per year. Further, Australian consumers could gain from imports of higher-quality Asian products. Australian firms also have an emerging comparative advantage in supplying technologies, designs, and services to Asian partners.
However, there may be some costs as well, including higher regional prices of protected products and additional competition for inward foreign direct investment. Thus, Australia would be advised to improve its attractiveness as a location for investors. Australia also has an interest in maintaining effective competition in its own market as IPRs are strengthened regionally. Australia could take a leading role in countering attempts by the United States and Europe to erect excessively protectionist new standards.     

DOES FOREIGN DIRECT INVESTMENT PROMOTE ECONOMIC GROWTH? EVIDENCE FROM EAST ASIA AND LATIN AMERICA

Although there is considerable evidence on the link between foreign direct investment (FDI) and economic growth in developing countries, causal patterns of the two variables has not been investigated yet with a reliable procedure. This article provides an empirical assessment of the issue by using data for 11 economies in East Asia and Latin America. Although FDI is expected to boost host economic growth, it is shown that the extent to which FDI is growth-enhancing appears to depend on country-specific characteristics. Particularly, FDI tends to be more likely to promote economic growth when host countries adopt liberalized trade regime, improve education and thereby human capital conditions, encourage export-oriented FDI, and maintain macroeconomic stability.     

Determinants of labour productivity: Comparison between developing and developed countries of Asia‐Pacific

The current study investigates the trends in labour productivity of the major developing and developed economies of the Asia‐Pacific region and examines its determinants over the period 1980–2014. The study analyses capital deepening, human capital, technology, share of agriculture in GDP, financial development, institutional quality, inflation as well as macroeconomic variables as potential determinants of productivity, and identifies the differences in the impact of these factors on the productivity of developing and developed countries. Using panel cointegration and group‐mean fully modified ordinary least squares estimation, the study finds that capital deepening, human capital, technology, institutional quality and macroeconomic variables (i.e. government size and openness) are significant determinants of labour productivity of both developing and developed economies of the Asia‐Pacific region. The study further finds that while both trade openness and foreign direct investment affect productivity of developing economies positively, only trade openness has a positive and significant impact on the productivity of developed economies. The share of agriculture in GDP affects the labour productivity of developing Asia‐Pacific economies significantly but not that of developed economies. Furthermore, capital deepening has a much higher impact on the productivity of developing Asia‐Pacific economies than that of developed economies.     

US Foreign Direct Investment in East Asia: Strategy and Policy Issues

East Asian trade and investment policies have attracted US investment into the region, but these policies should be fine-tuned for the region to compete effectively for US investment inflow and increase their global share of US foreign direct investment. The changes should consider the needs of the US investors and East Asia's own economic development. Bilateral free trade agreements with the US are the likely channel for these changes, but the question is whether East Asia is ready for a comprehensive and deep liberalization. East Asia should work toward a regional investment policy framework to facilitate and expand the regional production network developed by the US foreign direct investment.     

Stock market interdependencies: Evidence from the asian NIEs

National asset markets have become more integrated in recent years. This paper investigates the interrelationship, if any, among the stock markets in four newly industrialized economies (NIEs) in Asia. The results indicate that a significant link exists between the stock markets of Hong Kong and Singapore and those of Japan and the United States. On the other hand, the markets with severe restrictions on cross-country investing, that is, Korea and Taiwan, are not responsive to innovations in foreign markets. Finally, the United States stock market influences, but is not influenced by, the four Asian markets.     

Openness, Investment Climate, and FDI in Developing Countries

The paper assesses the importance of openness, infrastructure availability, and sound economic and political conditions in increasing developing countries' attractiveness with respect to FDI. The results show that these factors are particularly important for South Asia, Africa, and the Middle East. The paper also shows a higher impact of these factors on FDI in the manufacturing sector than on total FDI. The message to developing countries' policymakers is twofold. First, efforts towards openness should be initiated or further increased in order to make their economies attractive to foreign investors. Second, improvements in other aspects of the investment climate are important complements to openness and result in additional and sensitive increases in FDI inflows.     

中国入世对国际经济影响的量化分析

中国工业品出口引起的竞争加剧会不会导致东南亚国家非工业化 ,使它们回到作为初级产品出口国的地位 ?或者 ,制造业产业链中是否存在东南亚国家可以专业化的有利空间 ?通过G Cubed亚太模型的模拟表明 ,中国大量劳动力全面进入国际劳动分工只有在满足以下两个条件的情况下才会导致东南亚国家的非工业化 :流向东南亚国家的国外直接投资大量地转向中国 ,并且东南亚国家放任FDI流入的下降从而降低由此带来的技术扩散。如果东南亚国家能够通过其它方式很快吸收国外新技术及提高本土技术创新能力阻止技术下降 ,那么它们就能在国际制造业产业链中找到有利空间。本文的政策含义是 :东南亚国家要通过向它们的科学家和管理者加速扩散新知识以及为那些下岗工人提供合适的再培训 ,从而将人力资本的深化与广化作为首要考虑的目标。     

Global uncertainty and capital flows: any difference between foreign direct investment and portfolio investment?

This note investigates how global uncertainty relates to extreme waves of capital flows, including foreign direct investment, portfolio investment, and other investment. We find the clear differences in the role of global uncertainty between advanced and developing economies. Global uncertainty increases the likelihood of sudden contraction of portfolio investment in both advanced and developing economies, while it increases that of foreign direct investment in only advanced economies.     

Remittances and financial development: empirical evidence from heterogeneous panel of countries

Remittances are the second largest source of external finance after foreign direct investment in the developing economies. In this study, we analyse the role of incoming remittances on financial development for 57 highest remittance recipient economies. A long run equilibrium relationship is established between remittances and three alternative indicators of financial development. Estimates from the dynamic system-generalized method of moments reflect lower elasticity values for developing countries compared to the developed ones. Our findings are robust across countries, and highlight the necessity for strengthening institutional set-ups to increase the inflow of remittances, which will enhance financial development across countries. The role of foreign direct investment is found to be significant in most cases.     

东(南)亚地区华人资本在华外商直接投资现状及趋势分析

海外华人资本是世界经济的重要组成部分.近年来,随着经济全球化和中国对外开放的深入发展,海外华人资本,特别是东(南)亚地区华人资本纷纷涌向中国大陆进行投资,构成了中国大陆实际利用外商直接投资的主体,并对中国大陆经济发展起到了巨大的推动作用.东(南)亚华人资本在中国大陆直接投资的阶段及特征,有其独特性.     

EMPIRICS OF CHINA'S OUTWARD DIRECT INVESTMENT

Abstract.  We investigate the empirical determinants of China's outward direct investment (ODI). It is found that China's investments in developed and developing countries are driven by different sets of factors. Subject to the differences between developed and developing countries, there is evidence that: (i) both market-seeking and resource-seeking motives drive China's ODI; (ii) Chinese exports to developing countries induce China's ODI; (iii) China's international reserves promote its ODI; and (iv) Chinese capital tends to agglomerate among developed economies but diversify among developing economies. Similar results are obtained using alternative ODI data. We do not find substantial evidence that China invests in African and oil-producing countries mainly for their natural resources.     

Financial Integration,Growth and Volatility

The aim of this paper is to evaluate the welfare gains from financial integration for developing and emerging market economies. To do so, we build a stochastic endogenous growth model for a small open economy that can: (i) borrow from the rest of the world; (ii) invest in foreign assets; and (iii) receive foreign direct investment. The model is calibrated on 46 emerging market and developing economies for which we evaluate the upper bound for the welfare gain from financial integration. For plausible values of preference parameters and actual levels of financial integration, the mean welfare gain from financial integration is around 13.5% of initial wealth. Compared with financial autarky, actual levels of financial integration translate into higher annual growth rates.     

亚洲金融区域主义的政治逻辑

本文探讨了"合法性"与"权力"在金融区域主义方面的因果效应。当前以G7为主导的全球体制中合法性的明显缺失和国家间权力格局的变化影响了东亚的政策决策。东亚国家寻求"抗衡性"的战略,也即在保持着与以G7为中心的全球金融体制合作关系的情况下,通过发展自身的区域性制度(或其他潜在方案)以避免对前者的过度依赖。上述观察意味着,除非现存全球金融体制解决了合法性问题,并且当前(有利于东亚的)权力转移发生逆转,亚洲新兴经济体不会将应对国际金融问题的全部希望寄于全球性的解决方案。     

Partnerships, Buy-Out Options and Investment in Emerging Markets

Asymmetric information and fear of acquiring a "lemon" may explain the paucity of foreign investment in emerging market economies. If investors are uncertain about the profitability of investments, intrinsically inefficient, temporary partnerships or joint ventures may serve as mechanisms through which information is transmitted. Temporary partnerships with joint investments by the domestic firm and the investor, together with a buy-out option to the investor, may sometimes separate good and bad investment prospects in equilibrium. However, separating equilibria may fail to exist. Implications for foreign direct investment are traced and briefly related to the experience of transition economies.
JEL classification: D 8; F 2; L 14; O 12     

Neighbour-Immiserizing Growth: The Asian Crisis

This paper investigates the effects of population growth and China's entry into the world trading regime on the North and the South. In the absence of the terms of trade effect, population growth reduces the standard of living and causes a decline in welfare. Unilateral trade liberalization of China will worsen the terms of trade for other countries in the South, but will improve those for the North. Thus, population control is an important means to close the gap in per capita income between developing and developed economies. Trade liberalization by developing countries may not necessarily induce income convergence. JEL Classification Number: F1.