Productivity and economic growth in East Asia: innovation, efficiency and accumulation

This paper uses a varying coefficients frontier production function model to examine the sources of growth between 1987 and 1993 in four East Asian economies—Hong Kong, Singapore, Japan and South Korea. Using data for 20 manufacturing sectors at the three-digit SIC level, this study provides the first comprehensive examination of sources of growth that allows one to decompose total factor productivity growth, separating out technical efficiency changes (TECs) from technological progress (TP). We find that while there is ample evidence of the importance of increasing inputs in growth, and there is some support for technical efficiency change, or catching up to the frontier over this period, there is weak or even negative evidence for the role of technological progress, measured as a shift in the estimated production frontier.     

Bank Efficiency and Macro-economic Factors: The Case of Developing Countries

Abstract

This paper examines the effects of macro-economic factors on bank efficiency of commercial banks in Asia, Middle East/North Africa, and Africa. To achieve the objective, the stochastic frontier approach (SFA) was used to simultaneously estimate the parameters of the stochastic frontier and the inefficiency model. The results show that the effect of macro-economic factors on bank efficiency differs across region. Cost inefficiency of the commercial banks in the Asian region is negatively related to the real gross domestic product per capita, credit to the private sector, and market concentration but is positively related to trade openness. Banks cost inefficiency in the Middle East/North Africa is negatively related to trade openness but is positively related to market concentration suggesting that banking market in this region should be more open to competition.     

EU enlargement and its impacts on East Asia

Ten countries—most completing their transition from socialist-based economies to market economies—are slated to join the European Union (EU) in 2004 and four additional countries are expected to become members at some future dates. Despite the relatively small economic size of the accession countries, this type of deep integration can have non-negligible effects on countries outside of the preferential zone as the reduction in barriers across partners leads to a re-orientation of trade. In this paper, we evaluate the extent of trade adjustments and the economic impacts it will have on the East Asian economies using a dynamic computable general equilibrium (CGE) model. The overall macroeconomic effects on East Asia are small. There is some trade diversion, but there may be an opportunity to increase market penetration in some sectors of the expanding EU for which East Asia has a marked comparative advantage. The paper also assesses the relative importance of linking trade openness to productivity and lowering trade costs between the accession countries and the EU-15.     

Is the J-Curve Effect Observable for Small North European Economies?

The present study tests for the J-curve for five North European countries—Belgium, Denmark, The Netherlands, Norway, and Sweden—using generalized impulse response functions. The results provide empirical support for the J-curve. Each country has an impulse response function generated from a vector error-correction model that suggests that after a depreciation, there will be a dip in the export-import ratio within the first half-year after the depreciation. The long-run export-import ratio appears to be higher than the low point of this early dip in almost all cases. Also, in most cases, the export-import ratio appears in many periods after the depreciation to be converging from below to a higher long-run equilibrium.     

Performance of land reform projects in the North West province of South Africa: Changes over time and possible causes

Anecdotal evidence as well as selected studies on the performance and progress of South Africa’s land reform programme generally present mixed to rather negative results. Few longitudinal studies exist on the progress of redistributed farms, resulting in an incomplete picture of the performance and progress of land reform projects. In this article, we report on the progress and performance of a group of land reform projects in the North West province of South Africa over five years. As part of a comprehensive audit of land reform projects in the North West province, 43 farms were studied in 2005 to assess their performance, based on their production status. Five years later, in 2010, 37 of these farms were visited again to review their progress. The results indicate that the production status (and thus performance) of land reform projects is not static. Although some projects either improved or maintained their initial production status, the overall trend shows deterioration in performance. Numerous factors are responsible for the decline, including group characteristics where farms are owned by groups of beneficiaries. This article is thus the first to use two surveys of a group of land reform projects to show the true status of farms in their post-transfer phase in South Africa.     

Can East Asia rise again?

In recent times, the economies of East Asia have been confronted by two major economic recessions, the first caused by the East Asian financial crisis, and the second by the slump in the ‘new economy.’ The causes of these two recessions, their scope and their influences differ significantly and during these periods of economic downturn the economies affected have adopted various monetary policies aimed at reducing interest rates and tax rates, and pursuing the expansion of government expenditure. However, these policies have obviously not yet been as effective as expected.This paper sets out to determine those factors affecting the possibility of East Asia rising again from the recent economic slump, a slump which has stemmed from excessive investment in the electronics and information industries. The paper begins with an overview of the East Asian economy, with particular reference to the recent serious decline following the steady recovery from the East Asian financial crisis and a review of the measures taken to counter it. Proposals are then made with regard to a number of lessons to be learned from the recent slump.There are three major issues involved in the question of whether East Asia can rise again from the current economic slump. First of all, many of the economies of East Asia have tried their utmost to upgrade their industrial structures from labor- to technology-intensive, or towards a knowledge-based economy and, to some extent, have actually been quite successful in achieving their goals. Secondly, almost all of the East Asian economies have paid particular attention to educational development, with many families having sent their children to foreign countries to receive advanced education in the hope that when they return they can make a substantial contribution to the progress of their home economies—examples of this trend are provided by Taiwan and India. Thirdly, there are abundant natural resources in East Asia along with rich sources of manpower with a hard-working spirit; these two factors can create comparative advantages and strengthen the competitiveness of these economies.In view of the recent developments towards regionalism, it is imperative for the economies of East Asia to form an East Asian Community in the near future, and many of the economies in this region are currently endeavoring to realize this vision, despite many obstacles still facing East Asia which will ultimately need to be overcome.     

Production efficiency and its spatial disparity across China’s TVEs: A stochastic production frontier approach

The development of China’s township and village enterprises (TVEs) in recent years is beyond doubt encouraging. However, it is uncertain whether or not this rapid development is exacerbating China’s spatial disparity by encouraging inequality of production efficiency across these enterprises. By using the stochastic production frontier model with a simple exponential specification of time-varying firm effects, which incorporates panel data, this paper aims to answer this question by examining the changes in production efficiency of the TVEs located in different provinces between 1988 and 1993, with particular reference to the spatial disparities of these changes. The findings of this paper indicate that the production efficiencies of the TVEs, on average, improved between 1988 and 1993. Furthermore, the results also show that regional inequality, in terms of production efficiency across the TVEs located in different provinces, had narrowed in the six years under study. JEL classification: C33; D24; 011; 047     

Farmers, Vertical Coordination, and the Restructuring of Dairy Supply Chains in Central and Eastern Europe

The combination of transition and globalization since the early 1990s has caused dramatic changes in the dairy chains in Central and Eastern Europe. This paper uses survey evidence from several Central and East European countries to document the growth of vertical coordination in the dairy chain, its relationship with policy reforms, its effects and the implications for small farms. Evidence suggests that in several countries small dairy farms have benefited from vertical coordination processes by providing them access to inputs and higher value markets.     

Did it pay to be a pioneer? Wealth accumulation in a newly settled frontier society

European settler colonies are often thought to have been characterised by a continued expansion of the landed frontier, which impacted the distribution of wealth across their settler populations. Hampered by a lack of data, few studies have been able to study this in depth. How does settlement timing affect wealth and wealth accumulation when frontier expansion is not a smooth, continuous process? Was it the case that pioneers reaped greater economic benefits from locating their farms on superior land, or would they be disadvantaged compared with later arrivals owing to limited infrastructure or greater risk of conflict with indigenous populations? In this paper, we use a unique dataset that allows us to analyse the link between time of arrival and wealth accumulation in a colonial agrarian frontier society: the Graaff-Reinet district in South Africa's Cape Colony between 1786 and 1850. We find that those who arrived early located their farms in the more climatologically suitable areas of the district and utilised their superior lands to accumulate wealth more quickly than latecomers. However, owing to institutional changes that favoured later British arrivals, we also show that the existence of an early-arrival premium did not mean persistence in land ownership.     

Technical Efficiency Measures and Its Determinants for Olive Producing Farms in Tunisia: A Stochastic Frontier Analysis

Abstract: This paper investigates farm level technical efficiency of production and its determinants in a sample of 178 olive producing farms in Tunisia using a stochastic frontier production function approach applied to cross‐section data. Results indicate that technical efficiency of production in the sample of olive producing farms investigated ranges from a minimum of 58.5 per cent to a maximum of 95.5 per cent with an average technical efficiency estimate of 82 per cent. This suggests that olive producers may increase their production by as much as 18 per cent through more efficient use of production inputs. Further, the estimated coefficients in the technical inefficiency model indicate the positive effect on technical efficiency of the share of productive trees, the share of skilled labour and agricultural training. However, a negative relationship between technical efficiency and fruit trees is found.     

Wealth Accumulation and Distribution in the Midwest in the Late Nineteenth Century

It is well known that early settlers on the frontier reaped the benefits of development as population grew, especially through capital gains on real estate. But population turnover—so pervasive in the rural north in the nineteenth century as well as in contemporary settlement economies—also afforded early settlers an advantage: they knew local soil and market conditions better than those who settled later. Such location-specific human capital augmented the incomes, and therefore the wealth, of early settlers. Early settlers in Missouri had higher rates of wealth accumulation than later arrivals, and the contribution of location-specific human capital was at least equal to the contribution of capital gains.     

The Measurement of Technical Efficiency Using Frontier Production Functions of Rice Farms in West Java 1

Information from the Patanas survey of 1983/84 was used to estimate frontier production functions for rice farmers from four villages in West Java. The results indicate that rice farmers in these regions were technically efficient in their rice production.     

Input–Output and General Equilibrium Models for Hull and Humber Region in England

This paper shows how one can construct an input output table for four Humber sub regions in England with information on levels and share of employment and output provided by the Humber Forum using coefficients from the national input–output table of UK. It then illustrates how these can be applied to construct multisectoral general equilibrium models specific to Hull, East Riding, North Lincolnshire and North East Lincolnshire regions situated in two sides of Humber estuary and a regional model that takes these four inter-dependent economies constituting the Humber economy. A dynamic model is constructed for Hull to assess the prospects in next hundred years based on micro consistent dataset in which households and firms are assumed to have perfect foresight in making their consumption and production decisions. These models are then applied to evaluate impacts of tax policies that can distort relative prices of commodities and factors of production and thus can distort the efficient allocation of scarce economic resources and on welfare of households in the Humber region. To my knowledge this is the first study of this type for this region.

Asia/Pacific Regional Trade Agreements: An empirical study

At the same time as the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) have been encouraging trade liberalized, there has been a proliferation of Regional Trade Agreements (RTAs). These RTAs also aim to reduce trade barriers, but they do so it in a preferential way. There is continued debate as to whether such RTAs are an effective way of achieving free trade, or if increased trade among members causes less trade with non-member countries? If RTAs increase total trade, this is known as ‘trade creation’, whereas if the extra trade occurs at the expense of non-members, this is called ‘trade diversion’. Trade creation implies improved welfare, whereas ‘trade diversion’ may adversely affect welfare. This paper examines five different RTAs using a gravity model to see if they have been trade creating or trade diverting. Annual data from 26 countries covering five RTAs in the Asia and Pacific region for the years 1980–2000 was used.The results show that the effects of the different RTAs varied remarkably. The Association of South East Asian Nations (ASEAN) and the Australian and New Zealand Closer Economic Relations (CER) fostered greater trade with trading partners and with the rest of the world. While the Asian Pacific Economic Cooperation (APEC), the Southern Cone Common Market (MERCOSUR) and the North American Free Trade Association (NAFTA) tended to be trade diverting, that is, they expanded intra-bloc trade at the expense of trade with others.     

Invoicing currency and the optimal basket peg for East Asia: Analysis using a new open economy macroeconomic model

An important characteristic of trade in Asia is that the US dollar is the dominant invoicing currency. This fact might have a consequence on the region's choice of the currency regime. To investigate this possibility, I develop a three country “new open economy macroeconomics” model that consists of East Asia, Japan, and the US. Assuming that East Asia pegs its currency to a basket of the other two's currencies, the optimal basket weights are derived numerically. It is shown that the weights under a realistic invoicing pattern are drastically different from those in the textbook case of “producer currency pricing.” J. Japanese Int. Economies 20 (4) (2006) 569–589.     

Perspective on the 21st century : Practical lessons from my management experience

The dramatic changes in the industrial structure since World War II owe much to technological advances that have enabled corporations to pursue their endeavors on unprecedented scale, as in mass production and mass retailing. 1 characterized my management emphasis as ‘C&C’ which stands for the integration of computers and communications. C&C is a technological frontier that has spawned a continuing stream of new products and advanced concepts. C&C, however, is a very different kind of technological advance. As C&C takes hold in society and as information networks mature, information will become the central element in new amalgams with the other traditional corporate resources: people, money, and property.     

Expectative land rights, house consolidation and cemetery squatting: Some perspectives from Central Java

With more than 40% of the urban population of the Third World living in informal settlements, quasi- and extralegal adaptations have been utilized to appropriate land for housing. The most direct of these — squatting — has its inherent risks, however, for those who wish to improve their dwellings. Research has shown that house consolidation is more a function of resident perceptions than of strict legal categorization. This paper reports how such perceptions have triggered a greater rate of house consolidation among Javanese cemetery squatters than that in an adjoining area with formal land tenure.     

Village Governance,Community Life,and the 2014 Village Law in Indonesia

In January 2014, the government of Indonesia issued Law 6/2014 on Villages, primarily to address weaknesses in the decentralisation paradigm by improving governance arrangements and shifting resources to a level of government less captured by special interests. Using longitudinal data from 40 Indonesian villages in the three Local Level Institutions studies, fielded in 1996, 2001, and 2012, we investigate the effects that prior policy has had on village life and identify the likely implications of the 2014 law on village governance. We focus on shifts in the capacities of and opportunities for local governments to increase their responsiveness to community needs, as well as consider the constraints on these governments. We suggest that there is potential for the law to increase government responsiveness—through a combination of strong financial management systems, new national institutional arrangements, and empowered citizens who can apply pressure on village governments to work in the interests of communities—but that substantial risks and obstacles remain.     

Total factor productivity, the east Asian miracle, and the world production frontier

Total Factor Productivity, the East Asian Miracle, and the World Production Frontier. — The post WWII growth of the East Asian Tiger states has stimulated the discussion about its determinants. Young and Krugman hold that high capital accumulation rather than gains in efficiency or technological progress has spurred growth. Nelson and Pack, however, have recently criticized the methods of measuring technological progress. Applying the nonparametric approach to frontier production function determination and the Malmquist index of total factor productivity change, the authors take up this criticism. They calculate productivity indicators for a sample of 18 American, Asian, and European countries. For the Tiger states, their results confirm that capital accumulation was the main source of growth in 1960-1973, whereas they find evidence for an increasing importance of efficiency improvements for the growth in 1973-1990.     

Red Holocaust

ABSTRACT

Reduced transport costs and income growth in industrialising European countries changed the market conditions for European farmers in the late nineteenth century. Grain prices fell while dairy prices rose. It has been claimed that these price changes hit large grain farmers with vested interests in grain trade particularly hard, while owner-occupiers and smallholders fared better and with help of developing cooperative associations, came out as successful commercial agriculturalists by switching to intensive branches, foremost dairying. Recent research on the Danish case, shows, however, that change was initiated on large elite estates with long-term dairy traditions. The literature on the Swedish case indicates, that larger farms switched to intensified fodder production quicker than smaller farms did, while in the early twentieth century smaller farms played an un-proportionally large role on the dairy market. Using individual farm data from two East-central Swedish parishes in 1878/80, 1895/96 and 1910/11, it is shown, that larger farms tended to modernise crop rotations and switch towards dairy production earlier than small farms did. Smaller farms caught up, and by 1910 their land use was about as strongly adapted to commercial dairy production as larger farms’ land use was.