Changing Labor Market Conditions and Economic Development in Hong Kong, the Republic of Korea, Singapore, and Taiwan, China

In the newly industrializing economies (NIEs) of Hong Kong,the Republic of Korea, Singapore, and Taiwan (China), the entireworking population has benefited from labor market institutions.The East Asian NIEs attained and maintained generally full employment,improved their job mixes, raised real earnings, and loweredtheir rates of poverty. This article reaches two principal conclusions. First, labormarket conditions continued to improve in all four economiesin the 1980s at rates remarkably similar to their rates of aggregateeconomic growth. Second, labor market repression was not a majorfactor in the growth experiences of these economies in the 1980s.It thus appears that labor market repression is neither necessarynor desirable for outward-oriented economic development.     

Are stock and real estate markets integrated? An empirical study of six Asian economies

Rising asset prices spurred by Asia's emerging economy have drawn much attention recently. This study examines one source of growth patterns in asset prices by analyzing the integration relationship between stock markets and real estate markets in Asia. Six economies are selected for empirical analysis: China, Hong Kong, Japan, Singapore, South Korea, and Taiwan. Results show that stock markets are integrated with real estate markets in Japan, and partially integrated with real estate markets in China, Hong Kong, and Taiwan. This implies that these two investment vehicles are substitutable in China, Hong Kong, Japan, and Taiwan, and provide diversification potential for investment portfolios in South Korea and Singapore. Examining the timing of market changes, we found the real estate market leading the stock market in some countries, and the stock market leading the real estate market in others. We conclude that stock and real estate markets show a variety of inter-relationships depending on economic and political policy environments.     

遭遇反倾销与多产品企业的出口行为——来自中国制造业的证据

近年来中国出口企业遭遇的反倾销调查越发严重,基于此,本文将反倾销纳入多产品出口企业的分析框架,采用倍差法全面考察了遭遇反倾销对中国多产品企业出口及生产率的影响,主要得到以下结论:遭遇反倾销显著减少了多产品企业的出口数量和出口产品种类,提高了多产品企业的出口价格、出口产品集中度和出口市场多元化,且该效应受到企业全球价值链上游嵌入度、下游嵌入度以及地位指数的制约;异质性分析表明,民营企业会通过集中核心优势出口核心产品、放弃边缘产品出口的方式来应对国外的反倾销诉讼,而遭遇反倾销对国有企业的影响较小。在贸易方式方面,遭遇反倾销对企业出口的消极影响会随着加工贸易比例的提高而增强。最后,通过构造企业层面的产品竞争力指数,我们发现尽管遭遇反倾销总体上不利于企业的出口增长,但也可在一定程度上促进企业出口产品组合向其更具竞争优势的核心产品转变,从而加速多产品企业内部出口产品间的优胜劣汰。     

Asian Economic Integration and Stock Market Comovement

Using daily returns from 1988 to 1998, we investigate to what degree twelve equity markets in Asia are integrated with Japan's equity market and examine the factors that affect the level of economic integration. We find that the equity markets of Australia, China, Hong Kong, Malaysia, New Zealand, and Singapore are highly integrated with the stock market in Japan. There is also evidence that these Asian markets become more integrated over time, especially since 1994. A higher import share as well as a greater differential in inflation rates, real interest rates, and gross domestic product growth rates have negative effects on stock market comovements between country pairs. Conversely, increased export share by Asian economies to Japan and greater foreign direct investment from Japan to other Asian economies contribute to greater comovement.     

Impacts of China's Accession to the World Trade Organization

This article presents estimates of the impact of China's accessionto the World Trade Organization. China is estimated to be thebiggest beneficiary (US$31 billion a year from trade reformsin preparation for accession and additional gains of $10 billiona year from reforms after accession), followed by its majortrading partners that also undertake liberalization, includingthe economies in North America, Western Europe, and Taiwan (China).Accession will boost manufacturing sectors in China, especiallytextiles and apparel, which will benefit directly from the removalof export quotas. Developing economies competing with Chinain third markets may suffer small losses. Accession will haveimportant distributional consequences for China, with the wagesof skilled and unskilled nonfarm workers rising in real termsand relative to those of farm workers. Possible policy changes,including reductions in barriers to labor mobility and improvementsin rural education, could more than offset these negative impactsand facilitate the development of China's economy.     

Trade and Growth in the New Member States: The Role of Global Value Chains

We analyze the determinants of value-added and productivity growth of New Member States in the period between 1995 and 2009. We show that in the analyzed countries, exports contributed to roughly 30% to over 40% of the overall growth of GDP while the contribution of the domestic component varied from negative to over 60%. We show that in the most important export manufacturing industries of the NMS, the growth in exported value added was substantial, while the growth of the domestic component of GDP was mostly due to the growth in services. We associate growth of sectoral productivity with the foreign direct investment and exporting but, more importantly, with the position of a sector/country in the global value chains. We show that sectors that have imported intermediate goods have experienced higher productivity growth. Moreover, faster productivity growth was found in sectors further away from the final demand and in sectors exporting intermediate goods.     

Credit Allocation and Firm Productivity Under Financial Imperfection: Evidence from Chinese Manufacturing Firms

The role of the financial system, especially the credit market, in productivity enhancement has interested many researchers. However, how credit allocation affects firms’ productivity in emerging economies remains unanswered. Using data from the Annual Survey of Industrial Firms (ASIF) during 1999–2007, this article examines whether credit allocation impacts Chinese firms’ productivity under financial imperfection. Our results show that the size of credit market has no influence on Chinese firms’ total factor productivity (TFP), while allocating more credit to non-SOEs significantly promotes firm TFP. Our further analysis shows that firms which are less subsidized, smaller, more external financially dependent, and more labor intensive are affected more by credit allocation. As China is the largest emerging economy, our analysis also sheds light on the development of firms in emerging economies.     

Efficiency tests of foreign exchange markets for four Asian Countries

This paper uses the traditional variance ratio test of Lo and MacKinlay (1988, 1989), the non-parametric-based variance ratio test of Wright (2000) and the multiple-variance ratio test of Chow and Denning (1993), to re-examine the validity of the weak form efficient market hypothesis for foreign exchange markets in four floating-rate markets in neighboring Asian economies (Japan, South Korea, Taiwan and the Philippines). The results show that the random walk patterns of the exchange rate return series cannot be rejected, with the one exception of Taiwan, where inefficiency is shown to be most prominent. We therefore conclude that the foreign exchange markets of Japan, South Korea and the Philippines are weak form efficient, while the foreign exchange market of Taiwan is inefficient.     

The Soviet Economic Decline

Soviet growth from 1960 to 1989 was the worst in the world afterwe control for investment and human capital; the relative performanceworsens over time. There is some evidence that the burden ofdefense spending modestly contributed to the Soviet debacle.The declining Soviet growth rate from 1950 to 1987 can be accountedfor by a declining marginal product of capital with a constantrate of growth of total factor productivity. The Soviet relianceon extensive growth (rising capital-to-out-put ratios) was nogreater than that of market economies, such as Japan and theRepublic of Korea, but a low elasticity of substitution betweencapital and labor implied especially acute diminishing returnsto capital compared with the case in market economies.     

Stock market liberalization and innovation

We investigate the effect of stock market liberalization on technological innovation. Using a sample of 20 economies that experience stock market liberalization, we find that these economies exhibit a higher level of innovation output after liberalization and that this effect is disproportionately stronger in more innovative industries. The relaxation of financial constraints, enhanced risk sharing between domestic and foreign investors, and improved corporate governance are three plausible channels that allow stock market liberalization to promote innovation. Finally, we show that technological innovation is a mechanism through which stock market liberalization affects productivity growth and therefore economic growth. Our paper provides new insights into the real effects of stock market liberalization on productivity growth and the economy.     

Examining export trade and corporate innovation: A multiphase difference-in-differences method

Using a multiphase difference-in-differences model, this study investigates the relationship between export trade and the corporate technological innovation of listed companies. It reveals that engaging in export trade increases corporate innovation input and output. In terms of patent output, export trade greatly promotes the output of invention patents and utility model patents with a high technological content. These conclusions remain valid after a series of robustness and endogeneity tests. Regarding the mechanisms of the observed relationships, export trade stimulates corporate technological innovation mainly by realizing economies of scale and increasing risk-taking. The positive correlation between export trade and corporate technological innovation is strongest among state-owned enterprises, non-high-tech enterprises, enterprises based in central and eastern China, enterprises engaged in general trade, and enterprises exporting to developed economies. Given the growing trade frictions ongoing at the time of writing, the conclusions of this study provide vital practical guidance and empirical evidence for a national strategy of innovation-driven development.     

Regional Transfer of Haze Pollutants Embodied in China’s Foreign Trade and Factors Affecting It: A GMRIO-Based Empirical Analysis

The paper estimated the balance of emissions embodied in bilateral trade and the pollution terms of trade between China and six major world economies, including USA, Japan, and others, from 1995 to 2009, and then discussed the factors affecting them using the Structural Decomposition Analysis method. We find that, with the exception of Taiwan, the balances of the haze pollutants emissions embodied in bilateral trades were negative between China and the each of the rest five, and this was mainly resulted from the China export scale effect and intermediate input structural effects. We also find that China has become the “Pollution Refuge” for the economies like USA and Japan.     

The bivariate GARCH approach to investigating the relation between stock returns,trading volume,and return volatility

We use a bivariate GJR-GARCH model to investigate simultaneously the contemporaneous and causal relations between trading volume and stock returns and the causal relation between trading volume and return volatility in a one-step estimation procedure, which leads to the more efficient estimates and is more consistent with finance theory. We apply our approach to ten Asian stock markets: Hong Kong, Japan, Korea, Singapore, Taiwan, China, Indonesia, Malaysia, the Philippines, and Thailand. Our major findings are as follows. First, the contemporaneous relation between stock returns and trading volume and the causal relation from stock returns and trading volume are significant and robust across all sample stock markets. Second, there is a positive bi-directional causality between stock returns and trading volume in Taiwan and China and that between trading volume and return volatility in Japan, Korea, Singapore, and Taiwan. Third, there exists a positive contemporaneous relation between trading volume and return volatility in Hong Kong, Korea, Singapore, China, Indonesia, and Thailand, but a negative one in Japan and Taiwan. Fourth, we find a significant asymmetric effect on return and volume volatilities in all sample countries and in Korea and Thailand, respectively.     

经济政策不确定性如何影响企业出口决策？——基于出口频率的视角

出口频率作为出口决策的重要一环,是企业出口扩张的新边际,也是出口变化的“晴雨表”。本文在随机存货模型的基础上,考察了经济政策不确定性对企业出口频率的影响及其传导渠道,并采用2000-2006年工业企业数据库与海关数据库的匹配数据进行实证检验,结果发现:目的国经济政策不确定性增加会显著降低企业出口频率,且这一影响存在部分惯性效应;经济政策不确定性通过贸易成本、存货成本和市场需求波动共同影响企业出口频率的中介效应十分显著,其中贸易成本是最重要的传导渠道,占比达到19%以上;如果进一步考虑目的国、产品和企业异质性,会发现出口目的国经济发展水平较高、出口产品为中间品和消费品的企业,其出口频率受经济政策不确定性的影响较小。因此,政府和企业应高度关注出口频率的变化趋势,合理应对经济政策不确定性对出口决策的外部冲击。     

The influence of government intervention on the trajectory of bank performance during the global financial crisis: A comparative study among Asian economies

The global financial crisis that started from 2007 onwards spread around the world and impacted the performance of banks in major economies. Many governments have used a variety of intervention policies to recover their financial systems. By examining the dynamic changes in bank performance before and after government intervention, this study demonstrates the use of the piecewise latent trajectory model. We used the data collected from Bloomberg for banks of five major Asian economies, Japan, South Korea, Hong Kong, Singapore and Taiwan, over the eleven-quarter period from the 4th quarter of 2007 to the 2nd quarter of 2010 on six financial performance indicators reflecting solvency, credit risk and profitability. The change patterns of bank performance before/after government intervention during the global financial crisis have been compared among the five economies. Our empirical results indicate that, on average, the bank performance in terms of solvency, credit risk, and profitability improves after government intervention. Moreover, the influence of government intervention on bank performance depends on the evaluative financial indicator, the economy, and whether banks are internationalized. South Korea and Hong Kong have been identified to be the economies with stronger bank performance after government intervention. Policies demonstrated useful in South Korea and Hong Kong have been summarized and discussed.     

Does cross-listing in the US foster mergers and acquisitions and increase target shareholder wealth?

We examine the role of cross-listing in alleviating domestic market constraints and facilitating mergers and acquisitions. Our results show that cross-listing allows shareholders of target firms to extract higher takeover premiums relative to their non-cross-listed peers. Moreover, shareholders of Sarbanes–Oxley-compliant targets seem to benefit from a higher premium. We also find that cross-listed firms are more likely to be acquisition targets, consistent with the belief that cross-listing increases firms’ attractiveness and visibility on the market for corporate control. Our results are robust to various specifications and to the self-selection bias arising from the decision to cross-list.     

Do productive firms get external finance? Evidence from Chinese listed manufacturing firms

Due to information asymmetry problem in financial markets good quality firms often find it difficult to prove to external finance providers about their true quality and to distinguish themselves from bad quality firms. We argue that instead of sending indirect signals to financial market good quality firms could focus on improving their productivity to obtain external finance. Besides relying solely on firms' balance sheet information external finance providers using firms' TFP or labour productivity information would have a true knowledge of firms' efficiency and risk. Overall, using a panel of 1591 Chinese listed manufacturing firms between 2003 and 2016 we find that productivity measured by TFP or labour productivity is statistically and economically important and positive in determining firms' external finance, i.e. total leverage, new issue of equity and long-term debt. We find that productivity is helpful for firms to raise new equity finance, but only some weak results for total leverage and long-term debt. Such results hold for both the whole sample and private firm sample. We also find that large and/or old firms and exporting firms are able to make better use of their productivity to gain external finance than their respective counterparts, i.e. small young firms and non-exporting firms. The causality of the regression results is also confirmed by difference-in-difference tests using an exogenous industrial policy shock.     

Scale, scope, and spillovers: the determinants of research productivity in drug discovery

We examine the relationship between firm size and research productivity in the pharmaceutical industry. Using detailed internal firm data, we find that larger research efforts are more productive, not only because they enjoy economies of scale, but also because they realize economies of scope by sustaining diverse portfolios of research projects that capture internal and external knowledge spillovers. In pharmaceuticals, economies of scope in research are important in shaping the boundaries of the firm, and it may be worth tolerating the static efficiency loss attributable to the market power of large firms in exchange for their superior innovative performance.     

Technological Capability and Firm Efficiency in Taiwan (China)

This article highlights the importance of firms' own investmentsin technological capability. Recent research on the nature andextent of technical change in developing countries shows thatthe accumulation of technological capability should be treatednot as a by-product of some other activity but as an activityin its own right. This research also points to the criticalrole of firms and indicates that firm-level efforts to obtaininternational knowledge may have higher payoffs when accompaniedby complementary investments in the development of in-housetechnological capabilities. Using micro data from Taiwan (China), the authors estimate thetechnical efficiency of firms. They proxy firm-level effortsat modifying or adapting technology by expenditures on researchand development and on-the-job training. They then use a stochasticproduction frontier model to estimate the correlation of a firm'sefficiency both with investments in training and research anddevelopment and with international linkages (such as exporting,direct foreign investment, and foreign technology licenses).The evidence from manufacturing firms in Taiwan suggests thatefficiency is positively correlated with the firm's investmentsin training and research and development and with its informalcontacts with foreign purchasers through export sales.