Rethinking Land Reform in East Asia: Egalitarian or Inegalitarian?

Taking a historical and comparative view, we explore the long debated cause of the spectacular economic successes of East Asia using land reforms in China and Japan during the 1940-50s. Examining the approach to land reform embodied by technocrats such as Liu Shaoqi in China and Wada Hiroo in Japan in addition to the implementation mechanisms of the policies they adopted, we show that the land reforms developed characteristics of dynamic factor endowment according to the Engerman-Sokoloff hypothesis. Fairly equal land redistribution led to political power equality and improved agricultural productivity and income equality, which is conducive to long-term economic development and the prevention of the Kuznets effect ex ante. Nevertheless, factors such as initial exogenous shocks, insufficient scale of family farming, persistent government support and consequential interest groups obstruct sustainable development of the agricultural sector as well as the generalization of East Asian experiences. Equality or inequality is essentially a policy choice in addition to being a long-term ex post evaluation of the reforms.     

Peaks or tails – What distinguishes financial data?

We argue against the view that it is mostly the peaks of the empirical densities of stock returns (and of other risky returns as well) that set such data aside from “normal” variables. We show that peaks depend on sample size and on the way returns are standardized, and that for given data sets of stock returns, both higher peaks and lower peaks than in a standard normal case can be obtained. First version received: March 1998/Final version received: April 2000     

FDI and domestic investment in Germany: crowding in or out?

This paper estimates the effects of outward FDI on domestic business investment in Germany at the industry level for a panel of 19 industry and 10 services sectors. We pay particular attention to the different motivations behind FDI, and distinguish between FDI to high-versus low-wage countries, to Europe versus the rest of the world, and FDI in services and industry sectors.We find that, in industry, FDI to low-wage countries crowds out domestic investment, whereas FDI to high-wage countries outside Europe crowds in domestic investment. In services, FDI to Western Europe crowds in domestic investment.     

Human capital and income inequality in India: is there a non-linear and asymmetric relationship?

The article attempts to provide empirical evidence on the relationship between human capital and income inequality in India in a non-linear and asymmetric framework. To capture both long-run and short-run asymmetries, we have employed the non-linear autoregressive distributed lag approach using the relevant data from 1970 to 2016. Findings of the article suggest that education expansion acts as a major factor in reducing prevailing high income inequality, that is an increase in average years of schooling results in more equal distribution of income. In contrast, high economic growth, inflation and trade openness create unequal distribution of income. The asymmetric causality test results indicate that there is unidirectional causality running from female human capital, economic growth and inflation to income inequality. From a policy perspective, we suggest that education expansion should be used as a powerful tool to mitigate income inequality by emphasizing the quality of education. At the same time, policies geared towards social benefits, inclusive education, training for unskilled workers and price stability should be encouraged to attain fair income distribution in India.     

International Trade and Manufacturing Employment: Is India following the Footsteps of Asia or Africa?

The Indian manufacturing sector has rapidly increased its integration with the world economy since the 1991 trade reforms. We examine whether trade integration created or destroyed jobs in the Indian manufacturing sector, and compare India's employment outcomes with four other countries—Bangladesh, Kenya, South Africa, and Vietnam. We find that the impact of international trade on manufacturing employment seems to be similar to those found for the two African countries rather than the two Asian countries, a surprising result for a country with an apparent comparative advantage in labor-intensive manufacturing goods, and a large excess supply of unskilled labor.     

Does asymmetric information affect the premium in mergers and acquisitions?

We test the influence of information asymmetry on the premium paid for an acquisition. We analyze mergers and acquisitions as English auctions. The theory of dynamic auctions with private and common value predicts that more informed bidders may pay a lower price. We test that prediction with a sample of 1,026 acquisitions in the United States between 1990 and 2007. We assume that blockholders of the target's shares are better informed than other bidders because they possess privileged information on the target. Our empirical results show that blockholders pay a much lower premium than do other buyers     

The changing state–market condominium in East Asia: rethinking the political underpinnings of development

This article addresses the effects of inequality on the globalisation process. It is argued that the recent financial and economic crisis is a manifestation of a tendency of the aggregate demand to fall relatively to aggregate supply, generated by an asymmetric income distribution, which in turn both increases, and is reinforced by, the mobility of goods, capital and labour, in a process of cumulative causation. This process has not become manifest earlier due to counteracting tendencies generated by the financial system, that were disrupted during the crisis. It is also argued that mainstream economics does not have the adequate framework for explaining the crisis, and actually contributed to the crisis through its theories and policies. Hence an alternative economic framework is suggested for addressing the crisis, drawing upon the contributions of several heterodox economic traditions, especially post-Keynesianism.     

OCA Issue in East Asia under the Pressure of Chinese RMB Appreciation

As the rumor that RMB will appreciate in the near future, most Asian currencies had appreciated according to this matter since the appreciation of Chinese RMB will strengthen the exports of those Asian counties, thus appreciate the currencies of those countries. An OCA matter here comes again to the Asian countries. As we all know, Euro has been formally used among European areas since 1999, and this is the fir.st time that the optimum currency system was adopted in the international history. Asia, as another area that has most development potentiality in the world, should it adopt the monetary integration process as well？ In this paper the necessary conditions to form an OCA are analyzed; European experience are conjured with the own feature of East Asia areas; possibilities of forming the OCA in East Asia are concluded as well as the resistances; besides the potential process of forming an OCA is suggested.     

Monetary and Financial Integration in the EMU: Push or Pull?

This paper examines the channels through which monetary union increased financial integration, using panel data on bilateral international commercial bank claims from 1998–2006. I decompose the increase in claims into three channels: a "borrower effect," as a country's EMU membership may leave its borrowers more creditworthy in the eyes of foreign lenders; a "creditor effect," as membership in a monetary union may increase the attractiveness of a nation's commercial banks as intermediaries, perhaps through increased scale economies or through an improved regulatory environment after the advent of monetary union; and a "pairwise effect," as joint membership in a monetary union increases the quality of intermediation between borrowers and creditors when both are in the union. Isolating these three channels through a series of difference-in-differences specifications, I find that the pairwise effect is the primary source of increased financial integration. This result is robust to a number of sensitivity exercises.     

Land Grabs,Power, and Gender in East and Southern Africa: So,What's New?

When land grabs are viewed from a gendered and historical lens, critical questions arise concerning three domains of inquiry about what is arguably “new,” “foreign,” and “large-scale?” They highlight historical continuities from the colonial past elite and male capture and gendered micro-political land grabs unabated over long periods of time, which once aggregated across Sub-Saharan Africa, are large-scale in themselves. This contribution reflects on feminist political-ecological research on gender and land in Kenya, Mozambique, and Madagascar and provides windows into negotiations and contestations in processes of land grabs. It analyzes what is new, while considering relations of power and knowledge that shape different ways land grabs are named and, therefore, the kinds of actions that are subsequently prescribed. Land grabs are occurring in spite of strong laws and policies, illustrating the critical role of power relations in shaping them.     

Gendered Paths to Asset Accumulation? Markets,Savings, and Credit in Developing Countries

An extensive literature shows how property inheritance is biased against women in many developing countries, yet relatively little attention has been given to gender bias in other means of acquiring physical assets, such as the market. Using individual-level data from Ecuador, Ghana, and Karnataka, India, this study analyzes modes of acquisition and financing of housing, agricultural land, other real estate, and businesses. The findings show that women acquire fewer of their assets through the market than men, and that in asset markets, both men and women are more likely to use their own savings than to use credit. The study also analyzes current loans for asset acquisition and finds that, in general, women tend to be somewhat disadvantaged in securing formal bank loans. The results suggest that financial inclusion to promote more gender equal access to accumulation of assets should focus on both savings and credit, with priority to savings.     

Brunner and Leijonhufvud: friends or foes?

Karl Brunner and Axel Leijonhufvud constantly pointed out the prominence of imperfect information in macroeconomic analysis. This paper argues that, despite strong oppositions related to their rival schools of thought, this emphasis on informational problems led them to adopt similar views on many theoretical and methodological issues. These issues encompass the perception of the economic agent in society, the theory of price inflexibility and unemployment, the role of relative prices, the importance of signal-extraction problems and the position within the Marshall-Walras divide.     

Inequality and growth in the United States: is there asymmetric response at the state level?

A previous study that tried to assess the impact of economic growth on income inequality in the U.S. used state-level data and an ARDL panel model to conclude that economic growth worsens income inequality in the U.S. In this article, we use the same data set but an ARDL time-series model applied to each state in the U.S. to show that the above conclusion is only valid in 20 states. Additionally, we use a nonlinear ARDL approach to show that the effects are asymmetric in the short run as well as in the long run. Significant long-run asymmetric effects reveal that in 28 states both an increase and a decrease in real output have worsened income distribution.     

Tobacco and alcohol: complements or substitutes?

The question of whether alcohol and tobacco are consumed as complements or substitutes is crucial for determining the side-effects of anti-smoking policies. Numerous papers have empirically addressed this issue by estimating demand systems for alcohol and tobacco, and subsequently calculating cross-price effects. However, this traditional approach is often seriously hampered by insufficient price variation observed in survey data. We, therefore, suggest an alternative instrumental variables approach that statistically mimics an experimental study and does not rely on prices as explanatory variables. This approach is applied by means of German survey data. Our estimation results suggest that a reduction in tobacco consumption results in a moderate reduction in alcohol consumption. It is demonstrated that this implies that alcohol and tobacco are complements. Hence, we conclude that successful anti-smoking policies will not result in the unintended side-effect of an increased (ab)use of alcohol.     

Hysteresis in unemployment: Fact or fiction?

A stylized fact of European unemployment dynamics is one of extreme persistence and possible unit root behavior. This has led to a major reconsideration of the natural rate paradigm. We apply the Kalman filter to estimate the natural rate of unemployment for Germany and France. When the moving natural rate model is tested against the alternative of a unit root process, the unit root hypothesis is resoundingly rejected.     

Innovation and imitation: substitutes or complements?

Most of the research on imitation and innovation has focused on developed countries and examined whether imitation promotes or hinders innovation at the macro, industry and intra firm level, and the effect that this has on economic growth. Less research has been conducted about the dynamics that exist between innovation and imitation at the plant-level in developing countries, and the effect that trade policy has on this relationship. This article uses plant-level data from Mexico to analyse the dynamic relationship that exists between innovation and imitation at the microeconomic level. The empirical results suggest that in the context of a developing country, innovation and imitation complement each other and trade policy has no effect on this relationship.     

What explains indirect exports of goods and services in Eastern Europe and Central Asia?

This paper investigates the determinants of indirect exporting, using firm-level data for 27 countries in Eastern Europe and Central Asia. Indirect exporting depends on a combination of fixed and variable trade cost factors. We first hypothesize that firms that perceive customs, transportation, crime and legal systems as severe obstacles anticipate higher fixed costs and are more likely to export indirectly. The second hypothesis is that indirect exporting tends to be a temporary strategy. Econometric models are used to test the first hypothesis and transition matrices to test the second. In particular, probit, Heckman-probit and fractional response models are estimated to analyse the determinants of the export mode and the share of indirect exports. The results indicate that the factors that account for the fixed cost of exporting, mainly affect the decision to export indirectly (extensive margin), but some of them also affect, to a lesser extent, the amount exported indirectly (intensive margin). More specifically, factors such as customs and trade restrictions and transportation obstacles affect the extensive margin only, whereas crime affects both margins. Secondly, trade agreement membership mainly affects trade in manufactured goods, while exchange rate volatility affects positively the extensive and intensive margin of indirect exports of services. The results also indicate that firms are more likely to change their status as an indirect exporter than they are to change their status as a direct exporter or a non-exporter, which provides support to the second hypothesis.     

How reliable and consistent are subjective measures of welfare in Europe and Central Asia?

This paper analyses the reliability and consistency of subjective well‐being measures, using the Life in Transition Survey. Drawing on two life satisfaction questions with alternative scales, our results do not reveal substantial biases in accounts of life satisfaction due to framing. Subjective individual assessments of household relative income position, on the other hand, do not appear to be reliable predictors of objective poverty or wealth. We find that subjective relative income position is only weakly correlated with objective welfare measures. There are differences in evaluations of the household's relative standing across different household members, and these differences are correlated with respondent characteristics.