East Asia's growth: technology or accumulation?

Krugman, building on the work of Alwyn Young, has argued that hypergrowth in East Asia derives mostly from factor accumulation, owing little to technological change. Yet this explanation is at odds with what analysts of technological change have to say about technology acquisition in these countries. This article examines the Young-Krugman thesis and argues that the problem lies in the misconception of technological change as distinct from accumulation. The critique is taken further by means of a review of the multifaceted way that technology raises the productivity of labor. It is argued that technology is carried not as disembodied knowledge, but as techniques hard-coded in physical devices and structures, by patterns soft-coded in human and organizational capabilities and business-friendly institutions, formal and informal. These operate as symbiotic complements, not separable substitutes as assumed in conventional theory. These arguments are supplemented by perspectives introduced from the technology literature. Since the respective roles and relationship between accumulation and technology are scrutinized, the analysis provides important policy conclusions on the value of East Asian growth strategies.     

Trade size and components of the bid-ask spread

The relation between theorized components of the bid-ask spreadand trade size for a sample of NYSE firms is examined. We findthat the adverse selection component increases uniformly withtrade size. Conversely, order processing costs decrease withincreased in trade size for all but the largest trades. We findthat order persistence decreases with trade size. The adverseselection component is highest at the beginning of the day andlowest at the end of the day for all but the largest trades.Trades of NYSE firms executed on regional exchanges or NASDAQcontain a large order processing cost component but no significantadverse information effect.