Indonesia's economic performance in comparative perspective and a new policy framework for 2049

This is the first paper of a planned ‘Indonesia 2049’ project, which asks how far Indonesia's economy will have developed 100 years after actual political independence in 1949. We compare dimensions of Indonesia's economy with those of two oil exporters (Mexico and Nigeria), three large populous developing economies (China, India and Brazil) and three Southeast Asian neighbours (Malaysia, Thailand and the Philippines). Under Soeharto, Indonesia's economic performance was better than it had been under Soekarno, and above the average of the eight comparator countries, but below that of the East Asian economies. Our view is that Susilo Bambang Yudhoyono's second administration must adopt a new economic policy framework to ensure successful transition to knowledge-based growth. This proposed new framework goes beyond the Washington Consensus of ‘getting prices right’ and ‘getting institutions right’ to include ‘getting the role of science right’ and ‘getting the conception of the reform process right’.     

Investment opportunity set,political connection and business policies of private enterprises in China

The main purpose of this paper is to examine the factors that determine the business policies of private enterprises in the People’s Republic of China. Little is known about these private enterprises although these are surpassing the state-owned enterprises to become the most important corporate sector in China. The phenomenal growths of these enterprises provide an interesting setting to study the effect of the investment opportunity set (IOS) on business policies. We also examine how a firm’s political connection, generally believed to be instrumental to a firm’s success in transition economies, affects its business policies. We provide evidence on the importance of these factors in shaping the private firms’ business policies in China. More specifically, our results show that growth firms pay lower dividends, have lower overdue receivables relative to sales, have higher percentage of bonus shares, and are more likely to engage in joint ventures. In addition, firms with better political connection are able to borrow more, are more likely to establish a board of directors, and are more likely to acquire SOEs. These results have policy implications with regard to private enterprises in transitional economies in general and those in China in particular.     

Corporate Sustainable Development: Testing a New Scale Based on the Mainland Chinese Context

According to the predominant corporate sustainable development (CSD) framework, this exploratory paper verifies that CSD construct can be modeled by integrating the dimensions of social, economic, and environmental development. We first developed and validated measurement scales for these three dimensions based on a survey of 314 managers in mainland China. Then, using structural equation modelling, we confirmed that the proposed model is valid. Therefore, our findings may allow researchers to explore CSD further, and practitioners to develop their understanding of CSD initiatives in organizations.     

Efficiencies and scope economies of Chinese airports in moving passengers and cargo

The paper looks at the technical efficiency of Chinese airports using multi-output stochastic input distance function analysis. This method provides a statistical test of scope economies to investigate the contribution of air cargo transport to airport efficiency. Our findings confirm the presence of scope economies in air passenger and air cargo transport among airports in China. We compare and contrast these results with results obtained from single-output stochastic production frontier analysis in which the effect of scope economies is not included. Our results indicate that the presence of scope economies significantly affects the estimation of technical efficiency, thus implying different efficiency rankings among airports in China.     

Beyond Gentrification: Hegemonic Redevelopment in Hong Kong

Like other concepts, gentrification must be situated in the socio‐historical context in which it was produced. Since its coinage the concept has travelled widely, yet it has been applied unevenly, and in some cases uncritically, in various locations now including Asian cities. This essay challenges the application of the concept of gentrification to Hong Kong, as attempted by an article previously published in this journal. It responds through two main lines of inquiry. First, it demonstrates how the absence of historical, geographical and socio‐political context weakens the basis for a critical urban geography. Second, in constructing a historical baseline, this essay proposes to conceive urban redevelopment through hegemony‐cum‐alienation, which is a more complicated process than displacement of the working class. Alienated hegemonic redevelopment perpetuates systemic reproduction and associated power politics, yet with the primary source of contradiction residing in landed and property relations. Conclusions suggest the urgency of developing new approaches instead of relying on more empirical studies as evidence for an already over‐developed concept. Analysis of the Hong Kong case suggests how the spent concept of gentrification could be superseded by alternatives.     

我国西南地区旅游扶贫实施中应注意的若干问题

分析了旅游资源比较丰富的我国西南贫困地区旅游扶贫实施中应该注意的十大问题,包括实现多重目标的有机结合问题、旅游资源保护与开发的有机综合问题、旅游扶贫与小城镇开发建设有机整合问题、旅游扶贫与提升人力资源的有机会融合问题、旅游扶贫与旅游规划结合问题、旅游扶贫与其他扶贫方式结合问题、旅游扶贫理论与旅游扶贫实践结合问题、旅游扶贫的短期性的个别人收益与长期性的多数人受益结合问题、旅游扶贫与其他产业的共同发展结合问题、旅游扶贫和西部大开发结合起来等,为我国西南地区各级政府以及旅游部门有效开展旅游扶贫工作提供新思路。     

DYNAMIC ORDER SUBMISSION AND HERDING BEHAVIOR IN ELECTRONIC TRADING

I analyze the dynamic trading behavior of market participants by developing a bivariate modeling framework for describing the arrival process of buy and sell orders in a limit order book. The model contains an extended autoregressive conditional duration model with a flexible generalized Beta distribution to explain the duration process, combined with a dynamic logit model to capture the traders' order submission strategy. I find that the state of the order book as well as the speed of the order arrival have a significant influence on the order placement, inducing temporal asymmetric market movements.     

The relative contributions of location and preferential policies in China's regional development: being in the right place and having the right incentives

A large part of the literature on provincial inequality in China has found it necessary to include regional dummies in the provincial growth regressions. A smaller but vocal part of the literature has emphasised the granting of preferential policies to explain the faster growth of the coastal provinces. We replace the regional dummies with a measure of the ability to participate in international trade (Geography), and a preferential policy index (Policy). We find that geography and policy had about equal influence on coastal growth (3 percentage points each). Geography affected growth with a much longer lag than policy, however. The policy index was highest for the metropolises (Beijing, Shanghai, and Tianjin) and lowest for the central and northwestern provinces. The preferential policies are to a large extent “deregulation policies” that enabled marketization and internationalization of the coastal economies and allowed them to become more like their East Asian neighbours (and competitors). The weak (statistically insignificant) support for conditional convergence is in line with the existence of institutions that retard the income convergence process generated by the movement of labor and capital and by the Stolper–Samuelson mechanism. The household registration system ties the peasants to the land, the monopoly state bank system favors borrowing by state enterprises, and local protectionism reduces inter-provincial trade. Clearly, these institutions need to be deregulated. An effective strategy to develop the western provinces must therefore encompass physical capital formation, human capital formation, and institutional capital formation.     

The Shrinking Earnings Premium for University Graduates in Hong Kong: The Effect of Quantity or Quality?

In 1989, the Hong Kong government embarked on a program to increase the provision of first-year first-degree places. The expansion of tertiary education represents a large and exogenous increase in the supply of university graduates to the territory. This article measures the labor market effects of the expansion program by studying the changes in earnings premium for university graduates. Two alternative hypotheses—crowding and quality effects—are identified to explain why the earnings premium shrank. The results support the view that the declining quality of university graduates is the prime candidate for the declining earnings premium. (JEL J31 , I28 , J18 )