Foreign direct investment and vertical integration of production by Japanese multinationals in Thailand

We test the vertical model of foreign direct investment (FDI) empirically using firm level information on Japanese multinational activity in Thailand. These data allow us to investigate the effects of both home country (Japan) and host country (Thailand) characteristics on the inter-industry pattern of FDI. For 85 manufacturing industries over the period from 1985 to 1995, we find a positive influence of industry variation in skill intensity and market size in the host country and a negative effect of transport costs on the amount of FDI. These results provide strong direct econometric evidence of vertical integration of production across the countries. Journal of Comparative Economics 32 (4) (2004) 805–821.     

Forecasting economic time series using flexible versus fixed specification and linear versus nonlinear econometric models

Nine macroeconomic variables are forecast in a real-time scenario using a variety of flexible specification, fixed specification, linear, and nonlinear econometric models. All models are allowed to evolve through time, and our analysis focuses on model selection and performance. In the context of real-time forecasts, flexible specification models (including linear autoregressive models with exogenous variables and nonlinear artificial neural networks) appear to offer a useful and viable alternative to less flexible fixed specification linear models for a subset of the economic variables which we examine, particularly at forecast horizons greater than 1-step ahead. We speculate that one reason for this result is that the economy is evolving (rather slowly) over time. This feature cannot easily be captured by fixed specification linear models, however, and manifests itself in the form of evolving coefficient estimates. We also provide additional evidence supporting the claim that models which ‘win’ based on one model selection criterion (say a squared error measure) do not necessarily win when an alternative selection criterion is used (say a confusion rate measure), thus highlighting the importance of the particular cost function which is used by forecasters and ‘end-users’ to evaluate their models. A wide variety of different model selection criteria and statistical tests are used to illustrate our findings.     

Book Reviews

Richard Robison, Indonesia: The Rise of Capital, Allen and Unwin, Sydney, 1986 pp. xxv + 425. Indexed. $19.95.

W.L. Korthals Altes, Changing Economy in Indonesia: Volume 7: Balance of Payments, 1822–1939, Amsterdam: The Royal Tropical Institute. pp. 167.

Trade Statistics, Java, 1823–73: Trade Statistics, Indonesia 1874–1937. Mededeelingen van het Centraal Kantoor voor de Statistiek nos 160 and 161

Om Prakash, The Dutch East India Company and the Economy of Bengal, 1630–1720, Princeton: Princeton University Press, 1985 pp. xii + 291, map, tables. graphs, glossary, index. Cloth $38.50.

Sediono M.P. Tjondronegoro, Social Organization and Planned Development in Rural Java, Singapore, Oxford University Press for the Institute of Southeast Asian Studies, 1984, pp. xv + 326.

A. Fujimoto and F. Matsuda (eds), An Economic Study of Rice Farming in West Java, Tokyo: NODAI Research Institute, Tokyo, University of Agriculture, 1986.

A. Fujimoto and T. Matsuda (eds), A Comparative Study of the Structure of Rice Productivity and Rural Society in Southeast Asta Two Village Studies in Indonesta and Thailand, Tokyo: University of Agriculture, 1985. Reviewed by C.L J. van der Meer (1986) Bulletin of Indanesian Economic Studies, 22(2) pp. 124–27

David Jenkins, Suharto and His Generals: Indonesian Military Politics, 1975–1983, Ithaca: Cornell Modern Indonesia Project, Monograph Series No. 64, 1984, pp. xiii + 280. US$12.50. David Bourchier, Dynamics of Dissent in Indonesia Sawito and the Phantom Coup, Ithaca: Cornell Modern Indonesia Project, Interim Reports Series, 1984, pp. 128. US$9.00.

Linda G. Martin (ed), The ASEAN Success Story: Social, Economic, and Political Dimensions, East-West Center, distributed by the University of Hawaii Press, Honolulu, 1987, pp. xviii + 253. $15.00.

Mubyarto and Edy Suandy Hamid (eds), Kredit Pedesaan di Indonesia, Badan Penerbit Fakultas Ekonomi, U.G.M., 1986 pp, 160.

Ron Hatley, et al., Other Javas Away from the Kraton, Melbourne: Monash University, 1984, pp. 60.

K.S. Nathan and M. Pathmanathan (eds), Trilateralism in Asia: Problems and Prospects in US-Japan-ASEAN Relations, Antara Book Company, Kuala Lumpur, 1986, pp. xviii + 205. $18.00 (cloth): $12.00 (paper).     

Using technology to improve the management of development impacts on biodiversity

The mitigation hierarchy (MH) is a prominent tool to help businesses achieve no net loss or net gain outcomes for biodiversity. Technological innovations offer benefits for business biodiversity management, yet the range and continued evolution of technologies creates a complex landscape that can be difficult to navigate. Using literature review, online surveys, and semi-structured interviews, we assess technologies that can improve application of the MH. We identify six categories (mobile survey, fixed survey, remote sensing, blockchain, data analysis, and enabling technologies) with high feasibility and/or relevance to (i) aid direct implementation of mitigation measures and (ii) enhance biodiversity surveys and monitoring, which feed into the design of interventions including avoidance and minimization measures. At the interface between development and biodiversity impacts, opportunities lie in businesses investing in technologies, capitalizing on synergies between technology groups, collaborating with conservation organizations to enhance institutional capacity, and developing practical solutions suited for widespread use.     

The effects of group decision-making process and problem-situation complexity on implementation attempts

The effects of group problem-solving method and problem-situation complexity on attempts at implementing group solutions were investigated in a laboratory-field setting. Group members were supervisory nurses from various organizations, who were randomly assigned to three groups in a balanced research design which included three group decision-making processes and three levels of problem-situation complexity in implementation. The dependent variable was the number of attempts at implementing group-derived solutions in home organizations. The results showed that structure in group decision-making processes led to increased rates of implementation attempts at all levels of problem-situation complexity. There was a significant complexity-by-process interaction effect among the decision-making processes, which supports the conclusion that the type of group decision-making process and the problem-situation complexity should be considered in order to optimize the number of implementation attempts.g     

The Effects of Public Ownership and Regulatory Independence on Regulatory Outcomes

We examine the effects of public ownership and regulatory agency independence on regulatory outcomes in EU telecommunications. Specifically, we study regulated interconnect rates paid by entrants to incumbents. We find that public ownership of the incumbent positively affects these interconnect rates, and suggest that governments influence regulatory outcomes in favor of incumbents in which they are substantially invested. However, we also find that the presence of institutional features enhancing regulatory independence from the government mitigates this effect. In order to study regulatory independence, we introduce a new cross-country time-series database—the European Union Regulatory Institutions (EURI) Database. This database describes the development of institutions bearing on regulatory independence and quality in telecommunications in the 15 founding EU member states from 1997 to 2003 *We thank Laurent Pipitone for superb research assistance. Geoff Edwards thanks the Sasakawa Foundation and the Institute of Management, Innovation and Organization at the Haas School of Business for generous financial assistance, and London Business School for non-financial support. Leonard Waverman thanks the Global Communications Consortium for support     

Unfair dismissal legislation and property rights: some reflections

Starting from the premise that workers have ‘property rights’ in their jobs, this article considers ways in which British unfair dismissal legislation might be said to uphold such rights. The evidence indicates that remedies of compensation and re-employment afford minimal property rights to unfairly dismissed workers.