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on Central and Western Asia |
| By: | Baldwin, Richard (Asian Development Bank Institute); Kawai, Masahiro (Asian Development Bank Institute) |
| Abstract: | Motivated by the proliferation of free trade agreements (FTAs) in Asia over the last decade, this paper studies the challenges faced by the Asian “noodle bowl”—overlapping, multiple trade rules, regulations, and standards in Asia—in the process of regional and global trade integration. The paper first highlights the importance of trade and investment linkages among Asian economies that have formed Asian supply chains, called Factory Asia. It then considers ways and means of multilateralizing Asian trade regionalism by discussing the pros and cons of various approaches—such as the Association of Southeast Asian Nations (ASEAN)-centered regional trade agreements, including the Regional Comprehensive Economic Partnership agreement, and cross-regional FTAs, including the Trans-Pacific Partnership agreement and a future Asia–European Union FTA. The paper emphasizes the promising role of inclusive Asian regionalism and the need to move to global integration. |
| Keywords: | free trade agreements; asia; asian noodle bowl; global trade integration; asean; trans-pacific partnership; inclusive asian regionalism |
| JEL: | F13 L23 O19 |
| Date: | 2013–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0431&r=cwa |
| By: | Brunner, Hans-Peter (Asian Development Bank) |
| Abstract: | Economic corridors connect economic agents along a defined geography. They provide important connections between economic nodes or hubs that are usually centered in urban landscapes. They do not stand alone, as their role in regional economic development can be comprehended only in terms of the network effects that they induce. As the case studies in this paper show, there is no standard picture of what economic corridor development is and what it can achieve. What economic corridors can achieve for regional economic integration depends first on what characteristics the specific existing economic networks in which the economic corridors are embedded personify, and second on which characteristics corridor development are intended to introduce or strengthen. Corridor characteristics interact dynamically to create patterns of regional economic development. Models that make this interaction explicit have combined elements of the New Economic Geography (nonlinear and General Equilibrium elements). The Asian Development Bank (ADB) has a significant stake in the successful application of corridor development approaches with an annual investment of $2 billion or more in regional cooperation and integration. |
| Keywords: | Economic corridors; development; regional economic integration; agents; nonlinear dynamics |
| JEL: | F15 O18 R12 R58 |
| Date: | 2013–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbrei:0117&r=cwa |
| By: | Krüger, Jens (Asian Development Bank) |
| Abstract: | This paper examines the role of international trade in employment growth in micro- and small enterprises using a representative sample of manufacturing firms in six Southeast Asian countries. After controlling for firm and individual characteristics as well as country and sector dummies, participation in international trade plays a significant role in explaining this growth, boosting firm-level growth by 3% per year on average. The fact that firms start exporting quickly after their foundation suggests that reverse causality is not an issue for our estimates. However, biases arising from unobserved heterogeneity cannot be ruled out. Therefore, we exploit the fact that firms were exposed to unexpected variation in real exchange rates between 2005 and 2008 to investigate the causal relationship between trade and employment growth. The results are not conclusive, but they do not suggest that the relationship is driven by unobserved heterogeneity. |
| Keywords: | MSE graduation; trade; employment growth |
| JEL: | D22 O12 |
| Date: | 2013–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbrei:0115&r=cwa |
| By: | Rantala, Olavi |
| Abstract: | The study deals with the theory and measurement of competitiveness. The basic theory of firm implies that under constant returns to scale the unit cost of production can be used to measure the marginal cost of production and to model the impact of competitiveness on the market share of a firm. The competitiveness and the market share of a firm is the lower the higher its unit costs are compared to the average unit costs of all firms in the market. Empirical measurement of the unit costs of the Finnish industry is made with respect to Germany. It turns out that the unit costs of the Finnish industry have risen higher than the unit costs of the German industry since 2005, calculated without the effect of electronics industry. In addition to production costs the study deals with the theoretical and empirical impact of transportation costs on competitiveness in export markets. This is an important issue for Finland locating geographically far away from the main markets of the world. A major disadvantage for the future competitiveness of Finnish export industry will be the EU sulphur directive and the possible inclusion of shipping into the EU emissions trading scheme. The longer marine transportation distance from Finland means that Finland will lose competitiveness for example compared to Germany. |
| Keywords: | competitiveness, imperfect competition, production costs, transportation costs |
| JEL: | C67 D43 F12 |
| Date: | 2013–08–14 |
| URL: | http://d.repec.org/n?u=RePEc:rif:report:15&r=cwa |
| By: | Hartmut Lehmann; Maria Giulia Silvagni |
| Abstract: | This paper analyses convergence in per capita gross regional product of Russia’s regions during the period 1995-2010, when regional data are available. Using a panel regression framework we find no evidence for beta-convergence. Instead we find divergence, which is, however, attenuated over time. Robustness checks that use regional real income instead of gross regional product confirm this outcome as do non-parametric estimates of convergence, namely estimates using Markov transition probability matrices and stochastic kernel plots of regional relative income. Decompositions of regional income and gross regional product also find no sigma-convergence of Russian regions. These decompositions point to the geographical concentration of extractive activities in the Urals and of business services and of the public administration in the Moscow area as the main culprit for this lack of convergence. They also establish that despite reforms to equalize provisions of public goods across Russia, the social services sector of the public administration, education and health still do not have the expected equalizing impact on regional income.<P>Y a-t-il convergence entre régions de Russie ? : Exploration des preuves empiriques: 1995-2010<BR>Cet article analyse la convergence du produit régional brut per capita entre régions de Russie au cours de la période 1995-2010, lorsque les données régionales sont disponibles. En utilisant une régression de panel, nous ne trouvons aucune preuve de bêta-convergence. Nous trouvons au contraire une divergence qui s’atténue toutefois au fil du temps. Nous confirmons ces résultats avec deux tests de robustesse : un qui utilise le revenu régional réel au lieu du produit régional brut, un autre basé sur des estimations non paramétriques de convergence, à savoir des estimations des matrices de probabilité de transition de Markov et une représentation de kernel stochastiques du revenu régional relatif. Des décompositions du revenu régional et du produit régional brut ne montrent pas non plus de sigma-convergence entre régions russes. Ces décompositions soulignent la concentration géographique des activités extractives dans l'Oural et de services aux entreprises et de l'administration publique dans la région de Moscou comme les principaux responsables de ce manque de convergence. Elles établissent également que malgré les réformes pour égaliser les provisions de biens publics à travers la Russie, le secteur des services sociaux de l'administration publique, l'éducation et la santé n'ont toujours pas l'impact attendu sur l'égalisation des revenus régionaux. |
| Keywords: | convergence, Russian regions, regional inequality decomposition, regional distribution dynamics, convergence, régions russes, décomposition inter-régionale de l'inégalité, dynamique de distribution régionale |
| JEL: | O47 P25 R11 R12 |
| Date: | 2013–08–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1083-en&r=cwa |
| By: | Degryse, Hans; Elahi, Muhammad Ather; Penas, María Fabiana |
| Abstract: | We study the role of regional banking system characteristics for regional banking system fragility in Asia, Europe, Latin America and the US. We find that regional banking system fragility reduces when banks in the region jointly hold more liquid assets, are better capitalized, and when regional banking systems are more competitive. For Asia and Latin-America, a greater presence of foreign banks and more wholesale funded banks also reduces regional banking fragility. In contrast, regional banking fragility increases in foreign bank presence and wholesale funding in the US. We further investigate the possibility of contagion across regions. We find that the contagion effects of Europe and the US on Asia and Latin America are significantly higher compared to the effect of Asia and Latin America among themselves. Finally, the impact of cross-regional contagion is attenuated when the host region has a more liquid and more capitalized banking sector. JEL Classification: G15, G20, G29 |
| Keywords: | Banking system stability, cross-regional contagion, financial integration |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20131567&r=cwa |
| By: | Corradin, Stefano; Popov, Alexander |
| Abstract: | How does home ownership affect new business creation? We develop a model of career choice in the presence of liquidity constraints in which shocks to the value of real estate affect the propensity of potential entrepreneurs to borrow against the value of their property. Using a large US individual-level survey dataset over the 1996-2006 period, we show that a 10% increase in home equity raises the probability of transition into entrepreneurship by up to 14%. Our results persist when we use the topological elasticity of housing supply to generate variation in home equity that is orthogonal to entrepreneurial choice. JEL Classification: G21, L26 |
| Keywords: | collateral channel, entrepreneurship, Home ownership |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20131544&r=cwa |
| By: | Mukherjee, Vivekananda; Mitra, Siddhartha; Banerjee, Swapnendu |
| Abstract: | The paper presents a theoretical model with bureaucratic corruption where bribe income can leak out of an economy. In such an economy given its perception about the extent of leakage the government sets the price of public services required for entrepreneurship by maximizing the welfare of the economy. We show that the corruption persists at the equilibrium. The government prices its services at a level higher than their unit cost of provision in high leakage economies. However, the price falls to unit cost level in more prosperous economies. We also find that the number of entrepreneurs starting business and the total income received as bribe are non-increasing functions of the prosperity level and the extent of leakage from the economy. The predictions of the model generate interesting policy implications: for example it clearly shows that in low prosperity economies the control of leakage may induce higher level of corruption, while the opposite is true in the high prosperity economies. |
| Keywords: | Corruption, Leakage, Entrepreneurship, Pricing of Public Services |
| JEL: | C72 D73 H57 O17 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:49049&r=cwa |
| By: | Richard S.J. Tol (Department of Economics, University of Sussex; Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands; Department of Spatial Economics, Vrije Universiteit, Amsterdam, The Netherlands; Tinbergen Institute, Amsterdam, The Netherlands); Francisco Estrada (Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands; Centro de Ciencias de la Atmósfera, Universidad Nacional Autónoma de México, Mexico) |
| Abstract: | Estimates of the impacts of observed climate change during the 20th century obtained by different integrated assessment models (IAMs) are separated into their main natural and anthropogenic components. The estimates of the costs that can be attributed to natural variability factors and to the anthropogenic intervention with the climate system in general tend to show that: 1) during the first half of the century, the amplitude of the impacts associated to natural variability is considerably larger than that produced by anthropogenic factors and according to most models the effects of natural variability were mainly negative. These non-monotonic impacts are mostly determined by the low-frequency variability and the persistence of the climate system; 2) IAMs do not agree on the sign (nor on the magnitude) of the impacts of anthropogenic forcing but indicate that they steadily grew over the first part of the century, rapidly accelerated since the mid 1970's, and decelerated during the first decade of the 21st century. The economic impacts of anthropogenic forcing range in the tenths of percentage of the world GDP by the end of the 20th century; 3) the impacts of natural forcing are about one order of magnitude lower than those associated to anthropogenic forcing and are dominated by the solar forcing. Human activities became dominant drivers of the infrapolated economic impacts at the end of the 20th century, rivaling in magnitude with those of natural variability. FUNDn3.6 allows to further decompose the natural and anthropogenic contributions into different sectors. The benefits of anthropogenic contribution in agriculture and energy are shown to outweigh the losses in health and water resources. |
| Keywords: | climate change; impacts; 20th century |
| JEL: | Q54 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:6213&r=cwa |
| By: | Tasso Adamopoulos; Diego Restuccia |
| Abstract: | There are striking differences in the size distribution of farms between rich and poor countries. We study the determinants of farm-size across countries and their impact on agricultural and aggregate productivity by developing a quantitative model of agriculture and non-agriculture that features a non-degenerate size distribution of farms. We find that differences in measured aggregate factors such as capital, land, and economy-wide productivity account for 1/4 of the observed differences in farm size and productivity. Farm-level policies that misallocate resources from large and productive farms to small and less productive farms are prevalent in poor countries and have the potential to account for the remaining differences. We assess the quantitative importance of misallocation in two ways. First, we construct a summary measure of farm-size distortions across countries by exploiting within-country variation in crop-specific price distortions and their correlation with crop farm size. This measure and aggregate factors jointly account for more than 1/2 of the cross-country differences in size and productivity. Second, we quantify the effects of specific policies in developing countries: a land reform that imposes a ceiling on farm size and a progressive land tax. We find that each individual policy generates a reduction of 3 to 7 percent in size and productivity. |
| Keywords: | Aggregate productivity, agriculture, farm-size distortions, misallocation. |
| JEL: | O11 O13 O4 E0 |
| Date: | 2013–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-494&r=cwa |