nep-fdg New Economics Papers
on Financial Development and Growth
Issue of 2012‒03‒14
three papers chosen by
Iulia Igescu
Global Insight, GmbH

  1. Can Asia Sustain an Export-Led Growth Strategy in the Aftermath of the Global Crisis? An Empirical Exploration By Arslan Razmi; Gonzalo Hernandez
  2. International Financial Integration and Economic Growth: New Evidence on Threshold Effects By Jinzhao Chen; Thérèse Quang
  3. The Global Economic Recession and Industrial Structure : Evidence from Four Asian Dragons By Wen-jen Hsieh

  1. By: Arslan Razmi (Asian Development Bank Institute (ADBI)); Gonzalo Hernandez
    Abstract: Many developing countries have attempted to pursue the East Asian growth model in recent decades. This model is widely perceived to have been based on export-led growth. Given that developed countries are likely to grow at a slower rate and be less willing to run trade deficits in the post-financial-crisis world, can this growth model be sustained? Using panel data for Asian countries, this paper contributes to addressing this question by distinguishing between different kinds of export- and tradable-led growth in order to more precisely identify the nature of growth in the pre-crisis decades. We find in particular that, among our variables of interest, the proportion of a country's manufactured exports that is destined for industrialized countries is the one most robustly associated with output growth. The results have implications for continued post-crisis growth in Asian developing countries.
    Keywords: export-led growth, Asian developing countries, post-crisis, global crisis
    JEL: F43 O11 O53
    Date: 2011–12
  2. By: Jinzhao Chen; Thérèse Quang
    Abstract: Recent research highlights that countries differ with respect to their experience with capital flows and do not systematically gain from capital account liberalization. This paper is related to the empirical literature that investigates the particular conditions under which international financial integration (IFI) is growth-enhancing. Relying on non-linear panel techniques, we find that countries that are able to reap the benefits of IFI satisfy certain threshold conditions regarding the level of economic, institutional and financial development, and the inflation rate. Our results also reveal a differentiated behaviour of foreign direct investment and portfolio liabilities compared to debt liabilities.
    Keywords: international financial integration, economic growth, panel threshold regression model
    JEL: F3 F4 O4
    Date: 2012
  3. By: Wen-jen Hsieh (Asian Development Bank Institute (ADBI))
    Abstract: The collapse of exports that has attended the current global economic recession threatens the export-led economic growth of the four Asian dragons. To better understand the economic performances and future prospects of the four dragons, this paper first examines the economic structural changes that have taken place in Hong Kong, China; the Republic of Korea; Singapore; and Taipei,China, as well as the gradual shifting of the sources of economic growth away from the manufacturing sector and toward the service sector. Following this, a panel data set for the four dragons for the period 1995–2008 is constructed and a fixed-effects model applied to the data. The estimated coefficients deriving from the application of the model indicate that growth in the service sector, exports, and gross fixed capital formation each have a positive and statistically significant impact on economic growth. While the estimated coefficient is not significant, there is also a hint of a positive causal relationship between manufacturing sector growth rates and GDP. The empirical results confirm the shifts observed in industrial structures and the contribution of the service sector to economic growth. New service development (NSD), which integrates manufacturing output with high value-added services, is anticipated to be a new engine for economic growth and deserves more attention, especially in the realm of government policymaking within the four Asian dragons.
    Keywords: export-led economic growth, Asian dragon, Industrial Structure, Global Economic Recession
    JEL: F01 E6 O12
    Date: 2011–10

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