nep-sea New Economics Papers
on South East Asia
Issue of 2006‒09‒16
seven papers chosen by
Kavita Iyengar
Asian Development Bank

  1. China and the Dutch Economy, Stylised facts and prospects By Wim Suyker; Henri de Groot
  2. Output Growth, Capital Flow Reversals and Sudden stop Crises By Saubhik Deb
  3. Can You Teach Old Dragons New Tricks? FDI and Innovation Activity in Chinese State-Owned Enterprises By Sourafel Girma; Yundan Gong; Holger Görg
  4. Lessons from “Benchmark” Countries: Korea & Ireland By Shandre Thangavelu; Hu Guangzhou
  5. Shaken, not stirred: the impact of disasters on international trade By Martin Gassebner; Alexander Keck; Robert Teh
  6. Diversification at financial institutions and systemic crises By Wagner,Wolf
  7. Are Rural Credit Markets Competitive? Is There Room for Competition in Rural Credit Markets? By Kilkenny, Maureen; Jolly, Robert W.

  1. By: Wim Suyker; Henri de Groot
    Abstract: China’s spectacular economic performance over the past few decades has had a positive net impact on the Dutch economy. Imports of cheap Chinese products have lowered Dutch inflation. Increasing Chinese exports to Europe have strengthened the role of the Netherlands as a key European distribution centre. Strongly increasing Chinese exports did not have a noticeable impact on the pace of restructuring in the Netherlands. Nor did this development lead to higher unemployment or did it cause a marked widening of Dutch income differentials. Concerning competition on world markets, Chinese export products are more complements than substitutes for Dutch export products. The Chinese economy is expected to continue its rapid expansion. Over the next five years, Chinese exports are likely to double. Increasing trade with China will continue and is expected to enhance Dutch welfare in the upcoming years and will continue to be associated with modest increases in competition and continued restructuring on some markets.
    Keywords: China; Dutch economy; globalisation; trade; scenario analysis; FDI
    JEL: F14 F23 F40 F47 J31 O40 O57
    Date: 2006–09
  2. By: Saubhik Deb (Department of Economics)
    Abstract: This paper studies the effects of capital flow reversals and sudden stop crises on output growth and how these effects vary across regions and between emerging and industrial countries. We found that capital flow reversals are generally contractionary in the developing countries and particularly in Asia and Africa. But neither capital flow reversals nor sudden stop crises have any significant growth effect in the industrial countries. Our initial estimates for sudden stop crises support the widely held belief regarding the contractionary nature of such crises. Further robustness checks indicate that the estimated negative growth effects for such crises are mainly driven by the presence of the Asian countries in the sample. Moreover, when the turbulent years of the East Asian crises are excluded from the sample, no significant effect of sudden stop crises could be found. Our research reconfirms the contractionary nature of capital flow reversals in developing countries but raises doubt about the existence of contractionary sudden stop crises.
    Keywords: Currency Crisis, Capital Flow Reversal, Sudden Stop Crisis
    JEL: F32 F43
    Date: 2006–04–06
  3. By: Sourafel Girma (University of Nottingham); Yundan Gong (University of Nottingham); Holger Görg (University of Nottingham and IZA Bonn)
    Abstract: We investigate whether inward FDI, either at the firm or industry level, has any impact on product innovation by Chinese State owned enterprises (SOEs). We use a comprehensive firm level panel data set of Chinese SOEs covering the period 1999 to 2003. Our results show that foreign capital participation is associated with higher innovative activity. Inward FDI in the sector has a negative effect on innovative activity in SOEs. However, there is a positive effect of FDI on SOEs that export, invest in human capital or R&D, or have prior innovation experience. We also find that SOEs with internal R&D activity and human capital development are successful innovators. Hence, our results suggest that rather than relying on sector level inward FDI to improve domestic innovative activity, it is important to get the firm-level fundamentals right.
    Keywords: innovation, FDI, state owned enterprises, spillovers, competition, China
    JEL: F23 O31
    Date: 2006–08
  4. By: Shandre Thangavelu (Singapore Centre for Applied and Policy Economics (SCAPE) Department of Economics, National University of Singapore); Hu Guangzhou (Singapore Centre for Applied and Policy Economics (SCAPE) Department of Economics, National University of Singapore)
  5. By: Martin Gassebner (Department of Management, Technology and Economics, ETH Zurich (Swiss Federal Institute of Technology), Switzerland); Alexander Keck (World Trade Organization (WTO). Economic Research and Statistics Division); Robert Teh (World Trade Organization (WTO). Economic Research and Statistics Division)
    Abstract: This paper examines the impact of major disasters on trade flows using a gravity model(170 countries, 1962-2004). As a conservative estimate, an additional disaster reduces imports on average by 0,2% and exports by 0.1%. Despite the apparent persistence of bilateral trade volumes, the impact of catastrophes depends on the democracy level and size of the affected country. In autocracies, exports and imports are significantly reduced: had Togo been struck by a major disaster in 2000, it would have lost 6.8% of its imports and 8.2% of its exports. Democratic countries' exports suffer modest decreases, while imports are hardly affected
    Keywords: International trade, disasters, gravity model, governance bounds analysis.
    JEL: F14 P52 P48 C23
    Date: 2006–06
  6. By: Wagner,Wolf (Tilburg University, Center for Economic Research)
    Abstract: We show that the diversification of risks at financial institutions has unwelcome effects by increasing the likelihood of systems crises. As a result, complete diversification is not warranted adn the optimal degree of diversification is arbitrarily low. We also identify externalities that cause financial institutions to diversify beyond diversification may thus have reduced welfare.
    Keywords: diversification;financial consolidation;conglomeration;securitization;system risk
    JEL: G21 G28
    Date: 2006
  7. By: Kilkenny, Maureen; Jolly, Robert W.
    Abstract: Not available.
    Date: 2006–05–31

This nep-sea issue is ©2006 by Kavita Iyengar. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.