nep-sea New Economics Papers
on South East Asia
Issue of 2008‒03‒08
nine papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Regional Trade Agreements in East Asia: Will They Be Sustainable? By Park, Innwon
  2. Outsourcing in East Asia and its impact on the Japanese and Korean Labour Markets By Sanghoon Ahn; Kyoji Fukao; Keiko Ito
  3. Unobservable Shocks as Carriers of Contagion: A Dynamic Analysis Using Identified Structural GARCH By Mardi Dungey; George Milunovich; Susan Thorp
  4. Trade Liberalisation and Economic Performance: Latin America versus East Asia 1970-2006 By Nanno Mulder; Osamu Onodera
  5. Geography vs. Institutions at the Village Level By Michael Grimm; Stephan Klasen
  6. Facilitating Trade and Structural Adjustment: Experiences in Non-Member Countries By Osamu Onodera
  7. The strategies of multilatinas: from the quest for regional leadership to the myth of the global corporation \r\n By Alexandre MINDA (LEREPS-GRES)
  8. Organizational Change Perspectives on Software Process Improvement By Müller, Sune Dueholm; Mathiassen, Lars; Balshøj, Hans Henrik
  9. Faciliter les échanges et l’ajustement structurel Thaïlande : l’expérience de pays non membres By Somkiat Tangkitvanich; Osamu Onodera

  1. By: Park, Innwon
    Abstract: Searching for sustainable regional trade agreements (RTAs) for East Asia, we quantitatively evaluated the likely impact of proposed East Asian RTA strategies─(i) the AFTA (a being-left-alone strategy), (ii) an ASEAN Hub RTA (a hub-and-spoke type of overlapping RTA strategy), (iii) the AFTA vs a China-Japan-Korea RTA (a duplicating or competing RTA strategy), (iv) an ASEAN+3 RTA (an expansionary RTA strategy)─on the East Asian economies and the world economy with respect to consumption, production, volume of trade, and terms of trade effect by applying a multi-country and multi-sector CGE model. We found that there was no perfectly Pareto improving RTA strategy among the four different scenarios proposed for East Asia relative to the existing AFTA. However, the expansionary ASEAN+3 RTA can be a sustainable Pareto efficient policy option because the members’ gains were significantly positive enough with more evenly distributed gains between members. The effects on world welfare were also positive enough and the negative effect on nonmembers was not very significant. More interestingly, if the East Asian countries are willing to cooperate with their Pacific Basin partners to form an APEC level of RTA, the evolution toward a global trade bloc can be counted as a Pareto improvement for East Asian economies in every aspect we measure.
    Keywords: regional trade agreements; sustainability; Pareto efficiency; CGE model; East Asia
    JEL: C68 F15 O53
    Date: 2008–02
  2. By: Sanghoon Ahn; Kyoji Fukao; Keiko Ito
    Abstract: This study describes the changing patterns of intermediate goods trade and foreign direct investment (FDI) in East Asia and investigates the impacts of international outsourcing on the Japanese and the Korean labour markets. The main findings of the paper are as follows. First, intra-regional trade in East Asia grew remarkably during the period 1990-2003. While overall trade with the rest of the world roughly doubled in this period, intra-regional trade in East Asia more than tripled. Second, the main factor behind increased intra-regional trade in East Asia was the trade in intermediate goods through outsourcing and the international fragmentation of production. Third, reflecting the fact that outsourcing to Asia (particularly to China) has a negative impact on the demand for workers with lower education and a positive impact on the demand for workers with higher education, relative wage shares of workers by educational attainment have changed substantially both in Japan and Korea. Fourth, our empirical analysis provides evidence of labour demand shift towards skilled labour in Japanese manufacturing as a result of outsourcing. For Korea, although the overall effects of outsourcing have been insignificant in Korea partly because a substantial part of Korean outsourcing remained directed towards Japan, our results imply that labour demand would shift away from less-skilled workers towards more-skilled workers if outsourcing to China increased and outsourcing to Japan decreased in the future.
    Keywords: Korea, Japan, manufacturing, outsourcing
    JEL: F14 F16 F23
    Date: 2008–01–22
  3. By: Mardi Dungey (Univeristy of Cambridge); George Milunovich (Macquarie University); Susan Thorp (University of Technology, Sydney)
    Abstract: Markets in fnancial crisis may experience heightened sensitivity to news from abroad and they may also spread turbulence into foreign markets, creating contagion. We use a structural GARCH model to separate and measure these two parts of crisis transmission. Unobservable structural shocks are named and linked to source markets using variance decompositions, allowing clearer interpretation of impulse response functions. Applying this method to data from the Asian crisis, we find signifcant contagion from Hong Kong to nearby markets but little heightened sensitivity. Impulse response functions for an equally-weighted equity portfolio show the increasing dominance of Korean and Hong Kong shocks during the crisis, whereas Indonesia\'s infuence shrinks.
    Keywords: Contagion, Structural GARCH
    JEL: F37 C51
    Date: 2008–02–25
  4. By: Nanno Mulder; Osamu Onodera
    Abstract: This paper, together with four other country case studies, is a part of a broader research programme addressing trade and structural adjustment issues in non-member economies which was conducted as a follow-up to Trade and Structural Adjustment: Embracing Globalisation (OECD, 2005) which identified policies for successful trade-related structural adjustment. This paper studies the trade liberalisation and structural adjustment experiences and their outcomes in terms of economic and trade performance in East Asia and Latin America. The report consists of 5 main sections; After an introduction, Section A first looks at the growth performance and role of trade and FDI. Section B looks at trade related policy trends in the two regions while section C looks at some trade and foreign direct investment indicators. Section D compares the structural adjustment in the two regions and Section E concludes.
    Keywords: trade, liberalisation, Latin America, structural adjustment, liberalization
    Date: 2008–02–07
  5. By: Michael Grimm; Stephan Klasen
    Abstract: There is a well-known debate about the roles of geography versus institutions in explaining the long-term development of countries. These debates have usually been based on cross-country regressions where questions about parameter heterogeneity, unobserved heterogeneity, and endogeneity cannot easily be controlled for. The innovation of Acemoglu, Johnson and Robinson (2001) was to address this last point by using settler mortality as an instrument for geography-induced endogenous institutions and found that this supported their line of reasoning. We believe there is value-added to consider this debate at the micro level within a country as particularly questions of parameter heterogeneity and unobserved heterogeneity are likely to be smaller than between countries. Moreover, at the micro level it is possible to identify more precise transmission mechanisms from geography via institutions to economic development outcomes. In particular, we examine the determinants of economic development across villages on the Indonesian Island of Sulawesi and find that geography-induced endogenous emergence of land rights is the critical institutional link between geographic conditions and technological change. We therefore highlight and empirically validate a new transmission channel from endogenously generated institutions on economic development.
    Keywords: Geography, migration, land rights, institutions, technology adoption, agricultural development, Indonesia
    JEL: K11 O12 Q12
    Date: 2008–02–26
  6. By: Osamu Onodera
    Abstract: This paper, together with five other background studies, is a part of a broader research programme addressing trade and structural adjustment issues in non-member economies which was conducted as a follow-up to Trade and Structural Adjustment: Embracing Globalisation (OECD, 2005) which identified policies for successful trade-related structural adjustment. This paper revisits and elaborates on specific parts of these policy recommendations with a view to reassessing their applicability to developing countries. The five background studies; a comparison study comparing East Asia and Latin America and four country case studies (Chile, Ecuador, the Philippines and Thailand), which were conducted as a part of this project, form the basis for the analysis, supplemented by existing literature. The report consists of 4 main sections; The first section provides an introduction and the second section provides an overview of the liberalisation experiences of the four countries. In the third section, some of the ?recommendations in OECD (2005) are revisited with a greater focus on developing countries, covering such issues as i) trade and investment policies, ii) macroeconomic policy, iii) social safety nets and labour market policies, iv) policies to facilitate export response, v) institutional frameworks and regulatory and competition environment, vi) role of multilateral cooperation and regional and bilateral initiatives, and vii) broad based approach to reforms. The fourth section concludes.
    Keywords: exchange rates, trade, macroeconomic policies, social safety net, structural adjustment
    Date: 2008–02–05
  7. By: Alexandre MINDA (LEREPS-GRES)
    Abstract: The emerging Latin American corporations come essentially from Brazil and Mexico. Their prime motivation lies in the acquisition of natural resources and the search for market openings. With the exception of Cemex and Embraer who aspire to be global players, the majority of the multilatinas are regional or bi-regional companies. To a large extent, the sectorial breakdown of the multilatinas reflects the productive and technological specialisation of Latin America. They do not have at their disposal the same specific advantages as the emerging Asian multinational corporations in the high-tech industries or in the high capital-intensive sectors. The recent growth of their international activities has certainly impacted the dynamics of the global economy, particularly as regards the re-establishment of North-South links and the strengthening of South-South co-operation.
    Keywords: Emerging multinational corporations, multilatinas, foreign direct investment, re-establishment of North-South links, South-South co-operation
    JEL: D F L O O
    Date: 2008
  8. By: Müller, Sune Dueholm (Department of Business Studies, Aarhus School of Business); Mathiassen, Lars (Georgia State University); Balshøj, Hans Henrik (Systematic Software Engineering)
    Abstract: Many software organizations have engaged in Software Process Improvement (SPI) and experienced the challenges related to managing such complex organizational change efforts. As a result, there is an increasing body of research investigating change management in SPI. To provide an overview of what we know and don’t know about SPI as organizational change, this paper addresses the following question: What are the dominant perspectives on SPI as organizational change in the literature and how is this knowledge presented and published? All journals on the AIS ranking list were screened to identify relevant articles and Gareth Morgan’s organizational metaphors (1996) were used to analyze this literature considering the following dimensions of each article: organizational perspective (metaphor), knowledge orientation (normative versus descriptive), theoretical emphasis (high versus low), main audience (practitioner versus academic), geographical origin (Scandinavia, the Americas, Europe, or the Asia-Pacific), and publication level (high versus low ranked journal). The review demonstrates that the literature on SPI as organizational change is firmly grounded in both theory and practice, and Scandinavia and the Americas are the main contributors to this research. The distribution of articles across Morgan’s metaphors is uneven and reveals knowledge gaps that present new avenues for research. The current literature offers important insights into organizational change in SPI from machine, organism, and brain perspectives. Practitioners may use these articles as a guide to SPI insights relevant to their improvement initiatives. In contrast, the impact of culture, dominance, psychic prison, flux and transformation, and politics in SPI have only received scant attention. We argue that these perspectives offer important insights into the challenges involved in managing change in SPI. Researchers are therefore advised to engage in new SPI research based on one or more of these perspectives. Overall, the paper provides a roadmap to help identify insights and specific articles related to SPI as organizational change.
    Keywords: Software Process Improvement; Organizational Change; Organizational Metaphors; Images of Organization; Literature Review
    Date: 2008–01–17
  9. By: Somkiat Tangkitvanich; Osamu Onodera
    Abstract: Le présent document est la quatrième étude de cas nationale réalisée dans le cadre d'un programme de recherche sur les échanges et l'ajustement structurel dans les pays non membres. Ce programme visait à compléter l'étude Changer l’ajustement structurel : les enjeux de la mondialisation (OCDE, 2005), qui formule des recommandations pour assurer la réussite de l'ajustement structurel lié aux échanges. Le présent document examine la libéralisation des échanges en Thaïlande dans les années 1970. Le rapport comprend six grandes sections : la section 1 fait l'entrée en matière, alors que la section 2 fait un survol de la croissance de l'économie thaïlandaise. La section 3 examine plus en détail les efforts de libéralisation des échanges et les politiques d'investissement de la Thaïlande, notamment le régime des échanges initial et les trois phases de libéralisation des échanges : 1) les premières réformes douanières (1982-1984) ; 2) la réforme douanière exhaustive et son annulation dans la foulée de la crise asiatique (1993-) ; 3) les réformes postérieures à la crise (1999-). La section 4 porte sur les modifications apportées à la structure des investissements et des échanges, et la section 5 analyse en profondeur l'ajustement structurel effectué dans trois secteurs : l'automobile et les pièces détachées, les textiles et l'habillement, et les services de télécommunications. La dernière section, la section 6, renferme les enseignements tirés de l'analyse. L'expérience de la Thaïlande confirme que la croissance économique passe par un environnement macroéconomique sain, la viabilité budgétaire, un cadre politique et économique relativement stable, un marché du travail flexible et des infrastructures fiables. Cet exemple de libéralisation progressive des échanges démontre que l'ouverture au commerce international et à l'investissement étranger réduit les distorsions économiques.
    Keywords: libéralisation, politique de change, ajustement structurel, échanges, instabilité macroéconomique
    Date: 2008–02–22

This nep-sea issue is ©2008 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.
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