nep-sea New Economics Papers
on South East Asia
Issue of 2008‒04‒12
five papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Widening Deviation among East Asian Currencies By OGAWA Eiji; YOSHIMI Taiyo
  2. The Rise of China: Prospects of Regional Trade Policy By Filip Abraham; Jan Van Hove
  3. Determinants of Foreign Direct Investment in Cambodia: Country-Specific Factor Differentials By Cuyvers L.; Plasmans J.; Soeng R.; Van den Bulcke D.
  4. Allocating an indivisible good. A questionnaire-experimental study of intercultural differences By Erik Schokkaert; Kurt Devooght; Bart Capeau; Sara Lelli
  5. Multinationals are Multicultural Units: Some Indications from a Cross-Cultural Study By Kwanjai, Nantawan Noi; Hertog, J. Friso den

  1. By: OGAWA Eiji; YOSHIMI Taiyo
    Abstract: This paper investigates recent diverging trends among East Asian currencies as well as recent movements of the weighted average value of East Asian currencies (Asian Monetary Unit: AMU) and deviations (AMU Deviation Indicators) of the East Asian currencies from the average values. Our empirical analysis shows that linkages with the US dollar have been weakening since 2001 or 2002 for some of the East Asian countries. On the other hand, the monetary authority of China continues stabilizing the exchange rate of the Chinese yuan against the US dollar even though it announced its adoption of a currency basket system. It is found that the weighted average of East Asian currencies has been appreciating against the US dollar in recent years while depreciating against the currency basket of the US dollar and the euro. Also, deviations among the East Asian currencies have been widening in recent years, reflecting the fact that these countriesf monetary authorities are adopting a variety of exchange rate systems. In other words, a coordination failure in adopting exchange rate systems among these monetary authorities increases volatility and misalignment of intra-regional exchange rates in East Asia.
    Date: 2008–03
  2. By: Filip Abraham; Jan Van Hove
    Abstract: China now engages in multilateral trade liberalization as a new member of the WTO. Concurrently, the number of regional trade agreements is increasing worldwide. China and its trading partners would benefit from increased regional liberalization. Using a gravity equation for 23 Asia-Pacific countries between 1992 and 2000, we show that ASEAN and APEC currently have small effects on Asia-Pacific exports, which are mainly influenced by growth, trade barriers and common language. However, we find that China’s participation in regional agreements has large export potentials, not only with respect to ASEAN, but also in a broad agreement including South- and East-Asian countries.
    Date: 2008–03
  3. By: Cuyvers L.; Plasmans J.; Soeng R.; Van den Bulcke D.
    Abstract: Multinational Companies (MNCs) serve foreign markets by exporting to, by licensing or by engaging in international production in the host countries. Cambodia has become the destination of foreign direct investment (FDI) after its first-ever general elections in 1993. Based on approved foreign-invested projects, the majority of Cambodia’s inward FDI came from Asian neighboring countries, in particular, Malaysia, Taiwan, and China, which together accounted for about 60% of the total. The United States is the fourth largest investor in Cambodia. Cuyvers et al. (2006) provide an overview of inward FDI trends in Cambodia over the period 1994-2004. This paper seeks to uncover factors influencing inward FDI in Cambodia by empirically studying its economic and geographic as well as political determinants. Panel data analysis is used to investigate the factors affecting both approved FDI and realized FDI in the Kingdom of Cambodia during 1995-2005. Investment decisions are made by the foreign investors after having compared the factors affecting their locational decisions between the home country and the potential host countries. Therefore, relative data, rather than absolute ones, are used. A better understanding of the meanings of these factors which determine the inflows of FDI, both approved and realized, should be useful for policy recommendation and implementation. This paper is organized as follows. Section 2 reviews the relevant literature and outlines the hypotheses formulation. Section 3 presents a stochastic economic model. The discussion about the data takes place in section 4. The estimation methodology and estimation results are presented in sections 5 and 6, respectively. Section 7 concludes.
    Date: 2008–03
  4. By: Erik Schokkaert; Kurt Devooght; Bart Capeau; Sara Lelli
    Abstract: We present the results of a questionnaire study in Belgium, Burkina Faso and Indonesia focusing on the problem of the just allocation of an indivisible good. The formal axioms proposed in social choice theory are helpful in structuring the response patterns. Interindividual differences can be interpreted in a meaningful way in terms of basic intuitions about desert, efficiency and compensation. Belgian students are most resourceegalitarian, Burkinese students attach a large weight to innate capacities, Indonesian students focus on actual production. The crucial no-envy criterion is supported by a majority of respondents, but this majority becomes small if there is an unavoidable conflict between no-envy and the "responsibility" requirement of the stand-alone upper bound.
    Keywords: distributive justice, indivisible good, no envy criterion, intercultural differences
    JEL: D63
    Date: 2008–03
  5. By: Kwanjai, Nantawan Noi (UNU-MERIT); Hertog, J. Friso den (UNU-MERIT, Maastricht University)
    Abstract: This paper makes a case for the value of looking at culture and multinationals from a management and organizational perspective because it is one which could direct greater attention towards culture as a significant factor in future investigation on multinational corporations. We attempt to illustrate that multinationals are fundamentally multicultural units in more ways than one. This paper is based on selected materials from a qualitative study of culture and learning in organizations and management. The study investigated four selected Dutch firms in Thailand using evidences collected through observations and open-ended interviews. All evidences were analysed under grounded theory procedure. Parts of the evidences and theorization from the study are presented in this paper, which begins with two cultural riddles from one of the cases as a backdrop for subsequent discussions. Following the riddles is an abridge version of the key finding of the study-a grounded theory of cross-cultural intelligence. Then the two riddles are revisited, this time to illustrate how the proposed theory could illuminate an understanding of their covert meanings vis-à-vis culture and learning in multinationals. Last, we reinstate how our study and its theoretical and empirical findings can elucidate the central thesis that multinationals are essentially multicultural units.
    Keywords: case study, culture, corporate culture, cultural intelligence, multinationals, Netherlands, Thailand
    JEL: F23 M14
    Date: 2008

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