nep-sea New Economics Papers
on South East Asia
Issue of 2009‒05‒16
six papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Weathering the storm : investing in port infrastructure to lower trade costs in East Asia By Abe, Kazutomo; Wilson, John S.
  2. China's Growth, World Food Prices, and Developing Countries Exports By Villoria, Nelson
  3. The Impact of the Asian Miracle on the Theory of Economic Growth By Robert W. Fogel
  4. Transmission Channels Linking Real Estate Shocks with Macroeconomic Performance: Evidence from Malaysia By Hon-Chung Hui
  5. A Global Network and its Local Ties. Restructuring of the Benetton Group By Giuseppe Tattara; Paolo Crestanello
  6. How big is leakage from forestry carbon credits? Estimates from a Global Model By Acosta, Montserrat; Sohngen, Brent

  1. By: Abe, Kazutomo; Wilson, John S.
    Abstract: The world economic crisis of 2008 presents clear challenges to prospects for economic growth in developing countries. This is particularly true for emerging economies in East Asia that have relied to a great extent over the past decade on export-led growth. What steps to facilitate trade promise a relatively strong return on investment for East Asia to help sustain trade and growth? The authors examine how port infrastructure affects trade and the role of transport costs in driving exports and imports for the region. They find that port congestion has significantly increased the transport costs to East Asia from both of the United States and Japan. The analysis suggests that cutting port congestion by 10 percent could cut transport costs in East Asia by up to 3 percent. This translates into a 0.3 to 0.5 percent across-the-board tariff cut. In addition, the estimates suggest that the trade cost reduction of investment in port infrastructure in East Asia that translates into higher consumer welfare would far outweigh the cost for physical expansion of the ports in the region.
    Keywords: Transport Economics Policy&Planning,Common Carriers Industry,Transport and Trade Logistics,Economic Theory&Research,Ports&Waterways
    Date: 2009–04–01
  2. By: Villoria, Nelson
    Abstract: This paper explores the impacts of China's growth in the international markets of agricultural products. These impacts are important because they are related to two different ongoing discussions about the role of China in the world economy. One of these discussions have to do with China as a source of price inflation while the other has to do with China as an engine of growth for developing countries, in this case, through increased export opportunities. Our results suggest that China has been a source of aggregated mild price inflation in the largest developed economies that occupy the first ranks as food importers. This is probably related to a more intense pressure on world food supplies. When we look at the counterfactual exports of selected exporters, we find that few countries in Latin America (Brazil, Peru), and in Asia (Malaysia, Indonesia), have benefited from China's increased food demand.
    Keywords: gravity, China, food prices, International Development, International Relations/Trade,
    Date: 2009
  3. By: Robert W. Fogel
    Abstract: This paper, divided into seven sections, considers the development of economic growth theory in light of the spectacular advances of the economies of China, India, and Southeast Asia. Section 1 reviews the debate over the sources of technological change and the measurement of total factor productivity that emerged during the second half of the 1950s. Section 2, “Convergence and Divergence,†deals with the closing of the economic gap between the U.S. and other OECD nations that existed after World War II and the increasing economic gap between OECD and Third World nations. Section 3, “The Asian Miracle,†describes the new recognition among Western economists that the sustained, very rapid growth in China and Southeast Asia was changing the global economic balance. Section 4, “Endogenous Economic Growth,†deals with the work of a group of mainly verbal theorists, including Simon Kuznets and T.W. Schultz, who sought to define social, political, demographic, religious, and ideological conditions that preceded the epoch of modern economic growth, which began in the late eighteenth or early nineteenth centuries. That line of thought was extended by more mathematical economists who studied the invention and modeled the diffusion of new technologies in agriculture (Zvi Griliches) and industry (Edwin Mansfield). Section 5, “Bridges between Two Cohorts of Theorists on Technological Change,†compares the work of Griliches, Richard Nelson, and Dale W. Jorgenson, whose quantitative analysis of endogenous technological change spanned the period from the mid-1950s to the new cohort of growth theorists that emerged during the mid- to late-1980s. Section 6, “The Economic Historians,†focuses on their investigations of the interrelationships of the evolution of social, economic, and political institutions and on findings about the impact of institutional changes on invention, innovation, the process of technological change, and economic growth. Section 7, “The Impact of the Asian Economic Miracle on Growth Theory,†focuses on the theorizing about the likely impact of the rapidly expanding Asian economies on the shaping of the global economy over the next several decades.
    JEL: B2 O4 O53
    Date: 2009–05
  4. By: Hon-Chung Hui (Nottingham University Business School - Malaysia Campus)
    Abstract: This paper examines the transmission channels through which property markets propagate shocks to the real economy. Using a four-equation model which portrays the theoretical inter-linkages between real estate value and other components of the economy, our findings suggest that in the short run, negative real estate shocks affect GDP by dampening construction, bank lending activities and to a certain extent, consumption. The impact of shocks on investment is harder to decipher given the complicated dynamics arising from an almost instantaneous adjustment process towards equilibrium each time the system is perturbed. In the long run, there is no evidence of positive wealth effects on consumption while sustained depressions in property markets could be harmful to future economic growth.
    Keywords: Real estate shocks; Transmission channels; Macroeconomic performance
    JEL: C32 E20
    Date: 2008–06
  5. By: Giuseppe Tattara (Department of Economics, University Of Venice Cà Foscari); Paolo Crestanello (CEG, Treviso. University Of Venice Cà Foscari)
    Abstract: The paper investigates the change in strategy of the Benetton Group, since the mid nineties, in face of the severe intensive competition in the international fashion market. New competitors, in particular the European brands Zara, Mango and H&M, have challenged the Benetton position in the Italian and the European clothing market and have pushed the Group towards cost reduction through globalization of his suppliers. Benetton is a vertically integrated producer that controls (in different ways) the whole value chain from textile raw materials to the sales to the consumers. Till 2000 Benetton made part of its production in its own factories and through a wide network of domestic sub-contractors, mainly specialized in sewing. Now Benetton has drastically moved to a new strategy, abandoning Italy and organizing production around a dual supply chain: close locations (East Europe and North Africa) for quick production and far away locations (Asia) for more standardised products. The paper discusses also the redefinition of competences for the Treviso clothing district, where Benetton traditional sub-contractors have been in few years, drastically curtailed. Benetton restructuring marks the transition to a new network of competences between agents in the district.
    Keywords: Global value chains, Internationalization, Benetton, Apparel
    JEL: L22 L23 L67
    Date: 2009
  6. By: Acosta, Montserrat; Sohngen, Brent
    Abstract: There is widespread recognition that forestry carbon credits can reduce the net emissions of carbon into the atmosphere. Designing systems to sequester carbon, however, has proven difficult due to a number of efficiency issues, including leakage. Leakage occurs when policy makers develop carbon projects in specific places which protect some parcels of land, but leave other parcels of land unprotected. This analysis uses a newly developed model of global land use change from an established forestry and land use model, described in Sohngen et al. (1999); Sohngen and Mendelsohn (2003); and Kindermann et al. (2008). To assess leakage we estimate carbon under storage under one scenario where the world is awarded carbon credits and another where tropical developing nations are awarded the credits. We focus our results on several regions, namely Brazil, the rest of South America, Sub-Saharan Africa and Southeast Asia. Carbon prices are assumed to be constant, and range from US$0 tC to US$900 tC. The model adjusts global land uses to these specific policies, and leakage is assessed by comparing carbon gains within the project areas to net global changes in carbon. A number of policy relevant results emerge. First, the estimates indicate that leakage ranges from 2% to more than 14%. Second, as carbon credits increase, leakage decreases across the world.
    Keywords: Carbon Sequestration, Leakage, Carbon Credits, Environmental Economics and Policy, Land Economics/Use,
    Date: 2009

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