Global Connectedness and Bilateral Economic Linkages - Which Countries?

Access to off-shore markets, technology, and ideas are important to greater productivity and higher living standards in New Zealand. Global connectedness requires deep and rich links with other countries. However, as a small country, we only have the resources to focus on a handful of countries. Are there a key set of countries with which New Zealand should be seeking to form deeper bilateral economic relationships? This paper reviews the benefits from deeper external bilateral economic engagements using the insights from the new literature on economic growth, which place great importance on trade; international integration, human capital, and local and cross-border knowledge spillovers from research and development (R&D) and foreign direct investment (FDI). This paper will then use insights from the new literature on economic growth to develop criteria for selecting countries as partners for deeper bilateral economic linkages across six global connectedness dimensions: FDI, R&D links, trade in goods, inbound tourism, education exports, and people linkages. To account for the growing role of a number of economies in global trade, the partner selection criteria will identify two groupings of target countries. The first grouping is focus countries: those countries that are of immediate interest for deeper bilateral linkages. The second country grouping is horizon countries: countries that are likely to grow in their importance to New Zealand over the next 10 to 20 years. The key message of this paper is a greater bilateral economic focus by New Zealand on the major economies along the Asia-Pacific Rim (and the UK). When external initiatives come before decision-makers, they should be seen through a lens that places greater confidence in proposals for deeper relationships with the Asia-Pacific Rim countries (or the UK), and greater scrutiny of proposals that emphasise other regions and countries.economic growth; trade; economic integration; migration; technology diffusion; New Zealand

Ideas and innovation in East Asia

The generation, diffusion, absorption and application of new technology, knowledge or ideas are crucial drivers of development. This paper surveys the diverse approaches to innovation adopted by East Asian economies, the problems faced and outcomes achieved, as well as possible policy lessons. Knowledge flows from advanced countries remain the primary source of new ideas in developing economies. The authors evaluate the role of three main channels for knowledge flows to East Asia - international trade, acquisition of disembodied knowledge and foreign direct investment. The paper then looks at the exceptionally fast growth in domestic innovation efforts in Korea, Taiwan (China), Singapore and China, drawing on information about R&D as well as original analysis of patent and patent citation data. Citation analysis shows that while East Asian innovations continue to draw heavily on knowledge flows from the US and Japan, citations to the same or to other East Asian economies are quickly rising, indicating the emergence of national and regional knowledge stocks as a foundation for innovation. A last section pulls together findings about policies and institutions to foster innovation, under three heads: the overall business environment for innovation (macroeconomic stability, financial development, openness, competition, intellectual property rights and the quality of communications infrastructure), human capital development, and government fiscal support for innovation.E-Business,Knowledge Economy,Economic Theory&Research,Technology Industry,Agricultural Knowledge&Information Systems

Spillover-effects, crowding-in and the contributions of FDI to growth in China: A review of the literature

The paper presents a review of theoretical concepts and empirical findings on the issue of FDI-induced spillover and crowding-effects in the Chinese economy. Against the background of the peculiar characteristics of China's FDI-inflows the paper discusses various research agendas and results. It finds mostly inconclusive evidence, which is understood to result from an insufficient analytical differentiation of FDI and host economy actors. On the 'supply'-side of FDI it seems to be necessary to include the parameter of 'cultural affinity' in the analysis and differentiate between Overseas Chinese and non-Chinese investors (with the latter probably featuring a greater potential for positive externalities). On the 'demand'-side it seems to be adequate to differentiate between the state and collective / private domestic sector and analyze their respective incentives to actively explore potential spillover effects and actually appropriate new technologies introduced by foreign investors. It seems as if the harder the budget constraints and the more competitive the environment, the greater the realized spillover effects. It becomes obvious that most existing studies are working with data that does not reflect the dynamic developments of the recent ten years. --Foreign direct investment,spillover-effects,crowding-in,Chinese economy

Knowledge Spillover Agents and Regional Development

It is widely recognised that knowledge and highly skilled individuals as "carriers" of knowledge (i.e. knowledge spillover agents) play a key role in impelling the development and growth of cities and regions. In this paper we discuss the relation between the mobility of talent and knowledge flows. In this context, several issues are examined, including the role of highly skilled labour for regional development, the features that characterise knowledge spillovers through labour mobility, the key factors for attracting and retaining talent as well as the rise of "brain gain" policies. Although the paper deals with highly skilled mobility and migration in general, a particular attention will be paid to flows of (star) scientists.Series: SRE - Discussion Paper

How to make TTIP inclusive for all? Potential economic impacts of the Transatlantic Trade and Investment Partnership (TTIP) on developing countries. Bertelsmann Studies

Since the creation of the World Trade Organization (WTO) in 1995, the rules of world trade have not changed. They do not account for the fact that the nature of international division of labor is no longer the one that prevailed during the negotiations in the Uruguay Round which led to the WTO (1986-1994). At that time, the geopolitical situation was entirely different than today’s: the Soviet Union still existed, and the acronym “BRICS” was still unknown. Since then, the opening up of emerging markets such as China, both unilaterally and through its accession to the WTO, and other unilateral steps towards trade liberalization in many other developing countries, plus the arrival of modern information and communication technology, have changed the global economy. Countries no longer exchange final goods and raw materials with each other. Now, trade happens along global production chains: many firms in many different countries contribute towards the production of final goods by supplying parts and components, various services, and the final assembly. Goods are no longer made in one country for export, but they are made in the world for the world

Knowledge Spillover Agents and Regional Development: Spatial Distribution and Mobility of Star Scientists

It is widely recognised that knowledge and highly skilled individuals as “carriers” of knowledge (i.e. knowledge spillover agents) play a key role in impelling the development and growth of cities and regions. In this paper we discuss in a conceptual way the relation between spatial movements of talent and knowledge flows and present empirical results on the geography and mobility patterns of star scientists. Our findings show that these phenomena a highly uneven in nature, benefiting only a few countries which are capable to act as magnet for scientific talent.DYNREG

Manufacturing and Economic Development

This paper examines the theoretical and empirical evidence for the hypothesis that manufacturing is the main engine of growth in developing countries. The paper opens with an overview of the main arguments supporting the engine of growth hypothesis and then examines each of these arguments using a mix of statistical analysis of secondary data and secondary literature. The paper concludes that manufacturing will continue to be important in accelerating growth and achieving catch-up in developing countries. However, compared to the past 60 years, market service sectors will become relatively more important as potential sources of growth and catch up.structural change, manufacturing, engine of growth, catch-up

Firm-level Analysis of Globalization: A Survey

This paper extensively reviews empirical studies that analyze the various impacts of the globalization phenomenon on corporate activities by using micro data. First, we set up a flow chart describing how globalization leads to national productivity enhancement. Secondly, we summarize the hypotheses and the methods explored in 13 lines of literature on globalization, which this flow chart maps. Thirdly, we discuss further possible avenues for micro data analysis. Finally, we provide some suggestions on statistics-related policies.Firm-level data; Globalization; Productivity.

The Effect of Defense R&D on Military Capability and Technological Spillover

Generally, the purpose of defense research and development (R&D) is to expand military capability for the armed forces of a country. Any spin-off of technologies from defense R&D programs is usually not a prime motivation but more often an unintended consequence. Nevertheless, many of the technologies used in civilian life were initially research and development projects for military purposes. These technologies eventually become adapted to civilian applications since they had beneficial economic and social \u27\u27spillover\u27\u27 effects. However, there is a lack of research measuring the final outputs of defense R&D, including technology \u27\u27spin-offs.\u27\u27 This study mainly tried to understand the effect of defense R&D expenditures on military capability and technological spillover. Statistical measures such as correlations were used to understand these effects. The study revealed that there is a highly positive correlation between defense R&D expenditure and military capability, as well as between defense R&D expenditure and technological spillover index. The study contributed to the academic literature in three ways by providing: new measures of military capability, a new estimation method for defense R&D expenditures, and a new method to measure technological spillover effect from defense R&D expenditures

Knowledge Spillover Agents and Regional Development

It is widely recognised that knowledge and highly skilled individuals as “carriers” of knowledge (i.e. knowledge spillover agents) play a key role in impelling the development and growth of cities and regions. In this paper we discuss the relation between the mobility of talent and knowledge flows. In this context, several issues are examined, including the role of highly skilled labour for regional development, the features that characterise knowledge spillovers through labour mobility, the key factors for attracting and retaining talent as well as the rise of “brain gain” policies. Although the paper deals with highly skilled mobility and migration in general, a particular attention will be paid to flows of (star) scientists.DYNREG