Intraregional Trade in Emerging Asia

The share of emerging Asia in world trade has increased sharply over the past 25 years. A large part of this increase is the result of booming intraregional trade. This paper investigates the key factors behind the rapid increase in intraregional trade among economies in emerging Asia and its implications for the dependency of economies in the region on the business cycles in the EU, Japan, and the United States. The rise in intraregional trade is largely driven by rapidly growing intra-industry trade, which is a reflection of greater vertical specialization and the dispersion of production processes across borders. This has led to a sharp rise in trade in intermediate goods among economies in emerging Asia, but the EU, Japan, and the United States remain the main export markets for final goods.Trade;export growth, export markets, industry export performance, world exports, trading partners, intermediate goods, intraregional exports, export market, exporters, trade growth, total exports, trade integration, world export shares, trade policies, international domestic demand, export structure, expanding vertical specialization, trade intensity, export promotion, export sectors, world export market, trade agreements, trade flows, world economy, factor markets, international markets, export expansion, regional regional trade agreements, increased correlation of business cycles, external shocks, economic integration, asian exports, world market, trade structures, trading partner, total export, trade structure, factor analysis, trade share, growing growing exports, outward-oriented growth, per capita income, fixed capital formation, domestic consumption, exporter, import restrictions, exporting country, economic downturns, exporters ? access, exporters of labor, trade reforms, export commodity, export base, factor endowments, bilateral commodity composition, export promotion policies, trade patterns

Long-Term International Capital Movements and Technology: A Review

This paper reviews the theoretical literature on the question of how long-term international capital movements depend on the international distribution of technology. It focuses on long-term investment flows, as these are more affected by international differences in technologies than short-term financial flows. International capital movements are investigated in the context of various technology specifications, ranging from models with only one common technology to those with multiple and endogenous technologies. The paper demonstrates that the theoretical specification of technology is crucial to the prediction of the size and direction of international capital movements.

Can the Neoclassical Model Explain the Distribution of Foreign Direct Investment Across Developing Countries?

Since the beginning of the 1990s, foreign direct investment (FDI) in developing countries has increased dramatically. The distribution of FDI flows across these countries, however, is highly uneven; only a small number attract comparatively large amounts of foreign capital. This paper investigates whether the pattern of FDI flows can be explained by the standard neoclassical model or by modified versions of this model that allow for differences in production technologies across countries. The results suggest that the standard neoclassical approach is not particularly useful if we want to understand FDI flows to developing countries.

The Dynamics of Provincial Growth in China: A Nonparametric Approach

China's growth performance since the start of economic reforms in 1978 has been impressive, but the gains have not been distributed equally across provinces. We use a nonparametric approach to analyze the variation in labor productivity growth across China's provinces. This approach imposes less structure on the data than the standard growth accounting framework and allows for a breakdown of labor productivity into efficiency gains, technological progress, and capital deepening. We have the following results. First, we find that on average capital deepening accounts for about 75 percent of total labor productivity growth, while efficiency and technological improvements account for about 7 and 18 percent, respectively. Second, technical change is not neutral. Third, whereas improvement in efficiency contributes to convergence in labor productivity between provinces, technical change contributes to productivity disparity across provinces. Finally, we find that foreign direct investment has a positive and significant effect on efficiency growth and technical progress. IMF Staff Papers (2009) 56, 239–262. doi:10.1057/imfsp.2008.1; published online 11 March 2008

The Dynamics of Provincial Growth in China

China''s growth record since the start of its economic reforms in 1978 has been extraordinary. Yet, this impressive performance has been associated with an increasing regional income disparity. We use a recently developed nonparametric approach to analyze the variation in labor productivity growth across China''s provinces. This approach imposes less structure on the data than the standard growth accounting framework and allows for a breakdown of labor productivity into capital deepening, efficiency gains, and technological progress. Like other studies before us, we do not find strong evidence of convergence in labor productivity across China''s provinces during 1978-98. However, our results show that provinces converged in efficiency levels, while they diverged in capital deepening and technological progress.Labor productivity;Economic growth;Data analysis;labor productivity growth, growth rate, growth accounting, gdp growth, growth rates, per capita income, growth model, labor shares, average productivity growth, gdp per capita, labor compensation, growth rate of output, neoclassical growth model, real gdp, capital formation, labor productivity levels, labor share, per capita incomes, per capita income growth

Foreign Direct Investment in China

China's increasing openness to foreign direct investment (FDI) has contributed importantly to its exceptional growth performance. This paper examines China's experience with FDI and identifies some lessons for other countries. Most of the factors explaining China's success have also been important in attracting FDI to other countries: market size, labor costs, quality of infrastructure, and government policies. FDI has contributed to higher investment and productivity growth, and has created jobs and a dynamic export sector. China's success, however, did not come without some pitfalls: an increasingly complex tax incentive system and growing regional income disparities. Accession to the WTO should broaden China's "opening up" policies and continue FDI's contributions to China's economy in the future.Foreign direct investment;fdi, foreign investors, direct investment, foreign investment, investors, tax incentives, economic zones, joint ventures, tax incentive, market size, profit remittances, investment decisions, tax regime, special economic zones, foreign ownership, foreign companies, foreign trade, investment policies, foreign participation, international investment, foreign exchange, foreign enterprises, international investors, foreign capital, investment climate, foreign banks, high-technology industries, manufacturing sectors, tax liability, taxable income, foreign invested enterprises, technology transfer, host country, foreign partner, manufacturing sector, rate of return, tax system, market access, free trade areas