Linkages and Spillovers from Foreign Ownership in the Indian Pharmaceutical Firms

The paper examines the spillover and linkage effects from the presence of foreign firms in the Indian pharmaceutical industry. A comprehensive panel data consisting of nearly 200 firms from 1989 to 2000 was used in the current study. The recent semi-parametric estimation methods as suggested by Olley and Pakes (1996) and Levinsohn and Petrin (2003) were adopted to account for the endogeneity in the input demand. Our results suggest the existence of positive and significant spillover from the foreign equity ownership in the Indian pharmaceutical industry. However, we also found negative and significant spillovers from the backward linkages with foreign firms. The negative spillovers from the backward linkages suggest the possibility of large technology and efficiency gap between local and foreign firms. The results also suggest that institutional arrangements that protect intellectual property rights such as product patents as opposed to process patents will be important for establishing positive linkages and spillovers between local and foreign firms in the Indian pharmaceutical industry.FDI, Backward and Horizontal Linkages, Olley-Pakes, Levinsohn-Petrin

Singapore Information Sector: A Study Using Input-Output Table

The paper measures the impact of information technology on the output growth of Singapore economy. A vibrant information sector will play an important catalytic role in developing Singapore into a knowledge-based economy. The analysis provided in the paper support the assertion that information economy will be a precursor to a knowledge-based economy. The information sector grew in tandem with the expansion of export in the first half of the 1990s. By the second half of the 1990s, it developed sufficient momentum and capability to expand domestically as a cluster. The use of ICT as intermediate input is found to be generally pervasive in the economy. The paper also investigated the impact of falling prices of information input on sectoral GDP. It is found that for a 10% decrease in information input prices, the sector GDPs had to increase by 0.05% to 2.2%. The overall impact for the economy is a positive 0.84% increase in national income (GDP) for a 10% decline in information input prices.

Financial Health and Firm Productivity: Firm-Level Evidence from Viet Nam

Does financial health shore up firm productivity? This paper empirically investigates this question and presents productivity as another driving factor in translating financial development into real economic progress. Our empirical framework employs Levinsohn and Petrin's (2003) semi-parametric estimation of total factor productivity (TFP) using firm-level panel data during 2002 - 2008, and incorporates financial health variables into conventional determinants of firm productivity. Our findings suggest that liquidity and access to external credit boosts firm productivity, with the latter particularly imperative for exporting and/or importing firms. We also present supplementary results regarding economies of scale, high-tech capital accumulation, human capital investment and foreign ownership

Choice of Monetary and Exchange Regimes in ECOWAS: An Optimum Currency Area Analysis

There are plans by five West African countries to establish a second monetary zone in the sub-region by December 2009. In this paper we ask whether a monetary union is the appropriate exchange rate regime for the sub-region based on economic criteria. We address the issue using a rigorous theoretical framework that captures the crucial trade-off between the savings in transaction costs, resulting from a common currency, and the macroeconomic stabilization benefits of a flexible exchange rate regime. The main result is that a flexible exchange rate regime dominates a monetary union in the ECOWAS sub-region.Exchange rates; Regimes, Welfare, Transaction costs, West Africa

Global Financial Crisis: Impact on Singapore and ASEAN

Despite creating a record of number of jobs in 2007 and 2008 (237,000 jobs in 2007 and 202,400 jobs in the first three quarters of 2008) and averaging a growth rate of nearly 10 percent from 2004 to 2007, Singapore was the first East Asian country to fall into a recession from the current global economic crisis in July 2008. It was projected that the Singapore economy will grow by -1.0 to 2 percent in 2009. This paper examines the current state of the Singapore economy and highlights several policy considerations as the City-State adjusts to the current global economic crisis. The paper also discusses the role of ASEAN in the current global economic crisis. The paper highlights that the ability of Singapore to ride the current global crisis will depend critically in reducing the cost of the downturn by increasing the productivity of local workers and firms, and concurrently enhancing the economic integration opportunities in ASEAN.Global Financial Crisis, Singapore, ASEAN, Financial Crisis

Global Financial Crisis : Impact on Singapore and ASEAN

Despite creating a record of number of jobs in 2007 and 2008 (237,000 jobs in 2007 and 202,400 jobs in the first three quarters of 2008) and averaging a growth rate of nearly 10 percent from 2004 to 2007, Singapore was the first East Asian country to fall into a recession from the current global economic crisis in July 2008. It was projected that the Singapore economy will grow by -1.0 to 2 percent in 2009. This paper examines the current state of the Singapore economy and highlights several policy considerations as the City-State adjusts to the current global economic crisis. The paper also discusses the role of ASEAN in the current global economic crisis. The paper highlights that the ability of Singapore to ride the current global crisis will depend critically in reducing the cost of the downturn by increasing the productivity of local workers and firms, and concurrently enhancing the economic integration opportunities in ASEAN.global financial crisis, Singapore, ASEAN, financial crisis

Trade linkages between China, India and Singapore: Changing comparative advantage of industrial products

Purpose – The purpose of this paper is to examine the trade linkages and degree of export competitiveness between Singapore, China and India. Design/methodology/approach – Balassa's export performance index and the dynamic RCA index was adopted, as suggested by Kreinin and Plummer to identify the revealed comparative advantage (RCA) of the above countries in industrial products by SITC 1- and 2-digit levels. The Spearman's rank correlation coefficient is used to identify the degree of complementarity between RCA indices. Findings – Given the abundant resources, China and India have comparative advantage in a broad range of manufactured goods as compared to Singapore. From the disaggregated analysis at 2-digit level, the paper finds that the Singapore and China exports are complements, although the degree of complementarity has being declining over time. Meanwhile, Singapore and India exports are found to be stronger complements and stable over time. The results also show that China and India exports are strong substitutes. The paper also finds that the export specialization of China and India has experienced significant changes and shifting to new export products over time. Originality/value – Given the recent trade agreements between China and Singapore and India and Singapore, it is important to examine the trade linkages (complementarity/substitutability of trade) between these countries. The paper highlights the importance of China and India in complementing countries such as Singapore as it climbs the technological ladder to maintain its competitiveness in the world market.China, Comparative tests, Competitive strategy, India, International trade, Singapore