FDI and Innovation as Drivers of Export Behaviour: Firm-level Evidence from East Asia

This paper examines the links between ownership, innovation and exporting in electronics firms in three late industrializing East Asian countries (China, Thailand and the Philippines) drawing on recent developments in applied international trade and innovation and learning. Technology-based approaches to trade offer a plausible explanation for firm-level exporting behavior. The econometric results (using probit) confirm the importance of foreign ownership and innovation in increasing the probability of exporting in electronics. Higher levels of skills, managers' education and capital also matter in China as well as accumulated experience in Thailand. Furthermore, a technology index composed of technical functions performed by firms emerges as a more robust indicator of innovation than the R&D to sales ratio. Accordingly, technological effort in electronics in these countries mostly focuses on assimilating and using imported technologies rather than formal R&D by specialized engineers.foreign direct investment, innovation, technological capabilities, R&D, firm-level exports, electronics, East Asia, China, Thailand and the Philippines

Regionalism as an Engine of Multilateralism: A Case for a Single East Asian FTA

As East Asia becomes increasingly integrated through market-driven trade and FDI activities, free trade agreements (FTAs) are proliferating. Consolidation of multiple and overlapping FTAs into a single East Asian FTA can help mitigate the harmful noodle bowl effects of different or competing tariffs, standards, and rules. A region-wide FTA will also encourage participation of low-income countries and reduce trade-related business costs, particularly for small and medium enterprises. A computable general equilibrium (CGE) model examines the economic impact of various types of FTAs in East Asia (among ASEAN+1's, ASEAN+3, and ASEAN+6) finding that consolidation at the ASEAN+6 level would yield the largest gains to East Asia among plausible regional trade arrangements.Free Trade Agreement; ASEAN; multilateralism

Central Asia after Fifteen Years of Transition: Growth, Regional Cooperation, and Policy Choices

This paper presents a coherent and systematic analysis of the collapse and subsequent revival of the Central Asian Republics (CARs) since 1990. The focus is on the pattern of growth and structural change during the cycle of decline and subsequent revival in the CARs, which have yet to be adequately analyzed in the literature on transition. The paper relates economic performance to initial conditions, country characteristics, and policies. Within this framework, it proposes a simple typology of policies (including a new 'Type III' set of policies on regional cooperation and industrial competitiveness) and relates them to the cycle of decline and revival. It goes on to examine medium-term prospects and policy needs for the CARs.growth; economic reform; regional cooperation; industrial competitiveness; Central Asia; transitional economies

Foreign ownership, technological capabilities, and clothing exports in Sri Lanka

Drawing on recent developments in applied international trade and innovation and learning in developing countries, this paper examines the links between firm-level export performance, foreign ownership, and the acquisition of technological capabilities in a sample of 205 clothing enterprises in Sri Lanka. Econometric analysis indicates that foreign ownership, firm size, human capital, technological capabilities, and geographical location are all positively associated with export shares. Furthermore, higher levels of technological capability are associated with larger firm size, university-level manpower, and R&D. Microlevel investigations are a complementary input to developing policies for promoting private sector competitiveness in outward-oriented developing countries

Understanding innovation in production networks in East Asia

This paper explores the "black box" of innovation in the electronics production network in East Asia through a mapping exercise of technological capabilities and an econometric analysis of exporting in the People's Republic of China (PRC), Thailand, and the Philippines. Technology-based approaches to trade offer a plausible explanation for firm-level exporting behavior and complement the literature on production networks. The econometric results confirm the importance of foreign ownership and innovation in increasing the probability of exporting in electronics. Higher levels of skills, managers' education, and capital also matter in the PRC as well as accumulated experience in Thailand. Furthermore, a technology index composed of technical functions performed by firms (to represent technological capabilities) emerges as a more robust indicator of innovation than the research and development (R&D) to sales ratio. Accordingly, technological effort in electronics in these countries mostly focuses on assimilating and using imported technologies rather than formal R&D by specialized engineers

Making the Millennium Challenge Corporation compact work for Sri Lanka

For more about the East-West Center, see http://www.eastwestcenter.org/Ganeshan Wignaraja, executive Director of the Lakshman Kadirgamar Institute of International Relations and Strategic Studies, explains that "At least half of Sri Lanka's borrowing in 2018 was from private capital markets, and nearly a third came from China.

Central Asia : Mapping Future Prospects

Central Asia has emerged as one of the worlds fastest growing regions since the late 1990s and has shown notable development potential. This is significant for a region comprising largely of small landlocked economies with no access to the sea for trade. Among the advantages, of the region are its high- priced commodities (oil, gas, cotton and gold), reasonable infrastructure and human capital as legacies of Soviet rule; and a strategic location between Asia and Europe. Furthermore, many Central Asian Republics (CARs) have embarked on market-oriented economic reforms to boost economic performance and private sector competitiveness. Central Asia : Mapping Future Prospects considers the regions economic prospects to 2015. It charts recent economic performance, highlighting the economic revival. It also synthesizes recent forecasts and constructs scenarios for future economic variables against a constant global background. Projections include, among others, gross domestic product (GDP), manufactured exports per head, GDP per capita and poverty. A special theme chapter develops a manufacturing competitiveness index to compare the CARs with other transition economies and explores the impact of economic reform and supply-side factors (e.g. foreign investment and human capital) on industrial performancecentral Asia, future economic variables, gross domestic product, manufactured exports per head, GDP per capita, poverty, manufacturing competitiveness index

Four stylised facts about Covid-19 impacts in Sri Lanka

The Covid-19 pandemic has wreaked havoc for economies worldwide, and smaller countries have been hit particularly badly. Sri Lanka’s economy was already under stress but was slowly moving in the right direction when the combined effects of the pandemic on public health and the economy has dealt a severe blow. Ganeshan Wignaraja suggests possible ways to recover with some surety amidst the temperamental threat of the Covid-19 virus

Assessing the experience of South Asia-East Asia integration and India's role

This paper examines the gains for South Asian economies from integrating with East Asia and India's role in this process. Evidence of increased pan-Asian integration exists but the process is uneven. Bilateral trade has grown. Bilateral foreign direct investment flows and free trade agreements (FTAs) have also increased, albeit at a slower pace than trade. The integration process has been led by India and Pakistan with limited participation of smaller South Asian economies. Tackling key impediments in cross-border infrastructure, FTAs, trade barriers and business regulations, and barriers to services will foster further integration. Computable general equilibrium (CGE) simulations suggest that a South Asia-East Asia FTA offers the most gains for South Asia and that India has an incentive to include its neighbors in such an arrangement rather than going it alone with East Asia. The rest of South Asia will gain by deepening South Asian integration and fostering ties with East Asia

Foreign Direct Investment, Innovation, and Exports: Firm-Level Evidence from People's Republic of China, Thailand, and Philippines

This paper examines the links between ownership, innovation, and exports in electronics firms in three late-industrializing developing countries (People's Republic of China, Thailand, and Philippines), drawing on recent developments in applied international trade and innovation and learning. Technology-based approaches to trade offer a plausible explanation for firm-level exporting behavior. The econometric results (using probit) confirm the importance of foreign ownership and innovation in increasing the probability of exporting in electronics. Higher levels of skills, managers' education, and capital also matter in the People's Republic of China as well as accumulated experience in Thailand. Furthermore, a technology index composed of technical functions performed by firms emerges as a more robust indicator of innovation than the research and development to sales ratio. Accordingly, technological effort in electronics in these countries mostly focuses on assimilating and using imported technologies rather than formal research and development by specialized engineers