Asian NICs Research Articles

Environmental Phillips curve: OECD and Asian NICs perspective.

This research aims to explore the existence of a new concept known as "environmental Phillips curve" (EPC) developed by the authors. Taking annual data of 30 countries for 26years, a panel data estimation method is applied. The invented function shows an inverse relationship between pollution and unemployment. In most of the cases, the industrialized countries show that the relationship is valid. The notion is proved effective in every format of investigation. It seems that curbing pollution in the world is only possible at the cost of human employment. Therefore, if countries want to curb environmental pollution without affecting the generation of employment and reducing poverty, they should contemplate both innovation and enforcement alternative technologies that would be less polluting but employment friendly. Moreover, this research also suggests that if a country can treat pollution efficiently, it can increase the national income without a deteriorating unemployment level.

Top Down vs. Grassroots E-Government: A Comparative Analysis of the Effectiveness of E-Procurement against Corruption in Malaysia and Korea

Purpose: Democratization and social structure have been identified as critical factors affecting E-Government’s corruption fighting capacity. To determine how E-Government functions differently against corruption in democratic egalitarian vs. authoritarian inegalitarian nations, this study examines the factors behind Korea’s successful anti-corruption E-Procurement program KONEPS and Malaysia’s less successful E-Perolehan program. Originality: Despite the contributions of large sample empirical work, no in-depth case analysis has yet shown how democracy and egalitarian social structure increases E-Government’s effectiveness against corruption, which is important for those interested in reforming under-utilized or ineffectively applied E-Government systems. Methodology: This longitudinal case study unpacks the causal mechanisms between cause and outcome, comparing and contrasting the development of E-Government, in particular, E-Procurement in two East Asian NICS: the consolidated egalitarian democracy of South Korea and single party, inegalitarian Malaysia. Result: Democratization and an egalitarian social structure provided incentives for citizens and politicians to back E-Government as a graft-fighting tool. Korean civic groups pressed to stop corruption and helped design KONEPS to reduce bureaucratic discretion over the selection of tender winners and release of annual purchasing plans and detailed bid information. In contrast, the Malaysian state introduced E-Government to bolster the ruling UMNO’s image and intentionally maintained E-Perolehan’s information asymmetries and bureaucratic discretion to preserve lucrative corruption schemes. Conclusion and Implication: Malaysia’s newly elected opposition party politicians have a strong incentive to use E-Perolehan against corruption by releasing more information regarding procurement plans, contract details and selection criteria while eliminating bureaucratic discretion over the selection of tender winners.

The Feminization of Employment through Export-Led Strategies: Evidence from Viet Nam.

The early successful experiences of the East Asian NICs confirmed the role of exports as an engine of growth. Surprisingly, most of the earlier studies omit one important empirical fact, namely that the feminization of work contributed significantly to their rapid industrialization. Feminist trade theories argue that export-oriented development strategies have so far been exploitative of cheap female labour in the South. As globalization gathers pace, an increasing number of women in Developing Countries (DCs) have been absorbed into labour-intensive, export-oriented manufacturing sectors. However, the structural changes that go hand in hand with export promotion, as well as the international environment the South faces today, have dramatically modified the inner drives behind the phenomenon. This paper reviews the salient mechanisms at work through a structuralist approach of gender. By examining women’s labour force participation rate in Viet Nam, we show how patterns of gender relations stemming from structural characteristics, as well as social and institutional practices, is related to export-oriented industrialization.

Paradigm Change in the Asian Fashion Industry: In terms of Production, Consumption and Trade

Abstract This study focuses on apparel production and consumption trends in major Asian economies in order to understand a paradigm change in the Asian fashion industry. A comparison of trade among ASEAN, NICs, and developed countries shows the changes that have occurred in terms of production and consumption of fashion products before and after 2000 in Korea, Hong Kong, and China. The flow of imports and exports in the apparel industry was analyzed using UN trade statistics data. The results found a change of industry structures in Asian NICs and ASEAN countries. Garment production bases have moved to lower cost regions like China and ASEAN; in addition, NICs sent a part of their export business in the fashion industry to ASEAN countries. The Asian fashion industry has transformed from a production base for developed countries into a consumption market with the emergence of newly industrializing economies. Keywords NICs, ASEAN, apparel trade, fashion industry, imports, exports International Journalof Human Ecology

China moving up the value chain: What can be learned from the Asian NICs?

The excess supply of labor in China will be exhausted in the near future as the growth of the population slows down and the share of working-age people shrinks. Once the country crosses the “Lewis Turning Point”, the mobilization of resources can no longer drive growth. In order to compensate for the increasing labor cost and sustain its growth, Chinese firms will need to increase profitability by moving up the value chain. Although the overall strategic objective of upgrading is widely shared and the logic of the globally fragmented production system is now well understood, a strategic impetus is missing to make the transition happening in China. The article contributes some ideas to this debate. Since the challenges that China faces today are similar to the ones faced by South Korea and Malaysia 30 years ago, their experience can shed light to help China find a solution to upgrade its industry. As an impetus, China needs to shift its emphasis from “opening the market in exchange for technology” to “exchanging advanced technologies for other advanced technologies”. It is crucial to give priority to establishing a leading position in several technology-advance frontiers. This will require the Chinese government to take a proactive role in market orientation, resource allocation and the promotion of close collaboration between the public and private sector.

The Impact of Social Movements on Taiwan's Democracy

This article discusses and critiques the four articles that comprise this volume on Taiwan's social movement and democratization. I argue that the four articles suggest that while Taiwan's social movements have made a clear impact on Taiwan's democratization, they remain challenged by the neo-liberal orientation of elected governments, in both KMT and DPP forms. The article provides brief comparison to East Asian NICs and Western experiences with social movements. A strength of the articles is their attention to the complex ways social movements and democratization have impacted each other for the past two decades, with attention to unintended consequences. It concludes with some thoughts on the implications of how nationalism and globalization will continue to shape the potential of social movements in Taiwan.

South Africa's Manufactured International Trade in the Post-Sanctions Epoch: Patterns and Potentials

We identify those sectors of the South African economy in which the country exhibits a comparative advantage. This is accomplished through the development of an index of Regional Revealed Comparative Advantage, based in the work of Richardson and Zhang (2001). South Africa's comparative advantage is associated with products servicing producers and high in capital intensity. The pattern of comparative advantage in South Africa differs from those patterns found to be typical of “developing countries in general, and from those describing the “flying geese” dynamic changes of East Asian NICs as well as other Asian countries. An important contribution of this paper is a demonstration of a high degree of compatibility of projected shifts in competitiveness patterns developed utilizing (solely) trade data and RRCA methodology with patterns developed (solely) utilizing relative unit labor measures.

Do the Asian Drivers Undermine Export-oriented Industrialization in SSA?

Summary An increase in outward orientation in general, and in export-oriented manufacturing in particular is widely indicated as a suitable developmental path for SSA. The logic for this is drawn both from the demonstration effect of China and the earlier generation of Asian NICs, and from theory. However, the entry of China (and to a lesser extent India) into the global economy as a significant exporter of manufactures poses severe problems for export-oriented growth in SSA. This can be seen from SSA’s recent experience in the clothing and textile sectors, often considered to be the first step in export-oriented manufacturing growth. Without sustained trade preferences over Asian producers, SSA’s clothing and textile industry will be largely excluded from global markets and face significant threats in its domestic market. This has generalizable implications for other sectors, and for other sets of low income producers.

Histoire de l'industrialisation et succès asiatiques de développement : une rétrospective de la littérature scientifique francophone

Les succès des pays d’Asie orientale ont défié la notion de Tiers Monde et le concept du décollage économique et du changement social. La littérature scientifique francophone a peu contribué à l’analyse de ce phénomène historique pourtant unique et aux grands débats internationaux sur l’universalité ou la spécificité des conditions de l’industrialisation et des modalités du rattrapage des NPI asiatiques. Elle s’est peu interrogée si leurs expériences confirmaient ou non la lecture occidentalo-centrée de l’histoire économique des 19-20èmes siècles, et jusqu’où elles pouvaient remettre en cause le paradigme de l’industrialisation et reconfigurer celui de la mondialisation.

Gains and Losses from Preferential Trade Agreements: Some Evidence from NAFTA

In this article we integrate two topics in international trade policy that have received (separately) a lot of attention: the effects of regional trade blocs, and export pessimism regarding poorer countries. The specific issue that allows us to bring together these questions is whether regional integration adversely affects non-members. We use quarterly data on bilateral trade flows for the period 1990 through 1997 to examine U.S. imports from its NAFTA partners as well as from non-NAFTA trade partners, and more specifically, those countries expected to be hurt by NAFTA. Two measures are used: a. “import penetration” or imports from a particular source as a share of US GDP, and b. the income elasticity of expenditure on imports from a particular source. Both “import penetration” and the income elasticity of expenditure affect the export earnings of U.S. trade partners, a matter of particular concern for developing countries. The broadest pattern observed in the income-expenditure elasticities is clear evidence of increased penetration by non-oil developing countries. This is in marked contrast to the stable GDP share and expenditure elasticity for developed country imports. Regional results suggest that the Caribbean and the East Asian NICs were the only area groupings that experienced a reduction in income-expenditure elasticity. But overall on the basis of U.S. income-expenditure elasticities it appears that the first four years of NAFTA were associated with trade expansion rather than trade diversion.

The Political Economy of U.S. Direct Investment in East Asian NICs, 1966–2000

This paper examines the role of FDI from the United States in the economic performance of East Asian NICs for 1966–2000. To this end, we draw our argument of the role of FDI from the modernization–dependency debate. Then, we test the economic effects of U.S. direct investment on economic growth in East Asian NICs using a neoclassical production function model that captures the economic impacts of both foreign and domestic investment on economic growth. Our empirical results show that U.S. direct investment has a positive and significant effect on economic growth in East Asian NICs.

The New Public Management Reform and Governance in Asian NICs: A Comparison of Hong Kong and Singapore1

This article compares the New Public Management (NPM) reform in Hong Kong and Singapore. First of all, it highlights how the macroeconomic environment, the political system, and state traditions, factors that are commonly identified as affecting the pattern of NPM reform in western liberal democracies, assume different contexts and significance in affecting reform in Asian states. With these general factors, we further compare the NPM reform of these two Asian newly industrialized countries in the areas of economic, administrative, and social governance, and identify the similarities and differences in the objectives of reform, the levels of reform, and the factors affecting such reform in these two cases.

Coalitional politics, economic reform, and technological upgrading in Malaysia

Summary Many attribute Malaysia’s admirable economic growth to liberal economic policies. However, this view ignores the way coalitional politics often drove illiberal government intervention in the economy to correct ethnically based economic inequality, create national heavy industries, and favor politically well-connected entrepreneurs. A more nuanced analysis reveals a complex mix of liberal and illiberal economic policies designed to balance competing coalitional interests. These policies led to rapid economic growth sufficient to support redistributive politics. Yet they also retarded technological development, leaving Malaysia mired in mediocrity: neither price competitive with China nor technologically competitive with Singapore, the East Asian NICs, or the OECD countries.

Labour and Neo-Liberal Globalization in South Korea and Taiwan

As they increasingly embrace neo-liberal economic policies (especially since the 1997‐8 Asian financial crisis), the Northeast Asian NICs of South Korea and Taiwanarenowsaidtobelosingtheiruniquenessasalternativecapitalistmodels. Central to the neo-liberal project is labour flexibility. This entails the reform of employment legislation and of the wider social settlement between state, business and labour. This article will argue against the ‘homogenization’ thesis by revealing the distinctive political, economic and ideological characteristics that distinguish the recent market-oriented labour reforms in South Korea and Taiwan from neo-liberal transitions elsewhere. The sources of variation in the pathways of labour market reform within the Northeast Asian NICs will also be explained. Neo-liberal globalization is said to have homogenizing effects on formerly regionally specific capitalist forms. Long depicted as an alternative model of capitalist development, the Northeast Asian NICs of South Korea and Taiwan are now said to be losing their uniqueness astheyembrace neo-liberaleconomicpolicies,atransition hastened by the 1997‐8 Asian financial crisis. A crucial component of the transition to neo-liberalism is the creation of flexible labour forces. This entails the reform of institutional relationships that govern flexibility, namely, the regulations specified in employment legislation and the wider state-business-labour arrangements or social settlements underpinning those rules. From the perspective of recent labour reforms in South Korea (hereinafter Korea) and Taiwan, this article will question the ‘homogenization’ thesis. It will do so by revealing the distinctive political, economic and ideological characteristics that mark out the recent market-oriented labour reforms in Northeast Asia from neo-liberal transitions elsewhere. Having established the continuing distinctiveness of the Northeast

Apparel industry in East Asian newly industrialized countries

The East Asian newly industrialized countries (from now on, Asian NIC) of Hong Kong, South Korea, and Taiwan have experienced decreasing export competitiveness due to rise of labor costs. While cheap labor has been the main source of competitiveness of Asian NIC, it cannot be a viable factor for Asian NIC any more. As the industry sector develops, its competitive advantage factors should be changed accordingly. This study is a preliminary attempt to illustrate how apparel industries in Asian NIC can obtain competitive advantage in the global economy and to suggest their future direction and challenges. By synthesizing industry‐specific and Asian NIC‐specific advantages, this study presents three critical factors for Asian NIC: global brand, global sourcing, and agility. Future directions and challenges for the industries are suggested.

Politics and Economic Reform in Malaysia

Malaysia's admirable economic growth is often attributed to liberal, open economic policies. Aggregate measures of openness, however, often veil the way coalitional politics drove illiberal government intervention in the to correct ethnically based economic inequality, create national heavy industries, and favor politically well-connected entrepreneurs. A more nuanced analysis reveals a complex mix of liberal and illiberal economic policies designed to balance competing coalitional interests. These policies created a economy that successfully replaced growing political and social instability with rapid economic growth sufficient to support redistributive politics. Yet this same dual also slowed further reform and retarded technological development, leaving Malaysia mired in mediocrity: neither price competitive with China nor technologically competitive with Singapore, the East Asian NICs, or the OECD countries.

Determinants of Outsourcing Decisions: An Empirical Investigation in an Asian NIC—Singapore

ABSTRACT The awareness of the various benefits of outsourcing has prompted the business-to-business marketers as well as logisticians all over the world to learn about the phenomenon and use it. However, the current literature, which discusses more about theoretical rather than empirical aspects of outsourcing, focuses almost exclusively on its use in the industrially developed nations of the West. Research on outsourcing in developing nations are rare; despite being a common practice amongst many international companies located in the Asia Pacific region countries, not much is known about how decisions to outsource are made. This empirical study on outsourcing in Singapore is an attempt to shed some light on the issue and to bridge the gap in the literature.

The Two Giants of Asia: Trade and Development in China and India

The literature on trade and development has supported the existence of a strong negative relationship between trade share and country size. The larger the country in size, the smaller is the trade ratio, and a lower degree of “openness” means less competitive pressures emanating from abroad when the country opens up to foreign trade, investment, and technology transfer. It is therefore likely that the impact of opening up policies would be much less in a large country such as China and India than among other East Asian NICs. The success story of China’s opening policies in recent years may imply that the favorable impact of “opening up” is not just for small economies, but also for large continental economies. Consequently, large countries such as China and India may not necessarily suffer from a large country constraint in adopting the export-oriented, outward-looking development strategy.

Significance of Development Stage Theory for Explaining Industrial Growth Pattern between Asian Nics and Selected Advanced Economies

The East Asian miracle was real. Prior to the 1997 economic and currency crises, Asian NICs --Hong Kong, Korea, Singapore and Taiwan-- achieved remarkable annual GDP growth. In these countries the overall economic performance was significantly determined by the industrial development triggered by changes in domestic demand, increases in FDI, intensive innovation efforts of indigenous firms, and export expansion of manufactured goods. Furthermore, fast economic growth and active state interventions like those adopted in most NICs were accompanied by various structural changes in the industrial sector. This study examines the applicability of the development stage theory for explaining the growth dynamics of industrial production in Asian NICs for the period 1980-95 and compares their specialisation pattern with that of more advanced economies like Japan, West Germany and the US.

Dynamic Modeling of Stock Market Interdependencies: An Empirical Investigation of Australia and the Asian NICs

This article examines the patterns of dynamic linkages among national stock prices of Australia and four Asian NIC stock markets namely, Taiwan, South Korea, Singapore and Hong Kong. By employing recently developed time-series techniques results seem to consistently suggest the relatively leading role of the Hong Kong market in driving fluctuations in the Australian and other NIC stock markets. In other words, given the generality of the techniques employed, Hong Kong showed up consistently as the initial receptor of exogenous shocks to the (long-term) equilibrium relationship whereas the Australian and the other NIC markets, particularly the Singaporean and Taiwanese markets had to bear most of the brunt of the burden of short-run adjustment to re-establish the long term equilibrium. Furthermore, given the dominance of the Hong Kong market in the region, the study also brings to light the substantial contribution of the Australian market in explaining the fluctuations to the other three markets, particularly Singapore and Taiwan. Finally, in comparison to all other NIC markets, Taiwan and Singapore appear as the most endogenous, with the former providing significant evidence of its short-term vulnerability to shocks from the more established market such as Australia.