East Asian Economies Research Articles

Towards sustainable agricultural development and food security in East Asia: The role of broad money and banking credits

The existing literature has extensively explored the role of financial development in boosting agricultural output. However, there is a lack of empirical research on the effects of broad money and banking credits on food production in East Asian countries. This study addresses this gap by examining the relationship between financial variables and agriculture in selected East Asian economies from 1995 to 2019, focusing on food security. Our findings indicate that increases in broad money and financial sector credit significantly enhance long-term food security by 0.216% and 0.846%, respectively. Additionally, we observed positive correlations between food security and agricultural inputs: a 1% increase in agricultural land, fertilizer use, and renewable energy adoption improves food security by 0.219%, 0.049%, and 0.146%, respectively. Robustness checks and Granger causality tests further validate these results. This study underscores the critical role of financial resources and agricultural inputs in food security and calls for a reassessment of credit systems to mitigate any adverse effects. These findings provide important insights for policymakers aiming to strengthen food security in East Asia.

Professor Shinichi Ichimura: The visionary founder of the East Asian Economic Association

Professor Shinichi Ichimura: The visionary founder of the East Asian Economic Association

Linkages between industry, agriculture, growth, renewable energy and the environment and the role of institutional quality, evidence from selected South and East Asian economies

This study aims to reveal the influence of industrial progress and agricultural value addition on environmental harm and explores how the unique moderating role of institutional quality handles this association; using the panel ARDL approach on a panel of South and East Asian economies from 1980 to 2020. The baseline model proposes that for each 1% increase in agricultural added value and industrial progress, carbon dioxide emissions may fluctuate considerably positively by 0.563% and 0.758% respectively. In the long term, the plausibility of the upturned U-shaped association between economic growth and carbon dioxide emissions in South and East Asian economies has been confirmed in the analysis. The use of renewable energy considerably condenses long-term emission levels. Institutional quality is found to have a strong moderating effect on the link between the main model regressors (renewable energy use, industrial growth, GDP per capita, and agricultural value addition) and CO2 emissions. Institutional quality supports the enhancement of industrial and agricultural capabilities and the improvement of environmental worth. Finally, the threshold results indicate that the influence of the main regression variables of the model (renewable energy utilization, industrial growth, per capita GDP, and agricultural added value) on carbon dioxide emissions has fully penetrated the institutional quality level. Strong, high-quality institutions, rather than weak institutions, can improve the aptitude of industry and agriculture to mitigate environmental degradation. In this pursuit, it becomes increasingly important to develop policies that support renewable energy based on institutional values.

The influence of ICT competencies on English digital reading achievement

Due to the prevalence of information and communication technologies (ICT) among secondary school students and the increasing significance of digital reading, exploring the impact of ICT on students’ digital reading performance in English seems necessary. The current research aimed to examine the effects of ICT competencies factors on secondary school students’ English digital reading performance. Data were obtained from 7703 15-year-old students from three East Asian economies, Macau, Hong Kong, and Singapore, from the Programme for International Student Assessment (PISA) 2018 dataset. The results of hierarchical regression analysis revealed that students’ ICT literacy was negatively correlated with their English digital reading performance, while the influence of attitudes toward ICT varied across the three East Asia economies. Additionally, males had lower English digital reading achievement, while students with higher socioeconomic status (SES) had higher English digital reading performance.

Rule of law, corruption and transparency impacts on green growth of East Asian economies

This paper highlights the necessity for nations to adopt green growth strategies to achieve economic prosperity, social equity, and environmental sustainability. By examining governance indicators in six East Asian economies from 1995 to 2021, it finds that a 1% increase in the rule of law boosts green energy deployment by 0.33%, while a 1% rise in corruption reduces it by 0.25%. Similarly, a 1% increase in transparency leads to a 0.45% rise in green energy. Higher income levels encourage green energy adoption, with a 1% increase in income resulting in a 0.19% boost, whereas a 1% rise in income inequality decreases deployment by 0.32%. The paper suggests policies to enhance the rule of law, promote transparent governance, reduce income inequality, and encourage inclusive growth to support green growth objectives.

CHEER and markets’ integration: evidence from selected East Asian economies

Purpose This paper aims to investigate markets’ integration using the capital enhanced equilibrium exchange rate (CHEER) model for seven, highly competitive, East Asian countries. Design/methodology/approach The sample consists of monthly observations, whereas unit root and cointegration techniques with structural shifts have been used. Findings The evidence shows that the weak form of the CHEER approach holds for Malaysia and Thailand. For China, Japan, Korea, Singapore and Taipei, only the uncovered interest parity condition is validated, implying capital markets integration. In contrast, for these five countries, the results indicate absence of goods’ markets integration. This outcome can be attributed to the impact of quite high non-tariff barriers and the Balassa–Samuelson effect. Originality/value To the best of the author’s knowledge, this is the first study that investigate markets’ integration in several East Asian economies, using the CHEER approach and more accurate price indices.

An empirical investigation of the impact of energy consumption, globalization and natural resources on ecological footprint and economic growth, evidence from China, Japan, South Korea and China Taiwan

Natural resources are regarded as important indicators that make great contributions to reducing environmental pollution and promoting growth in today's era of globalization. Thus, a more rigorous assessment of the complexity of determining growth and ecological footprint is critical. This study examines the dynamic linkages between globalization, natural resources, renewable and non-renewable energy use, ecological footprint and growth in Taiwan, Japan, China, and South Korea from 1975 to 2020. In terms of the certainty of cross-sectional dependence of panel variable data, this study uses second-generation panel unit root, cointegration, long-term elasticity, and two-way causality estimation tests to obtain reliable and valid results. The findings explore the fact that environmental degradation is substantially mitigated by the using of renewable energy sources, while other underlying factors, such as non-renewable energy sources, natural resource rent (NRR), economic growth, and globalization, exacerbate environmental pollution. In addition, the use of renewable and non-renewable energy, NRRs and globalization drive economic progress. Globalization and ecological footprint have a bilateral causal association. The research analysis supports the feedback hypothesis based on a bidirectional causal relationship between renewable energy use and ecological footprint. Based on the empirical findings of the current study, various policy endorsements are proposed to scare and control environmental damage without hampering growth in specific East Asian economies.

Economic Development Pattern and Trade Imbalance: Comparing the U.S. with East Asia

With the development of trade globalization, East Asian countries have occupied an important position in global trade. The rise of the East Asian economy has led to a long-term trade deficit between the United States and East Asian countries, causing economic imbalance. Focusing on the economic development patterns of the United States and East Asian countries, this paper proposes a research question: How does the difference in economic development between the U.S. and East Asian countries lead to trade imbalance? This article uses comparative advantage and absolute advantage theory, Keynesian political economy, global savings glut hypothesis and the flying-geese model to provide theoretical support for the research, and then uses data from the World Bank and Bureau of Economic Analysis to further demonstrate. The last part of this paper makes an empirical analysis through case analysis and model tests. This study argues that differences in economic development lead to an international division of labor and a savings-investment gap, which in turn lead to trade imbalances.

The impact of eco-preneurship and green technology on greenhouse gas emissions - An analysis of East Asian economies

The pressing need to address the effects of rising greenhouse gas emissions on the environment has become a global concern. Policymakers, governments, and stakeholders advocate a sustainable clean environment. Therefore, green technology and eco-entrepreneurship initiatives are being implemented to reduce these emissions. Despite their efforts in sustainable environments, there is insufficient research on how these initiatives impact economies. This study explores the impact of eco-entrepreneurship and green technology on reducing greenhouse gas emissions in East Asia. Using China and Japan, ranked the first and fifth highest greenhouse gas emitters globally, as case studies, the study employed ARDL and NARDL models for empirical analysis. The findings show that short-run linear estimates of eco-entrepreneurship are significant only in China, while nonlinear short-run estimates are significant for both China and Japan. Comparably, short-run linear estimates of green technology are significant for both China and Japan, while nonlinear coefficient estimates are significant only in Japan. The linear estimate of eco-entrepreneurship was significant and negative in both countries. The coefficient estimates for green technology are significant and negative for both countries. In the nonlinear model, the positive shock coefficient estimates for eco-entrepreneurship are negative and significant in China and Japan. These initiatives are vital for reducing greenhouse gas emissions and improving East Asian economies.

Analysis of the Difficulties and Countermeasures of East Asian Regional Economic Cooperation

Global economic development witnessed two significant developments during the 1990s: economic globalization and regional economic integration. East Asia's economy has been steadily developing, making it one of the most promising areas in the world economy. Nonetheless, East Asia's economic cooperation is developing far more slowly than that of the European Union and the North American Free Trade Area. East Asian nations have deeply realized that the only way to increase the competitiveness of their economies and, consequently, their overall economic strength is to actively participate in economic cooperation, as evidenced by the rapid development of trade and economic ties between the European Union and the North American Free Trade Area. This article aims to study the difficulties and countermeasures of East Asian regional economic cooperation in the context of current economic globalization and regional economic integration. According to this study, there are three key reasons why regional economic cooperation among Southeast Asian countries is problematic: political factors in East Asian countries, economic factors in East Asian countries, and social and cultural factors in East Asian countries. Various measures have been suggested to address the current challenges. These include fostering East Asian regional cooperation around ASEAN, expediting economic recovery through trade and economic cooperation, and fortifying cultural exchanges and cooperation to further the development of East Asian regional economic cooperation.

Foreign Direct Investment Response to Economic Growth Shocks: Evidence from a VAR Estimation on a Panel Dataset

This paper examines the relationship between inward foreign direct investment (IFDI) and economic growth in OECD and ASEAN, China and Hong Kong (East Asia) over the past 35 years (1985-2019). Our estimates using vector autoregression on a panel dataset show that the mutually causal relationship between IFDI inflows and economic growth exists in both the advanced and emerging countries. However, the relationship appears to be stronger in the OECD economies than in the East Asian economies, and IFDI is more responsive to economic growth in the OECD countries. The results from impulse response functions also indicate that a shock in economic growth leads to a change in the IFDI inflows into OECD countries while there is no strong evidence in ASEAN, China and Hong Kong.

The J-curve effect in agricultural commodity trade: an empirical study of South East Asian economies

PurposeIn this paper we examine the validity of the J-curve hypothesis in four Southeast Asian economies (Indonesia, Malaysia, the Philippines and Thailand) over the 1980–2017 period.Design/methodology/approachWe employ the linear autoregressive distributed lags (ARDL) model that captures the dynamic relationships between the variables and additionally use the nonlinear ARDL model that considers the asymmetric effects of the real exchange rate changes.FindingsThe estimated models were diagnostically sound, and the variables were found to be cointegrated. However, with the exception of Malaysia, the short- and long-run relationships did not attest to the presence of the J-curve effect. The trade flows were affected asymmetrically in Malaysia and the Philippines, suggesting the appropriateness of nonlinear ARDL in these countries.Originality/valueThe previous research tended to examine the effects of the real exchange rate changes on the agricultural trade balance and specifically the J-curve effect (deterioration of the trade balance followed by its improvement) in the developed economies and rarely in the developing ones. In this paper, we address this omission.

The role of foreign direct investment in east and Southeast Asia: Evidence before and after 2009 global financial crisis

This research investigates the influence of Foreign Direct Investment (FDI), domestic physical stock, and the human capital index on labor productivity across 17 East and Southeast Asian economies. In the period from 1980 to 2009 (pre-global financial crisis), the study reveals that, initially, FDI stock independently contributes little to productivity. It underscores the necessity of specific human capital thresholds for FDI to enhance productivity by facilitating technology diffusion from source to host economies. While most economies in our sample surpass these thresholds, Cambodia, Laos, and Myanmar do not, indicating unexploited potential for productivity enhancement via FDI. In the post-2009 era, following the financial crisis, FDI emerges as the primary driver of labor productivity in these economies, rendering the previously mentioned human capital thresholds less critical across all 17 economies. The study also observes a significant, mutually intensifying crowding-out effect between FDI stock and domestic physical capital, which notably escalated around the 2009 financial crisis. Despite this, the influence of FDI stock on labor productivity substantially surpasses that of domestic physical capital, especially after 2009. These insights underscore the critical need for policymakers to strategically balance the influx of foreign investment with domestic capital investment to optimize economic growth in the aftermath of the 2009 crisis.

Environmental effects of growth and global value chains: The case of East and Southeast Asian economies

AbstractThe Environmental Kuznets Curve (EKC) hypothesis has become an important topic in the literature on the effects of growth on the environment, albeit surrounded by some controversy and nuance. Although this hypothesis has been analyzed in the literature in multiple ways and using different variables, there is still a gap in the consideration of global value chains (GVCs), which delve into the international division of production. This is particularly important in the intermediate stages of production, as they include tasks with a greater environmental impact. This research aims to analyze the environmental effects of economic growth and foreign trade linked to GVCs in a sample of 12 countries of East and Southeast Asia, given their strong insertion in GVCs. Based on the EKC, variables such as GDP per capita, environmental impact, and renewable energy consumption are incorporated. As a novelty, the research also includes GVCs participation and position indexes, and different measures of CO2 emissions. Our results confirm the existence of a nonlinear relationship between economic activity and its environmental effects, although with important nuances depending on the mode of insertion of each country in GVCs. In this sense, although all the selected countries increased their total emissions, substantial disparities are observed depending on the perspective considered (producer, consumer, and exports). Ultimately, it is concluded that, for an effective reduction of the environmental impact in these countries, it is essential to design policy measures, targeting new technologies, consumption and production patterns, and attracting green foreign direct investment.

The study of the relationship between green finance and resource efficiency in east asian economies

This empirical study, spanning 2000 to 2022 in East Asian economies, employs the Continuously-Updated and Fully Modified approach to explore determinants of fossil fuel utilization efficiency. Findings reveal a positive link between a 1% increase in green finance and a 0.16% enhancement in fossil fuel efficiency, reducing intensity. Conversely, increased inward foreign direct investment (FDI) correlates with reduced efficiency and heightened fossil fuel intensity, emphasizing the need for eco-friendly FDI strategies. A positive connection is identified between a 1% rise in green energy deployment and a 0.26% improvement in fossil fuel efficiency. However, an elevated employment ratio is associated with lower efficiency and higher fossil fuel intensity. To foster a sustainable and energy-efficient future, recommended policies include prioritizing green finance, digitalizing the green financial sector, implementing green FDI reforms, creating green job positions, and enhancing societal awareness in East Asian economies.

Cultural Contexts and Policy Frameworks: Examining Work-life Balance Initiatives in East Asia

This study presents a comparative analysis of work-life balance (WLB) policies in Hong Kong, Singapore, Japan, and China. Through a qualitative case study approach, it examines the legislative frameworks, implementation strategies, and cultural contexts influencing WLB policies in these countries. The research reveals varying levels of policy comprehensiveness and effectiveness across the four nations. Singapore emerges as a leader with its comprehensive government-led initiatives and strong legislative support for WLB. Japan demonstrates significant policy reforms aimed at addressing demographic challenges, albeit with persistent implementation issues. China shows regional variations in policy implementation, while Hong Kong's approach is characterized as more market-driven with less cohesive government strategies. The study identifies common challenges across the region, including deeply ingrained work cultures, gender disparities, and the need to balance economic competitiveness with employee well-being. The research concludes with targeted recommendations for Hong Kong, emphasizing the need for a more comprehensive legislative framework, enhanced gender equality measures, and a cultural shift towards valuing work-life balance. These findings contribute to the ongoing dialogue on improving work-life balance in East Asian economies and offer insights for policymakers and organizations striving to create more balanced and productive work environments.

Economic integration processes in East Asia - results, opportunities and challenges

The East Asian region is a major global economic player, given its economic size and potential. As such, regional economic integration of East Asia could be considered as an important building bloc towards integration of the Asia Pacific region. East Asia has made significant progress in creating institutions for closer cooperation and integration. East Asian regional production networks are the most integrated in the world, and regional financial initiatives have taken off. Gripped by this wave of regionalism, the East Asian economies have expedited further liberalization process and have started unmarked trade liberalization strategies, enhanced economic cooperation, and negotiating on currency un-ion. Since 1997, East Asian regionalism seems to have progressed and an East Asian Community is just around the corner. This paper is a study which presents the realities that East Asian regionalism is still lap-sided: economic regionalism is highly developed, while other key components (regional financial integration, education collaboration, and a regional political framework) are developing at a slower rate, stagnating, and/or regressing. It aims to present the reality of East Asian regionalism, provoke awareness of false perspectives, and present a recommendation towards a balanced and more sustainable East Asian integration.

Opportunities and Challenges of East Asian Economic Cooperation from a Cross-cultural Perspective—Taking the Implementation of the Belt and Road as an Example

Opportunities and Challenges of East Asian Economic Cooperation from a Cross-cultural Perspective—Taking the Implementation of the Belt and Road as an Example

The EU Trade Policy and Its Impact on East Asian Economies and Particularly in South Korea

Global political economy has been experiencing a new normal period through the COVID-19 pandemic and the Ukraine War since Jan. 2020. At the same time, the trade conflict between the USA and China has been continuing since the Trump Administration and even expanding to the technology conflict under the Biden Administration that has enhanced protectionism in the world trade. Due to these conflicts, discussions on de-globalization or re-globalization are raised. The two expected or unexpected historical events have resulted in a long wave of high inflation, energy and food crises, disorder of global supply chains etc. in the global economy, which is known as a new normal era shifted from low inflation, well-functioning global supply chains based on division of labor. In order to strengthen its economic and political leadership, the Biden government has upgraded the Trump’s America First Policy to the Made in America Policy based on Chips and Science Act (CSA) and Inflation Reduction Act (IRA), which represent a new era of protectionism. In parallel, the EU has also considered to impose Net Zero Industry Act (NZIA) and other Acts in Green Deal Industrial Plan (GDIP). This paper aims to analyze the new trend of protectionism in the EU. It also focuses on impacts of protectionism on South Korea in particular.

INDUSTRIAL POLICY IN ASIAN NEWLY INDUSTRIALIZED COUNTRIES: CONTROVERSIES, REVIEW AND LESSONS

The paper’s aim is to use the successful example of the newly industrialized Asian countries, as well as the countries of the East Asian region in general, to prove the need to implement industrial policy in many countries, both those lagging behind in industrial development and those that have reached the technological frontier. The paper describes the evolution of industrial policy in these countries and what distinguishes them from other developing countries that were unsuccessful in its implementation: the developmental state, which recognized timely the turning point from the strategy of import substitution to the strategy of export promotion, implemented both strategies simultaneously, picked winners, provided support to infant industries through selective interventions, but also disciplined the recipients of its support, tracked its own comparative advantages and anticipated their changes, with a strong synergy between the state and private sectors, and looking at Japan as a model of industrial development, i.e. the lead goose. Industrial policy is one of the most controversial issues in economics. There has been a long debate between two schools of thought - orthodoxy and heterodoxy - as to whether there is a need for industrial policy in general, as well as the role of the state in the process of its creation and implementation, as opposed to the free market model of development in which there is no place for industrial policy, and if it appears it can be only of a general nature, and by no means in the form of selective interventions. Over the last 10 to 15 years, there has been a revision both at the academic level and in the real world that has made industrial policy more acceptable, and thus the debate about it has become less ideologically colored and more pragmatic and nuanced. At the theoretical level, the market fundamentalist view of little theoretical justification for industrial policy has lost its dominance. Despite maintaining neoliberal orthodoxy as the advice of international financial institutions in the process of creating economic policy in developing countries, industrial policy remained important for the promotion of industrial development, especially the infant industries. It is accepted that there are many types of market failures that must be addressed through industrial policy. It is increasingly recognized that industrial policy is not just a highly idiosyncratic practice associated only with the miracle economies of East Asia, but what most of today’s developed countries used when they were in the position of the catching-up countries. As a conclusion, the paper discusses the possibility of transferring the East Asian model to other countries, and sheds light on the determinants of industrial policy success and failure. The key conclusion is that there is room for successful industrial policy even in countries that have reached the technological frontier and want to push it further, as well as in countries lagging behind in industrial development, although the global context in which industrial policy is situated has changed over time. A special commentary is referred to the economic and industrial development of the former countries of Yugoslavia.