East Asian Newly Industrialized Economies Research Articles

Are There Laws of Innovation? Part I: Introduction

One important indicator of national economic strength, in addition to real GDP, is its innovative capacity. Sustained investment in research and development (R&D) is essential for the occurrence of innovation in an economy. The stock of real R&D capital, defined as the cumulative past real expenditure on R&D, less depreciation of ten percent per year, is a useful summary measure of the current potential capacity of innovation. It is compared across the Group-of-Seven (G-7) Countries, the four East Asian Newly Industrialized Economies (EANIEs) and China on both an aggregate and a per capita basis. Indicators of success in innovation, such as the number of patent applications submitted and the number of patents granted, both domestically and abroad, each year, are also compared across the same set of economies. The real R&D capital stock can be shown to have a direct and positive causal relationship to the number of patents granted -- the higher the level of the real R&D capital stock of an economy, the higher is the number of domestic and U.S. patents granted to it. Among R&D expenditures, different categories may be distinguished: basic research, applied research and development. The share of basic research in total R&D expenditures is also compared across the same set of economies, as “break-through” discoveries and innovations can only consistently occur in an economy with a strong foundation of basic research.

International Dependency and Economic Fluctuations in East Asian NIEs

This paper investigates the sources of economic fluctuations in the four Asian newly industrialized economies (NIEs), namely Hong Kong, Republic of Korea, Singapore and Taiwan. As small open economies, their macro-economic development is highly dependent on technology as well as markets of large countries. Using the common trends model, we examine the impacts of external supply shock, internal supply shock and trade shock on the key national macro-economic variables of these four economies, i.e. output, consumption, investment, export and import. Our empirical evidence suggests that supply-side disturbances, both the country-specific supply shocks and international supply shocks explain the bulk of fluctuations in output.

Total Factor Productivity Growth in East Asia: Implications for the Future

The total factor productivity (TFP) growth controversy and the recent economic crisis raise many questions about the future growth of East Asia. Our analysis of historical experiences shows that low TFP growth in the East Asian newly industrialized economies (NIEs) is a natural pattern of growth at the initial phase of industrialization. Empirical evidence shows that East Asian NIEs in recent decades have been proceeding toward an efficiency-based growth as developed countries did some time ago. The history of Latin America, however, indicates that the reform of old-fashioned institutions is needed if East Asia is to follow the path of the developed countries.

Pathways to industrial environmental improvement in the East Asian newly industrializing economies

AbstractAfter the adoption of ‘grow first clean up later’ environmental strategies, governments in the East Asian newly industrializing economies (NIEs) turned to environmental ‘clean‐up’ by enacting landmark environmental legislation, creating command and control environmental agencies and promulgating tough air and water emissions standards. Available evidence suggests there is wide variability in the performance of these new environmental regulatory agencies.Most attribute this variability to differences in ‘political will’. However, why have some governments among the East Asian NIEs been able to muster the ‘political will’ to impose duties on industrial polluters while others have not?This paper answers this question by summarizing a larger study (Rock, 2002) which examines the ‘politics of industrial pollution’ control in six East Asian NIEs. Each case study is based on extensive interviews, the collection of data on the effectiveness of pollution management policies, and the integration of both with the political economy literature on each economy. Copyright © 2002 John Wiley & Sons, Ltd. and ERP Environment

The Changing Nature of East Asia as an Economic Region

T Z a HE WORLD iS considered as having three major regions: Western Europe, North America and East Asia. Unlike the other two regions, however, East Asia is not as well defined as an economic region. While Western Europe and North America are economically institutionalized by the European Union (EU) and the North American Free Trade Agreement (NAFTA) respectively, East Asia has no comparable regional arrangement. This paper argues that East Asia is a globally defined economic region different from the other major regions. While cultural and economic diversity prevents formal integration, regional integration has been achieved by informal means such as regional production networks, ethnic business networks and subregional economic zones. The case of economic integration in East Asia also adds to conventional theories of economic integration by providing an alternative to the EU-type formal integration. This paper studies the regional production network (RPN), a major regional element of Asian economic integration. These networks, driven by the foreign direct investment (FDI) from Japan and based on a multi-tier division of labor, are stitching together the disparate economies of Asia, integrating them with one another.' They helped to launch first the East Asian newly industrialized economies (EANIEs) and then those of the ASEAN Four (Thailand, Malaysia, Indonesia and the Philippines) and China. The RPN has created a trade triangle amongJapan, East Asia and North America (In this paper, East Asia is referred as Northeast Asia and Southeast Asia, but when it is used in parallel to Japan, Japan is not included.). In this triangle, Japan provides capital goods and technology to East Asia, East Asia exports consumer goods to North America, and North America is a major market for both Japan and East Asia. However, while the RPN was the dominant form of informal integration in the past, its weakness has also recently become

半周辺国家の社会発展-NIEs形成の社会的差異

In the contemporary sociology, Newly Industrializing Economies (NIEs) are one of the most relevant research subjects. This paper attempts to analyze the social basis in the formation of NIEs. First of all, both endogenous factors, which are class relations, state intervention and ideology, and exogenous factors, which are determined by the world-system, are specified by focusing on the formation process of indigenous capitals in NIEs and how NIEs have been able to develop in the world-system is explained. Secondly, the differences between east Asian and Latin American NIEs are clarified and to what extent NIEs are likely to be a model of other developing countries is discussed.

HDTV and the electronics industries of the East Asian NIEs

High Definition Television (HDTV) is expected to provide opportunities for and threats to the electronics industries of the East Asian Newly Industrialized Economies (EANIEs). Not all of them will be able to get involved in the core technologies, and will have to resort to involvement in complementary and ancillary technologies. They will have to co‐operate with the firms of developed countries to participate fully in HDTV.

Changing Labor Market Conditions and Economic Development in Hong Kong, the Republic of Korea, Singapore, and Taiwan, China

In the newly industrializing economies (NIEs) of Hong Kong, the Republic of Korea, Singapore, and Taiwan (China), the entire working population has benefited from labor market institutions. The East Asian NIEs attained and maintained generally full employment, improved their job mixes, raised real earnings, and lowered their rates of poverty. This article reaches two principal conclusions. First, labor market conditions continued to improve in all four economies in the 1980s at rates remarkably similar to their rates of aggregate economic growth. Second, labor market repression was not a major factor in the growth experiences of these economies in the 1980s. It thus appears that labor market repression is neither necessary nor desirable for outward-oriented economic development.

External shocks and structural adjustments in east Asian newly industrializing economies

AbstractThe two oil price increases and the subsequent recessions in the industrial countries in the 1970s constituted large external shocks for the trade‐dependent East Asian newly industrializing economies (NIEs). The effects of these external shocks on their balance of payments were two‐fold. First, the higher price of oil meant deteriorations of terms of trade and hence increases in import bills. The second impact was recession‐induced declines in the volume of exports. The recession also added to the protectionist pressures, especially against labour‐intensive exports of the NIEs. Therefore, there was a secondary decline in the demand for the NIE's exports. Unlike many other developing countries, however, the East Asian NIEs have coped with such large external shocks quite remarkably. In less than a decade they have been able to turn their current account deficits into surpluses. By using a framework developed by Salter and Corden, this paper seeks to examine the nature of the East Asian NIEs adjustment experience. The East Asian NIEs responded to external shocks with a policy package which included downward adjustments in exchange rates and reductions in absorption, especially public consumption. In the short run the depreciation of their currencies improved competitiveness and discouraged imports. It also switched expenditure away from tradables freeing goods for exports. While these short‐run adjustments improved their current accounts, the long‐run adjustments were crucial in sustaining these improvements and eventually producing surpluses in current accounts. In the longer run, depreciations of their currencies switched the production structure of Korea — and to some extent that of Taiwan — towards tradables. Hong Kong and Singapore were relatively less successful in restructuring their economy towards the traded sector. In the case of Singapore it was perhaps due to an excessive emphasis on the home‐ownership scheme. In Hong Kong the tying of Hong Kong dollar to that of the US led to a substantial appreciation of the currency when the US dollar rose in the early 1980s. Nevertheless, they were relatively more successful than most other developing countries. This paper suggests that this was due to their ability to regulate the labour market which, in turn, enhanced the switching effect of devaluation.