Newly Industrialized Countries Research Articles

Strategic linkage process and value-driven system: A dynamic analysis of high-tech firms in a newly-industrialized country

The current balanced scorecard literature suggests that a link should exist between lagging and leading measurements of non-financial performance perspectives and financial performance measures. This work designed a dynamic integrated model for examining the influence of strategic links on the Taiwanese high-tech industry, and to examine the relationships among the strategic perspectives of the balanced scorecard (BSC). This work studied the descriptive validity of the balanced scorecard as a causal model for leading and lagging measurements of non-financial and financial performance in relation to time-lag effects. Structural equation modeling (SEM) and dynamic analysis were used to empirically examine the relations among strategic linkages and value drivers within the model. The analytical results demonstrate the existence of directly positive driver effects between the learning–growth, customer, and financial perspectives; also the internal process (leading measurements) mediates the relationship between learning–growth (leading measurements) and financial perspective (lagging measurements). The results indicated that time tag positively influenced the non-financial and financial perspectives, and that they were strongly correlated with the strategic linkage process.

Dutch Disease in the Labor Market: Women, Services, and Industrialization

The light manufacturing export industries have been the gateway to sustained growth in many newly-industrializing countries. Women have played an important role in those industries. This paper presents a theory linking women's work and industrialization. The theory fits the observation that in low-growth developing countries, women mostly work in household services while in higher-growth developing countries, women work in manufacturing. In the model, the existence of a services equilibrium or an industrialization equilibrium, or multiple equilibria depends on an economy's endowment of land relative to labor.

An Empirical Examination of East Asia´ s Pre-Crisis Pegged Exchange Rates

I. Introduction According to conventional wisdom, the rigidity of pre-1997 pegged exchange rate regimes in East Asia was one of the main causes of the currency crisis. (1) The basis for assuming that East Asia's pre-crisis exchange rates were rigid is the declarations of central banks about exchange rate policies. In practice, however, the declared exchange rate regime itself may not indicate rigidities--a tightly controlled managed float regime may be more rigid than a pegged regime with a wide band, ceteris paribus. As Ghosh et al. (1995) and Reinhart (2000) point out, declared exchange rate regimes may differ from the actual characteristics of exchange rates. Therefore, it is worthwhile to pursue a statistical examination of East Asia's pre-crisis exchange rates in order to identify their distinctive characteristics. We also investigate the issue of whether systematic relationships existed among East Asia's bilateral exchange rates vis-a-vis the U.S. dollar in the pre-crisis period. For example, was there a systematic relationship between the Malaysian ringgit-U.S, dollar exchange rates and the Thai baht-U.S, dollar exchange rate? The existence of such systematic relationships in the pre-crisis period would lend further support to the contagious nature of the Asian currency crisis. At the same time, the pre-crisis existence of relationships raises the interesting question of how the peg regimes were able to last so long in light of their vulnerability to external shocks. Evidence shows that intra-day, daily, or weekly exchange rates are approximated by martingales, and the returns exhibit conditional volatility, fat-tail distribution, skewness, and excess kurtosis. Autoregressive conditional heteroscedasticity (ARCH) models have been used successfully to describe foreign exchange rate data. More recently, Engle and Gau (1997) examine the conditional volatility of the exchange rates under the target zone regime of the European Monetary System (EMS). They find that exchange rates within the EMS show the same characteristics as free-floating exchange rates except for strong negative autocorrelations. Conditional volatility in exchange rates has been attributed to the irregular arrival of new information in the market. Engle, Ito, and Lin (1990) interpret volatility persistence in foreign exchange markets to either the time it takes market traders to act on new information or the autocorrelation of news across countries arising from potential policy coordination. They employ Ito and Roley's (1987) decomposition of the intra-day yen-U.S, dollar exchange rates based on the operating times of different markets to show volatility spillover across markets. On the other hand, Baillie and Bollerslev (1990) examine systematic relationships in the conditional returns or variances of the hourly bilateral exchange rates of the United Kingdom, Germany, Switzerland, and Japan vis-a-vis the U.S. dollar. They use the robust inference procedures of Wooldridge (1990) and Bollerslev and Wooldridge (1992) in order to handle the skewness and excessive kurtosis in the data. The results fail to show systematic relationships among the four major exchange rates. Our paper investigates the behaviour of the precrisis daily bilateral exchange rates of four Newly Industrializing Countries (NICs) of Hong Kong, South Korea, Singapore, and Taiwan, and four members of the Association of Southeast Asian Nations (ASEAN-4), Indonesia, Malaysia, Philippines, and Thailand, vis-a-vis the U.S. dollar. We perform preliminary analyses and robust misspecification tests to explore the distinctive characteristics of East Asian exchange rates. We also look for empirical evidence of systematic relationships among the region's precrisis bilateral exchange rates vis-a-vis the U.S. dollar. Although our paper is essentially a study of the behaviour of exchange rate rather than exchange rate policy or regime, we do attempt to draw some policy implications from our results. …

Unarmed Insurrections: People Power Movements in Nondemocracies and Citizen Power, Politics, and the Asian Miracle: Reassessing the Dynamics

Unarmed Insurrections: People Power Movements in Nondemocracies. By Kurt Schock. Minneapolis: University of Minnesota Press, 2005. $67.50 cloth, $22.50 paper. Citizen Power, Politics, and the Asian Miracle: Reassessing the Dynamics. By O. Fiona Yap. Boulder, CO: Lynne Reiner, 2005. $49.95. These works exemplify the kind of broadly comparative study that many political scientists call for, yet few actually undertake. Kurt Schock studies six different popular movements against authoritarian rule, and O. Fiona Yap analyzes the interaction between citizens and government in four Asian newly industrialized countries (NICs). Together, they illuminate the dynamics of state-society relations in illiberal political contexts.

Taiwan as a Business Model of Defense Technology Development for Newly Industrialized Countries in East Asia

Abstract The establishment of defense technology policies is highly complex. For example, domestic issues include technology capability, economic conditions, market size, and vision of the national military establishment. Meanwhile, international issues include threats from enemy nations, existing alliances, and the international arms market competition. Furthermore, due to the interactions among the above issues, a dynamic complexity phenomenon arises in developing defense technology policy. Unlike some of the most industrialized countries such as Europe and the United States, the establishment of defense technology policies in newly industrialized countries (NICs) in East Asia is rather difficult and serious. This study analyzes the situation of the seven largest arm-importing nations, assesses the efficiency of their military expenditure in enhancing military critical technologies (MCTs). Taiwan, the largest arms importer, is then adopted as a case study to analyze the characteristics and structures of...

Catch up of semiconductor latecomers in China

PurposeThis study aims to discuss the development of the semiconductor industry in China and analyzes it through current studies about the catch up of latecomers in newly industrialized countries (NICs).Design/methodology/approachUse the case study approach to explore and discuss the development track of the Chinese semiconductor industry and the catch up experience of Huang Hong NEC in China.FindingsThe experience of NICs can explain the catch up of semiconductor latecomers in China. However, the role of government has changed along with the whole development of the China semiconductor industry; external pressure may influence the pace of development and the span of control of the China Government for future catch ups.Research limitations/implicationsThe study focuses on one single case, which may not reflect the individual differences appeared in different firms in China.Originality/valueThis study contributes to our knowledge about the catch up of latecomer firms in an emerging market and verifies classical arguments about the experience of NICs through the experience of China's semiconductor industry.

Welfare restructuring in Asian newly industrialised countries: a comparison of Hong Kong and Singapore

English This article studies the patterns of welfare restructuring in Asian newly industrialised countries (NICs) in reaction to economic globalisation and socioeconomic change through a comparative study of Hong Kong and Singapore. It argues that Hong Kong has gone through a budget-driven restructuring resulting in the retrenchment of its residual welfare state, while Singapore has undergone a policy-driven restructuring that aims to consolidate the state regulation of the welfare society. The difference in the patterns of restructuring is found to be related to state strength, electoral politics, interest group politics, the production system and the pre-existing institutional arrangement of social programmes. The findings illustrate the characteristics of welfare restructuring in Asian authoritarian NICs.

Does internationalization affect union bargaining power? An empirical study for five EU countries

In this paper, we assess the impact of international trade on union bargaining power in five EU countries, using a two-step estimation procedure. In the first step, we use firm-level data to estimate union bargaining power at sector level within a production function framework. We simultaneously test for the bargaining regime and estimate, rather than impose, union preferences. We find that a labour-hoarding regime is clearly favoured over an efficient bargaining or a right-to-manage framework. Overall, unions appear to be wage-oriented. In the second step, the bargaining power estimates are regressed on variables reflecting the level of foreign competitiveness of OECD countries and Newly Industrialized Countries (NIC), as well as on a number of other potential determinants of union power. We find a significant negative impact of internationalization on union bargaining power that is comparable in NIC and OECD countries. Copyright 2006, Oxford University Press.

Future mitigation commitments: differentiating among non-Annex I countries

In the long term, any definition of adequacy consistent with UNFCCC Article 2 will require increased mitigation efforts from almost all countries. Therefore, an expansion of emission limitation commitments will form a central element of any future architecture of the climate regime. This expansion has two elements: deepening of quantitative commitments for Annex B countries and the adoption of commitments for those countries outside of the current limitation regime. This article seeks to provide a more analytical basis for further differentiation among non-Annex I countries. To be both fair and reflective of national circumstances, it is based on the criteria of responsibility, capability and potential to mitigate. Altogether, non-Annex I countries were differentiated in four groups, each including countries with similar national circumstances: newly industrialized countries (NICs), rapidly industrializing countries (RIDCs), ‘other developing countries’, and least developed countries (LDCs). Based on the same criteria that were used for differentiating among non-Annex I countries, a set of decision rules was developed to assign mitigation and financial transfer commitments to each group of countries (including Annex I countries). Applying these decision rules results in (strict) reduction commitments for Annex I countries, but also implies quantifiable mitigation obligations for NICs and RIDCs, assisted by financial transfers from the North. Other developing countries are obliged to take qualitative commitments, but quantifiable mitigation commitments for these countries and the LDC group would be not justifiable. As national circumstances in countries evolve over time, the composition of the groups will change according to agreed triggers.

Future mitigation commitments: differentiating among non-Annex I countries

Abstract In the long term, any definition of adequacy consistent with UNFCCC Article 2 will require increased mitigation efforts from almost all countries. Therefore, an expansion of emission limitation commitments will form a central element of any future architecture of the climate regime. This expansion has two elements: deepening of quantitative commitments for Annex B countries and the adoption of commitments for those countries outside of the current limitation regime. This article seeks to provide a more analytical basis for further differentiation among non-Annex I countries. To be both fair and reflective of national circumstances, it is based on the criteria of responsibility, capability and potential to mitigate. Altogether, non-Annex I countries were differentiated in four groups, each including countries with similar national circumstances: newly industrialized countries (NICs), rapidly industrializing countries (RIDCs), ‘other developing countries’, and least developed countries (LDCs). Based on the same criteria that were used for differentiating among non-Annex I countries, a set of decision rules was developed to assign mitigation and financial transfer commitments to each group of countries (including Annex I countries). Applying these decision rules results in (strict) reduction commitments for Annex I countries, but also implies quantifiable mitigation obligations for NICs and RIDCs, assisted by financial transfers from the North. Other developing countries are obliged to take qualitative commitments, but quantifiable mitigation commitments for these countries and the LDC group would be not justifiable. As national circumstances in countries evolve over time, the composition of the groups will change according to agreed triggers.

Bargaining in Less-Democratic Newly Industrialized Countries

Do governments in less-democratic newly industrialized countries (NICs) bargain with their citizens? In this article we develop a game-theoretic model to show that the government may not be able to avoid bargaining in open economies such as the Asian NICs when economic conditions are less than optimal. The reason is that, in the absence of government bargaining, citizens acting rationally and strategically choose to withdraw resources such as labor or production investment from a weak economy. Under these circumstances, government bargaining to elicit resource investment is a sub-game perfect equilibrium outcome. To test the model, we analyze data on production investment in the Asian NICs of South Korea, Taiwan, Singapore, and Malaysia from the 1960s to the 1990s. The analysis supports the prediction of the formal model and, hence, makes three contributions to the study of this topic. First, when we relax the assumption that citizens are naïve, governments in less-democratic open economies such as the Asian NICs may not be able to avoid bargaining with their citizens. Second, resource-withholding or withdrawal is an equilibrium strategy that convinces the government to bargain. Third, governments may bargain credibly even in the absence of formal constraints.

Industrial Restructuring and Early Industry Pathways in the Asian First-Generation NICs: The Singapore Garment Industry

The authors aim to contribute to understanding of the industrial dynamics/evolution of mature export production complexes in the first generation Asian newly industrialised countries (NICs), employing an evolutionary economic perspective. Over the past decade and longer, the first-generation Asian NICs, Singapore included, have been confronted with imperatives necessitating deep restructuring. We observe that the pattern of industrial decline associated with failed restructuring caused by lock-in does not fit these countries, industrial regions, and early industries. Yet research has hardly begun to look at adjustment or to address deeper evolution from tenets in the framework of evolutionary economics, although such an approach is made more rather than less relevant by continued resilience. We analyse the pathway(s) of one early industry, the apparel industry in Singapore, through the 1980s and 90s. The withering away in the Singapore context of an industry such as apparel manufacture is not inevitable. From a juxtaposition of the line of thinking in evolutionary economics in which hindrance and decline due to path dependency and lock-ins are emphasised, with an alternative line in which the possibility of adjusting through renewal and the limited operation of lock-ins is emphasised, we discuss why the latter rather than the former has been the case.

Development, flexibility and R & D performance in the Taiwanese IT industry: capability creation and the effects of state-industry coevolution

Of the East Asian Newly Industrialized Countries (NICs) Taiwan has one of the most inspiring stories. In almost all accounts of Taiwan, the state has been described as the major impetus of economic development and technological upgrading. Consequently, Taiwan has become the poster child of the neodevelopmental state theories. This paper takes a critical view of these accounts, exploring the capabilities and limits of the Taiwanese state in achieving sustained industrial growth in two key sectors of the IT industry, software and IC design. This is done through mapping the evolution of the two subsectors and the changing roles of the state in it, looking specifically at capabilities, innovations, and business models employed by private firms. The main arguments are, first, that the division of labor between state and private industry that successfully developed an industrial system utilizing OEM and ODM business strategies may now limit RD and, (2) when the public research institute has seen private IT firms as their final customers. However, the same policy approach has hampered the growth of the industry when the institutions competed directly with the industry for its own customers. Copyright 2005, Oxford University Press.

Latin America and International Trade: Regionalism and Beyond

Latin America In A Changing Global Environment. Edited by Riordan Roett and Guadalupe Paz. (Boulder, CO: Lynne Rienner, 2003. Pp. 243. $45.00 cloth.) The European Union, Mercosul And The New World Order. Edited by Helio Jaguaribe and Alvaro de Vasconcellos. (Portland, OR: Frank Cass, 2003. Pp. 247. $64.50 cloth, $26.50 paper.) East Asia And Latin America: The Unlikely Alliance. Edited by Peter H. Smith, Kotaro Horisaka, and Hoji Nishijima. (Lahman, MD: Rowman and Littlefield Publishers, 2003. Pp. 432. $80.00 cloth, $29.95 paper.) Trade Negotiations In Latin America: Problems And Prospects. Edited by Diana Tussie. (New York: Palgrave Macmillan, 2003. Pp.xiv+221. $70.00 cloth.) Greater America: A New Partnership For The Americas In The Twenty-First Century. By L. Ronald Scheman. (New York: New York University Press, 2003. Pp. 307. $35.00 cloth.) When at the beginning of the 1990s Latin America left debt crisis and dictatorships behind it, a new chapter started for many Latin Americanists as well. The transformation towards, or restoration of, democracy in various societies of the Western Hemisphere became the next phase in the careers of many scholars. At the same time a new type of expert entered the field of Latin American Studies: the trade specialist. The 1990s became the decade of the so-called "Washington Consensus" and of "Open Regionalism," setting off a whole process of financial [End Page 354] and economic transformation within and between Latin American countries. The new type of Latin American analyst focused on emerging, or re-emerging, trends in different parts of Latin America of trade liberalization and regional economic integration. Often presented as part of the same package of reforms identified as the Washington Consensus, trade liberalization and regional integration were actually stimulated in Latin America by both endogenous and exogenous factors. Within Latin America previous decades had seen a variety of pan-American or subregional initiatives aimed at creating free trade areas or common markets within sections of the hemisphere. Some succeeded, such as in the Caribbean; others, after eventful starts in the 1960's, like the Andean Pact or in Central America, faltered under the burden of the unruly economic and political decades that followed. However, until the ideologically-driven ISI (import substitution industrialization) outlook of many of the participating countries was abolished, no real opportunity existed for opening borders or widening regional trade relations. The end of international tensions created by the Cold War, the rise of new ideas in developed economies based on market deregulation and trade liberalization, as well as a new interest in so-called export-driven "emerging" economies or NICs (Newly Industrializing Countries), all allowed for renewed strategies in Latin America under the justification of the Washington Consensus, but all aimed at regional economic integration and trade liberalization. This was achieved either through bilateral approaches, as pursued by countries like Mexico and Chile, or through subregional initiatives, such as the Mercosur process or the revived Andean Community. Thus, the beginning of the 1990s saw a revival of regional integration strategies in Latin America, driven mostly by Latin American countries themselves. Outside of Latin America a number of important factors contributed to the opening up of Latin American markets, either by involving them in a wider type of extra-regional trade integration process, or by trying to strengthen their own indigenous processes of integration through political and technical assistance, and through development aid, often based in the contributing countries on a mix of idealism, political calculation and plain commercial interest. The main protagonists for these exogenous factors were the United States and the European Union (EU), with President George H.W. Bush's Enterprise of the Americas initiative and President Clinton's Free Trade Area of the Americas proposals being the most pronounced attempts in recent years to access Latin American markets and integrate them with the U.S. economy. On the other hand, the European Union, partially driven in its policies towards...

Strategic implications of manufacturing performance comparisons for newly industrialising countries

The manufacturing strategies and practices in a number of newly industrialising countries (NICs) are studied. The IMSS data for four Latin American industrialising countries, referred to as Group 1, are analysed, comparing these with two benchmarks, which represent more advanced manufacturing situations in well established industrialised countries. Comparing results indicated similarities for Group 1 with the two benchmarks, on simultaneously aiming at all their competitive goals. The study also proved a mismatch in their emphasis on the goals and the level of the objectives achieved in this regard. Links for this mismatch were searched for in various areas including human resource and technological aspects. Results also highlighted serious shortcomings for Group 1 in process technology criteria as compared with the two benchmarks. Comparison results with regard to human resources as well as planning and control aspects are also discussed in the paper. Based on this study, it has been concluded that environmental features have to be thoroughly analysed before any manufacturing strategy is developed for the firms in NICs. Further, continual interactions between manufacturing strategies for these firms with their environmental features have to be included in their strategy formulation process.

Globalization and systems of production and innovation in newly industrialized countries (NICs): lessons from Brazil

This article presents a working definition of ‘competitiveness’ and ‘social capabilities’ which should be taken into consideration when dealing with industrializing countries that are facing the challenges and opportunities of the ICT techno-economic paradigm. Empirical evidence from nine production and innovation ‘arrangements’ in Brazil are used in order to indicate the need for public policy, so that these challenges can be properly managed and the opportunities fully captured at a time of intense competition in the world market.

The globalisation of the construction industry—a review

The recent advances in transport and communication coupled with the protocols of the World Trade Organisation (WTO) have given access to markets that were previously insulated. The process that has come to be known as “globalisation” and is conceptualised as a situation where political borders become increasingly more irrelevant, economic interdependencies are heightened, and national differences are accentuated due to dissimilarities in societal cultures and central issues of business, is not new though. As railways and steamships lowered transport costs and Europe moved towards free trade during the late 19th Century, a dramatic convergence in commodity prices took place. Labour flows were considerably higher than usual, and millions of immigrants made their way from the old to the new world. These immigrants took with them their knowledge of construction that they employed in their new settlements, either as a hybrid with the local construction knowledge or supplanting the latter altogether. In this sense, the globalisation of construction had begun albeit unintentionally. Over the years, however, the construction industry has become well organised in similar ways to any other industry and WTO protocols have enabled firms to participate in cross-border markets unhindered. In principle, the unhindered access to international markets makes economic sense, but the reality is that only a few firms, particularly those based in advanced industrialised countries (AICs) can take full advantage of the open market. However, as globalisation is now an inescapable fact, firms based in both the newly industrialised countries (NICs) and least developed countries (LDCs) should adopt strategies that could enable them benefit from the open market. To enable comprehensive exploration of possible strategies that small firms in developing countries could adopt to benefit from the open construction market, this paper reviews the history of the globalisation of the construction industry and its current status. It concludes by pointing out the avenues that could be pursued by firms based in LCDs to benefit from the open construction market.

New international business perspectives on Pakistan

AbstractWhat image comes to mind when one thinks of Pakistan? Prior to the attacks of September 11, 2001, and the subsequent invasion of Afghanistan, many businesspeople had little information about this ancient land. Recently, Pakistan has come to the world's attention as a powerful ally in the U.S.‐led war against terrorism. Situated at the crossroads of the Middle East, Southeast Asia, China, and member nations of the former Soviet Union, Pakistan has long been a leading player in regional political and economic activity. This article presents some new perspectives on Pakistan as a market worthy of a closer look. We survey Pakistan's history and geography, as well as its sociocultural, political‐legal, economic, and competitive environments with a view to identifying new opportunities for foreign investors and global marketers. Current business trends and marketing opportunities are discussed, concluding with an outlook for future growth and development. Valuable insights are offered to businesspeople interested in doing business in Pakistan, a little‐studied but vitally important newly industrializing country (NIC) and big emerging market (BEM). © 2004 Wiley Periodicals, Inc.

State-Technologist Nexus in Taiwan's High-Tech Policymaking: Semiconductor and Wireless Communications Industries

The literature on East Asia's political economies identifies cohesive state bureaucracy and its effective intervention in the market as the key factors that have enabled the East Asian economic miracle and that differentiate the success of East Asian newly industrializing countries (NICs) from the failure of other developing countries. However, the sharply diverging growth trajectories of the Taiwanese semiconductor and wireless communications industries show that cohesive state bureaucracy and its effective intervention are not the generic trait of the Taiwanese developmental state, repeatedly found across industries and through time. On the contrary, the scope, depth, and coherence of state intervention are a variable rather than a constant. The semiconductor industry had an activist state promoting its growth from its very inception, whereas the wireless communications industry has failed to acquire consistent state support. Explaining the variation of state intervention requires not only an analysis of the state apparatus but also a study of its institutional links to the industry. This article develops an institutional explanation of the Taiwanese state's differing roles in promoting the semiconductor and wireless communications industries, but it differentiates itself from the existing literature of the developmental state and network theories by privileging the role of overseas technologists in influencing the scope, depth, and coherence of state intervention in two industries.

ITC investment, GDP and stock market values in Asia-Pacific NIC and developing countries

This study provides some evidence against the 'productivity paradox' in Asia-Pacific newly industrialized countries (NIC) and developing countries during the 1992-2001 period. The results show that information and communication technology (ITC) investments positively and significantly affect the GDP and stock market values in each of the analyzed Asia-Pacific NICs and developing countries: Hong Kong, Indonesia, South Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand. ITC-boosted growth increased national productivity, which translated into increased expectations of future profitability at the firm level and positively affected the values of the respective stock markets.