Newly Industrializing Economies Research Articles

A budgeting resource allocation model for capacity expansion

The reconfiguration of the global supply chain has created opportunities for newly industrialized economies (NIEs) to strengthen and expand their production capacities. We develop a dynamic modeling framework to study a firm’s resource allocation decisions while building capacity for a portfolio of production lines over multiple decision periods. Our model adds to the literature on versions of this problem in which distributions of market demands are incorporated into the investment-return function, and where no partial order fulfillment is possible. We consider two specific cases: one involving exogenously defined demand distributions, and one where the distributions of the parameters of the demand distribution are updated based on Bayesian inference. For each case, we first identify optimal capacity levels as a function of unit investment cost, holding cost, and the demand distribution of each production line. We then characterize the optimal path to reach these levels under different market conditions by deriving closed-form optimal resource allocation policies.

The determinants of the use of process control mechanisms in FDI decisions in headquarters–subsidiary relationships

This study investigates the impact of foreign direct investment (FDI) motivations and technological resource commitment on headquarters’ employment of process control over subsidiaries, to better understand the process control mechanisms. Drawing on agency theory and the resource dependence perspective, a cross-sectional data model is developed among the 1541 Taiwanese manufacturing firms engaged in foreign investments, 1015 headquarters–subsidiary (HQ–Sub) relationships in China were selected from the database; in each of these relationships, the headquarters is located in Taiwan, while the subsidiary is located in China. Our findings reveal that the headquarters will use process control if the primary motivation for setting up a subsidiary in a host country is resource-seeking, but not use process control with market-seeking motivation. This control process relationship is enhanced/weakened/weakened by the headquarters’/subsidiaries’/partners’ technological resource commitment. Taiwanese multinational corporations (MNCs) from newly industrialized economies (NIEs) seeking to choose control mechanisms that fit their technological resources and FDI motivations in China are given guidelines. It adds to the use of control mechanisms with HQ-Sub literature. Both resource-seeking and market-seeking motivations shed light on technological resource commitment by various units of an MNC, to ward off information asymmetry.

None-linear nexus between natural resources dependency, foreign direct investment, and environmental sustainability in newly industrialized countries

This study explores the non-linear effect of natural resource rents and foreign direct investment (FDI) on consumption-based carbon emissions in Newly Industrialized Economies (NIEs) from 1995 to 2020. Furthermore, this study examines the interactive effect of mineral resources and FDI, coal resources, and FDI using the method of moments quantile regression (MMQR). It also apply dynamic ordinary least square (DOLS), fully modified ordinary least square (FMOLS), and fixed effect-ordinary least square (FE-OLS) for the robustness. The preliminary findings confirm that cross-sectional units are interdependent with slope heterogeneity and panel cointegration. The subsequent results through MMQR reflect that mineral rents and coal rents tend to increase the carbon emissions across all the quantiles (0.10th to 0.90th); however, the average change in the dependent variable is higher at higher-order quantiles (0.60th-0.90th) and lower at lower order quantiles (0.10th to 0.30th). FDI tends to control trade-adjusted carbon emissions in all three ranges of quantiles. The interactive effect of mineral resources and FDI and coal resources and FDI support a significant reduction in carbon emissions. These findings suggest promoting the international flow of investment in the energy-efficient and natural resource industry for sustainable development.

The political economy of special economic zones: the cases of Ethiopia and Vietnam

There are over 5,000 Special Economic Zones (SEZs) in the world. About 75 percent of developing economies and almost all transition economies use SEZs in their early stages of industrialization. Why have SEZs traveled so far and fast globally? How does this policy vary when it enters different national contexts? I develop an SEZ policy adoption framework for developing or transitioning countries. I then apply the framework to compare how Ethiopia and Vietnam have learned from mainland China and Taiwan’s SEZ policies. Drawing on field interviews with 53 key stakeholders, I argue that the recent wave of SEZ adoption among late industrializers is rooted in their desires to catch up, just as China and other Newly Industrialized Economies (NIEs) did. A coalition between the NIEs’ governments, private investors, and state-owned companies actively promoting their model become the key policy ambassadors in the globalization of SEZ while expanding NIE capital to emerging markets. The localization of SEZs in national contexts, however, is constrained by their extant institutional settings. My case studies demonstrate the importance of policy transfer as a driver of SEZ policy and highlight the critical role that emulation plays in late industrialization.

Cross-National Distribution of Research Outputs in Accounting: A Bibliometric Analysis

This paper presents an empirical study of the cross-national distribution of research in accounting as a distinctive subject of business research using bibliometric methods. Data utilized in this study has been extracted from Scopus and sample nations include all OECD countries and Asian Newly Industrialized Economies (NIEs). Our analysis confirms a continuous process of convergence in research specialization in accounting between 1996 and 2015. We also find a developing shift in the connection between accounting and other areas of business research.

A koreai köztársaság kereskedelmi politikája és a koreu szabadkereskedelmi megállapodás

The Republic of Korea (South Korea) is one of the typical, newly-industrialised economies of Asia (ANIEs) that has undergone spectacular economic and social development over the last half century. Since the 1960s it has developed gradually and has become one of the most advanced nations of the world. As a result of the stalemate of the Doha-round, and of the financial and economic crisis in 2008–2009, a new trend seems to have emerged in the field of trade liberalization in the world. Instead of striving for a comprehensive, multilateral framework, a growing number of “new generation” free trade agreements have been emerging that are concluded on a bilateral level or among a few countries. The Republic of Korea joined this trend in 2008. Since then it has concluded a number of FTAs with Asian, American, European and other partners including the USA and the European Union, and it still has a number of draft agreements under negotiation. The EU-Korea FTA (KOREU) entered into force on 1 July 2011, marking a new era in EU-Korea trade relations. It is the most comprehensive free trade agreement ever concluded by the EU, and the first with a partner country in Asia. Since it came into force, import duties have been eliminated on nearly all products (98.7 % of duties within five years), which resulted in a far-reaching trade liberalization in services as well. Since 2011 the European Union’s exports to Korea have been growing, and the former trade deficit in the EU-Korea relations has shifted to European surplus in the balance of trade. This can be seen as an advantage for the EU, but it also reflects the vulnerability of the Korean economy’s competitiveness.

SPECIAL ECONOMIC ZONES: NEED OF THE HOUR

The ever-increasing global competition compels the governments to adopt export oriented trade strategies, thereby contributing towards overall economic growth and development. The high economic growth trajectory pursued by the newly industrialized economies (NIEs), has been propelled by increase in exports. Different countries have pursued policies of developing export zones, for imparting an outward orientation to their economy. India has also established such zones with denite objectives for foreign trade development and export promotion. It is signicant to understand the concept of Special Economic Zones (SEZs), Chinese model of SEZ, its principal benets, their performance and contribution towards trade competitiveness in India. SEZ as a trade policy needs to be evaluated in the light of SEZ Act, 2006. A non-parametric critical approach has been taken to study the SEZ policy in reference to its performance, limitations and challenges to perform in a highly competitive global environment.

Industrial Policy in the EU and Its Neighbourhood: Learning from Policy Experimentation

Newer approaches of industrial policy that focus on catalytic and facilitating interventions of government have become a rivalling model to neoclassical laissez-faire approaches. Inspired by the success stories of East Asian newly industrialised economies (NIEs), newer approaches advocate a more experimental policy stance. Newer industrial policies, including the concept of the “entrepreneurial state”, call upon governments to play a catalytic and facilitating role in increasing innovation and, thus, economic growth. During the past three decades, countries have experimented with some of these new approaches, and so has the European Union (EU). Currently, two major policy frameworks of the EU, Horizon 2020 and smart specialisation, shape the European approach to industrial policy and are gaining in importance for enlargement and neighbourhood countries, too. At the same time, these countries outside the EU have pursued their own experiments in industrial policy. The article argues that to better understand what contributes to the success or failure of industrial policies, learning from experiences made both by the EU and its neighbours is valuable. The article draws conclusions from three countries in the EU’s neighbourhood, Israel, Tunisia, and North Macedonia. In particular, the article examines the role EU approaches and programs, such as smart specialisation or Horizon 2020, can play in anchoring more entrepreneurial industrial policies in enlargement and neighbourhood countries and addresses problems to be expected when governments are to engage in policy experimentation.

ASEAN Political-Security Community: Challenges of establishing regional security in the Southeast Asia

Throughout the post-World War 2 history, Japan has looked on as a passive observer of the events happening in the Korean peninsular despite the peninsula’s geographical proximity and undeniable importance for her security. Neither the outbreak nor results of the Korean War, for example, were influenced by Japan’s action. She was not able to change the continuos division and conflicting relations between North (the Democratic People’s Republic of Korea) and South (the Republic of Korea) Koreas either. Other major neighbors, namely the US, the former Soviet Union, and China, played more active roles and had certain responsibilities in the establishment of the peninsula’s present situation. Even after the size of Japan’s economy, an important potential political power source, became undeniably huge and the basic character of international system, namely the Cold War situation, was changed, this impression of Japan’s passive, if not nonexistent, Korea policy has not changed much. To be exact, Japan played no minor role in South Korea’s achievement in becoming one of Newly Industrializing Economies (NIEs) through her provision of official developmental assistance (ODA) and private investment. But Japan’s ODA to South Korea was often either a response to American requests for strategic aid or, by building infrastructure, a foundation by which Japanese industry advanced on the South Korean market. Therefore, if Japan contributed to the economic growth of South Korea, it was a byproduct rather than the result of a grand strategy for the peninsular. When we turn attention to North Korea, Japan’s appearance has been even less visible. She did not earnestly attempt to draw North Korean society out of its isolation. Through the Korean Peninsula Energy Development Organization (KEDO), the Japanese

Can Chinese IT Firms Develop Innovative Capabilities within Global Knowledge Networks?

China’s opportunities to build innovative capabilities in the IT industry differ from those faced earlier by Japan and East Asian newly industrializing economies (NIEs). China has a unique combination of advantages in a booming market for electronics products and services, the world’s largest pool of low-cost and easily trainable knowledge workers, the emergence of sophisticated lead users and test-bed markets, and policy efforts to strengthen China’s innovation system. As a later latecomer, China can learn from the achievements and mistakes of earlier latecomers.The international environment is also dramatically different. Most important is the expansion of global knowledge networks, which have extended beyond markets for goods and finance into markets for technology and knowledge workers. Taking into account these important differences, this chapter addresses two questions: Does integration into global knowledge networks facilitate the efforts of Chinese IT firms to develop innovative capabilities? If yes, precisely what type of capabilities are they developing?The findings of this chapter can be summarized as follows:• Integration into global knowledge networks exposes Chinese IT firms to leading-edge technology, “best-practice” management, and sources of knowledge. • Knowledge about its own markets and production sites helps Chinese IT firms to exploit these opportunities.• Successful Chinese firms have not attempted to compete head-on with global leaders through radical innovations. Instead, they have focused on incremental and architectural innovations that support technology diversification strategies.• Integration into global networks needs to be supported by a strong domestic innovation system.These findings contradict a pessimistic literature that appraises China’s innovative capabilities as weak. They also contradict fears, sometimes played up for political purposes, that Chinese firms could make radical innovations that would challenge U.S. technology leadership. A central proposition here is that Chinese IT firms make the most progress in areas that escape the attention of both pessimists and proponents of an emerging technology threat.

Global Capital, Business Groups and State Coordination: the Changing Profile of Chaebol-State Relations in South Korea

This article examines the effects of global capitalism and state coordination on the financial behaviour of <em>chaebol</em> (business conglomerates) in South Korea. This study focuses on the evolution from controller to coordinator in the post-developmental South Korean state. In recent times, the Korean government has been studied as the exemplar of the Asian newly industrializing economies (NIEs) based on its ability to <em>control</em> economic development. As civil society pressures outgrew government control in the 1990s, the government’s mission shifted from control to <em>coordination </em>– the state sought to accommodate newly emerging or enlarged bargaining domains of key political-economic actors. However, the emergent post-developmental state is buffeted by the growing strength of the private sector, domestically and transnationally. While civil society strived to mobilize mass movements to further social democracy, the neoliberal evolution of capitalist class interests generated institutional configurations favouring the hegemony of finance capital.

The Age of Large-Population Countries and Marxian Optimal Growth Theory

While it appears that small-population economies were advantageous for growth when Asia's newly industrialized economies (NIEs) were expanding rapidly, we are now seeing a different trend in which large-population countries like China and India have become the most rapidly growing nations in the world. This is true for the BRIC states (Brazil, Russia, India, and China) as a whole. Brazil and Russia also have large populations of over 100 million, and their geopolitical and economic influence is crucial. This is one of the most important features of the present geopolitical economy. The present article first demonstrates this trend statistically and then proposes the hidden historical law underlying these phenomena. This anti-Malthusian law can be explained by Marxian optimal growth theory, as developed by our research group. This shows that each country experiences its own rapid growth phase over a certain period and finally realizes a higher per capita GDP similar to that of the present advanced nations. Under this trend, GDP balance among countries will become closer to the population balance among countries. It should be a much more equal world.

Collaboration with foreign universities for innovation: evidence from Chinese manufacturing firms

While prior research has focused upon the role of university-industry linkage in the promotion of innovation, there has been little research distinguishing the different roles of domestic and foreign universities in this pursuit. This paper explores the different impacts of domestic and foreign universities on innovation performance in emerging economies using a national firm-level survey database from China. It finds that international innovation collaboration with leading universities in other developing countries, especially with those in the Newly Industrialised Economies (NIEs) and the emerging South, is fruitful in enhancing the creation of ground-breaking innovations in indigenous Chinese firms. In contrast, the contribution of universities in the US/EU/Japan is significantly beneficial to foreign-invested firms. Collaboration with domestic universities has played a significant role in the diffusion of advanced technology in China.

Using Water Footprints for Examining the Sustainable Development of Science Parks

The Hsinchu Science Park was established in Taiwan in the 1980s, replacing traditional industries with high value-added and technology-intensive industries. Taiwan has become one of the Newly-Industrialized Economies (NIEs). However, the continued expansion of high-tech enterprises in science parks requires large amounts of resources to be consumed, deteriorating the quality of the environment, for which society must pay a high cost. In this study, the input-output model was used to explore the water footprints of the Hsinchu Science Park. The study results revealed that among the six industries at the Hsinchu Science Park, the integrated circuit industry (whether in 2001, 2004, or 2006) had the lowest total water consumption per unit of output. From a water footprint perspective, compared with the other industries of the science park, the development of the integrated circuit industry has had a lower impact on the environment. Furthermore, the integrated circuit industry, precision machinery industry, and biotechnology industry have become increasingly dependent on foreign water resources to alleviate the water shortage in Taiwan. In contrast to previous studies on water consumption, this study incorporated indirect water usage into the analysis; thus, a comprehensive view of the water consumption of each industry was analyzed from a broad perspective.

The role of universities in the national innovation systems of China and the East Asian NIEs: An exploratory analysis of publications and patenting data

The Triple Helix model highlights the ‘third mission’ of universities to engage in IP (intellectual property) creation and technology transfer activities further downstream. This paper uses publications data and US patent data to examine the role played by leading research-intensive universities in the national innovation systems of the emerging economy of China and the newly industrialised economies (NIE) of Singapore, Hong Kong, Korea and Taiwan. Our analysis highlights significant differences amongst these five East Asian economies, and also reveals contrasts to observed patterns in the USA and Europe. Our findings confirm that universities in the five economies have increased their contribution to their respective national innovation systems in terms of research output and R&D collaboration. The NIE universities experienced rapid patent growth rates over 1995–2005, followed by Chinese universities in the subsequent period of 2006–2010. However, the contribution of universities in all five East Asian economies to the total volume of IP creation in their economies generally remains low. Moreover, patent quality is low compared to patents from non-university sectors, suggesting weak technology commercialisation impacts.

Regulatory Reforms for Improving the Business Environment in Selected Asian Economies — How Monitoring and Comparative Benchmarking Can Provide Incentive for Reform

The determinants of a business friendly environment that underpin rapid and sustained economic growth include the macroeconomic and financial market environments, infrastructure, labor market skills and efficiency, and governance and institutions. Obtaining licenses and credit to start a business, finding and managing labor, ensuring investor protection, enforcing contracts, paying taxes, trading across borders, and identifying the requirements for closing a business are all important factors in assessing the operating climate for doing business. By comparative benchmarking, this paper examines these determinants in six developing Asian economies — the People’s Republic of China, Indonesia, Malaysia, the Philippines, Thailand, and Viet Nam — and compares them with similar indicators for five benchmark economies — the newly industrialized economies (NIEs) of Hong Kong, China; the Republic of Korea; and Singapore; and the developed economies of Japan and the United States. This paper also identifies areas where reform has taken place and where further efforts are needed, such as addressing policy uncertainties, the quality of governance and legal and institutional frameworks, and inadequate regulatory capacity. Attending to these shortcomings will require policymakers to implement structural reforms that improve efficiency and competitiveness by minimizing unnecessary regulatory barriers in business activities, encouraging private incentives and market discipline, creating a level playing field across all sectors, and fostering competition to upgrade institutional capacity. This paper argues that the regular monitoring of relevant indicators and comparative benchmarking can provide important incentive structures that encourage the sharing and implementation of good practices through peer pressure mechanisms and serve as a starting point for dialogue between governments and the private sector on reform priorities that can improve the business environment.

Fiscal discipline and competitiveness in newly industrialised economies: lessons from the Nordics model

This paper assesses selected fiscal and competitiveness issues in the newly industrialised economies (NIEs) of Hong Kong, Singapore, (South) Korea and Taiwan since the Asian financial crisis. The NIEs have been globally competitive and successful in maintaining a high degree of fiscal discipline up until the global financial crisis. Despite the temporary worsening of their fiscal balances due to the cyclical downturn, most of the NIEs have bounced back without apparent long–lasting negative repercussions. The paper also undertakes fiscal sustainability computations for the NIEs to assess their fiscal space and also discusses the new Nordics welfare model.

"Institutional Distances, Resources, and Entry Strategies of Newly Industrialized Economy Firms"

This research builds on the three institutional pillars to examine how newly industrialized economy (NIE) firms perceive the institutional distances with respect to their unique resources and in tu...

SAGE DOCTRINE, SOCIAL CAPITAL, AND LABOR — MANAGEMENT RELATIONS IN 21ST CENTURY TAIWAN

Within just four decades Taiwan was able to transform itself from a poor and backward economy into a high income, newly-industrialized economy. Taiwan's outstanding economic performance during this period prompted the World Bank and other international organizations to refer to this transformation as the "Taiwan miracle," and other developing countries have been encouraged to learn from Taiwan's experience. Harmonious and stable labor–management relations was — one of the major factors contributed to this successful development because they facilitated the inflow of a large amount of direct foreign investment (DFI) and therefore provided the island with the capital and appropriate advanced technologies that were urgently needed, and generated a large number of employment opportunities. In this paper, we use the concept of social capital to explain the causes of the harmonious labor–management relations in the past, and discuss the possible future of Taiwan's labor–management relations.

Relevance of Own R&D and Sources of Knowledge Transfer for Industrial Innovation in China

This study investigates industrial innovation and innovation patterns in China with a comparison to the Asian Newly Industrialized Economies (NIEs). It estimates knowledge production functions based on an original firm-level dataset. Estimation results suggest that even though firms in China carry out various innovation activities at the same time, the innovation pattern found among their counterparts in the Asian NIEs is still relevant for contemporary China. In particular, sourcing knowledge and technologies from their OEM customers still plays a crucial role for Chinese firms' process innovation. In contrast, firms cannot rely on this knowledge source for realizing more sophisticated, knowledge-intensive innovation outcomes, such as product innovation and patenting, for which their own R&D engagement is more significant.