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22. Measuring the Competitive Threat from China
- Author:
- Rhys Jenkins
- Publication Date:
- 02-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- In recent years there has been a growing literature that analyses the threat which Chinese exports pose to the exports of other developing countries. The paper provides a critique of the standard measures of export similarity which have been used to estimate the threat from China in these studies. Two alternative indices, the static and the dynamic index of competitive threat, are developed and estimated for 18 developing countries and compared with estimates for the standard measures. It is shown that the latter tend to underestimate the extent to which countries are threatened by China. They also distort both the rankings of countries according to the extent to which they face competition from China and the direction of change in the competitive threat over time.
- Topic:
- International Political Economy and International Trade and Finance
- Political Geography:
- China and Asia
23. The Optimal Distance to Port for Exporting Firms
- Author:
- Thomas Gries, Wim Naudé, and Marianne Matthee
- Publication Date:
- 04-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Success in international trade depends, amongst other things, on distance from markets. Most new economic geography models focus on the distance between countries. In contrast much less theorizing and empirical analysis have focused on how distances within a country—for instance due to the location behaviour of exporting firms—matter to international trade. In this paper we contribute to the literature on the latter by offering a theoretical model to explain the optimal distance that an export-oriented firm would locate from a port. We present empirical evidence from South Africa in support of the model.
- Topic:
- International Trade and Finance
- Political Geography:
- Africa and South Africa
24. Ownership Reform, Foreign Competition, and Efficiency of Chinese Commercial Banks: A Non-Parametric Approach
- Author:
- Shujie Yao, Zhongwei Han, and Genfu Feng
- Publication Date:
- 04-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Since China joined the WTO in 2001, the pressure for bank reforms has mounted as China ought to fully open up its financial market to foreign competition by 2006. Efficiency is key for domestic banks to survive in a liberalised environment, but it appears that the last hope for raising bank efficiency is through ownership reform. Whether ownership reform and foreign competition can solve China's banking problem remains to be tested. This paper aims to answer this question through using a non-parametric approach to analyse the efficiency changes of 15 large commercial banks during 1998-2005. We find that ownership reform and foreign competition have forced the Chinese commercial banks to improve performance, as their total factor productivity rose by 5.6 per cent per annum. This coincides with the recent bullish Chinese stock markets led by three listed state-owned commercial banks. Despite such encouraging results, we remain cautious about the future of the Chinese banks, as the good results may have been artificially created with massive government support and the fundamentals of the banks may be still weak.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- China and Asia
25. The Rise of the Southern Economies: Implications for the WTO-Multilateral Trading System
- Author:
- Silvia Nenci
- Publication Date:
- 02-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The rise of the emerging southern economies – China, India, Brazil, and South Africa (CIBS) – as both economic and political actors, is having significant and far-reaching impact on the world economy. Notwithstanding the increasing amount of study and research, there are still important knowledge-gaps with respect to a range of likely consequences of the dynamism of the Southern Economies. One of these gaps concerns the implications for the WTO-multilateral trading system. The present paper proposes a review of the southern participation in the multilateral integration process and suggests a methodology to assess the impact of CIBS' rise on the future of the WTO system. Through the analysis of the trajectories of 'impact' of the trade channel, the paper draws some suggestive remarks.
- Topic:
- International Organization and International Trade and Finance
- Political Geography:
- Africa, China, India, Asia, South Africa, Brazil, and South America
26. Trade Expansion of China and India: Threat or Opportunity
- Author:
- Guanghua Wan and Mahvash Saeed Qureshi
- Publication Date:
- 02-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- By exploring the export performances and specialization patterns of China and India, we assess their trade competitiveness and complementarity vis-à-vis each other as well as with the rest of the world. Our analysis indicates that (i) India faces tough competition from China in the third markets especially in clothing, textile and leather products; (ii) there is a moderate potential for expanding trade between the two countries; (iii) China poses a challenge for the East Asian economies, the US, and most of the European countries especially in medium-technology industries; (iv) India appears to be a competitor mainly for its neighbouring South Asian countries; and (v) complementarity exists between the imports of China and India, and the exports of the US, some European states and East Asian countries, especially Japan, Korea, Malaysia, Singapore and Thailand, implying opportunities for trade expansion; and finally (vi) the export structure of China is changing with the exports of skill intensive and high-technology products increasing and those of labour-intensive products decreasing gradually. This suggests that challenges created by China in traditional labour-intensive products might reduce in the long run.
- Topic:
- International Trade and Finance
- Political Geography:
- United States, Japan, China, Europe, South Asia, Malaysia, India, Asia, Korea, Singapore, and Thailand
27. Trade Liberalization and the Self-employed in Mexico
- Author:
- Gurleen K. Popli
- Publication Date:
- 01-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- In this paper I examine the trend in income inequality and poverty among the selfemployed workers in Mexico over the last two decades (1984–2002). This is the period over which Mexico opened its economy to the global market through trade and investment liberalization. For the first decade following the liberalization, inequality and poverty among the self-employed increased; as the economy stabilized and the country saw economic growth inequality started to go down, but poverty kept increasing. To understand the changes in inequality and poverty I decompose the inequality and poverty indices into within and between group components. Rising returns to skilled labour, regional differences in impact of liberalization and sectoral shifts in employment are important factors in explaining the trends in both inequality and poverty.
- Topic:
- International Trade and Finance and Markets
- Political Geography:
- Mexico
28. Globalization and Smallholders: The Adoption, Diffusion, and Welfare Impact of Non-traditional Export Crops in Guatemala
- Author:
- Paul Winters, Angeli Kirk, Benjamim Davis, and Calogero Carletto
- Publication Date:
- 02-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- As developing countries continue on the path of economic liberalization, there is a compelling need to ensure that the benefits of globalization reach poor rural communities. Increased commercialization of agriculture and diversification into nontraditional exports (NTXs) is one strategy that has often been advocated as a way for developing countries to use their comparative advantage in lower labor costs and to achieve growth in the agricultural sector. Given the predominantly rural nature of most developing countries and the preponderance of poor people in these areas, high-value agricultural production is considered the ideal mechanism to extend the benefits of globalization directly to the rural poor:1 Allowing poor farmers to shift into the export sector and take advantage of internationally demand driven prices that are higher relative to traditional crops may reduce inequality while fostering overall economic growth (Nissanke and Thorbecke 2007).
- Topic:
- Agriculture, Development, Globalization, International Trade and Finance, and Poverty
- Political Geography:
- Global Focus
29. The Significance of Transport Costs in Africa
- Author:
- Wim Naudé and Marianne Matthee
- Publication Date:
- 08-2007
- Content Type:
- Policy Brief
- Institution:
- United Nations University
- Abstract:
- The success of Africa's exports, as well as its spatial development, depends on lowering transport costs. In this Policy Brief, we address a number of pertinent questions on transport costs in Africa, such as 'what are transport costs?', 'do transport costs matter for trade?', 'how important are transport costs in practice?', and 'why are Africa's transport costs so high?' We present a case study of the firm location decisions of exporters in South Africa to illustrate the significance in particular of domestic transport costs for manufactured exports. The message from this Policy Brief is that Africa's international transport costs are significantly higher than that of other regions, and its domestic transport costs could be just as significant. Moreover we show how domestic transport costs influence the location, the quantity, and the diversity of manufactured exports. Various policy options to reduce transport costs in Africa are discussed.
- Topic:
- Economics, International Trade and Finance, and Markets
- Political Geography:
- Africa
30. Stranger than Fiction? Understanding Institutional Changes and Economic Development
- Author:
- Ha-Joon Chang
- Publication Date:
- 08-2007
- Content Type:
- Policy Brief
- Institution:
- United Nations University
- Abstract:
- The volume Institutional Change and Economic Development fills some important gaps in our understanding of the relationship between institutional changes and economic development. It does so by developing new discourses on the 'technology of institution building' and by providing detailed case studies—historical and more recent— of institution building. It is argued that functional multiplicity, the importance of informal institutions, unintended consequences, and intended 'perversion' of institutions all imply that the orthodox recipe of importing 'best practice' formal institutions does not work. While denying the existence of universal formulas, the volume distills some general principles of institutions building from theoretical explorations and case studies.
- Topic:
- Development, Economics, International Cooperation, and International Trade and Finance
31. Foreign Direct Investment: Key Issues for Promotion Agencies
- Author:
- Sergey Filippov, Iornara Costa, and Mariana Zanatta
- Publication Date:
- 10-2006
- Content Type:
- Policy Brief
- Institution:
- United Nations University
- Abstract:
- The growing importance attached to attracting foreign direct investment (FDI) is evidenced by the steady rise of investment promotion agencies (IPAs) worldwide, especially from the early 1990s. Since its launch in 1995, the World Association of Investment Promotion Agencies (WAIPA) has registered a growing number of members representing cities, regions, countries and free zones from all over the world: from 112 in 2002, 161 in 2004, rising to 191 members from 149 countries in 2006. According to the United Nations Conference on Trade and Development (UNCTAD) there were around 500 IPAs in more than 160 countries in 2004.
- Topic:
- Foreign Policy, Development, Economics, and International Trade and Finance
- Political Geography:
- United Nations
32. Analysis of the Potential Impact of the Current WTO Agricultural Negotiations on Government Strategies in the SADC Region
- Author:
- A.J.E. Charman and J. Hodge
- Publication Date:
- 09-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This study aims to help identify how the Agreement on Agriculture (AoA) could potentially constrain government action to achieve food security in the Southern African Development Community (SADC). The paper considers the proposed tariff and subsidy reduction modalities of the current round of WTO negotiations. The main focus is on the potential direct effects of the AoA, in terms of proposed reductions to domestic subsidies and tariffs, on food security policy in SADC countries. The study examines the argument that subsidy reductions and further liberalizing market access may pose constraints on the food security policy options of governments within the region.
- Topic:
- International Trade and Finance, Markets, and Treaties and Agreements
- Political Geography:
- Africa
33. Regional Inequality, Industry Agglomeration and Foreign Trade: The Case of China
- Author:
- Yin Ge
- Publication Date:
- 09-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- How do foreign trade and foreign direct investment affect regional inequality? Foreign trade and investment may affect internal economic geography, and the resulting industry agglomeration may contribute to regional inequality. This paper provides empirical evidence supporting this linkage. The results indicate that the increasing regional inequality in China has been accompanied by an increase in the degree of regional specialization and industry agglomeration. Foreign trade and foreign investment are closely related to industry agglomeration in China. Industries dependent on foreign trade and FDI are more likely to locate in regions with easy access to foreign markets, and exporting industries have a higher degree of agglomeration.
- Topic:
- Economics, Industrial Policy, and International Trade and Finance
- Political Geography:
- China and Asia
34. The Determinants of Loan Contracts to Business Firms: Empirical Evidence from a Private Bank in Vietnam
- Author:
- Robert Lensink and Pham Thi Thu Trà
- Publication Date:
- 08-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper deals with loan contracting from a private bank in Vietnam. We focus on the main loan contract features that the bank uses in lending to business firms, namely loan maturity, collateral and loan interest rate. Based upon the simultaneous equation model of Dennis et al. (2000) and the bank's loan contracting policies, we examine the possible interdependency of the three different loan contract terms. Also, we try to determine which firm characteristics and exogenous factors are relevant for loan contracts. We find strong interdependencies between these contract terms with significant bi-directional relationships between collateral and loan maturity, loan rate and loan maturity, and a uni-directional relationship between loan rate and collateral. The conflicting signs within the collateral–loan maturity relationship and the loan interest rate–loan maturity relationship can be explained by our hypothesis that the choice for a certain loan maturity is primarily determined by borrowers' behaviors, whereas the loan rate and the collateral requirements are primarily determined by banks policies. In addition, our results support the relevance of firm quality, agency costs of debt and relationship lending in loan contract design.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- Vietnam and Southeast Asia
35. Financial Sector Development and Growth: The Chinese Experience
- Author:
- Mingming Zhou and Iftekhar Hasan
- Publication Date:
- 08-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper documents the financial and institutional developments of China during the past two decades, when China was successfully transformed from a rigid centralplanning economy to a dynamic market economy following its unique path. We empirically examine the relationship between financial development and economic growth in China by employing a panel sample covering 31 Chinese provinces during the important transition period 1986-2002. Our evidence suggests that the development of financial markets, institutions, and instruments have been robustly associated with economic growth in China.
- Topic:
- Development, Economics, and International Trade and Finance
- Political Geography:
- China and Asia
36. Excess Credit and the South Korean Crisis
- Author:
- Bassam A. Fattouh and Panicos O. Demetriades
- Publication Date:
- 08-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- We provide a novel empirical analysis of the South Korean credit market that reveals large volumes of excess credit since the late 1970s, indicating that a sizeable proportion of total credit was being used to refinance unprofitable projects. Our findings are consistent with theoretical literature that suggests that soft budget constraints and overborrowing were significant factors behind the Korean financial crisis of 1997-98.
- Topic:
- Economics, International Trade and Finance, and Markets
- Political Geography:
- Asia, South Korea, and Korea
37. The Political Economy of Taxation and Tax Reform in Developing Countries
- Author:
- Jonathan Di John
- Publication Date:
- 07-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Taxation provides one of the principal lenses in measuring state capacity, state formation and power relations in a society. This paper critically examines three main approaches (economic, administrative and political economy) to understanding taxation. It also examines differences in tax composition across middle-income developing regions and finds that Latin American economies tax upper income groups much less than in East Asia and Eastern Europe, and explores the political economy and policy implications of these differences. The paper also examines issues of tax reform in low income/post-war economies and explores the problem that capital flight poses for less developed countries.
- Topic:
- Development, International Trade and Finance, Political Economy, and Third World
- Political Geography:
- Eastern Europe, East Asia, and Latin America
38. Food Security in the South Pacific Island Countries with Special Reference to the Fiji Islands
- Author:
- K.L. Sharma
- Publication Date:
- 06-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper analyses the status of food security in selected South Pacific Island countries, namely Cook Islands, Fiji Islands, Papua New Guinea, Samoa, Solomon Islands, Tonga, and Vanuatu at the national and household levels during the period 1991-2002. Due to narrow resource base and production conditions, Pacific Islands concentrate on a few primary commodities for production and exports. During recent years import dependency for food items has increased mainly due to a decline in per capita food production and a rapid rate of rural-urban migration. Currently, export earnings can finance food imports but earnings could fall short of the requirements needed after the expiry of some commodity preferential price agreements with importing countries. National food security is dependent on the continuation of subsistence farming and tapping ocean resources in conjunction with the on-going commercial farming of those crops in which Pacific Islands have a comparative advantage. Increased productivity is crucial for improving agricultural performance through government investment in rural infrastructure, agricultural research and extension, irrigation and appropriate price incentives. This would also help alleviate poverty for improvement in economic accessibility of food by households. There is also a need to design appropriate disaster risk management programmes to minimize any adverse effects on the food supply.
- Topic:
- Economics, Human Welfare, and International Trade and Finance
- Political Geography:
- Australia/Pacific, Solomon Islands, Papua, Guinea, Cook Islands, Samoa, Tonga, Vanuatu, and Fiji
39. The Gender Dimensions of Post-Conflict Reconstruction: The Challenges in Development Aid
- Author:
- Elaine Zuckerman and Marcia E. Greenberg
- Publication Date:
- 06-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Based on analysing World Bank and other donor post-conflict reconstruction (PCR) loans and grants from rights-based, macroeconomic and microeconomic perspectives, we conclude that few PCR projects identify or address gender discrimination issues. Bank PCR investments hardly reflect Bank research recognizing that gender inequality increases the likelihood of conflict and gender equality is central to development and peace. Our conceptual framework examining women's programmes, gender mainstreaming, and gender roles in transforming violent into peaceful societies, leads to recommending that PCR projects systematically address gender issues and promote gender equality to make peace work.
- Topic:
- Development, Gender Issues, Humanitarian Aid, and International Trade and Finance
40. Does the WTO Agreement on Agriculture Endanger Food Security in Sub-Saharan Africa?
- Author:
- Samuel K. Gayi
- Publication Date:
- 06-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The paper examines the state of food security in Sub-Saharan Africa (SSA), based on an analysis of a selection of indicators of food security and nutritional wellbeing during the period 1990-2002 within the context of the WTO Agreement on Agriculture. It argues that it may be advisable for those SSA countries with both static and dynamic comparative advantage in agriculture to pursue policies towards 'food self-sufficiency' as a means to attaining food security, considering their large rural farming population, at least until such time that international trade in agriculture is fully integrated into the WTO disciplines. This is particularly relevant in view of the fact that high agricultural protectionism in the north currently distorts price signals and thus the opportunity costs of allocating factors of production in these economies. The SSA countries that lack comparative advantage in agriculture may want to aim for a 'food self-reliance' strategy to attain food security.
- Topic:
- Agriculture, Human Welfare, and International Trade and Finance