Showing papers in "Economics of Planning in 2011"
TL;DR: In this article, the authors analyzed the role that the governments have played in promoting innovation capacity and their contribution to economic development and found that innovation capacity has contributed significantly to the economic growth of China and India, especially in the 1990s.
Abstract: Decomposing the GDP growth from 1981 to 2004, this paper finds that innovation capacity has contributed significantly to the economic growth of China and India, especially in the 1990 s. Outputs of the national innovation system, measured by patents and high-tech/service exports, demonstrate the considerable progress China and India have made in innovation capacity. The enhanced innovation capacity of China and India is primarily due to their heavy investment in the inputs of innovation system, i.e., R&D expenditure and R&D personnel, in recent decades. This paper emphasizes the role that the governments have played in promoting innovation capacity and their contribution to economic development. Both governments have transformed their national innovation systems through linking the science sector with the business sector, providing incentives for innovation activities, and balancing import of technology and indigenous R&D effort. Using case studies of domestic biotech firms in China and India, this paper also offers micro-level insights on innovation capacity and economic development: (1) innovation capacity has become essential for domestic firms’ market success and (2) global institutional factors and national government policies on innovation have considerable influence on the choice of innovation at the firm level, i.e., to conduct indigenous R&D or to import foreign technology.
94 citations
TL;DR: In this article, the authors discuss relationship between export diversity and economic performance, focusing on Brazil, China, India and South Africa (BCIS), using time data on exports over the period 1962-2000 and applied general equilibrium (AGE) models for each country, and note the similarities as well as differences in the patterns of diversification in these countries.
Abstract: In this paper we discuss relationship between export diversity and economic performance, focusing on Brazil, China, India and South Africa (BCIS). Using time data on exports over the period 1962–2000 and Applied General Equilibrium (AGE) models for each country, we note the similarities as well as differences in the patterns of diversification in these countries. We find evidence of a U-shape relationship between per capita income and export specialization in at least China and South Africa, and given that the results from Granger causality testing are inconclusive and not robust with regards to export diversification measures, some preliminary evidence from the results suggest that export diversification Granger causes GDP per capita in Brazil, China and South Africa, but not in India, where it is rather GDP per capita changes that are driving export diversification. From AGE modeling we find that South Africa differs from the other economies in that it is the only case where export diversification has an unambiguously positive impact on economic development while in contrast in Brazil, China and India, it is rather export specialization that is preferred. We show that the manner in which export diversification is obtained may be important: if it is obtained with less of a reduction in traditional exports, the impacts are better (less negative).
55 citations
TL;DR: In this paper, the authors examined whether the Russian economy exhibits the symptoms of the Dutch Disease over the transition period begun in the early 1990s, and concluded that the risk of Dutch Disease exists, and two preventive thrusts of action could be undertaken to reduce its threat: namely to diversify the economy and to hold back the appreciation of the exchange rate through targeted fiscal and monetary policies.
Abstract: The present study examines whether the Russian economy exhibits the symptoms of the Dutch Disease over the transition period begun in the early 1990s. Five warning signs have been detected, namely, a real exchange rate appreciation (1); a flourishing economic situation pushed by higher oil prices (2); a relative de-industrialisation (3); an export reduction in the non-booming-sector (4) and a real wage growth (5). The first three symptoms are estimated simultaneously in a VECM dimension. The results suggest the existence of three long-run cointegrating vectors, thus confirming the presence of the first three symptoms. Specifically, a 10% oil price shock leads to a real appreciation by 4%, a rise in GDP by 3% and a decline in domestic manufacturing production vis-a-vis service production by another 3%. Finally, a number of manufacturing exports have been crowded out and real wages have recorded important increases. To a certain extent, this corroborates the presence of symptom 4 and 5. The paper concludes that the risk of the Dutch Disease exists, and two preventive thrusts of action could be undertaken to reduce its threat: namely to diversify the economy and to hold back the appreciation of the exchange rate through targeted fiscal and monetary policies. These instruments would render Russia less vulnerable to exogenous shocks.
46 citations
TL;DR: In this paper, the authors examined Wagner's law and the Keynesian hypothesis concerning the link between real government spending and real GDP using both a bivariate and a multivariate model.
Abstract: By making use of annual data from Malaysia for the period 1970 to 2006, this paper examines Wagner’s law and the Keynesian hypothesis concerning the link between real government spending and real GDP. Unlike most existing studies, we utilize both a bivariate and a multivariate model. In addition, we consider two cases: one that focuses on the link between aggregate government spending and GDP and the other where the link between government spending on education and GDP is considered. The use of a multivariate model serves to reduce the problem of serious misspecification which appears to have been ignored by most existing studies. The presence of cointegration is investigated by means of Auto Regressive Distributed Lag (ARDL) approach. This approach also allows one to distinguish between the short and the long-run relationships. Within the context of a bivariate model, our empirical analysis reveals that aggregate government spending Granger causes the real GDP which supports Wagner’s law. However, in a multivariate framework, we found support for the Keynesian hypothesis suggesting that omitted variables bias can significantly alter the validity of Wagner’s law.
42 citations
TL;DR: In this article, the authors present results from an econometric analysis of Russian bank defaults during the period 1997-2003 focusing on the extent to which publicly available information from quarterly bank balance sheets is useful in predicting future defaults.
Abstract: This paper presents results from an econometric analysis of Russian bank defaults during the period 1997–2003, focusing on the extent to which publicly available information from quarterly bank balance sheets is useful in predicting future defaults. Binary choice models are estimated to construct the probability of default model. In the first part of the paper we analyse bank survival over the financial crisis of 1998. We find that preliminary expert clustering or automatic clustering improves the predictive power of the models and incorporation of macrovariables into the models is useful. Heuristic criteria are suggested to help compare model performance from the perspectives of investors or banks supervision authorities. In the second part of the paper we use the probability of default models developed in the first part in rolling windows to analyse the Russian banking system trends after the crisis 1998.
28 citations
TL;DR: In this paper, the authors analyzed the patterns of export productivity and trade specialization profiles in Brazil, China, India and South Africa, and in other economic groupings and regions, and revealed that there are important differences in the export productivity, and export sophistication are in line to that of wealthier and more advance economies.
Abstract: The paper analyses the patterns of export productivity and trade specialization profiles in Brazil, China, India and South Africa, and in other economic groupings and regions. Various measures of trade specialization and a time varying export productivity indicator are estimated using highly disaggregated export data. The findings reveal that there are important differences in the export productivity and specialisation patterns across countries and regions. Export productivity—and export sophistication—are in line to that of wealthier and more advance economies. The results further confirm the importance of not just the volume of exports, but the type of specialisation patterns.
28 citations
TL;DR: In this article, the authors compare Brazil and the CIBS group of countries from the point of view of the direction and intensity of structural change and suggest that structural change has been relatively weak in Brazil and that this has been associated with a less dynamic growth performance since the 1980s.
Abstract: Schumpeterian growth theory stresses the role of structural change in long run growth. Countries which increase the share of technology-intensive sectors in their economic structures benefit more from technological learning and innovation. In addition, they are more able to respond to changes in the international markets and to compete in sectors whose demand grows at higher rates. The paper compares Brazil (and to a lesser extent the CIBS group of countries) from the point of view of the direction and intensity of structural change. It is suggested that structural change has been relatively weak in Brazil and that this has been associated with a less dynamic growth performance since the 1980s.
17 citations
TL;DR: In this article, the authors analyzed the export growth of China's information communication technology (ICT) products in two major markets Japan and the US from 1995 to 2008 and its competition with six East Asian countries: Indonesia, Malaysia, Philippines, Thailand, Singapore and Korea.
Abstract: This paper analyzes the export growth of China’s information communication technology (ICT) products in two major markets Japan and the US from 1995 to 2008 and its competition with six East Asian countries: Indonesia, Malaysia, Philippines, Thailand, Singapore and Korea. The analysis shows that China has emerged as the largest single supplier of ICT products to both markets. By 2008, China’s exports accounted for 44 and 38% of total Japanese and the US ICT imports respectively. On the other hand, market shares of the six East Asian countries either remained stagnant or decreased substantially. The analysis by destination markets and by product categories indicates that, there exist significant negative correlations between market shares of China and that of the six East Asian countries, implying that the rapid expansion of China’s ICT exports crowded out exports of its East Asian competitors.
11 citations
TL;DR: In this paper, the authors studied the effect of property rights regime on farm efficiency, using a high-quality representative sample from Ukraine's agricultural sector, and found that a fully delineated and secure system of property right leads to large positive gains in efficiency.
Abstract: This paper studies the effect of property rights regime on farm efficiency, using a high-quality representative sample from Ukraine’s agricultural sector. At the farm level, I find that a fully delineated and secure system of property rights leads to large positive gains in efficiency. In Ukraine, farms with a well-defined and enforced governance system have 20% higher level of productive efficiency and 9% higher level of technical efficiency as compared to farms with a contractual incompleteness. The ownership arrangement has profound effect on agricultural production in Ukraine.
10 citations
TL;DR: The authors showed that intermediate imports are significantly affected by manufactured exports, and that once the effect is controlled for, there is no significant rise in their income-elasticity, in contrast to what is observed for other types of imports.
Abstract: Numerous applications of the balance-of-payments-constrained growth (BPCG) model have concluded that Mexico’s equilibrium GDP growth rate fell after trade liberalization, because of a sharp rise in the income-elasticity of imports. Following the bounds testing approach of Pesaran et al. (2001), the present note estimates equations for intermediate and other types of imports in Mexico from 1960 to 2006. It shows that intermediate imports are significantly affected by manufactured exports, and that once the effect is controlled for, there is no significant rise in their income-elasticity—in contrast to what is observed for other types of imports. Since manufactured exports are highly intensive in imports, what the typical BPCG regression detects as an increase in the elasticity of intermediate imports may reflect a compositional effect, namely, the re-composition of GDP towards exports. Some implications for the BPCG model are briefly discussed in the conclusions.
9 citations
TL;DR: In this article, the authors evaluate the potential usefulness of self-rated health (SRH) as an indicator of health in a developing country context using a data set generated from Enugu State, Nigeria, which includes information on SRH and health status index (HSI).
Abstract: The use of self-rated health (SRH) as an indicator of health has generally been limited to the study of socioeconomic inequalities in industrialized societies. We evaluate the potential usefulness of this indicator in a developing country context using a data set generated from Enugu State, Nigeria, which includes information on SRH and health status index (HSI). We also evaluate the difference in the estimated socioeconomic inequality in health using two specifications of the concentration index: the standard specification and Erreygers (J Health Econ, 28:504–515, 2009a) specification. The results show that self rated health is a potentially useful indicator of health state for populations in developing countries. Our tentative results indicates that the Erreygers (J Health Econ 28:521–524, 2009b) specification of the concentration index detects larger levels of inequality than the standard specification, and thus raises questions for researchers who use results obtained from the instrument for policy advice. The simulation results also show that the level of social aversion to socio-economic differences among people would generally increase the perceived level of health inequality in a population.
TL;DR: In this paper, comparable data is used examining labor force participation in the Baltic States in 1990 (the late Soviet period), 1996, and 1999, showing that much of the decrease was concentrated among older individuals (over 55) and women.
Abstract: It is well documented that labor force participation rates fell precipitately as the economies of the former Soviet Union and Central and Eastern Europe made the transition from plan to market. However data allowing for direct comparison between the planned and transition periods of specific countries is rare. Here comparable data is used examining labor force participation in the Baltic States in 1990 (the late Soviet period), 1996, and 1999. While the data do indicate large drops in labor force participation, much of the decrease was concentrated among older individuals (those over 55) and women.
TL;DR: In this paper, the ability of the Egyptian Bank Reform Plan (2004-2009) to enhance bank efficiency and attain the prime national macroeconomic objectives of generating youth employment, stabilizing consumer prices and managing national debt, which were significantly impacted by the global financial crisis (GFC).
Abstract: This study tests the ability of the Egyptian Bank Reform Plan (2004–2009) to enhance bank efficiency and attain the prime national macroeconomic objectives of generating youth employment, stabilizing consumer prices and managing national debt, which were significantly impacted by the global financial crisis (GFC). The Pedroni Fully Modified Ordinary Least Squares (FMOLS) method is employed and the period covered extends from 2003:01 till 2010:03. The results of the study reveal that the bank reform program has helped the economy weather the impact of the global economic meltdown. On the whole, the reformed banking sector showed evident success in helping the Central Bank of Egypt achieve its nominal anchor of price stability, with the highest outcome delivered by foreign banks. State banks are the most efficient in creating jobs and financing national debt. Private domestic banks are fairly functional in job creation and financing foreign debt. While these results attest to the general success of the reform in mitigating the impact of the blow of the GFC, further enhancement of the role of foreign banks is needed to attain the other two macroeconomic goals.
TL;DR: In this paper, a stylized model of regional development is introduced, which is characterized by two pillars: (1) international integration indicated by FDI and/or trade lead to imitation of international technologies, technology spill overs and temporary dynamic scale economies, and (2) domestic factors indicated by human and real capital available through interregional factor mobility.
Abstract: Concerns about the duration of China’s growth and hence the question of a permanent significant contribution of China to world economic growth relate, amongst other things, to the problem of reducing regional disparity in China. While China’s high average growth is driven by a small number of rapidly developing provinces, the majority of provinces have experienced a more moderate development. To obtain broad continuos growth it is important to identify the determinants of provincial growth. Therefore, we introduce a stylized model of regional development which is characterized by two pillars: (1) International integration indicated by FDI and/or trade lead to imitation of international technologies, technology spill overs and temporary dynamic scale economies, and (2) domestic factors indicated by human and real capital available through interregional factor mobility. Using panel data analysis and GMM estimates our empirical analysis supports the predictions from our theoretical model of regional development. Positive and significant coefficients for FDI and trade support the importance of international integration and technology imitation. A negative and significant lagged GDP per capita indicates a catching up, non steady state process across China’s provinces. Highly significant human and real capital identifies the importance of these domestic growth restricting factors. However, other potentially important factors like labor or government expenditures are (surprisingly) insignificant or even negative. Extending the model using an unbalanced panel leads to a positive effect of the quality of governance and institutions on development.
TL;DR: In this paper, the authors compare economic efficiencies in Brazil, India, and China, where economic efficiency measures the gap between potential and actual output for a given input combination and technological factor.
Abstract: We compare economic efficiencies in Brazil, India, and China, where economic efficiency measures the gap between potential and actual output for a given input combination and technological factor. We use stochastic production frontier models to measure the contributions of factors of production and technology to growth and estimate non-positive error terms that capture production inefficiencies in each country. The results suggest that China and India had relatively inefficient production in the early 1980s but have since improved production efficiency substantially. In the same period, production efficiency in Brazil has lagged those of China and India. The gap between Brazil’s production efficiency and those of its Asian peers has narrowed in recent years. However, production remains more efficient in China and India, supporting more rapid growth in these countries relative to Brazil.