Border Industry in Myanmar: Turning the Periphery into the Center of Growth

The Myanmar economy has not been deeply integrated into East Asia’s production and distribution networks, despite its location advantages and notably abundant, reasonably well-educated, cheap labor force. Underdeveloped infrastructure, logistics in particular, and an unfavorable business and investment environment hinder it from participating in such networks in East Asia. Service link costs, for connecting production sites in Myanmar and other remote fragmented production blocks or markets, have not fallen sufficiently low to enable firms, including multi-national corporations to reduce total costs, and so the Myanmar economy has failed to attract foreign direct investments. Border industry offers a solution. The Myanmar economy can be connected to the regional and global economy through its borders with neighboring countries, Thailand in particular, which already have logistic hubs such as deep-sea ports, airports and trunk roads. This paper examines the source of competitiveness of border industry by considering an example of the garment industry located in the Myanmar-Thai border area. Based on such analysis, we recognize the prospects of border industry and propose some policy measures to promote this on Myanmar soil.

Multiplant strategy under core-periphery structure

A typical implicit assumption on monopolistic competition models for trade and economic geography is that firms can produce and sell only at one place. This paper fallows endogenous determination of the number of plants in a new economic geography model and examine the stable outcomes of organization choice between single-plant and multi-plant in two regions. We explicitly consider the firms' trade-off between larger economies of scale under single plant configuration and the saving in interregional transport costs under multi-plant configuration. We show that organization change arises under decreasing transportation costs and observe several organization configurations under a generalized cost function.

Globalization and the Evolution of the Supply Chain: who gains and who loses?

This paper focuses on two distinct facets of globalization: the decrease in the trade costs of goods and the decline of communication costs between headquarters and production facilities within firms. When the unskilled have about the same wage in the two regions, the decrease of these costs fosters the gradual agglomeration of plants in the core region accommodating the headquarters. By contrast, when the wage gap is significant, the process of integration eventually triggers the re-location of plants into the periphery. In particular, when the process of re-location is driven by falling communication costs, the welfare of all workers living in the core goes down whereas the welfare of those who reside in the periphery rises.

Chapter 2 Equilibrium locations of upstream and downstream firms

This paper explores the interaction between upstream firms and downstream firms in a two-region general equilibrium model. In many countries, lower tariff rates are set for intermediate manufactured goods and higher tariff rates are set for final manufactured goods. The derived results imply that such settings of tariff rates tend to preserve a symmetric spread of upstream and downstream firms, and continuing tariff reduction may cause core-periphery structures. In the case in which the circular causality between upstream and downstream firms is focused as agglomeration forces, the present model is fully solved. Thus, we find that (1) the present model displays, at most, three interior steady states, (2) when the asymmetric steady-states exist, they are unstable and (3) location displays hysteresis when the transport costs of intermediate manufactured goods are sufficiently high.

Measuring population mobility speed from space

Ad-hoc population dynamics in Krugman’s type core and periphery models adjust population share of a region, based on its real wage rate deviation from national average, at pre-specified speed of population mobility. Whereas speed of population mobility is expected to be different across countries, for geographical, cultural, technological, etc. reasons, one common speed is often applied in theoretical and simulation analysis, due to spatially patchy, and temporally infrequent, availability of sub-national regional data. This article demonstrates how, increasingly available, high definition spatio-temporal remote-sensing data, and their by-products, can be used to measure speed of population mobility in national and sub-national level.