Theory of a Flowchart Approach to Industrial Cluster Policy

A flowchart approach to industrial cluster policy emphasizes the importance ofthe ordering of policy measures. The flow of policy implementation is to establish an industrial zone, to invite an anchor company, and to promote its related companies to invest in the industrial zone. This article delineated "a flowchart approach to industrial cluster policy" by proposing sufficient conditions for forming industrial clusters typical in the manufacturing industry in Asia to enhance regional economic growth. The typical industrial cluster policy was theorized by defining an industrial zone as "quasi-public goods", and it was shown that the policy enhances economic growth under a production function of "increasing returns to scale" of an anchor company. Critical amounts of the production of "scale economies" that are used by the related companies to decide whether or not to invest in clusters were also shown.

Agglomeration Economies in Japan: Technical Efficiency, Growth and Unemployment

This paper examines if the effects of agglomeration economies get manifested in technical efficiency and generate faster economic growth and higher (lower) levels of employment (unemployment). Using the prefecture level data for each of the two-digit groups of industries in Japan, the paper estimates region-specific technical efficiency index based on the stochastic frontier production function framework. The results of the factor analysis show that in most of the industry-groups (with a few exceptions) efficiency has a positive association with external scale variable(s). Though the relationship is not seen to be very strong, it would be equally erroneous to ignore the effect of agglomeration economies on efficiency. In the case of some of the light goods industries the agglomeration effect is relatively stronger. Further, economic growth varies positively with external scale variable(s) and unemployment rate tends to fall with respect to growth and concentration. All this tends to suggest that measures against industrial concentration may be counter-productive, particularly in the context of globalisation when countries are in dire need of raising productivity.

Development of land rental market and its effect on household farming in rural China : an empirical study in Zhejiang Province

This paper investigates the impact of land rental market development on the efficiency of labor allocation and land utilization in rural China. To test the hypothesis that the shadow wage of a rent-in household with limited off-farm opportunities will increase with the development of a land rental market for households, a statistical comparison between the shadow wage and the estimated market wage was conducted. The results showed that the shadow wage for both rent-in households and non-rent-in households was significantly lower than the market wage, but that the wage for the rent-in households was statistically higher than that for non-rent-in households in Fenghua and Deqing, the two counties surveyed in this study. In addition, the estimated marginal product of farmland for rent-in households was statistically higher than the actual land rent that those households paid, while a null hypothesis that the actual rental fee accepted by rent-out households is equivalent to the marginal product of farmland for those households was not rejected in Fenghua county where land transactions by mutual agreement were more prevalent. These results indicate that the development of the land rental market facilitates the efficiency of labor allocation and farmland utilization in rural China.

The Production Technology of Philippine Domestic Banks in the Pre-Asian Crisis Periods: Estimation of Cost Function in the 1990-96 Period

This is to analyzes the operational behavior and technical progress among Philippine domestic banks, using micro-level data on individual banks. First, we summarize their major business activities and gain insight on how the structure is changing. Then, we formally estimate the cost function of Philippine domestic banks using panel data covering a seven-year period (1990-96). The presence of economies of scale and economies of scope is investigated and technical progress in the banking industry is measured. In addition, the results of analysis for the Philippines are compared with those of similar studies on Thailand conducted by the author previously.

Production Networks and Spatial Economic Interdependence: An International Input-Output Analysis of the Asia-Pacific Region

The Asia-Pacific Region has enjoyed remarkable economic growth in the last three decades. This rapid economic growth can be partially attributed to the global spread of production networks, which has brought about major changes in spatial interdependence among economies within the region. By applying an Input-Output based spatial decomposition technique to the Asian International Input-Output Tables for 1985 and 2000, this paper not only analyzes the intrinsic mechanism of spatial economic interdependence, but also shows how value added, employment and CO2 emissions induced are distributed within the international production networks.

Economic impact of political protests (strikes) on manufacturing firms : evidence from Bangladesh

Political protests in the form of strikes, locally known as hartal, remain quite common in the Indian subcontinent countries. Such a form of protests is associated with mass movement, intended to cause a total shutdown of economic activities and often results in coercion, violence, and damage to both public and private properties. Utilizing the World Bank Enterprise survey data of 2007 and 2013 of Bangladesh, this study examines the impacts of hartals on manufacturing firms. We find that political protests significantly increase costs for firms. Using flexible cost function based on factor analysis we see that the factor-neutral effect of strikes is positive and statistically significant, showing evidence of a reduction in firm productivity due to hartals. However, we did not find any evidence for systematic factor re-optimization by firms – in response to political strikes – suggesting that firms do not reallocate factor shares to tackle uncertain and irregular shocks like hartals.