Integration versus Outsourcing in Stable Industry Equilibrium with Communication Networks

For the selection of a firm's structure between vertical integration and arm's-length outsourcing, the importance of the thickness of the market had been emphasized in the previous literature. Here we take account of communication networks such as telephone, telex, fax, and the Internet. By doing so, we could illustrate the relationship between communication networks and the make-or-buy decision. With communication network technology differing in each type of firm, both vertically integrated firms and arm's-length outsourcing firms coexist, which was never indicated in the previous literature. However, when common network technology is introduced, such coexistence generically does not occur.

Expansion of Asparagus Production and Exports in Peru

Peru is the one of the most important exporters of asparagus in the world. Its export volume of fresh asparagus is ranked number one, and its export volume of preserved asparagus number two, globally. The objective of this paper is to provide an overview of the recent trends in asparagus production and exports around the world and to analyze factors in the development of the Peruvian asparagus industry. The production of asparagus has spread geographically. The center of its production used to be in the principal consuming countries, such as France, Germany and the United States. Afterward, it spread to neighboring countries such as Spain and Mexico where production factors such as climate and labor costs are favorable. After the rise and fall of Taiwan as a major preserved white asparagus exporter, China and Peru replaced its position. Finally, in recent years, Peru expanded its fresh green asparagus exports to the U.S. market by taking advantage of the increasing demand for fresh vegetables and supplying produce in seasons when neither U.S. nor Mexican producers can harvest. In addition to the changing factors in the international market, there are several factors in the development of the industry: high yields of produce due to favorable climatic and soil conditions; the introduction of the drip irrigation system, which enabled desert cultivation; the integration of production and exports, which is indispensable for fresh produce exports; and the collective efforts of the industry with help from the public sector.

The Nature of the State in Afghanistan and Its Relations with Neighboring Countries

Since the formation of Afghanistan, its nature as a Pashtun state has affected all its international relations. On the other hand, the fact that it was originally established as a buffer state between Britain and Russia still governs its national integration. In this article I examine Afghanistan's relations with its neighbors through an investigation of its history and the present conditions of its borders with its southern, western and northern neighbors. My aim is to obtain an overall perspective of Afghanistan's relations with its neighbors, historically decisive elements, and the aftermath of the September 11 terrorist attacks.

An Asian Triangle of Growth and Cluster-to-Cluster Linkages

It is expected that an Asian triangle of growth will be formed in the coming few decades. China, India and ASEAN surround the Asian triangle, which is home to many industrial clusters. Multinational corporations will link these clusters together. Regional integration will help them in this task by lowering the barriers of national borders. This paper explains the necessity of regional integration for cluster-to-cluster linkages in the Asian triangle of growth.

Integration under 'One Country, Two Systems' - The Case of Mainland China and Hong Kong-

Ever since the handover of the territory in 1997, Hong Kong has had its own unique law and its own economic system and international legal personality, and has not been integrated with Mainland China. The Basic Law guarantees the uniqueness of the Hong Kong SAR until 2047. But close economic ties between Hong Kong and the Mainland will promote closer economic integration. The Basic Law limits only a customs union and the introduction of a single currency, but not the formation of a Free Trade Agreement (hereafter FTA) and monetary union. FTA has already been realized in the form of the Closer Economic Partnership Arrangement (hereafter CEPA). The Hong Kong SAR government, including the bureaucrat as well as the Chief Executive Tung Chee Hwa, was opposed to, and hesitant towards, the formation of a regional trade agreement with the Mainland, but the business community made them to adopt a positive attitude towards the CEPA. It is unclear how much integration can been deepened, but it can be argued that the current policy of the Hong Kong SAR is too supportive of business, and an excessive degree of economic integration may threaten the uniqueness of Hong Kong. But if Hong Kong achieves democracy and enjoys complete autonomy, it will be easy for economic integration to co-exist with the 'One Country, Two Systems' approach, in the interests of the business community and of the citizens of the SAR.

Bringing Non-governmental Actors into the Policymaking Process: The Case of Local Development Policy in Thailand

During the past two decades in Thailand, non-governmental actors, such as NGOs, intellectuals, and people's organizations, have found widening opportunities to participate in policy formation and in the implementation of local development. The government has facilitated the formation of civil society forums, in the expectation of influencing local-level governance. The last two national five-year development plans were formulated after taking into account the voices of people in the provinces. Even though they may seem petty, some state funds are now transmitted through non-governmental institutions for policy implementation at the grassroots level. These changes have their origin in a reformation of rural development administration in early 1980s. This reformation in due course led to policies that have allowed the participation of non-governmental actors. Meanwhile, rural people have proved their ability to engage in participatory development by forming various local organizations, while NGOs have grown to be proficient facilitators of local development. This paper describes the process whereby three leading actors, namely the government, local people, and the NGOs, have interacted to bring about a more participatory system of local development administration.

Financial Cooperation in East Asia

This paper addresses the rationale for financial cooperation in East Asia. It begins by giving a brief review of developments after the Asian currency crisis, and argues that enhancing regional financial cooperation both quantitatively and qualitatively will require: (1) upgrading surveillance capabilities in the region, and (2) creating a clear division of labor between regional institutions and the IMF. It also mentions the issue of membership and the background forces that have led to the duplication of similar forums in East Asia. Although the concern over crisis management is the central issue in East Asian financial cooperation, other issues such as exchange rate policy coordination and fostering regional capital markets are discussed as well.

Export-Led Growth and Geographic Distribution of the Poultry Meat Industry in Brazil

This paper includes an examination of the sustainability of recent high growth in the poultry meat industry in Brazil. In addition, an assessment is made of the impact of increased production of poultry meat products on the development of local industries. Comparative studies of leading companies in the United States, Mexico, and Brazil reveal competitive advantages in the low costs of feedstuff and labor as well as disadvantages in the scale of business and management efficiency in the Brazilian poultry sector. Increases in domestic and foreign demand for Brazilian poultry meat have promoted development of the Brazilian poultry sector in local areas. The formation of industrial clusters is observed using regional data related to the location of slaughterhouses and the number of chickens farmed. Statistical analyses support observations made in this paper.

Myanmar's Economic Relations with China: Can China Support the Myanmar Economy?

Against the background of closer diplomatic, political and security ties between Myanmar and China since 1988, their economic relations have also grown stronger throughout the 1990s and up to 2005. China is now a major supplier of consumer and capital goods to Myanmar, in particular through border trade. China also provides a large amount of economic cooperation in the areas of infrastructure, energy and state-owned economic enterprises. Nevertheless, Myanmar’s trade with China has failed to have a substantial impact on its broad-based economic and industrial development. China’s economic cooperation apparently supports the present regime, but its effects on the whole economy will be limited with an unfavorable macroeconomic environment and distorted incentives structure. As a conclusion, strengthened economic ties with China will be instrumental in regime survival, but will not be a powerful force affecting the process of economic development in Myanmar.

Winner-Take-All Contention of Innovation under Globalization: A Simulation Analysis and East Asia's Empirics

This paper sets out to examine how innovation enhances export competitiveness: The proposition that export volume becomes enhanced as more productivity-enhancing innovation is captured by the exporting economy is the focus of this study. From a Schumpeterian perspective, innovation can be characterized by continuous creation and subsequent diffusion of newer technologies on the basis of the exporters' existing capital stock. Then we highlight the theoretical possibility that concentration of innovative activities in a small group of "winner" economies would lead to larger shares of "winner" economies' exports of innovation-active commodities than those commodities for which technology involved is already mature. The world's export data corroborates this theoretical prediction overall, and a focus upon East Asia has revealed the region's increasing resort to technology-intensive commodity sectors, which has presumably been enabled through attracting technology-bearing inward foreign direct investment. Considering the overall gains from innovation, acceleration of full "cycle" of innovation and imitation might be a desirable option.

Business Cycles of Non-mono-cultural Developing Economies: The Case of ASEAN Countries

Based on analyses of actual data, we reveal that many Asian developing economies own economic structural features of "non-mono-cultural economy" and the "large primary good sector", which have not been discussed in developing economies RBC literature. We also examine the input-output tables to develop a model reflecting actual developing economies' structures. Referring to the analyses, we construct RBC models of ASEAN countries. Based on the model, we find that approximately half of GDP volatility is attributable to domestic productivity shocks, and the remaining half is attributable to price shocks.

Migration and Wellbeing at the Lower Echelons of the Economy: A Study of Delhi Slums

This paper based on a primary survey of households (2004-05) in the slum clusters of Delhi examines whether migrants are likely to experience upward mobility in their place of destination or alternatively, if they merely transfer their poverty from rural areas to large cities. First, a simple bifurcation of population in terms of poor and non-poor sub-groups is examined along with the incidence of poverty across different categories of occupations and non-workers. Then, an explanation of the variations in per capita expenditure across households is provided, and a binomial logit model (poor/non-poor) is developed identifying the variables which raise (or reduce) the probability of being non-poor (or poor). Next, an estimate of the wellbeing (deprivation) index is derived from factor analysis of a large number of variables including demographic and economic aspects of households. Empirical findings suggest that while duration of migration and the wellbeing index do not have a definite relationship, migrant households who have been in the city for a very long time have a higher wellbeing index on average than those who migrated in the last ten years. This tends to support the view that migrants do not merely transfer rural poverty to urban areas, and further that population mobility yields improvement in the living standard, if only in the very long term. Implementation of "employment-cum-shelter" support schemes in the urban areas may contribute to their wellbeing.

Organizational Capability of Local Societies in Rural Development: A Comparative Study of Microfinance Organizations in Thailand and the Philippines

The importance of organizing local people for development work is widely recognized. Both governmental and non-governmental agencies have implemented various projects that have needed and encouraged collective action by people. Often, however, such projects malfunction after the outside agencies retreat from the project site, suggesting that making organizations is not the same as making a system of making organizations. The latter is essential to make rural organizations self-reliant and sustainable. This paper assumes that such a system exists in local societies and focuses on the capacity of local societies for creating and managing organizations for development. It reveals that (1) such capability differs according to the locality, (2) the difference depends on the structure of the organizations that coordinate people's social relations, and (3) the local administrative bodies define, at least partly, the organizational capability of local societies. We compare two rural societies, one in Thailand and the other in the Philippines, which show clear contrasts in both the form of microfinance organizations and the way of making these organizations.

Retrospective Voting in Turkey: Macro and Micro Perspectives

Recent studies have shown that party systems in emerging democracies do not always adequately reflect the various cleavages of society. Under such circumstances, retrospective voting may play a more important role than cleavage voting in determining electoral outcomes. For studies of retrospective voting, the choice between macro and micro level as the independent variable is a major methodological issue. Using individual-level data on Turkey, this paper addresses two major questions: (1) Are voters' decisions based on household economic conditions or national economic conditions? Do sociopolitical conditions also count? (2) Does the future evaluation of the economy affect voting decisions apart from past evaluation? Logit models are used in this research to answer these questions.

Trade and Business Cycle Correlations in Asia-Pacific

Recent empirical studies challenge the traditional theory of optimum currency areas by arguing that a monetary union enhances trade and business cycle co-movements among its member countries sufficiently as to obviate the need for national monetary policy. This paper examines the empirical relationship between trade and business cycle correlations among thirteen Asia-Pacific countries, paying particular attention to the structural characteristics of their economies and other issues not explored fully in the literature. According to our result, although trade is relevant to the business cycles of individual countries, the main determinant of their international correlations is not the geographical structure of their trade but what they produce and export --more specifically the extent to which their output and exports are concentrated on electronic products.