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.

Shock Transmission Mechanism of the Economic Crisis in East Asia : An Application of International Input-Output Analysis

This paper investigates the impacts of the 2008 economic crisis on industries in East Asia. By using the updated Asian international input-output table for 2008, the paper attempts to identify the transmission mechanism and the magnitude of impact of the crisis on industries in East Asia. The analyses reveal that the crisis significantly affected industrial output of the nine East Asian countries. In particular, the countries which are deeply involved in production networks were affected most seriously. Moreover, the analyses show that the impact was transmitted to East Asian industries considerably through the “triangular trade”, in which China imports parts and components from neighboring East Asian countries and then exports final products to the U.S. and EU markets.

Chapter 1 Economic Integration and Industry Location: Theories, Empirical Results, and Implications for CLMV

Trade affects the internal location of industry in two ways: it induces firms to specialize and it expands the set of markets that firms serve. If there are industry-specific external economies, firms in related industries will spatially agglomerate (Hanson 1996a). In the context of economic integration, diminished barriers to trade affect industry location particularly in less developed countries. As described below, regional agreements in North America and Europe have caused frontier regions to expand. These regions, which include border regions and port cities, have advantages over internal regions in terms of access to foreign markets. Since trade liberalization induces many firms in developing countries to participate in production networks and to specialize in labor-intensive activities such as assembling and processing of foreign-made components, their inputs as well as final products need to be carried across borders. Therefore, the best industry location, one that minimizes transport costs, is likely to shift to frontier regions. In East Asia, China has developed rapidly since it opened up to international trade. Simultaneously, a large amount of foreign direct investment (FDI) has been attracted and industry agglomerations have been formed in coastal regions, that is, frontier regions linked to the global market by sea, leaving many internal regions behind. Similarly, Cambodia, Laos, Myanmar, and Vietnam (CLMV) have joined AFTA and/or the WTO and liberalized international trade since the 1990s. Moreover, transport infrastructures such as the East-West Economic Corridor, the Southern Economic Corridor, and the North-South Economic Corridor have been built and narrowed economic distances in the Greater Mekong Subregion (GMS). As a result, frontier regions are likely to increase their location advantages and lure labor-intensive operations from neighboring countries. It is expected that, as has happened in North America and Europe, economic integration in East Asia will significantly affect internal geography in CLMV. In this study, I first review theories relevant to economic integration and industry location within a country. In particular, emphasis is placed on the new economic geography (NEG). Secondly, empirical results for North America and Europe are surveyed since they have preceded East Asia in regional integration and a substantial number of studies have been conducted on these regions. The final section summarizes and discusses implications for internal geography in CLMV.

Location choice in low-income countries : evidence from Japanese investments in East Asia

Unlike most existing studies, this paper examines the location choices of MNEs in developing countries. Specifically, we investigate the location choices of Japanese MNEs among East Asian developing countries by estimating a four-stage nested logit model at the province level. Noteworthy results of location elements are as follows. As is consistent with the mechanics of cheap labor-seeking FDI, Japanese MNEs are more likely to invest in locations with low income and low tariff rates on products from Japan. Also, accessibility to other locations and/or ports matters in attracting Japanese MNEs because it is crucial in importing materials and exporting their products. In addition, WTO membership and bilateral investment treaties are important because these contribute to the settlement of trade and investment disputes, which is more likely to be necessary in developing countries.

Transport modal choice by multinational firms : firm-level evidence from Southeast Asia

We examine transport modal decision by multinational firms to shed light on the role of freight logistics in multinational activity. Using a firm-level survey in Southeast Asia, we show that foreign ownership has a significantly positive and quantitatively large impact on the likelihood that air/sea transportation is chosen relative to truck shipping. This result is robust to the shipping distance, cross-border freight, and transport infrastructure. Both foreign-owned exporters and importers also tend to use air/sea transportation. Thus, our analysis presents a new distinction between multinational and domestic firms in their decision over transport modes.

Promoting institutional connectivity in the Asia Pacific region : a study of supply chain and trade in services

This paper analyzes "institutional connectivity", or the degree of seamless trade in services centering on the distribution sector. Foreign equity participation in mode 3 (commercial presence) of trade in services and business firms’ investment performance has been studied closely. Net economic benefits of transparent institutional connectivity in the wholesale sector have also been revealed statistically in the case of Japan’s bilateral FTAs with other APEC members. Given these results, APEC could work on establishing its own harmonized "service trade commitment table" with only the foreign capital participation as its simple policy restriction. This would surely enhance an APEC-wide, institutional supply chain connectivity.

State-business relations in the smaller gulf monarchies -- the role of business actors in the decision-making process

The Arab monarchies of the Gulf have been undergoing striking socio-economic changes caused by the ending of the rent-based welfare state model on which they had largely relied since the 1950s. In this perspective, this paper aims at examining the comparative role of local business communities in affecting the orientations and the outcomes of the policies implemented during the period of high oil prices in the 2000s. This paper pays a special attention to the impact of the Arab Spring on the state-business relations in two of the smaller Gulf monarchies (Bahrain and Oman).

The European Union's promotion of regional economic integration in Southeast Asia: Norms, markets or both? Bruges Political Research Paper No. 25/May 2012

The EU‘s external action includes a preference for regional interlocutors and a tendency to promote regionalism. This work concentrates on the southeast Asian area and it aims at investigating the nature of EU‘s promotion of ASEAN regional integration. The EU‘s ideas and practices of regionalism as well as the single market experience influence the EU‘s international action. The power deriving from the EU‘s institutionalized market is used by the Union in a normative way to diffuse the EU‘s ideas and principles, advance the EU‘s interests and spread its model of economic integration through political dialogue, development cooperation and preferential trade arrangements. This action seems to result in a certain diffusion of the EU‘s ideas and practices in southeast Asia as well as in a subsequent reappropriation and redefinition of external inputs by ASEAN.

Why EU promotion is at odds with successful crisis management: public relations, news coverage, and the Aceh Monitoring Mission. EU Centre in Singapore Working Paper No. 10, September 2012

The EU’s Common Foreign and Security Policy (CFSP) and its accompanying Common Security and Defence Policy (CSDP) missions can be tools used to increase the international profile of the European Union. Nevertheless, CSDP missions garner little news coverage. This article argues that the very nature of the missions themselves makes them poor vehicles for EU promotion for political, institutional, and logistical reasons. By definition, they are conducted in the middle of crises, making news coverage politically sensitive. The very act of reporting could undermine the mission. Institutionally, all CSDP missions are intergovernmental, making press statements slow, overly bureaucratic, and of little interest to journalists. Logistically, the missions are often located in remote, undeveloped parts of the world, making it difficult and expensive for European and international journalists to cover. Moreover, these regions in crisis seldom have a thriving, local free press. Using the Aceh Monitoring Mission (AMM) as a case study, the author concludes that although a mission may do good, CSDP missions cannot fulfil the political function of raising the profile of the EU.

Student's cross-perception of the economic crises in the European Union and in Southeast Asia. EU Centre in Singapore Working Paper No. 11, December 2012

The financial crisis of 1997-1998 in Southeast Asia and the European Union’s financial crisis of 2008 followed by the sovereign debt crisis represented major policy events in the regions and beyond. The crises triggered policy adjustments with implications on economic and other policies. This paper aims at evaluating the perception of university students in the European Union (EU) and Southeast Asia on the management of these crises. It strives to confirm several ex ante assumptions about the relationship between students’ background, their policy orientation and their knowledge of the European Union and ASEAN policies. It also provides an analysis of the students’ evaluation of the geopolitical importance of the global regions and the EU and ASEAN policies. The paper is based on opinion surveys conducted during the first part of 2012 at four universities, two in the EU and two in ASEAN countries. In the eyes of EU and ASEAN students, the EU crisis is not being managed appropriately. The citizens of the EU surveyed were even significantly more critical of the EU’s anti-crisis measures than any other surveyed group. Their ASEAN counterparts were generally more positive in their evaluations.

The International Conference Education and Creativity for a Knowledge–based Society – Social and Political Scinces, Communication, Foreign Languages and Public Relations. Vienna, Osterreichish Rumanischer Akademischer Verein, 2012. VIth edition

No abstract.