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1. The COVID-19 Pandemic and the World Trade Network

Author:
Kozo Kiyota
Publication Date:
03-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Global trade is expected to suffer a significant contraction as a result of the COVID-19 pandemic. Did the relative importance of countries in the world trade network change as a result of the pandemic? The answer to this question is particularly important for Association of Southeast Asian Nations (ASEAN) countries because of their strong trade linkages with China, where the COVID-19 virus originated. This paper examines how the world trade network has changed since the COVID-19 pandemic, with a particular focus on ASEAN countries. Tracking the changes in centrality from January 2000 to June 2020, we find no evidence that centrality changed significantly after the pandemic started for most ASEAN countries. Our results suggest that the relative importance of the ASEAN countries in the world trade network is unchanged and will remain unchanged even after the pandemic.
Topic:
Globalization, International Trade and Finance, Pandemic, and COVID-19
Political Geography:
Asia and Southeast Asia

2. The COVID-19 Pandemic, Air Transport Perturbation, and Sector Impacts in ASEAN Plus Five: A Multiregional Input–Output Inoperability Analysis

Author:
Tamat Sarmidi, Norlin Khalid, Sufian Jusoh, and Muhamad Rias K.V. Zainuddin
Publication Date:
04-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study simulates the sector impacts of demand-side perturbations on air transport sectors due to the COVID-19 pandemic, focusing on ASEAN members plus Australia, China, Japan, the Republic of Korea, and New Zealand. This study involves (i) the generation of a multiregional input–output table from the latest Global Trade Analysis Project data, (ii) a network analysis to determine the importance of the air transport industry in each country, (iii) multiplier and linkages analyses, (iv) determinations of sector impacts from demand-side perturbations on air transport sectors due to the COVID-19 pandemic, and (v) simulation of the effect of fiscal and monetary measures to mitigate the pandemic’s impact. This study demonstrates that the aviation industry is a key sector in domestic and regional economic activities, and the reduction in air transport consumer demand due to the pandemic is estimated to cause gross domestic product (GDP) reductions from 0.4% to 2.1%. Government intervention, through fiscal and monetary policies, has, however, mitigated severe impact, moderating GDP and value-added losses. Thus, a viable policy prescription for the aviation industry is of utmost importance.
Topic:
Globalization, International Trade and Finance, Pandemic, COVID-19, and Travel
Political Geography:
Asia and Southeast Asia

3. The Effect of the COVID-19 Pandemic on Global Production Sharing in East Asia

Author:
Archanun Kohpaiboon and Juthatip Jongwanich
Publication Date:
04-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper examines the effect of the COVID-19 pandemic on global production sharing in ASEAN Member States. Product-level analysis – on hard disk drives, air conditioners, microwaves, televisions, washing machines, and automotive parts – is undertaken to examine trade patterns between January 2019 and October/November 2020. The key finding suggests that the pandemic caused parts shortages, but this effect has been short-lived. There is no strong evidence that multi-national enterprises have altered their supply chains or means of sourcing parts and components in response to the pandemic. There is some indication that multi-national enterprises are moving away from China, but whether this reflects a ‘COVID-19 effect’ or the trade war between the United States and China is not clear. COVID-19, a once-in-a-century event, may not alone be a compelling reason to restructure supply chain management relating to global production sharing, which has been a structural phenomenon driving economic globalisation.
Topic:
Globalization, Pandemic, COVID-19, Supply Chains, and Production
Political Geography:
East Asia, Asia, and Southeast Asia

4. Facilitating Trade in Pharmaceuticals: A Response to the COVID-19 Pandemic

Author:
Ben Shepherd
Publication Date:
04-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper reviews trade in pharmaceutical products, focusing on ASEAN countries. Trade in this sector is of singular policy importance as a result of the COVID-19 pandemic. First, the paper shows that pharmaceuticals are traded within Global Value Chains, which in turn means that international linkages are complex. Second, the paper shows that policy reforms can help boost trade in the sector, which has important human development implications during the pandemic period.
Topic:
Globalization, International Trade and Finance, Pandemic, Global Value Chains, COVID-19, and Pharmaceuticals
Political Geography:
Asia and Southeast Asia

5. The Effect of Non-Tariff Measures on Global Value Chain Participation

Author:
Upalat Korwatanasakul
Publication Date:
06-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study examines the impact of non-tariff measures (NTMs) on global value chain (GVC) participation and the underlying mechanisms. Our study employs a novel approach using an additional compliance requirement indicator as a relative proxy for NTMs to measure their impact on GVC participation. We conduct a cross-sectional analysis at the industry level, spanning 19 industrial sectors in 30 countries in 2015. We combine our additional compliance requirement indicator dataset calculated from NTM data in the Trade Analysis Information System, with our dataset on trade in value added estimated from the Organisation for Economic Co-operation and Development Inter-Country Input–Output Table. Our analysis finds that, while NTMs and tariffs both negatively impact backward GVC participation, the impact of NTMs is greater than that of tariff measures. Moreover, the estimated results show that inward foreign direct investment is positively associated with backward GVC participation. Therefore, policies that reduce trade costs from policy barriers, especially NTMs, and attract more foreign direct investment can help promote GVC participation.
Topic:
Globalization, International Trade and Finance, Industry, Global Value Chains, and Non-Tariff Measures
Political Geography:
Asia and Southeast Asia

6. Potential for India’s Entry into Factory Asia: Some Casual Findings from International Trade Data

Author:
Mitsuyo Ando, Kenta Yamanouchi, and Fukunari Kimura
Publication Date:
06-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Despite its impressive economic growth in the past few decades, India is slow in adopting a task-by-task international division of labour or international production networks (IPNs). Using international trade data for international comparison from multiple angles, this paper visualises the position of India – particularly in machinery IPNs and information and communication technology (ICT) services. Although machinery industries are at the centre of IPNs in East Asia, the paper clearly visualises that India has not yet participated in Factory Asia. Rather, trade data indicate that India is still engaged in import-substituting industrialisation. The paper also argues that ICT services are a strength for the Indian economy, and its competitiveness could be utilised effectively by combining new technologies with traditional industries such as manufacturing. India still has huge potential for utilising the mechanics of a new international division of labour to accelerate economic growth, innovation, and poverty alleviation.
Topic:
Globalization, International Trade and Finance, Labor Issues, Manufacturing, Industry, and Global Value Chains
Political Geography:
India and Asia

7. Is the COVID-19 Pandemic Recasting Global Value Chains in East Asia?

Author:
Nobuaki Yamashita and K. Fukasaku
Publication Date:
07-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper assesses how the current COVID-19 pandemic is shaping global value chains in East Asia after the formidable disruptions inflicted by the health crisis. Some have expressed the view that global value chains would readjust and production processes would move home, i.e. reshoring, facilitated by the recent movement of protectionism measures in the post-pandemic world. We evaluate such concerns and examine the role of policy with a focus on non-tariff measures in East Asia.
Topic:
Globalization, International Trade and Finance, Pandemic, Global Value Chains, and COVID-19
Political Geography:
East Asia and Asia

8. East Asian Integration and Its Main Challenge: NTMs in Australia, China, India, Japan, Republic of Korea, and New Zealand

Author:
Yan Lili Ing and Grace Hadiwidjaja
Publication Date:
07-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
While East Asia has been moving forward with its regional integration agenda, one main challenge remains and is growing – non-tariff measures (NTMs). Animal, vegetable, and food products tend to be more regulated than other products, largely due to quality and safety standards. NTMs affect 66%–98% of total trade in those sectors. Our paper presents the frequency index, coverage ratio, and prevalence score to measure NTMs in the region. They are highest amongst food, vegetable, and animal products; and vary amongst other products, depending on the economy. We find that the high frequency index of NTMs does not necessarily translate to a high value of coverage ratio for trade. One explanation could be that countries tend to regulate imported goods which compete with the domestic products more than imported goods which they need.
Topic:
Globalization, International Trade and Finance, Regional Cooperation, Tariffs, Non-Tariff Measures, and Economic Integration
Political Geography:
Japan, China, India, Asia, South Korea, Australia, Southeast Asia, and New Zealand

9. Feeling the Pulse of Global Value Chains: Air Cargo and COVID-19

Author:
Christopher Findlay, Hein Roelfsema, and Niall Van De Wouw
Publication Date:
07-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper focuses on air cargo market development, with special attention to the connections between countries in Asia, the European Union, and the United States. Before the coronavirus disease (COVID-19) crisis, we show that participation in global value chains played a crucial role in how countries in Asia increased their exposure to the European Union market, which was hit hardest by the COVID-19 crisis. Analysing the effects of the crisis in 2020- using a fuzzy set complexity approach and recent high-frequency data on air cargo transport - we show that such demand effects, together with domestic contraction conditions, explain a large share of variation in air cargo dynamics across countries in Asia. However, we also show that implementing best practices in pandemic control positively impacts air cargo recovery for countries that cannot rely on export market rebounds. After reviewing the convergence in air cargo business models since 2010, the paper continues to assess recovery options. The main conclusion is that business models will converge on long haul point-to-point models that combine passengers and cargo, moving away from the current hub and spoke system.
Topic:
Globalization, International Trade and Finance, Pandemic, Global Value Chains, and COVID-19
Political Geography:
Asia and Southeast Asia

10. Exploring Digital Economic Agreements to Promote Digital Connectivity in ASEAN

Author:
Sarah Y. Tong, Yao Li, and Tuan Yuen Kong
Publication Date:
07-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper explores modules and articles on cooperation concerning the digital economy that are applicable for Association of Southeast Asian Nations (ASEAN) countries under certain circumstances. It investigates the progress of and obstacles to ASEAN’s digital connectivity, as well as features of existing Digital Economic Agreements and digital economy-related articles in other agreements. We propose the use of a differentiated strategy and steps to promote integration for ASEAN countries covered in this research.
Topic:
Economics, Globalization, International Trade and Finance, Digital Economy, and Digitalization
Political Geography:
Asia and Southeast Asia

11. Technical Barriers to Trade and the Performance of Indian Exporters

Author:
Pavel Chakraborthy and Rahul Singh
Publication Date:
08-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
We study the effects of technical barriers to trade (TBTs) imposed by destination markets on prices, marginal costs, and markups of Indian manufacturing exporters. Using detailed firm-product-level data on prices and production from PROWESS, we first identify the underlying component of prices (i.e. marginal costs and markups), and use those as our outcomes of interest in the second stage. We find that (i) introduction of TBTs by importing countries increases marginal costs by 5% and prices by 4%, (ii) there is considerable heterogeneity based on exporters’ initial productivity, (iii) productive exporters (those belonging to the lower deciles) experienced an increase in marginal costs and decrease in markups compared to low productivity exporters, and (iv) overall effects are driven by private firms (both domestic and foreign) belonging to intermediate input industries.
Topic:
Globalization, International Cooperation, International Trade and Finance, and Exports
Political Geography:
India and Asia

12. Effective Rates of Protection in a World With Non-Tariff Measures and Supply Chains: Evidence from ASEAN

Author:
Ben Shepherd
Publication Date:
08-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The concept of effective rate of protection expresses protection on a sector’s final output relative to protection affecting its inputs. As such, it is well adapted to analysing the effects of trade policy from a supply chain standpoint. This paper makes two contributions to the literature on effective rates of protection. First, it draws on the literature on trade in value added to highlight an alternative to the traditional measure that better accounts for supply chain trade by considering both direct and indirect input use. Second, it includes data on ad valorem equivalents of non-tariff measures, which are increasingly important as trade policy instruments. In an analysis covering 17 aggregate goods sectors, I find that average tariff only effective rates of protection in ASEAN averaged 6.9% and ranged from zero to 23.4% in 2018. By contrast, effective rates including non-tariff measures averaged 14.0% and ranged from –6.2% to 44.0%. While patterns of escalation and even effective taxation differ substantially across sectors, most countries practice a tariff and NTM trade policy that is broadly neutral between input and output sectors, but which causes low to moderate isolation from world markets. Given the complexity of tariffs and NTMs from a supply chain perspective, there would likely be reductions in economic waste accompanying substantial simplification.
Topic:
Economics, Globalization, International Cooperation, International Trade and Finance, Protectionism, Non-Tariff Measures, and Supply Chains
Political Geography:
Asia and Southeast Asia

13. The Trade Restrictiveness Index and Its Impact on Trade Performance in Selected East Asian Countries

Author:
Norlin Khalid, Muhamad Rias K.V. Zainuddin, Tamat Sarmidi, Sufian Jusoh, Faliq Razak, and Mohd Helmi Ali
Publication Date:
09-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper aims to investigate the effect of non-tariff measures (NTMs) on trade in selected East Asian countries. In doing so, we first estimate the ad valorem equivalent (AVE) of NTMs and construct an augmented trade restrictiveness index (ATRI) by measuring the overall external regulations imposed by importing countries. Second, we analyse the effect of the AVE and trade restrictiveness index (TRI) of importing nations on the exports of various sub-sector products for each country in selected East Asian countries. Based on a standard gravity model framework, we perform a Poisson pseudo maximum likelihood (PPML) regression at the sectoral level (Harmonized System 2-digit) for total exports and major sub-sectors (agri-food, health, logistics, and manufacturing). The findings show that the ATRI has a negative and significant relationship towards bilateral exports for total exports, manufacturing, and logistics sub-sectors. The negative impacts of the ATRI also highlight that trade barriers play a significant role in bilateral exports. NTM restrictions (proxied by the calculated AVE of NTMs) imposed by importing countries have mixed results for technical and non-technical measures. Where technical measures have negative and significant impacts on bilateral exports for total exports, manufacturing, and health sub-sectors. This implies that implementation of technical NTMs such as sanitary and phytosanitary (SPS) and technical barrier to trade (TBT) measures in importing nations adversely affect bilateral exports for these sub-sectors. This is in line with our hypothesis, as exporters may face difficulties in meeting the current NTM specifications, leading to lower bilateral exports. In addition, the results show that most trade agreements have a positive and significant relationship with ASEAN and East Asia countries’ bilateral exports, suggesting that free trade agreements enhance trade between countries.
Topic:
Economics, Globalization, International Trade and Finance, and Non-Tariff Measures
Political Geography:
East Asia and Asia

14. The Global Economic Impact of the COVID-19 Pandemic: The Second Wave and Policy Implications

Author:
Gyeong Lyeob Cho, Minsuk Kim, and Yun Kyung Kim
Publication Date:
09-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper examines the macroeconomic impact of the COVID-19 pandemic through the Computable General Equilibrium model. Due to a second wave and a subsequent delay in economic recovery, the pandemic could lead to a permanent shock in capital accumulation and productivity. This implies that the shock may not merely affect the short-term growth rate but also negatively impact the future economic growth path from its pre-pandemic trend. Through simulations, in the mild scenario, countries lose 0.10% to 0.31% of their future economic growth rates; in the severe scenario, they lose 0.21% to 0.69%.
Topic:
Economics, Globalization, International Trade and Finance, Public Health, Pandemic, and COVID-19
Political Geography:
Global Focus

15. Robustness and Resilience of Supply Chains During the COVID-19 Pandemic: Findings from a Questionnaire Survey on the Supply Chain Links of Firms in ASEAN and India

Author:
Yasuyuki Todo, Keita Oikawa, Masahito Ambashi, Fukunari Kimura, and Shujiro Urata
Publication Date:
09-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Using a unique firm-level data set from the Association of Southeast Asian Nations (ASEAN) and India collected from November 2020 to February 2021, this paper examines how the robustness and resilience of supply chain links – i.e. maintaining links and substituting another for a disrupted partner, respectively – were determined when firms faced economic shocks due to the spread of the coronavirus disease (COVID-19). Focusing on the role of the characteristics of firms’ supply chains, we find that homophily, i.e. the tendency to form a group with similar agents, was often associated with the robustness of supply chain links, most likely because of the strength of homophilous ties. In particular, when a foreign-owned firm had a supply chain link with a firm located in the same country as its home country, the link was quite robust. We also find that the geographic diversity of customers and suppliers creates resilience of supply chains. When the demand or supply from a partner of a firm was disrupted because of COVID-19, the firm likely mitigated the damage from the disruption through substitution of partners if its supply chains were well diversified across countries. In addition, larger or younger firms tended to be resilient and robust. The robustness and resilience of supply chains are found to have led to higher performance.
Topic:
Globalization, International Trade and Finance, Pandemic, Resilience, COVID-19, and Supply Chains
Political Geography:
India, Asia, and Southeast Asia

16. The Economic Consequences of Globalisation in the United States

Author:
Peter Petri and Meenal Banga
Publication Date:
01-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The unprecedented rise in global interdependence since World War II, especially since the 1970s, has been very productive. World gross domestic product (GDP) growth increased from around 2% per year in the 1970s to 4% per year before the global financial crisis. Globalisation helped to lift a billion people from extreme poverty and improved the lives of billions more. The United States also gained an estimated 11%–19% of its annual GDP. Yet many Americans are concerned about the fairness of these gains. We review evidence of increasing wage inequality and stubborn unemployment effects, even though, on balance, technological change has had a much greater impact on these outcomes than globalisation. Barriers against globalisation do not offer solutions to inequality – they reduce the size of the economic pie without necessarily improving its distribution. Policies should focus on redistributing gains from growth, increasing the productivity of all workers, and helping affected communities adapt socially and economically to rapid change.
Topic:
Globalization, Financial Crisis, Inequality, and Economic Growth
Political Geography:
United States and North America

17. The Economic Impact of Globalisation in Indonesia

Author:
Kiki Verico and Mari Pangestu
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper analyses the economic impact of globalisation in Indonesia from the end of the 1960s to date. The analysis found that globalisation generated a positive impact on Indonesia’s economic growth through the trade and investment channel; reduced wage inequality and child labour participation; and increased labour absorption, including women's participation in the labour market. Through the trade channel, globalisation also contributed to Indonesia’s productivity and structural economic transformation, benefited small and medium-sized enterprises (SMEs), contributed to poverty alleviation and reduced inequality, and increased trade in services such as tourism. Through the investment channel, there is evidence of the spillover effect of technology transfer, technology progress, improvement of the role of SMEs, and contribution to poverty alleviation. The waves of open and more restrictive trade and investment policies, which Indonesia has gone through in the last few decades, reflect the political economy reality – that is, the impact of globalisation is dynamic and only felt in the medium term, whereas the cost and potential negative impact is often felt more immediately throughout trade creation. The trade creation increases imports from countries with which free trade agreements have been negotiated, decreasing the domestic producer surplus. Since globalisation will create net benefits in the long run, Indonesia should continue its process of globalisation and integration with the world economy to ensure the net benefits and to move forward in its structural transformation, while managing the costs of globalisation and its transition process.
Topic:
Globalization, International Cooperation, International Trade and Finance, and Economic Growth
Political Geography:
Indonesia, Asia, and Indo-Pacific

18. A Spark Beyond Time and Place: Ogawa Shinsuke and Asia

Author:
Tamako Akiyama
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
One of the most important documentary film-makers of the post-war period, Ogawa Shinsuke, had an enormous impact on film-makers across Asia. This paper will unpack some of the paradox-filled processes by which his influence spread across the Asian film-making world through an analysis of interviews, film festival records, and the role of translation during his lifetime (1936–1992). Energised by an increasing interest in mentoring young Asian film-makers in his later years, and having created a platform for the exchange of films and ideas through the first documentary film festival in Asia in the late 1980s, Ogawa continued to offer a kind of spiritual orientation to other film-makers in translation even after his death. This paper will examine how this process was not merely a result of Ogawa’s own efforts but realised through a series of interwoven yet contradictory social, economic, and interpersonal histories. Amidst the call for a greater exchange of media within and beyond Japan, the circulation across Asia of Ogawa’s cultural capital offers an opportunity to think about the significance of the various ‘investments’ that form such capital, and poses important issues for considering the conditions under which it can continue to survive.
Topic:
Globalization, Culture, and Media
Political Geography:
Japan and Asia

19. In the Closet: Japanese Creative Industries and their Reluctance to Forge Global and Transnational Linkages in ASEAN and East Asia

Author:
Shinji Oyama
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper addresses rarely asked questions: is Cool Japan a creative industries policy and, if so, what kind of creative industries policy is it? It addresses these questions by examining Cool Japan’s differences from the UK derived and globally very influential creative industries model. The paper will try to make sense of these differences by looking at how the Japanese creative industries comprise businesses of different sizes with a varied history and prestige, how those companies have complex and contrasting relationships with various state organisations, and how the forces of globalisation and its free-market and neo-liberal economic ideologies affect companies in various sectors differently. This will challenge the dominant narrative of Japanese Creative Industries and Cool Japan in which, it is generally believed, the former embraces globalisation and digitalisation, and the latter is responsible for broadening the appeal of Japanese popular culture abroad. This paper reveals the complexity and diversity of the creative industries from socio-cultural and politico-economic perspectives often overlooked in the Cool Japan discourse.
Topic:
Globalization, International Cooperation, transnationalism, and Industry
Political Geography:
Asia

20. Domestic Value Added, Exports, and Employment: An Input-Output Analysis of Indonesian Manufacturing

Author:
Arianto A. Patunru
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The paper is motivated by the current emphasis on the share of domestic value added in exports (SVEX) as a policy criterion for export development strategy in developing countries. Our hypothesis is that the policy emphasis on SVEX, which harks back to the import substitution era, is inconsistent with the objectives of achieving economic growth with employment generation in this era of economic globalisation. We test this hypothesis by examining the relationship of the SVEX with both export-induced employment and the total domestic value added, or the contribution of exports to gross domestic product, by applying the standard input–output methodology to data from Indonesian manufacturing. Our findings do not support the view, widely held in policy circles, that industries characterised by a higher SVEX have the potential to make a greater contribution to employment generation and total domestic value added. The policy inference is that, in this era of economic globalisation, policy makers should focus on the export potential of industries in designing export development policy, rather than on the SVEX.
Topic:
Globalization, Labor Issues, Trade, and Global Value Chains
Political Geography:
Indonesia and Indo-Pacific

21. The Impact of Economic Globalisation on Firm Performance and the Labour Market: Evidence from Japan

Author:
Keiko Ito
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper summarises the major findings and arguments in the literature on the impact of globalisation on firm performance and the labour market, focusing on the case of Japan. Internationalised firms show better performance. Although offshoring has shifted labour demand towards skilled workers, thedirect contribution of globalisation to the widening wage gap is quite limited. The empirical evidence for Japan is more or less consistent with that for other developed countries, but some observations on Japan are worth pointing out. First, several empirical studies confirm a learning-by-exporting effect. Second, there is no strong evidence that increases in imports from China have reduced domestic employment. Increases in imports from China have a positive effect on value added growth in downstream industries, implying that imports from China are likely to be complementary to domestic production in Japan.
Topic:
Globalization, Industrial Policy, Labor Issues, Exports, and Imports
Political Geography:
Japan, China, and Asia

22. trade, investment, globalisation, Thailand Economic Consequences of Globalisation: Case Study of Thailand 26 December 2019 The paper reviews empirical works examining the effect of globalisation in Thailand, beginning with a discussion of its integration into the economy. Three drivers of … Read More Malaysia, globalisation, trade Globalisation and Economic Development: Malaysia's Experience 23 December 2019 The economic development of Malaysia has been strongly driven and shaped by globalisation, from the pre-colonial to the post-independence period. The country has harnessed trade, … Read More Australia, economic integration, reform, productivity Economic Consequences of Globalisation: The Australian Framework for Reforms

Author:
Christopher Findlay, Kotas Mavromaras, and Zhang Wei
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Australia has experienced significant reforms to policy affecting trade in goods and services, investment, and people. The contributions of these reforms to growth have been significant. However, the scope remains for significant further reform. The drivers of reforms since World War II are reviewed in this chapter. The consequences of globalisation in Australia and the slowdown in the pace of reform and its consequences, for productivity growth in particular, are also discussed. The Australian experience provides valuable insights for other economies, in relation to the scope and timing of reform and the role of supporting institutions.
Topic:
Economics, Globalization, Reform, and Trade
Political Geography:
Australia

23. Globalisation and Economic Development: Malaysia's Experience

Author:
Cassey Lee
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The economic development of Malaysia has been strongly driven and shaped by globalisation, from the pre-colonial to the post-independence period. The country has harnessed trade, foreign capital, and foreign labour to grow and has transformed its economy from one that was highly dependent on primary commodities (tin and rubber) into one driven by manufactured exports. The impact of globalisation on the Malaysian economy has changed through the various phases of its development experience. The early phases of the country’s engagement with globalisation reduced poverty and inequality. In later stages, excessive dependence on low-skilled foreign labour, although beneficial initially, may have compromised the competitiveness of the economy. Malaysia’s multi-ethnic society has also posed considerable challenges in the balancing of domestic needs and benefits with greater engagement with globalisation. The openness of the Malaysian economy has also made it vulnerable to global economic shocks.
Topic:
Globalization, International Trade and Finance, Inequality, and Economic Development
Political Geography:
Malaysia and Asia

24. Economic Consequences of Globalisation: Case Study of Thailand

Author:
Archanun Kohpaiboon
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The paper reviews empirical works examining the effect of globalisation in Thailand, beginning with a discussion of its integration into the economy. Three drivers of economic globalisation are emphasised: international trade, foreign direct investment, and cross-border labour mobility. The findings point to globalisation’s potential to create a favourable economic impact. Opening up to international trade could promote productivity and drive economic growth. Large foreign direct investment inflows enticed by export-oriented industrialisation are likely to generate horizontal technological spillovers within a given industry; vertical spillovers through the linkages were not a robust result. There is no evidence that employing foreign workers retards firm productivity; rather, the opposite is the case. Well-performing firms are in a position to attract foreign workers and maintain production capacity. Global production sharing (GPS) does not necessarily mean the participating countries are trapped at the low end of the quality ladder. The Thai experience supports the case for further globalising its economy. Any possible side effects of globalisation can be mitigated by other policies such as strengthening the social safety net.
Topic:
Globalization, International Trade and Finance, Labor Issues, and Economic Growth
Political Geography:
Asia and Thailand