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15841. Turkey’s Membership Process In a Multi-Speed European Union

Author:
Ekrem Yaşar Akçay and İdris Turan
Publication Date:
07-2020
Content Type:
Journal Article
Journal:
AURUM Journal of Social Sciences
Institution:
Altinbas University
Abstract:
The European Union, established after World War II, has strengthened the revival of Europe, which has suffered greatly due to the war in many areas, including economic, political and socio-cultural. At the same time, the European Union overtook the conflicts between states. The European Union, which has occasionally passed through major breaks since its foundation, has recently begun to evolve into a new structure called multispeed Europe. On the 60th anniversary of the signing of the Treaty of Rome, the member states, for the first time, have mentioned this new structure in an official publication. This structure has led to disagreements 13 among EU member states. On the other hand, it is also a matter of curiosity how the candidate countries will follow once this structure is created. This study assesses the potential effects of a a multi-speed European Union on Turkey-EU relations. In addition, it tries to evaluate whether the EU’s new structure will be an advantage for Turkey or not. In other words, this study aims to explore the possibility of Turkey’s EU full membership in the EU’s new model.
Topic:
International Relations, Treaties and Agreements, European Union, and Regional Integration
Political Geography:
Europe, Turkey, Middle East, and Mediterranean

15842. Foreign Market Entry Mode Choice In Service Firms: a Business Model Perspective

Author:
Alptegin Albayraktaroğlu
Publication Date:
07-2020
Content Type:
Journal Article
Journal:
AURUM Journal of Social Sciences
Institution:
Altinbas University
Abstract:
The topic of foreign market entry in service sector could benefit from a more granular approach, since the business model (BM) employed varies greatly across different types of services. It is argued that this in turn would affect the internationalization strategy to be employed in each service case. In this paper, services are classified along three dimensions (inseparability, capital intensity, degree of customization), and propositions are developed regarding the right foreign market entry mode for each of the eight service variations. The propositions are grounded in business model and general strategic management theories, since it is argued that service firms design their activity systems in host countries via tradeoffs between adjustment costs and transaction costs involved. As the service classification defines the nature of these costs for the focal firm, previous findings regarding the choice of foreign market entry mode reflects BM designs to optimize such costs. The scientific value of this paper is the introduction of the business model concept as a new perspective for research on decision making in service firm internationalization.
Topic:
Business, Internationalization, Foreign Market Entry, and Service Marketing
Political Geography:
Global Focus

15843. Informal employment and wages in Poland

Author:
Jacek Liwiński
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
Purpose: This paper tries to identify the wage gap between informal and formal workers and tests for the two-tier structure of the informal labour market in Poland. Design/methodology/approach: I employ the propensity score matching (PSM) technique and use data from the Polish Labour Force Survey (LFS) for the period 2009–2017 to estimate the wage gap between informal and formal workers, both at the means and along the wage distribution. I use two definitions of informal employment: a) employment without a written agreement and b) employment while officially registered as unemployed at a labour office. In order to reduce the bias resulting from the non-random selection of individuals into informal employment, I use a rich set of control variables representing several individual characteristics. Findings: After controlling for observed heterogeneity, I find that on average informal workers earn less than formal workers, both in terms of monthly earnings and hourly wage. This result is not sensitive to the definition of informal employment used and is stable over the analysed time period (2009–2017). However, the wage penalty to informal employment is substantially higher for individuals at the bottom of the wage distribution, which supports the hypothesis of the two-tier structure of the informal labour market in Poland. Originality/value: The main contribution of this study is that it identifies the two-tier structure of the informal labour market in Poland: informal workers in the first quartile of the wage distribution and those above the first quartile appear to be in two partially different segments of the labour market.
Topic:
Demographics, Labor Issues, Employment, Social Policy, and Informal Economy
Political Geography:
Europe and Poland

15844. Renewed Transatlantic Responses towards China: Identifying Common Ground

Author:
Katrin Bastian and Graeme P. Herd
Publication Date:
11-2020
Content Type:
Commentary and Analysis
Institution:
George C. Marshall European Center for Security Studies
Abstract:
The western global order originated in the 19th and 20th centuries. It is characterized by formal international institutions and a regime of treaties, rules, norms, networks, expectations, and moral obligations. As Sigmar Gabriel and John B. Emerson note, “Our liberty is protected by democracy, the rule of law, the separation of powers, and freedom of expression and assembly. These shared principles have shaped the outlook on both sides of the Atlantic for decades.”1 These shared democratic, free, and open society principles are challenged by undemocratic non-western, economically and/or militarily successful powers, not least the People’s Republic of China (PRC) and the Russian Federation. The PRC has a population of 1.4 billion (comprising 18 percent of the global share), a 5,000-year-old history and culture, and boasts the world’s second largest economy. The PRC is ideologically assertive and displays a visible ambition to play a role on the international stage. Sociological theory suggests that the numeric dimension of a group determines social reality. Indeed, as Lenin noted: “quantity has a quality all of its own.” In this light, the PRC is simply “too big and too many” not to shape international politics. Ironically, the political West is involuntarily assisting in this reconfiguration of international power by voluntarily withdrawing from multilateral institutions and geopolitically-critical regions (the U.S., at least in the Trump administration) or by being overwhelmed with administrative tasks (the European Union, as a result of the growing number of member states, deeper integration, and COVID-19).
Topic:
Civil Society, Globalization, Multilateralism, Institutions, and Social Order
Political Geography:
Global Focus

15845. The COVID-19 Pandemic: Counterterrorism Practitioners’ Assessments

Author:
James Wither and Richard Masek
Publication Date:
10-2020
Content Type:
Special Report
Institution:
George C. Marshall European Center for Security Studies
Abstract:
The outbreak of the COVID-19 pandemic in February 2020 arguably created the greatest global security challenge since 1945. Faced with this unanticipated threat, scholars and practitioners from the security and counterterrorism fields have struggled to understand and assess the impact of the pandemic on global and domestic terrorism.1 Many terrorist groups and individual extremists reacted with enthusiasm to the pandemic. Salafi-jihadist and far-right extremists, in particular, claimed that the pandemic vindicated their very different ideological standpoints and called for attacks while affected states were at their most vulnerable. However, outside of areas already impacted by armed conflict like the Sahel, there has not been a rise in terrorist attacks during the pandemic. Terrorists of all kinds have stepped up their propaganda, hoping to influence anxious people largely confined to their homes by lockdowns and compelled to spend more time on the Internet and social media. However, the extent to which terrorists have successfully attracted new converts to their cause or active recruits during the crisis still remains uncertain. The pandemic has also raised the specter of bio-terrorism, as there were fears that terrorists might try to use COVID–19 as a biological weapon. Early in the crisis, some extremists used the internet to encourage infected individuals to spread the virus in public places, but there is little evidence of such activities being carried out. As regards more sophisticated attacks, some terrorist groups in the past have aspired to employ bio-terrorism, but the necessary weapons have always proved too difficult for terrorists to successfully develop or deliver. Despite the calls for attacks on social media, the pandemic’s lockdowns, increased surveillance, the ban on gatherings, and travel restrictions, coupled with a heavy police and military presence on the ground in some cities have created a challenging environment for terrorist operations. But as governments continue to focus their efforts on combating the virus, normal security protocols may be reduced or abandoned. In most countries, the security services have been drawn directly into efforts to counter the pandemic and to an extent have been affected by social distancing and other restrictions employed to combat the virus. There are also concerns that international cooperation to combat terrorism will be reduced as countries focus more narrowly on domestic priorities. Many governments have resorted to emergency legislation to allow the police to enforce lockdowns and social isolation. This is normal behavior for autocratic governments, but unprecedented in liberal democracies, at least during peacetime. Repressive legislation allows intrusive surveillance, detention, and prevents freedom of assembly and movement. Although traditionally there has been no direct link between poverty and terrorism, socio-economic hardships caused by the pandemic are also likely to be severe, especially in the developing world. Government repression is a common trigger for acts of terrorism as it can turn already aggrieved citizens into violent extremists. To date, the COVID–19 pandemic has highlighted governments’ lack of preparedness, social inequalities and macro-economic failings. It would be premature, however, to conclude that the coronavirus crisis will inspire new forms of anti-state terrorism or turn largely non-violent anti-globalization and environmentalist groups into violent extremists. In the longer term, it remains to be seen whether counterterrorism will retain the priority it has been given since 9/11 in terms of financial, technical, and manpower resources. Public health as a national security priority may command a much greater share of resources than ever before. Given the impact of the COVID–19 pandemic on public finances, budget cuts to the security services may be more severe than after the financial crisis in 2008-2009, which could create new vulnerabilities for terrorist groups to exploit. The aim of this report is to provide further insights into the issues outlined above by providing data on the preliminary impact of COVID–19 supplied by over 400 military and civilian counterterrorism professionals surveyed by the George C. Marshall European Center for Security Studies’ (GCMC) Program in Terrorism and Security Studies (PTSS) faculty team.
Topic:
Terrorism, Counter-terrorism, Pandemic, and COVID-19
Political Geography:
Global Focus

15846. Compounded Crisis in Belarus: Drivers, Dynamics, and Possible Outcomes?

Author:
Pal Dunay and Graeme P. Herd
Publication Date:
10-2020
Content Type:
Policy Brief
Institution:
George C. Marshall European Center for Security Studies
Abstract:
Until 2014, Belarus had embraced its Soviet legacy identity. After the Russian annexation of Crimea and its subsequent support for the separatists in Donetsk and Luhansk, elite discourse in Minsk favored a geopolitical shift away from Moscow and emphasized Belarus’ independent statehood and strategic autonomy. Elites tolerated and even co-opted a more nationalist agenda (including re-interpretations of history and the increased visiblity of nationalist symbols) and a clearer delineation emerged between pro-Russian and pro-Ukrainian public groups in Belarus, inspired also in part by the Ukrainian reform process, though this was not clearly reflected in institutional politics. Belarusian national identity lacks the deeper anti-Russian sentiment inhrerent in that of Ukraine. Russia responded by enhancing its profile in Belarus through increased Russkiy Mir and Rossotrunichestvo activities to positively shape public opinion, even as it distanced itself from Lukashenka. In the last few years, Russia more publicly challenged Lukashenka to make good on his pledges by signing and implementing the thirty-one roadmaps for Union State integration. The Wagner debacle of July 29 further strained relations, not least as President Alyksandr Lukashenka instrumentalized the arrests to suggest that Russia was the greatest threat to Belarusian sovereignty and only he could defend its statehood. The current political crisis can also be attributed to a number of accumulating internal proximate factors, which eroded support for an incumbent president seeking a sixth five-year term after twenty-six years in power: the mismanagement of COVID-19 responses; a lost economic decade in which recovery shackled the IT sector and entrepreneurship and initiated the 2017 “parasite tax” protests; the rise of “autocrat fatigue”; a generational change with those under forty years old not identifying with Lukashenka’s Soviet era models and mentality; and a generalized resistance to the idea that the election could be rigged as usual. The existing social contract was at breaking point.
Topic:
Nationalism, Conflict, Pandemic, COVID-19, and Political Crisis
Political Geography:
Europe and Belarus

15847. “Germany’s EU Presidency 2020: The Security Dimension and EU-NATO Cooperation”

Author:
Ralf Roloff
Publication Date:
07-2020
Content Type:
Commentary and Analysis
Institution:
George C. Marshall European Center for Security Studies
Abstract:
On July 1, 2020, Germany assumed the Presidency of the Council of the European Union for the second half of 2020. How Germany manages the EU Council presidency will be of utmost importance for the future of the European Union as well as for the transatlantic relationship. The German EU presidency faces two major challenges: first, containing the coronavirus crisis and working towards a European economic recovery and second, initiating a lasting dynamic towards European solidarity, and autonomy. How are the two challenges intertwined with security questions? Germany intends to promote closer EU-NATO security cooperation. The coronavirus pandemic has tested this envisaged cooperation, but also offered new opportunities. Hence, what is the pandemic’s impact on Germany’s ambitions for EU-NATO cooperation? On July 2, 2020, the Marshall Center brought together a group of experts and alumni from Belgium, Croatia, Germany, Hungary, Lithuania, Poland, Portugal, Romania, Slovakia, and the United States in a virtual workshop designed to share their expectations for Germany’s EU presidency as well as generate ideas about how to lay the groundwork for strengthening Euro-Atlantic security and EU-NATO cooperation going forward. The following takeaways are informed by the discussion.
Topic:
Defense Policy, NATO, International Cooperation, European Union, and Leadership
Political Geography:
Europe and Germany

15848. COVID-19 and Irregular Migration in the Mediterranean

Author:
Benjamin P. Nickels and Margo Shields
Publication Date:
06-2020
Content Type:
Commentary and Analysis
Institution:
George C. Marshall European Center for Security Studies
Abstract:
Every year, tens of thousands of men, women, and children attempt to move—from East to West and from South to North—across the Mediterranean. This year, irregular migration across the Mediterranean is taking place during an unprecedented global coronavirus pandemic. How is COVID-19 affecting this year’s Mediterranean irregular migration and what should be done to manage this migration during the pandemic? On June 17, 2020, the George C. Marshall European Center for Security Studies brought together a diverse set of twelve practitioners and experts from Europe, Africa, the United States, and the Middle East to address this question. The following takeaways are informed by the discussion.
Topic:
Migration, Refugees, Humanitarian Crisis, Pandemic, and COVID-19
Political Geography:
Africa, Europe, and Mediterranean

15849. Tashkent COVID-19 Video Conference Calls for International Cooperation

Author:
Gregory Gleason, Pál Dunay, and Robert Baumann
Publication Date:
05-2020
Content Type:
Commentary and Analysis
Institution:
George C. Marshall European Center for Security Studies
Abstract:
The COVID-19 infection spread rapidly through the Central Asian states in early 2020. Political leaders in Kazakhstan, Kyrgyzstan, and Uzbekistan were quick to adopt containment and mitigation policies to counter the spread of the disease, announcing national emergencies, establishing quarantines, ordering commercial and public institutions to temporary close, and restricting road, rail, air, and maritime transport routes. Kazakhstan, Kyrgyzstan, and Uzbekistan, in particular, swiftly took steps to implement restrictions, impose curfews, and initiate sheltering-in-place measures. The neighboring Central Asian states of Tajikistan and Turkmenistan, meanwhile, instituted a number of counter-infection measures but did not acknowledge instances of COVID-19 infection.1 The Tashkent State University of Oriental Studies, a leading foreign area studies center in Tashkent, Uzbekistan, conducted an international video-teleconference on the topic of the coronavirus pandemic on April 22, 2020. George C. Marshall Center professors Dr. Pál Dunay and Dr. Gregory Gleason were invited as presenters at the international video conference. Also invited as a presenter was Dr. Robert Baumann, the director of graduate degree programs for the U.S. Army Command and General Staff College at Ft. Leavenworth. The Uzbek Academy of the Armed Forces was included in the video conference. Marshall Center alumni also participated and actively contributed to the discussions. The key questions facing the crisis caused by the spread of the COVID-19 pandemic were introduced by Gulchekhra Rikhsieva, Uzbekistan Senator and Rector of Tashkent State University of Oriental Studies. Professor Rikhsieva opened the video conference, describing the seriousness of the dangers presented by the spread of COVID-19 in Uzbekistan and other countries. She called upon the fifty-three video attendees of the conference to use the opportunity to meet the challenges of the crisis objectively and realistically. She called upon the attendees to identify international cooperation measures that could augment Uzbekistan’s state policies in reducing the risks inherent in this and other potential subsequent pandemics. The two-and-a-half-hour conference included eighteen brief video presentations, surveying and comparing the current state of affairs in Uzbekistan, Kazakhstan, and other countries. Professor Rikhsieva concluded the discussion with remarks regarding the challenges and opportunities inherent in addressing public policy issues of international cooperation in the context of the video format.
Topic:
Governance, Leadership, Public Health, Pandemic, and COVID-19
Political Geography:
Central Asia and Asia

15850. With the World in Turmoil, Transnational Organized Crime Sees Opportunity in Counterfeit Pharmaceuticals and Medical Supplies during the COVID-19 Pandemic

Author:
Stephen Noguera and Kalliroi Ziavrou
Publication Date:
04-2020
Content Type:
Commentary and Analysis
Institution:
George C. Marshall European Center for Security Studies
Abstract:
The coronavirus disease (COVID-19) pandemic poses a host of global health, economic, and security challenges, to include the continued challenge of combating transnational organized crime. While some believe this pandemic will disrupt and have a negative impact on the global operations of transnational organized criminal groups, the morbid reality is that these groups view the crisis as a lucrative opportunity. For the foreseeable future, we can expect organized criminal groups to quickly adapt in order to exploit the pandemic via various illicit schemes. In Italy, mafia groups are already demonstrating that they are intent on benefiting from the crime-related opportunities that the COVID-19 pandemic will present.1 There are numerous opportunities and illicit ventures transnational organized crime will seek to exploit as this pandemic runs its course. Perhaps most concerning are the activities associated with the manufacture and trafficking of counterfeit pharmaceuticals and medical supplies, including personal protection equipment (PPE).2 Since the outbreak of the crisis, the sale of these products has increased.3 Interpol is warning that one of the five global threats from the coronavirus is the fraudulent and counterfeit trade in personal protective equipment and anti-viral pharmaceuticals.4 Moreover, during this crisis counterfeiters will most probably use shortages in the supply of some products to provide counterfeit alternatives.5 The European Medicines Agency (EMA) is urging the general public not to buy medicines from unauthorized websites and other vendors aiming to exploit fears and concerns during the ongoing pandemic of COVID-19. Such products are likely to be falsified medicines.6 According to the World Health Organization (WHO), “falsified” medicines are medical products that deliberately/fraudulently misrepresent their identity, composition, or source.7 For counterfeit products, the WHO is also using the terminology “substandard” (also called “out of specification”), for authorized medical products that fail to meet either their quality standards or specifications, or both, and “unregistered/unlicensed” for medical products that have not undergone evaluation and/or approval by the National or Regional Regulatory Authority (NRRA) for the market in which they are marketed/distributed or used, subject to permitted conditions under national or regional regulation and legislation.8
Topic:
International Cooperation, Public Health, Pandemic, COVID-19, and Medicine
Political Geography:
Europe

15851. Learning-to-Export Effect as a Response to Export Opportunities: Micro-Evidence from Korean Manufacturing

Author:
Chin Hee Hahn and Yong-Seok Choi
Publication Date:
02-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper aims to investigate whether empirical evidence supports the learning-to-export hypothesis, which has received little attention in the previous literature. By taking full advantage of plant–product level data from the Republic of Korea during 1990–1998, we find some evidence for the learning-to-export effect, especially for innovated product varieties with delayed exporters: their productivity, together with research and development and investment activity, was superior to their matched sample. On the other hand, this learning-to-export effect was not significantly pronounced for the industries protected by import tariffs. Thus, our empirical findings suggest that it would be desirable to implement some policy tools to promote the learning-to-export effect, while tariff protection cannot be justifiable for that purpose.
Topic:
Industrial Policy, International Trade and Finance, Tariffs, Manufacturing, and Productivity
Political Geography:
Asia and South Korea

15852. Improving Digital Connectivity For E-commerce: A Policy Framework and Empirical Note for ASEAN

Author:
Lurong Chen
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Global cross-border e-commerce has become increasingly important in the international economy. The next Asian miracle of growth could be born out of the region's digital transformation. Digital connectivity is the cornerstone that will make change feasible and smoothen the transformation. Digital connectivity consists of not only physical connectivity that facilitates the movement of raw materials, intermediate goods, and goods, but also cyber connectivity to support free flows of data, information, and services. This paper proposes a policy framework of promoting digital connectivity to support the development of e-commerce. Policy efforts to improve data connectivity, logistics, and online payment can help the Association of Southeast Asian Nations narrow the development gaps in information and communications technology infrastructure, both cross-border and within countries. Improving institutional connectivity and service development play a significant role. Digital connectivity is essential for the digital-friendly ecosystem that will facilitate digital transformation, which will affect not only e-commerce but also countries’ overall economic performance.
Topic:
International Trade and Finance, Science and Technology, Digital Economy, and Connectivity
Political Geography:
ASEAN

15853. Pandemic (COVID-19) Policy Regional Cooperation and the Emerging Global Production Network

Author:
Fukunari Kimura
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
In this paper, we explore the possible policy responses to the pandemic shock as well as the related economic (financial crisis) shocks on trade and global value chains (GVCs) in East Asia. We find that regional policy coordination is critical to mitigate and isolate the pandemic shock. It is important to identify the pandemic events early to flatten the pandemic curve at the national and regional level. This supports a recent study by the World Bank (2020) which highlights the importance of early mitigation policies during the pandemic shock. The cost of the pandemic and economic shocks increases significantly when several countries in the region experience the systemic pandemic shock concurrently. In this case, flattening the regional pandemic curve becomes important. The results also indicate the need for greater coordination in East Asia to mitigate the pending economic shock in terms of unemployment, corporate bankruptcy, and financial market fragility. The paper also highlights that the stability of the GVC network is critical during the pandemic in terms of hedging the risk of disruptions to the procurement of critical medical and health products as well as the stability of the services linkages to manufacturing, such as the logistics sector. Regional policy coordination and the stability of GVCs are valuable in the post-pandemic recovery of the region.
Topic:
World Bank, Pandemic, Global Value Chains, and COVID-19
Political Geography:
East Asia and Asia

15854. Labour Market Impacts of Import Penetration from China and Regional Trade Agreement Partners: The Case of Japan

Author:
Kazunobu Hayakawa, Tadashi Ito, and Shujiro Urata
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The impacts of imports on the domestic labour market have been hotly debated recently. The purpose of this paper is to empirically examine the effects of not only imports from China but also those under regional trade agreements (RTAs) on employment in Japan. As in previous studies in the literature, we found that the rise in import penetration from China significantly decreases employment in Japan. However, import penetration under RTA regimes is found to have insignificant effects on employment. The finding suggests that the increase in imports under RTA regimes might not be harmful to the domestic labour market. In addition, we did not find significant effects of import penetration via input–output linkages. This insignificant result may be because imports by Japanese manufacturing firms are mostly conducted in the form of intra-firm trade, enabling them to avoid negative impacts on employment.
Topic:
International Trade and Finance, Regional Cooperation, Labor Issues, Employment, and Manufacturing
Political Geography:
Japan, China, and Asia

15855. Trade Reform and the Evolution of Agglomeration in Vietnamese Manufacturing

Author:
Đoàn Thi Thanh Ha and Hông Quỳnh Nguyen
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
It is well-documented that agglomeration contributes to productivity growth. However, concentrations of workers could also lead to increasing regional income disparities. Therefore, understanding the evolution of agglomeration is relevant for the formulation of industrial policy and inclusive growth. This study documents the extent, pattern, and determinants of agglomeration in Vietnamese manufacturing during 2002–2016, a period when substantial economic reform took place. Our major findings are three-fold. First, agglomeration, as measured by the Ellison–Glaeser index, has declined since the mid-2000s. Second, there exists significant sectoral heterogeneity in the level and trend of agglomeration. Third, we do not find a significant impact of trade and foreign direct investment on agglomeration per se. However, foreign direct investment in port districts does contribute to disagglomeration.
Topic:
International Trade and Finance, Reform, Manufacturing, and Productivity
Political Geography:
Asia and Vietnam

15856. Analysis of Global Value Chain Participation and the Labour Market in Thailand: A Micro-level Analysis

Author:
Upalat Korwatanasakul and Youngmin Baek
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study assesses the links between global value chain (GVC) participation and the labour market to examine the relatively unexplored employment-related distribution effects of GVC integration. Based on the Mincer wage model, we examine the relationship between GVC participation and worker productivity and wages at the individual level. Our main estimation method is a simple ordinary least squares estimation using pooled cross-sectional data from the Thai Labour Force Survey for the period 1995–2011. We also separately examine the effects of forward and backward GVC participation on wages and wage distributions. Our results show that GVC participation induces higher monthly wages for individuals and increases productivity in the labour market through either the forward linkage or backward linkage. We even find that GVC participation can help mitigate inequality. Our findings show that GVC participation promotes inclusive job creation and provides more job opportunities for rural, female, and low-skilled workers. Policies to support leveraging the existing strong industries through upgrading, smoothing labour movements while improving agricultural productivity, and preparing to move towards a services economy can help prepare Thailand, and other developing countries in general, to upgrade to higher value chains. Although GVC participation may be a catalyst for higher wages, greater labour productivity, and more inclusive job creation, its employment effects are complicated. An unbalanced policy framework might contribute to uneven income distributions and exclusive job creation as participating in GVCs through different linkages can benefit different stakeholders in varying ways. Therefore, a policy framework that balances the benefits among stakeholders in terms of wage distributions and job inclusion is ideal.
Topic:
Labor Issues, Work Culture, Global Value Chains, and Labor Market
Political Geography:
Asia and Thailand

15857. New Developments in International Production Networks: Impact of Digital Technologies

Author:
Ayako Obashi and Fukunari Kimura
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
We conducted a standard gravity exercise using worldwide disaggregated trade data to shed light on the influence of the spread of digital technologies on network trade. We found that growing investment in industrial robots in relatively lagging countries, together with imported digitally deliverable services, is enhancing bilateral network trade flows in East Asia, but not necessarily in other parts of the world. This suggests that exploring complementarities between machines and human resources in production blocks supported by better service-link connectivity may allow newly developed economies to retain and expand the international division of labour.
Topic:
Regional Cooperation, Science and Technology, Digital Economy, and Productivity
Political Geography:
East Asia and Asia

15858. Assessment of Industrial Cluster Policies in Viet Nam: The Role of Special Economic Zones in Attracting Foreign Direct Investment

Author:
Nguyen Quynh Huong
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Special economic zones (SEZs) are considered as one of important regional industrial policies to attract foreign investment in developing countries such as Viet Nam. The review of SEZs development in Viet Nam including the comprehensive review of infrastructure and business environment in SEZs are presented in this paper for the first time. Moreover, the paper gives novel non-parametric evidence to indicate the positive causal linkage between the zoning policies and the attraction of foreign investment at district-level in the country during the period 2011–2015.
Topic:
Industrial Policy, Regional Cooperation, Foreign Direct Investment, and Industry
Political Geography:
Asia and Vietnam

15859. A Quantitative Analysis of Disaster Risk Reduction Investment Effects for Sustainable Development: Indonesia Case Study

Author:
Hiroaki Ishiwata, Hiroyuki Wada, Koji Suzuki, and Naoto Tada
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper analyses the long-term impacts of large-scale disasters on the economic growth of developing countries in the Association of Southeast Asian Nations (ASEAN) Community, by the scale of disaster risk reduction (DRR) investments. As a means of quantitatively analysing the optimal level and economic efficiency of DRR investments, a case study was conducted on Indonesia by using a dynamic stochastic macroeconomic model. The results showed that in Indonesia, although greater economic growth is expected when additional DRR investments are made, an excessive DRR investment may contrarily lead to a slowdown in economic growth: an optimal level of DRR investment exists and maintaining its level is essential for sustainable economic growth. Furthermore, it was confirmed that there is a break-even point when the amount of accumulated disaster damage mitigation benefits exceeds the amount of accumulated DRR investment. This demonstrated that the funds invested in DRR could be recovered. Additionally, the results also showed that even if no disaster damage is caused over a long period of time, DRR investments are by no means redundant as the ‘ex-ante risk reduction effect’ will be generated when the optimal level of DRR investment is made. Lastly, it was determined that providing a continuous DRR investment is important in achieving the global target set forth in the Sendai Framework for Disaster Risk Reduction. In addition, it is considered desirable to maintain a higher level of DRR investment than that which is currently being implemented.
Topic:
Economic Growth, Investment, Risk, and Disaster Management
Political Geography:
Indonesia, Asia, and Indo-Pacific

15860. Technology Imports and Employment in Developing Countries: Evidence from Viet Nam

Author:
Thu Thu Vu and Duc Anh Dang
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Advanced machines and technology replace workers through automation. However, capital–labour substitution need not reduce aggregate labour demand, as it induces simultaneous contrasting effects within industries. To explore these effects, we examine the relationship between employment in Vietnamese manufacturing firms and imported capital goods in 2011–2017. To solve the problem of potential endogeneity and measurement errors, we used Association of Southeast Asian Nations (ASEAN) imported capital goods as an instrument variable for imported capital goods in Viet Nam. We found that imported capital goods do not displace employment and even increase employment and labour productivity. The impacts of imported advanced technology are more pronounced in large firms. More imported technology increases labour productivity in state-owned enterprises and the number of workers in large firms and firms in industrial zones. However, the increase in the level of employment is lower in industries and firms intensively using machines.
Topic:
Development, Science and Technology, Employment, and Imports
Political Geography:
Asia and Vietnam