Prema‐chandra Athukorala and Shahbaz Nasir
The purpose of this paper is to examine patterns and determinants of trade among developing countries (South‐South trade), with emphasis on the role of production sharing in…
Abstract
Purpose
The purpose of this paper is to examine patterns and determinants of trade among developing countries (South‐South trade), with emphasis on the role of production sharing in global economic integration of the Southern economies.
Design/methodology/approach
The paper begins with an analytical narrative of the emerging trends and patterns of South‐South trade using a classification system that helps delineating trade based on global production sharing (network trade) from total recorded trade. Then it undertakes a comparative econometric analysis of the determinants of South‐South and South‐North trade using the standard gravity model.
Findings
The share of South‐South trade in world trade has shown a significant increase over the past two decades. This increase has predominantly come from the dynamic East Asian countries, reflecting their growing engagement in global production sharing. The growth dynamism of East‐Asia centered production networks depends heavily on demand for final (assembled) goods in the Northern markets; South‐South trade is largely complementary to, rather than competing with, South‐North trade. While regional trading agreements (RTAs) could play a role at the margin, natural economic forces associated with growth and structural change in the economy and the overall macroeconomic climate as reflected in the real exchange rate, and the quality of trade related logistics are far more important in the expansion of South‐South network trade.
Originality/value
This is the first study to examine patterns and determinants of South‐South trade paying attention to the role of global production sharing. The findings are valuable for informing the contemporary policy debate on promoting South‐South trade. The trade data classification system developed here is expected to help further research on this subject.
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The 1997‐1998 Asian financial crises underscored the dangers of open capital accounts in developing nations that have weak macroeconomic policies or poorly regulated financial…
Abstract
The 1997‐1998 Asian financial crises underscored the dangers of open capital accounts in developing nations that have weak macroeconomic policies or poorly regulated financial systems. Most developing Asian countries responded to the crisis by adopting the orthodox remedies prescribed by the International Monetary Fund. These included liberalised capital accounts, floating exchange rates and tighter fiscal and monetary policies designed to restore investor confidence. Malaysia departed from this orthodoxy. In September 1998 it imposed controls on capital account transactions, pegged its currency to the US dollar, cut interest rates and reflated its economy. The literature suggests that even temporary capital account controls entail serious economic risks for developing countries. However, the undue hardships imposed by the IMF regimen suggest that it is time to re‐evaluate the role of currency controls in mitigating the destabilising effects of unfettered capital flows in developing countries that have poorly regulated financial systems. This article analyses the effectiveness of Malaysia’s 1998 capital controls by evaluating Malaysia’s post‐1998 economic progress. Its goal is to inform the debate concerning the benefit‐risk tradeoffs of currency controls in developing countries.
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Arisman Arisman and Ratnawati Kusuma Jaya
The purpose of this article is to explain and share about labour migration for employment purposes issues from the perspective of a sending and receiving country in Association of…
Abstract
Purpose
The purpose of this article is to explain and share about labour migration for employment purposes issues from the perspective of a sending and receiving country in Association of Southeast Asian Nations (ASEAN) (Indonesia; sending state and Malaysia; receiving state) on managing the international labour migration between the two countries.
Design/methodology/approach
The research adopting “mixed methods”, mixing of quantitative and qualitative data within a single investigation or sustained programme of inquiry. The activity includes collecting primary data in two countries. Data collection is done by distributing questionnaires to migrant workers in the receiving states and used indepth interview to 10 stakeholders in the sending states.
Findings
The protection of migrant workers in Johor Bahru is still weak. The graph shows that Indonesian migrant workers in Johor mostly have their documents kept by their employer. Fisheries sector has the highest percentage of workers whose documents are retained by the employer. Meanwhile the sector in which the worker mostly do not get a weekly one day off is the domestic worker. Overall, this means that Malaysia has to put more attention on the existing regulation in order to create a more comfortable working environment.
Originality/value
This paper observe three parameters such as working hour, who keep the passport of the Indonesian migrant workers and weekly one day off relate to working condition of Indonesian migrant workers.
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– The purpose of this paper is to examine the impact of trade and investment liberalization on the wage skill premium between skilled and unskilled workers in Vietnam.
Abstract
Purpose
The purpose of this paper is to examine the impact of trade and investment liberalization on the wage skill premium between skilled and unskilled workers in Vietnam.
Design/methodology/approach
An analysis is undertaken by means of descriptive statistics and econometric investigation using a firm-level data set from the Enterprise Survey of Vietnam.
Findings
It is shown that there has been a positive wage differential between foreign-invested enterprises (FIEs) and domestic enterprises over the period 2000-2009. More importantly, the FIE-domestic wage differentials are found to be significantly positive after accounting for differences in capital intensity, size, firm location, and industry features. Furthermore, statistical evidence shows that these wage differentials narrowed over the period 2006-2009.
Originality/value
One of the first study examines the FIE-domestic wage differentials given the outward-oriented economic reforms since 2000 in Vietnam.