Bernadette Andreosso-O'Callaghan

Sources of output change in China: 1987-1997: application of a structural decomposition analysis

Since the beginning of the economic reforms implemented in the industrial sectors of China, the economy has grown and changed rapidly. The high GDP growth rates recorded since 1985 have stimulated unprecedented changes in the economic structure of this developing economy. The major causes of the changes are: the increase in consumption and investment, production technological change and trade. The objective was to analyse this type of structural change, and to explore the sources of economic growth during the period 1987–1997, by using the method of structural decomposition analysis (SDA). The chosen SDA method, based on the comparison between two input-output tables, allowed us to decompose each sectors and industrys output growth; it enabled the relative impact of final demand and technological change of each industry on overall growthto be measured.

An Analysis of Structural Change in China using Biproportional Methods

Traditional IO techniques have been used and applied in detail to the case of the Chinese economy with a view to describing and analysing the gradual, albeit radical, transformation of the Chinese industrial fabric since the beginning of the economic reforms. Using a Biproportional Filter, our study has a threefold objective: to measure and analyse structural change that has taken place in the Chinese manufacturing sector since 1985; to highlight those industries that have been most responsible for the change; and to explain the reasons for these changes.

Is Ireland a Role Model for SME Development in the New EU Member States

Abstract Beyond their many differences, the similarity of economic situations between Ireland in the early 1970s and the small new member states today invites research as to whether Ireland is a useful case study with regard to small and medium–size enterprise development. Positioned in the wider current debate on the factors that cause growth, as epitomised for example by the Sapir Report, this work is timely given that in less than three decades, the Irish economic outlook has improved from that of one of the four cohesion countries of the EU to earning the accolade of ‘celtic tiger’ during the 1990s. This article explores the following questions: are all the ingredients of the Irish experience for SME development present in the NMS? What lessons can be learned? What are the similarities and contrasts between SMEs in Ireland and in the NMS? As well as highlighting the existence of similarities, it is argued that advantages exist in the NMS which were absent when Ireland joined the then Common Market in 1973.

Economic structural complementarity: how viable is the Korea‐EU FTA?

Purpose - Economic structural complementarity between country A and country B, or the way the two countries specialize in different industries is a useful tool for the analysis of the likely impact of trade liberalization. Although implicit in earlier work on economic integration, this concept has been overshadowed subsequently, probably because of the “econometrization” of the studies on trade liberalization. This paper aims to discuss first the relevance of the concept of structural complementarity between two economies in the context of regional integration. Second, since the EU and Korea are on the verge of signing a free trade agreement (FTA), it aims to show that measuring economic structural complementarity in the case of these two countries is all the more desirable. Design/methodology/approach - The paper applies a number of indices such as the trade complementarity index and the Kreinin-Finger similarity of export index to the manufacturing sector. Findings - On the whole the EU and Korea are structurally complementary, implying large potential gains from the FTA. However, the existence of two critical industries, namely road vehicles and electrical machinery are revealed. Practical implications - The FTA poses some sectoral challenges to the industries, in particular for the EU, and it calls for appropriate strategies in these areas. Originality/value - This article both clarifies and measures economic structural complementarity, a concept connected with, but not reduced to that of competitiveness. By using several indicators, the present study shows that the manufacturing sectors of the EU and of Korea are on the whole complementary.

Responding to the crisis: are policies aimed at a strong indigenous industrial base a necessary condition for sustainable economic growth?

We examine whether a strong indigenous manufacturing base is a necessary condition for sustainable economic growth in the case of two small, open economies, Ireland and Sweden. Sweden has been impacted by the economic crisis to a lesser degree than Ireland; we explore (through a manufacturing activity lens) the reasons for the asymmetric impacts and ask if the nature of the shock is related to ‘Economic Sovereignty’ and to the type of industrial policy. We argue Sweden was less affected given that its indigenous firms control the highly export-focused and technology-based engineering sector whereas in Ireland high-technology sectors are controlled by foreign firms. In terms of policy implications, we suggest that industrial policy should aim for sustainable economic activity and growth such that industrial activity within the economy should be able to minimise the impact of asymmetric shocks such as the current global economic recession.

Territory, research and technology linkages - is the Shannon region a propitious local system of innovation?

Despite the establishment of high-tech multinational enterprises (MNEs) in Ireland since the late 1950s, the country did not succeed in closing the technological gap with most of its EU counterparts. The weak National System of Innovation (NSI), and in particular low business and government R&D levels, combined with a lack of research and technology linkages between MNEs and indigenous firms, explain these poor results. However, the Shannon region in the West of the country presents some specific institutional characteristics that could theoretically make the region a strong technological enclave. The various actors in the region - i.e. the administrative, financial, political and research institutions, as well as the business organizations - have indeed infused a new type of economic development. After a brief review of the available concepts and models articulated around these actors and their interrelationships, the paper analyses whether the Shannon region, taken as an illustrative example, mirrors a specific economic and technological localized setting. The study is based on a survey of indigenous and foreign firms.

How red is China's red capitalism? Continuity and change in China's financial services sector during the global crisis

Chinese capitalism cannot be captured by theoretical frameworks and concepts such as the ‘Varieties of Capitalism’ approach. Despite its integration into the world economy and the financial crises, the country has kept a stable Leninist basis of formal institutions. The case of financial services shows: (i) a resilience of the sector to the ‘Great Financial Crisis’ of 2008 and (ii) the use of the crisis as an opportunity. Examining the control of Chinese financial services shows that private interests and the regulatory authorities are intimately linked to the state apparatus and that there is no radical break in sight with Chinas unique blend of party state-led capitalism.

Analysis of the Current Account Position of Four Asian Countries Before the 1997 Crisis

The current paper presents an empirical analysis of the current account positions during the pre Asian crisis period, in the four most crisis-hit countries (namely Thailand, the Philippines, South Korea and Indonesia). We have employed the procedures advocated by Husted for the presence of stationarity in current accounts by estimating a cointegration relationship between any countrys exports and imports. The results do not substantiate the presence of cointegration between the series, implying that the macroeconomic fundamentals in these countries prior to the crisis were far from robust, at least from the perspective of current account sustainability. Copyright 2007 Blackwell Publishing Ltd

Are the Economies of ASEAN and the EU Complementary

The revival of EU-ASEAN economic relations has recently been stirred by the EU-ASEAN Vision Group that was set up in 2005, with the aim of looking into the possibility of a free trade area (FTA) between the two regions. This article analyses the economic feasibility of an EU-ASEAN FTA by measuring the degree of complementarity existing between the economic structures of both regions. The idea is that the greater the complementarity, the higher the scope for trade expansion between the two economies, the lower the costs induced by resource reallocation and the more desirable and successful the FTA. Using a standard trade complementarity index, we find a clear manufacturing-services complementarity between the two regions. At a lower level of aggregation, ASEAN displays a relative comparative advantage in automatic data processing machines (an EU structural weakness). Moreover, for the large majority of manufactured products traded, intra-industry trade (IIT) ratios are relatively low, denoting important trade complementarities between the two regions in general.

Assessing the Feasibility of Monetary Integration in the Former Soviet Republics

The disintegration of the USSR brought with it a turbulent period of transition for the newly emerged independent states. This initiated a process of economic decentralisation and a re-allocation of resources. Various regional formations aiming to create a single market or even a common currency area have been proposed amongst the former Soviet states. Despite this, very little in terms of economic integration has been achieved so far. Economies within the CIS are divergent in terms of size and economic structure, with external shocks being more prominent for regional countries. The empirical analysis provided here examines the sustainability of optimum currency area arrangements within the CIS. The results present weak evidence to support monetary arrangements in the region, nonetheless some evidence was found for Russia-Belarus and to some extent Russia-Kazakhstan. Russia remains the dominant, most diversified and advanced economy in the region. In the case of a monetary union with regional countries, the union is likely to happen by absorption. External shocks have divergent effects on regional countries; the differences to a large extent are attributed to the magnitude of responses, further weakening the argument in favour of the OCA in the region.