Masaru Ichihashi

Exports and Economic Growth in Indonesia : A Causality Approach based on Multi-Variate Error Correction Model

Empirical findings testing the linkage of exports and economic growth have been mixed and inconclusive. This paper attempts to re-examine the exports and economic growth nexus in Indonesia during the period of 1971 to 2008. In contrast to cross-country study, the paper investigates such relationship in a time series framework using a vector autoregressive (VAR) model by employing other related important variables. The paper also proposes a distinction to previous studies by the inclusion of variable of intermediate imports. The tests on the long-run and short-run relationship between exports and economic growth are conducted. Based on finding of causality analysis conducted in VECM system, this paper concludes that exports and economic growth exhibits bi-directional causal structure, which is ELG in long-run and GLE in short-run. Despite of some empirical evidence of ELG in precedent studies, we find a supporting evidence of ELG merely in the long-run for our dataset of Indonesia. These findings indicate the significance of both exports and economic growth to economy of Indonesia as indicated in GIRF analysis. In addition, we found no supporting evidence of positive causality from intermediate imports to GDP per capita.

Structural change, labor productivity growth, and convergence of BRIC countries

In this study, we seek to understand the patterns of structural change, labor productivity growth and convergence in BRIC countries. In the first part, we employ the dataset of labor productivity from de Vries et al. (2012) and the Groningen Growth and Development Center (2013) and utilize the shift and share analysis to investigate the contribution of within shift, static shift and dynamic shift effects on growth of labor productivity. In the second part, we use the convergence tests to check for the cross-country convergence in each economic sector. Our aggregate shift-share decomposition results report that labor productivity growth within sector itself is the main source of aggregate growth, while an effect of labor movement exists (shift effect) but not substantial. Among BRIC, we found that, during 1980-2008, China had the highest rate of labor productivity growth, following by India, Russia, and Brazil, respectively. The results of the convergence analysis show that service sectors in BRICs have faster catching-up rates than industrial sectors, and there is no convergence in agriculture. Among service sectors, financial, insurance, and real estate sector has highest speed of convergence. The BRICs results are then used to compare with the four OECD countries f results. It is found that in OECD countries, the sectors that converge fastest are mining and finance, insurance, and real estate. Nevertheless, the magnitudes of speed of convergence in OECDs are not comparable to BRICs. This confirms the growth theory in that less developed countries converge faster than developed nations. In sum, our findings imply that service sectors are the driving force of economic growth and economic convergence in BRICs.

The role of foreign direct investment in Indonesia's manufacturing exports

This article examines whether foreign direct investment (FDI) has contributed to the changing structure of Indonesias manufacturing exports. It uses industry-level data from 1990 to 2008, classified by factor intensity. Our analysis reveals that FDI promotes exports in most panel observations, especially exports from physical-capital-intensive (PCI), human-capital-intensive (HCI) and technology-intensive (TI) industries. Yet by applying a differentiated cross-section-effect model, we determine that the export-generating potential of FDI is stronger in PCI, HCI and TI industries than in natural-resource-intensive or unskilled-labour-intensive industries, in which Indonesia has a comparative advantage. We also assess the influence of other determinants of export performance – namely, private domestic capital investment, GDP growth and exchange rates. Our findings have implications for policymakers seeking to sustain Indonesias export performance.

Governance Structures and Management Efficiency in Japanese Companies

This study uses panel data from companies from FY 2001 to 2004 to analyze the effects of banks, share owning, and directors on the management efficiency of companies, with consideration given to the attributes of managers, the presence of labor unions, and the existence of an education and training system. The results showed that the impacts of bank dependence and labor unions on management efficiency differ depending on the origins and attributes of the managers. We confirm that Japanese companies that have high dependence on banks and weak pressure from the capital markets, with labor unions in place and managers that are promoted internally within the company—in other words typical Japanese-style companies—tend to have lower management efficiency as compared with Japanese companies that do not share these attributes. Underlying all this is the difficulty involved in making employment adjustments in non-founder-managed companies, particularly in companies where managers are promoted internally.

The impact of foreign direct investment on host country's exports : Sector-based evidence from Indonesian manufacturing

This study sought to elucidate the existence of a link between foreign direct investment (FDI) and exports in the manufacturing sectors of Indonesia. It contributes to the literature by investigating the sector-based impact of inward FDI on a host countrys exports, using disaggregated data of manufacturing sectors categorized by factor intensity from 1990 to 2008. So doing enables one to test an FDI-substitute or FDI-complementary effect on sector-based export performance. The FDI theory proposes the possibility of an export-promoting effect in host economies. Employing panel analysis on the full sample and subsamples, and by later applying a differentiated cross-section effect, we found that FDI flows significantly crowd-in manufacturing exports in most panel observations. Interestingly, such an export effect is even stronger in physical capital, human capital, and technology-intensive sectors, without any significant evidence of a crowd-out effect in natural resource-intensive and unskilled labor-intensive industries, sectors in which Indonesia has a comparative advantage. In addition, this study uncovered the importance of other determinants of export performance. The findings draw some main policy implications, namely the importance of targeted sector-based policy, competitive exchange rate management, and further development of industrialization towards high value-added activities.

Productivity and Unemployment Convergence in the Eurozone and ASEAN: A Comparative Study Based on Demographic and Maastricht Criteria Roles

growth causing a reduction of the number of children in the population, an increase of the share of the population concentrated in the working ages, a raise of the support ratio and a correspondence raising per-capita income (2). Thus, the wide gap in demographic aspects could induce huge disparity. The objective of this analysis is comparatively testing the determinacy of demographic and MC variables on productivity and unemployment convergence by comparing the Eurozone and ASEAN.To enrich the analysis, we employ(3) method to catch the channel between real per-capita GDP with productivity.Toanswer main objective, we apply Solow model and follow β convergence approach of (4) and others reviewing the determinants of convergence and economic growth. The contribution of this study mainly was the break ground study to investigate productivity and unemployment convergence by comparing a developed regional organization (the Eurozone) with a developing one (ASEAN). It also tries to confirm the benefit of imposing MC on regional implementing the criteria with another as a policy evaluation. The improvement relatively to previous work was employing decomposition analysis as an additional approach. The result will be beneficial especially for ASEAN to maintain sustainability of regional economic integration mainly based on Eurozone experience as ex-ante and ex-post lesson.

The Role of Maastricht Criteria and Membership in Determining Convergence in the Eurozone and ASEAN: A Panel Data Analysis

The effectiveness of The Maastricht Treaty (MT) to induce economic convergence in the area was questionable after some Eurozone countries hit by the recent economic crisis. Some studies showed that Maastricht Criteria (MC) as accession criteria for euro membership contributed to low growth in area. It is interesting to analyze the impact of MC and membership on income convergence in the Eurozone and compare it with Association of Southeast Asian Nation (ASEAN). Employing panel analysis, the purpose of this study is to comparatively analyze the income convergence with MC as control variables in the Eurozone and ASEAN during 1990-2009, or just one decade before and after the introduction of Euro coin. The result showed that both the Eurozone and ASEAN were unconditionally and conditionally converged, and also indicated the significance of MC in determining income convergence in both areas. The findings were interesting for policy makers, especially for ASEAN, which was in the process for implementing ASEAN Economic Community (AEC) by 2015.

Measurement of reciprocity in a village through social networks

ABSTRACT This paper examines measuring of interdependency among households through their transactions by using information of individual villagers in a disadvantaged area in a developing country. To obtain the information, we created a village input–output table (VIOT) from household survey data conducted in a rural village in Lao PDR in 2015 and 2016. Because each household in the village is not only a producer but also a consumer who is trading products and consuming them, the VIOT is a simple but useful tool to know the economic transactions among villagers. The main findings are that four higher-income families, which mainly trade rice very frequently, are playing key roles in the village economy, and the interdependency among higher-income households is stronger than among lower/middle-income households. Additionally, this method can be used to form an economic policy such as poverty reduction because of informing households playing a key role in the village.

Relationship between Financial Development and Foreign Direct Investment

This study examines the relationship between foreign direct investment (FDI) and financial development (FD) based on a sample of 93 countries including high-income, upper middle-income and low-income countries. The estimation results for the entire sample indicate that FDI is beneficial instrument to enhance the speed of FD. The empirical results for the high-income countries indicate that FDI stimulates only the loan sector and does not have a significant effect on domestic credit for the private sector. The empirical results for upper middle-income countries show that FDI can speed up the FD of upper middle-income countries. Finally, the results for lowincome countries indicate that the effects of both FDI on both the domestic credit sector and domestic credit for private financial sector of FD are unclear and inconsistent.

Notes on Comparative Economic Development

This paper will show two things: The first thing, in the first subsection, is to give a more general and comprehensive outline of economic development framework. The second thing, in the second subsection, is to answer where the originality of Japanese economy and organization came from as an application of our comprehensive economic development framework. Japanese society also has many common bases with other countries regarding various social aspects, but simultaneously the originality can be drawn from them as well. It means that the uniqueness of Japanese economy and organization has been formed through the many common social factors and different ways of the mixture. Its geographical/environmental condition (warm humid) and the agricultural mode (irrigated rice and fish catching), the village style and the way of people settlement (coastal and mountainous, family units) are originally generated. The religious culture (Confucianism, Buddhism and Shinto) grown and introduced to there, the political decision making system (collectivism, patriarchy or paternalism) and the bureaucracy also seem to be so unique. Such centralized power and collectivism social relation were involved to a modern production system and factors of economic development were also utilized fully, and then Japan succeeded his productivity rapidly in the very short run.