This paper anatomizes the linkage between country/region characteristics and Japanese MNE activity in India from both theoretical and empirical sides. We construct a North-South firm-heterogeneity model with FDI and exchange rate. We use this model to make three contributions: First, we theoretically reveal how country characteristics affect the average sales of the firm in the host country. Secondly, we make clear the state-level characteristics on three main industrialized areas in India using the data from some valuable databases. Thirdly, we estimate determinant factors of average sales of each Japanese affiliate firms in India focusing on regional characteristics derived in the theoretical part using firm-level data. We also construct several proxy variables of determinant factors of average sales in state-level and put into estimated regression equation. This empirical analysis targets at the 1990s and 2000s. Over this period, India enjoyed steady economic growth and it can be linked with increase of FDI inflow and technological spillover from MNEs. We find out that some regional characteristics such as level of human-capital or transportation cost in each state and also exchange rate have a significant effect on average sales of each Japanese affiliate firms in India.
{"title":"Regional disparities, firm heterogeneity, and the activity of\u0000 Japanese\u0000 manufacturing multinationals in India","authors":"Hiroyuki Nishiyama, Azusa Fujimori, Takahiro Sato","doi":"10.1111/1468-0106.12384","DOIUrl":"https://doi.org/10.1111/1468-0106.12384","url":null,"abstract":"This paper anatomizes the linkage between country/region characteristics and Japanese MNE activity in India from both theoretical and empirical sides. We construct a North-South firm-heterogeneity model with FDI and exchange rate. We use this model to make three contributions: First, we theoretically reveal how country characteristics affect the average sales of the firm in the host country. Secondly, we make clear the state-level characteristics on three main industrialized areas in India using the data from some valuable databases. Thirdly, we estimate determinant factors of average sales of each Japanese affiliate firms in India focusing on regional characteristics derived in the theoretical part using firm-level data. We also construct several proxy variables of determinant factors of average sales in state-level and put into estimated regression equation. This empirical analysis targets at the 1990s and 2000s. Over this period, India enjoyed steady economic growth and it can be linked with increase of FDI inflow and technological spillover from MNEs. We find out that some regional characteristics such as level of human-capital or transportation cost in each state and also exchange rate have a significant effect on average sales of each Japanese affiliate firms in India.","PeriodicalId":46516,"journal":{"name":"Pacific Economic Review","volume":" ","pages":""},"PeriodicalIF":1.5,"publicationDate":"2022-01-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42697565","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines the effect of domestic monetary policy on capital flows after controlling for the effect of conventional push factors (global factors). We conduct a time-varying coefficient vector autoregressive (TVC-VAR) model analysis using monthly data (January 2010–July 2019) from Korea. Our empirical results show that an expansionary monetary policy shock has a short-run (1- and 3-month) negative impact on gross inflows to the equity market, which is the main driver of gross capital inflows to Korea. This negative effect increases throughout the sample period. Monetary policy easing is also associated with a decrease in outflows of equity, representing a reversal of Korean residents’ foreign equity investment as the domestic policy rate decreases. This effect dampens the negative impact on gross capital inflows, which leads to mild responses of net capital inflows in the short run. We also find a clear relationship between the level of the policy rate and its impact on gross capital inflows. The lower the policy rate, the greater the negative impact of the expansionary monetary policy shock on gross capital inflows. This time-varying effect reflects difficulties that many emerging market economies, including Korea, face in setting monetary policy when policy rates are low.
{"title":"Time-varying effect of monetary policy on capital flows in Korea","authors":"Joonyoung Hur, Kyunghun Kim","doi":"10.1111/1468-0106.12382","DOIUrl":"https://doi.org/10.1111/1468-0106.12382","url":null,"abstract":"This paper examines the effect of domestic monetary policy on capital flows after controlling for the effect of conventional push factors (global factors). We conduct a time-varying coefficient vector autoregressive (TVC-VAR) model analysis using monthly data (January 2010–July 2019) from Korea. Our empirical results show that an expansionary monetary policy shock has a short-run (1- and 3-month) negative impact on gross inflows to the equity market, which is the main driver of gross capital inflows to Korea. This negative effect increases throughout the sample period. Monetary policy easing is also associated with a decrease in outflows of equity, representing a reversal of Korean residents’ foreign equity investment as the domestic policy rate decreases. This effect dampens the negative impact on gross capital inflows, which leads to mild responses of net capital inflows in the short run. We also find a clear relationship between the level of the policy rate and its impact on gross capital inflows. The lower the policy rate, the greater the negative impact of the expansionary monetary policy shock on gross capital inflows. This time-varying effect reflects difficulties that many emerging market economies, including Korea, face in setting monetary policy when policy rates are low.","PeriodicalId":46516,"journal":{"name":"Pacific Economic Review","volume":"83 2","pages":""},"PeriodicalIF":1.5,"publicationDate":"2022-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138509246","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Return predictability between industries and the stock market in China","authors":"Yanying Zhang, Y. Tse, Gaiyan Zhang","doi":"10.1111/1468-0106.12379","DOIUrl":"https://doi.org/10.1111/1468-0106.12379","url":null,"abstract":"","PeriodicalId":46516,"journal":{"name":"Pacific Economic Review","volume":" ","pages":""},"PeriodicalIF":1.5,"publicationDate":"2021-10-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45274558","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Service trade network structure and its determinants in the Belt and Road based on the temporal exponential random graph model","authors":"Lianyue Feng, Helian Xu, Gang Wu, Wenting Zhang","doi":"10.1111/1468-0106.12378","DOIUrl":"https://doi.org/10.1111/1468-0106.12378","url":null,"abstract":"","PeriodicalId":46516,"journal":{"name":"Pacific Economic Review","volume":" ","pages":""},"PeriodicalIF":1.5,"publicationDate":"2021-10-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43185668","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In December 2019, a series of pneumonia cases of unidentified type, later to become known as COVID-19, emerged in Wuhan, the capital of Hubei province in China. By the end of January 2020, the virus had spread to Beijing, Shanghai and Guangdong. From there, the virus spread around the world at high speed, and finally on March 12, 2020, the World Health Organization (WHO) classified the COVID-19 outbreak a worldwide pandemic. The COVID-19 health shock and the ensuing shutdown measures to contain it have plunged the global economy into the deepest recession since World War II. Understandably, the COVID-19 pandemic has attracted heightened attention from academics and policymakers alike. In autumn 2021 the situation is such that the availability of highly effective vaccines in less than a year is a cause for hope, but several significant dangers to recovery of global health and economic growth are still clear and present. New variants of SARS-CoV-2, the virus that causes COVID-19, have emerged. At the same time, vaccine rollouts have been slow in several advanced and emerging market countries. While economic recovery in some hard-hit countries has been swift, the effects in other countries remain clearly perceptible. Taken together, these developments raise the real possibility that the current pandemic will continue to have a significant impact on economic growth in the upcoming years. Better understanding of the Covid-19 pandemic presents deep intellectual challenges as well as opportunities for useful economic policy applications. Against this background, this special issue contains five research papers, with a focus on the macroeconomic impacts of COVID-19 on the Asian Pacific economies. Rungcharoenkitkul (2021) provides a review of the macroeconomic consequences of COVID-19 up to June 2021. The paper begins with an overview of the past epidemics and selected studies to draw lessons from past experiences for the current COVID-19 pandemic. On the impact of current pandemic, estimates suggest a median output loss of 8% in 2020. The DOI: 10.1111/1468-0106.12377
{"title":"Special issue: The implications of\u0000 COVID\u0000 ‐19 for emerging\u0000 Asia","authors":"M. Funke, Tai-kuang Ho","doi":"10.1111/1468-0106.12377","DOIUrl":"https://doi.org/10.1111/1468-0106.12377","url":null,"abstract":"In December 2019, a series of pneumonia cases of unidentified type, later to become known as COVID-19, emerged in Wuhan, the capital of Hubei province in China. By the end of January 2020, the virus had spread to Beijing, Shanghai and Guangdong. From there, the virus spread around the world at high speed, and finally on March 12, 2020, the World Health Organization (WHO) classified the COVID-19 outbreak a worldwide pandemic. The COVID-19 health shock and the ensuing shutdown measures to contain it have plunged the global economy into the deepest recession since World War II. Understandably, the COVID-19 pandemic has attracted heightened attention from academics and policymakers alike. In autumn 2021 the situation is such that the availability of highly effective vaccines in less than a year is a cause for hope, but several significant dangers to recovery of global health and economic growth are still clear and present. New variants of SARS-CoV-2, the virus that causes COVID-19, have emerged. At the same time, vaccine rollouts have been slow in several advanced and emerging market countries. While economic recovery in some hard-hit countries has been swift, the effects in other countries remain clearly perceptible. Taken together, these developments raise the real possibility that the current pandemic will continue to have a significant impact on economic growth in the upcoming years. Better understanding of the Covid-19 pandemic presents deep intellectual challenges as well as opportunities for useful economic policy applications. Against this background, this special issue contains five research papers, with a focus on the macroeconomic impacts of COVID-19 on the Asian Pacific economies. Rungcharoenkitkul (2021) provides a review of the macroeconomic consequences of COVID-19 up to June 2021. The paper begins with an overview of the past epidemics and selected studies to draw lessons from past experiences for the current COVID-19 pandemic. On the impact of current pandemic, estimates suggest a median output loss of 8% in 2020. The DOI: 10.1111/1468-0106.12377","PeriodicalId":46516,"journal":{"name":"Pacific Economic Review","volume":" ","pages":""},"PeriodicalIF":1.5,"publicationDate":"2021-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44033853","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Cross‐border bank flows through foreign branches and the effect of a macroprudential policy","authors":"Youngjin Yun","doi":"10.1111/1468-0106.12375","DOIUrl":"https://doi.org/10.1111/1468-0106.12375","url":null,"abstract":"","PeriodicalId":46516,"journal":{"name":"Pacific Economic Review","volume":" ","pages":""},"PeriodicalIF":1.5,"publicationDate":"2021-09-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41563756","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Revisiting the return‐volatility relationship of exchange rates: New evidence from offshore\u0000 RMB","authors":"Yue Chen, Juan Lin, Ximing Wu","doi":"10.1111/1468-0106.12374","DOIUrl":"https://doi.org/10.1111/1468-0106.12374","url":null,"abstract":"","PeriodicalId":46516,"journal":{"name":"Pacific Economic Review","volume":" ","pages":""},"PeriodicalIF":1.5,"publicationDate":"2021-09-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44874202","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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