scholarly journals How Much of South Korea’s Growth Miracle Can Be Explained by Trade Policy?

2015 ◽  
Vol 7 (4) ◽  
pp. 188-221 ◽  
Author(s):  
Michelle Connolly ◽  
Kei-Mu Yi
Keyword(s):  
Trade Policy ◽  
Capital Accumulation ◽  
Manufacturing Sector ◽  
Value Added ◽  
Policy Reforms ◽  
Welfare Gains ◽  
Catch Up ◽  
Multistage Production ◽  
Investment Goods ◽  
Tariff Reductions

This paper assesses the importance of trade policy reforms in South Korea, as well as the General Agreement on Tariffs and Trade (GATT) tariff reductions, in explaining Korea's growth miracle. We develop a model of neoclassical growth and trade in which lower tariffs lead to increased gross domestic product (GDP) per worker via comparative advantage and specialization, and capital accumulation. We calibrate the model and simulate the tariff reductions that occurred between early 1962 and 1989. The model can explain 17 percent of South Korea's catch-up to the G7 countries in value-added per worker in the manufacturing sector. These gains, as well as most of the welfare gains, are driven by two key transmission channels: multistage production and imported investment goods. (JEL F13, F43, L60, O47)

scholarly journals A Long Run ARDL Investigation of Manufacturing Adjustment to the Services Economy in Nigeria

2021 ◽  
Vol 9 (3) ◽  
pp. 95-107
Author(s):  
Olumuyiwa Olamade
Keyword(s):  
Capital Accumulation ◽  
Negative Impact ◽  
Manufacturing Sector ◽  
Value Added ◽  
Business Services ◽  
Development Indicators ◽  
Services Sector ◽  
Positive Effects ◽  
Distributed Lag ◽  
Long Run

The long-run equilibrating relationship between the value-added growth of services and manufacturing is investigated in this research. The study is based on the well-established empirical link between manufacturing and service activities, and in particular, manufacturing's servicification. The selected variables' annualized time series were obtained from the World Development Indicators. The paper used the autoregressive distributed lag framework to regress manufacturing value-added growth against service value-added growth while accounting for economic growth, factor input growth, and trade effects. The findings revealed that in Nigeria, a strong performing services sector has a large negative impact on manufacturing performance, whereas capital accumulation and income growth have positive effects. The supply constraint of business services that the manufacturing sector requires is at the root of this finding. The paper advocates for policy frameworks that support the efficient supply of business services as both a manufacturing input and a productivity enhancer for the entire economy.

scholarly journals Investment Demand and Structural Change

Econometrica ◽  
2021 ◽  
Vol 89 (6) ◽  
pp. 2751-2785 ◽  
Author(s):  
Manuel García-Santana ◽  
Josep Pijoan-Mas ◽  
Lucciano Villacorta
Keyword(s):  
Capital Accumulation ◽  
Developing Economies ◽  
Value Added ◽  
Relative Price ◽  
Investment Rate ◽  
Investment Demand ◽  
Consumption Goods ◽  
Sectoral Composition ◽  
The One ◽  
Investment Goods

We study the joint evolution of the sectoral composition and the investment rate of developing economies. Using panel data for several countries in different stages of development, we document three novel facts: (a) the share of industry and the investment rate are strongly correlated and follow a hump‐shaped profile with development, (b) investment goods contain more domestic value added from industry and less from services than consumption goods do, and (c) the evolution of the sectoral composition of investment and consumption goods differs from the one of GDP. We build a multi‐sector growth model to fit these patterns and provide two important results. First, the hump‐shaped evolution of investment demand explains half of the hump in industry with development. Second, asymmetric sectoral productivity growth helps explain the decline in the relative price of investment goods along the development path, which in turn increases capital accumulation and promotes growth.

scholarly journals Efficiency of Large-scale Manufacturing in Pakistan: A Production Frontier Approach

2006 ◽  
Vol 45 (4II) ◽  
pp. 689-700 ◽  
Author(s):  
Tariq Mahmood ◽  
Ejaz Ghani ◽  
Musleh-Ud Din
Keyword(s):  
Trade Policy ◽  
Large Scale ◽  
Manufacturing Sector ◽  
Import Substitution ◽  
Industrial Sector ◽  
Global Market ◽  
Early Years ◽  
Policy Reforms ◽  
Market Place ◽  
Production Frontier

The large scale manufacturing sector in Pakistan has gained increasing prominence over the years with its share in output rising to about 13 percent in 2005-06 from 5.67 percent in 1959-60.1 The sector has operated amid varying policy environments ranging from outright import substitution in the early years to a more deregulated and liberal environment in the recent years driven largely by concerns to improve the efficiency of the industrial sector which is critical for attaining greater competitiveness. While industrial and trade policy reforms in recent years have exposed domestic enterprises to greater internal and external competition, most of these enterprises continue to seek state patronage and have yet to reposition themselves to compete effectively in the global market place. Furthermore, the trade policy still has an import substitution bias for certain critical sectors whose imports are subject to tariff peaks and this raises concerns on their efficiency. This study aims to assess the efficiency of large scale manufacturing sector in Pakistan using the production frontier approach. Section 2 reviews the literature while Section 3 sets out the methodology and discusses data employed in the study. Section 4 analyses empirical findings, and Section 5 concludes the discussion.

scholarly journals Brazilian trade policies: some observed and estimated effects of the 1990s liberalization

2009 ◽  
Vol 39 (1) ◽  
pp. 59-88
Author(s):  
William Tyler ◽  
Angelo Costa Gurgel
Keyword(s):  
Trade Policy ◽  
Productivity Growth ◽  
Computable General Equilibrium ◽  
Economic Effects ◽  
Trade Policies ◽  
Cge Model ◽  
Policy Reforms ◽  
Policy Changes ◽  
Welfare Gains ◽  
Policy Effects

This paper seeks to examine economic effects of Brazil's trade policy liberalization in the early-1990s. The effects in Brazil, along with those of many other countries pursuing similar reforms, have been contentious. The period in question was one of macroeconomic turmoil followed by successful stabilization, and various policies were pursued sometimes simultaneously, rendering it analytically difficult to separate out various policy effects. The paper examines the existing evidence on the country's productivity growth and employs a computable general equilibrium (CGE) model to simulate the effects of trade policy changes. The analysis suggests that the trade policy reforms resulted in significant welfare gains for Brazil.

Hungarian small business tax and possibilities to minimize distortions from capital income taxation

2015 ◽  
Vol 37 (s1) ◽  
pp. 87-105
Author(s):  
Benedek Nobilis ◽  
András Svraka
Keyword(s):  
Small Business ◽  
Cash Flow ◽  
Capital Accumulation ◽  
Value Added ◽  
Regulatory Elements ◽  
Capital Income ◽  
Potential Growth ◽  
Elegant Method ◽  
Business Tax ◽  
Working Out

Governments throughout the EU and OECD countries rely on revenues raised on capital income. Albeit several arguments can be made for keeping these taxes, in their widespread form they hinder capital accumulation and significantly lower potential growth due to their savings and investment distorting nature. At the same time, the actual economic impact of tax types is largely influenced by their structure. An elegant method, which is also simple in its concept, for eliminating the economic distortions of profit taxes is cash-flow taxation which moves income taxes closer to the more growth-friendly value-added taxes. The small business tax, which was introduced in Hungary in 2013, was designed along these principles. In this paper we review the theoretical literature on cash-flow taxation and discuss the main regulatory elements of the small business tax, as well as the solutions elaborated for working out the challenges related to its implementation.

scholarly journals Women’s Economic Empowerment in Vietnam: Performance and Constraints of Female-Led Manufacturing SMEs

2021 ◽  
Vol 14 (6) ◽  
pp. 255
Author(s):  
MinhTam Bui ◽  
Trinh Q. Long
Keyword(s):  
Labor Productivity ◽  
Small And Medium Enterprises ◽  
Manufacturing Sector ◽  
Value Added ◽  
Medium Size ◽  
Formal Sector ◽  
Firm Level ◽  
Average Value ◽  
Significant Difference ◽  
Medium Enterprises

This paper identifies whether there was a performance difference among micro, small and medium enterprises (MSMEs) led by men and by women in Vietnam during the period 2005–2013 and aims to provide explanations for the differences, if any, in various performance indicators. The paper adopts a quantitative approach using a firm-level panel dataset in the manufacturing sector in 10 provinces/cities in Vietnam in five waves from 2005 to 2013. Fixed effect models are estimated to examine the influence of firm variables and demographic, human capital characteristics of owners/managers on firms’ value added, labor productivity and employment creation. We found that men led MSMEs did not outperform those led by women on average. Although the average value added was lower for female-led firms in the informal sector, the opposite was true in the formal sector where women tend to lead medium-size firms with higher value added and labor productivity. The performance disparity was more envisaged across levels of formality and less clear from a gender perspective. Moreover, while firms owned by businessmen seemed to create more jobs, firms owned by women had a higher share of female employees. No significant difference in business constraints faced by women and by men was found.

Trade Policy Reforms in South Asia

World Economy ◽  
1998 ◽  
Vol 21 (7) ◽  
pp. 881-896 ◽  
Author(s):  
Jayatilleke S. Bandara ◽  
Mark McGillivray
Keyword(s):  
Trade Policy ◽  
South Asia ◽  
Policy Reforms

U.S. ELASTICITIES OF SUBSTITUTION AND FACTOR AUGMENTATION AT THE INDUSTRY LEVEL

2012 ◽  
Vol 17 (4) ◽  
pp. 861-897 ◽  
Author(s):  
Andrew T. Young
Keyword(s):  
Manufacturing Sector ◽  
Weighted Average ◽  
Value Added ◽  
The United States ◽  
Large Majority ◽  
Elasticity Of Substitution ◽  
Constant Elasticity ◽  
Constant Elasticity Of Substitution ◽  
First Order ◽  
Industry Level

We provide industry-level estimates of the elasticity of substitution (σ) between capital and labor in the United States. We also estimate rates of factor augmentation. Aggregate estimates are produced. Our empirical model comes from the first-order conditions associated with a constant–elasticity of substitution production function. Our data represent 35 industries at roughly the 2-digit SIC level, 1960–2005. We find that aggregate U.S. σ is likely less than 0.620. σ is likely less than unity for a large majority of individual industries. Evidence also suggests that aggregate σ is less than the value-added share-weighted average of industry σ's. Aggregate technical change appears to be net labor–augmenting. This also appears to be true for the large majority of individual industries, but several industries may be characterized by net capital augmentation. When industry-level elasticity estimates are mapped to model sectors, the manufacturing sector σ is lower than that of services; the investment sector σ is lower than that of consumption.

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