scholarly journals Industrial Capital Intensity and Comparative Advantages Dynamism of Indonesian Export Products

2015 ◽  
Vol 16 (2) ◽  
pp. 107
Author(s):  
Ni Putu Wiwin Setyari ◽  
Tri Widodo ◽  
Muhammad Edhie Purnawan
Keyword(s):  
Comparative Advantage ◽  
Capital Flows ◽  
Industrial Structure ◽  
Large Population ◽  
Capital Intensity ◽  
International Capital Flows ◽  
International Capital ◽  
Trade Theory ◽  
Marginal Rate ◽  
Capital Intensive

The development of new trade theory which incorporates the interaction between trade and international capital flows indicates if the possibility of changes in a country's comparative advantage due to the opening of international capital flows. International capi tal flows allow for changes in the industrial structure of a country depends on the composition of the products produced in that coun try. More capital-intensive types of products produced by a country, the greater the need for capital and the higher marginal rate of capital that can be given to attract greater international capital flows. Therefore, a comparative advantage should be seen as dynamic rather than static. As a country with large population, Indonesia tends to specialize in labor -intensive products. The other hand, efforts to attract foreign direct investment are very intensively conducted. The estimation results indicate if there was a shift in the pattern of industrial specialization Indonesia, from labor –intensive tends toward capital intensive.

scholarly journals Industrial Structure, Demographic Pattern, and Indonesian Current Account

2017 ◽  
Vol 19 (3) ◽  
Author(s):  
Ni Putu Wiwin Setyari ◽  
Ida Bagus Putu Purbadharmaja ◽  
Ni Luh Karmini
Keyword(s):  
Current Account ◽  
Capital Flows ◽  
Industrial Structure ◽  
Capital Intensity ◽  
Developed Countries ◽  
International Capital Flows ◽  
Current Account Balance ◽  
International Capital ◽  
Trade Theory ◽  
Capital Intensive

The new trade theory shows the interaction between capital intensity, reflects the comparative advantages of a country as well as the industrial structure, and international capital flows. One main proposition stated if a country has high capital intensity in their industrial structure, and changes tends to be capital intensive, foreign capital will flow into the country because the domestic savings position become lower than investment needs. It can explain why international capital flows from developing countries to the developed countries that are relatively rich in capital. This study attempted to examine the consistency and reliability of the theory in the context of Indonesia. The important thing here is the existence of different viewpoints in assessing the phenomenon of the current account balance. The model used is the restricted error correction mechanism in Autoregressive Distributed Lag (ECM-ARDL) approach. The result indicates that both industrial structure and demographic pattern are affecting Indonesian current account significantly. Specifically, capital intensity negatively affects Indonesian current account. This indicates the higher capital intensity, which means the greater tendency to capital-intensive industry structure, leads to higher current account deficit. The analysis also highlights the importance of demographic pattern in determines Indonesian current account through their impact to savings – investment position.

Industrial Structure and Capital Flows

2012 ◽  
Vol 102 (5) ◽  
pp. 2111-2146 ◽  
Author(s):  
Keyu Jin
Keyword(s):  
Capital Flows ◽  
Industrial Structure ◽  
Developed Countries ◽  
Financial Capital ◽  
International Capital ◽  
Composition Effect ◽  
Financial Capital Flows ◽  
Current Account Imbalances ◽  
Capital Intensive ◽  
Developing And Developed Countries

This paper provides a new theory of international capital flows. In a framework that integrates factor-proportions-based trade and financial capital flows, a novel force emerges: capital tends to flow toward countries that become more specialized in capital-intensive industries. This “composition” effect competes with the standard force that channels capital toward the location where it is scarcer. If the composition effect dominates, capital flows away from the country hit by a positive labor force/productivity shock—a flow “reversal.'' Extended to a quantitative framework, the model generates sizable current account imbalances between developing and developed countries broadly consistent with the data. (JEL F14, F21, F32, F41, L16, O19)

Human Capital and International Capital Flows: Evidence from China

2021 ◽  
pp. 016001762198942
Author(s):  
Zhenshan Yang ◽  
Yinghao Pan ◽  
Dongqi Sun ◽  
Li Ma
Keyword(s):  
Human Capital ◽  
Capital Flows ◽  
Global Economy ◽  
Global Market ◽  
International Capital Flows ◽  
International Capital ◽  
Outward Fdi ◽  
Local Economies ◽  
Vector Autoregressive ◽  
External Resources

The pattern of international capital flows has changed dramatically in the process of globalization. In this study, we argue that human capital (HC) facilitates a region’s reversal from being a net recipient of external resources to being an active contributor in the global market. Using a panel vector autoregressive regression method, we examine the relationships among regional HC, foreign direct investment (FDI), and outward FDI during 2004–2015 in China. Our results show that HC plays a key role in both attracting FDI and generating outward FDI. The findings contribute to research on the dynamic capacity building of regions participating in the global economy, especially strengthening HC for local economies participating in the global economy as either investment recipients or contributors.

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