Journal of International Commerce, Economics and Policy

This Special Issue of the Journal of International Commerce, Economics and Policy is dedicated to investigating specific topics in the realm of globalization and development. The papers in this issue address capital flows, aid, migration, ideas, trade, and policy. They aim to provide a nuanced approach to analyzing the potential links between globalization processes and development.

This paper examines the factors that determine banking flows from advanced economies to emerging markets. In addition to the usual determinants of capital flows in terms of global push and local pull factors, we examine the role of bilateral factors, such as growth differentials and economic size, as well as contagion factors and measures of the depth in financial interconnectedness between lenders and borrowers. We find profound differences across regions. In particular, in spite of the severe impact of the global financial crisis, emerging Europe stands out as a more stable region. Assuming that the determinants of banking flows remain unchanged in the presence of structural changes, we use these results to explore the short-term implications of Basel III capital regulations on banking flows to emerging markets.

Foreign divestments have become a regular feature of global investment patterns. These divestments have mainly been explained by changes in the economic and institutional factors of the host countries. Recently, as institutional quality has improved in emerging economies, perceived risks have decreased and divestments can no longer be fully explained by host country factors. This paper examines the effects of a firm's home country institutional quality on its divestment decisions in foreign markets. It also studies whether these factors affect developed and developing host countries differently during normal and crises years.

This paper explores the effects of aid, institutions, and social cohesion on per capita income growth in 34 African countries using the Arellano-Bond dynamic panel GMM estimator. The paper focuses on the interplay of aid and institutions and the interplay of aid and social cohesion. The empirical results indicate that social cohesion enhances the growth effects of aid but there is a threshold effect, suggesting that aid becomes effective in enhancing growth in countries with higher social cohesion. Surprisingly, the results show that beyond a certain level of improvements in institutional quality, institutions (political rights and civil liberties) reduce the effectiveness of aid.

This paper examines the impact of international labor migration on foreign bank presence in 30 Asian and Latin American countries. While it is well established that social and economic characteristics of the host economy influence entry by foreign banks, we test whether social and economic linkages between bank-host and bank-origin economies influence foreign bank activity. In particular, we consider whether international migration from bank-host to the bank-origin countries affects foreign bank activity. Panel Tobit models find that international migration promotes foreign bank presence. Banks originating in industrialized nations with large immigrant populations tend to expand into migrant-source developing countries.

We consider intellectual property rights (IPRs) in a Schumpeterian growth model in which patent holders face the threats of profit loss due to imitation and complete valuation loss due to outside innovation. We disaggregate IPR policies by distinguishing between the quality of the IPR regime and the intensity of IPR enforcement. An increase in the quality of the IPR regime unambiguously promotes growth. However, the relationship between IPR enforcement intensity and growth follows an inverted U-shaped curve. The growth-maximizing intensity of IPR enforcement is decreasing in institutional quality. We also investigate the model's welfare implications and examine the economy under a no-growth equilibrium.

Vietnam has been among the most successful East Asian economies, especially in weathering the external shocks of recent globalization crises. Examination of economic performance and policy responses shows rising dependence on foreign finance around each crisis, and actions by the government to counteract that dependence and bolster the domestic economy while continuing to restructure the economy toward greater emphasis on the private sector. Growth, employment and poverty alleviation have been maintained at the expense of renewed inflation, larger budget deficits, and currency depreciation. The "stop-go" nature of present macroeconomic policy is the consequence of balancing growth versus inflation, responding to severe external shocks and holding to a growth objective in the face of substantial internal and external criticism.

This paper addresses the role of policy in the relationship between globalization and development by considering four examples: trade-related capacity building, standards for multinational enterprises, medical brain drain, and access to medicines. The paper demonstrates that, despite concerns about policy space, there is some room for improving the way that globalisation processes contribute to development and poverty alleviation. None of the policies considered constitutes a fix-all but rather can make some marginal changes that could be significant in the long run.