The Singapore Economic Review

This short article advocates the further development of Indonesia through an export-oriented industrialization policy. It opines that it is only through this policy that the perennial depreciation of the Indonesian exchange rate, including through capital flight, can be stopped. The article also advocates a twin-engine approach, with the State be responsible for the efficient supply of public goods, and the private sector, including the active participation of foreign investment, be encouraged, actively, for the supply of private goods, with concentration on export-oriented manufactured goods. The social and educational system will have to give support to this fundamental policy shift.

The objective of this study is to assess the roles of domestic direct investment, foreign direct investment and exports as catalysts of Malaysia's economic growth using cointegration and Granger causality test techniques. To address the dynamics in the growth relationships, the study also performs time-varying regression and variance decomposition analyses. It covers the quarterly sample period from 1991:Q1 to 2010:Q2. The econometric results suggest that all the three variables have a positive impact on economic growth and thus are catalytic to economic growth. However, the growth effect of domestic direct investment is more stable than that of the other two growth determinants. Contrary to earlier empirical studies, the variance decomposition analysis herein reveals that domestic direct investment is the most important determinant of growth in the long-run (L-R) compared to exports and foreign direct investment.

We develop a general equilibrium endogenous growth model where final goods are produced in either the exporter sector or the importer sector, in order to analyze the short, medium and long-run growth effects of an external demand shock induced by an international crisis, such as the current one. Depending on the policy response, such a shock might (or might not) severely affect competitiveness, wage inequality, the economic growth rate and the technological-knowledge bias. This bias controls the paths towards the new steady state. The model shows that countries with balanced public finances can accommodate the external shock and that the intervention should be prompt, as the delay is costly. Results appear to be supported by empirical evidence.

High level of intra-regional trade and negative spillovers from competitive devaluation make exchange rate coordination extremely desirable in Asia. Employing a hypothetical Asian Currency Unit we evaluate the degree of coordination among Asian currencies. Traditional empirical tests yield little evidence of coordination among real and nominal exchange rates. However, introducing endogenously determined structural breaks to account for changes in exchange rate regimes provides more mixed evidence. While there is still little evidence for coordination in nominal terms, some degree of coordination among real rates emerges. The limited evidence for exchange rate coordination can be explained by the diverse exchange rate regimes prevailing in these economies, signaling differences in policy objectives.

We discuss the important determinants requires to develop green patents, which eventually reinforce green growth. The theoretical framework examined four elements, the enforcement of intellectual property rights (IPRs), research and development (R&D) expenditures, market size and environmental taxations. We empirically test the green patent data to test the interrelationship of green patents representing the green innovations and IPR, R&D expenditures, market size and environmental taxations. Keeping in view the availability of the data we studied 11 developed countries, which are Austria, Australia, Canada, France, Japan, Finland, Germany, Sweden, U.K and U.S. The panel data can better handled the technological change rather than the pure cross section or pure time series data. Therefore, this study used the Pooled Least Square estimation techniques like Fixed Effect Model (FEM) and random effect model (REM) for both balance period of 1995–2010 and unbalanced period from 1995–2010. We only interpreted the balance period results depicting the enforcement of IPRs has negative and significant impact on green patents while the R&D expenditures, market size and environmental taxations has positive and significant impact on the green patents e.g. development of green innovations. We believe that the enforcement of explanatory variables will eventually acquire green growth.

Thailand's rapid economic development brought about remarkable wealth and poverty reduction over the past three decades. However, the problem of inequality continues to challenge Thailand's development process. The country has long been known for its concentration of growth in and around Bangkok. Despite that, studies on inequality focusing on geographical dimension have been limited. This paper therefore explores disparities as well as convergence in Gross Provincial Product (GPP)-per-capita over the past two decades. It also investigates growth determinants at provincial level. Finally, the disparities in poverty and the extent to which provincial growth and inequality affect poverty are analyzed.

This paper examines the causal relationship between central bank intervention and exchange rate returns in India. Using monthly data from December 1997 to December 2011, the empirical results derived from the CCF approach of Cheung and Ng [Journal of Econometrics72 (1996) 33–48] suggest that there is causality-in-variance from exchange rate returns to central bank intervention, but not vice versa. These findings are robust in the sense that they hold in cases where the returns were measured from either the spot rate or the forward rate. Therefore, we conclude that the Indian central bank has intervened in the foreign exchange market to respond to exchange rate volatility, although the volatility has not been influenced by central bank intervention in the form of net purchases of foreign currency in the market.

Relatively little is known about the determinants of inequality in Southeast Asia. This paper fills this void by comprehensively testing Kuznets' hypothesis for Southeast Asia. We estimate both unconditional and conditional Kuznets' curves using panel data for 8 countries. The analysis suggests the existence of a Kuznets' curve with respect to per capita income; the path of inequality is non-linear with respect to economic development. There is no evidence of a Kuznets curve with respect to non-agricultural employment. There is some evidence in terms of urbanization, though this is not robust. There is robust evidence on the role of national governments and education in shaping the path of inequality in the region. Government involvement reduces inequality. Education appears to have a non-linear effect on inequality.

This paper investigates the relationship between economic growth and energy consumption through non-linear causality tests. Eight developing countries from Europe and Central Asia spanning the period 1993 to 2008 are selected for the purpose of panel empirical analysis. Panel unit root and panel cointegration tests with and without considering cross section dependency (CD) problems are implemented. Next, linear panel cointegration tests are employed and, finally, a two-regime Dynamic Panel Smooth Transition Vector Error Correction (PSTRVEC) model is estimated for testing the presence of non-linear short- and long-run causality. To this end, a new estimator, called the Dynamic Non-linear Pooled Common Correlated Effect Estimator (DNPCCEE) is proposed. The empirical findings indicate that short and long-run causalities are regime-dependent.

This study investigates whether government participation in firm ownership leads to better firm performance of publicly listed companies in Malaysia. The sample covers 257 companies listed on the Bursa Malaysia from 1997 to 2009. Multiple regression models with balanced panel data are used to examine the impact of government ownership (GOVN) on firm performance. We find a negative relationship between GOVN and firm performance, a finding that supports the negative public perception of government-linked companies (GLCs) in Malaysia. We conclude that government ownership is not an effective tool for improvement of firm performance in Malaysia.

This paper examines trends in women's labor force participation, sectoral and occupational distribution, and wage incomes relative to men, including by age and education. Since 1980, gender disparities in virtually all categories have substantially narrowed; those remaining result from women's continued disproportionate responsibility for family care, and additional factors affecting women at the highest levels of the labor force and income distribution. There are some areas of concern for women's economic future in Singapore, including the impacts of ageing, foreign labor and immigration, and wage stagnation experienced by low-income families under Singapore's economic development model.