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101. Implications of Foreign Direct Investment, Capital Formation and its Structure for Global Value Chains

Author:
Amat Adarov and Robert Stehrer
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
In the age of globalisation, international trade and foreign direct investment (FDI) have become integral elements of cross-country production sharing. In this paper we empirically assess the impact of FDI, as well as capital dynamics and structure, on the formation of global value chains (GVC) and trade in value added at country and sectoral levels based on a database constructed for a sample of European countries over the period 2000-2014. The analysis reveals that inward FDI is especially conducive to the formation of backward linkages while outward FDI facilitates forward GVC participation, especially in high-tech manufacturing sectors. A particularly robust influence of FDI and capital accumulation on GVC integration is identified in the textile and clothing industry. While capital accumulation in general intensifies GVC linkages for most sectors, ICT capital appears to be especially instrumental for backward integration of electrical and transportation equipment sectors.
Topic:
Globalization, International Trade and Finance, Foreign Direct Investment, Trade, and Global Value Chains
Political Geography:
United States, Japan, and Europe

102. Advancing human rights in Asia through trade after Brexit

Author:
Katarina Schwarz, Todd Landman, and Katrina Peake
Publication Date:
06-2019
Content Type:
Policy Brief
Institution:
Asia Research Institute, University of Nottingham
Abstract:
How can the UK best protect human rights in Asia, an area historically weak in protecting and promoting human rights, when it comes to securing new trade deals after exiting the European Union (EU)? This policy brief assesses potential pathways for the UK to protect human rights in Asia through trade after exiting the EU, accounting for the specific challenges of advancing human rights in the region. It draws on existing practice, with a focus on the EU, to make suggestions for future UK trade policy through both unilateral and bilateral arrangements.
Topic:
Human Rights, Bilateral Relations, European Union, Brexit, Trade, and Trade Policy
Political Geography:
United Kingdom and Asia

103. Advancing Human Rights in Asia through Trade after Brexit: Background Report

Author:
Katarina Schwarz, Todd Landman, and Katrina Peake
Publication Date:
06-2019
Content Type:
Special Report
Institution:
Asia Research Institute, University of Nottingham
Abstract:
Throughout the period of the United Kingdom’s membership in the European Union (EU) and under the status quo, the EU possesses exclusive competence of its Common Commercial Policy. It therefore does not have to consult the UK when developing trade agreements, and the UK’s part in these processes is defined by its role within the EU. The UK alone does not determine the existence, scope, or terms of trade relationships with third countries. However, after exiting the EU, the United Kingdom will exercise more substantial, and ultimate, decision-making power over the nature of trade with external partners. This creates an opportunity for the development and evolution of new, direct trading relationships with countries beyond the EU—relationships that are likely to have increasing significance in the UK economy after withdrawal and over time. As Prime Minister Theresa May recognised in a speech in Florence: "Our relations with countries outside the EU can be developed in new ways, including through our own trade negotiations, because we will no longer be an EU country, and we will no longer directly benefit from the EU’s future trade negotiations." Many aspects of these agreements are open to negotiation, creating new possibilities for the UK to expand its influence in a variety of areas, and to address particular challenges faced within the borders of trading partners.
Topic:
Human Rights, Bilateral Relations, Brexit, Trade, and Trade Policy
Political Geography:
United Kingdom and Asia

104. Prospects for a closer relationship with Indonesia after Brexit

Author:
Jacqueline Hicks
Publication Date:
06-2019
Content Type:
Policy Brief
Institution:
Asia Research Institute, University of Nottingham
Abstract:
As the United Kingdom considers post-Brexit trade opportunities outside the European Union, this briefing looks at the potential for greater cooperation with Indonesia. It finds that there are some sectoral and trade and investment opportunities between the two countries. Developing a long-term strategy that signals commitment is key to participation in Indonesia’s promising growth trajectory. The UK can mitigate its reduced bargaining power outside the EU by providing targeted, practical trade facilitation measures in exchange for increased investment opportunities. Becoming an agile and dynamic economic partner in comparison with the EU’s bureaucratic approach chimes well with the small business background of Indonesia’s President Widodo.
Topic:
International Cooperation, European Union, Economic growth, Trade, and Trade Policy
Political Geography:
Britain, United Kingdom, Indonesia, and Asia

105. The Impact of the State on the Quality of an Economic System: A Cross-Country Analysis

Author:
Maciej Bałtowski and Piotr Kozarzewski
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
The paper discusses the role of the state in shaping an economic system which is, in line with the welfare economics approach, capable of performing socially important functions and achieving socially desirable results. We describe this system through a set of indexes: the IHDI, the World Happiness Index, and the Satisfaction of Life index. The characteris-tics of the state are analyzed using a set of variables which describe both the quantitative (government size, various types of governmental expenditures, and regulatory burden) and qualitative (institutional setup and property rights protection) aspects of its functioning. The study examines the “old” and “new” member states of the European Union, the post-communist countries of Eastern Europe and Asia, and the economies of Latin America. The main conclusion of the research is that the institutional quality of the state seems to be the most important for creation of a socially effective economic system, while the level of state interventionism plays, at most, a secondary and often negligible role. Geographical differentiation is also discovered, as well as the lack of a direct correlation between the characteristics of an economic system and the subjective feeling of well-being. These re-sults may corroborate the neo-institutionalist hypothesis that noneconomic factors, such as historical, institutional, cultural, and even genetic factors, may play an important role in making the economic system capable to perform its tasks; this remains an area for future research.
Topic:
Demographics, Economy, Economic growth, State, Economic Policy, Institutions, Trade, and Welfare
Political Geography:
Europe, Eastern Europe, Asia, Latin America, and European Union

106. Financing for the Polish economy: prospects and threats

Author:
Andrzej Halesiak, Ernest Pytlarczyk, Mariusz Wieckowski, and Stefan Kawalec
Publication Date:
06-2019
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
In a properly functioning economy, finance has important role to play in making main sectors of the economy – production, trade, services – to thrive. One of the most important – and often unappreciated – channels by which finance affects the processes taking place in the real sector is the selection of investment projects. It is banks and financial intermediaries that to a great degree decide which projects are carried out in the economy at a given moment, and which are not. If financial institutions are excessively conservative (which today is often an effect of the tight regulatory environment), they will prefer low-risk projects with high levels of collateral (e.g. mortgage loans). A financial system oriented this way will rarely be a source of problems, but at the same time not inclined to finance innovative projects with high potential to benefit the economy. Thus for any economy, a very important question is whether its regulatory framework smartly balances both of these aspects: financial system safety and the need to take on risk. When analyzing the functioning of the financial system, it’s worth noting the gradual blurring of certain traditional boundaries. While decades ago households were the main source of savings in the economy, and the borrowers were enterprises and the public sector, today both households and companies are on both sides, as suppliers and receivers of capital. The boundary between the functioning of banks and capital markets is also increasingly blurred. Today banks operate broadly through the capital market, both as acquirers of securities and as issuers. One area that has been developing dynamically in recent years is the flow of financial resources bypassing traditional intermediaries: direct lending through the peer-to-peer (P2P - direct financing of a project by business partners) and crowdfunding platforms (fundraising by collecting money online).
Topic:
Demographics, GDP, Financial Markets, Economy, Banks, Investment, and Trade
Political Geography:
Europe and Poland

107. Is Non-State Money Possible? mBank – CASE Seminar Proceedings No. 158

Author:
George Selgin
Publication Date:
02-2019
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
"Depending on how one interprets the question that forms the topic of my talk, one can argue that the answer is obvious, or one can argue just the opposite. In one sense of course, it’s obvious that non-state money is possible. That’s the sense in which we ask only whether some kinds of non-state money are possible. And of course, the answer is yes. The vast majority of payments today, in Poland as elsewhere, are made with privately produced forms of money – that is, with bank deposits of various kinds – transferable by cheque or using debit cards. And there is nothing surprising about that. But of course, my assigned question can also be understood in a different and more interesting way. The interesting question is not whether some kinds of non-state- supplied money are possible. It is a different question, or rather two different questions. One of these is whether non-state circulating monies, or currencies, are possible. Can we rely on the private sector to supply hand-to-hand circulating means of payment? The other even more fundamental question is whether we can have a complete monetary system in which all forms of money supplied privately, and the state plays no substantial regulatory role. In fact, I intend to argue that non-state supplied currencies are also possible, and that completely private monetary systems, in which the state plays no important part, are possible as well. Indeed, I will argue, not only that these things are possible, but that history offers examples of them. That is, they are not just hypothetically possible. I plan to spend much of my time talking to you about these historical examples of privately produced currencies and private or mostly private monetary systems. I wish not merely to make it clear that private currencies and mostly private monetary systems really have existed in the past, but to point out to you that these private currencies and monetary systems have often been entirely or at least highly successful. We might even envy them today, given the performance of our own relatively heavily regulated monetary systems." - Prof. George Selgin writes in the introduction.
Topic:
Monetary Policy, Economic growth, Banks, Trade, and Cryptocurrencies
Political Geography:
Europe and Poland

108. White Paper on Regulating E-Commerce in India: Need for Principles-based Approach

Author:
Ananth Padmanabhan and Arjun Sinha
Publication Date:
03-2019
Content Type:
Special Report
Institution:
Centre for Policy Research, India
Abstract:
E-commerce has come under heavy regulatory intervention in the past few months. From data localisation to mandatory sharing of data, and a catch-all definition of e-commerce itself to regulatory barriers for inventory-based business models in all these sectors, these recent proposals leave limited room for natural evolution through market competition. Pushing back against these proposals, this White Paper argues that a principles-based rather than rule-based approach must be adopted to regulate this sector. This can be operationalised through a four-step process: the first step is to identify critical sectors where a policy is required in the first place; the second requires prioritising concerns that regulation needs to address immediately rather than crystal-gazing; the third is to explore possible models of co-regulation; and the final step is to focus on effective enforcement of the limited number of areas where state intervention through policy would exist because of adherence to the first three steps.
Topic:
Science and Technology, Regulation, Internet, Business, and Trade
Political Geography:
South Asia, India, and Asia

109. Digitization and the Future of Trade A Conversation with Martin Labbé

Author:
Martin Labbé
Publication Date:
07-2019
Content Type:
Journal Article
Journal:
Fletcher Security Review
Institution:
The Fletcher School, Tufts University
Abstract:
Martin Labbé is the Tech-Sector Development Coordinator at the International Trade Centre and the Program Manager for Netherlands Trust Fund IV (NTF IV), a USD 10 million Export Sector Competitiveness Program. He manages NTF IV Uganda and NT IV Senegal tech-sector development projects, working closely with IT sector associations & tech hubs, SMEs and tech startups to support the internationalization of the local digital economy. He has been actively involved in designing and managing several online and offline B2B business-development and marketing activities in developing countries and transition economies as well as training small- and medium-sized enterprises (SME) on technology and trade, with a focus on e-commerce.
Topic:
International Trade and Finance, Science and Technology, Economy, and Trade
Political Geography:
United Nations and Global Focus

110. China and instability in developing countries

Author:
Nicholas Crawford
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
International Institute for Strategic Studies
Abstract:
China has become the largest lender to developing countries, and a major investor there too. As a result, it has a major stake in many countries facing political and economic instability. Western policymakers involved in responding to instability and crises overseas need to understand how China navigates these situations. China’s approach is similar in some respects to that of Western states, but there are also important differences. China’s policy towards countries facing political and economic instability is driven by four main concerns: It seeks to strengthen and maintain its partnerships with those countries to ensure they remain open to and supportive of the Chinese government and its businesses. China is determined to protect its financial interests, businesses and citizens from the harms that result from instability. It is concerned to see its loans repaid, its investments secure, its workers safe and its supply chains undisrupted. It wants to maintain its narrative of non-interference. Any intervention in the politics or policies of its partner states must be seen as being at the invitation of their governments (although China may pressure its partners for consent). China wants to increase its influence in the world, independently and distinctively. It is increasingly proactive in its response to instability in partner countries. Some responses seek to address the instability directly; other responses are intended to protect Chinese interests in spite of the instability. This paper analyses the political economy of China’s responses to instability, identifies the types of responses China undertakes, and assesses these responses.
Topic:
Human Rights, International Cooperation, Developing World, Political stability, and Trade
Political Geography:
Africa, United States, China, Europe, Beijing, and Asia