Productivity, Competitiveness and Incomes in Asia - an Evolutionary Theory of International Trade

NEW HORIZONS IN INSTITUTUIONAL AND EVOLUTIONARY ECONOMICS SERIES, Edward Elgar Publishing Ltd., 2005

Posted: 4 Oct 2005

See all articles by Hans-Peter Brunner

Hans-Peter Brunner

Action International for Evolutionary Development

Peter M. Allen

Cranfield University

Abstract

The authors of this book link productivity change, trade competitiveness, networks of interaction and cooperation and income growth in developing Asian countries with the complex evolutionary processes of economic development and international trade. They take an innovative approach to simulating the complex micro-dynamics of competitiveness in order to distinguish those trade-related microeconomic dynamics and institutional reforms vital to leading countries out of institutional and poverty traps.

Real competitiveness changes in six countries (Bangladesh, India, Indonesia, Nepal, Pakistan and Thailand) are measured from 1991 to 2000 with detailed international export unit value comparisons, to detect structural changes towards technology and knowledge intensive goods in trade patterns. No significant structural change was detected in the six countries during that period.

Evolutionary trade theory is presented in two models and is calibrated with transaction and trade data form West Bengal and Nepal. One model is driven by firms' ability to trade for productivity and to increase unit value. The other model reveals that lower transport costs - resulting from investment in transport and institutional reforms related to the investment and trade environment - result initially in small productivity differences that can be amplified in a non-linear evolutionary system and eventually lead to a spatial restructuring of the system, and to a structural change in the trade patterns. The models in this path-breaking book can be used to explore the impact of a variety of interventions and policies.

Keywords: Asia, Competitiveness, Developing countries, (Evolutionary)Trade theory, Institutions, Networks, Productivity, Quality growth, Spatial structure, Unit labor costs

JEL Classification: E11, F10, F14, O12, O33, O47

Suggested Citation

Brunner, Hans-Peter W. and Allen, Peter M., Productivity, Competitiveness and Incomes in Asia - an Evolutionary Theory of International Trade. NEW HORIZONS IN INSTITUTUIONAL AND EVOLUTIONARY ECONOMICS SERIES, Edward Elgar Publishing Ltd., 2005, Available at SSRN: https://ssrn.com/abstract=811144

Hans-Peter W. Brunner (Contact Author)

Action International for Evolutionary Development ( email )

17 ADB Avenue, Level 29, Pasig
1600 Metro Manila
Philippines
+63 920 9707531 (Phone)

Peter M. Allen

Cranfield University ( email )

Cranfield
Bedfordshire MK43 OAL, MK43 0AL
United Kingdom

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