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AbstractInnovation is crucial for driving economic growth. This paper conducts a comprehensive analysis of the effect of intermediate input import policy uncertainty (IIIPU) on firm innovation. Specifically, leveraging China’s entry into the WTO as a quasi-natural experiment, this study utilizes a difference-in-differences strategy to analyze the intermediate input import policy uncertainty on the innovative activities of Chinese manufacturing firms. The findings reveal that a reduction in intermediate input import policy uncertainty (IIIPU) significantly hampers firm innovation activities. This negative impact persists even after undergoing a series of tests on identification assumptions and robustness checks, and it intensifies annually after China’s accession to the WTO. In addition, the reduction in IIIPU has a more pronounced effect on high-productivity firms, foreign-invested enterprises, and utility model patents. [ABSTRACT FROM AUTHOR]

AbstractWe examine the impacts of financial technology and financial literacy on the development of financial inclusion among the younger generation using data from a survey with 1288 students in Vietnam in the city and rural areas. We employ logistic regression and two-stage instrumental variable regression for our analysis, with location and financial shock caused by COVID-19 serving as the instruments. Vietnam is a fintech hub in Asia with the world-leading adaption of cryptocurrency and a significantly high rate of e-wallet use. The results indicate although there is a gap in access to financial services between urban and rural areas, the access rate is considerably high. Fintech and financial literacy play a significant role in facilitating this high level of financial inclusion development. Women have better access to financial services, showing the effectiveness of women’s empowerment programs. Little evidence shows the negative impact of the pandemic on financial inclusion. [ABSTRACT FROM AUTHOR]

The garment industry is considered as one of the driving forces of socio-economic development of Bangladesh due to its significant contribution to the country's exports, employment generation, and poverty alleviation. This study investigates the determinants of the Bangladesh garment exports in the post Multi-Fibre Arrangement (MFA) environment. Using data from World Bank Enterprise Surveys and other information from secondary sources, this study finds that labour cost, labour productivity, firm size, availability of domestic input materials, and firm location in a port city are the major determinants of Bangladesh garment exports. In addition, the analysis finds that cheap labour, firm size, product and market diversification, preferential market access, and proactive policies by the Bangladesh government have also helped the Bangladesh garment industry to become successful during the post-MFA period. [ABSTRACT FROM PUBLISHER]

This paper revisits the role of the manufacturing sector during the middle-income stage of development. By exploiting a large dataset that covers different sectors, we find that in the middle-income stage, manufacturing pulls along all the other sectors, including the services sector. A decline in manufacturing growth negatively affects the growth of all the other sectors, in both the short-run and long-run. Additionally, we attempt to identify the underlying mechanisms of the essential role played by manufacturing during this development stage. We find that a larger share of manufacturing in the economy not only promotes gross private saving ratio but also accelerates the pace of technological accumulation. Our empirical findings in this paper indicate that the manufacturing sector is still the key engine of economic growth for middle-income economies. [ABSTRACT FROM PUBLISHER]

This paper examines the links between productivity, wages and employment in Indonesia's manufacturing sector utilizing the rich datasets of National Labour Force Survey (Sakernas), National Income Account and Manufacturing Statistics. A decoupling trend between real wages and productivity in the overall manufacturing sector is evident, but the dynamics within the sector is far from homogenous. Wages and productivity are further disaggregated into large–medium (LM) and cottage–small (CS) manufacturing firms and significant gaps between LM and CS firms are found. This paper challenges the conventional wisdom of negative wage elasticity with respect to employment. In contrast to the overall diverging trend between real wage and productivity in the overall manufacturing sector, a positive link between wages and productivity in the LM manufacturing industry has led to a positive correlation between wages and employment. This is analogous to the ideal situation where both productivity and wage increase, while the overall economy (employment and output) expands. [ABSTRACT FROM AUTHOR]

This study examines the linkages between agriculture, industry, and services sectors, and analyses the pattern of economic growth in India. The vector autoregression model is estimated on annual data for the period 1950–1951 to 2009–2010. The results provide strong support for the long-run and a weak support for the short-run linkages among sectors. The development of rural sector is generally synonymous with the growth of agriculture and that of urban sector with the growth of manufacturing and services sectors. The services sector bypassed the successful completion of the process of industrialization, and prematurely emerged as the dominant driver and key lever of economic growth. The development strategy needs to be rebalanced to revitalize agriculture to generate rural employment, support industry, and provide the wage goods and food security. The revitalization of agriculture needs to be complemented by the development of highly productive and internationally competitive manufacturing sector to boost the manufacturing goods exports, stimulate the positive productivity spillovers, provide productive job opportunities to surplus labour in agriculture, generate urban employment, reduce underemployment and disguised unemployment in the informal sector of the urban economy, and accomplish the process of industrialization. [ABSTRACT FROM PUBLISHER]

This paper investigates the dilemmas of reaching the Vietnamese goal of ‘civilized and equitable’ society expressed from central planning towards a ‘socialist market economy under state guidance’ with deeper integration into the global capitalist system, and their impacts on the labor markets. Using long-run statistical data, historical contexts and industrial policies, and fieldwork interviews (from 1980s to 2014), we focus on two important labor-intensive, export-based industries: the long-established textile/garment industry and the emerging electronics industry, which surpassed textile exports in 2013. Evidence shows that the ‘high road’ to industrialization model – with domestic linkages and skills upgrading – does not accompany growth in exports, as low-skilled assembly, mostly young female workers join the labor force with non-liveable wages and substandard working conditions. These two case studies delve into different stages of industrial policy, which is more defined in the textile/garment case and underdeveloped in the electronics case. [ABSTRACT FROM AUTHOR]

The Philippines was rated in the early 1960s by the World Bank as second only to Japan in Asia's industrialization race. In the 1970s–1990s, the Philippines pursued export-oriented industrialization (EOI). However, the Philippines’ industrial drive failed to take off and we trace this failure to the narrow program of EOI that Philippines pursued with the support of international financial institutions, which was myopic because it simply focused on how to open up the economy without a focus on industrial upgrading. There were no value-adding linkages with the domestic economy, home-grown export champions, program for upgrading and infrastructure and support institutions for national producers. The failure is due to the absence of systemic governance and policy coherence. Nonetheless, the Philippines has posted positive growth rates in recent decades, due largely to remittances of Filipino migrant but has helped transform the country into a service-sector-led economy without passing through industrial transformation. [ABSTRACT FROM AUTHOR]

Although increasing globalizations spurred rapid industrialization in Malaysia, this article shows that the lack of significant technological upgrading and structural change has caused the premature plateauing of manufacturing, stemming from failures to coordinate policies, enforce standards, sustain high productivity growth and stimulate transition to higher value-added activities. Manufacturing as a whole has registered slow wage growth since the late 1990s, with labour markets characterized by heavy presence of low-skilled foreign workers, increased contract labour and outsourcing and declining worker organization. The focus on perspiration-based low-skilled foreign labour rather than on expanding professional and skilled labour has driven Malaysia down the low industrialization road. The Malaysian experience reflects a case of manufacturing's importance and direct contribution to the economy contracting before recording high levels of value added and sustained productivity growth, and with labour market practices constraining instead of facilitating positive change. [ABSTRACT FROM AUTHOR]

This paper examines globalization, industrialization, and labor markets in Indonesia using a case study of manufacturing. It attempts to answer the question of how changes in the labor market after the 1997–1998 Asian Financial Crisis affected industrialization and labor market performance. The paper generates three main findings. First, the responsiveness of output to employment and wages to employment declined substantially over the period 1996–2006 but recovered in 2009. The decline could be a consequence of the implementation of rigid labor laws since 2003. The recovery in 2009 may reflect firms’ adjustment period to the new environment or simply that firms found different opportunities. Second, exporters generally show higher employment elasticity than non-exporters. However, since the implementation of the labor law, exporters tend to retain employment more than non-exporters when wages rise. Third, exporters began substituting labor with machinery as wages started rising. [ABSTRACT FROM AUTHOR]

The Indian growth process has been marked by the relative absence of structural change and the inability of faster output expansion to shift people out of low-productivity activities into higher value ones. Recent rapid growth has also been based on and resulted in growing inequalities. Private accumulation has relied upon existing social inequalities that create segmented labour markets that keep wages of certain social categories low, and on types of exclusion that allow large-scale displacement and dispossession without adequate compensation. The associated boom has required debt-driven bubbles to provide domestic demand since incomes of the masses have not risen in tandem, but such a strategy is inherently unsustainable. This growth process is now reaching the limits of its viability and is facing constraints posed by economic, social, political and environmental challenges. [ABSTRACT FROM AUTHOR]

While mainstream accounts of globalization are telling us that liberalization is essential for engendering the conditions of prosperity across the world, we argue that selective interventions are necessary to ensure that these processes open the path to the high road to industrialization. While recognizing the importance of relative surplus appropriation through technological deepening as the engine of capitalist accumulation, the extant evidence suggests that a proactive state focusing on enhancing labour is pertinent to ensure sustainable long-term industrialization and structural change so that the material conditions of workers improve over time. Hence, this article provides the introduction to globalization, industrialization and labour market experiences in selected East and South Asian economies. [ABSTRACT FROM AUTHOR]

How can labor-intensive industries in middle-income countries avoid the ‘middle-income trap’ and evolve as dynamic industries? This article addresses this question by focusing on the local garment industry in Thailand. Thailand's garment industry became fully integrated into international production networks in the 1980s, and was once among the main drivers of its manufacturing-based export growth. However, with rising wages and labor shortages, there is strong need to upgrade and shift from labor-intensive assembly to higher value-added functions. In contrast to the export-oriented sector, the local garment markets are primarily served by small informal garment suppliers. Nevertheless, some of the suppliers undertake functions that are typically more knowledge intensive, including designing and marketing. In this context, this paper discusses what implications this local-based industry has in overcoming possible middle-income traps, and suggests that domestic oriented policies could play key roles. [ABSTRACT FROM PUBLISHER]