ASIA PACIFIC BUSINESS AND SOCIETY (BSP2005)

1. ASIA PACIFIC BUSINESS AND SOCIETY (BSP2005)

2. On Exchange Rates….. • Hong Kong currency pegged to USD • 7.80 HKD to 1 USD

3. In News… • Toyota reported record quarterly profit • ‘recorded group net profit of $3.6 billion USD in the three months ended Dec 31’ • ‘said a weak yen, which boosts the value of overseas earnings, added $250 million USD to the third quarter’

4. Asia’s Growth • Exceeded Western economies • East Asia’s Four Tigers • 1966-1990 Singapore: • Economy grew at 8.5%/annum, 3 x US • Per capita income grew at 6.6%

5. Discussion • How is that possible? • Culture? • Perspiration? Inspiration? • Is it repeatable/ sustainable?

6. Singapore • Employment: 27% → 51% • Education: 1966 >50% no formal education • 1990 >68% had secondary • Investment as share of output: 11% → 40%

7. Singapore • Little evidence of improvement in efficiency, increase in measured inputs • Not sustainable in the long run, double education, double employment, double investment share of output?

8. Singapore • Gave up consumption and leisure to achieve the growth • Growth accounting concept. Growth high but net productivity not high enough. Efficiency close to, but still below that of western nations

9. Four Tigers • Little evidence of improvement in efficiency • Mere increases in inputs, without an increase in the efficiency with which inputs are used, MUST run into diminishing returns – input-driven growth is inevitably limited

10. Discussion • What about Japan? • Any differences in their model? • Perspiration? Inspiration? • China?

11. Japan • Favorite counter-example • Statistical evidence shows that Japan grew through high rates of input growth and efficiency growth • Much less in common with • the other Asian nations

12. China • Chinese population so huge it will become a major economic power even with a fraction of Western productivity level

13. In conclusion… • Relation between culture and their associated performance? • Western laissez-faire vs. Asian economies with fewer civil liberties? • Reward for deferred gratification

14. Other examples of Cultural Differences • Zara • International markets • Within Europe • British: Social Conscious • Germans: Price Conscious • French: Fashion/Variety Conscious • Italians: Fashion Conscious

15. Other examples of Cultural Differences • Related to mode of entry into markets • Joint Ventures • Greenfields • Acquisitions

16. Discussion • Culture may have an influence on economic development • What other factors influence economic development? • Hint: Think about Singapore

17. Political freedom and Economic Devt • Study on 115 countries: • High degree of political openness • Per capita growth: 2.53% • Closed system • Per capita growth: 1.41% • So does political freedom lead to development? Or is it the other way around?

18. Public Policy and Economic Devt • Is intervention good? • Highly interventionist (Japan, Korea) • vs. noninterventionist (Hong Kong, Thailand) • Emphasis on large conglomerates (Korea) vs. small entrepreneurial firms (Taiwan)

19. Other factors • Initial conditions: • Countries that had good primary education systems and less income inequality • Significantly so in the East Asian ‘Tigers’ • But not entirely true because of data collection efforts

20. Project Groupings (E10)

21. Project Groupings (E11)

22. Project Groupings (E12)