Search results

Due to the emergence of global production networks, trade statistics have became less accurate in describing the dependence of emerging Asia on external demand. This chapter analyses, using an update of the Asian International Input–Output (AIO) table, the interdependence of emerging Asian economies, the United States, the EU15, and Japan via trade and production linkages. According to the results, we do not find evidence of the decoupling of emerging Asia from the rest of the world. On the contrary, we find evidence on increasing trade integration, both globally and regionally. Nonetheless, our analysis indicates that emerging Asia's dependence on exports is only about one-third of its GDP, that is, well below the 50% exposure suggested by trade data. This finding can be explained by the high import content of exports in these economies, which is a result of the increasing segmentation of production across the region.

This chapter examines dynamic connectedness among emerging Asian equity markets as well as explores their linkages vis-à-vis other major global markets. We find that international equity markets are tightly integrated. Measuring connectedness based on a generalized Vector Autoregressive (VAR) model, more than half of all total forecast error variance in equity return and volatility shocks come from other markets as opposed to country own shocks. When examining the degree of connectedness over time, we find that international stock markets have become increasingly connected, with a gentle upward trend since the Asian financial crisis (AFC) but with a rapid burst during the global financial crisis (GFC). Despite the growing importance of Asian emerging markets in the world economy, we find that their influence on advanced economies are still relatively small, with no significant increase over time. During the past decade, advanced markets have been consistently net transmitters of shocks while emerging Asian markets act as net receivers. Based on the nature of equity shock spillovers, we also find that advanced countries are still tightly connected among themselves while intraregional connectedness within Asia remains strong. By investigating whether uncertainty plays an important role in explaining the degree of stock market connectedness, we find that economic policy uncertainty (EPU) from the US is an important source of financial shock spillover for the majority of international equity markets. In contrast, US financial market uncertainty as proxied by the VIX index drives equity market spillovers only among advanced economies.

This chapter focuses on the impact that private-equity financing has on nurturing and developing global entrepreneurs in emerging economies. The research question is: how do potentially high-impact entrepreneurial start-ups in emerging economies rapidly expand globally in order to compete with developed-country competitors. Oviatt’s and McDougall’s (1994, 2005) international new venture typology is used to analyze a case study of an emerging-economy, born-global start-up and its relationship with a venture capital firm, which is crucial to develop a competitive international business strategy.

In spite of operating in an emerging country lacking a well-developed entrepreneurial ecosystem (institutional void), a global start-up in conjunction with a venture capital firm that practiced a hands-on investment strategy, was able to successfully scale its business model globally over a 10-year period. The venture capital firm played a critical role in providing institutional support, lacking in this emerging country, to enable the start-up to quickly grow and become competitive with Western competitors.

In the aftermath of the global economic crisis, the pursuit of new perspectives and different growth models is imperative. One of the most significant trends of our time is the rise of Asia in the world economy. After centuries of Western economic dominance, China, India, and the rest of the East, alongside emerging economies more broadly, are beginning to challenge the West for positions of global industry leadership and underlying managerial philosophies and perspectives. In this paper, I review some key philosophical insights from Asia that have underpinned the success of many Asian businesses for generations, hoping that it will encourage more efforts – conceptually, theoretically, and empirically – leading the discourse on fresh new perspectives on business in emerging economies in general, and on Asian management in particular.

That asset returns are typically neither independent nor normally distributed is a stylised fact of many financial markets. We examine market returns for a number of emerging Asian nations before and during the Asian crisis and global financial crisis periods and consider how well these are described by the assumptions of normality and independence. Specifically we seek to ask how – if at all – these crises impacted upon the time-series properties of stock market returns in the emerging Asian economies. The first part of the chapter examines the comparative fit of the normal distribution to daily stock market returns for each of the economies under observation. The second part of the chapter follows with an examination of dependence relations in emerging Asian market returns around the crises periods.

The paper analyzes the impact of the global financial crisis on capital flows, financial markets and economic activity in Asia and attempts to explain why Asian markets were hit hard despite relatively strong fundamentals, and why the subsequent recovery was relatively quick. The openness of a country to trade and finance and the degree of integration into international financial markets are shown to be important determinants of the swings in economic activity and capital flows during both the reversal and recovery phases. It also discusses the role played by macroeconomic and financial policies in the recovery and concludes with some lessons from Asia's experience.

Emerging financial markets have largely proven resilient to the consequences of the Global Financial Crisis. While this owes much to the bitter experience and economic strategies developed and implemented following the Asian Financial Crisis of 1997–1998, providence also played a hand in that relatively few of its financial institutions were exposed to the complex structured products that underpinned the demise of many financial intermediaries in the United States and Europe. The objective of this volume is to investigate and assess the impact and response to the crisis in emerging markets from a number of perspectives. These include asset pricing, contagion, financial intermediation, market structure and regulation. Our hope is that the assembled chapters offer clear insights into the complex financial arrangements that now link emerging and developed financial markets in the current economic environment. The volume spans four dimensions: first, a series of background studies offer explanations of the causes and impacts of the crisis on emerging markets more generally; then, implications are considered. The third and final sections provide insights from regional and country-specific perspectives.

A perplexing problem that has challenged emerging economies in their quest for sustainable economic development has centered around their ability in coping with currency crises. This chapter explores how emerging economies in parts of Asia and Latin America have learned to cope and in some cases overcome the problems associated with rapid growth on the one hand and foreign exchange difficulties on the other. The authors explain the Asian financial crisis of the late nineties through fundamental breakdowns in economic principles, the failure of the much admired East Asian miracle under Asian circumstances, and the instability introduced to the Asian environment through rapid, short term, quickreturn-seeking capital flows.

This study aims to investigate both market concentration and bank competition of banking across six emerging Asian countries (e.g., Bangladesh, Indonesia, India, Philippines, Malaysia, and Vietnam) over pre and post the 2008 global financial crisis. The conduct parameter approach following the framework suggested by Uchida and Tsutsui (2005) is used to estimate bank competition in these countries. The study employs both seemingly unrelated regression (SUR) and three-stage least squares (3SLS) to estimate simultaneously the system of equations in our model. Generally we find a negative association between market concentration and bank competition across most of the countries in the study suggesting that banks in concentrated markets collude to generate higher profits. Monopolistic competition was the best description of competitive structure of banking across the majority of countries investigated by this study. The study fills the gap in the banking literature by investigating bank competition, concentration, and their relationship across emerging Asian economies over the 2008 global financial crisis. Moreover, several policy implications for banking industry are suggested.

This chapter examines how foreign banks respond to domestic monetary policy in host countries during crisis periods, in particular, the response shown toward the Asian financial crisis of 1997–1999 and the global financial crisis of 2008–2009. By observing 283 domestic and foreign banks in seven emerging Asian economies, we find that foreign banks are slower than domestic banks in adjusting the growth of their loans to changes in host monetary policy. This inertia by foreign banks is found to be more pronounced in the recent 2008–2009 global crisis than in the 1997–1999 Asian regional crisis, suggesting that the buffering/hampering effects of foreign banks on the effectiveness of the domestic monetary policy transmission mechanism become stronger in a recent global crisis originating from outside Asia than a regional crisis imploded within Asia a decade earlier. We also find that foreign banks’ lower sensitivity than domestic banks to host monetary policy during the crisis periods is heterogeneous, depending on factors such as the extent of the adverse impact of crises on parent banks, the scope of business operation by parent banks, and foreign banks’ mode of entry into host banking markets.