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Full-Text Articles in Social and Behavioral Sciences
Imitation Versus Innovation In An Aging Society: International Evidence Since 1870, James B. Ang
Imitation Versus Innovation In An Aging Society: International Evidence Since 1870, James B. Ang
James B Ang
The budgetary implications of an aging population in the OECD are often considered dire. This study argues that this need not be the case provided that older educated workers are more innovative than their younger counterparts and that the workers with tertiary education stay in the labor force until their 60s. In using a panel of 21 OECD countries over the period 1870–2009, this paper estimates the productivity growth effects of education for different age groups, through the channels of innovation and imitation. The results show that educated workers are highly innovative and that the propensity to innovate increases sharply …
Agricultural Transition And The Adoption Of Primitive Technology, James B. Ang
Agricultural Transition And The Adoption Of Primitive Technology, James B. Ang
James B Ang
This paper tests Jared Diamond's influential theory that an earlier transition from a hunter-gatherer society to agricultural production induces higher levels of technology adoption. Using a proxy for the geographic diffusion barriers of Neolithic technology and an index of biogeographic endowments to isolate the exogenous component of the timing of agricultural transition, the findings indicate that countries that experienced earlier transitions to agriculture were subsequently more capable of adopting new technologies in 1000 BC, 1 AD, and 1500 AD. These results lend strong support to Diamond's hypothesis.
What Drives The Historical Formation And Persistent Development Of Territorial States?, James B. Ang
What Drives The Historical Formation And Persistent Development Of Territorial States?, James B. Ang
James B Ang
The importance of the length of state history for understanding variations in income levels and growth rates across countries has received a lot of attention in the recent literature on long-run comparative development. The literature, however, is silent about its origins. This paper explores the determinants of statehood by considering the potential roles of an early transition to fully-fledged agricultural production, the adoption of state-of-the-art military innovations, and the opportunity for economic interaction with the regional economic leader. The results demonstrate that only the association between economic interaction and the rise and development of the state is statistically robust.
Quality-Adjusted Human Capital And Productivity Growth, James B. Ang
Quality-Adjusted Human Capital And Productivity Growth, James B. Ang
James B Ang
This article examines the influence of quality‐adjusted educational attainment on growth and tests whether it facilitates the transfer of technology developed at the frontier for a panel of 60 countries. Using outcomes of pathogen stress as instruments, the results show that quality‐adjusted educational attainment and its interaction with distance to the frontier play important roles for growth.
Financial Development And Barriers To The Cross-Border Diffusion Of Financial Innovation, James B. Ang
Financial Development And Barriers To The Cross-Border Diffusion Of Financial Innovation, James B. Ang
James B Ang
This paper explores the determinants of financial development by focusing on the role played by barriers to the diffusion of financial technology. These barriers are measured using human genetic distance from the technology frontier. The results based on cross-sectional data for 123 countries suggest that genetic distance to the global frontier has an economically and statistically significant effect on financial development, in that countries that are genetically far from the technology leader tend to have lower levels of financial development. Genetic distance is found to have the largest effect, even after controlling for other determinants of financial development established in …
Export Performance On The Asian Miracle Economies:The Role Of Innovation And Product Variety, James B. Ang
Export Performance On The Asian Miracle Economies:The Role Of Innovation And Product Variety, James B. Ang
James B Ang
Traditional export models fall short of explaining the marked increase in exports of the Asian miracle economies in the post-WWII period. A model showing that exports are driven by innovations, innovative competitiveness, demand, and price competitiveness is estimated for China, India, Korea, Japan, Singapore and Taiwan over the period 1953-2010. The results demonstrate that innovation stocks and competitiveness are important determinants behind their success. Furthermore, innovation stocks and innovative competitiveness are shown to be less influential for export growth in China and India and their export booms have been fueled by process rather than product innovation.
Innovation And Financial Liberalization, James B. Ang
Innovation And Financial Liberalization, James B. Ang
James B Ang
This paper attempts to shed some light on the role of financial sector policies in generating new knowledge, drawing on the experience of one of the fastest growing and largest developing countries. Using time series data for India over the period 1963–2005, the results indicate that interest rate restraints help generate ideas. Other financial repressionist policies, in the form of high reserve and liquidity requirements, as well as significant directed credit controls, appear to have a dampening effect on ideas production. These results lend some support to the argument that some form of financial sector reforms may help stimulate economic …
What Drives Ideas Production Across The World?, James B. Ang
What Drives Ideas Production Across The World?, James B. Ang
James B Ang
The ideas production function is at the heart of endogenous growth theory. Using data for Europe, its offshoots, and the Asian Tiger economies over the period from 1870 to 2010, this paper provides direct estimates of an ideas production function that explicitly distinguishes between the first- and second-generation endogenous growth models while allowing for human capital and international knowledge spillovers through various channels. The estimates show strong intertemporal and cross-country knowledge spillovers, provide robust support for Schumpeterian growth theory, and suggest that human capital and some channels of international knowledge spillover are influential for ideas production.
International R&D Spillovers And Productivity Trends In The Asian Miracle Economies, James B. Ang
International R&D Spillovers And Productivity Trends In The Asian Miracle Economies, James B. Ang
James B Ang
This paper examines the importance of the domestic R&D stock and foreign knowledge spillovers on total factor productivity for six Asian miracle economies over the period from 1955 to 2006. The productivity effects of international knowledge spillovers through the following channels are considered: imports, exports, inward foreign direct investment, patents, geographical proximity and no specific channel. The estimates show that knowledge has been transmitted through all the channels considered but that the import channel and the no-weighting channel have probably been the most important ones for the Asian miracle economies.
Innovation And Productivity Advances In British Agriculture: 1620–1850, James B. Ang
Innovation And Productivity Advances In British Agriculture: 1620–1850, James B. Ang
James B Ang
Theory, historiography, and empirical evidence suggest that agriculture is the key to economic development. This article examines the extent to which productivity advances in British agriculture during the period 1620–1850 were driven by technological progress. Measuring technology by patents and new book titles on agricultural methods, the results are consistent with endogenous growth theory, indicating that technological progress has played a significant role in agricultural productivity advances.
Are Modern Financial Systems Shaped By State Antiquity?, James B. Ang
Are Modern Financial Systems Shaped By State Antiquity?, James B. Ang
James B Ang
We demonstrate that existing differences in financial development between countries can be explained by the cumulative variations in their levels of state experience since 1 AD. This dimension of early historical development has not been considered so far in studies that analyze the determinants of financial development. The estimation allows for all major theories established in the literature as possible explanations for the disparity of financial development across the globe. Significance of state antiquity is robust to the use of alternative indicators of financial development, the consideration of different lengths and periods of statehood, and controlling for a range of …
Institutions And The Long-Run Impact Of Early Development, James B. Ang
Institutions And The Long-Run Impact Of Early Development, James B. Ang
James B Ang
We study the role of institutional development as a causal mechanism of history affecting current economic performance. Several indicators capturing different dimensions of early development in 1500 AD are used to remove the endogenous component of the variations in institutions. These indicators are adjusted with large-scale movements of people across international borders using the global migration matrix of Putterman and Weil (2010) to account for the fact that the ancestors of a population have facilitated the diffusion of knowledge when they migrate. The exogenous component of institutions due to historical development is found to be a significant determinant of current …
Risk Capital, Private Credit, And Innovative Production, James B. Ang
Risk Capital, Private Credit, And Innovative Production, James B. Ang
James B Ang
Although ideas production plays a critical role for growth, there has been only a modicum of research on the role played by financial forces in fostering new inventions. Drawing on Schumpeterian growth theory, this paper tests the roles of risk capital and private credit in stimulating knowledge production. Using panel data for 77 countries over the period 1965-2009, it is found that countries with more developed financial systems are more innovative. A stronger patent protection framework, on the other hand, curbs innovative production.
The Effects Of Human Capital Composition On Technological Convergence, James B. Ang
The Effects Of Human Capital Composition On Technological Convergence, James B. Ang
James B Ang
This paper empirically investigates whether the contribution of human capital to productivity growth depends on the composition of human capital and proximity to the technology frontier in a panel of 87 sample countries over the period 1970-2004. It tests the hypothesis that primary and secondary education is more suitable for imitation whereas tertiary education is more appropriate for innovation. The results show that the growth enhancing effects of higher education increase with proximity to the technology frontier only for high and medium income countries.
Financial Development, Liberalization And Technological Deepening, James B. Ang
Financial Development, Liberalization And Technological Deepening, James B. Ang
James B Ang
This paper focuses on examining the effects of financial development and liberalization on knowledge accumulation. The results consistently show that while financial development facilitates the accumulation of new ideas, the implementation of financial reform policies is negatively associated with it. The undesirable effects of financial liberalization are found to operate through the triggering of crises and volatility in the financial system. There is also evidence supporting the hypothesis that financial liberalization reallocates talent from the innovative sector to the financial system, thus retarding technological deepening. Moreover, the findings also suggest that increased R&D activity and the presence of a stronger …
Savings Mobilization, Financial Development And Liberalization: The Case Of Malaysia, James B. Ang
Savings Mobilization, Financial Development And Liberalization: The Case Of Malaysia, James B. Ang
James B Ang
This paper attempts to identify the key factors behind Malaysia’s remarkable savings performance. Drawing on the life cycle theory, the saving function is estimated by incorporating other relevant structural features and institutional settings of the Malaysian economy into the specification. Particular emphasis has been placed on the roles of financial factors in mobilizing funds in the private sector. The results suggest that financial deepening and increased banking density tend to encourage private savings. Development of insurance markets and liberalization of the financial system, however, tend to exert a dampening effect on private savings.
Finance And Consumption Volatility: Evidence From India, James B. Ang
Finance And Consumption Volatility: Evidence From India, James B. Ang
James B Ang
The main objective of this paper is to explore the determinants of private consumption growth volatility in India, focusing on the role of financial sector policies. Using data for India over the period 1950-2005, the results show that the implementation of financial repressionist policies is strongly associated with lower consumption volatility. The results remain robust after controlling for a wide range of macroeconomic shocks and variables. The presence of a threshold effect implies that the benefits of financial reforms in reducing consumption volatility can only be reaped when the financial system becomes sufficiently liberalized. The results also indicate that the …
Finance And Inequality: The Case Of India, James B. Ang
Finance And Inequality: The Case Of India, James B. Ang
James B Ang
Although theory emphasizes the role of financial market frictions in explaining income inequality, there is little empirical research exploring how financial development and financial sector reforms influence the evolution of income inequality. This article examines how finance impacts income inequality in India using annual time series data for over half a century. The results indicate that while financial development helps reduce income inequality, financial liberalization seems to exacerbate it. The results are robust to the use of different measures for financial development and financial liberalization.
Determinants Of Private Investments In Malaysia: What Causes The Postcrisis Slumps?, James B. Ang
Determinants Of Private Investments In Malaysia: What Causes The Postcrisis Slumps?, James B. Ang
James B Ang
This paper examines the determinants of private investment in Malaysia, with an emphasis on the postcrisis investment slumps. A static private investment function is derived from the neoclassical framework, with appropriate modifications to account for the structural features observed in the country. To introduce dynamics into the model, we adopt a cost minimization problem, which assumes firms optimize investment levels with respect to a quadratic loss function. The results suggest that the availability of financial resources in the economy has a significant positive impact on private investment. Macroeconomic uncertainty exerts a negative influence on the investment climate in the private …
Can Second-Generation Endogenous Growth Models Explain The Productivity Trends And Knowledge Production In The Asian Miracle Economies?, James B. Ang
James B Ang
Using data for six Asian miracle economies over the period from 1953 to 2006, this paper examines the extent to which growth has been driven by R&D and tests which second-generation endogenous growth model is most consistent with the data. The results give strong support to Schumpeterian growth theory but only limited support to semi-endogenous growth theory. Furthermore, it is shown that R&D has played a key role for growth in the Asian miracle economies.
Research, Technological Change And Financial Liberalization In South Korea, James B. Ang
Research, Technological Change And Financial Liberalization In South Korea, James B. Ang
James B Ang
Drawing on the recent developments in innovation-based growth models that emphasize the importance of financial factors and R&D activity, this paper explores the impact of research efforts and financial sector reforms on inventive activity, using Korea as the case study. Based on time series data over the period 1967–2005, the results consistently show that the implementation of a series of financial liberalization policies is strongly associated with a higher rate of knowledge generation. They also show that R&D intensity has a significant positive influence on ideas production, providing some support for the Schumpeterian endogenous growth framework.
The Indian Growth Miracle And Endogenous Growth, James B. Ang
The Indian Growth Miracle And Endogenous Growth, James B. Ang
James B Ang
Using over half a century of R&D data for India, this paper tests whether the second-generation endogenous growth theories are consistent with India's growth experience. Furthermore, the paper examines the extent to which growth in India can be explained by R&D activity, international R&D spillovers, catch-up to the technology frontier and policy reforms. The empirical results show that the growth in India over the past five decades has been driven by research intensity following the predictions of Schumpeterian growth theory.
Four Centuries Of British Economic Growth: The Roles Of Technology And Population, James B. Ang
Four Centuries Of British Economic Growth: The Roles Of Technology And Population, James B. Ang
James B Ang
Using long historical data for Britain over the period 1620–2006, this paper seeks to explain the importance of innovative activity, population growth and other factors in inducing the transition from the Malthusian trap to the post-Malthusian growth regime. Furthermore, the paper tests the ability of two competing second-generation endogenous growth models to account for the British growth experience. The results suggest that innovative activity was an important force in shaping the Industrial Revolution and that the British growth experience is consistent with Schumpeterian growth theory.
Do Public Investment And Fdi Crowd In Or Crowd Out Private Domestic Investment In Malaysia?, James B. Ang
Do Public Investment And Fdi Crowd In Or Crowd Out Private Domestic Investment In Malaysia?, James B. Ang
James B Ang
Motivated by the concern of a persistent decline in total investment in Malaysia during the post-crisis era, this article examines the long-run relationship between private domestic investment (PDI), public investment and foreign direct investment (FDI) in Malaysia. Using multivariate cointegration techniques, the results indicate a fairly robust cointegrated relationship between these variables during the period 1960 to 2003. Both public investment and FDI are found to be complementary to, rather than competing with, PDI.
Financial Development And The Fdi–Growth Nexus: The Malaysian Experience, James B. Ang
Financial Development And The Fdi–Growth Nexus: The Malaysian Experience, James B. Ang
James B Ang
This article examines the FDI-growth nexus in the small open economy of Malaysia by controlling for the level of financial development. Financial development is proxied by a composite index, which is a summary measure of four financial development indicators. Using time-series data from 1965 to 2004, the results show that FDI and financial development are positively related to output in the long-run. The impact of FDI on output is enhanced through financial development. To supplement these findings, we assess the causal relationships between the variables using the recent causality tests available in the literature. The results indicate that economic growth …
Catching Up To The Technology Frontier: The Dichotomy Between Innovation And Imitation, James B. Ang
Catching Up To The Technology Frontier: The Dichotomy Between Innovation And Imitation, James B. Ang
James B Ang
Using data for 55 developing and developed countries, this research examines the roles of technology transfer, research intensity, educational attainment and the ability to absorb foreign technology in explaining cross-country differences in productivity growth. The results show that innovation is an important factor for growth in OECD countries whereas growth in developing countries is driven by imitation. Furthermore the interaction between educational attainment and the distance to the frontier is a significant determinant of growth in the overall sample.
Household Saving Behaviour In An Extended Life Cycle Model: A Comparative Study Of China And India, James B. Ang
Household Saving Behaviour In An Extended Life Cycle Model: A Comparative Study Of China And India, James B. Ang
James B Ang
This paper examines the determinants of household saving in China and India over the last few decades using the life cycle model, with appropriate modifications to account for the expected benefits of pension saving. Consistent with the predictions made in the life cycle model, higher income growth promotes more household saving, and higher age dependency does the opposite. An increase in the inflation rate appears to encourage household saving. Interestingly, the evidence suggests that an increase in expected pension benefits tends to discourage household saving in China in the long run, but the reverse is found in India.
Co2 Emissions, Research And Technology Transfer In China, James B. Ang
Co2 Emissions, Research And Technology Transfer In China, James B. Ang
James B Ang
Although the economy of China has grown very strongly over the last few decades, this spectacular performance has come at the expense of rapid environmental deterioration. Amidst animated debate on the issue of global warming, this study attempts to explore the determinants of CO2 emissions in China using aggregate data for more than half a century. Adopting an analytical framework that combines the environmental literature with modern endogenous growth theories, the results indicate that CO2 emissions in China are negatively related to research intensity, technology transfer and the absorptive capacity of the economy to assimilate foreign technology. Our findings also …
Private Investment And Fnancial Sector Policies In India And Malaysia, James B. Ang
Private Investment And Fnancial Sector Policies In India And Malaysia, James B. Ang
James B Ang
This paper examines the role of financial sector policies in determining private investment in the economies of India and Malaysia. The results suggest that significant directed credit programs favoring certain priority sectors tend to discourage private capital formation in both countries. Interest rate controls appear to have a positive impact on private investment, with the effect being more pronounced in Malaysia. While high reserve and liquidity requirements exert a negative influence on private investment in India, the effect is found to be positive in Malaysia.
Determinants Of Foreign Direct Investment In Malaysia, James B. Ang
Determinants Of Foreign Direct Investment In Malaysia, James B. Ang
James B Ang
Using annual time series data for the period 1960–2005, this paper examines the determinants of FDI for Malaysia to inform analytical and policy debates. Consistent with the prediction of the market size hypothesis, real GDP is found to have a significant positive impact on FDI inflows. There is evidence that growth rate of GDP exerts a small positive impact on inward FDI. From a policy point of view, the results suggest that increases in the level of financial development, infrastructure development, and trade openness promote FDI. On the other hand, higher statutory corporate tax rate and appreciation of the real …