1 the business environment in emerging economies prof. olivier cadot spring semester, 2014
TRANSCRIPT
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The business environment in emerging economies
Prof. Olivier CadotSpring Semester, 2014
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SEMINAR OBJECTIVES
Get the big picture
o How is the world economy evolving? What is the role of emerging economies
o Basic differences between industrial and emerging economieso What do we know about economic development? Understand to
anticipate
Learn to analyze data
o Do and present descriptive statisticso Do and interpret basic regression analysiso Understand indices
Learn to present and discuss your ideas
o Select what you communicateo Give a «narrative» to your analysiso Provide constructive comments to others
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SEMINAR EVALUATION
Hands-on data analysis exerciseo Get datao Organize it (cleaning, formatting)o Analyse it (descriptive statistics, econometric analysis)o Present your results
Group projecto Topic to be agreed with instructor/assistanto Original contribution (not just review of the literature)o Data analysis
Discussion of group projects
Optional: In-class case presentation and discussion
Exercises 30%
Group workPaper 50%Discussion 20%
Total 100%
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SEMINAR FORMAT AND SCHEDULE
Six introductory sessionsFebruary 20, 27; March 6, 13, 20, 27
Group work, phase I (topic determination & data gathering): AprilGroup meetings with professor/asssistant, round I: Week of April 15
Group work, phase II (analysis and preliminary draft): MayGroup meetings with professor/assistant, round II: Week of May 12Assignment of «discussant» roles
Presentations and discussion: May 15, 22, 29
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SUGGESTIVE LIST OF PAPER TOPICS
o Governance in extractive industries o Country competitiveness analysiso Measuring «logistics friendliness»o Export entrepreneurshipo Statistical analysis of competitiveness and other indiceso Public-private partnerships in public utilities, with a focus on water
privatizationo Free-trade agreementso Product standards, technical regulations, and competitiono NGO management & accountabilityo Project impact analysis
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UNDERSTANDING GLOBALIZATION
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TRADE GROWS FASTER THAN PRODUCTION
-
10.00
20.00
30.00
40.00
50.00
60.00
70.00
1960
1964
1968
1972
1976
1980
1984
1988
1992
1996
2000
2004
2008
Low & middle income
High income
Openness ratioTrade growth vs. GDP growth
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GLOBAL TRADE PATTERNS
250
375
1’395
628628
263263 427
242
105
5575
Source: Adapted from The Economist, A Survey of Logistics, 17 June 2006, p. 5.Million US dollars
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SHIFTING PATTERNS, SHIFTING CENTER OF GRAVITY
Source: JM Grether and N Mathys (2006), “Is the World’s Economic Center of Gravity Already in Asia?”, mimeo, Univ. of Lausanne
2015
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THE DECLINE OF THE RICH COUNTRIES
Share of high-income countries in trade in goods
-
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
Share of world GDP, constant dollars,OECDShare of world GDP, constant dollars,non-OECD
-
10.00
20.00
30.00
40.00
50.00
60.00
70.00
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Share of world GDP at PPP, OECD
Share of world GDP, at PPP, non-OECD
In current USD At PPP
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THE RISE OF ASIAN PLAYERS
0
2
4
6
8
10
12
14
16
18
Trade in services (% ofGDP)
Service exports: India, 1975-2010
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THE INTERNATIONALIZATION OF COMPANIES
-
1.00
2.00
3.00
4.00
5.00
6.00
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
Low & middle income
High income
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
Low & middle income
High income
Inward and outward FDI flows
Inward
Outward
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DIFFERENCES IN VALUES (I): HOFSTEDE (1980)
Power acceptance Individualism
“Masculinity” (competitiveness) Risk aversion
Source : http://www.clearlycultural.com/geert-hofstede-cultural-dimensions/uncertainty-avoidance-index/
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DIFFERENCES IN VALUES (II): A CULTURAL DISTANCE INDEX
2 21 1
1i i i
i
F s s
H
1 1 1ij i j i jD s s s s
Intra-country fragmentation index
Inter-country distance index (Thoenig et al. 2009)
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HAS CULTURAL DISTANCE SHRUNK?
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DETERMINANTS OF CULTURAL DISTANCE
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THE TRANSPORTATION REVOLUTION
Share of U.S. trade shipped by air, 1965-2010
Source: Feyrer (2009)
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GLOBALIZATION: STYLIZED FACTS
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GLOBALIZATION: STYLIZED FACTS
-
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
Low & middle income
0
10
20
30
40
50
60
70
80
90
100
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Low income
SSA
The developing world’s debt burden
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SUMMING UP
Source: Sala i Martin 2002
Income distribution over time: World, 1970-80
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SUMMING UP
Source: Sala i Martin 2002
Income distribution over time: World 1990-98
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SUMMING UP
Poverty: tide turning?
Headcount of individuals living on less than $1 a day worldwide
Source: World Bank (2002),"Globalization, Growth and Poverty:Building an Inclusive World Economy"
million individual
s
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What is globalization?
o Rising openness to trade/reduced trade protection Goods Services
o Rising mobility of capital/internationalization of firms FDI Speculative flows
o Reduced global incidence of poverty Uneven across continents Halted by global financial crisis
SUMMING UP