Econ 4450 (2010) Note 9 - Econ 4450 Note 9 Case 3 East...

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Econ 4450 Note 9
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Case 3 East Asian Export Expansion (Light Industries) Three are 3 sub-cases depending on whether trade is promoted by (a) both the local and a foreign government (b) the local government (c) no government. (c) denotes the case of Hong Kong, in general; (b) is the general situation, where the local government encourages export with tax incentive for foreign firms coming for outsourcing or exemption of tariffs for imported inputs used for export. (a) Is the case during the migration of light industry from Japan to Taiwan and then Korea.
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What is conspicuous in case (a) is the granting of government assistance by Japan for the exodus of its own industries. Two points may be made: 1)Regarding to the facts, one may use Kojima (1978) as source, see Wan, (2004, Ch. 4, 112-116) 2)Regarding to the reason, a succinct discussion may be found in Kwan (1996, 163) , to be reproduced in full below:
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Foreign directed investment has played a dominant [role?] in the emergence of new industries and the withering away of old ones
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This note was uploaded on 04/29/2010 for the course ECON 4450 taught by Professor Wan during the Spring '09 term at Cornell University (Engineering School).

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Econ 4450 (2010) Note 9 - Econ 4450 Note 9 Case 3 East...

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