In East Asia, services trade integration, both in market and policy, lags far behind goods trade integration. In spite of a proliferation of ASEAN plus one type FTAs in the Region since the early 2000s, policy-led services integration has not happened in East Asia. The aim of this research project is to investigate the reasons why the Japan-ASEAN bilateral FTAs, which were concluded in the 2000s, resulted in the shallow GATS-plus FTAs. Since barriers in services trade lie in domestic regulations, we examine how domestic determinants, namely interests and institutions in domestic decision-making, shaped the negotiating positions of Japan and ASEAN. From our empirical work, we found the following: (i) The services trade policy-making structure, which involves a wide participation of domestic regulatory authorities in the decision-making process, constituted horizontal fragmentation of power. Because of horizontal fragmentation of power, the domestic regulatory authorities with strong regulatory autonomy and regulatory concerns were able to exercise a veto power against changes in the status-quo and pushed backward the lead ministry’s negotiating positions. (ii) In terms of interests, no strong proliberalisation interests existed either on the policy demand or supply sides. On the policy demand side, while there existed very limited exporting interests, the import-competing services suppliers were afraid of the erosion of rents and adjustment costs caused by preferential market liberalisation. On the policy supply side, there was few incentives to lock in domestic services reforms by using the Japan-ASEAN bilateral FTAs. In addition, (a) pressure for speedy conclusion of an FTA to win the political competition of creating FTAs in the Region and (b) the strong economic and political motivation of FTAs to enhance regional supply chains in the manufacturing sector undermined the countries’ negotiating positions on services trade. From the findings above, we conclude that services trade integration in East Asia lags far behind goods trade because of the double layered political economy impediments. The first layer of impediment, which is the horizontally fragmented domestic decision-making structure, reflects the heterogeneity of services. The second layer of impediment, which is interests, mostly reflects the distinctive characteristics of East Asia.

The thesis comprises three essays, all of which are empirical studies of different issues on exchange rates. Implementing advanced econometrics methodologies with monthly time series data, these studies focus on macroeconomic determinants to measure the relationships within the variables. The first essay (Chapter Two) re-examines the robustness of the export-led growth hypothesis across the exchange rate regimes in Malaysia. According to the exchange rate regime history, Malaysia experienced three different exchange rate mechanisms from 1990 to 2010. Generally, the results vary across the time and regimes. Specifically, the study suggests bi-directional and/or unidirectional causality between exports and economic growth across the regimes, both in the short-run and long-run. The second essay (Chapter Three) tries to bridge the gap between the exchange rate issues by investigating the impact exchange rate exposure on sector level in Malaysia from October, 1992 to December, 2010. The purpose of this study is to examine the impact of the exchange rate exposure in Malaysia sectorial returns by using an augmented model. Overall, in all instances, the results suggest that the exchange rate exposures in Malaysia can be categorized as the long memory in the volatility process. After investigating currency exposure in two types of models, the results further suggest that the sectors are largely affected by the currency fluctuations. The third essay (Chapter Four) explores the channels and magnitude of exchange rate volatility-export nexus empirically on the export flow of five ASEAN countries namely, Singapore, Malaysia, Thailand, Philippines and Indonesia to the United States from January, 1990 to December, 2010. The major results show that increases in the volatility of the real bilateral exchange rate, exert significant effects upon export demand in the short run in each of the ASEAN countries. This study further suggests significant negative effects from the bilateral exchange rate volatility of exports flow in Singapore, Malaysia and Philippines. However, these findings do not apply to Indonesia and Thailand.

There is growing attention to analyse the influence of gender upon women’s entrepreneurship. Nonetheless, the body of literature almost entirely concentrates on developed nations, specifically on the USA and Europe. The research context for the thesis is Bangladesh, a South Asian developing nation, where there was a government initiative to support small businesses of women through bank loans. Recognising that entrepreneurship is a social phenomenon, it is important to explore how gender subordination is articulated in the experiences of women business-owners in developing countries. Placing women at the centre of the study, this feminist standpoint research undertook interviews with 21 Bangladeshi women business-owners. Considering finance as a major area of entrepreneurship, this thesis analyses the influence of gender upon women business-owners’ access to debt finance in the context of a patriarchal developing nation. To address this aim, the study investigates the family as well as the broader societal context. The thesis contributes to advance the understanding of gender subordination of women business-owners within the context of debt financing from developed nations to developing nations. The extant literature on debt finance of developed nations focuses almost solely on discrimination-related issues. It is individual woman business-owner centric, ignoring the family or the broader societal context. Nevertheless, the empirical evidence of this study suggests that male family members were inevitably involved in the process. Further, in developed nations, the exploration of patriarchal practices is primarily limited to the adverse effect of societal expectation of work (i.e., domestic responsibilities and childcare) on the businesses of women. This study extends the view by demonstrating that the dominating, oppressing and exploiting roles of male family members were evident at the individual level with a direct influence on the business activities. The husbands of many women were even found to share the bank loans entirely or partially. This has implications for the effectiveness of the government policy, aiming at the emancipation of the women. Moreover, the study significantly adds to the prevailing knowledge by identifying certain context specific family related issues (for instance, child marriage) or the structural, cultural issues of the broader society (such as, corruption) in relation to gender subordination of women business-owners. While explaining gender subordination of women business-owners, the contribution of the thesis is not limited to its understanding in a developing nation. Given the highly patriarchal nature of the context, the study provides opportunity to extend the comprehension of some of the issues of gender subordination (for instance, the respectable position of women) that are existing in developed nations in a more subtle form. Thus, it provides a platform for future research in the field of entrepreneurship, gender and finance in developing nations as well as in developed nations.

In 1965 the New Order Government took office in Indonesia, following years of severe economic turmoil. Since then the Indonesian economy has performed well, owing much to large oil export revenues and appropriate economic policies. This thesis presents a study of the Indonesian economy focused on three main themes: aid, the public sector and the real exchange rate (RER). In particular, we emphasise aid effectiveness on fiscal behaviour and on the RER. The thesis is organised in five chapters. Chapter 1 presents a synthetic overview of the main episodes in Indonesian economic history. Chapter 2 reviews theoretical and empirical issues on aid. Chapter 3 presents a dynamic model of government behaviour aimed at assessing aid’s impact on fiscal budget and on other real variables in the Indonesian economy. Following Heller’s seminal contribution (1975) and White’s new insights (1993), we insert the government sector into a simple macroeconomic framework: a constrained utility maximising framework which allows for feedback effects through higher income and dynamic linkages. The model is tested for the Indonesian case over the period 1968-93 and the estimated parameters are used to carry out a simulation exercise. We conclude with a positive assessment of aid giving, provided it is given in loans. Loans are found to encourage tax collection, public and private investment and consumption. Exchange rate management has played a significant role in Indonesia as an instrument to ensure competitiveness during and after the oil boom. Chapter 4 analyses the behaviour of the RER for the Indonesian rupiah and offers a theoretical and statistical background. Unit root testing has been extensively used to test for stationarity. We have consistently rejected the hypothesis of RER stationarity, except in those cases in which the full sample series have been used and/or two breaks have been allowed. Chapter 5 presents a modelling approach to RER determination. Following Edwards (1989), we present an econometric model of the RER and develop an extension of it in terms of the Error Correction Mechanism (ECM). Central to the analysis is the role of fundamentals, in particular aid and the price of oil, in determining the RER. The estimated parameters are then used to construct the equilibrium RER in order to study RER misalignment. Simulations are also carried out to investigate the impact of exogenous shocks and policy options on the RER. Results show that the Indonesian RER suffered from misalignment especially during the oil boom and until the early 1990’s. We also find that aid and the real price of oil do matter: both act as fundamental determinants of RER behaviour and contribute to RER stability, a finding confirmed by the simulation exercise. Interestingly, aid and government consumption appear to influence in differences and not in levels the RER.

This Thesis examines the determinants of corporate capital structure during a period characterised by significant changes in the overall economic conditions. Empirical studies of capital structure generally concentrate on identifying the firm-specific factors that managers should consider in making capital structure decisions, while ignoring the possible implications of the overall economic conditions that could affect the firms’ financing decisions. Given that the 2007 Global Financial Crisis (GFC) was accompanied by an economic recession, this provides a unique opportunity to investigate the impact of the overall economic conditions on firm’s capital structure. There have been a number of unique factors to the 2007 GFC and the following economic recession that are not observed in previous economic downturns in the UK. These include near-zero interest rate (which was reduced by the Bank of England from a pre-crisis peak of 5.75% in July 2007 to 0.5% in March 2009), the extraordinary level of support to the troubled firms offered by the government (e.g., the Business Payment Support Service; the Asset Protection Scheme; and the Funding for Lending Scheme), and the unprecedented banks’ forbearances on non-performing loans (e.g., granting waivers to breaches of pre-agreed loan covenants; switching to an interest-only loans; offering payment holidays; and rolling over the loan). These factors while protecting many viable businesses, may have contributed to the survival of some technically insolvent firms that would have defaulted otherwise. Recent evidence from insolvency practitioners have suggested the emergence of such “zombie” firms in the UK over the course of the GFC and the following economic recession. Accordingly, the objective of this Thesis is fourfold. The main objective is to investigate the impact of the recent GFC and the firm-specific determinants of the capital structure on firms’ leverage ratios. The second objective is to identify zombies, thirdly to develop an empirical model to identify the determinants of zombieness status, and fourthly to estimate their impact on the probability of becoming a zombie. The same dataset on the constituents of the FTSE 250 Index is utilised in achieving all these objectives. Identifying zombies via a two-condition criteria, and using a population-averaged logit procedure, we show that the probability of becoming a zombie increases with the degree of financial leverage and viability of the business (as perceived by firm’s top management). However, it is negatively affected by firm’s profitability, cash-generating ability, and the ability to pay dividends. Our results thus show that there was a prevalence of zombie firms in the UK which evolved from the GFC. Using data on the constituents of the FTSE 250 Index over the period 2004-2012 and estimating a two-step System GMM procedure, we find that the leverage ratio is positively affected by the tangibility of assets, the size of the firm, the amount of non-debt tax shields, growth opportunities and business risk, but declines with an increase in firm profitability. Furthermore, the recent GFC is found to exert a significant impact on firms’ leverage ratio. The results also confirm that firms have target leverage ratios with a fairly fast speed of adjustment. Applying the same estimation technique to a post-crisis model, we find that, despite the substantial differences in their ability to meet financial obligation, the leverage ratios of zombies and non-zombies do not seem to be determined differently. We further establish that except for business risk and growth opportunities, other commonly used firms-specific determinants of capital structure, maintain their empirical relevance over the post-crisis period.

This thesis reviews the literature, simulates and applies the Gravity Model of International Trade. The gravity model is widely used in international trade to examine trade flows within a network of exporters and importers. It describes the push and pull factors of trade flows and is fast becoming the most favoured tool when estimating the welfare effects of a trade policy. Therefore, estimating an accurate baseline equation is critical to correctly identify the welfare effects of trade and accompanying trade policies. Recent developments in the literature on the gravity model have helped in this regard. Chapter 1 presents a summary. The literature identifies several estimation issues and prescribes several actions that could be taken to best estimate the gravity model and minimize potential bias in the coefficient(s) of interest. With the objective of minimizing the bias on the coefficient(s) of interest, this thesis, in Chapter 2, builds on the literature by simulating and estimating the gravity model using varying assumptions about the data generating process (dgp) of the errors, conditional mean and sample. The findings from these simulations are then used to guide the application (Chapter 3) of the gravity model to trade among Caribbean Community (CARICOM) members and trade between CARICOM members and the rest of the world (ROW). Subsequently, in Chapter 4, the gravity model is used as the basis for a general equilibrium framework to investigate the importance of international borders, regional trade agreements (RTAs) and the potential impact of deeper integration in the form of a currency union among CARICOM members. The welfare implications for CARICOM members, associated with being a member of the RTA and adapting a common currency, are presented in Chapter 4 along with several recommended trade policies and areas for future research.

The first chapter provides an overview of the topics covered in this thesis. The second chapter explores the effect of historic gender division of labour during slavery on African American women’s performance in the labour market. Using census data from 1870 to 2010, I show that African American women living in areas with lower levels of gender division of labour were more likely to participate in the labour market and have higher occupation income scores after emancipation. The effects are persistent for at least 70 years after the end of slavery. I analyse the mechanisms driving the results, distinguishing between labour supply and demand channels, and I explore intergenerational transmission of gender roles. The third chapter empirically assesses the importance of ethnic networks in facilitating international trade. In particular, it investigates the impact of ethnic Cantonese networks in the United States on the export performance of firms based in Southern China. The results indicate that exposure to ethnic networks has a positive effect on exports, both at the extensive and the intensive margin. We explore the mechanisms underlying the results, distinguishing between information flows, contract enforcement, foreign investment and technology diffusion. The fourth chapter analyses the effect of ethnic Chinese networks in the United States on knowledge diffusion and innovation in China. I construct a proxy for the ethnic network based on historic Chinese settlements and current industry employment patterns, exploiting the migration restrictions imposed by the Chinese Exclusion Act of 1882. The results indicate that when innovation in the U.S. increases, industries that are more exposed to the ethnic network in the U.S. innovate more in China. This suggests that ethnic networks contribute to the diffusion of technology across countries.

From its inception, behavioural economics’ mission has been to bring deeper psychological insights into economics. Relying mostly on experimental data, this field became notorious for providing evidence of the shortcomings of standard economic models in predicting human behaviour. These findings motivated a first generation of behavioural models, which tried to systematise this departure from standard economics. However, these initial attempts were widely criticised for their methods (these models were argued to lack the tractability, systematic approach and level of generality desired by economic science) and for their lack of relevance for economic phenomena (markets, evolution and arbitrage would drive away behavioural biases). This criticism motivated a second wave of behavioural models, which augmented neo-classical frameworks with psychologically realistic behavioural assumptions. This approach allowed this field to establish a link to previous results of economics and address criticisms about the relevance of behavioural findings in markets. A further step in the direction of linking behavioural models and standard theory is to introduce learning to behavioural models. While this concept has been largely absent from behavioural economics’ analysis of markets for technical reasons, its presence is necessary for two reasons. First, learning is commonly used to dismiss (behaviourally motivated) consumer mistakes, so it is crucial to study whether existing results of this literature will be robust to this variation. Second, in a world which is constantly evolving, learning in itself is an important driver of economic phenomena and, hence, should not be dismissed by this field. In this thesis, I augment previous behavioural models by studying their existence in environments with consumer learning. By extending static behavioural problems to dynamic environments with learning, I am able to explain puzzles in the areas of technology adoption and contract theory. In chapter 1, I propose that status considerations – a feature of consumers’ preferences overlooked by classical theory – can have positive effects in society whenever they are considered in an environment with active learning (i.e., experimentation). In chapter 2 and 3, I show that when naıve of behavioural consumers (who lack self-awareness about their preferences) can learn, pricing methods in subscription contracts, which were previously unexplained by standard contract theory, can be shown to be the optimal response of firms trying to prevent consumer learning.

This dissertation studies the economic history of South Africa’s industrial decentralisation policies, which led to greater trade and foreign investment with Taiwan during the closing phases of apartheid. These large industrial schemes sought to increase exports of finished goods, diversify manufacturing from urban centres, and develop the African homelands, while continuing the status quo of racial segregation. In examining (1) bilateral trade, (2) foreign investment and (3) business network agglomeration, I illustrate the role Taiwanese firms played in fulfilling important aims of the industrial decentralisation policy. The three interrelated topics explain how the diplomatic relationship developed, the effects to bilateral trade, and why Taiwanese investors came to be the largest group of industrialists in the apartheid-era homelands. However, the research agenda presented in this thesis is not merely a narrow analysis of trade and investment. It also provides a broader perspective of key questions in South Africa’s economic history: specifically, the rise and fall of apartheid, the contradictory forces of regional industrial decentralisation, which shaped Africa’s most industrialised economy, and the roots of persistent inequality stemming from the homeland system. The period between 1975 and 1994 was turbulent with both countries facing different degrees of political and economic isolation. Prior scholarship has focused on the diplomatic relationship between the two countries, as international sanctions made quantitative data difficult to access. The introduction of new qualitative and quantitive data on the apartheid economy highlights the economic motives for this large wave of Asian foreign investment, especially those in the rural African homelands. Moreover, it draws lessons from the historical patterns of apartheid industrial and spatial development, which are analogous to current African special economic zone policies.

This thesis argues that the British Industrial Revolution, which marked the beginning of sustained modern economic growth, was facilitated by the blossoming in eighteenth and early nineteenth century Britain of the world’s first infrastructure for commercial R&D, composed of a network of ‘Knowledge Access Institutions’ (KAIs): scientific societies, ‘mechanics institutes’, public libraries, masonic lodges and other organisations. This infrastructure lowered the cost of access to knowledge for scientists, inventors and entrepreneurs, raising the productivity of R&D and encouraging a sustained increase in R&D effort. This contributed to the acceleration in technological innovation that lay behind the transition to modern economic growth. First, I define the concept of KAIs and explain how they affected the rate of economic growth. Second, I present detailed data on the KAI infrastructure and estimate its effect on the rate of technological innovation during the British Industrial Revolution, using newly constructed spatial datasets on British patents between 1700 and 1852 and exhibits at the Great Exhibition of 1851. Third, I argue that KAIs were largely exogenous to industrialisation, rooted instead in the intellectual developments of the Scientific Revolution and European Enlightenment. Fourth, I show that the prevalence of Knowledge Access Institutions was correlated with the emergence of modern economic growth across countries in the late nineteenth century and that the cost of access to knowledge was a binding constraint to economic progress shared by many countries during this period. Finally, based on the case of late nineteenth century US manufacturing, I investigate the extent to which the emergence of modern economic growth depended on the incentives to innovate rather than the capabilities lent by access to knowledge and other factors. The thesis suggests that the sharp fall in the cost of access to knowledge that we are currently experiencing may give rise to an acceleration in the rate of technological innovation in the coming decades and that policymakers should direct some effort towards mitigating the potentially harmful effects of rapid technological change.