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To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jmacro.2009.06.002 Byline: James B. Ang Keywords: Financial liberalization; Knowledge creation; Endogenous growth; Korea Abstract: 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. Author Affiliation: Monash University, Victoria, Australia Article History: Received 5 June 2008; Accepted 8 June 2009

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jpolmod.2007.04.010 Byline: James B. Ang (a)(b) Keywords: Energy consumption; Pollutant emissions; Causality; Multivariate cointegration Abstract: The objective of this paper is to examine the long-run relationship between output, pollutant emissions, and energy consumption in Malaysia during the period 1971-1999. To supplement the findings of cointegrating analysis, we assess the causal relationships between the variables using the recent causality tests available in the literature. The results indicate that pollution and energy use are positively related to output in the long-run. We found a strong support for causality running from economic growth to energy consumption growth, both in the short-run and long-run. Author Affiliation: (a) RSPAS (Economics), Australian National University, Canberra, ACT 0200, Australia (b) Department of Economics, Monash University, 900 Dandenong Road, Caulfield East, Vic 3145, Australia Article History: Received 1 September 2006; Revised 1 March 2007; Accepted 1 April 2007

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jpolmod.2007.06.014 Byline: James B. Ang Keywords: Foreign direct investment; Malaysia Abstract: 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 exchange rate appear to discourage FDI inflows. Interestingly, the results also seem to suggest that higher macroeconomic uncertainty induces more FDI inflows. Author Affiliation: Monash University, Department of Economics, 900 Dandenong Road, Caulfied East, Vic. 3145, Australia Article History: Received 1 December 2006; Revised 1 May 2007; Accepted 1 June 2007

Summary: The main objective of this paper is to explore the impact of financial sector reforms, financial deepening, and intellectual property protection on the accumulation of knowledge for one of the world’s largest developing countries. The findings indicate that increased intellectual property rights protection is associated with higher knowledge accumulation. While financial deepening facilitates the accumulation of ideas, the implementation of a series of financial liberalization policies is found to have a non-linear effect. The results show that financial liberalization will exert a beneficial impact on technological deepening only if the financial system is sufficiently liberalized. [Copyright &y& Elsevier]

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 indicate that more energy use, higher income and greater trade openness tend to cause more CO2 emissions. [Copyright &y& Elsevier]

Summary: 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. [Copyright &y& Elsevier]