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The current study examines the relationship between FDI inflows and economic growth of Korea and tests the Bhagwati hypothesis which says that FDI inflow is more beneficial to economic growth in an open trade regime in a multivariate framework. Unlike previous works on the concerned hypothesis, a small-sample cointegration test is applied to the time-series data. There is no evidence of cointegration among the variables. The Granger causality test results show that, although FDI inflows do not cause per capita real GDP, the latter is revealed to cause the former when the economic crisis dummy variable is included. There is a unidirectional short-run causality from domestic investment to per capita real GDP growth rate. The case of Korea does not support the Bhagwati hypothesis.

The government of China has tried to promote exports by various means including the establishment of Special Economic Zones, tax and financial benefits, duty drawback, export insurances, and exchange rate management. Of particular interest is that exports by foreign invested enterprises have increased substantially since the 1990s and have significantly contributed to the rapid economic growth. As China became a Member of the WTO, China has recently tried to make its export promotion policies consistent with the WTO regulations. The export promotion measures permitted in the WTO system such as the duty drawback and export insurance schemes may show resource allocational inefficiencies. It would be necessary for the Chinese government to maintain efficiently run export-promoting systems.

This paper examines the Melo and Vogt (1984) hypotheses concerning the relationship between import demand elasticities and trade liberalization during the process of economic development in Thailand. The results using first differenced variables to assure stationarity show that income elasticity increased with import liberalization, supporting the hypothesis. However, price elasticity is not shown to increase with economic development, unlike the hypothesis concerning the change in income elasticity. These results contradict those of previous researchers that used nonstationary variables. Published by Elsevier Science Inc.

This article describes the issues arising from discussion on the ILO core labour standards in the global trading system and the attitude of ASEAN in this context. ASEAN has been oppos ing the proposals to link trade sanctions with core labour standards in the sense that such proposals are Trojan horses for protectionism. Some suggestions are provided to reconcile the opinion of the proponents with that of the opponents regarding this issue.

Acknowledging the effect of the structural break in late 1985, a Perron-type detrending method is adopted with respect to the variables concerned with Japanese import demand. The detrended series are revealed to be nonstationary and not cointegrated, making previous research invalid. This implies that the traditionally used market force variables cannot explain Japanese import demand well, even for the officially well-liberalized period. Closed minds or a private barrier such as the peculiar domestic distribution system not related to the Japanese government's official liberalization measure seem to be important in explaining Japanese import demand behavior.

This paper applies the exchange market pressure (EMP) model to Korea under a managed floating exchange rate. We show that the EMP model is superior to one concentrating solely on foreign reserve or exchange rate changes. Given that the balance of paymnets in Korea experienced a drastic turn to surplus during the estimated period, we checked the stability of the coefficients. The results show that the coefficients have remained stable.

This paper tests the stability of the exchange market pressure model in the case of Korea under a managed floating exchange rate. Using the cusum of squares test, we show that the structural stability was broken in about mid-1986. This is plausible given that there was a sudden surplus in the balance of payments in Korea in late 1985. Estimation results show that the exchange market pressure model works very well where there is a surplus in balance of payments; however, its explanatory power is poor in periods of deficit.