Title
nternational Migration and Trade Liberalization --Some Lessons from Asia
Abstract
The world is increasingly interconnected with each other in
terms of goods, money, and labor (international migration). In
view of the importance of international migration in recent years,
the purpose of this paper is to analyze, somewhat rigorously,
the economic impact of migration on sending countries as well
as receiving countries, taking East Asia after the Asian Financial
Crisis as an example.
After examining the data on migration in East Asia before
and after the Asian Financial Crisis, I develop a simple 2x2x2 CGE model,
which incorporates migration, foreign investment, and international trade,
to empirically analyze the impact of migration in a wider perspective (i.e.,
migration, trade, and FDI are simultaneously analyzed). The model is applied
to the relationship between Japan and seven countries/area in East Asia
(China, Indonesia, Korea, Malaysia, the Philippines, Thailand and Taiwan).
Through a series of simulation exercises, I found that migration tends
to give negative welfare effects to receiving countries, although it has
positive welfare impact on sending countries. The simulation exercises
also suggest that migration is inferior to trade liberalization as a means
of bringing positive welfare effects, such as income creation and reduction
of unemployment, to sending countries, because migration is the movement
of human being as a whole and therefore it inherently involves higher adjustment
cost than international trade which is a mere movement of goods across
the border.
Strategy of international business of Japanese manufacturing
companies has drastically changed for the last half century. Export long
occupied central position in the international business strategy. In 1985
the Plaza Accord was reached and sharp appreciation of Japanese yen started.
And strategic shift from export to foreign production began in 1986. Recently
many companies have overseas R&D sites. However, when we turn our attention
to management of international business, we observe only subtle change.
Foreign subsidiaries are managed by Japanese expatriates. The Japanese
language plays important role in the communication on important matters.
Global operations are managed by Japanese persons and in the Japanese language.
The non-manufacturing multinationals share the same characteristics as
the manufacturing multinationals.
The Japanese style international management is well suited
to respond to Japanese customers and to transfer technology from Japanese
parent companies to their overseas subsidiaries. However, it has problems.
It is costly and depresses initiatives of local capable staff.
Then, should Japanese multinationals change their international
management in the future ?
The Japanese style international management is based
on Japanese management at parent companies in Japan. It is also based on
cultural factors such as the Japanese language, Japanese persons' attitude
toward foreigners and interpersonal relationship. Thus, to change the management
of international business is more difficult than to change the strategy
of international business.
Junichi GOTO
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: (81) 78 803 7036
Fax: (81) 78 803 7059