The Mechanism and Stability of Global Imbalances
| Project/Area Number |
23K22120
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| Project/Area Number (Other) |
22H00849 (2022-2023)
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| Research Category |
Grant-in-Aid for Scientific Research (B)
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| Allocation Type | Multi-year Fund (2024)
Single-year Grants (2022-2023) |
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| Section | 一般 |
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| Review Section |
Basic Section 07040:Economic policy-related
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| Research Institution | Waseda University |
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Principal Investigator |
菊地 朋生 早稲田大学, 国際学術院(アジア太平洋研究科), 教授 (60906527)
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| Co-Investigator(Kenkyū-buntansha) |
戸部 智 関西学院大学, 総合政策学部, 講師 (00824145)
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| Project Period (FY) |
2022-04-01 – 2025-03-31
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| Project Status |
Granted (Fiscal Year 2024)
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| Budget Amount *help |
¥9,360,000 (Direct Cost: ¥7,200,000、Indirect Cost: ¥2,160,000)
Fiscal Year 2024: ¥2,210,000 (Direct Cost: ¥1,700,000、Indirect Cost: ¥510,000)
Fiscal Year 2023: ¥2,730,000 (Direct Cost: ¥2,100,000、Indirect Cost: ¥630,000)
Fiscal Year 2022: ¥4,160,000 (Direct Cost: ¥3,200,000、Indirect Cost: ¥960,000)
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| Keywords | Global imbalances / Superpower / Gravity Model / Portfolio Investment / Foreign Debt / superpowers / club goods / coalition formation / World order |
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| Outline of Research at the Start |
The reseach project has two objectives. First, we investigate theoretically how competition between US and China to expand their shpere of influence depends on preferences and characteristics of other countries such ideological orientation, GDP and trade with US and China.Second, we investigatge and empirically the determinants of portfolio investment flows and how they contribute to economic growth in the receipient countries to understand why capital does not necessarily flow from rich to poor countries.
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| Outline of Annual Research Achievements |
We have revised and published "The Power of Non-Superpowers," Tomoo Kikuchi and Shuige Liu (https://doi.org/10.48550/arXiv.2209.10206).The paper proposes a game-theoretic model to investigate how non-superpowers with heterogenous preferences and endowments shape the superpower competition for a sphere of influence. Two superpowers play a Stackelberg game by providing club goods.Their utility depends on non-superpowers who form coalitions to join a club in the presence of externality. The coalition formation, which depends on the characteristics of nonsuperpowers,influences the behavior of superpowers and thus the size of their clubs. Our data-based simulations of the subgame perfect equilbirum capture how the US-China competition depends on other countries.
We are working on "Does Foreign Equity Contribute to Economic Growth?" Tomoo Kikuchi, Satoshi Tobe, Duy Van Dang, and Quang Trung Nguyen.The paper constructs a panel dataset covering 56 countries from 1985 to 2017 and find a positive relationship between foreign equity investment and GDP growth with private investment being a mediator. The impact of foreign equity investmenton private investment peaks in two years before it fades out.
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| Current Status of Research Progress |
Current Status of Research Progress
2: Research has progressed on the whole more than it was originally planned.
Reason
1) We set out to model currency choices for international trade settlement. We obtained the basic theorectical and simulation results for "Trade Networks and Currency Choices" with Lien Thi Quynh Pham and we are currently finalzing a draft. 2) We set out to work on empirical projects on a) the patterns of portfolio investment, b) foreign equity and economic growth, c) the perfomance of overseas M&A activities by US companies. For a) and b) we have obtained the main results and are working to produce working papers on "Portfolio Investment Patterns in East Asia," with Changran Lee; "The Role of Tax Havens for Portfolio Investment of the US and China," with Xiaoyu Cheng; "Does Foreign Equity Contribute to Economic Growth?" with Duy Van Dang and Quang Trung Nguyen. For c) we are still doing our preliminary analysis on "The Exorbitant Privilege and Cross-border M&A," with Sinan Caner Yamak.3) We set to analyze the relationship between our theoretical and emprical results. We have not yet attempted to present all our results in a coherent way.
Overall, we are making progress according to our initial plan to produce both theoretical and empirical papers under the umbrella project "The Mechanism and Stability of Global Imbalances".
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| Strategy for Future Research Activity |
We plan to publish the following working papers in arXiv: 1) "Does Foreign Equity Contribute to Economic Growth?" with Duy Van Dang and Quang Trung Nguyen; 2) "Portfolio Investment Patterns in East Asia," with Changran Lee; 3) "The Role of Tax Havens for Portfolio Investment of the US and China," with Xiaoyu Cheng; 4) "The Exorbitant Privilege and Cross-border M&A," with Sinan Caner Yamak.
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Report
(2 results)
Research Products
(9 results)
