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Institutions for Knowledge Intensive Development: Economic and Regulatory Aspects in South-East Asian Transition Economies

Periodic Reporting for period 1 - IKID (Institutions for Knowledge Intensive Development: Economic and Regulatory Aspects in South-East Asian Transition Economies)

Reporting period: 2017-01-01 to 2018-12-31

The prioritisation and deployment of knowledge within an economy remains a key success factor for long-term economic development, increased productivity and socio-economic sustainability. The achievement of knowledge driven growth is particularly challenging for emerging market economies that are still seeking to catch up to the frontier knowledge economies. The project seeks to understand the causes and consequences of the differences in the evolution of knowledge intensity of economies, with particular focus on transition countries in South-East Asia.We aim to identify some key micro and macro level institutional incentives for development towards a knowledge economy, and stimuli for capital allocation into knowledge-based investments. Moreover, we seek to study and outline some key channels for efficient regulation that might contribute to knowledge intensification in a transition economy. The project makes use of frontier empirical research methods, including advanced stochastic frontier analysis and dynamic panel data estimation techniques. The conceptual underpinnings of the project are at the intersection of industrial organisation theories, new institutional economics, development economics, and modern concepts in regulatory efficiency and justice. The project will develop lasting excellence oriented cooperation with South-East Asian universities, and contribute to R&D capacity building based on European academic values. Promoting of the project results through intersectoral knowledge transfer will be an important task. We aim to contribute to social innovation through policy suggestions, and to a paradigm shift regarding the role of institutions in transition processes. The project is a joint effort of Swiss and Estonian universities’ economics and law researchers with transition studies experience from Eastern Europe, and their fellow researchers from Laos, Vietnam and Cambodia with thorough insight into the institutional context in their societies.
The first two years of the 4-year project “Institutions for Knowledge Intensive Development: Economic and Regulatory Aspects in South-East Asian Transition Economies” (IKID), led by Tallinn University of Technology (TalTech) in collaboration with the University of Lausanne (UNIL) and in cooperation with South-East Asian partners from the National University of Laos (NUOL), Ho Chi Minh City University of Law (HCMCUL) and Royal University of Law and Economics (RULE), has been successful in terms of both staff exchanges and scientific progress. Total 45 researchers have been on a staff exchange to a partner university in 2017-18 and total 170 months of staff exchanges were completed – more than anticipated in the project plan, thanks to the quick and successful start from the very beginning of the project. All the partner universities have contributed actively to the staff exchanges and research activities. The staff exchanges have provided good opportunities for the researchers from the South-East Asian partner universities to work together with researchers from the European host universities under the different work packages of the project with the aim to identify some key micro and macro level institutional incentives for development towards a knowledge economy, and stimuli for capital allocation into knowledge-based investments. Moreover, work started during the first two years of the project has sought to study and outline some key channels for efficient regulation that might contribute to knowledge intensification at different levels of a transition economy.
The project is investigating the institutional determinants and success factors of development into knowledge intensive economies, with focus on the economic and regulatory environment in Laos, Vietnam and Cambodia. The project builds on new institutional economics, development economics, industrial organisation and modern concepts in regulatory efficiency and justice in combination with frontier empirical research methods (including advanced stochastic frontier analysis and dynamic panel data estimation techniques) in investigating micro and macro level institutional factors and regulatory efficiency. The project contributes to the knowledge exchange and cooperation between Europe and South-East Asian emerging economies.

The project comprises six Work Packages managed by TalTech and UNIL researchers:
1) Institutional factors behind the knowledge intensity gap between frontier knowledge economies and transition economies,
2) Regulation and incentives structures supporting development towards a knowledge economy,
3) Efficiency in the financial sector and financing of R&D investments in light of changing regulatory environment,
4) Regulatory aspects in the transfer of knowledge through ICT-enabled solutions,
5) Training in core academic competencies in economics, law and empirical research,
6) Knowledge transfer workshops.

The project aims to develop lasting excellence oriented cooperation with South-East Asian universities, and contribute to R&D capacity building based on European academic values. Promoting of the project results through intersectoral knowledge transfer will be an important task. We aim to contribute to social innovation through policy suggestions, and to a paradigm shift regarding the role of institutions in transition processes.
Workshop on regulatory issues in South-East Asia led by Prof Tanel Kerikmäe (TalTech)
Lecture at RULE on Institutions for Economic Development by Prof Aaro Hazak (TalTech)
Meeting at NUOL with Prof Andreas Ziegler (UNIL)
Workshop on academic publishing by Prof Ali Kutan as part of the June 2017 summer courses in Estonia
Workshop on research management at HCMCUL led by Prof Aaro Hazak (TalTech)
June 2017 Conference in Tallinn, keynote by Prof Josef C. Brada (Arizona State University)
Project IKID Midterm Meeting in Tallinn, June 2018