Did all these lead to a death of distance? Consider the following. An urban coastal corridor emerged from Tokyo to Sydney, through Seoul, Taipei, Shanghai, Hong Kong, Kuala Lumpur, Singapore and Jakarta. If we extend Venables’ argument on productivity enhancement through increase in size of urban agglomerations, we can begin to appreciate the productivity effects of this mega urban corridor in East Asia.
Even if the source of financing is not bank funding, the interest rate conditions in the market definitely influence the opportunity cost of even internal resources of firms. The effectiveness of interest rate and exchange rate channels, no doubt, depends upon the depth and vibrancy of the debt and foreign exchange markets.