nep-sea New Economics Papers
on South East Asia
Issue of 2006‒07‒21
twelve papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Status of Institutional Reforms for Integrated Water Resources Management in Asia: Indications from Policy Reviews in Five Countries By D. J. Bandaragoda
  2. Working Hours in Japan: Who Is Time-Privileged? By Scott M. Fuess, Jr.
  3. Cross-Border Acquisitons and Target Firms' Performance: Evidence from Japanese Firm-Level Data By Kyoji Fukao; Keikok Ito; Hyeg Ug Kwon; Miho Takizawa
  4. Structural Breaks in the Real Exchange Rate Adjustment Mechanism By Copeland, Laurence; Heravi, Saeed
  5. Specialization and Happiness: A U.S.-Japan Comparison By Ono, Hiroshi; Lee, Kristen Schultz
  6. Centralization or Decentralization of Decision Rights? Impact on IT Performance of Firms By Takahito Kanamori; Kazuyuki Motohashi
  7. Aspetti nazionali ed internazionali delle popolazioni considerate da una "finestra demografica" By Antonio GOLINI; Cristiano MARINI
  8. The Economics of Young Democracies: Policies and Performance By Ethan Kapstein; Nathan Converse
  9. Small and Medium Enterprise in India - Overcoming Policy Constraints to Achieving Rapid Growth in a Globalizing Economy By Morris Sebastian; Basant Rakesh
  10. Measuring corruption in Eastern Europe and Central Asia : a critique of the cross-country indicators By Knack, Stephen
  11. Production-weighted Estimates of Aggregate Protection in Rich Countries toward Developing Countries By David Roodman
  12. Quali fonti per la misurazione dell'immigrazione marocchina in Italia: Confronto tra paese di origine e paese di accoglienza By Roberta PACE; Brahim EL MOUAATAMID

  1. By: D. J. Bandaragoda (International Water Management Institute)
    Keywords: water resource management / institutional development / water policy / water resources development / case studies / water shortage / river basins / water conservation / irrigation management / water law / drinking water / cost recovery / water pollution / national planning / Asia / China/ Indonesia / Philippines / Sri Lanka / Thailand /
    Date: 2006
  2. By: Scott M. Fuess, Jr. (University of Nebraska-Lincoln and IZA Bonn)
    Abstract: In the U.S. the relationship between hours worked and employee earnings has been reversed. Whereas the highest earners used to work the shortest hours, now they work the longest hours. This study examines whether such a reversal has occurred elsewhere, namely, Japan. Since the early 1990s the Japanese government has sought to transform the country into a "lifestyle superpower" by trying to encourage more daily time for leisure and less time on the job. Analyzing data for 1976-2003, it is clear that scheduled and actual working hours did indeed fall after 1990. During the early years of the sample, 1976-89, the highest earners also worked the shortest hours, that is, high income workers were timeprivileged. As working hours fell in the 1990s, the time privileges of the highest earners changed too. Specifically, the highest earners gained time advantages relative to the lowest earners but lost some advantages relative to the median.
    Keywords: time allocation and labor supply, wage level and structure, country studies: Japan
    JEL: J22 J31 J40
    Date: 2006–07
  3. By: Kyoji Fukao; Keikok Ito; Hyeg Ug Kwon; Miho Takizawa
    Abstract: Using Japanese firm-level data for the period from 1994-2002, this paper examines whether a firm is chosen as an acquisition target based on its productivity level, profitability and other characteristics and whether the performance of Japanese firms that were acquired by foreign firms improves after the acquisition. In our previous study for the Japanese manufacturing sector, we found that M&As by foreigners brought a larger and quicker improvement in total factor productivity (TFP) and profit rates than M&As by domestic firms. However, it may argued that firms acquired by foreign firms showed better performance simply because foreign investors acquired more promising Japanese firms than Japanese investors did. In order to address this potential problem of selection bias problem, in this study we combine a difference-in-differences approach with propensity score matching. The basic idea of matching is that we look for firms that were not acquired by foreign firms but had similar characteristics to firms that were acquired by foreigners. Using these firms as control subjects and comparing the acquired firms and the control subjects, we examine whether firms acquired by foreigners show a greater improvement in performance than firms not acquired by foreigners. Both results from unmatched samples and matched samples show that foreign acquisitions improved target firms' productivity and profitability significantly more and quicker than acquisitions by domestic firms. Moreover, we find that there is no positive impact on target firms' profitability in the case of both within-group in-in acquisitions and in-in acquisitions by domestic outsiders. In fact, in the manufacturing sector, the return on assets even deteriorated one year and two years after within-group in-in acquisition, while the TFP growth rate was higher after within-group in-in acquisitions than after in-in acquisitions by outsiders. Our results imply that in the case of within-group in-in acquisitions, parent firms may be trying to quickly restructure acquired firms even at the cost of deteriorating profitability.
    Keywords: FDI, TFP, Acquisition, Selection bias, Propensity score matching, Average treatment effect
    JEL: C14 D24 F21 F23
    Date: 2006–07
  4. By: Copeland, Laurence (Cardiff Business School); Heravi, Saeed (Cardiff Business School)
    Abstract: We show that the behaviour of the real exchange rates of the UK, Germany, France and Japan has been characterised by structural breaks which changed the adjustment mechanism. In the context of a Time-Varying Smooth Transition AutoRegressive of the kind introduced by Lundbergh et al (2003), we show that the real exchange rate process shifted in the aftermath of Black Wednesday in the case of the Pound, in 1984-5 in the case of the Franc and, more tentatively, during the Asian crisis of 1997-8 in the case of the Yen.
    Date: 2006–07
  5. By: Ono, Hiroshi (European Institute of Japanese Studies); Lee, Kristen Schultz (Penn State University)
    Abstract: This paper examines the relationship between specialization and happiness in marriage in the U.S. and Japan. Our findings, based on the General Social Surveys in the U.S. and Japan, indicate both similarities and differences in the determinants of marital happiness in the two countries. In the U.S., the findings are mixed. Women in the U.S. are more likely to embrace the bargaining model where their happiness is determined by their own income. Men in the U.S. are more likely to support the specialization model; they are happier if their wives are not working or, alternatively, if they are financially dependent on their wives. In Japan, we find support for the specialization model, particularly in the case of women; they are happier if they are specialized in the household and they have a higher household income. Our research highlights how marital quality is affected by the institutional context and the normative environment.
    Keywords: gender; family; marital happiness; specialization; bargaining
    JEL: D13 J12 J16
    Date: 2006–05–01
  6. By: Takahito Kanamori; Kazuyuki Motohashi
    Abstract: The effects of IT on the decision making structure of firms has been a topic of debate for decades. On the one hand, IT increases the information available to top management, and the coordination advantages that it provides may lead firms to centralize decision making. On the other hand, IT makes it possible to disseminate global information of the firm to line workers enabling them to make better decisions as well as enhances management's monitoring capability, favoring decentralization. In order to understand the economy wide effects of centralization and decentralization of decision rights on the productivity effect of IT, we conduct an empirical analysis to examine the change in the effects of IT performance in firms that changed its decision making structure, using a panel data set for 2,300 Japanese firms over 4 years. Our results indicate that both centralization and decentralization have a substantial productivity effect on IT for firms that changed its decision making structure and the productivity effects are more marked for firms that conducted radical change of decision rights. Moreover, we find evidence that changes in decision rights have a more pronounced productivity effect on large firms. Finally, our results show that productivity effects due to changes in decision rights are realized only in the non-manufacturing sectors. This paper sheds some light on the effects of decision rights on firms' IT performance and underscores the importance of organizational redesign accompanying IT investment.
    Date: 2006–07
  7. By: Antonio GOLINI ([n.a.]); Cristiano MARINI ([n.a.])
    Abstract: A first aim of this paper is to examine the demographic machinery of the first and second demographic transition and to try to evaluate when and how long a "demographic window" - recognized trough the "dependency ratio" - is opened in a population. A second aim is an attempt to evaluate the possible impact of spatial differences in timing and length of demographic windows on relations, both economic and migratory ones, among countries. In brief, we want to give "a domestic and an international view on population from a demographic window". In order to evaluate the whole process and possible costs and benefits of the first and second demographic transition, we preferred to make reference to actual populations rather than to theoretical ones, in particular to four countries placed along the road from the beginning of the first demographic transition to the heart of the second one: Nigeria, Egypt, China, and Italy.
    Date: 2006–07
  8. By: Ethan Kapstein; Nathan Converse
    Abstract: Since the “third wave” of democratization began in 1974, nearly 100 states have adopted democratic forms of government, including, of course, most of the former Soviet bloc nations. Policy-makers in the west have expressed the hope that this democratic wave will extend even further, to the Middle East and onward to China. But the durability of this new democratic age remains an open question. By some accounts, at least half of the world’s young democracies—often referred to in the academic literature as being “unconsolidated” or “fragile”—are still struggling to develop their political institutions, and several have reverted back to authoritarian rule. Among the countries in the early stages of democratic institution building are states vital to U.S. national security interests, including Afghanistan and Iraq. The ability of fledgling democracies to maintain popular support depends in part on the ability of their governments to deliver economic policies that meet with widespread approval. But what sorts of economic policies are these, and are they necessarily the same as the policies required for tackling difficult issues of economic stabilization and reform? Conversely, what sorts of economic policies are most likely to spark a backlash against young and fragile democratic regimes? Do the leaders of young democracies face trade-offs as they ponder their electoral and economic strategies? These are among the questions we explore in this paper, which provides an overview of the monograph we are currently writing on the economics of young democracies. We do so first by exploring the hypothesized relationships between democratic politics and economic policy, as well as the findings of several important empirical studies with respect to the economic performance of young democracies around the world. We then provide some descriptive statistics on how the new democracies have fared in practice, making use of a new dataset that we have compiled (and which, among other things, is more up-to-date than most others cited herein). Do the data reveal any distinctive economic patterns with respect to democratic consolidation and reversal? We will show that they do. In particular, we find that deteriorating or stagnant economic performance constitutes a red flag or warning signal that the country is at risk of democratic reversal. Moreover, we find considerable variation in economic performance, suggesting that the design of political institutions in new democracies may have a significant influence on the probability of their survival.
    Keywords: Democratic transition
    JEL: O10 N40
    Date: 2006–03
  9. By: Morris Sebastian; Basant Rakesh
    Abstract: Sustained very high rate of growth (above 8% in the context today in India) would be able to achieve (since a labour productivity growth of 4 to 4.5 % is to be factored in) a labour absorption rate of 3.5 to 4% which is about a percent above the growth in the rate of the workforce. But slower growth of around 6% which is what India seems to be achieving in the 90s on an average would keep disguised unemployment alive for long. Similarly, the transformation of firms and especially SMEs which have little autonomous capacity is itself a function of growth oriented policies. In the nineties labour has been sufficiently flexible to allow rapid growth whenever demand was high. In any case the unorganised workers, did not have the ability to resist hire and fire. Demand has been lower than possible otherwise since the rupee especially in comparison to the East Asian currencies has not been aggressively priced. Lacking a very rapid growth in the market sufficient to overcome disguised unemployment, the transformation of these industries has itself been affected. Similarly the continuation of tariff inversion, high and uncompensated energy taxes hurt manufacturing and especially the small and medium sector whose dependence on relative factor cost is higher. The slow movement towards de-reservation has further attenuated the process. The dynamic inefficiencies and distortions are far more significant than the static efficiency penalty that the economy pays in the continuation of reservation. Without these corrections the move to have “free-trade” agreements with the ASEAN countries would hurt manufacturing in India and especially the SMEs. Many of the traditional small firms are in clusters, and a cluster oriented approach would be important for their success. A strategy based on leveraging trade names /brand names, many of which could be argued to be "geographic indicators", with much equity world wide, would require immediate changes in our intellectual property rights regime. Costs of excise registration and dealing with excise authorities are too large, and there is a 'fixed' component to this cost which cannot be spread over a large value of turnover. Only significantly lower excise rates for small firms could compensate them sufficiently. The criteria of "with and without the use of power" in the Factories Act, be entirely dispensed with. All units with more than 50 employees including the entrepreneur and family labour, be brought /retained under (all) the provisions of the Factories Act. And all other units be entirely exempt from its provisions. Credit is the single most important constraint for small firms. Incentivisation of priority sector targets is the solution. The policy of directed lending to small firms (the targets for priority sector lending) ought to shift from targets or quotas to incentives to banks for lending to small firms. Responsible risk taking in lending would have to re-emerge. Tax based incentives for banks and financial intermediaries are possible. Statutory Reserves based incentives for banks too are possible. Concessions on interest rates are dysfunctional, though the margin above PLR rates ought to be subject to a ceiling. State Finance Corporations which could play a crucial role in financing of SMEs would have to go through quick restructuring and refocus on promotion of new enterprises typically where vast positive external effects are anticipated, such as in technology based small firms, promising industries, nodal industries, industrial estate corporations, in exchanging specific infrastructural support to existing clusters of small firms, etc. Investments in infrastructure especially general roads, power, railways, and water supply would help to improve the performance of small firms significantly. For all small firms power and water continue to remain constraints shamefully after nearly 10 years of reform. These can easily come down at least for export industries if the taxes and cross subsidies on them are made vattable. Despite the Electricity Act 2003, it is shameful that open-access has not been extended to SMEs. Technology based and skill labour using industries such as IT, BT, pharmaceuticals and auto oriented industries, also need to be exploited. In automobiles taxes are still very large and the inverted tariffs / high cost of materials and energy that are uncompensated hurt the prospects of India emerging as a base for manufactures. In IT, Biotechnology, pharmaceutical industries and other related offshoring activities the challenges lie in bringing about better IPR regimes that reduces the risk faced by foreign firms in their operations in India. IPR regimes requiring much insight would have to be worked work out that is able to balance the interest of Indian firms and yet lead to much industrial relocation. The addition of a petty patent register could considerably enhance the extraction of value from the many innovations that take place in the SME sector. Municipal infrastructure is inadequate and its correction in at least a few cities is of crucial importance to the growth of the off-shoring activities and growth in these industries. Financial institutions could usefully develop strong venture capital arms to finance innovative small firms that have a good potential to emerge in the near future in many industries. Problems with government procurement which are ‘designed to fail’ keeps alive a very large market for shoddy goods among SMEs. Merging of the umpteen laws and regulations into one wherever feasible can reduce the currently large costs of SMEs in dealing with government.
    Keywords: Small-Firms; Industry-structure; India; SME; International-Trade; Globalisation; Country-studies; economic-development
    JEL: O1
    Date: 2006–07–11
  10. By: Knack, Stephen
    Abstract: This paper assesses corruption levels and trends among countries in the transition countries of Eastern Europe and Central Asia (ECA) based on data from several sources that are both widely used and cover most or all countries in the region. Data from firm surveys tend to show improvement in most types of administrative corruption, but little change in " state capture " in the region. Broader, subjective corruption indicators tend to show somewhat greater improvement in ECA than in non-ECA countries on average. A " primer on corruption indicators " discusses definitional and methodological differences among data sources that may account in large part for the apparently conflicting messages they often provide. This discussion concludes that depending on one ' s purpose, it may be more appropriate to use data from a single source rather than a composite index because of the loss of conceptual precision in aggregation. A second conclusion is that the gains in statistical precision from aggregating sources of corruption data likely are far more modest than often claimed because of interdependence among data sources. The range of detailed corruption measures available in firm surveys are exploited to show that broad, perceptions-based corruption assessments appear to measure primarily administrative corruption, despite their stated criteria placing great weight on " state capture. " Finally, the paper emphasizes the need for scaling up data initiatives to fill significant gaps between our conceptual definitions of corruption and the operational definition embodied in the existing measures.
    Keywords: Governance Indicators,Poverty Monitoring & Analysis,Scientific Research & Science Parks,Science Education,Corruption & Anitcorruption Law
    Date: 2006–07–01
  11. By: David Roodman
    Abstract: A challenge in the development of aggregate indexes of trade protection is finding weights to put on various tariffs that a) reflect their importance to exporters and b) are not endogenous to the protection being measured. One common basis for weights is actual imports; but these, as is well-known, are endogenous. Various authors have worked to correct this endogeneity, but doing so is difficult in product areas where protection is both high and widespread. For this reason, I develop a new set of estimates of overall protection in rich countries with respect to developing ones that eschews import weights as much as possible in favor of weights based on the value of exporter’s total production in each product area. The results are generally much higher than those from the Bouët et al. (2004) “MAcMap” data set; there, weights are based on imports of large reference groups of countries. I conclude that product areas in which protection is high and widespread are systematically de-emphasized when using pure MAcMap weights to aggregate across major product groups. In particular, when gauging rich-country protection with respect to developing countries, agriculture is de-emphasized. I also develop estimates of trade-distorting subsidies by country and commodity and translate these into tariffequivalents with the methodology of Cline (2004) in order to estimate overall protection levels. Agricultural tariffs dominate subsidies in trade-distorting effect, and agricultural protection in turn dominates goods protection generally. Japan is most protective, largely because of rice tariffs near 900%, followed by Norway and Switzerland. Because of their greater reliance on agriculture, the poorest countries face higher trade barriers than wealthier developing countries, despite tariff preferences.
    Keywords: Doha Round, measuring trade openness, agricultural subsidies
    JEL: F13 O19 H25
    Date: 2005–08
  12. By: Roberta PACE (Universit… di Bari, Facolt… di Scienze politiche, DSSM); Brahim EL MOUAATAMID (Centre d'Etudes et de Recerches Demographiques (CERED), Rabat - Maroc)
    Abstract: Although in the last few years literature on international Moroccan migration had become quite relevant, investigations on the topic are limited and lack of scientific analysis based on wide empirical investigation.;The analysis of migration has often been hamper by several deficiencies in the statistic system caused by structural factors and by administrative and material constraints that had been promoted to justify limits of potential sources. Nevertheless, there have always been not fully utilized alternatives and it’s time to revaluate them.;Furthermore it should be noticed that there are several incoherencies concerning concepts adopted by different receiving countries. Data sources differ a lot from country to country and, sometimes, figures appear incompatible even within the same country ;In Italy the estimation of phenomena is greatly linked to different methods applied for data collection and exploitation. However the existence of several sources and their comparison at a national level, endorse the evaluation of the evolution of Moroccan immigrations to Italy and moreover to face
    Date: 2006–07

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