nep-sea New Economics Papers
on South East Asia
Issue of 2008‒02‒09
eleven papers chosen by
Kavita Iyengar
Asian Development Bank

  1. China's Impact on the Exports of Other Asian Countries: A Note By Kumakura, Masanaga; Kuroko, Masato
  2. Understanding Asian equity flows, market returns and exchange rates By Chayawadee Chai-Anant; Corinna Ho
  3. Asset prices and monetary policy: booms and fat tails in East Asia By Maria Socorro Gochoco-Bautista
  4. Venturing Beyond the Marathon: The Entrepreneurship of Ultrarunning and the IAU World Cup in Korea By Siri Terjesen
  5. The Impact of the Indonesian Health Card Program: A Matching Estimator Approach By Meliyanni Johar
  6. Does exporting lead to productivity spillovers in horizontal or vertical industries? Evidence from Indonesia By Prasanna Guru Sethupathy
  7. Geography vs. institutions at the village level By M. Grimm; S. Klasen
  8. Market linkages, variance spillovers and correlation stability: empirical evidences of financial contagion By Monica Billio; Massimiliano Caporin
  9. A Wave of Protectionism? An Analysis of Economic and Political Considerations By Philipp Maier
  10. Global monitoring with the BIS international banking statistics By Patrick McGuire; Ilhyock Nikola Tarashev
  11. The quality of medical advice in low-income countries By Leonard, Kenneth; Hammer, Jeffrey; Das, Jishnu

  1. By: Kumakura, Masanaga; Kuroko, Masato
    Abstract: Despite widespread interest in China's growing trade surplus and its impact on other countries, empirical research in these issues is handicapped by the lack of reliable statistics on aggregate import and export prices. Although researchers estimate the trade volumes of China and other East Asian countries using a variety of surrogate price indices, an inappropriate deflator can give rise to a significant bias in econometric analysis. This paper discusses the potential seriousness of this problem by examining recent studies on the export competition between China and other Asian countries.
    Keywords: China, East Asia, Trade Price Index, Electronics, Exports, Trade problem
    JEL: F14 F31
    Date: 2007–12
  2. By: Chayawadee Chai-Anant; Corinna Ho
    Abstract: This paper examines from various angles foreign investors' daily transactions in six emerging Asian equity markets and their relationship with local market returns and exchange rate changes over the period 1999-2006. Confirming much of the literature, we find that equity market returns matter for net equity purchases, and vice versa. In addition, we find that while currency returns tend to show little influence over foreign investors' demand for Asian equities, net equity purchases do have some explanatory power over near-term exchange rate changes. Moreover, we find that foreign investors do quite often move in or out of multiple Asian markets simultaneously - but more so on the way in than on the way out. Nonetheless, during specific events of heightened market volatility, we observe some interesting deviations from the full-sample average relationships.
    Keywords: Asian equity markets, foreign investor, market returns, currency returns, exchange rate
    Date: 2008–02
  3. By: Maria Socorro Gochoco-Bautista
    Abstract: Do housing and equity booms significantly raise the probability of extremely bad outcomes at the margin? This study addresses this question for a group of 8 East Asian countries. The main findings are the following: (i) Asset price booms in housing and equity markets, either separately or jointly but especially in housing, significantly raise the probability at the margin that (a) the real output gap will be in the left tail of its distribution, in which output is significantly below trend, and (b) the price-level gap will be in the right tail of its distribution, in which the price level is significantly above trend. At the margin, the risk of the occurrence of these particular tail events due to asset price booms is largely asymmetric and does not apply to the tails of good outcomes; and (ii) Expected real output and price level outcomes that are either obtained without conditioning on asset price booms or are obtained conditional on asset price booms using the normal approximation underestimate the risk of tail events and lead to less pessimistic but misleading inferences. One implication for monetary policy is that an approach that is ex-ante more compatible with risk management may be appropriate.
    Keywords: asset price booms, tails, GDP-at-risk, CPI-at-risk, risk management
    Date: 2008–01
  4. By: Siri Terjesen (Queensland University of Technology and Max Planck Institute of Economics, Jena)
    Abstract: This article describes the entrepreneurial development and professionalism of ultradistance running (ultrarunning) in South Korea, culminating with the hosting of the IAU World Cup 100K in 2006. This case study-based research provides evidence of various macro-environmental and individual drivers of a grassroots entrepreneurial process, contextualised in Korea's sporting culture. Macro-environmental factors include the economic crisis and Korean cultural values of comradery, emotional expressiveness and entrepreneurial spirit. At the individual level, self-leadership, focus, persistence, team dynamics and access to resources explain the growth of ultrarunning and the commitment to hosting the IAU World Cup. Implications for sports entrepreneurship and grassroots-initiated mega-sporting events in Asia are discussed.
    Keywords: Athletics, Entrepreneurship, Korea, Mega-Sporting Event, Self-Leadership, Ultramarathon, Ultrarunning
    JEL: L26 M13 N85 N95
    Date: 2008–01–30
  5. By: Meliyanni Johar (School of Economics, The University of New South Wales)
    Abstract: This study evaluates the effectiveness of a pro-poor nation-wide health card program in Indonesia which provides free basic health care at public health facilities. To quantify the effect of the program, it departs from the traditional regression-based approach in the literature to employ propensity score matching to reduce the selection bias due to non-random health card distribution. The setting of the program and the richness of the data set support this strategy in providing accurate estimates of the program’s effect on its recipients. The result finds that in general the health card program only has limited impact on the consumption of primary health care by its recipients. This finding suggests the presence of other factors that are counteracting the generous demand incentive.
    Keywords: Impact evaluation; health sector reform; Indonesia
    JEL: I1
    Date: 2007–10
  6. By: Prasanna Guru Sethupathy (Columbia University)
    Abstract: This paper investigates the presence of productivity spillovers due to exporting. In particular, it examines whether productivity gains from exporting spill over upstream (to suppliers), downstream (to customers) or horizontally (to competitors). Using plant-level data on Indonesian manufacturing sectors, we find productivity gains to downstream firms of approximately 2.5-3.5% during the period 1990-1996. We do not find the presence of spillovers upstream or horizontally.
    Date: 2007
  7. By: M. Grimm; S. Klasen
    Abstract: There is a well-known debate about the respective roles of geography versus institutions in explaining the long-term development of countries. These debates have usually been based on cross-country regressions where questions about parameter heterogeneity, unobserved heterogeneity, and endogeneity cannot easily be controlled for. The innovation of Acemoglu, Johnson and Robinson (2001) was to address this last point by using settler mortality as an instrument for endogenous institutions and found that this supported their line of reasoning. We believe there is value-added to consider this debate at the micro level within a country as particularly questions of parameter heterogeneity and unobserved heterogeneity are likely to be smaller than between countries. Hence, we examine the determinants of economic development across villages on the Indonesian Island of Sulawesi and find technology adoption to play a crucial role. We show that geography-induced migration together with population size foster through their effect on institutions technology adoption.
    Keywords: geography, land rights, migration, technology adoption, agricultural development, Indonesia
    JEL: K11 O12 Q12
    Date: 2007
  8. By: Monica Billio (Department of Economics, University Of Venice Cà Foscari); Massimiliano Caporin (Dipartimento di Scienze Economiche “Marco Fanno”, University of Padova)
    Abstract: We propose a simultaneous equation system with GARCH errors to model the contemporaneous relations among Asian and American stock markets. On the estimated residuals, we evaluate the correlation matrix over rolling windows and introduce a correlation matrix distance, which allows both a graphical analysis and the development of a statistical test of correlation movements. Furthermore, we introduce a methodology that can be used for identifying turmoil periods on a data-driven basis. We employ the previous results in the analysis of the contagion issue between Asian and American stock markets. Our results shows some evidence of contagion and the proposed statistics identifies, on a data-driven basis, turmoil periods consistent with the ones currently assumed in the literature.
    Keywords: Financial market contagion, Market linkages, Variance spillovers, Dynamic correlations, Rolling correlations, Transformed correlations
    JEL: C51 F3 C22 C32
    Date: 2007
  9. By: Philipp Maier
    Abstract: In light of the U.S. current account deficit, pressure is high on Asian countries to revalue their currencies. The calls from some U.S. policymakers for tariffs on imports from China has sparked fears that this could trigger a world-wide surge in protectionism. This study evaluates the risk of protectionism, considering two dimensions: first, the economic effects of tariffs; second, the incentives for policymakers to adopt tariffs. Following the political economy literature, we distinguish 'benevolent' policymakers - who care about long-term GDP - and 'myopic' policymakers, for whom short-term considerations are important. An analysis of the economic effects using the Bank of Canada's <em>Global Economy Model</em> shows that the gains from import tariffs are small: in the short-term, tariffs raise the price of imports and shift consumption toward domestically-produced goods; but they also lead to a real appreciation. This improves the terms of trade, but falling export volumes lead to a reduction in GDP in the long-run. As regards the political dimension, we conclude that a 'benevolent' policymaker would not adopt tariffs, because of negative long-term economic consequences, but 'myopic' policymakers might be tempted to exploit short-term political gains. Given the potentially high costs of protectionist trade policies, protectionism is therefore rightly viewed as an important risk.
    Keywords: International topics; Recent economic and financial developments; Regional economic developments
    JEL: E66 F32 F47
    Date: 2008
  10. By: Patrick McGuire; Ilhyock Nikola Tarashev
    Abstract: This paper illustrates various applications of the BIS international banking statistics. We first compare international bank flows to measures of real activity and liquidity and show that the international banking system is becoming a more important conduit for the transfer of capital across countries. We then use network analysis tools to construct a bird's eye view of the structure of the international banking market and to identify key financial hubs. Linking this information with balance of payments statistics helps to better understand the role of banks in the financing of current account flows, for example the recycling of petrodollars and Asian surpluses. Finally, the paper illustrates how the BIS statistics can be used to analyse internationally active banks' foreign exposures to credit risk and, thus, spot vulnerabilities in the international banking market.
    Date: 2008–02
  11. By: Leonard, Kenneth; Hammer, Jeffrey; Das, Jishnu
    Abstract: This paper provides an overview of recent work on quality measurement of medical care and its correlates in four low and middle-income countries-India, Indonesia, Tanzania, and Paraguay. The authors describe two methods-testing doctors and watching doctors-that are relatively easy to implement and yield important insights about the nature of medical care in these countries. The paper discusses the properties of these measures, their correlates, and how they may be used to evaluate policy changes. Finally, the authors outline an agenda for further research and measurement.
    Keywords: Health Monitoring & Evaluation,Health Systems Development & Reform,Gender and Health,Health Economics & Finance,Disease Control & Prevention
    Date: 2008–01–01

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