nep-sea New Economics Papers
on South East Asia
Issue of 2008‒08‒14
twelve papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Border Barriers in Agricultural Trade and the Impact of their Elimination: Evidence from East Asia By Hayakawa, Kazunobu; Chang, Kuo-I
  2. Detecting shift and pure contagion in East Asian equity markets: A Unified Approach. By Thomas J. flavin; Ekaterini Panopoulou
  3. Contract farming of swine in Southeast Asia as a response to changing market demand for quality and safety in pork: By Tiongco, Marites; Catelo, Maria Angeles; Lapar, Ma. Lucila
  4. Farm Development and Rural Poverty Comparison among Villages in Kulon Progo Regency of Yogyakarta Special Province of Indonesia By Nasution, Zamal
  5. Agricultural R&D capacity and investments in the Asia–Pacific region: By Beintema, Nienke M.; Stads, Gert-Jan
  6. Value Chain Dynamics and Growth of Local Firms:The Case of Motorcycle Industry in Vietnam By Fujita, Mai
  7. Carbon Emissions and Economic Growth: Homogeneous Causality in Heterogeneous Panels By David J. Maddison; Katrin Rehdanz
  8. Accelerating progress toward reducing child malnutrition in India: A concept for action By von Braun, Joachim; Ruel, Marie; Gulati, Ashok
  9. Ethanol Expansion in the Food versus Fuel Debate: How Will Developing Countries Fare? By Elobeid, Amani; Hart, Chad E.
  10. Optimal reserve composition in the presence of sudden stops - the euro and the dollar as safe haven currencies By Roland Beck; Ebrahim Rahbari
  11. Competitiveness of India's Manufacturing Sector: An Assessment of Related Issues By L, lakshmanan; S, Chinngaihlian; Raj, Rajesh
  12. On Sequential and Simultaneous Contributions under Incomplete Information By Parimal Bag; Santanu Roy

  1. By: Hayakawa, Kazunobu; Chang, Kuo-I
    Abstract: Abstract: By means of a GTAP based-CGE model, we investigate the impact of the elimination of import tariffs and non-tariff policy barriers (NTPBs) on agricultural trade towards East Asian FTAs. To do that, we first measure the NTPBs by employing a widely-used method derived from the literature on border effects. Next, by adding into the GTAP database our estimates on the NTPBs, which the original GTAP database by its nature does not succeed in incorporating, we compute the impact of the entire elimination of policy barriers (the complete reduction of import tariffs and of NTPBs) on GDP.
    Keywords: Border barrier, Agricultural trade, GTAP, East Asia
    JEL: F13 F14 Q17
    Date: 2008–06
  2. By: Thomas J. flavin (Economics, National University of Ireland, Maynooth); Ekaterini Panopoulou (Department of Statistics and Insurance Science, University of Piraeus, Greece)
    Abstract: We test for contagion between pairs of East Asian equity markets over the period 1990-2007.We develop an econometric methodology that allows us to test for both 'shift'and 'pure' contagion within a unified framework. Using both Hong Kong and Thailand as potential shock sources, we find strong evidence of both types of contagion. Therefore during episodes of high-volatility, equity returns are influenced by changes in the transmission of common shocks and additionally by the diffusion of idiosyncratic shocks through linkages which do not exist during normal times.
    Keywords: Shift contagion; Pure contagion; Financial market crises; Regime switching
    JEL: F42 G15 C32
    Date: 2008
  3. By: Tiongco, Marites; Catelo, Maria Angeles; Lapar, Ma. Lucila
    Abstract: "Contract farming is conventionally thought of as a form of industrial organization that helps to overcome high monitoring, supervision, and environmental mitigation costs incurred from ensuring a reliable and uniform-quality supply (from the standpoint of integrators) and high capital and small-scale input and service purchase costs (from the standpoint of individual farmers). But contract farming is also a private sector vertical coordination response to the changing demand for certifying the use of quality inputs to produce quality outputs and of safe production procedures. This paper draws on lessons learned from experiences in the Philippines, Thailand, and Vietnam to illustrate how contract farming accomplishes that goal." from Author's Abstract
    Keywords: Contract farming, Changing demand, Pork quality, Food safety, Water quality,
    Date: 2008
  4. By: Nasution, Zamal
    Abstract: Poverty has always been a concern in Indonesia. More than half of Indonesia's 235 million people are poor. The district of Kulon Progo is the second lowest district in Yogyakarta province both in economic growth and welfare level, so less developed among four others district. This research’s aim is to address factors influence the farm development in poverty alleviation and rural development in Kulon Progo Regency of Yogyakarta Special Province of Indonesia. Statistical data were retrieved from Indonesia’s Central Board of Statistic in range of 2003 through 2006. Primary data comprised of farm development by the government, rural poverty in each village, farmer experience in poverty allevation were derived by conducting direct audience with the government officials, head of villages, field farm officials, farmer group units, and field observation. Using purposive random sampling, this research divides Kulon Progo Regency into north zone, middle zone, and south zone; according to the lowest and highest poverty level of each village. Regression model is developed with classical normal linier regression model to reveal each variable share on rural poverty. Simultaneously, this linear regression model explains 70% of rural poverty caused by all variables. Numbers of farmer positively affects numbers of poor rural inhabitants, where the 1% increasing of numbers of farmer will raise 0.922% numbers of poor rural inhabitants. Irrigated land has a negative impact to rural poverty, where the increasing level of 1% irrigated land will eradicate 0.101% numbers of poor rural inhabitants. Numbers of household member is not significant to influence poor rural inhabitants. In contrary of common belief, the significant role of land ownership has a positive impact to influence rural poverty, where the 1% increasing size of land ownership will raise 0.177% poor rural inhabitants. Regression model results land ownership positively affects rural poverty. Taking interview with some key persons in the six villages compared to statistical data explains that poverty rate is affected by dry land productivity rather than wet land productivity. Based on geographic information system analysis, there are some run-off of water bodies in the north zone. These potential flows should be able to support farm development in the dry land.
    JEL: I31 Q01 A10 I32
    Date: 2008–06–26
  5. By: Beintema, Nienke M.; Stads, Gert-Jan
    Abstract: "Science and technology (S&T) are major contributors to food security, poverty reduction, and economic growth, as has been proven in Asia since the early-1970s through the Green Revolution in agriculture. Continuing to secure such gains, however, is becoming an increasingly complex undertaking. More than ever, quantitative data are vital for measuring, monitoring, and benchmarking the performance of agricultural S&T systems, including their inputs and outcomes. This brief reviews major institutional developments and investment and human resource trends in agricultural research and development (R&D) in 11 countries of the Asia–Pacific region. The brief draws on a set of country briefs, reports, and underlying datasets developed by the Agricultural Science and Technology Indicators (ASTI) initiative. ASTI worked with regional partners to collect detailed quantitative and qualitative information on research capacity and investment trends within agricultural R&D agencies. These data were then linked with investment and human resource data from the Chinese government and other secondary sources to provide a broader regional and global context." from text
    Keywords: Agricultural research, Agricultural development, Research and development, Capacity, Investments,
    Date: 2008
  6. By: Fujita, Mai
    Abstract: Vietnam’s burgeoning market for motorcycles has attracted global industry eaders,players from developing countries, and local firms. This has led to a dynamic evolution of value chains. This paper presents an explanation of the varieties of the growth patterns xperienced by the local suppliers, focusing on the roles of customer and local supplier strategies. Case studies showed that while the role of customers may be important, strategies of suppliers to improve the ompetitive edge in the production of otorcycle components and to diversify into other products account for important ariations of growth trajectories among local suppliers. Findings presented in this paper suggest the need to direct more attention to strategy that local firms use to boost their competitive edge in business.
    Keywords: Local suppliers, Value chains, Vietnam, Motorcycle industry, Southeast Asia
    JEL: L22 L62 O33
    Date: 2008–07
  7. By: David J. Maddison; Katrin Rehdanz (Institute for World Economics)
    Abstract: This paper introduces the concept of homogeneous non-causality in heterogeneous panels. This concept is used to examine a panel of data for evidence of a causal relationship between GDP and carbon emissions. The technique is compared to the standard test for homogeneous non-causality in homogeneous panels and heterogeneous non-causality in heterogeneous panels. In North America, Asia and Oceania the homogeneous non-causality hypothesis that CO2 emissions does not Granger cause GDP cannot be rejected if heterogeneity is allowed for in the data-generating process. In North America the homogeneous non-causality hypothesis that GDP does not cause CO2 emissions cannot be rejected either.
    Keywords: Energy; Carbon Emissions; Granger Causality; Heterogeneous Panels
    JEL: Q54
    Date: 2008–07
  8. By: von Braun, Joachim; Ruel, Marie; Gulati, Ashok
    Abstract: "1. The facts: Child malnutrition in India India is home to 40 percent of the world's malnourished children and 35 percent of the developing world's low-birth-weight infants; every year 2.5 million children die in India, accounting for one in five deaths in the world. More than half of these deaths could be prevented if children were well nourished. India's progress in reducing child malnutrition has been slow. The prevalence of child malnutrition in India deviates further from the expected level at the country's per capita income than in any other large developing country. 2. The challenge: Accelerating progress in reducing child malnutrition in India India has many nutrition and social safety net programs, some of which (such as Integrated Child Development Services [ICDS] and the Public Distribution System [PDS]) have had success in several states in addressing the needs of poor households. All of these programs have potential, but they do not form a comprehensive nutrition strategy, and they have not addressed the nutrition problem effectively so far. 3. Strategic choices for improved child nutrition India lacks a comprehensive nutrition strategy. Various choices for nutrition strategies can be considered. A review of some of the more successful country experiences suggests that all of them implemented complex, multisectoral actions with more or less emphasis on service-oriented nutrition policies (as in Indonesia), incentive-oriented nutrition policies linked to community or household participation and performance (as in Mexico), or mobilization-oriented nutrition policies (as in Thailand). These choices are not mutually exclusive. India now has the opportunity to “leapfrog” toward innovative nutritional improvement based on the experiences of other countries and on experiences within India itself. 4. Cooperation for policy actions To accelerate progress in reducing child malnutrition, India should focus on the following four cross-cutting strategic approaches: a. ensuring that economic growth and poverty reduction policies reach the poor; b. redesigning nutrition and health policies and programs by drawing on science and technology for nutritional improvement, strengthening their implementation, and increasing their coverage; c. increasing investments and actions in nutrition services for communities with the highest concentration of poor; and d. focusing programs on girls' and women's health and nutrition. IFPRI, in collaboration with Indian experts and international networks, could bring much-needed experience with programs and policies around the world to bear on this effort. An evidence-based, research-intensive approach with “learning while implementing”—which has shown success in other countries—is recommended. There is no time or reason to wait for taking action." from Text
    Keywords: Malnutrition in children, Policies, Integrated Child Development Services (ICDS), Public Distribution System (PDS), Nutrition, stakeholders, Global Hunger Index, Gross national income per capita, Hunger, Child mortality,
    Date: 2008
  9. By: Elobeid, Amani; Hart, Chad E.
    Abstract: This paper examines the impact of ethanol expansion in the United States, brought about by higher crude oil prices, on agricultural commodity prices. Given the United States's stature as a major producer and exporter of many agricultural commodities, the resulting increase in commodity prices has spillover effects into the global market. Using the price changes estimated within a multi-commodity, multi-country agricultural modeling system, this paper attempts to show how an increase in world commodity prices would affect the costs of food baskets around the world and how higher food costs will impact food security, particularly in developing countries. In general, we find that countries where corn is the major food grain experience larger increases in food basket cost while countries where rice is the major food grain have smaller food basket cost increases. Countries where wheat and/or sorghum are the major food grains fall in between. Consequently, the highest percentage increases are seen in Sub-Saharan Africa and Latin America where food basket costs are estimated to increase by at least 10%. The lowest percentage increases are seen in Southeast Asia, with cost increases of less than 2.5%.
    Keywords: ethanol, prices, commodity, food
    JEL: Q0 Q4
    Date: 2008–08–06
  10. By: Roland Beck (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Ebrahim Rahbari (London Business School, Economics Department, Regent’s Park, London, NW1 4SA, United Kingdom.)
    Abstract: We analytically derive optimal central bank portfolios in a minimum variance framework with two assets and "transaction demands" caused by sudden stops in capital inflows. In this model, the transaction demands become less important relative to traditional portfolio objectives as debt to reserve ratios decrease. We empirically estimate optimal dollar and euro shares for 24 emerging market countries and find that optimal reserve portfolios are dominated by anchor currencies and, at current debt to reserve ratios, introducing transactions demand has a relatively modest effect. We also find that euro and dollar bonds act as "safe haven currencies" during sudden stops. Dollars are better hedges for global sudden stops and for regional sudden stops in Asia and Latin America, while the euro is a better hedge for sudden stops in Emerging Europe. We reproduce qualitatively the recent decline in the share of the dollar in emerging market reserves and find that the denomination of foreign currency debt has very little importance for optimal reserve portfolios. JEL Classification: F31, F32, F33, G11.
    Keywords: Foreign exchange reserves, currency composition, sudden stops.
    Date: 2008–07
  11. By: L, lakshmanan; S, Chinngaihlian; Raj, Rajesh
    Abstract: This paper provides an analytical abstract of various parameters of manufacturing competitiveness of the Indian economy. India's manufacturing exports have risen impressively in the past decade or so and found to be directly linked to the world GDP and inversely related to real effective exchange rate (REER). Indian manufacturing industries have certain inherent strengths and advantages in having a relatively inexpensive, adequate and skilled labour force, cost-effective and competitive prices of goods produced, large manufacturing base and proximity to fast growing Asian markets. India is one of the leading producers and exporters in a number of commodities and enjoys significant advantages in terms of lower labour costs as compared to other economies. Nevertheless, India's competitiveness is lost on account of lower labour productivity and higher input and material costs. To improve the competitiveness of the Indian manufacturing goods, issues like further diversification of export basket, upgradation of export quality, improvement in productivity, increased technology intensity in production, enhanced R&D activity, encouraging business environment, less cumbersome regulatory environment, flexible labour laws, removal of infrastructural bottlenecks and SME related issues need attention of all concerned.
    Keywords: Manufacturing sector; Competitiveness
    JEL: F14 L52 O57 L60
    Date: 2007–01–07
  12. By: Parimal Bag (National University of Singapore, Singapore.); Santanu Roy (Southern Methodist University, Dallas, Texas.)
    Abstract: Under incomplete information about (independent) private valuations of a public good, we establish sufficient conditions under which, despite the incentive to free ride on future contributors, the expected total amount of voluntary contributions is higher when agents contribute sequentially (observing prior contributions) rather than simultaneously. We establish this in a conventional framework with quasi-linear utility where agents care only about the total provision of the public good (rather than individual contribution levels) and there is no non-convexity in provision of the public good. We allow for arbitrary number of agents and fairly general distribution of types.
    Keywords: Contribution games, public good, incomplete information.
    JEL: D73 H41 L44
    Date: 2008–08

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