nep-sea New Economics Papers
on South East Asia
Issue of 2009‒02‒28
seven papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Economic Implications of Deeper Asian Integration By Francois, Joseph; Wignaraja, Ganeshan
  2. International Comparison of Japan’s Official Development Assistance (ODA) policy By Furuoka, Fumitaka
  3. United Kingdom and United States Tourism Demand for Malaysia:A Cointegration Analysis By Habibi, Fateh; Abdul Rahim, Khalid; Chin, Lee
  4. Examining the Regional Aspect of Foreign Direct Investment to Developing Countries By Eva Rytter Sunesen
  5. The Margins of US Trade (Long Version) By Bernard, Andrew; Jensen, J Bradford; Redding, Stephen J; Schott, Peter
  6. Quantifying the Impact of Chikungunya and Dengue on Tourism Revenues By Dileep V Mavalankar
  7. Anthropometry of Love: Height and Gender Asymmetries in Interethnic Marriages By Belot, Michèle; Fidrmuc, Jan

  1. By: Francois, Joseph; Wignaraja, Ganeshan
    Abstract: The Asian countries are once again focused on options for large, comprehensive regional integration schemes. In this paper we explore the implications of such broad-based regional trade initiatives in Asia, highlighting the bridging of the East and South Asian economies. We place emphasis on the alternative prospects for insider and outsider countries. We work with a global general equilibrium model of the world economy, benchmarked to a projected 2017 sets of trade and production patterns. We also work with gravity-model based estimates of trade costs linked to infrastructure, and of barriers to trade in services. Taking these estimates, along with tariffs, into our CGE model, we examine regionally narrow and broad agreements, all centered on extending the reach of ASEAN to include free trade agreements with combinations of the northeast Asian economies (PRC, Japan, Korea) and also the South Asian economies. We focus on a stylized FTA that includes goods, services, and some aspects of trade cost reduction through trade facilitation and related infrastructure improvements. What matters most for East Asia is that China, Japan, and Korea be brought into any scheme for deeper regional integration. This matter alone drives most of the income and trade effects in the East Asia region across all of our scenarios. The inclusion of the South Asian economies in a broader regional agreement sees gains for the East Asian and South Asian economies. Most of the East Asian gains follow directly from Indian participation. The other South Asian players thus stand to benefit if India looks East and they are a part of the program, and to lose if they are not. Interestingly, we find that with the widest of agreements, the insiders benefit substantively in terms of trade and income while the aggregate impact on outside countries is negligible. Broadly speaking, a pan-Asian regional agreement would appear to cover enough countries, with a great enough diversity in production and incomes, to actually allow for regional gains without substantive third-country losses. However, realizing such potential requires overcoming a proven regional tendency to circumscribe trade concessions with rules of origin, NTBs, and exclusion lists. The more likely outcome, a spider web of bilateral agreements, carries with it the prospect of signficant outsider costs (i.e. losses) both within and outside the region.
    Keywords: ASEAN; Asian FTAs; gravity model of services; preferential trade; regionalism; trade costs and infrastructure
    JEL: F13 F17
    Date: 2008–09
  2. By: Furuoka, Fumitaka
    Abstract: The introduction of the ODA Charter in 1992 can be seen as Japan’s official pledge to pay more attention to political conditions in recipient countries and to impose political conditionalities on them. However, in practice, the Japanese government has continued using foreign aid as a diplomatic tool to pursue own economic interests. In this paper, in order to determine the quality of Japanese foreign aid, Japan’s ODA will be compared with the foreign aid of other countries. In term of quantity, the amount of Japan’s ODA is impressive. In 1989, Japan topped the US as the biggest donor of foreign aid among all aid donor countries. Despite the impressive quantity of Japanese foreign aid, the ratio of Japan’s ODA to GNP in 1999 was 0.27 percent, which was lower than the average ODA ratio to GNP among DAC members (0.39 percent). Denmark was the country with the highest ratio (1.06 percent) followed by the Netherlands (0.82 percent). In term of geographical distribution, a prominent characteristic of Japan’s ODA is that Asia, especially East Asian countries, receives the biggest share of Japanese aid. Far East Asia received 54.5 percent of this amount, and South and Centra Asia received 19.2 percent. African countries in South of the Sahara were left far behind receiving only 9.5 percent of total Japanese bilateral aid, while the African countries in North of the Sahara received only 2.1 percent. Furthermore, Grant Share (GS) of Japan’s ODA was 39.6 percent, while the DAC’s average rate of GS that year was 77.8 percent. Among DAC members, the Scandinavian countries, Australia and New Zealand had a very high GS, almost 100 percent. Germany’s and France’s GS were nearly 80 percent. These figures show that Japan’s GS has been one of the lowest among DAC members. Also, Japan’s untied aid ratio became one of the highest of the DAC
    Keywords: Foreign aid: Japan: quality of aid
    JEL: F35
    Date: 2009–02–24
  3. By: Habibi, Fateh; Abdul Rahim, Khalid; Chin, Lee
    Abstract: Tourism industry has been an important contributor to the Malaysia economy. In this paper we inspect variations in the long run demand for tourism from United Kingdom and United States to Malaysia. The demand for tourism has been explained by macroeconomic variables, including income in origin countries, tourism prices in Malaysia, and travel cost between the two countries. Annual data from 1972 to 2006 are used for the analysis. Augmented Dickey-Fuller and Johansen’s maximum likelihood tests are used to test for unit root and cointegration. An error correction model (ECM) are estimated to a explain United Kingdom and United States demand for tourism to Malaysia. The results show that the long run equilibrium exists among variables, and the United Kingdom and United States tourists seem to be highly sensitive to the price variable.
    Keywords: Tourism demand; cointegration analysis; Error Correction Model
    JEL: C22 L83
    Date: 2008–11–20
  4. By: Eva Rytter Sunesen (Department of Economics, University of Copenhagen)
    Abstract: This paper applies a general-to-specific analysis to detect regularities in the driving forces of foreign direct investment (FDI) that can explain why some regions are more attractive to foreign investors than others. The results suggest that regional differences in FDI inflows to African, Asian and Latin American countries can be fully explained by structural characteristics rather than fixed regional effects. The implication of this finding is that countries that are lagging behind other developing countries in attracting foreign capital have the opportunity to implement policies aimed at improving the investment climate for foreign investors. This also means that there is no African bias. Among a large number of return and risk variables applied in the empirical literature, growth and inflation turn out to be the only robust and significant FDI determinants across regions although the size of their impact varies.
    Keywords: foreign direct investment; Africa, Asia; Latin America; general-to-specifc
    JEL: F21 O57
    Date: 2009–02
  5. By: Bernard, Andrew; Jensen, J Bradford; Redding, Stephen J; Schott, Peter
    Abstract: Recent research in international trade emphasizes the importance of firms' extensive margins for understanding overall patterns of trade as well as how firms respond to specific events such as trade liberalization. In this paper, we use detailed U.S. trade statistics to provide a broad overview of how the margins of trade contribute to variation in U.S. imports and exports across trading partners, types of trade (i.e., arm's-length versus related-party) and both short and long time horizons. Among other results, we highlight the differential behavior of related-party and arm's-length trade in response to the 1997 Asian financial crisis.
    Keywords: heterogeneous firms; product differentiation; product market entry and exit
    JEL: F1
    Date: 2009–02
  6. By: Dileep V Mavalankar
    Abstract: The objective of this paper is to predict the order of magnitude of possible reduction in tourism revenues if a major epidemic of chikungunya or dengue were to discourage visits by international tourists, and to prove that even a conservative estimate can be comparable to or even greater than the cost of illness and intervention programmes combined, and therefore should not be ignored in the estimation of the overall burden. [IIMA WP No. 2009-02-03].
    Keywords: chikumgunya, dengue, disease burden Gujarat, Malaysia, Thailand, revenues, epidemic, tourism, public funded, direct, indirect, costs, revenues, tourists, illness, india,
    Date: 2009
  7. By: Belot, Michèle; Fidrmuc, Jan
    Abstract: Both in the UK and in the US, we observe puzzling gender asymmetries in the propensity to outmarry: Black men are substantially more likely to have white spouses than Black women, but the opposite is true for Chinese: Chinese men are half less likely to be married to a White person than Chinese women. We argue that differences in height distributions, combined with a simple preference for a taller husband, can explain a large proportion of these ethnic-specific gender asymmetries. Blacks are taller than Asians, and we argue that this significantly affects their marriage prospects with whites. We provide empirical support for this hypothesis using data from the Health Survey for England and the Millenium Cohort Study, which contains valuable and unique information on heights of married couples.
    Keywords: Gender; Height; Intermarriage
    JEL: J12 J15
    Date: 2009–01

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