|
on South East Asia |
| By: | Hui-Boon Tan (Nottingham University Business School - Malaysia Campus); Lee-Lee Chong (Faculty of Management, Malaysia Multimedia University) |
| Abstract: | This study highlights the importance of choice of exchange rate system to macroeconomic stability of small- open countries based on the outcomes of the recent exchange rate regime switches of three small Asian countries during the post Asian financial crisis period. The three selected countries are Indonesia, Malaysia and Thailand, which have high similarities in their economic structures, but have reacted very differently in mitigating the economic distortion of the 1997 financial crisis, in particular in the adoption of exchange rate system. By focussing on macroeconomic volatilities of these countries, our results show that the amplified volatilities due to the crisis were not stabilised by switching the system to a more flexible regime. For instance, Thailand and Indonesia had switched their system from a managed-float to an independent-float, and as a result, the volatilities were increased instead of reduced after the switch. The volatilities, however, were effectively stabilised after the countries made the second switch - from the independent-float back to the managed-float with pre-announcement. For Malaysia, a switch from the managed-float to the pegged system successfully reduced the volatilities. The exchange rate misalignments of the countries, except Indonesia, were also reduced when the countries switched from a flexible to a more fixed system. These empirical findings thus strongly support central banks of small-open economies to adopt a more fixed, such as the managed-float system, rather than a flexible, such as the independentfloat. However, the managed-float system needs to couple with efficient management to ensure a smooth and stable regime. |
| Keywords: | Exchange rate regimes; Macroeconomic volatility; Financial crisis; Exchange rate misalignment |
| JEL: | E42 E44 F31 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:nom:nubsmc:2008-03&r=sea |
| By: | Hui-Boon Tan (Nottingham University Business School - Malaysia Campus); Chen-Chen Yong (Faculty of Management, Multimedia University) |
| Abstract: | This study determines the effect of regional economic integration, namely the ASEAN Free Trade Area, on bilateral trade flows between the ASEAN-5 countries and their major trading partner, Japan. The analysis begins with the construction of a simple country-specific index based on the Common Effective Preferential Tariff (CEPT) scheme of AFTA to measure the progress of economic integration of each ASEAN-5 country. The index is then used to determine the effect of this economic integration on bilateral trade flows between the individual ASEAN-5 country and Japan. The empirical results of this study based on the Autoregressive Distributed Lag (ARDL) approach show that there is a significant trade creation between ASEAN-5 and Japan after the implementation of the regional free-trade area. The Philippines and Malaysia are the two most benefited countries, in terms of trade flows to Japan, from the regional economic integration of AFTA. The results also show that the other three countries, namely Indonesia, Singapore and Thailand, have gained in trade flows to Japan due to the Japanese foreign Investments in the countries. |
| Keywords: | AFTA; Economic integration; Trade flows; Foreign direct investment |
| JEL: | F10 C22 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:nom:nubsmc:2008-07&r=sea |
| By: | Ohara, Moriki; Sato, Yuri |
| Abstract: | This paper discusses the diversity of industrial development among Asian countries that emerges through an investigation of the motorcycle industry despite its uniform industrial attributes. The paper then explores factors that generate diversity, focusing attention on the differences in knowledge-based assets accumulated in each country. It finds that diversity is brought about through the differences in domestic industrial resources and the capabilities of local firms. The analysis underscores each country’s intrinsic logic in industrial development, contrary to the current trend of stressing assimilation through the global production networks of multinational corporations. |
| Keywords: | Motorcycle industry, Asian industrial development, Knowledge-based asets, Industrial resources, Capabilities, Asia |
| JEL: | L16 L62 O14 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper182&r=sea |
| By: | Habibullah, M.S.; Baharom, A.H.; Fong , Kin Hing |
| Abstract: | This study examines the impact of inflation and output growth on stock market returns and volatility in selected Asian countries, namely India, Japan, Korea, Malaysia and Philippines. By using monthly data from 1991 to 2004 and by employing GARCH (1, 1) model, it is found that macroeconomic volatility, which is measured by movement in inflation and output growth, have a weak predictive power for stock market returns and volatility in these countries. The movements of the inflation rate have significant impact to the stock market returns, either positive or negative depending on the inflation rates and their fluctuation in that country. While output growth movements have significant effect to stock market volatility, countries with relatively higher output volatility is associated with higher conditional volatility of stock returns, which is positive effect but is negative for countries which have relatively lower output volatility. |
| Keywords: | Stock returns; volatility; output; inflation; Asian countries |
| JEL: | G14 E44 |
| Date: | 2009–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14114&r=sea |
| By: | Chia-Lin Chang (Department of Applied Economics National Chung Hsing University,Taichung, Taiwan); Michael McAleer (Universidad Complutense de Madrid.Department of Quantitative Economics); Dan Slottje (FTI Consulting and Department of Economics Southern Methodist University) |
| Abstract: | International tourism is a major source of export receipts for many countries worldwide. Although it is not yet one of the most important industries in Taiwan (or the Republic of China), an island in East Asia off the coast of mainland China (or the People’s Republic of China), the leading tourism source countries for Taiwan are Japan, followed by USA, Republic of Korea, Malaysia, Singapore, UK, Germany and Australia. These countries reflect short, medium and long haul tourist destinations. Although the People’s Republic of China and Hong Kong are large sources of tourism to Taiwan, the political situation is such that tourists from these two sources to Taiwan are reported as domestic tourists. Daily data from 1 January 1990 to 30 June 2007 are obtained from the National Immigration Agency of Taiwan. The Heterogeneous Autoregressive (HAR) model is used to capture long memory properties in the data. In comparison with the HAR(1) model, the estimated asymmetry coefficients for GJR(1,1) are not statistically significant for the HAR(1,7) and HAR(1,7,28) models, so that their respective GARCH(1,1) counterparts are to be preferred. These empirical results show that the conditional volatility estimates are sensitive to the long memory nature of the conditional mean specifications. Although asymmetry is observed for the HAR(1) model, there is no evidence of leverage. The QMLE for the GARCH(1,1), GJR(1,1) and EGARCH(1,1) models for international tourist arrivals to Taiwan are statistically adequate and have sensible interpretations. However, asymmetry (though not leverage) was found only for the HAR(1)model, and not for the HAR(1,7) and HAR(1,7,28) models. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ucm:doicae:0906&r=sea |
| By: | Chia-Lin Chang (Department of Applied Economics, National Chung Hsing University, Taiwan); Michael McAleer (School of Economics and Commerce, University of Western Australia); Dan Slottje (FTI Consulting and Department of Economics, Southern Methodist University) |
| Abstract: | International tourism is a major source of export receipts for many countries worldwide. Although it is not yet one of the most important industries in Taiwan (or the Republic of China), an island in East Asia off the coast of mainland China (or the People's Republic of China), the leading tourism source countries for Taiwan are Japan, followed by USA, Republic of Korea, Malaysia, Singapore, UK, Germany and Australia. These countries reflect short, medium and long haul tourist destinations. Although the People's Republic of China and Hong Kong are large sources of tourism to Taiwan, the political situation is such that tourists from these two sources to Taiwan are reported as domestic tourists. Daily data from 1 January 1990 to 30 June 2007 are obtained from the National Immigration Agency of Taiwan. The Heterogeneous Autoregressive (HAR) model is used to capture long memory properties in the data. In comparison with the HAR(1) model, the estimated asymmetry coefficients for GJR(1,1) are not statistically significant for the HAR(1,7) and HAR(1,7,28) models, so that their respective GARCH(1,1) counterparts are to be preferred. These empirical results show that the conditional volatility estimates are sensitive to the long memory nature of the conditional mean specifications. Although asymmetry is observed for the HAR(1) model, there is no evidence of leverage. The QMLE for the GARCH(1,1), GJR(1,1) and EGARCH(1,1) models for international tourist arrivals to Taiwan are statistically adequate and have sensible interpretations. However, asymmetry (though not leverage) was found only for the HAR(1) model, and not for the HAR(1,7) and HAR(1,7,28) models. |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0097&r=sea |
| By: | Rasyad A. Parinduri (Nottingham University Business School - Malaysia Campus); Shandre M. Thangavelu (Department of Economics, National University of Singapore) |
| Abstract: | We examine the effect of remittances on the migrant households consumption and saving patterns as well as their living standard using the Indonesia Family Life Survey data. Using matching - and difference-in-differences matching estimators, we find that remittances seem to change the household consumption patterns. However, we do not find strong evidence that indicates remittances improve these households' living standard. Moreover, it seems that remittance households do not enjoy better education or healthcare, which suggests that remittances may not play an important role in speeding up economic development through these two means. If anything, we show that remittance households manage to invest some of their income in the traditional forms of investment such as in house and jewelry (i.e., gold). |
| Keywords: | Remittances; Matching estimator |
| JEL: | D64 D82 F22 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:nom:nubsmc:2008-02&r=sea |
| By: | Vadlamannati, Krishna Chaitanya |
| Abstract: | Both theoretical and empirical literature has identified several channels through which FDI influence economic growth in Latin America. This study however examines the impact on economic output growth using aggregate production function augmented with FDI inflows, policy reforms and the interaction between the two for 22 Latin American countries over 1980-2006 period. The results demonstrate the importance of FDI inflows and policy reforms on economic output growth. Though the interaction between the two highlights complimentary affect, the results are not significant. On the other hand, both FDI and reforms influence economic growth only post 1990s, the period in which many Latin American countries initiated drastic economic policy reforms. Despite these positive outcomes, the coefficient of FDI on economic growth is found to be smaller. This is because, though absolute FDI inflows have increased in the region over the years, the rate of growth of FDI in comparison to other developing regions like Asia is very low. The share of Latin American FDI to total developing countries declined from 1970 to 2006. This suggests that even though there is a positive impact of FDI and policy reforms on economic growth, this effect is only marginal and Latin America as an investment destination is less attractive than other developing regions like Asia today. |
| Keywords: | FDI; Economic growth; Policy reforms; Latin America |
| JEL: | N16 F21 O4 |
| Date: | 2009–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14133&r=sea |
| By: | Chi Man Ng (The Open University of Hong Kong) |
| Abstract: | This article considers how technological growth affects country interconnectivity, particularly in the form of labor migration. It shows that technological growth brings a positive effect on migration stock as well as net migration. In addition, the technological growth effect is endorsed by negative relationship between refugee population and information technological advancement. Policy recommendation will be presented regarding the brain drain and refugee population problem.This paper was presented at the 18th International Conference of the International Trade and Finance Association, meeting at Universidade Nova de Lisboa, Lisbon, Portugal, on May 23, 2008. |
| Date: | 2008–05–14 |
| URL: | http://d.repec.org/n?u=RePEc:bep:itfapp:1106&r=sea |
| By: | Kozo Koyota (Research Seminar in International Economics, University of Michigan); Margit Molnar (Organisation for Economic Co-operation and Development (OECD)); Robert M. Stern (University of Michigan) |
| Abstract: | In this study we analyze the welfare and sectoral effects of a variety of options for the formation of free trade agreements by several major emerging market economies. The economies covered include: Brazil, Russia, India, Indonesia, China, and South Africa (BRIICS). The analysis is carried out using the Michigan Model of World Production and Trade, which is a multi-country, multi-sectoral computational general equilibrium (CGE) model of the global trading system. The version of the model that we use includes 31 countries/regions plus the rest-of-world and 27 sectors in each country/region. The unique feature of our study is that we have analyzed the simultaneous removal of trade barriers for the BRIICS countries with a variety of FTA partners. The computational results presented thus reflect both the direct effects of the bilateral FTAs and the effects of the other FTAs assumed to be undertaken. The computational results suggest that the welfare effects of the different FTA options are for the most part fairly small in absolute terms and as a percentage of GDP. We compare the FTA results with assumed adoption of unilateral free trade by the individual BRIICS nations and global (multilateral) free trade by all of the countries/regions covered in the Michigan Model. These calculations suggest that the welfare benefits of global (multilateral) free trade are much greater than the benefits to be derived from the various FTAs for the BRIICS countries that we have analyzed and from the assumed unilateral free trade for these countries. |
| Keywords: | BRIICS, free trade, welfare |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:mie:wpaper:582&r=sea |
| By: | Charlebois, Pierre; Gagne, Stephen; Gendron, Carole |
| Abstract: | The liberalization of red meat (beef and pork) markets since 1988 is a good example of government action that has led to significant gains for the Canadian and American agri-food industries. Japan, South Korea and Mexico are the main countries that have liberalized their red meat markets since 1988. This industry has also benefited from the agreement between Canada and the United States. It has also made gain from the liberalization of the pork market in Australia and the Philippines, and the beef market in Indonesia. This analysis captures the impact on the price received by farmers as well as on Canadian production in the absence of these increased market access. The combination of lower prices and lower production would have caused annual average decreases in farm cash receipts drawn from the cattle and hog market equal to C$776 million and C$486 million, respectively, for a grand total of C$25.7 billion over this 20-year period (1988-2007) for the entire agriculture industry. Additionally, the value added of the red meat processing industry would have dropped by an average of C$432 million per year, for a total loss of C$8.6 billion. Finally, the value of exports of the red meat supply chain would have dropped by an average of C$1.044 billion per year, for a grand total of C$21 billion over this 20-year period. |
| Keywords: | liberalization, benefits, red meats, pork, beef, Japan, Korea, Mexico, Agribusiness, Agricultural and Food Policy, International Relations/Trade, Livestock Production/Industries, |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaacem:47133&r=sea |
| By: | Francisco Secretario (AREES, Philippines); Kim Kwangmoon (AREES, Korea); Bui Trinh (AREES, Vietnam); Vanndy Nor (AREES, Cambodia); Hung Duong Manh (AREES, Vietnam) |
| Abstract: | <p>The Input-Output (I-O) table is now universally accepted as an effective analytical tool for the conduct of in-depth socio-economic as well as environmental studies, whether national or regional. The reason for its being widely used is because of its capability, in a simple compacted manner, to unravel the interwoven structural interdependent relations existing in an economy and the ability to translate these economic interdependencies into empirical analysis.</p><p>The construction therefore of an I-O Account as an integrated sub-account of the country's National Accounts could not be undermined. While the GDP periodically provides the aggregative measures of economic development, its usefulness as an effective analytical database for translating development objectives into specific programs and projects is quite limited. Knowledge and understanding of the economy's structure in all its details thus become an indispensable input in economic planning and policy formulation. And this type of technical information could only be retrieved through the compilation of I-O tables.</p><p>This paper, which deals with an economic assessment based on single country or intra-national I-O tables available provides therefore the technical insights into how the proposed research project shall be initiated and pursued. And this can be done by looking first at the I-O data of each country in the Region.</p> |
| Keywords: | Cambodia, Thailand, Vietnam, Indochina, IO, Input - Output |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:dpc:wpaper:1009&r=sea |