nep-sea New Economics Papers
on South East Asia
Issue of 2009‒07‒03
ten papers chosen by
Kavita Iyengar
Asian Development Bank

  1. When China Sneezes, Asia Catches a Cold: the Effects of China’s Export Decline in the Realm of the Global Economic Crisis By Ari Van Assche; Alyson C. Ma
  2. Evaluation of contagion or interdependence in the financial crises of asia and latin america, considering the Macroeconomic fundamentals By Pereira, Pedro L. Valls
  3. Standards Education Policy Development: Observations based on APEC Research By Choi, D.; Vries, H.J. de; Kim, D.
  4. Does Geographic Factors Determine Local Economic Development? By Brata, Aloysius Gunadi
  5. Political Economy of Agricultural Distortions in Transition Countries of Asia and Europe By Rozelle, Scott; Swinnen, Johan
  6. Disentangling the Global Financial Crisis: A Review of the Global Response By H. N. Thenuwara
  7. Is Child Work Injurious to Health? By Aditi Roy
  8. Are stock exchanges integrated in the world? - A critical Analysis By Varadi, Vijay Kumar; Boppana, Nagarjuna
  9. Do Multinationals or Domestic Firms Face Higher Effective Tax Rates? By Kevin S. Markle; Douglas Shackelford
  10. The Long-Term Effects of Military Conscription on Mortality: Estimates from the Vietnam-era Draft Lottery By Dalton Conley; Jennifer A. Heerwig

  1. By: Ari Van Assche; Alyson C. Ma
    Abstract: In this discussion report, we dispel the widely held misconception that China’s economy is excessively export-dependent and therefore particularly vulnerable to a drop in export demand. In the past two decades, China’s dramatic exports rise has largely been driven by the fact that many foreign firms have offshored a slice of their value chain – labor-intensive final assembly – to China for export purposes. Many of these assembly plants heavily rely on imported inputs from East Asian economies to produce their export products. Because of this feature, China passes on a large portion of its negative export demand shocks to the East Asian economies by reducing demand for their imported inputs. Using recent trade data, we provide evidence of this business cycle pass-through during the current economic crisis. <P>
    Date: 2009–06–01
  2. By: Pereira, Pedro L. Valls
    Abstract: This article investigates the existence of contagion between countries on the basis of an analysis of returns for stock indices over the period 1994-2003. The economic methodology used is that of multivariate GARCH family volatility models, particularly the DCC models in the form proposed by Engle and Sheppard (2001). The returns were duly corrected for a series of country-specific fundamentals. The relevance of this procedure is highlighted in the literature by the work of Pesaran and Pick (2003). The results obtained in this paper provide evidence favourable to the hypothesis of regional contagion in both Latin America and Asia. As a rule, contagion spread from the Asian crisis to Latin America but not in the opposite direction.
    Date: 2009–01–26
  3. By: Choi, D.; Vries, H.J. de; Kim, D. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: This paper stems from a research project carried out for the Asia Pacific Economic Cooperation (APEC) to make an inventory of national standards education policies. Twenty countries - sixteen Asia-Pacific economies and four European nations – have been investigated. The paper relates similarities and differences between these policies to the standardization education activities in place. The paper concludes with policy recommendations.
    Keywords: standards education;national standards strategy;policy development;APEC
    Date: 2009–06–02
  4. By: Brata, Aloysius Gunadi
    Abstract: The purpose of this paper is to analyze the influence of geographic characteristics on the local economic development. There are two important reasons related to that objective. First, study on this topic in the case of Indonesia is rather limited, especially in the field of local economic development of the country. Second, geographically, Indonesia is a heterogeneous country and its consequence is development policy should also consider the geographic characteristics of the country. The study estimates impact of some geographic variables on the Gross Domestic Regional Product (GDRP) per capita and GDRP density as indicators of local economic development with data of the districts in the Central Java province uses regression models. Geographic variables used in the model are distance to economic centres, location of districts, and a measure of clustering of economic activity. Other socio-economic variable is also used in the model, such as literacy rate which is one of the components of human development index (HDI). This study found that in general geography influences local economic performance; however, geography is not the only determinant of economic performance. It also suggests that study on geographic inequality not only apply “per capita approach” but also “density approach” to get a more comprehensive picture of the impact of geography on economic development.
    Keywords: geographic; local economic development; Indonesia
    JEL: R58 O18 R11
    Date: 2009–06
  5. By: Rozelle, Scott; Swinnen, Johan
    Abstract: The paper analyzes the political and institutional factors which are behind the dramatic changes in distortions to agricultural incentives in the transition countries in East Asia (China and Vietnam), Central Asia (Kazakhstan, Kyrgyz Republic, etc), the rest of the former Soviet Union, and in Central and Eastern Europe. The paper explains why these changes have occurred and why there are large differences among transition countries in the extent and the nature of the remaining distortions.
    Keywords: Distorted incentives, agricultural and trade policy reforms, national agricultural development, Political economy, agricultural distortions, transition economies, China, Agricultural and Food Policy, International Relations/Trade, F13, F14, Q17, Q18, N50, O13, O21, P22, P26,
    Date: 2009–05
  6. By: H. N. Thenuwara
    Abstract: At this moment, the world is undergoing the worst economic crisis since the Great Depression of 1930s. It is not clear exactly which factors instigated the crisis, but there are many candidates; the formation of an asset bubble in the US, and its subsequent crash, continued excessive consumption in the US, irresponsible lending and borrowing, non-recognition of risks in some asset classes, productivity slowdown, debt default, regulatory inaction, and some policy mistakes. The purpose of this paper is to evaluate the current economic and financial crisis, examine global responses and document lessons. [Central Bank of Srilanka]
    Keywords: Crises; economic crisis; debt; productivity; financial crisis; Latin American Crises; Japanese Crisis; Crisis in Europe; East Asian Crisis; Global Fiscal Policy Response; Global Regulatory Response; recovery
    Date: 2009
  7. By: Aditi Roy (SMU)
    Abstract: Estimating the causal impact of child work on the contemporaneous health of a child has proven quite challenging given non-random selection into the labor market and the inability to find strong and valid instruments. Our data, the Indonesian Family Life Survey is no different. Recognizing the lack of a credible instrument, we instead pursue a different strategy based on the methodology of Altonji et al. (JPE, 2005). This method assesses the robustness of the impact of child work estimated under the assumption of random selection (i.e., selection into child work on observable attributes only) to varying degrees of non-random selection (i.e., selection into child labor on unobservable attributes). If the estimated effect is found to be extremely sensitive to selection on unobservables, then one should be wary about inferring an adverse causal effect of child work. In addition, the nature of the selection process is identified using parametric assumptions. The results are striking, suggesting positive selection of children into work when we consider underweight and high weight status as dependent variables. This indicates that there is both healthy worker selection effect as well as unhealthy worker selection effect. There is however negative selection into work for the children belonging to the intermediate weight range. This heterogeneity in the selection process across the distribution has not been previously identified in the literature. Moreover, we also find evidence suggesting a heterogeneous impact of child work on health once we allow for a modest amount of selection on unobservables. Specifically, we find evidence of a negative causal effect of work on healthier children, but evidence of beneficial impact of work on the least healthy children.
    Keywords: Child work; health; selection on unobservables; Indonesia.
    JEL: I12 J13 J22 J28
    Date: 2009–06
  8. By: Varadi, Vijay Kumar; Boppana, Nagarjuna
    Abstract: In the recent rapid reforms made the global into a global village in nature and in terms of efficiency, transparency. The information flow in one market may affect the other markets in the world, because of its integration. In this regard, this paper explores the objective whether there is any integration of markets taken place or not. For reaching the objective, we have used rigorous time series techniques for the equal period of data (1st January, 2001 to 30th April, 2009) of 17 stock exchanges in the world, which includes Asia, Europe, north America, Latin America etc.,. Our findings are markets within the region are well integrated both in terms of short run and long run equilibrium, because of its less cross-country restrictions. Many of the markets are showing granger causal relations between each other.
    Keywords: Stock Markets; Cointegration; Economic Reforms
    JEL: C12 G15 C22 E44 G00
    Date: 2009–05
  9. By: Kevin S. Markle; Douglas Shackelford
    Abstract: To our knowledge, this paper provides the most comprehensive analysis of firm-level corporate income tax expenses to date. We use publicly available financial statement information to estimate firm-level effective tax rates (ETRs) for 10,642 corporations from 85 countries from 1988 to 2007. We find that multinationals and domestic-only companies face similar ETRs. We also find that, on average, ETRs declined by seven percentage points or 20% over the period. German, Japanese, Australian and Canadian decreases were large. American, British, and French declines were more modest. Nonetheless, because ETRs were falling worldwide, the ordinal rank from high-tax countries to low-tax countries changed little. Japanese firms always faced the highest ETRs. ETRs for tax havens and countries from the Middle East and Asia (ignoring Japan) were always lower than those for the U.S. and European countries. These findings should provide some empirical underpinning for ongoing policy debates about the taxation of multinational profits.
    JEL: F23 H25 K34 M41
    Date: 2009–06
  10. By: Dalton Conley; Jennifer A. Heerwig
    Abstract: Research on the effects of Vietnam military service suggests that Vietnam veterans experienced significantly higher mortality than both non-Vietnam veterans and the civilian population at large. These results, however, may be biased by non-random selection into the military if unobserved background differences between veterans and non-veterans affect mortality directly. The present study generates unbiased estimates of the causal impact of Vietnam era draft eligibility on male mortality. Using records from the Vietnam draft lottery to assign decedents born 1950-1952 draft lottery numbers, the study estimates excess mortality among observed draft eligible male decedents as compared to the (1) expected proportion of draft eligible decedents given Vietnam draft eligibility cutoffs and (2) observed proportion of draft eligible female decedents. The results demonstrate that there appears to be no effect of draft exposure on mortality (even cause-specific death rates). When we examine population subgroups—including splits by race, educational attainment, nativity and marital status—we find weak evidence for an interaction between education and draft eligibility. On the whole, these results suggest that previous research, which has shown that Vietnam-era veterans experienced significantly higher mortality than non-veterans, may be biased by non-random selection into the military and may thus overstate the need for compensatory government pensions.
    JEL: H56 I10 I18
    Date: 2009–06

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