nep-sea New Economics Papers
on South East Asia
Issue of 2009‒08‒02
seven papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Competition among the Manufacturing Exporters of China and ASEAN in the U.S. Market, 1994-2001 By Muhammad Zikri
  2. Rebalancing Growth in Asia By Prasad, Eswar
  3. Evaluating competitiveness of airports - Airport competitiveness index By Grancay, Martin
  4. An Econometric Model for Deforestation in Indonesia By Muhammad Zikri
  5. Vietnam as a Role Model for Development By Thoburn, John
  6. Does the village fund matter in Thailand ? By Boonperm, Jirawan; Haughton, Jonathan; Khandker, Shahidur R.
  7. Human Capital vs. Physical Capital: A Cross-Country Analysis of Human Development Strategies By Rizwana Siddiqui

  1. By: Muhammad Zikri (International and Development Economics Program Australian National University)
    Abstract: This paper aims to compare changes in the competitive position of China and ASEAN-4 (Indonesia, Malaysia, Singapore and Thailand) as exporters of manufactured goods to the US market between 1994 and 2001. Both static and dynamic shift-share models are employed to the 2-digit ISIC 3 of manufacturing section to investigate the changing patterns of export share that result from the shift effect, consisting industry-mix, export growth and interdependence. Findings from shift-share analysis shows China gained most of the US market share for exporting not only labour-intensive goods but also capital-intensive products at the expense of ASEAN. The static analysis suggests that China and Indonesia had difficulties in their industrial structures whereas Singapore and Malaysia experienced structural advantages. However, the dynamic analysis result shows that in 2001 the difficulties faced by China and Indonesia had disappeared, which indicated such an improvement in export structures had been made while Singapore and Malaysia, on contrary, lost their structural advantages. With respect to competitive effect, both static and dynamic analyses reveal that China’s competitive advantage was extremely strong compared to ASEAN. Indonesia was the best performer amongst ASEAN, mainly corresponding to solid competitive advantage in exporting ISIC 32, which is relatively labour-intensive products to the US market. On the other hand, Singapore recorded the largest loss in the US market share, particularly from 1997 onwards.
    Keywords: Export competition, manufacturing, shift-share analysis, ASEAN, China
    JEL: F14 L6
    Date: 2009–07
  2. By: Prasad, Eswar (Cornell University)
    Abstract: Rebalancing growth patterns of Asian economies is an important component of the overall rebalancing effort that will be required in the world economy. In this paper, I provide an empirical characterization of the composition of GDP levels and growth rates for the key emerging markets and other developing economies in Asia. China has by far the lowest share of private consumption to GDP in Asia and, during this decade, has recorded the lowest rate of employment growth relative to GDP growth. Investment growth has dominated GDP growth in China during this decade but is also important in the cases of India and Vietnam. To examine the global implications of domestic growth patterns in Asia, I analyze saving-investment balances, the composition of national savings, and the determinants of the evolution of household saving rates. During 2000-08, household saving rates (relative to household income) have risen gradually in China and India but fallen sharply in Korea. Corporate savings have surged across Asia during this period, becoming the main component of gross national savings in the region. In terms of sheer magnitudes, China's national savings and current account surpluses dominate the region's saving-investment balances. China accounts for just under half of GDP in Asia ex-Japan, but accounts for 60 percent of total gross national savings and nearly 90 percent of the current account surplus of the region. Finally, I discuss some policy implications that come out of the analysis on how to shift the patterns of growth, especially in China, from a welfare-enhancing perspective.
    Keywords: growth contributions, national savings and investment, current account balance, welfare consequences of growth
    JEL: E2 F3 F4
    Date: 2009–07
  3. By: Grancay, Martin
    Abstract: The paper introduces a concept of airport competitiveness index. The index consists of numerous indicators grouped into four categories: market potential, infrastructure, charges and recent traffic results. Another important factor we take into account is safety. We find that from the selected sample the most competitive airports are Singapore Changi, New York Kennedy, Newark Liberty and Dubai International. U.S. and South-East Asian airports in general are among the most competitive.
    Keywords: airport; air traffic; airport competitiveness index
    JEL: L93
    Date: 2009–01
  4. By: Muhammad Zikri (International and Development Economics Program Australian National University)
    Abstract: The aim of this paper is to develop an econometric model of deforestation in Indonesia using time series analysis based on the annual data from 1961 to 2000. From the model, we should be able: (i) To examine the forces of agricultural and timber sectors to forest decline; (ii) To distinguish the sources, direct and underlying causes of deforestation; and (iii) To identify macro-level economic factors that give pressures on deforestation. In order to achieve these purposes, a two-stage methods for the recursive system is chosen. The robustness of the estimation is checked to ensure there are no serial correlation and heteroskedasticity in all our equations. The main findings of model estimation show that, the forest product exports and the change in cereal cropland are the main sources of deforestation in Indonesia. Therefore, the factors determining the two sources become important to be taken into consideration. However, further examination on the underlying factors of deforestation in Indonesia are adversely affected by poor estimators given by the model.
    Keywords: Deforestation, econometric model, Indonesian forest
    JEL: Q23 C32
    Date: 2009–07
  5. By: Thoburn, John
    Abstract: Vietnam.s development performance since the early 1990s has been one of the strongest in the world, following the introduction of its doi moi (.renovation.) economic reform programme in 1986. The core of Vietnam.s economic strategy has been rapid integration into the world economy, with a diversified portfolio of exports and the attraction of direct foreign investment. This open approach has been combined with successful domestic agricultural growth and a strong, continued role for state-owned enterprises while encouraging growth of the private sector. Following an .East Asian. model, Vietnam has opened its domestic market only slowly while encouraging export growth.
    Keywords: Vietnam, globalization, trade, poverty, economic reform, development
    Date: 2009
  6. By: Boonperm, Jirawan; Haughton, Jonathan; Khandker, Shahidur R.
    Abstract: This paper evaluates the impact of the Thailand Village and Urban Revolving Fund on household expenditure, income, and assets. The revolving fund was launched in 2001 when the Government of Thailand promised to provide a million baht (about $22,500) to every village and urban community in Thailand as working capital for locally-run rotating credit associations. The money – about $2 billion in total – was quickly disbursed to locally-run committees in almost all of Thailand’s 74,000 villages and more than 4,500 urban (including military) communities. By May 2005, the committees had lent a total of about $8 billion, with an average loan of $466. Using data from the Thailand Socioeconomic Surveys of 2002 and 2004, each of which surveys almost 35,000 households, the authors find that the borrowers were disproportionately poor and agricultural. A propensity score matching model finds that Fund borrowing in 2004 was associated with, on average, 1.9 percent more income, 3.3 percent more expenditure, and about 5 percent more ownership of durable goods. These results are broadly consistent with the results from instrumental variables models (where the identifying instrument was the inverse of village size), which however show a smaller (marginal) effect. Households that borrowed both from the revolving fund and from the Bank of Agriculture and Agricultural Cooperatives gained substantially more in terms of higher income than those who borrowed from either one or the other or from neither.
    Keywords: Access to Finance,,Debt Markets,Economic Theory&Research,Rural Poverty Reduction
    Date: 2009–07–01
  7. By: Rizwana Siddiqui (Pakistan Institute of Development Economics, Islamabad)
    Abstract: This study estimates a small simultaneous equation model using panel data from sixty-four countries for the years 1996 and 2004. The model is estimated by various techniques—OLS, TSLS, dummy variable approach introducing variation at the regional level, and fixed and random effect approaches introducing variation at the individual country level. The objective is to identify the importance of basic needs in human development strategies in Asia, Africa, and the rest of the world (ROW). The results show that income per capita has priority over basic needs expenditure in development strategies of all regions despite being quantitatively different. However, the importance of basic needs expenditure cannot be denied in terms of capabilities development (improvement in health) that ultimately increases productivity.
    Keywords: Human Capital, Physical Capital, Income Per Capita, Basic Needs Expenditures, Human Development
    JEL: J24 E22 P24
    Date: 2009

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