|
on South East Asia |
| By: | Albert Guangzhou Hu (Singapore Centre for Applied and Policy Economics) |
| Abstract: | East Asia is emerging as a hub of technological innovation. This paper investigates the extent to which East Asia has become a source of international knowledge diffusion and whether such diffusion is localized to the region. Using citations made by U.S. Patent and Trademark Office (USPTO) granted patents to other USPTO patents as an indicator of knowledge flow and estimating a model of international knowledge diffusion, I find strong evidence corroborating the hypothesis of increasing regionalization of knowledge flow in East Asia. Korea and Taiwan, the region's leading innovators, cite each other at least as frequently as they cite the US and Japan. Such knowledge flow has substantially intensified since the mid 1990s. With the exception of Thailand, all of the East Asian economies that I examine, Hong Kong, Singapore, China, and Malaysia, cite Korea and Taiwan at least as frequently as they cite the US and Japan. The "G5" group, which includes Britain, Canada, France, Germany and Italy, has been the least often cited source of knowledge for East Asia. |
| Keywords: | Knowledge, East Asia, USPTO, diffusion, Korea, Taiwan, US, economies |
| JEL: | L24 D83 R49 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1062&r=sea |
| By: | Hadi Soesastro; M. Chatib Basri (Centre for Strategic and International Studies, Jakarta) |
| Abstract: | This paper focuses on Indonesia's trade policies after the economic crisis. It examines the trend towards protection and addresses the issues of competitiveness. The concluding part briefly discusses Indonesia's policies on and involvement in free trade agreements (FTAs), which have recently proliferated in the Asia Pacific region. |
| Keywords: | Indonesia, political economy, trade policy, economic crisis, free trade agreement |
| JEL: | F13 F15 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1110&r=sea |
| By: | Takashi Terada (AUSTRALIA-JAPAN RESEARCH CENTRE, ASIA PACIFIC SCHOOL OF ECONOMICS & GOVERNMENT) |
| Abstract: | This paper aims to examine the implications of the rise of East Asian regionalism for the Australia-Japan partnership. In particular, it investigates whether both nations can sustain their partnership, which evolved around Asia Pacific regionalism over the last few decades, by exploring the upsurge of Japan’s interest in East Asian regionalism and examining characteristics of Australia’s foreign policy under the Howard government, which lacked a regionalist approach in its first three terms but has shown a keener interest in furthering relations with East Asian countries and promoting East Asian regionalism since late 2004. |
| Keywords: | East Asia, Japan, Australia, foreign policy, Howard government, regionalism |
| JEL: | F13 F15 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1112&r=sea |
| By: | Focus on the Global South FGS |
| Abstract: | This collection of 19 new essays written by civil society activists, trade unionists and other water practitioners, presents examples of ongoing struggles against water privatization and commercialization as well as inspiring examples of people-centered public water management from across Asia. These essays will contribute to strengthening the discussion about the ways forward for public water delivery in Asia. [FGS Report]. |
| Keywords: | Malaysia, Hong Kong, Korea, Japan, India, population, Cambodia, Indonesia, Indian, democratization, Kerala, Tamil Nadu, technology, partnerships, people, conservation, privatization, commercialization, water, Asia, civil society, activsts, trade unionists, practitioners, public water, management, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2375&r=sea |
| By: | Peter Drysdale (AUSTRALIA - JAPAN RESEARCH CENTRE, ASIA PACIFIC SCHOOL OF ECONOMICS & GOVERNMENT) |
| Abstract: | The need for deeper financial and trade cooperation in East Asia became clear through the experience of the East Asian financial crisis. The imperatives of East Asian cooperation mean that the quest for East Asian influence and leadership on regional and international affairs through ASEAN + 3 will continue. However, the creation of an East Asian Economic Community requires leadership and a model that is consistent with East Asian (not European or American) circumstances. Japan’s changing role in the regional economy prompted policy initiatives such as espousal of bilateral free trade agreements (FTAs) aimed at closer East Asian regional economic and political links. This fundamental shift in Japan’s trade policy diplomacy was effected without public debate in Japan and the reactions to it from partner countries, almost entirely unanticipated by Japanese policymakers, led to some confusion in policy strategy. Discriminatory regional trade arrangements do not reflect the needs and circumstances of the East Asian economy at the beginning of the twenty-first century, and specifically the need to accommodate the growth and opening of the Chinese economy within the regional and global economic systems. The proliferation of FTA arrangements, with increasingly complicated rules of origin, is more likely to distort and derail rather than to encourage broader and deeper economic integration. The objectives of ‘closer economic partnership’ arrangements are better served by nondiscriminatory trade agreements than by distorting and limited bilateral FTAs. Many of the features of the East Asian economy have not fundamentally changed. It continues to be distinguished by its extra-regional trade and economic reach. Large flows of FDI, particularly into China, cement economic interaction with the global economy. Both economic and political considerations have influenced thinking among the Chinese leadership about the change in trade policy strategy. The sensible and rational choice for China is a global choice, the acceptance and entrenchment of global obligations and responsibilities in a multilateral ‘pluralist’ setting. |
| Keywords: | East ASIA, FTA, Cooperation, Strategies, trade, integration |
| JEL: | F15 F14 F59 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1093&r=sea |
| By: | Högberg, Andreas (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | Previous studies have shown that differences in corporate governance systems and both formal and informal institutions, such as traditions and laws appear to correlate with firm performance. It has been suggested that Scandinavia and South East Asia have similar ownership structures with vote-differentiated shares, pyramids and strong family ownership. However, the regions have different legal traditions and also differ substantially in informal institutions. This paper is a study of firm performance for a unbalanced dataset of listed firms in Scandinavia (represented by Denmark, Finland, Norway and Sweden) and South East Asia (represented by Malaysia, Thailand, Hong Kong, Taiwan and South Korea), from 1998 to 2006. Firm performance is estimated using both Tobin’s Q and the Marginal q-approach. |
| Keywords: | ownership; investment performance; corporate governance; institutions; growth |
| JEL: | G30 |
| Date: | 2009–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0208&r=sea |
| By: | Yose Rizal Damuri; Raymond Atje; Arya B. Gaduh (Centre for Strategic and International Studies, Jakarta) |
| Abstract: | The 1990s saw East Asia becoming more integrated as trade barriers fell, trade intensity and intra-industry trade increased, and production networks formed. This greater integration has resulted in changing patterns of trade specialization in the region, as different economies adjust. Some economies (especially resource-rich economies) maintain their top trade-specialty products, while others move towards higher-productivity manufacturing goods. Nonetheless, we observe in all East Asian countries in our study a trend towards specializing in products with higher sophistication and technological intensity. Meanwhile, our examination of the product specialization mobility and our empirical analysis suggest no indication of East Asian countries being in a "low-productivity specialization trap" which would disable them from shifting their specialization towards higher-productivity and higher-value goods. |
| Keywords: | trade specialization, regional integration, East Asia |
| JEL: | F14 F15 O14 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1071&r=sea |
| By: | Peter Drysdale; Kejun Jiang; Dominic Meagher (Australian National University) |
| Abstract: | In October 2005, the Crawford School (then the Asia Pacific School of Economics and Government) within the Australian National University (ANU) initiated a major research project on China and East Asian Energy. The project is being undertaken under the school’s East Asia Forum in conjunction with the China Economy and Business Program. The first conference in the series being organised under the auspices of the China and East Asian Energy Strategies Research Program was hosted in Beijing by the Energy Research Institute and the ANU on 10–11 October 2005. It was the first of five annual conferences in the program. This book brings together the key papers presented at that conference. |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:898&r=sea |
| By: | Takashi Terada (National University of Singapore) |
| Abstract: | Japanese Prime Minister Junichiro Koizumi ushered in a new era in Japan’s international trade policy in January 2002 when he and his Singaporean counterpart, Goh Chok Tong, signed the Japan-Singapore Economic Partnership Agreement (JSEPA), the first bilateral Free Trade Agreement (FTA) signed between Asian countries. This trade strategy also reflected Japan’s interest in launching its so-called ‘multi-layered trade policy’ which meant the pursuit of bilateral and regional trading arrangements, including FTAs, in an attempt to complement multilateralism based on the GATT/WTO to reinvigorate efforts to achieve global trade liberalisation. This paper aims to examine how and why Japan and Singapore decided to pursue FTAs, what interests both perceived in their pursuit of FTAs, what elements contributed to both countries being linked in this trade policy arrangement, and what implications the JSEPA has had for the FTA movement in East Asia. It argues that the JSEPA was made possible mainly through Singapore’s initial offer to exclude agricultural products from tariff elimination. But Japan faced problems in seeking FTAs with other ASEAN countries which were less developed than Singapore and had a higher proportion of agricultural exports, as the exclusion of specific agricultural products, such as rice and sugar, would contradict Japan’s claim that its FTAs would bolster the WTO-based multilateral system. The proliferation of FTAs in East Asia may generate a ‘spaghetti-bowl’ effect with varying rules of origin that may divert and distort trade, but the ‘new age’ aspects of the Japan-Singapore agreement will also have some positive economic effects. Although the preferential trade elements of the agreement are detrimental, the smaller portion of tariff elimination results in a smaller trade diversion effect on trading partners. Therefore, the Japan-Singapore agreement carries symbolic meaning in terms of trade policy debates as well as signifying a paradigm shift in Japan’s international trade policy. |
| Keywords: | FTA, Japan, Singapore |
| JEL: | F1 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:809&r=sea |
| By: | Josef T. Yap (Philippine Institute for Development Studies) |
| Abstract: | Intra-regional trade and investment among the ASEAN+3 countries�and the entire East Asia�has been progressing at a robust pace over the past 25 years. The process of economic integration could be aptly described as “regionalization� or marketdriven integration. In contrast, the European Union has followed ‘regionalism’ which refers to formal economic cooperation and economic arrangements. Over the past decade, efforts at promoting closer regionalism in East Asia have been stepped up for various reasons, including- i) a response to the experience and lessons of the 1997 financial crisis; ii) the gridlock in the Doha round, success of NAFTA, and expansion of the EU; and iii) the mitigation of political factors that prevented closer cooperation in the past, e.g. competition between China and Japan. However, the structure of East Asia regionalism should be analyzed carefully, in particular because the direct economic benefits of an East Asia FTA are questionable. Therefore, the configuration of the proposed East Asian Community must be developed pragmatically. It is argued that at this stage the EAFTA and EAC should still be promoted but with the view that their benefits are primarily political. The political windfall will likely lead to significant economic benefits, particularly in terms of narrowing the development gap in the region and advancing common interests in a global-rules setting. The political and institutional imperatives of establishing the EAFTA or EAC at this stage depend largely on whether countries of the region seek to expand economic ties or whether they would want to secure the political gains from closer integration and cooperation. |
| Keywords: | East Asia Free Trade Agreement, East Asian Community, regionalization, |
| JEL: | F59 F15 F14 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1078&r=sea |
| By: | Edward Teo; Shandre M. Thangavelu; Elizabeth Quah (Singapore Centre for Applied and Policy Economics) |
| Abstract: | This paper explores the relationship between unemployment (U) and job vacancies (V) in the Singapore labour market. Empirical analysis using the framework of the UV Curve (also known as the Beveridge Curve) indicates that Singapore’s labour market appears to have improved in its matching efficiency as compared to other East-Asian countries. However, detailed study of Beveridge Curve for the Singapore economy reveals that it has become more inelastic since the Asian crisis, thereby suggesting that the labour market is less responsive in recent years. This might suggest the possibility that employers are now more cautious and selective in their employment decisions. |
| Keywords: | unemployment, job vacancies, labour, Beveridge Curve, East-Asian, Singapore |
| JEL: | E24 J61 J64 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1667&r=sea |
| By: | S.M. Thangavelu; Toh Mun Heng (Singapore Centre for Applied and Policy Economics) |
| Abstract: | The World Trade Organisation’s 2004 Trade Policy Review of Singapore (WTO-TPR Singapore 2004) depicts the small and outward-oriented economy as one of the most open country to international trade and investment. The review highlights the benefits of the outward-oriented strategy that has enabled the Singapore economy to weather recent external shocks such as the Asian financial crisis to the SARS and to the recent unfavourable conditions in the Middle East. In particular, the report commended Singapore’s efforts on its liberalization of the services sector and its economic benefits to consumers and global trade. However, the WTO-TPR Singapore 2004 highlights several key areas of concerns- (a) the commitment to multilateral agreements with the rising number of bilateral free trade agreements signed by Singapore and (b) the lack of growth of total factor productivity, a key indicator for long-run efficiency of the economy. The paper addresses the above key concerns raised in the WTO’s TPR of Singapore in terms of its commitment to global trade in terms of WTO-plus bilateral FTAs, which intends to support multilateral trading system, and its overall industrial strategies to raise its competitiveness. |
| Keywords: | WTO-TPR Singapore 2004, WTO, Asian financial crisis, liberalization, bilateral free trade agreement, efficiency of the economy, |
| JEL: | F13 F41 F43 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1679&r=sea |
| By: | Daniel Suryadarma; Wenefrida Widyanti; Asep Suryahadi; Sudarno Sumarto (SMERU Research Institute) |
| Abstract: | This study investigates regional and ethnic inequality in Indonesia from five dimensions- access to education and health facilities, education outcome, health outcome, voice, as well as income and consumption. We believe this is the first comprehensive study that looks at ethnic inequality in Indonesia. We find systematic inequality between urban and rural areas, but not between ethnic groups. Our results indicate that the voiceless rural areas have been left behind by urban areas that have more voice in every indicator. Although we do not establish causation, this finding supports the long-held view inherent among Indonesians. The findings of this study imply that public policy aimed at accelerating rural development is the most effective route to reduce inequality in Indonesia. |
| Keywords: | health, education, income, voice, inequality, ethnic, regional, urban, Indonesia |
| JEL: | D63 R11 R10 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1636&r=sea |
| By: | Daniel Suryadarma; Akhmadi; Hastuti; Nina Toyamah (SMERU Research Institute) |
| Abstract: | This report documents the results of a pilot project on a new poverty monitoring system that improves the current system in three areas. First, it involves the locals in monitoring poverty in their own area. Second, the poverty indicators are sensitive to local conditions, accurate, and cannot be easily tampered. Third, the results are expeditious, with only five months needed between the start of data collection to final publication. Given Indonesia's geographical size and the decentralization that puts more power at the hands of the district governments in determining poverty alleviation programs, we believe that this monitoring system is the most suitable for Indonesia. |
| Keywords: | poverty, poverty monitoring system, Indonesia |
| JEL: | I32 I38 I30 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1633&r=sea |
| By: | Andrea L. Santiago (Philippine Institute for Development Studies) |
| Abstract: | The international education serve sector is undoubtedly growing. The movement of students across nations is expected to grow fourfold in the next quarter of a century. Undaunted by the current domination by English-speaking providers, countries in Asia have taken big steps to be centers of education in the region, an ambition. Their single-mindedness in the pursuit of this vision has already made them countries to contend with. This paper shows that the focus and determination of countries like Singapore, Malaysia and China, is not present in the Philippine environment that is characterized by an unusually high dependence on the private sector to meet the growing demands for education. Marred by a highly politicized setting and inadequate resources, the education sector struggles in its aims to provide education for the growing population at an affordable rate and still maintain a decent level of quality. With these conditions, the Philippines, slowly losing its edge in English education in the region, can only hope to niche and attract foreign students and academics into specific programs and institutions, hopefully with the concerted support of government. If Government is serious in its desire to compete internationally, policy makers must address squarely the barriers to achieving this, including the enactment of laws to facilitate the influx of education services trade. |
| Keywords: | international education, cross border transactions in education, higher education, trade in education services, foreign students, international degree costs |
| JEL: | H75 I28 I23 I21 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1809&r=sea |
| By: | Daniel Suryadarma; Asep Suryahadi; Sudarno Sumarto (SMERU Research Institute) |
| Abstract: | This study provides an overview of the concepts used to measure unemployment in Indonesia and their consequences for the measured unemployment trends. One finding shows that BPS’s decision in 2001 to relax the definition of labor force by including discouraged workers has resulted in an artificially high open unemployment rate and disguises the actual decline in traditionally-measured open unemployment rates post-crisis. Another finding indicates that discouraged workers in Indonesia are not confined only to the poor and those who are denied access to the proper job market. We recommend that, if Indonesia still wants to utilize a broader definition of the labor force, the measurement of open unemployment should adhere to the ILO’s recommendation of only including those discouraged workers who are still willing to work. The discouraged workers who are unwilling to work should be left in the “out of labor force� category. |
| Keywords: | discouraged workers, open unemployment, measurement, Indonesia |
| JEL: | E24 J64 J60 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1634&r=sea |
| By: | Daniel Suryadarma; Asep Suryahadi; Sudarno Sumarto (SMERU Research Institute) |
| Abstract: | In this study we investigate the causes of low secondary school enrollment in Indonesia despite near universal primary school attendance. We then find that attrition during the transition between primary and junior secondary education levels is the main cause. We investigate the causes of attrition using a longitudinal household survey dataset. Firstly, household welfare level is a significant determinant of the low enrollment. Secondly, children from Muslim families have a significantly lower probability of continuing to the secondary level. Thirdly, children in areas with relatively abundant employment opportunities have a higher probability of giving up schooling. Fourthly, girls have a significantly lower chance of continuing. The policy implications of our results point to, among other things, the need for refocusing government education spending and scholarship programs to target those who go missing from the education system after completing primary education. |
| Keywords: | education, determinants, secondary school, enrollment, Indonesia |
| JEL: | I21 I28 J16 Z12 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1635&r=sea |
| By: | Daniel Suryadarma; Rima Prama Artha; Asep Suryahadi; Sudarno Sumarto (SMERU Research Institute) |
| Abstract: | This study provides an overview of inequality in Indonesia for the period of 1984 to 2002 using several widely used measurements of inequality. Firstly, unlike previous studies, our paper uses real consumption expenditure that takes into account the high regional price disparity across regions in Indonesia. Secondly, we found that, although during the crisis all measures indicate a decrease in inequality, it actually increased for those below the poverty line. Finally, this study also provides an estimation of ‘distribution corrected’ growth elasticity of poverty for Indonesia. This proves to be an important explanation for the fact that the poverty rate decreased very rapidly between 1999 and 2002- because inequality during the peak of the economic crisis in 1999 was at its lowest level in 15 years. |
| Keywords: | inequality, real consumption expenditure, regional price disparity, growth elasticity of poverty, economic crisis, Indonesia |
| JEL: | D63 E21 I31 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1632&r=sea |
| By: | Yus Medina Pakpahan; Daniel Suryadarma; Asep Suryahadi (SMERU Research Institute) |
| Abstract: | We estimate intergenerational poverty persistence in Indonesia using a panel dataset. To the best of our knowledge, this is the first such study looking at the issue in the Indonesian context. Different from the majority of studies on this issue, we include controls for several household and individual characteristics, including for living arrangements. Moreover, to circumvent data issues that plague earnings data in developing countries, we use chronic poverty status as a long-term parental welfare measure. We find there is a substantial intergenerational mobility away from poverty among children from poor households. However, the risk of continuing to live in poverty as adults is 35 percentage points higher for children from chronically poor households than for children from households which are not chronically poor. |
| Keywords: | chronic poverty, intergenerational mobility, children, welfare, Indonesia |
| JEL: | I32 J62 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1623&r=sea |
| By: | David Vanzetti; Greg McGuire; Prabowo (AUSTRALIA-JAPAN RESEARCH CENTRE, ASIA PACIFIC SCHOOL OF ECONOMICS & GOVERNMENT) |
| Abstract: | Following the crises of the late 1990s and the subsequent slowdown in the world economy, many countries in the developed and developing world are at the crossroads in their trade strategy, uncertain whether to advance with trade reforms, to stand still or increase protection. While the case for liberalisation has been widely accepted as a long-term goal for economic policy, the gains from trade have not always been forthcoming and macroeconomic crises have exacerbated the situation. The delayed and uncertain benefits of reform, plus the costs of adjustment, the need to offset tariff revenue losses, and the possible benefits of some degree of intervention to foster industrialisation have all contributed to this indecision. Support for the WTO multilateral negotiations now appears half-hearted, and there are calls for increased protection. Following the slow progress of multilateral negotiations, attention has inevitably turned to regional and bilateral agreements. Indonesia provides an interesting case study of the potential benefits and costs of alternative trade strategies that are under active consideration in many developing countries. The ASEAN region has recently announced a deepening of its commitments and is considering widening the agreement to include countries such as China, Japan and the Republic of Korea. A bilateral agreement with the United States is also a possibility. Against this background, Indonesia’s options on trade policy range from increasing protection to actively pursuing bilateral, regional and multilateral initiatives. The results of a global general equilibrium analysis point to several interesting implications for policy makers. The results from the model show that increasing protection results in economic losses while a stand-still and more liberalisation produce economic gains. After undergoing full adjustment, estimated annual gains to Indonesia from a conservative Uruguay Round-style outcome within the WTO system total an estimated US$380 million (0.22 per cent of GDP). However, annual gains from a completely liberalised ASEAN plus China, Japan and Republic of Korea regional trade agreement are estimated at US$2.3 billion, again after adjustment. Indonesia could capture half of these benefits by liberalising unilaterally. The major source of the gains from unilateral, regional and multilateral liberalisation is improved efficiency following removal of tariffs on politically sensitive sectors such as motor vehicles. This improves productivity in many downstream sectors. There are significant trade diversion effects from regional integration, with non-members worse off as a result. The results have implications for other countries having second thoughts about their strategy. |
| Keywords: | trade policy, Indonesia, economic policy, ASEAN |
| JEL: | F13 F40 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1114&r=sea |
| By: | Daniel Suryadarma; Adri Poesoro; Sri Budiyati; Akhmadi; Meuthia Rosfadhila (SMERU Research Institute) |
| Abstract: | This study measures the impact of supermarkets on traditional markets in urban centers in Indonesia quantitatively using difference-in-difference and econometric methods as well as qualitatively using in-depth interviews. The quantitative methods find no statistically significant impact on earnings and profit but a statistically significant impact of supermarkets on the number of employees in traditional markets. The qualitative findings suggest that the decline in traditional markets is mostly caused by internal problems from which supermarkets benefit. Therefore, ensuring the sustainability of traditional markets would require an overhaul of the traditional market management system, enabling them to compete with and survive alongside supermarkets. |
| Keywords: | impact evaluation, traditional market, supermarket, urban, Indonesia |
| JEL: | L81 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1637&r=sea |
| By: | Asep Suryahadi; Daniel Suryadarma; Sudarno Sumarto; Jack Molyneaux (SMERU Research Institute) |
| Abstract: | In a fast urbanizing Indonesia, the rural sector still plays an important role in the country’s economy. Although declining, the majority of the population still live and find employment in rural areas. However, rural areas lag behind urban areas in many aspects. As a result, around 80% of all the poor in the country are found in rural areas. Resolving this problem requires a clear and effective strategy to jump-start and sustain economic growth in rural areas. This study finds that the growth of the agricultural sector strongly induces the growth of the non-agricultural sector in rural areas. Although it has been fluctuating over time, it is estimated that, on average, one percent growth in the agricultural sector will induce 1.2% growth in the non-agricultural sector in rural areas. This finding vindicates the view that rising incomes in the agricultural sector stimulate demand for locally produced goods and services in rural areas, in particular those produced by the non-tradable sector. Formulated appropriately, a rural development strategy that develops the agricultural sector could provide a major impetus for achieving a fast growing and vibrant rural sector in Indonesia. |
| Keywords: | economic growth, rural development, Indonesia |
| JEL: | O47 O13 R11 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1640&r=sea |
| By: | Peter Wilson; Ting Su Chern; Tu Su Ping; Edward Robinson (Singapore Centre for Applied and Policy Economics) |
| Abstract: | This paper uses dynamic shift-share analysis to examine the export performance of China in electronics compared to the east Asian NIEs exporting to the USA, European Union and Japan between 1988 and 2001. Our findings suggest that China has now emerged as a serious contender in the export market for electronics goods, but this position has not been a dominant one. Her main gains have been in consumer electronics and telecommunications equipment and to a lesser extent in disk-drives, printers and PCs; but in the higher-end exports of printed circuit boards and semiconductors, China has not yet gained a significant stronghold in developed country markets, at least to the extent that the growth in her overall exports and increase in market shares might suggest. Moreover, China’s success since the early 1990s has been largely underpinned by strong export growth rather than a favourable industry mix. Nonetheless, If China can sustain rapid growth in exports and is able consolidate its industrial base, China’s overall competitiveness can be expected to improve substantially in the future. Its low cost structure, an increasingly skilled workforce and an influx of technology and management skills associated with large foreign direct investment inflows, together with its recent entry into the WTO, places China in a very favourable position. |
| Keywords: | Trade, Competitiveness, Exports, East Asia, Shift-Share |
| JEL: | F10 F14 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1671&r=sea |
| By: | Alex Arifianto; Ruly Marianti; Sri Budiyati; Ellen Tan (SMERU Research Institute) |
| Abstract: | The government of Indonesia has started the implementation of locally based healthfinancing schemes based on health insurance principles. This scheme is commonly known as JPK-GAKIN, which is a health-financing scheme through which the poor can access health care in public facilities, including primary and secondary health care. Due to the perceived success of JPK-GAKIN pilots, the government has decided to provide JPK-GAKIN in all districts in Indonesia from January 1, 2005. This study looks at the effects of different characteristics of JPK-GAKIN program on healthcare service provision, utilization of health care services, quality of healthcare provision, and how insurance characteristics can influence the relationships between stakeholders. Three districts were selected for the case studies- Purbalingga (Central Java), Tabanan (Bali) and East Sumba (Nusa Tenggara Timur). We found that compared with previous health financing schemes, JPK-GAKIN scheme has achieved better results in providing access to adequate health care coverage to members of the population, especially the poor. However, we found several problems associated with the scheme, such as- there is a need to improve its targeting and efficiency, it needs stricter financial monitoring and auditing, and it needs to increase stakeholders’ involvement in the governance of the scheme. We will elaborate on these concerns and recommend possible policy options to resolve them in this paper. |
| Keywords: | local health financing, JPK-GAKIN, public health, poverty, Indonesia |
| JEL: | I38 I18 I10 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1616&r=sea |
| By: | Cheolsung Park (Singapore Centre for Applied and Policy Economics) |
| Abstract: | I estimate the gradient among children 0 to 14 years old across different age groups using data from Indonesia. I find that while the gradient is strong among the very young, it gets weaker and almost disappears among children older than 6. I find that unequal mortality of children by socioeconomic status depresses the gradient among children 3 years old or younger. I also find evidence that limited access to private healthcare providers decreases the gradient among children 4 to 12 years old. Schooling, on the other hand, is found to have a positive impact on health status of children from low-SES families but little impact on health status of high-SES children. It weakens the gradient among school-age children. |
| Keywords: | gradient, children, schooling |
| JEL: | J13 J10 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1661&r=sea |
| By: | Silvia Devina; Wenefrida Widyanti; Fitri Huriyati (SMERU Research Institute) |
| Abstract: | This data on health sector trends is based on the Susenas dataset of 1995-2006, which was collected by Statistics Indonesia (BPS). These tables cover all of the important indicators of health in Indonesia including morbidity, outpatient contact rates, immunization, choice of provider, contraceptive use, healthcare expenditures, and births assisted by skilled personnel, disaggregated by the main sources of household income, consumption quintiles, regions, urban/rural areas, sex and age groups, and education levels. We would like to express our gratitude to Menno Pradhan, Claudia Rokx, and Ioana Kruse from the World Bank, who initiated and facilitated this data analysis, and who provided guidance and suggestions. We would also like to thank Robert Sparrow for his technical help on dofile for the STATA program. |
| JEL: | Y10 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1627&r=sea |
| By: | Agus Priyambada; Asep Suryahadi; Sudarno Sumarto (SMERU Research Institute) |
| Abstract: | Although in general less prevalent than other developing countries at similar stage of development, the problem of child labor in Indonesia is significant. Like in other countries, this study finds that there is a strong link between the child labor phenomenon and poverty. The profile of child labor largely mirrors the profile of poverty. Furthermore, poverty is found as an important determinant of working for children. However, working does not always completely eliminate a child’s opportunity to obtain formal education. In fact, children from poor households can still go to school by undertaking part-time work to pay for their education, implying that banning working for these children may force them to drop out of schools instead. Since the phenomenon of child labor is strongly associated with and determined by poverty, the most effective policy for eliminating child labor is through poverty alleviation. Other policies that can foster the rate of reduction in child labor are to make it easier for children from poor families to access education and to increase the opportunity cost of working by improving the quality of education to increase the rate of return to education. |
| Keywords: | child, labour |
| JEL: | J78 J70 D63 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1624&r=sea |
| By: | Sudarno Sumarto; Daniel Suryadarma; Asep Suryahadi (SMERU Research Institute) |
| Abstract: | Although consumption expenditure data is crucial for assessing the level of people’s welfare and calculating important welfare measures such as the poverty headcount rate, collecting such data requires significant time and effort. In this study, we experiment with three approaches to predict consumption expenditure and poverty at household and aggregate level as simpler alternatives to using consumption expenditure. The idea is not to use these alternatives as a substitute for consumption expenditure data, rather to use it for the purposes of rapid monitoring and appraisal of welfare. The three approaches are i) consumption correlates model, ii) poverty probability model, and iii) the wealth index Principal Components Analysis (PCA). We test each approach’s performance and found that the consumption correlates model is the best approach to predict poverty quickly and relatively accurately. We found that education level, asset ownership, and consumption pattern are the best predictors of expenditure and poverty. |
| Keywords: | consumption, poverty, predictor, data, Indonesia |
| JEL: | I32 I31 E21 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1631&r=sea |
| By: | Saleth, Rathinasamy Maria; Inocencio, Arlene; Noble, Andrew D.; Ruaysoongnern, S. (International Water Management Institute; International Water Management Institute; International Water Management Institute) |
| Keywords: | Soil improvement / Impact assessment / Research projects / Soil fertility / Sandy soils / Water holding capacity / Clay soils / Soil water relations / Soil management / Farming systems / Crop yield / Vegetable crops / Rice / Sorghum / Models / Statistical methods / Cost benefit analysis / Economic analysis / Economic aspects / Thailand |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:iwt:rerpts:h042267&r=sea |
| By: | Asep Suryahadi; Daniel Suryadarma; Sudarno Sumarto (SMERU Research Institute) |
| Abstract: | This study extends the literature on the relationship between economic growth and poverty reduction by differentiating growth and poverty into their sectoral compositions and locations. We find that growth in the rural services sector reduces poverty in all sectors and locations. However, in terms of elasticity of poverty, urban services growth has the largest for all sectors except urban agriculture. We also find that rural agriculture growth strongly reduces poverty in the rural agriculture sector, the largest contributor to poverty in Indonesia. This implies that the most effective way to accelerate poverty reduction is by focusing on rural agriculture and urban services growth. In the long run, however, the focus should be shifted to achieving robust overall growth in the services sector. |
| Keywords: | economic growth, poverty, urban, rural, Indonesia |
| JEL: | I32 O18 O49 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1639&r=sea |
| By: | Widjajanti Suhayo; Akhmadi; Hastuti; Rizky Filaili; Sri Budiati; Wawan Munawar (SMERU Research Institute) |
| Abstract: | This field verification study is part of the effort to develop small-area poverty maps for all regions in Indonesia. The small-area poverty maps that contain consumption based poverty estimates at the provincial, district, sub-district and village levels have been developed based on data available from the 1999 Socio-economic Survey (SUSENAS) core and consumption module, the 2000 Village Survey (PODES) and the 2000 Population Census, using the small-area estimation method (poverty mapping). This field verification study was conducted in three sample provinces (Riau, North Sulawesi and West Nusa Tenggara) and particularly covers three districts (Indragiri Hulu, Bolaang Mongondow and West Sumbawa). The main objective of this study is to assess whether the poverty estimates calculated by poverty mapping match the poverty condition of the communities in the field. The assessment is done by comparing the rankings of regions based on poverty mapping and the rankings based on qualitative judgments which are determined through focus group discussions (FGDs) with relevant stakeholders at the provincial, district, sub-district and village levels. These comparisons found that the rankings of districts and sub-districts based on these two methods were fairly consistent, even with the rankings for 2004, and it indicates that the results from poverty mapping down to sub-district level can be used to date with a sufficient degree of confidence. The comparisons between the ranking of villages, however, vary across sub-districts, indicating the need to use the village level poverty estimates with caution. The findings of this study also highlight some possibilities to improve both the poverty mapping and the FGD methods for poverty analysis. |
| Keywords: | poverty, poverty maps, focus group discussions, Indonesia, |
| JEL: | I32 I30 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1630&r=sea |
| By: | Peter Wilson; Gavin Peebles (Singapore Centre for Applied and Policy Economics) |
| Abstract: | In this paper we explore the links between Singapore’s foreign exchange rate regime since 1981 and the broader aspects of its political economy. Singapore has been remarkably successful in achieving fast growth, low and stable price inflation and a strong external position. An important part of this strategy has been its managed floating exchange rate regime, which is generally regarded as being successful, but this needs to be viewed within the broader context of the government’s ‘pragmatic socialism’ to keep inflation low and stable as the bedrock for attracting inflows of mobile foreign capital to sustain long-run export competitiveness, and an economic strategy based on high levels of centralized saving and investment, a high degree of government involvement in the economy and the relentless accumulation of foreign exchange reserves. Indeed, part of the reason why managed floating has been successful in Singapore has been because the credibility of monetary policy has been enhanced through the government’s command over resources and its ability to respond quickly and flexibly to changes in economic circumstances using, where necessary, unorthodox policies of demand management to cut business costs. Exchange rate policy, therefore, becomes an integral part of the policy to redistribute income to capital to sustain employment and prevent mobile firms from leaving Singapore. By the early 1990s the imperative became to diversify the structure of the economy away from exclusive reliance on a predominantly foreign manufacturing base and to reduce the extent of government involvement in the economy and it became harder to justify high levels of centralized saving and investment. The dilemma is that the government is finding it difficult to extricate itself from the economy without compromising policy effectiveness, and there is little evidence that dependence of the economy on foreign capital and labour has diminished. |
| Keywords: | Exchange Rate, People’s Action Party, Political Economy, Singapore |
| JEL: | F4 O10 P16 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1672&r=sea |
| By: | Daniel Suryadarma; Yus Medina Pakpahan; Asep Suryahadi (SMERU Research Institute) |
| Abstract: | Using a sufficiently long-spanning longitudinal dataset, we estimate the short and long term effects of maternal and paternal death on children’s school enrollment, educational attainment, and health in Indonesia, then compare them to the effect of chronic poverty. We also investigate whether there are any gender dimensions in the effects. We find that young maternal orphans have worse educational outcomes than non-orphans, with the effect getting worse over time. However, we find no significant effect of orphanhood on health. However, chronically poor children have worse health and education outcomes. Among young children, the effect of maternal orphanhood on education is significantly more adverse than that of chronic poverty. Finally, chronically poor orphans do not suffer adverse effects beyond the effects of chronic poverty. |
| Keywords: | orphanhood, chronic poverty, education, health, children, Indonesia |
| JEL: | I10 I21 I31 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1638&r=sea |
| By: | Fali Huang; Myoung-jae Lee (Singapore Management University) |
| Abstract: | We investigate whether TV watching at ages 6-7 and 8-9 affects cognitive development measured by math and reading scores at ages 8-9 using a rich childhood longitudinal sample from NLSY79. Dynamic panel data models are estimated to handle the unobserved child-specific factor, endogeneity of TV watching, and dynamic nature of the causal relation. A special emphasis is put on the last aspect where TV watching affects cognitive development which in turn affects the future TV watching. When this feedback occurs, it is not straightforward to identify and estimate the TV effect. We adopt estimation methods available in the biostatistics literature which can deal with the feedback feature; we also apply the “standard� econometric panel data IV approaches. Overall, for math score at ages 8-9, we find that watching TV for more than two hours per day during ages 6-9 has a negative total effect mostly due to a large negative effect of TV watching at the younger ages 6-7. For reading score, there are evidences that TV watching between 2-4 hours per day has a positive effect whereas the effect is negative outside this range. In both cases, however, the effect magnitudes are economically small. |
| Keywords: | TV watching, treatment effect, panel data, dynamic model, Granger causality |
| JEL: | C33 I20 J13 E60 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1532&r=sea |
| By: | Sri Kusumastuti Rahayu; Nina Toyamah; Stella Aleida Hutagalung; Meuthia Rosfadhila; Muhammad Syukri (SMERU Research Institute) |
| Abstract: | This study explores the qualitative data on why some Indonesians do not use basic maternal and child health services and why some Indonesians do not send their children to primary or junior high schools, which will serve as a baseline for future PNPM Generasi (Program Nasional Pemberdayaan Masyarakat Generasi Sehat dan Cerdas) and PKH (Program Keluarga Harapan) evaluations. Based on results of FGDs, in-depth interviews, and direct observations conducted in West Java and NTT, the study finds that physical access limitations and isolation, economic access limitations, and the belief in the traditional custom are the main reasons why some community members do not use modern mother and child health services for pre- and postnatal monitoring or for delivery. Problems related to physical access and financial access are also the main reasons for attrition and why some parents do not send their children to junior high school. |
| Keywords: | Qualitative baseline data, PNPM Generasi, PKH, basic maternal and child health services, basic education services, Indonesia |
| JEL: | J13 I21 C00 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1625&r=sea |
| By: | Worawan Chandoevwit (Social Security Department, International Labour Office, Geneva) |
| Abstract: | Thailand is a middle-income country with per capita income of 134,343 baht or US$3,887 in 2007.1 It was once an agrarian economy, but with the pace of development, its economy now relies more on industry and services. As a result, employment in these sectors has been increasing. With the move into a modern economy, labour standards have improved. The first half of the 1970s, was a period in which advances were made in social democracy. Workers demanded that their right to a decent job should be protected by law. A number of laws came into force in this period, for example, on labour relations, workmen’s compensation, private-school teaching staff and labour protection. |
| Keywords: | social protection, European Union Agenda, informal economy, employment |
| JEL: | J01 I38 A13 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1129&r=sea |
| By: | Fali Huang; Peter Cappelli (Singapore Management University) |
| Abstract: | Arguably the fundamental problem faced by employers is how to elicit effort from employees. Most models suggest that employers meet this challenge by monitoring employees carefully to prevent shirking. But there is another option that relies on heterogeneity across employees, and that is to screen job candidates to find workers with a stronger work ethic who require less monitoring. This should be especially useful in work systems where monitoring by supervisors is more difficult, such as teamwork systems. We analyze the relationship between screening and monitoring in the context of a principal-agent model and test the theoretical results using a national sample of U.S. establishments, which includes information on employee selection. We find that employers screen applicants more intensively for work ethic where they make greater use of systems such as teamwork where monitoring is more difficult. This screening is also associated with higher wages, as predicted by the theory- The synergies between reduced monitoring costs and high performance work systems enable the firm to pay higher wages to attract and retain such workers. Screening for other attributes, such as work experiences and academic performance, does not produce these results. |
| Keywords: | Employee Screening, Monitoring, Work Ethic, High Performance Work Practices, Principal-Agent Model |
| JEL: | M51 M54 J30 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1533&r=sea |
| By: | Fali Huang; Peter Cappelli (Singapore Management University) |
| Abstract: | Arguably the fundamental problem faced by employers is how to elicit effort from employees. Most models suggest that employers meet this challenge by monitoring employees carefully to prevent shirking. But there is another option that relies on heterogeneity across employees, and that is to screen job candidates to find workers with a stronger work ethic who require less monitoring. This should be especially useful in work systems where monitoring by supervisors is more difficult, such as teamwork systems. We analyze the relationship between screening and monitoring in the context of a principal-agent model and test the theoretical results using a national sample of U.S. establishments, which includes information on employee selection. We find that employers screen applicants more intensively for work ethic where they make greater use of systems such as teamwork where monitoring is more difficult. This screening is also associated with higher productivity and higher wages and benefits, as predicted by the theory- The synergies between reduced monitoring costs and high performance work systems enable the firm to pay higher wages to attract and retain such workers. Screening for other attributes, such as cognitive ability, does not produce these results. |
| Keywords: | elicit effort from employees, worker, screening, monitoring, cognitive ability |
| JEL: | J2 J3 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1530&r=sea |
| By: | Tilak Abeysinghe; Keen Meng Choy (Singapore Centre for Applied and Policy Economics) |
| Abstract: | This paper sheds further light on the debate spearheaded by Riedel (1988) on the specification of a small country export function. The theoretical and empirical analysis in the paper shows that while the price-taker assumption cannot be rejected, the export function for Singapore should not be construed as a standard export supply equation. As argued by Kapur (1983) instead, it is an export function with both demand and supply factors playing a role. We arrived at the final model specification by taking into consideration changes in the import content of exports over time. The paper also provides a new methodology for deriving a quarterly series of manu7facturing net capital stock. |
| Keywords: | price taker, demand constraint, export function, import content, restricted cointegrating space |
| JEL: | C32 F14 F41 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1055&r=sea |
| By: | Delia S. Tantuico; Errol Wilfred Zshornack (Philippine Institute for Development Studies) |
| Abstract: | Intellectual property rights – copyrights, trademarks, patents, trade secrets, and related rights –have become increasingly important with the advent of increased international trade, global and knowledge-based economy and fast developing technology. A strong intellectual property rights regime is necessary in order to attract foreign trade and direct investments. For this reason, the protection of intellectual property rights has become an important negotiating item in all FTAs which the United States has entered into. In view of the proposed RP-US FTA negotiations, this paper seeks to determine whether the existing intellectual property regime in the Philippines provides adequate and sufficient legal protection of intellectual property rights. It also seeks to determine whether the administrative and judicial processes are adequate and speedy and acceptable in the enforcement and protection of said rights in the light of FTAs already entered into by the United States with other countries, in general, and with Singapore, in particular, which will be the benchmark for the RP-US FTA. Other relevant issues in the protection of intellectual property rights such as the annual review of ountries by the United States Trade Representative in relation to Special 301 of the U.S. Trade Law; piracy of optical media, including books and pharmaceuticals; and the Trade-Related Aspects of Intellectual Property Rights (TRIPS) are also discussed. The author proposes certain provisions to be added to the Intellectual Property Code; sustained, consistent and stricter implementation of intellectual property laws including more efforts at curbing piracy; and more importantly, a strong political will and a strong determination to strengthen intellectual property rights, as necessary to make the IPR regime up to par with U.S. and international |
| Keywords: | TRIPS, Intellectual Property Rights, Dispute Settlement, WTO, FTA, Market Access, Optical Media Act, E-commerce Law, Legal Protection, Investments, Capability Building |
| JEL: | O34 F13 F53 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1812&r=sea |
| By: | Alex Arifianto; Ruly Marianti; Sri Budiyati; Ellen Tan (SMERU Research Institute) |
| Abstract: | Based on the notion that good health is one of the basic right of all citizens, the Government of Indonesia (GoI) has promoted programs on health care financing for the poor. One of these programs is the Jaminan Pemeliharaan Kesehatan (JPK). In 2003, the pilot project on JPK for the poor (JPK-Gakin) started in 15 districts and two provinces, and was expanded to additional regions the following year. Since April 1 2004, PT Askes, a profit oriented private insurance company, was assigned as the insurer of the nonprofit health insurance scheme for the poor (the JPK-Gakin) in district Tabanan. With respect to PT Askes it is important to see in what ways does the prominent role of PT Askes influence the dynamics of health service delivery and how different is PT Askes from other insurers (the non-profit - public institutions) in managing the JPK-Gakin scheme. The Tabanan case demonstrated that the supervision and monitoring by the Dinas Kesehatan (DinKes) of an insurer like Askes runs the risks of being less effective because PT Askes is a relatively well-established institution that is totally independent of the DinKes. Moreover, there is a difference in the level of expertise and experience between PT Askes and the Dinkes regarding the management of insurance schemes. Therefore, the supervision and monitoring of PT Askes by the DinKes tends to be “formal� instead of “actual.� This difference in the level of expertise and experience can also be a barrier for the DinKes to negotiate the cost and coverage of the scheme with PT Askes. PT Askes – as the insurer – is also barely involved in the promotion and socialization of the program and the identification of the poor as their potential clients. Obviously, the JPK-Gakin scheme can secure primary health care for the poor (the gakin) at the puskesmas, but this does not necessarily mean that the poor will receive good quality care. In general, the health care at the puskesmas is quite limited both in term of quality and variety. The implementation of the JPK-Gakin scheme –including adequate capitation for the puskesmas from this scheme– would certainly not change this condition easily as it relates to more complex factors such as the availability of good medical staffs, instruments and facilities. The most positive effect of the JPK-Gakin scheme on the provision of health care for the poor is the possibility to get secondary and tertiary health care that is usually unaffordable for the poor. Nevertheless, for a range of different reasons, the majority of Gakin patients are not referred to the hospital. There are cases where the poor refused to be referred to the hospital although it was necessary because they were insecure about the additional costs that were not covered by PT Askes. Thus, although the JPK-Gakin scheme does secure the right of the poor to get medical treatment at the hospital, it cannot secure the actualization of it. |
| Keywords: | health care program, financing mechanism, insurance scheme, stakeholders,; health services |
| JEL: | I20 I18 G22 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1611&r=sea |
| By: | Euston Quah (Singapore Centre for Applied and Policy Economics) |
| Abstract: | This paper focusses narrowly on three areas of public policy concerning the environment deemed necessary for sustainable economic growth. It has relevance to Asian nations as they continue to demand for higher growth and at the same time keeping environmental degradation in check. The three areas are- (1) the issue of siting environmentally unfriendly but nationally required facilities, otherwise known as the NIMBY syndrome, (2) the waste generation problem, and (3) the need to price green goods. In addition to the above three areas for public policy, the paper also discusses a number of pragmatic principles for use in environmental management. Such things as cost-benefit analysis and project appraisal; the pursuit of clean and advanced technologies and inherent conflicts; exploring market solutions; understanding multiple stakeholders; and last but not least the need to establish data baselines for environmental quantity and quality. |
| Keywords: | environmental management, NIMBY syndrome, waste generation, green goods |
| JEL: | Q51 Q50 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1662&r=sea |
| By: | Yong Yik Wei; Aekapol Chongvilaivan; Chew Jing Yang (Singapore Centre for Applied and Policy Economics) |
| Abstract: | A knowledge-intensive, innovation-driven economy needs innovative and creative individuals in business, government, and the various professions. Singapore’s education system has an important role to play in equipping the young with the right qualities. This could be better achieved by moving away from an overly rigid education system that places undue emphasis on rote learning and examination scores, to an education system that develops students’ creativity and critical thinking abilities, and encourages their innate curiosity and willingness to experiment. We examine, as a backdrop, various economic theories of entrepreneurship and, believing that it is important to begin with a good educational foundation, the features of some alternative approaches to pre-school education. We also examine Singapore’s attempts to promote independent thinking and creativity among Singaporean students, and other countries’ experiences, in particular those of Finland and the Netherlands. Among other issues, emphasis is placed on play and the fostering of students’ love of learning, in less structured settings, as the media of learning during early childhood education. |
| Keywords: | Entrepreneurship; Pre-school Education; Play-based Learning; Reggio Emilia approach; Montessori Method; Teach Less, Learn More (TLLM) initiative |
| JEL: | I21 I28 I29 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1670&r=sea |
| By: | Fali Huang (Singapore Management University) |
| Abstract: | In a principal–agent framework, principals can mitigate moral hazard problems not only through extrinsic incentives such as monitoring, but also through agents’ intrinsic trustworthiness. Their relative usage, however, changes over time and varies across societies. This paper attempts to explain this phenomenon by endogenizing agent trustworthiness as a response to potential returns. When monitoring becomes relatively cheaper over time, agents acquire lower trustworthiness, which may actually drive up the overall governance cost in society. Across societies, those giving employees lower weights in choosing governance methods tend to have higher monitoring intensities and lower trust. These results are consistent with the empirical evidence. |
| Keywords: | Monitoring, Trustworthiness, Trust, Screening, Economic Governance |
| JEL: | D2 J5 L2 M5 Z13 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1531&r=sea |
| By: | John C. de Leon (Philippine Institute for Development Studies) |
| Abstract: | This paper introduces rice to the reader and analyzes the changes it has gone through these past 100 years in the shaping hands of varietal improvement science. Here, the richness of the crop as a genetic material and resource is revealed. Landrace rice, pureline selection rice, crossbred rice, semidwarf rice, hybrid rice, new plant type rice, designer rice - from the traditional to modern to futuristic - rice becomes all of these while traversing time in the Philippines. There is rice for the lowlands, uplands, the cool elevated; the irrigated and rainfed; the saline prone, drought prone, the flood prone - each kind serving as a wonderful display of dexterity from a tiny seed. Rice for full season farming and rice for double or relay cropping also exist. Of course, there must be rice for daily consumption and rice for important occasions. There is non-sticky rice or the glutinous opposite; well milled or brown rice; red rice; aromatic rice; micronutrient dense rice; golden rice; the generic fancy or specialty rices; even rice with healing wonders or medicinal properties. Harnessed by purposeful R&D, rice ably provides for the multiplicity of our needs. And though very much transformed already rice remains culturefriendly, like the science that does not tire molding it. Viewed in these sense, rice becomes very precious and unabandonable to many. |
| Keywords: | Rice, Filipinos, rice as essential crop, rice as essential food, rice culture, cultivated species, varieties, varietal improvement, yield, rice sufficiency, opportunities besides high yield |
| JEL: | Q16 I31 Q18 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1757&r=sea |
| By: | Rosa Fe D. Hondrade (Philippine Institute for Development Studies) |
| Abstract: | The province of Davao del Sur is considered one of the major rice-producing provinces of Region XI. It has been regarded as Mindanao’s top rice-yielding province because of its municipality’s (Hagonoy) high yield performance. Hagonoy’s average rice yield of more than six tons per hectare has consistently been higher than the provincial average of a little more than five tons per hectare, both of which are higher than the regional average of more than four tons per hectare. In Hagonoy, some 1,436 farmers who are also mostly farmer-cultivators are actively engaged in rice farming over a total rice area of 2,046 hectares. The Office of the Municipal Agriculture (OMAG) handles the extension services related to agriculture and fisheries as well as cooperative development. Manning the office are- one (1) municipal agriculture officer (officer-in-charge) and eight (8)agricultural technologists to cover 21 barangays in the municipality. Understaffed, the office follows a simple organizational structure, generally flat with only two levels (head -> ATs). Each staff has been assigned to handle different programs and 2–3 barangays. To cope with its situation of delivering agricultural programs and services to all its 21 barangays with limited personnel, the OMAG adopts the following strategy- a) ATs handle one or more programs covering two or more barangays; b) strengthen linkages with local, provincial, regional and national offices that implement agriculture programs; c) prioritize its programs with banner programs given full support and providing assistance to linkage programs (public or private); d) strengthen its cooperatives and farmers’ organizations to lend support in technology dissemination, pest and technology performance monitoring, and community mobilization; and exploit the use of information technologies like cell phones. The study has shown that farmers have multiple sources of information within a given farming system. In addition to formal institutions like the national and regional agencies, the provincial and municipal agriculture services of the local government units, farmers seek out or exchange information and knowledge with input suppliers, traders and other private individuals who have stakes in rice production and marketing. Much of the information travels freely but some may also come with a fee. Such stakeholders (public or private) in rice may interact either to fulfill their needs or to pursue their interests. And as they interact with one another, information on prices, market opportunities, new technologies and practices as well as policy changes is also exchanged. |
| Keywords: | agriculture extension, rice-growing area, municipal agriculture services, knowledge management |
| JEL: | Q10 O31 O32 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1748&r=sea |
| By: | Alex Arifianto; Ruly Marianti; Sri Budiyati; Ellen Tan (SMERU Research Institute) |
| Abstract: | Kabupaten Sumba Timur is one of 29 kabupaten/kota that were included in the test piloting of the JPK-Gakin program. Since 2003, the local health agency (Bapel) has been quite successful in managing this program. The program that is funded by the government from fuel subsidy allocations has already touched the poor whose numbers are quite significant (75% of the population are poor families) in Sumba Timur. Since 2005, the government has appointed PT Askes as the only implementing body for the JPKGakin program, while Bapel still operates this program. The involvement of two managers as JPKGakin implementers made the government issue a policy on the division of the puskesmas service area.. This transition period provided an opportunity for the local government to undertake an evaluation of the implementation of the program. There are several differences in the type and extent of health services offered by the two of them. The outcome of the findings shows that puskesmas and hospitals have responsibility for the patient costs of all poor families. However, the number of referrals of the poor to hospitals is small although Bapel provides transport allowances for patients who are referred to the hospital. There are quite a lot of limitations that are faced by the poor who live in a wide area across Sumba Timur. These limitations are the community’s very poor socio-economic conditions, endemic malaria, minimal numbers of health workers in rural areas and the long distances of peoples’ homes from health services. The manager of JPK-Gakin needs to give proper attention to the handling of health in Sumba Timur, the majority of whose people are poor. |
| Keywords: | JPK-Gakin, Sumba Timur, health, poverty program |
| JEL: | I38 I18 I10 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1615&r=sea |
| By: | Hastuti; Sudarno Sumarto; Nina Toyamah; Syaikhu Usman; Bambang Sulaksono; Sri Budiyati; Wenefrida Dwi Widyanti; Meuthia Rosfadhila; Hariyanti Sadaly; Sufiet Erlita; R. Justin Sodo; Sami Bazzi (SMERU Research Institute) |
| Abstract: | This report is the result of a rapid assessment of the first phase of the direct cash transfer program that is one part of the fuel subsidy reduction compensation program that is provided to poor households. The early observation and assessment of the administration of this program was needed in order to know the level of achievement of the program and its problems so it can be used as the basis for improving its administration and for planning programs of this type in the future. This assessment was undertaken using a qualitative methodology through in-depth interviews with a number of respondents and the quantitative analysis of secondary data. The investigation results show that time contraints for every phase of the direct cash transfer program, starting from the targeting process, socialization, card distribution, funds allocation to the handling of problems made the implementation appear �rushed� and its hastiness had an impact on the success of each phase of the implementation. The socialization program is the phase that was assessed as the weakest because it was not done intensively, especially in connection with institutions at the local level that had not yet been formed. In general, other phases of the program implementation proceeded well, although mistargeting triggered the emergence of conflict as the result of social jealousy. |
| Keywords: | fuel subsidy, poor, direct cash transfer, social jealousy |
| JEL: | H24 H20 H31 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1618&r=sea |
| By: | Fali Huang (Singapore Management University) |
| Abstract: | Much evidence suggests individuals differ in their predisposition to cooperate, which is essentially a component of human capital. This paper examines the role of individual cooperative tendencies and their interactions with institutions in generating social trust; it also endogenizes cooperative tendencies using a human capital investment model. Multiple equilibria and inefficiencies exist due to positive externalities. An innovative finding is that, when institutions are more effective in punishing defecting behaviors, more people invest in cooperative tendencies and hence the endogenous social trust is higher, though the equilibrium cooperative tendencies are lower. This paper provides a plausible explanation for many empirical and experimental results. |
| Keywords: | human capital, human capital investment model, endogenous social trust, cooperative tendencies |
| JEL: | Z13 J24 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1534&r=sea |
| By: | Liborio S. Cabanilla (Philippine Institute for Development Studies) |
| Abstract: | The paper describes the environment under which RP-US Agricultural trade currently operates. It also highlights key issues affecting current trade flows between the Philippines and the US, and provides background information vital for future bilateral agricultural negotiations with the U.S. Further to this, it shows that two major factors will determine the prospective net effects of a RP-US FTA on Philippine agriculture. First, the effects on exports will depend on the extent of US reduction of NTBs, particularly on mangoes, carrageenan, and canned tuna. Second, Philippine imports from the US will depend on its willingness to reconsider position, particularly on rice and corn. On this count, it must be noted that rice is an important wage good, and corn is a key livestock feed ingredient. Moreover, the advent of an FTA with the US should be a good reason to get Philippine agriculture better organized, in terms of policy and institutional support. |
| Keywords: | Agricultural Trade, US Agriculture support programs, Domestic Support Programs, Non-Tariff Barriers, liberalization, border controls, market access |
| JEL: | Q17 P45 O24 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1732&r=sea |
| By: | Sulton Mawardi; Akhmadi (SMERU Research Institute) |
| Abstract: | The selection criteria for research locations for Moving Out of Poverty (MOP) in Indonesia uses two main variables- the level of conflict intensity and level of economic growth. The village of Gura in Kabupaten Halmahera, in the Province of Maluku Utara, represents the sample area with a high conflict intensity and high economic growth. Based on these two variables, the MOP research focuses its study on specific questions, including- 1) how and why are there groups of people that can increase their prosperity or move out of poverty; 2) how and why are there groups of people that are still trapped in poverty; and 3) how and why are there groups of people who tend to fall into poverty. In general, this study shows that the people of Gura face complex problems. In the context of community and individual prosperity mobility, this complexity is a result of the interaction of various factors, such as economic, social, and other factors related to conflict. The community in Gura responded in different ways to the presence and direction of change in these factors. Some are able to adapt and take advantage of the changes that took place, and some appear to be astonished and have just started to adapt. Others appear not to be doing anything, or resign themselves to the fact that they have been left behind. |
| Keywords: | poverty, democracy, conflict, governance, livelihood |
| JEL: | I38 I32 I30 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1622&r=sea |
| By: | Liangjun Su; Zhenlin Yang (Singapore Management University) |
| Abstract: | We propose an instrumental variable quantile regression (IVQR) estimator for spatial autoregressive (SAR) models. Like the GMM estimators of Lin and Lee (2006) and Kelejian and Prucha (2006), the IVQR estimator is robust against heteroscedasticity. Unlike the GMM estimators, the IVQR estimator is also robust against outliers and requires weaker moment conditions. More importantly, it allows us to characterize the heterogeneous impact of variables on different points (quantiles) of a response distribution. We derive the limiting distribution of the new estimator. Simulation results show that the new estimator performs well in finite samples at various quantile points. In the special case of median restriction, it outperforms the conventional QML estimator without taking into account of heteroscedasticity in the errors; it also outperforms the GMM estimators with or without considering the heteroscedasticity. |
| Keywords: | Spatial Autoregressive Model, Quantile Regression, Instrumental Variable, Quasi Maximum Likelihood, GMM, Robustness |
| JEL: | C13 C21 C51 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1563&r=sea |
| By: | Ruly Marianti (SMERU Research Institute) |
| Abstract: | The images of devastation and the stories of misery in Aceh during and after the December 2004 tsunami, which had dominated the national and international media for weeks, confronted us with our weaknesses in times of disaster. This lead us to the fact that although disasters are as old as the history of mankind, we are still struggling with the question- what is to be done with disasters? This paper is a small part of the struggle. As a literature survey, it aims to provide a systematic overview on various important issues and debates on efforts in understanding and managing disaster. This paper is organized in two parts. The first part deals with the various theoretical aspects of disaster study such as definitional debates of disaster, classification of calamities, and some themes (risk, vulnerability, ageing, gender) that are important in understanding disasters. The second part examines various aspects of efforts in managing disasters. It discusses themes such as the components of disaster management and the way it has been done at different levels and in different countries. |
| Keywords: | tsunami, disaster, Aceh, classification of calamity, disaster management, Indonesia |
| JEL: | Q54 Q59 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1621&r=sea |
| By: | Hoon Hian Teck (Singapore Management University) |
| Abstract: | What forces have shaped our nation’s employment and remuneration record so far? Where is Singapore’s unemployment rate headed? What should policy-makers do about it? These are the questions tackled in this paper. It is shown that based on our historical experience, it would be necessary to achieve an annual real GDP growth rate of 7.1 percent in order to keep the unemployment rate unchanged. Moreover, a one-percentage point shortfall of the real GDP growth rate below 7.1 percent in any given year results in a rise in the unemployment rate of 0.12 percentage points over the previous year. Consequently, if the economy is able to generate at most 5 percent real GDP annual growth rate (the high end of the range of official medium-term projections of our economy’s growth rate, which is 3 to 5 percent), it would seem that the unemployment rate is set to rise from its current level based upon the historical relationship. Is there any reason, however, to believe that the Okun’s Law relationship for a fast-developing country like ours might be expected to change once we have reached the status of a mature economy as we now have become? After all, in a mature economy like the US, the critical real GDP growth rate required to keep the unemployment rate steady is only 3 percent. It is likely that the Okun’s Law relationship would indeed shift as the economy matures. As workers adjust their expectations to the reality that the economy has reached a new lower growth regime and they incorporate their revised growth expectations in their wage bargaining, the unemployment rate can remain steady despite slower growth. This steady structural rate of unemployment is, however, likely to be higher than in the past. In response to the worsened medium to long term outlook for the labor market, one is tempted to ask- Can anything be done by policy-makers to reduce the equilibrium rate of unemployment? I believe that reaching out for a weaker Singapore dollar in order to boost international competitiveness, and so to boost aggregate demand and hence employment, or reaching out for budgetary deficits as a direct means to boost aggregate demand is unlikely to have a lasting effect on the structural rate of unemployment. Instead that it would be better to consider policies aimed directly at influencing equilibrium unemployment. One proposal is to introduce an employment subsidy scheme aimed particularly at low-skilled workers, which has the effect of increasing job creation directly. Increased effort to create a business-friendly environment to encourage new start-ups by ensuring minimal red tape and enabling relatively easy financing for them will also work to increase the pace of job creation. Finally, the work of the Workforce Development Agency aimed at retraining low-skilled and older workers to meet the skills demand of new jobs and then matching them to firms offering the job vacancies should help somewhat in bringing down the structural rate of unemployment as our small geographical area works to our advantage when it comes to job-matching. |
| Keywords: | Singapore, employment, GDP, Okun’s Law relationship |
| JEL: | J21 J64 E24 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1573&r=sea |
| By: | Pao-li Chang; Myoung-jae Lee (Singapore Management University) |
| Abstract: | Rose (2004) showed that the WTO or its predecessor, the GATT, did not promote trade, based on conventional econometric analysis of gravity-type equations of trade. We argue that conclusions regarding the GATT/WTO trade effect based on gravity-type equations are arbitrary and subject to parametric misspecifications. We propose using nonparametric matching methods to estimate the `treatment effect' of GATT/WTO membership, and permutation-based inferential procedures for assessing statistical significance of the estimated effects. A sensitivity analysis following Rosenbaum (2002) is then used to evaluate the sensitivity of our estimation results to potential selection biases. Contrary to Rose (2004), we find the effect of GATT/WTO membership economically and statistically significant, and far greater than that of the Generalized System of Preferences (GSP). |
| Keywords: | GATT/WTO, GSP, treatment effect, matching, permutation test, signed-rank test, sensitivity analysis |
| JEL: | F13 F14 C14 C21 C23 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1148&r=sea |
| By: | Fali Huang (Singapore Management University) |
| Abstract: | This paper estimates production functions of child cognitive and social development using a panel data of nine-year old children each with over two hundred home and school inputs as well as family background variables. A tree regression method is used to conduct estimation under various speci.cations. A small subset of inputs is found consistently important in explaining variances of child development results, including the number of books a child has at various ages and how often a mother reads to child by age .ve, while the e¤ects of race and maternal employment are negligible when detailed inputs are controlled. |
| Keywords: | child development, tree regression method, panel data |
| JEL: | I20 J13 C40 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1527&r=sea |
| By: | Kong Weng Ho; Hian Teck Hoon (Singapore Management University) |
| Abstract: | In this paper, we take another approach to accounting for the sources of Singapore’s economic growth by being explicit about the channels through which Singapore, as a technological follower, benefits from international R&D spillovers. Taking into account the channels through which technology developed in the G5 countries diffuses to technological followers, we show that 57.5 percent of Singapore’s real GDP per worker growth rate over the 1970-2002 period is due to multifactor productivity growth. In particular, about 52 percent of the growth is accounted for by an increase in the effectiveness of accessing ideas developed by the technology leaders through improvement in our educational quality and increase in machinery imports and foreign direct investment from the G5 countries. We also find that capital accumulation that takes the form of imports of machinery as well as foreign direct investment from the G5 countries enhances the effectiveness of technology transfer thus raising the rate of return to capital. Compared to the rate of return to capital inferred from the traditional Solow growth model with purely exogenous technological progress of 10.8 percent, taking into account the technology transfer channel raises the implied rate of return to 13 percent. |
| Keywords: | technological diffusion, idea production function, multifactor productivity growth |
| JEL: | F43 O33 O47 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1522&r=sea |
| By: | Chia Ngee Choon; Shawna Lim Shi’en; Angelique Chan (Singapore Centre for Applied and Policy Economics) |
| Abstract: | Feminization of ageing leads to issues relating to long term healthcare financing since females are more susceptible to chronic illnesses. This paper assesses the current provision of long-term care (LTC) in Singapore by first examining the health status of elderly female; and then estimates the present value of LTC expenses. We calibrate the LTC costs for institutional nursing homes, community homes and informal home-based care with domestic helper. We next evaluate the comprehensiveness of a private disability insurance scheme in Singapore (Eldershield) in capturing the expected share of LTC expenditures. We compare the policy comprehensiveness of Eldershield payouts for different utilizations of LTC at different levels of means-tested government subsidies. With subsidies, the LTC cost can be adequately covered by Eldershield; without any subsidies, Eldershield is able to capture 25% to 40% of the LTC costs. We also evaluate the LTC financing implications after an osteoporotic hip fracture surgery. |
| Keywords: | health financing, long-term care, ageing, disability insurance, policy comprehensiveness |
| JEL: | H51 I11 J14 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1658&r=sea |
| By: | Myoung-Jae Lee; Chun Seng Yip (Singapore Management University) |
| Abstract: | There has been much recent interest in the effects of pre and non-market skills on future labor market outcomes. This paper examines one such effect- the effect on future wages of military leadership experience among "Vietnam generation" American men. We study rank, not just veteran status. We argue that rank is a good measure of pre-market leadership skills because of the clear military hierarchy and the primarily youth experience of Vietnam service. Two sources of selection bias are accounted for- non-random military entry and eventual rank attained. We apply a modified 2-stage parametric sample selection method. The rank premia on future wages are estimated using the parametric selection corrections and a propensity score matching with two indices. We find evidence of a leadership premium, but not a veterans' premium. It is the rank that matters. If one joins the military believing that military service commands a future wage premium, he had better become an NCO or an officer. |
| Keywords: | non-market skills, military, future wages, parametric sample selection |
| JEL: | J24 J10 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1551&r=sea |
| By: | Swee-Liang Tan; Roy Ng Jin Hou (Singapore Management University) |
| Abstract: | We structure case based teaching using a combination of computer-support technology and in-class activities. We create and design an on-line learning tool, Case Study On-line (CSOL) that enables instructor to structure the delivery of teaching resources and set up assignment tasks in the system. The tool enables tasks to be set in a way that they can be completed sequentially, and learning resources can be accessed only when required by students. Upon submission of their assignments, students can promptly receive instructor’s explanations to the tasks. Follow up activities take place in class, with the objective to promote active learning. The tool was adopted over two semesters in an undergraduate economics course and surveys were conducted among the students to evaluate the effectiveness of the tool. The results of the survey were very positive, providing support to our belief that a system of well-designed case teaching delivery tool, together with classroom activities, is able to increase the level of students’ engagement and interest. The paper helps to address some concerns about teaching methods in undergraduate economics courses. |
| Keywords: | Technologies-based Instruction, In-class Activities, Scaffolding, Active-based Learning |
| JEL: | A22 A20 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1566&r=sea |
| By: | Xiaolin Xing; Zhenlin Yang (Singapore Centre for Applied and Policy Economics) |
| Abstract: | This paper explores both observable and unobservable variables that would affect employed workers’ decisions on job change. We find that age, job satisfaction, satisfaction with working environment or job security, and firm size are among the major factors determining workers’ intentions of job-to-job mobility. Younger workers and workers in smaller firms are more likely to look for other jobs. We also find that men are more likely to consider a change in job than women, but when “actually looking for another job� is concerned, men and women do not differ. Furthermore, monthly income and working sector contribute significantly to looking for other jobs. |
| Keywords: | Voluntary job-to-job mobility; Job satisfaction; Logistic regression model |
| JEL: | J60 J63 C25 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1677&r=sea |
| By: | Filipe R. Campante; Quoc-Anh Do (Singapore Management University) |
| Abstract: | We construct an axiomatic index of spatial concentration around a center or capital point of interest, a concept with wide applicability from urban economics, economic geography and trade, to political economy and industrial organization. We propose basic axioms (decomposability and monotonicity) and renement axioms (order preservation, convexity, and local monotonicity) for how the index should respond to changes in the underlying distribution. We obtain a unique class of functions satisfying all these properties, defined over any n-dimensional Euclidian space- the sum of a decreasing, isoelastic function of individual distances to the capital point of interest, with specifc boundaries for the elasticity coecient that depend on n. We apply our index to measure the concentration of population around capital cities across countries and US states, and also in US metropolitan areas. We show its advantages over alternative measures, and explore its correlations with many economic and political variables of interest. |
| Keywords: | Spatial Concentration, Population Concentration, Capital Cities, Gravity, CRRA, Harmonic Functions, Axiomatics |
| JEL: | C43 F10 R23 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1144&r=sea |
| By: | Anthony Chin; Hong Junjie (Singapore Centre for Applied and Policy Economics) |
| Abstract: | In recent years the logistic needs have created tremendous pressure on the ‘hard’ transport infrastructure. Logistics and the harness of information technology are the key facilitators of mobility. The Chinese logistics market is still in its infancy and creates tremendous opportunities for investors. It recognized as one of important driving forces both for national economy and business. Beijing, Tianjin, Shanghai, Shenzhen and Guanzhou aspire to be regional or international logistics hubs and have adopted preferential policies in attracting FDIs in logistics. From 1996 to 2001, foreign capital invested in transportation, storage, post and telecommunications increased from USD6.96 billion to USD15.16 billion. This study looks at the location decisions of foreign logistics firms and identifies with the aid of a multinomial logit model factors that are crucial in attracting them to China. This is important as they have an important role to play in filling in the gap left by traditional Chinese firms, which largely concentrate, on warehousing and distribution. The results suggest that location of logistics firms depends on transport infrastructure, market size, labor quality and cost, agglomeration economies, communication cost, economic privatization degree, as well as government incentives. The importance of the above factors varies by source of region. European and North American firms favor higher population densities, lower labor cost, convenient airway transport and large cities while logistics firms from Hong Kong, Macao and Taiwan put more emphasis on communication infrastructure. |
| Keywords: | logistics, transport infrastructure, investment, |
| JEL: | H54 P33 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1657&r=sea |
| By: | Brishti Guha (Singapore Management University) |
| Abstract: | The purpose of this paper is to develop a simple model of an economy in which growth is driven by a combination of exogenous technical change in agriculture as well as by a rising world demand for labor-intensive manufactured exports. We explore the relative roles of agricultural innovation and rising export demand in a model with two traded industrial goods and a non-traded agricultural good, food. When the non-traded sector uses a specific factor, we show that technical change in agriculture may be the key to sustained factor accumulation in industry, in particular driving intersectoral labor migration. A key assumption is a less than unitary price elasticity of demand for food. Our results could form a crucial link in capturing the story of labor-abundant economies which experienced structural transformation and growth through labor-intensive manufactured exports, without prior technology breakthroughs in industry. They contribute to explaining the massive growth in factor accumulation which shows up in some growth accounting studies - they may also imply that some of the contribution of “technical progress� is mistakenly attributed solely to factor accumulation. |
| Keywords: | Structural change, agricultural productivity, labor migration, terms of trade |
| JEL: | O3 O4 F1 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1511&r=sea |
| By: | Zhenlin Yang (Singapore Management University) |
| Abstract: | This paper presents a modified LM test of spatial error components, which is shown to be robust against distributional misspecifications and spatial layouts. The proposed test differs from the LM test of Anselin (2001) by a term in the denominators of the test statistics. This term disappears when either the errors are normal, or the variance of the diagonal elements of the product of spatial weights matrix and its transpose is zero or approaching to zero as sample size goes large. When neither is true, as is often the case in practice, the effect of this term can be significant even when sample size is large. As a result, there can be severe size distortions of the Anselin’s LM test, a phenomenon revealed by the Monte Carlo results of Anselin and Moreno (2003) and further confirmed by the Monte Carlo results presented in this paper. Our Monte Carlo results also show that the proposed test performs well in general. |
| Keywords: | Distributional misspecification, Robustness, Spatial layouts, Spatial error components, LM tests |
| JEL: | C23 C5 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1576&r=sea |
| By: | Peter Warning; Ching Ju Mae Rosie; Kristine Toohey (Singapore Management University) |
| Abstract: | When most people think about the Olympic Games it is usually in terms of athletic performance. Clearly they are more than that (see Toohey & Veal, 1990). Even the mass media does not confine itself to covering only the sporting angle. For example, symbolism, economic factors, nationalism and politics routinely appear in mass media articles relating to the Olympic Games. There are scholarly journals that are devoted exclusively to the Olympic Games, such as Olympika and the Journal of Olympic History. So what do we mean when we talk about Olympic scholarship? Cursory scanning of other sport journals also reveals a plethora of subjects ranging from legal aspects to history to philatelic aspects among a host of Olympic topics. This paper questions how can we identify, classify and measure them. |
| Keywords: | Olympic Games, Olympic scholarship, sport journal |
| JEL: | L83 Z00 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1574&r=sea |
| By: | Davin Chor (Singapore Management University) |
| Abstract: | This paper constructs a data set on purchasing-power-parity (PPP) adjusted skilled and unskilled wages in 139 countries for the period 1968-1998, based on the International Labor Organization's (ILO) annual October Inquiry and the Freeman and Oostendorp (2000) Occupational Wages Around the World (OWW) le. It nds strong evidence for the existence of well-integrated markets for skilled and unskilled labor, justifying the approach of constructing a skilled wage series and an unskilled wage series. Several signicant results emerged from an analysis of a representative subset of 67 countries which provided unbroken coverage for 1970-1994- (i) there is striking evidence of unconditional convergence in the skilled-unskilled wage ratio worldwide; (ii) this relative wage convergence was especially strong within a "club" of open economies, suggesting that Heckscher-Ohlin-Sameulson mechanisms might be at work; and (iii) there is a relatively weak pattern of convergence in unskilled real wages, implying that the claim of "Divergence, Big Time" (Pritchett 1997) has to be qualied when factor markets are studied instead of aggregate incomes. |
| Keywords: | Wages, purchasing-power-parity |
| JEL: | E24 J31 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1158&r=sea |
| By: | Davin Chor (Singapore Management University) |
| Abstract: | Discussion of Balistreri, Hillberry, and Rutherford (2007)-“Structural Estimation and Solution of International Trade Models with Heterogeneous Firms� |
| Keywords: | Trade models, Structural Estimation |
| JEL: | J08 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1152&r=sea |
| By: | Kyoo il Kim (Singapore Management University) |
| Abstract: | This paper studies an alternative bias correction for the M-estimator, which is obtained by correcting the moment equation in the spirit of Firth (1993). In particular, this paper compares the stochastic expansions of the analytically bias-corrected estimator and the alternative estimator and finds that the third-order stochastic expansions of these two estimators are identical. This implies that at least in terms of the third order stochastic expansion, we cannot improve on the simple one-step bias correction by using the bias correction of moment equations. Though the result in this paper is for a .xed number of parameters, our intuition may extend to the analytical bias correction of the panel data models with individual speci.c e¤ects. Noting the M-estimation can nest many kinds of estimators including IV, 2SLS, MLE, GMM, and GEL, our .nding is a rather strong result. |
| Keywords: | Third-order Stochastic Expansion, Bias Correction, M-estimation |
| JEL: | C10 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1540&r=sea |
| By: | Shandre M. Thangavelu; Sanja Samirana Pattnayak (Singapore Centre for Applied and Policy Economics) |
| Abstract: | The paper examines the spillover and linkage effects from the presence of foreign firms in the Indian pharmaceutical industry. A comprehensive panel data consisting of nearly 200 firms from 1989 to 2000 was used in the current study. The recent semi-parametric estimation methods as suggested by Olley and Pakes (1996) and Levinsohn and Petrin (2003) were adopted to account for the endogeneity in the input demand. Our results suggest the existence of positive and significant spillover from the foreign equity ownership in the Indian pharmaceutical industry. However, we also found negative and significant spillovers from the backward linkages with foreign firms. The negative spillovers from the backward linkages suggest the possibility of large technology and efficiency gap between local and foreign firms. The results also suggest that institutional arrangements that protect intellectual property rights such as product patents as opposed to process patents will be important for establishing positive linkages and spillovers between local and foreign firms in the Indian pharmaceutical industry. |
| Keywords: | FDI, Backward and Horizontal Linkages, Olley-Pakes, Levinsohn-Petrin |
| JEL: | F23 C23 O3 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1668&r=sea |
| By: | Nicolas L. Jacquet; Serene Tan (Singapore Management University) |
| Abstract: | This paper endogenizes the market structure of an economy with heterogeneous agents who want to form bilateral matches in the presence of search frictions and when utility is non-transferable. We depart from standard matching models where all agents are assumed to be in a unique meeting place by assuming the existence of in…finitely many meeting places and allowing each agent to choose which meeting place to be in. The market is thus allowed to be segmented into di¤erent meeting places, and agents not only get to choose who to match with, but also who they meet with. We show that in equilibrium all market structures feature perfect segmentation where agents match with the …rst person they meet. All these market structures have the same matching pattern, implying that the value of search to each agent is the same. Although perfect assortative matching cannot be obtained in equilibrium, the degree of assortativeness is nevertheless greater than in standard models. |
| Keywords: | search, matching, segmentation, market structure |
| JEL: | J42 D83 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1536&r=sea |
| By: | Tomoki Fujii (Singapore Management University) |
| Abstract: | Myopia is important in environmental and resource management problems because they often involve inter temporal decisions over a long time horizon. We present a parsimonious extension of a standard dynamic programming equation in a continuous time and continuous state setting, which enables rich description of myopic behavior. In our model, the process of planning future controls and choosing current controls are clearly distinguished. We illustrate the behavior of various types of myopic agents with a simple example of non-renewable resource extraction, and discuss the policy relevance of the expiry of extraction permits to resource management under myopia. |
| Keywords: | non-constant discounting, resource management, myopia, time-consistency, observational equivalence |
| JEL: | C61 Q30 Q50 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1504&r=sea |
| By: | Ashok S. Guha; Brishti Guha (Singapore Management University) |
| Abstract: | We consider a model of international trade with increasing returns in a non-traded input into industry, “infrastructure�, and show that the nature of equilibrium depends crucially on whether the infrastructure provider acts in a “naïve� manner – akin to a Level 1 agent in a cognitive hierarchy (C-H) model – or in a more sophisticated manner. Infrastructure requires a fixed investment and is produced under decreasing marginal costs, and we model two possible market forms, monopoly and Cournot oligopoly with free entry – both capable of generating pecuniary externalities in the manufacturing sector . Unlike most other work exploring the theme of increasing returns, we derive a unique closed economy equilibrium. In a small open economy, we show that with “naïve� infrastructure provider(s), multiple equilibria obtain. In this event whether or not a small open economy becomes an industrial exporter depends crucially on the presence of unexhausted economies of scale, and it is possible to have equilibria where manufactures are exported in spite of the world price of manufactures being lower than the autarky price. With a more sophisticated infrastructure provider, however, even an open economy has a unique equilibrium, which for a wide range of parameter values also involves a greater degree of industrialization than any of the “naïve� equilibria. For some parameter values, however, neither infrastructure nor manufacturing can develop and the economy remains totally agrarian. |
| Keywords: | Increasing returns to scale, cognitive hierarchy, multiple equilibria, uniqueness, Cournot oligopoly |
| JEL: | F1 O1 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1512&r=sea |
| By: | Jean-Charles Rochet (Toulouse School of Economics, Manufacture de Tabacs, 21 allées de Brienne - 31000 Toulouse, France.); Julian Wright (Department of Economics, National University of Singapore, 21 Lower Kent Ridge Road, Singapore 119077.) |
| Abstract: | We build a model of credit card pricing that explicitly takes into account credit functionality. We show that a monopoly card network always selects an interchange fee that exceeds the level that maximizes consumer surplus. If regulators only care about consumer surplus, a conservative regulatory approach is to cap interchange fees based on retailers’ net avoided costs from not having to provide credit themselves. In the model, this always raises consumer surplus compared to the unregulated outcome, sometimes to the point of maximizing consumer surplus. |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20091138&r=sea |
| By: | Zhenlin Yang (Singapore Management University) |
| Abstract: | This paper concerns the joint modeling, estimation and testing for local and global spatial externalities. Spatial externalities have become in recent years a standard notion of economic research activities in relation to social interactions, spatial spillovers and dependence, etc., and have received an increasing attention by econometricians and applied researchers. While conceptually the principle underlying the spatial dependence is straightforward, the precise way in which this dependence should be included in a regression model is complex. Following the taxonomy of Anselin (2003, International Regional Science Review 26, 153-166), a general model is proposed, which takes into account jointly local and global externalities in both modelled and unmodelled effects. The proposed model encompasses all the models discussed in Anselin (2003). Robust methods of estimation and testing are developed based on Gaussian quasi-likelihood. Large and small sample properties of the proposed methods are investigated. |
| Keywords: | Asymptotic property, Finite sample property, Quasi-likelihood, Spatial regression models, Robustness, Tests of spatial externalities |
| JEL: | C1 C2 C5 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1575&r=sea |
| By: | Ashok S Guha; Brishti Guha (Singapore Management University) |
| Abstract: | We model an economy with two final goods, manufactures produced under IRS and food. The scale economies in manufacturing are external (therefore compatible with perfect competition) and traceable to internal economies in the provision of an infrastructural service (the third sector of the economy). We examine the equilibria of this economy under both autarky and free trade. We thus revisit a theme with a voluminous literature, beginning with R. C. O. Matthews’(1950) vintage classic and including, among others, Panagariya (1991), Krugman (1991), and Venables (1996). Much of this – as well as our own work – concerns multiple equilibria- it overlaps the development literature on poverty traps from Rosenstein Rodan (1943) to Murphy, Schleifer and Vishny (1989). We differ from this body of work in a major, and some minor, respects. We trace the source of increasing returns to infrastructure, and our focus is on the role of the infrastructure provider’s beliefs in determining the equilibrium and the fate of the economy. Internal economies in infrastructure provision ensure that it is non-competitive . We consider a pure monopoly. The infrastructure provider is of course aware of the impact of his decisions on the price of his services, but he may or may not appreciate their impact, on demand for labor (in a market where he competes with all other industrial and agricultural producers) and wages and induced effects on demand for infrastructure itself. He may in short be a ‘naïve’ or a ‘sophisticated’ decision-maker. We model the naïve infrastructure provider after Venables (1996). Venables portrays a producer of intermediates who derives the demand curve for his product on the assumption that his customers have already contracted for their purchases of other inputs, specifically labor. Similar beliefs on the part of our infrastructure provider generate an equilibrium that is unique in the closed economy. In the small open economy, on the other hand, equilibria, where they exist , will generally be multiple- at any world price, there will generally exist one at a low level with unexhausted scale economies and another at a high level where these have been exhausted. |
| Keywords: | Increasing returns to scale, cognitive hierarchy, multiple equilibria, uniqueness, Cournot oligopoly |
| JEL: | F1 O1 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1519&r=sea |
| By: | Peter C. B. Phillips; Jun Yu (Singapore Management University) |
| Abstract: | This paper overviews maximum likelihood and Gaussian methods of estimating continuous time models used in finance. Since the exact likelihood can be constructed only in special cases, much attention has been devoted to the development of methods designed to approximate the likelihood. These approaches range from crude Euler-type approximations and higher order stochastic Taylor series expansions to more complex polynomial-based expansions and infill approximations to the likelihood based on a continuous time data record. The methods are discussed, their properties are outlined and their relative finite sample performance compared in a simulation experiment with the nonlinear CIR diffusion model, which is popular in empirical finance. Bias correction methods are also considered and particular attention is given to jackknife and indirect inference estimators. The latter retains the good asymptotic properties of ML estimation while removing finite sample bias. This method demonstrates superior performance in finite samples. |
| Keywords: | Maximum likelihood, Transition density, Discrete sampling, Continuous record, Realized volatility, Bias reduction, Jackknife, Indirect inference |
| JEL: | C22 C32 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1558&r=sea |
| By: | Massimiliano Landi (Singapore Management University) |
| Abstract: | We consider a deterministic evolutionary model where players form expectations about future play. Players are not fully rational and have expectations that change over time in response to current payoffs and feedback from the past. We provide a complete characterization of the qualitative dynamics so induced for a two strategies population game, and relate our findings to standard evolutionary dynamics and equilibrium selection when agents have rational forward looking expectations. |
| Keywords: | evolutionary games, dynamic systems, bounded rationality |
| JEL: | C73 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1550&r=sea |
| By: | Gea M. Lee (Singapore Management University) |
| Abstract: | In this paper, we develop a model of collusion in which two firms play an infinitelyrepeated Bertrand game when each firm has a privately-informed agent. The colluding firms, fixing prices, allocate market shares based on the agent’s information as to cost types. We emphasize that the presence of privately-informed agents may provide firms with a strategic opportunity to exploit an interaction between internal contracting and market-sharing arrangement- the contracts with agents may be used to induce firms’ truthful communication in their collusion, and collusive market-share allocation may act to reduce the agents’ information rents. |
| Keywords: | Optimal collusion, internal contract, privately-informed agents, price-fixing |
| JEL: | C73 L13 L14 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1553&r=sea |
| By: | Tomoki Fujii (Singapore Management University) |
| Abstract: | Poverty reduction is a top priority for international organizations, governments and non-governmental organizations. The aid resources available for poverty reduction are, however, severely constrained in many countries. Minimizing the leakage of aid resources to the non-poor is a key to maximize poverty reduction with the limited amount of resources available. One way to minimize such leakage is to target resources geographically. That is, policymakers can move resources to the poorest part of the country. Geographic targeting can be quite effective when poverty is unevenly distributed across the country, and this proves to be the case in many countries. This paper is structured as follows. In section 2, we summarize the SAE poverty mapping Cambodia. Section 3, discusses the methodology and dataset we used to create an MWBI poverty map in Cambodia. Section 4, we describe the CCDB. In section 5, we compare the SAE poverty map and the MWBI poverty map as well as the CCDB in Cambodia. In section 6, we consider the implications for geographic targeting, and section 7 concludes. |
| Keywords: | poverty, geographical resource, Cambodia, MWBI, poverty map, CCDB, SAE |
| JEL: | I32 I38 I30 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1579&r=sea |
| By: | Fali Huang (Singapore Management University) |
| Abstract: | This paper establishes a simple model of long run economic and political development, which is driven by the inherent technical features of di¤erent production factors and the political con.icts among factor owners on how to divide the outputs. The main production factor in economy evolves from land to physical capital and then to human capital, which enables their respective owners (landlords, capitalists, and workers) to gain political power in the same sequence, shaping the political development path from monarchy to oligarchy and .nally to democracy with full su¤rage. When it is too costly for any group of factor owners to repress others, political compromise is reached and economic progress is not blocked; otherwise, the political con.icts may lead to economic stagnation. |
| Keywords: | Economic Development, Political Development, Democratization, Class Structure, Land, Physical Capital, Human Capital, Monarchy, Oligarchy, Democracy, Su¤rage Extension |
| JEL: | O10 O40 P16 N10 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1535&r=sea |
| By: | Fali Huang (Singapore Management University) |
| Abstract: | This paper establishes a simple model of long run economic and political development, which is driven by the inherent technical features of di¤erent production factors, and political con‡icts among factor owners on how to divide the outputs. The main capital form in economy evolves from land to physical capital and then to human capital, which enables their respective owners (landlords, capitalists, and workers) to gain political powers in the same sequence, shaping the political development path from monarchy to elite ruling and finally to full suffrage. When it is too costly for any group of factor owners to repress others, political compromise is reached and economic progress is not blocked; otherwise, the political con‡icts may lead to economic stagnation. |
| Keywords: | Economic Development, Political Development, Class Structure, Land, Physical Capital, Human Capital, Monarchy, Suffrage Extension |
| JEL: | O10 O40 P16 N10 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1529&r=sea |
| By: | Anthony S. Tay (Singapore Management University) |
| Abstract: | We investigate two methods for using daily stock returns to forecast, and update forecasts of, quarterly real output growth. Both methods aggregate daily returns in some manner to form a single stock market variable. We consider (i) augmenting the quarterly AR(1) model for real output growth with daily returns using a nonparametric Mixed Data Sampling (MIDAS) setting, and (ii) augmenting the quarterly AR(1) model with the most recent r -day returns as an additional predictor. We discover that adding low frequency stock returns (up to annual returns, depending on forecast horizon) to a quarterly AR(1) model improves forecasts of output growth. |
| Keywords: | Forecasting, Mixed Frequencies, Functional linear regression |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1569&r=sea |
| By: | Yixiao Sun (Dept. of Economics, UC, San Diego); Peter C.B. Phillips (Cowles Foundation, Yale University); Sainan Jin (School of Economics, Singapore Management University) |
| Abstract: | Using the power kernels of Phillips, Sun and Jin (2006, 2007), we examine the large sample asymptotic properties of the t-test for different choices of power parameter (rho). We show that the nonstandard fixed-rho limit distributions of the t-statistic provide more accurate approximations to the finite sample distributions than the conventional large-rho limit distribution. We prove that the second-order corrected critical value based on an asymptotic expansion of the nonstandard limit distribution is also second-order correct under the large-rho asymptotics. As a further contribution, we propose a new practical procedure for selecting the test-optimal power parameter that addresses the central concern of hypothesis testing: the selected power parameter is test-optimal in the sense that it minimizes the type II error while controlling for the type I error. A plug-in procedure for implementing the test-optimal power parameter is suggested. Simulations indicate that the new test is as accurate in size as the nonstandard test of Kiefer and Vogelsang (2002a, 2002b; KV), and yet it does not incur the power loss that often hurts the performance of the latter test. The new test therefore combines the advantages of the KV test and the standard (MSE optimal) HAC test while avoiding their main disadvantages (power loss and size distortion, respectively). The results complement recent work by Sun, Phillips and Jin (2008) on conventional and bT HAC testing. |
| Keywords: | Asymptotic expansion, HAC estimation, Long run variance, Loss function, Optimal smoothing parameter, Power kernel, Power maximization, Size control, Type I error, Type II error |
| JEL: | C13 C14 C22 C51 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1749&r=sea |
| By: | Davin Chor; Richard B. Freeman (Singapore Management University) |
| Abstract: | The 2004 Global Labor Survey (GLS) is an Internet-based survey that seeks to measure de facto labor practices in countries around the world, covering issues such as freedom of association, the regulation of work contracts, employee benefits and the prevalence of collective bargaining. To find out about de facto practices, the GLS invited labor practitioners, ranging from union officials and activists to professors of labor law and industrial relations, to report on conditions in their country. Over 1,500 persons responded, which allowed us to create indices of practices in ten broad areas for 33 countries. The GLS' focus on de facto labor practices contrasts with recent studies of de jure labor regulations (Botero et al., 2004) and with more limited efforts to measure labor practices as part of surveys of economic freedom (Fraser Institute) and competitiveness (World Economic Forum). Although our pool of respondents differs greatly from the conservative foundations and business leaders who contribute respectively to the Fraser Institute and World Economic Forum reports, the GLS and the labor market components of the economic freedom and competitiveness measures give similar pictures of labor practices across countries. This similarity across respondents with different economic interests and ideological perspectives suggests that they are all reporting on labor market realities in a relatively unbiased way. As a broad summary statement, the GLS shows that practices favorable to workers are more prevalent in countries with high levels of income per capita; are associated with less income inequality; are unrelated to aggregate growth rates; but are modestly positively associated with unemployment. |
| Keywords: | Labor Survey, industrial relation, |
| JEL: | J00 J80 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1151&r=sea |
| By: | Fali Huang (Singapore Management University) |
| Abstract: | This paper studies the transition of contract enforcement institutions. The prevalence of relational contracts, low legal quality, strong cultural preference for personalistic relationships, low social mobility, and highly unequal endowment form a cluster of mutually reinforcing institutions that hinder economic development. The cultural element per se does not necessarily reduce social welfare though it may slow down the legal development, while the real problem lies in endowment inequality and low social mobility. Thus a more equal distribution of resources may be the ultimate key to unravel the above interlocking institutions. These results are generally consistent with the empirical evidence. |
| Keywords: | relational contract, legal contract enforcement, institutions, endowment inequality, economic development |
| JEL: | O1 K49 C72 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1528&r=sea |
| By: | Hing-Man Leung (Singapore Management University) |
| Abstract: | Since the elasticity of substitution between capital and labor is not always one, and since technical progress is not always Harrod-neutral, it is desirable to have an endogenous growth model that admits all sizes of the elasticity and all known technology modes. We derive an equation to do just that, fully describing the per capita income growth rate at all times. It shows a typical economy needing hundreds if not thousands of years to reach its long term growth rate, leading to the conclusion that even the short run may be very long indeed. |
| Keywords: | The elasticity of substitution, Non-Harrod-neutral technology, short-run growth |
| JEL: | O10 O11 O12 O40 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1554&r=sea |
| By: | Christian Gouriéroux; Peter C. B. Phillips; Jun Yu (Singapore Management University) |
| Abstract: | It is well-known that maximum likelihood (ML) estimation of the autoregressive parameter of a dynamic panel data model with .xed e¤ects is inconsistent under .xed time series sample size (T) and large cross section sample size (N) asymptotics. The estimation bias is particularly relevant in practical applications when T is small and the autoregressive parameter is close to unity. The present paper proposes a general, computationally inexpensive method of bias reduction that is based on indirect inference (Gouriéroux et al., 1993), shows unbiasedness and analyzes efficiency. The method is implemented in a simple linear dynamic panel model, but has wider applicability and can, for instance, be easily ex-tended to more complicated frameworks such as nonlinear models. Monte Carlo studies show that the proposed procedure achieves substantial bias reductions with only mild increases in variance, thereby substantially reducing root mean square errors. The method is compared with certain consistent estimators and bias-corrected ML estimators previously proposed in the literature and is shown to have superior .nite sample properties to GMM and the bias-corrected ML of Hahn and Kuersteiner (2002). Finite sample performance is compared with that of a recent estimator proposed by Han and Phillips (2005). |
| Keywords: | Autoregression, Bias reduction, Dynamic panel, Fixed e¤ects Indirect inference |
| JEL: | C33 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1508&r=sea |
| By: | Kyoo il Kim (Singapore Management University) |
| Abstract: | This paper studies the uniform convergence rate of the turncated SNP (semi-nonparametric) density estimator. Using the uniform convergence rate result we obtain, we propose a test statistic testing the equivalence of two unknown densities where two densities are estimated using the SNP estimator and supports of densities are possibly unbounded. |
| Keywords: | SNP Density Estimator, Uniform Convergence Rate, Comparison of Two Densities |
| JEL: | C12 C14 C16 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1538&r=sea |
| By: | Pao-li Chang (Singapore Management University) |
| Abstract: | This paper provides a theoretical framework of dispute settlement to explain the surge in blocking incidence of GATT panel reports during the 1980s and the variations in withdrawn incidence versus total disputes across different decades of the GATT regime. The study first suggests the role of the degree of legal controversy over a panel ruling in determining countries' incentives to block (appeal) a panel report under the GATT (WTO) regime. The study then analyzes the effects of political power on countries' incentives to use, and their interactions in using, the dispute settlement mechanism, when two-sided asymmetric information exists regarding panel judgement. |
| Keywords: | dispute settlement, legal controversy, block, appeal, two-sided asymmetric information, political cost |
| JEL: | F02 F13 K33 K41 K42 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1147&r=sea |
| By: | Liangjun Su; Zhenlin Yang (Singapore Management University) |
| Abstract: | This paper investigates the asymptotic properties of quasi-maximum likelihood estimators for transformed random effects models where both the response and (some of) the covariates are subject to transformations for inducing normality, flexible functional form, homoscedasticity, and simple model structure. We develop a quasi maximum likelihood-type procedure for model estimation and inference. We prove the consistency and asymptotic normality of the parameter estimates, and propose a simple bootstrap procedure that leads to a robust estimate of the variance-covariance matrix. Monte Carlo results reveal that these estimates perform well in finite samples, and that the gains by using bootstrap procedure for inference can be enormous. |
| Keywords: | Asymptotics, Bootstrap, Quasi-MLE, Transformed panels, Variance-covariance matrix estimate |
| JEL: | C23 C15 C51 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1564&r=sea |
| By: | Kyoo il Kim (Singapore Management University) |
| Abstract: | We consider estimation and inference of parameters in discrete games allowing for multiple equilibria, without using an equilibrium selection rule. We do a set inference while a game model can contain infinite dimensional parameters. Examples can include signaling games with discrete types where the type distribution is nonparametrically specified and entry-exit games with partially linear payoffs functions. A consistent set estimator and a con.dence interval of a function of parameters are provided in this paper. We note that achieving a consistent point estimation often requires an information reduction. Due to this less use of information, we may end up a point estimator with a larger variance and have a wider confidence interval than those of the set estimator using the full information in the model. This finding justifies the use of the set inference even though we can achieve a consistent point estimation. It is an interesting future research to compare these two alternatives- CI from the point estimation with the usage of less information vs. CI from the set estimation with the usage of the full information. |
| Keywords: | Semiparametric Estimation, Set Inference, InÂ…nite Dimensional Parameters, Inequality Moment Conditions, Signaling Game with Discrete Types |
| JEL: | C13 C14 C35 C62 C73 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1541&r=sea |
| By: | Nicolas L. Jacquet (Singapore Management University) |
| Abstract: | This paper considers the efficiency properties of risk-neutral workers’ mobility decisions in an equilibrium model with search frictions, but no search externalities, when the rent accruing to a match is split through bargaining. Matches are ex ante homogeneous and their true productivity is learnt after the match is formed. It is shown that the efficiency of worker turnover depends on contract enforceability, and that in the absence of complete enforceability the equilibrium fails to be efficient. This is because without complete enforceability firms cannot credibly offer workers contracts that will guarantee them the entire future of all potential future matches. |
| Keywords: | On-the-Job Search, Learning, Bargaining, Contracts, Enforceability |
| JEL: | J30 J63 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1537&r=sea |
| By: | Kyoo il Kim (Singapore Management University) |
| Abstract: | This paper studies an econometric modeling of a signaling game with two players where one player has one of two types. In particular, we develop an estimation strategy that identi…es the payo¤s structure and the distribution of types from data of observed actions. We can achieve uniqueness of equilibrium using a re…nement, which enables us to identify the parameters of interest. In the game, we consider non-strategic public signals about the types. Because the mixing distribution of these signals is nonparametrically specifi…ed, we propose to estimate the model using a sieve conditional MLE. We achieve the consistency and the asymptotic normality of the structural parameters estimates. As an alternative, we allow for the possibility of multiple equilibria, without using an equilibrium selection rule. As a consequence, we adopt a set inference allowing for multiplicity of equilibria. |
| Keywords: | Semiparametric Estimation, Signaling Game, Set Inference, InÂ…nite Dimensional Parameters, Sieve Simultaneous Conditional MLE |
| JEL: | C13 C14 C35 C62 C73 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1539&r=sea |
| By: | Malcolm Dowling; Yap Chin-Fang (Singapore Management University) |
| Abstract: | The paper suggests that maintenance of a homeostatic equilibrium provides a rationale for many actions of economic agents. Homeostatic equilibrium has physical, economic, emotional, psychological and environmental dimensions. The characteristics of this equilibrium include feelings of safety, trust, connectedness with friends, family and community, and a predictable and welcoming social and work environment. Individuals generally make decisions that help them move toward and achieve this state of equilibrium. Departure from homeostasis reduces well being and stimulates agents to take actions that will return them to a state of homeostasis. This hypothesis is tested with probit analysis using sample responses from the four waves of the World Values Surveys conducted between 1980 and 2002. Results generally support the homeostasis hypothesis. Variables that reflect departure from homeostasis such as divorce and poor health are highly significant, pointing to a reduction in well being. Variables that reflect the importance of friends, family, a trusting social and work environment have significant impacts to raise well being. |
| Keywords: | Homeostatic equilibrium, development |
| JEL: | I3 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1162&r=sea |
| By: | Yin-Fang Zhang; David Parker; Colin Kirkpatrick (Singapore Centre for Applied and Policy Economics) |
| Abstract: | Over the last two decades electricity sectors in both developed and developing countries have been subject to restructuring to introduce private capital and increase competition. This has been accompanied by the introduction of new regulatory regimes. Although the effects of such reforms in a number of the developed economies are now well documented, apart from a few case studies the experience of developing countries is much less well researched. This is important because privatisation, competition and the reform of state regulation are key themes of donor aid programmes, notably those of the World Bank. This paper provides an econometric assessment of the effects of privatisation, competition and regulation on the performance of the electricity generation industry using panel data for 36 developing and transitional countries, over the period 1985 to 2003. The study identifies the impact of these reforms on generating capacity, electricity generated, labour productivity in the generating sector and capacity utilisation. The main conclusions are that on their own privatisation and regulation do not lead to obvious gains in economic performance, though there are some positive interaction effects. By contrast, introducing competition does seem to be effective in stimulating performance improvements. |
| Keywords: | Privatisation, competition, regulation, developing economies, electricity sector. |
| JEL: | L33 L43 L44 L50 O12 O38 O50 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1678&r=sea |
| By: | Massimiliano Landi; Antonio Merlo; Vincenzo Galasso; Andrea Mattozzi (Singapore Management University) |
| Abstract: | Like voters (the represented), politicians (the representees) are the heart and soul of representative democracy. But isn’t being a politician just like any other job? After we get past the rhetoric, is politics any different than other occupations? In the political sector, voters, parties and politicians represent the counterparts of consumers, firms and workers/managers in the market sector. In fact, the analogy is much deeper than it may appear at first sight. In the market sector, consumers determine to a large extent the success of a firm and ultimately the management’s fate. However, managers are chosen by the firms, which typically have an objective that is different from those of consumers and managers. Likewise, while in all democratic systems the voters ultimately determine who is elected, it is typically the case that political parties nominate candidates for public office. Furthermore, the objectives of voters and parties with respect to the selection of candidates may differ, and are constrained by the career ambitions of individuals with political aspirations. But then, what really makes a career in the political sector different from a career in any other economic sector? There are at least three distinctive features that characterize the labor market in the political sector. First, politicians are typically “under the spotlight,� receiving the attention of the media and of a variety of citizens’ organizations. This makes politics a “showcase,� where politicians in office can display their political skills, while it might be more difficult for individuals working in the market sector to reveal their market ability. Second, inter-party competition for potential politicians is likely to be of secondary importance, as ideological preferences are more likely to attract individuals toward specific parties at the beginning of their political careers. Third, it is often the case that political parties “take care of their losers� by reserving party’s positions to defeated incumbents. As a result, while individual careers within the political sector are inevitably linked to the opportunities available within parties, the extent to which individual endowments of “political� and “market� skills are correlated, or experience in the political (market) sector is also valuable in the market (political) sector, links the labor markets of the two sectors. This link affects the selection of politicians, the politicians’ careers, and the relationship between parties and voters. |
| Keywords: | politicians, voters, parties, political sector, |
| JEL: | J21 J00 J49 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1548&r=sea |
| By: | Jang-Sup SHIN; Sung-Won JANG (Singapore Centre for Applied and Policy Economics) |
| Abstract: | This paper analyzes the sources of first-mover advantages by examining the case of Samsung Electronics, a firm which has maintained and strengthened the technological leadership in the DRAM industry since 1992. The focus is on endogeneity of first-mover advantages under changing technological and competitive environments, part of which are also shaped by the technology leader. The paper also discusses general implications of this case study for strategy and organization for innovation. |
| Keywords: | first-mover advantage, Samsung Electronics, DRAM |
| JEL: | O32 L63 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1664&r=sea |
| By: | Massimiliano Landi; Domenico Colucci (Singapore Management University) |
| Abstract: | We consider a signalling game in which a population of receivers decide on the outcome by majority rule, sender and receivers have conflicting interests, and there is uncertainty about both players’ types. We model players rationality along the lines of recent findings in behavioral game theory. We characterize the structure of the equilibria in the reduced game so obtained. We find that all pure strategy equilibria are consistent with successful attempts to mislead the receivers, and relate them to the message bin Laden sent on the eve of the 2004 US Presidential elections. The same result holds if we allow for some uncertainty about the sign of the correlation between the sender’s and the receivers’ payoffs. |
| Keywords: | bin Laden, sender receiver games, US Presidential elections, signalling game, payoffs |
| JEL: | C70 D72 D70 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1547&r=sea |
| By: | Rafaelita M. Aldaba (Philippine Institute for Development Studies) |
| Abstract: | The paper studies the impact of trade liberalization on competition and productivity. Competition is the main channel through which trade liberalization affects economic performance. Competition fosters innovation and technology adoption which leads to increases in competitiveness and growth that will have large consequences for poverty and inequality. To realize these expected effects, it is important that firms change their behavior and adjust to the new market environment. The success of reforms depends to a great extent on the capacity of firms to exploit the new competitive conditions in the market and on their ability to take advantage of the opportunities offered to them. Firms, however, will not venture into the unknown and uncertain. They will only take advantage of the new market opportunities if the government program for implementing policy reforms is a credible one. Policy reversals, delays in timetable, and inconsistent decision-making may undermine the success of liberalization. Hence, the overall environment for market transactions is also an essential ingredient. Therefore, the strength of competition is a function not only of the behavior of firms but also of the external environment within which they compete. This includes the state of transport and communications, framework of laws and regulations, effectiveness of the financial system in matching investment resources with entrepreneurial opportunities, as well as information available to consumers. The experience of the Philippine manufacturing sector shows that which despite liberalization, competition and productivity growth have remained weak due to inadequate physical and institutional infrastructure. |
| Keywords: | competition, trade liberalization, effective protection, total factor productivity growth |
| JEL: | F13 O24 F10 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:1716&r=sea |