nep-sea New Economics Papers
on South East Asia
Issue of 2010‒06‒11
six papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Fiscal Decentralization and Urbanization in Indonesia By Comola, Margherita; de Mello, Luiz
  2. Fighting Forest Fires - An Assessment of Policy Options in Indonesia By Luthfi Fatah; Udiansyah
  3. An Empirical Study of Dividend Payout and Future Earnings in Singapore By Lee, King Fuei
  4. India’s Recent Infrastructure Development Initiatives: A Comparative Analysis of South and Southeast Asia By Bhattacharyya, Anushree; Chakraborty, Debashis
  5. Perceptions of Best Management Practices on Thai Citrus Farms and the Development of an Agri-Environmental Policy: A Case Study in the Ping River Basin, Thailand By Wimolpat Bumbudsanpharoke
  6. Cores of games with positive externalities By CHANDER, Parkash

  1. By: Comola, Margherita; de Mello, Luiz
    Abstract: Indonesia went through a process of fiscal decentralization in 2001 involving the devolution of several policymaking and service delivery functions to the subnational tiers of government (provinces and districts). This process is likely to have affected r
    Keywords: Indonesia, minimum wage, federalism, urbanization
    Date: 2010
  2. By: Luthfi Fatah (Faculty of Agriculture Lambung Mangkurat University); Udiansyah (Faculty of Agriculture Lambung Mangkurat University)
    Abstract: Uncontrolled forest fires are one of the key causes of habitat destruction in Indonesia. The haze they produce causes significant pollution problems for people in the country and in surrounding nations. This study has highlighted the root causes of the fires and assessed a range of potential new policy options to improve the situation. The study finds that the weak enforcement of forest conservation rules and regulations is a key problem and that this is caused by wide range of resource and institutional failures.
    Keywords: forest fire, Indonesia
    Date: 2010–04
  3. By: Lee, King Fuei
    Abstract: This paper applies Johansen’s vector error-correction model (VECM) to investigate for the existence of the dividend signalling effect in the Singapore aggregate market through impulse response analysis, forecast error variance decomposition and granger-causality test. Our findings show that a unit shock increase in dividend payout leads to a permanent increase in future earnings over time, thus supporting the existence of informational/signalling content in dividend payout in the Singapore market over the long run. We further find that at least half of the forecast error variance in earnings can be accounted for by innovations in the dividend payout, while the payout ratio is also shown to granger-cause earnings in the Singapore market.
    Keywords: Dividend payout; future earnings; dividend signalling; Singapore; impulse response function
    JEL: G35
    Date: 2010
  4. By: Bhattacharyya, Anushree; Chakraborty, Debashis
    Abstract: Since the early 1990s, the number of Regional Trade Agreements has increased considerably across continents. This is resulting into increasing regional integration with substantial importance being given to cross-border connectivity development. India, a late subscriber of active RTA strategy, is enthusiastically venturing into cross-border connectivity exercises to enhance its trade integration with the neighbouring countries in recent period. Developing cross-border connectivity is currently receiving salience in the regional forums like SAARC, though limited progress has been made so far. In contrast, ASEAN is the only forum in Asia where substantial progress in integration through cross-border infrastructure augmentation has been witnessed. India has recently entered into FTA with ASEAN and is involved in several infrastructure augmentation projects in several ASEAN member countries. Given this background, the current paper seeks to analyze the Indian infrastructure development initiatives in the immediate and Southeastern neighborhood. The discussion covers the SAARC and ASEAN initiatives towards building physical infrastructure, as well as the recent aid for trade initiatives being undertaken in South and Southeast Asia. The paper concludes by drawing the lessons for SAARC members from the ASEAN experience.
    Keywords: Economic Integration; Infrastructure
    JEL: F15 H54
    Date: 2010–06–02
  5. By: Wimolpat Bumbudsanpharoke (Scottish Agricultural College, University of Edinburgh)
    Abstract: The Ping river basin, one of the major tributaries in northern Thailand, is strategically interlinked with major waterways livening agricultural activities for centuries. The basin is considerably recognised as an area to be protected from potential water-consumption threats impacting downstream's agricultural and industrial activities and residential areas. Over decades, economic expansion has changed the pattern of land use putting pressures on natural resources. One of the main concerns in the Ping river basin is a deterioration of water quality. Emissions from point sources, exemplified by large industrial facilities and communities, are regulated under command and control strategies. However, diffuse discharges from agricultural activities pose pervasive difficulties in management and policy design. The recent government report highlights citrus cultivation as the activity with a high application rate of chemicals, coupled with forest encroachment. Recognition of the significant of nonpoint source pollution problems has stimulated policy makers to promote Best Management Practices (BMPs) to control farm emissions at the watershed level. A number of agricultural economics studies have made policy recommendation based on an assumption that farmers are homogenous and make decision to maximise their well-being. However, there is a lack of research around behavioural responses to agri-environmental policy. As such, this study is tailored to employ contemporary interests of economic and behavioural principles in order to tackle the problem by understanding farmers' perspective and serving correct requirements rather than traditionally campaigning policies without sound agreements. The main objective of this study is to consider psychological perspectives on farmer decision making in relation to BMP adoption. The study attempts to investigate beliefs that are associated with decision making, to understand subjectivity in conservation behaviour, to assess costs of various BMP, and to make relevant policy recommendations. Prior to the main analysis, a set of BMPs is defined. Twelve BMPs suitable for implementation in the Ping river basin are selected based on expert judgement. Two psychological theories, the Theory of Planned Behaviour and QMethodology, are proposed to investigate farmers' behavioural intentions and latent perceptions, respectively. Further, the economic analysis of BMP cost at farm level is conducted to investigate cost effects and adoption intention.
    Keywords: citrus farm, agri-environmental policy, Thailand
    Date: 2010–03
  6. By: CHANDER, Parkash (National University of Singapore and UniversitŽ catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium)
    Abstract: This paper introduces a core concept, called the -core, in the primitive framework of a strategic game. For a certain class of strategic games, it is a weaker concept than the strong Nash equilibrium, but in general stronger than the conventional - and - cores. We argue that the coalition formation process is an infinitely repeated game and show that the grand coalition forms if the -core is nonempty. This is a weaker sufficient condition than the previous such condition (Maskin (2003, Theorem 4)). As an application of this result, it is shown that the - core of an oligopolistic market is nonempty and thus the grand coalition forms.
    Keywords: positive externalities, strategic game, core, repeated game, coalition formation
    JEL: C7 D62
    Date: 2010–01–01

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