nep-sea New Economics Papers
on South East Asia
Issue of 2010‒12‒23
fourteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Technology and Indonesia’s Industrial Competitiveness By Thee Kian Wie
  2. Evolving Asian Power Balances and Alternate Conceptions for Building Regional Institutions By Wang, Yong
  3. The Asian Currency Crisis: Origins, Lessons and Future Outlook By Abdur R. Chowdhury
  4. ASEAN Economic Integration: Features, Fulfillments, Failures and the Future By Hill, Hal; Menon, Jayant
  5. The Evolution of Gender Wage Differentials and Discrimination in Thailand: 1991-2007 — An Application of Unconditional Quantile Regression By Kampon ADIREKSOMBAT, FANG Zheng and Chris SAKELLARIOU; Kampon ADIREKSOMBAT; FANG Zheng; Chris SAKELLARIOU
  6. Complex Vertical FDI and Firm Heterogeneity: Evidence from East Asia By Kazunobu Hayakawa; Toshiyuki Matsuura
  7. Does Exporting Raise Productivity? Evidence from Korean Microdata By Sanghoon Ahn
  8. Does Fiscal Decentralisation Strengthen Social Capital?: Cross-Country Evidence and the Experiences of Brazil and Indonesia By Luiz de Mello
  9. Achieving the trade targets of Millennium Development Goal 8: Status in the least developed countries of Asia and the Pacific By Mikic, Mia; Ramjoue, Melanie
  10. Virtual R&D Teams: A potential growth of education-industry collaboration By Ale Ebrahim, Nader; Ahmed, Shamsuddin; Abdul Rashid, Salwa Hanim; Taha, Zahari
  11. Examining the potential for cross-South Pacific trade: ASEAN and Latin America By Mikic, Mia; Jakobson, Elias
  12. Towards a spatial perspective on sustainability transitions By Coenen, Lars; Benneworth, Paul; Truffer, Bernhard
  13. An Efficient Test of Fiscal Sustainability By Vasco J. Gabriel; Pataaree Sangduan
  14. Discrimination in the Equilibrium Search Model with Wage-Tenure Contracts By FANG Zheng and Chris SAKELLARIOU; FANG Zheng; Chris SAKELLARIOU

  1. By: Thee Kian Wie
    Abstract: This paper will discuss the major factors, which affect Indonesia’s industrial competitiveness, specifically the determinants of its industrial technology development, which is crucial to raising Indonesia’s competitiveness. After a brief overview of industrial development before and after the Asian economic crisis, the paper discusses some recent assessments of the country’s competitiveness. It considers the determinants of Indonesia’s industrial technological development, including policy options open to the government.
    Keywords: Indonesia, industrial competitiveness, technology development, Asian, economic
    Date: 2010
  2. By: Wang, Yong (Center for International Political Economy)
    Abstract: The paper aims to examine economic interdependence and balancing power politics, and their mixed implications for regional institution building in East Asia based on the concept of common security. By pointing out the gap between the violent conflict prediction and the stability and prosperity reality following the end of the Cold War, the paper gives analysis to the factors affecting the security relations in the region, including (i) the role of the US, (ii) the rise of the PRC, (iii) ASEAN's efforts at regional cooperation, the (iv) the PRC–Japan rivalry. The author concludes that economic interdependence and regional cooperation in Asia have constrained a power struggle from spiraling out of control, while open regionalism has become a reasonable approach to regional institution building. Finally, the paper makes policy recommendations with respect to principles and steps in moving to a new regional security order.
    Keywords: East Asia; Regional Cooperation; Power Politics; Balance of Power; Regional Institutions; Common Security
    JEL: F53
    Date: 2010–12–01
  3. By: Abdur R. Chowdhury
    Abstract: This paper has three objectives. First, to explain what led to the crisis in the East and the South East Asia in the 1990s and how did this spread throughout the region; second, to analyse the lessons that can be learned from this crisis to prevent it from reoccurring in the future, and third, to evaluate the future outlook of the countries in this region. [Research for Action 47]
    Keywords: East, South East Asis, lessons, countries, future
    Date: 2010
  4. By: Hill, Hal (Arndt Corden Department of Economics); Menon, Jayant (Asian Development Bank)
    Abstract: The 10-member Association of Southeast Asian Nations, ASEAN, is arguably the most durable and successful regional grouping in the developing world. Established in 1967, it has contributed greatly to regional harmony and prosperity. ASEAN is characterized by great internal diversity, generally high economic growth, and a reluctance to establish a strong supranational structure. Beginning in 1976—with its five original members—ASEAN began to move toward economic cooperation and integration, initially with a focus on merchandise trade. In the 1990s, it added focus on services, investment, and labor. And in the past decade—now including all of Southeast Asia—ASEAN broadened cooperation on macroeconomic and financial issues, many of these together with its Northeast Asian neighbors—the "Plus 3" of the People's Republic of China, Japan, and the Republic of Korea. Members adopted what may appear to be formal preferential trade arrangements. But in practice these are usually multilateralized. ASEAN informally embraces what is sometimes termed "open regionalism." However, there is little likelihood in the foreseeable future that this will evolve into a deep EU-style economic integration behind a common external trade regime, despite a commitment to forming an ASEAN Economic Community beginning 2015.
    Keywords: ASEAN economies; ASEAN economic development; economic integration; regional trade agreements
    JEL: F15 F59 O53
    Date: 2010–12–01
  5. By: Kampon ADIREKSOMBAT, FANG Zheng and Chris SAKELLARIOU; Kampon ADIREKSOMBAT (Economic Intelligence Center, Siam Commercial Bank, Thailand); FANG Zheng (Division of Economics, Nanyang Technological University, Singapore, 639798); Chris SAKELLARIOU (Division of Economics, Nanyang Technological University, Singapore, 639798)
    Abstract: Using unconditional quantile regression combined with Oaxaca-Blinder decomposition, we study the gender wage differentials over the whole distribution in Thailand from 1991 to 2007. A Vshape pattern of the overall gender gap is observed in each year, most attributable to the wage structure effect (“discrimination”), and persistent sticky floors are documented. We also develop a “double decomposition” method to analyze the over-time changes in gender wage gaps, and find that the degree of gender inequality in the Thai labor market has improved compared to the 1990s, while relative changes in characteristics explained only very small part of the total changes.
    Keywords: Southeast Asia; Thailand; unconditional quantile regression; sticky floors; discrimination
    Date: 2010–05
  6. By: Kazunobu Hayakawa (Inter-disciplinary Studies Center, Institute of Developing Economies); Toshiyuki Matsuura (Institute of Economic and Industrial Studies, Keio University)
    Abstract: In this study, we statistically test the validity of the mechanics of complex vertical foreign direct investment (VFDI) in Japanese machinery FDI to East Asia by estimating a multiple-spatial lag model. From the theoretical viewpoint, in complex VFDI, the production activity of affiliates in a given country is positively related to that in neighboring countries that have large differences in factor prices with the given country. Our empirical results show that such mechanics of complex VFDI work in Japanese FDI to East Asia, and that they work more strongly in those MNEs with higher productivity. These results have important implications on the policies of developing countries in attracting FDI.
  7. By: Sanghoon Ahn
    Abstract: This paper explores a plausible channel through which exporting could have made both a substantial and a persistent contribution to export-oriented economic growth in Korea and by extension other East Asian NIEs: namely, the spillovers (or externalities) of learning-by-exporting. Plant-level data for Korean manufacturing show that more export-intensive industries tend to have a higher productivity level. In addition, a substantial part of the variance in plant-level productivity is explained by the variance in industry-level export intensity. [ADB Institute Research Paper Series No. 67]
    Keywords: plausible, channel, substantial, economic growth, Korea, East Asian
    Date: 2010
  8. By: Luiz de Mello
    Abstract: This paper tests the hypothesis that, by giving people more voice in the government decision-making process, fiscal decentralisation fosters social capital, measured in terms of interpersonal trust. Empirical evidence based on World Values Survey data and seemingly unrelated probit estimations for a cross-section of countries suggests that people living in federal/decentralised countries find it more important to have voice in government decisions than their counterparts living in unitary/centralised countries. Pro-voice attitudes are, in turn, associated with greater social capital. The cross-country estimations are complemented by country-specific regressions for Brazil and Indonesia on account of these countries. experiences with fiscal decentralisation. The results show that the cohorts of individuals that have been exposed to decentralisation are in general more pro-voice (and trustful of strangers in the case of Brazil) than their counterparts that have not been exposed to decentralisation. These findings are not driven by the effects of political liberalisation on people.s attitudes towards the importance of having voice in government decisions and interpersonal trust.<P>La décentralisation budgétaire renforce-t-elle le capital sociétal ? : Données internationales et expérience du Brésil et de l’Indonésie<BR>On examine dans ce document l.hypothese selon laquelle en faisant participer davantage les administres a la prise de decision publique, la decentralisation budgetaire accroit le capital societal, mesure a travers la confiance interpersonnelle. Les resultats empiriques obtenus a partir des donnees de l.Etude sur les valeurs mondiales et les estimations probit apparemment non correlees pour un ensemble de pays montrent que les populations des Etats federaux/decentralises jugent plus important d.avoir leur mot a dire dans les decisions publiques que les populations des pays unitaires/centralises. De plus, les attitudes favorables a la participation se traduisent par une augmentation du capital societal. Les estimations internationales sont completees par des regressions specifiquement nationales pour le Bresil et l.Indonesie prenant en compte leur experience de la decentralisation budgetaire. On constate que les cohortes d.individus qui ont connu la decentralisation sont en general plus favorables a une participation (et ont plus confiance dans les etrangers dans le cas du Bresil) que celles qui n.en ont pas beneficie. Ces resultats ne tiennent pas aux effets de la liberalisation politique sur l.attitude des individus a l.egard de l.importance d.une participation aux decisions publiques et sur la confiance interpersonnelle.
    Keywords: social capital, Brazil, decentralisation, federalism, Indonesia, capital social, Brésil, décentralisation, fédéralisme, Indonésie
    JEL: H11 H30 H77
    Date: 2010–12–06
  9. By: Mikic, Mia; Ramjoue, Melanie
    Abstract: This paper examines the progress made so far in achieving the trade targets of Millennium Development Goal 8 (“Building a Global Partnership for Development”) with respect to the Least Developed Countries (LDCs) of Asia and the Pacific. The paper uses data from the OECD, WTO and UNDP, among others, to measure the MDG indicators 8.6, 8.7 and 8.9 with respect to these countries, thereby quantifying some of the impacts in these countries of recent global and national policy changes in the areas of market access, tariff preferences for LDCs and Aid for Trade. This paper concludes that while the market access commitments of the Hong Kong WTO Ministerial Declaration of 2005 have largely been met and LDCs of the Asia-Pacific benefit disproportionately from Aid for Trade, the overall share of LDC exports as a part of total world exports has not increased over the past decade. In its conclusion, this paper suggests that other factors such as non-tariff barriers and product competitiveness play a significant role and should become policy priorities of better targeted Aid for Trade.
    Keywords: MDG 8; least developed countries (LDCs); Asia; Pacific; market access; tariff-free; quota-free; MDG indicators 8.6; 8.7 and 8.9; supply capacity; aid for trade
    JEL: F13 F19
    Date: 2010–06–01
  10. By: Ale Ebrahim, Nader; Ahmed, Shamsuddin; Abdul Rashid, Salwa Hanim; Taha, Zahari
    Abstract: In this paper, we present our more than two years research experiences on virtual R&D teams in small and medium-sized enterprises (SMEs) and draws conclusions, giving special attention to the structure of virtual teams required to support education-industry collaboration. We report the relevant results of an online survey study. The online questionnaire was emailed by using a simple random sampling method to 947 manufacturing SMEs. The findings of this study show that SMEs in Malaysia and Iran are willing to use virtual teams for collaboration and the platform for industry-education collaboration is ready and distance between team members or differences in time zones, are not barriers to industry-education collaborations.
    Keywords: Collaboration; virtual teams; SMEs; Education
    JEL: M12 O32 A2 L17 L1 O1 M11 M1 L15 O3
    Date: 2010–06
  11. By: Mikic, Mia; Jakobson, Elias
    Abstract: This paper discusses the potential for cross-South Pacific trade between selected Southeast Asian and Latin American economies. The objective of this discussion is to identify obstacles for more intensive trade between the observed countries. Firstly, the paper reviews trends in trade flows and trade patterns between the selected economies, and by using several trade performance indicators it finds the level of trade still relatively low. It then discusses the possible reasons for this state of affairs. It focuses on a review of tariffs, trading costs and other possible impediments to trade. Paper also considers how trade relations among these countries could be improved. It provides a background into the features of the trade agreements that have been signed among the countries belonging to these two sub-regions in an attempt to identify if any of them could be used as a “driver” for future integration.
    Keywords: ASEAN; Latin America; trade entropy; complementarity; trade agreements; cross-Pacific trade; noodle bowl
    JEL: F15 F13
    Date: 2010–12–01
  12. By: Coenen, Lars (CIRCLE, Lund University); Benneworth, Paul (Center for Higher Education Policy Studies (CHEPS), University of Twente); Truffer, Bernhard (Eawag (Acquatic Research Institute))
    Abstract: In the past decade, the literature on transitions towards sustainable socio-technical systems has made a considerable contribution in understanding the complex and multi-dimensional shifts considered necessary to adapt societies and economies to sustainable modes of production and consumption. However, transition analyses have often neglected where transitions take place, and the geographical configurations and dynamics of the networks within which transition evolve. An explicit analysis of the geography of transitions contributes to the extant transitions literature in a variety of ways. Firstly it provides a contextualization and reflection on the limited territorial sensitivity of existing transitions analysis. The majority of empirical studies have been conducted in a small number of countries, and primarily the Netherlands, UK or Scandinavia, with an increasing interest in Asian countries. Secondly, it explicitly acknowledges and investigates a variety of transition pathways. Thirdly, it encompasses not only greater emphasis but also better conceptual and theoretical devices for understanding the international, trans-local nature of transition dynamics. Drawing on recent insights from economic geography, this paper seeks to improve existing transition theory by (1) creating a conceptual framework for better understanding geographical dimensions of sustainability transitions, and (2) beginning to highlight some of the boundary
    Keywords: transitions studies; economic geography; territorial innovation systems; multi-scalarity; geographies of transitions
    JEL: O30
    Date: 2010–10–01
  13. By: Vasco J. Gabriel (Department of Economics, University of Surrey and Universidade do Minho - NIPE); Pataaree Sangduan (Bureau of the Budget, Thailand)
    Abstract: We suggest a multivariate efficient test of the 'strong' fiscal sustainability hypothesis, based on Horvath and Watson's (1995) cointegration test when cointegration vectors are pre-specified. Using data for a set of developed and developing economies, we show that, unlike our procedure, conventional methodologies tend to penalize the sustainability hypothesis.
    JEL: C32 E62 H60
    Date: 2010
  14. By: FANG Zheng and Chris SAKELLARIOU; FANG Zheng (Division of Economics, Nanyang Technological University, Singapore, 639798); Chris SAKELLARIOU (Division of Economics, Nanyang Technological University, Singapore, 639798)
    Abstract: We extend the Burdett and Coles (2003) search model with wage-tenure contracts to two types of workers and firms and derive the equilibrium earnings distributions for both types of workers, by means of which we succeed in predicting many stylized facts found in empirics. For example, we find that at the same wage level, majority workers almost always experience a faster wage increase than the minority workers; minority workers have a higher unemployment rate; discriminating firms make lower profit than non-discriminating firms and offers to minority workers by non-discriminating firms are consistently superior to those provided by discriminating firms etc. Besides, we find a similar result to the classical discrimination theory that the average wage of the majority workers, though higher in most cases, can be smaller than their counterpart’s wage when the fraction of discriminating firms is small and the degree of recruiting discrimination and disutility are mild. We also show that in a special case of CRRA utility function with the coefficient of relative risk aversion approaching infinity, our model degenerates to Bowlus and Eckstein (2002).
    Keywords: discrimination, wage gap, equilibrium search, wage-tenure
    Date: 2010–04

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