nep-sea New Economics Papers
on South East Asia
Issue of 2013‒04‒20
thirteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Impact of foreign capital entry in the Indonesian banking sector By Hamada, Miki
  2. Non-standard work, social dialogue and collective bargaining in Indonesia By Anwar, Ratih Pratiwi; Supriyanto, Agustinus
  3. Presidentialism and political parties in Indonesia : why are all parties not presidentialized? By Kawamura, Koichi
  4. Association of Southeast Asian Nations, People's Republic of China, and India Growth and the Rest of the World: The Role of Trade By Lawrence, Robert Z.
  5. The Effects of School Term Length on Education and Earnings: Evidence from a Regression Discontinuity Design By Parinduri, Rasyad
  6. Assessing Inequalities in Thai Education By Jirada Prasartpornsirichoke; Yoshi Takahashi
  7. Efficiency performance of Malaysian Islamic banks By Ab-Rahim, Rossazana; Kadri, Norlina; Ismail, Farhana
  8. Inflationary Implication of Gold Price in Vietnam By Siregar, Reza Yamora; Nguyen, Thi Kim Cuc
  9. Islamic finance in the states of Central Asia: Strategies, institutions, first experiences By Wolters, Alexander
  10. The development of private farms in Vietnam By Kojin, Emi
  11. An Investigation into the Pattern of Delayed Marriage in India By Baishali Goswami
  12. Outsourcing and Labour Productivity: Case of Singapore Manufacturing Sector By Aekapol Chongvilaivan; Shandre M. Thangavelu
  13. Prolonged reserves accumulation, credit booms, asset prices and monetary policy in Asia By Filardo , Andrew J.; Siklos , Pierre L.

  1. By: Hamada, Miki
    Abstract: After the Asian financial crisis of 1997/98, the Indonesian banking sector experienced significant changes. Ownership structure of banking sector is substantially-changed. Currently, ownership of major commercial banks is dominated by foreign capital through acquisition. This paper examines whether foreign ownership changes a bank’s lending behavior and performance. Foreign banks tend to lend mainly to large firms; this paper examines whether the credit to small and medium-sized enterprises (SMEs) is affected by foreign capital entry into the Indonesian banking sector. Empirical results show that banks owned by foreign capital tend to decrease SME credit.
    Keywords: Indonesia, Banks, Finance, Small and medium-scale enterprises, Banking, Foreign bank entry, SMEs
    JEL: G21 G34 O53
    Date: 2013–03
  2. By: Anwar, Ratih Pratiwi; Supriyanto, Agustinus
    Keywords: social dialogue, collective bargaining, workers rights, outsourcing, contract labour, informal economy, economic recession, Indonesia, dialogue social, négociation collective, droits des travailleurs, externalisation des activités, travail sous contrat, économie informelle, récession économique, Indonésie, diálogo social, negociación colectiva, derechos de los trabajadores, tercerización, trabajo subcontratado, economía informal, recesión económica, Indonesia
    Date: 2012
  3. By: Kawamura, Koichi
    Abstract: This paper analyzes whether the "presidentialization of political parties" is occurring in newly democratizing Indonesia, as argued by Samuels and Shugart (2010). In Indonesia not all parties are becoming presidentialized. Parties are presidentialized when they have a solid organizational structure and have the potential to win presidential elections. Parties established by a presidential candidate need not face an incentive incompatibility between their executive and legislative branches, since the party leader is not the "agent" but the "principal". On the other hand, small and medium-sized parties, which have few prospects of winning presidential elections, are not actively involved in the election process, therefore party organization is not presidentialized. As the local level, where the head of government has been directly elected by the people since 2005 in Indonesia, the presidentialization of political parties has begun to take place.
    Keywords: Indonesia, Political parties, Political system, Elections, Presidentialism
    Date: 2013–03
  4. By: Lawrence, Robert Z. (Asian Development Bank Institute)
    Abstract: This paper explores the impact of past and future growth in the Association of Southeast Asian Nations (ASEAN), the People's Republic of China (PRC), and India—the ACI countries—on aggregate welfare, relative wages, and global emissions in the rest of the world. It outlines several analytical frameworks, considers effects over the past decade and, based on consensus forecasts, the implications of that growth for the rest of the world in the decades to come.
    Keywords: asean; prc; trade; economic growth; aggregate welfare; relative wages; and global emissions
    JEL: F01 F10
    Date: 2013–04–15
  5. By: Parinduri, Rasyad
    Abstract: This paper examines the effects of a longer school year in Indonesia on grade repetition, educational attainment, employability, and earnings. I exploit an arbitrary rule that assigned students to a longer school year in Indonesia in 1978-1979, which fits a fuzzy regression discontinuity design. I find the longer school year decreases the probability of grade repetition and increases educational attainment. It also increases the probability of working in formal sectors and wages later in life. Moreover, there is some evidence that some effects of the longer school year are larger for females and for individuals who grew up in rural areas.
    Keywords: school term length, grade repetition, educational attainment, returns to schooling, regression discontinuity design, Asia, Indonesia
    JEL: I21 J24 J31
    Date: 2013
  6. By: Jirada Prasartpornsirichoke (Graduate School for International Development and Cooperation, Hiroshima University); Yoshi Takahashi (Graduate School for International Development and Cooperation, Hiroshima University)
    Abstract: Using data from Thailand's Household Socioeconomic Survey, this paper measures the inequalities of Thai education in 2011. We utilize the Gini coefficients to estimate Thai educational inequalities from cumulative years of educational attainment which are between zero (no schooling) to twenty-one (doctoral level) years. The education Gini coefficient of the whole country is 0.349. At the provincial level, the Gini coefficients are in a range between 0.272 (Nonthaburi) and 0.521 (Mae hong son). The provinces located near the Bangkok metropolis have greater equality in education, except for Samut Sakhon, while the provinces in the northern part of Thailand have severe inequality in education, especially the border provinces. As for the effect of schooling on educational inequality, we found that at the regional level, average years of schooling was significantly and negatively associated with the educational inequality, except in the northern part of Thailand. The magnitudes of coefficients of average years of schooling in the northern and southern parts are twice that of the central part of Thailand. The policy implication of this paper is that the Thai government should pay attention to two points in adjusting the scope of distribution: reduce the number of people without schooling and extend the educational attainment of people with primary education to secondary education. At the regional level, the policy of education expansion for reducing educational inequality is workable only in central Thailand, the north, and the south. Governments should utilize different policies in each region. In addition, the Thai government should pay more attention to solving the social problems which contribute to the issue of educational inequality.
    Keywords: Inequality in education, the Gini coefficient, Years of schooling, Thai education
    JEL: I24
    Date: 2013–03
  7. By: Ab-Rahim, Rossazana; Kadri, Norlina; Ismail, Farhana
    Abstract: This study examines the efficiency performance of the full-fledged Islamic banks in Malaysia for the period of 2006 to 2011. The Malaysian Islamic banking industry has grown tremendously in terms of assets, deposits and total financing over the study period. Data Envelopment Analysis is employed in this study to measure the cost efficiency as well as the technical efficiency and its decompositions. The results show that, on average the main contributor of cost efficiency for Islamic domestic and foreign banks in Malaysia is allocative efficiency. In addition, the results find that Islamic foreign banks are more efficient than domestic banks with respect to pure technical efficiency and allocative efficiency.
    Keywords: Efficiency; Islamic banks; Malaysia
    JEL: D21 G21
    Date: 2013–04–16
  8. By: Siregar, Reza Yamora; Nguyen, Thi Kim Cuc
    Abstract: The sustained elevated gold price domestically, hovering persistently above the global market price, underscores the peculiar nature of the gold market in Vietnam and the resiliently strong demand for gold in the local market. In particular, the movements in the price of gold seem to lead a symmetrical trend in the headline inflation since the outbreak of the 2007 global financial crisis. The primary objective of this study is therefore to assess possible inflationary consequence of the gold price movements in Vietnam. Past studies demonstrate that if gold could be viewed as a financial asset, shifts in the gold price should be monitored as one of the determining factors of inflation. Yet, hardly any study has assessed potential inflationary implication of gold in Vietnam, especially during the recent years of volatile and double-digit inflation rates.
    Keywords: Gold Price; Vietnam; Money Demand; and Inflation
    JEL: C24 E31 E41 E52
    Date: 2013–04–12
  9. By: Wolters, Alexander
    Abstract: [Introduction] Islamic finance has been developing steadily in the last decades since the 1970s, yet for most parts its growth was concentrated in the Arab states and in several south-east Asian parts of the world with a Muslim majority (Malaysia in particular). Perhaps the only exceptions to that were global financial centers like London or New York that serve as organizational hubs to channel and direct Islamic financial resources (Baba 2007). In comparison with that, in Central Asia Islamic finance appeared only in recent years. Triggered not least by the global financial crisis, political decision makers and financial entrepreneurs in the region were eager to develop new sources for capital. The Middle East and the Arabic states, less touched by the meltdown of Western banks, were welcoming partners for fresh capital a part of which now was labeled 'Islamic'. Before, Central Asia had experienced almost no developments in Islamic finance. Only the 'Islamic Development Bank' (IDB), a major development-aid institution that sometimes applies Islamic principles of loan-giving and investment, had been launching projects in the republics since the end of the 1990s. After the financial crisis, however, the double effect of a real-economy need for new and fresh cash-flows and the rising discourse of and the search for alternative forms of banking has opened a new chapter for Islamic finance in the region of Central Asia. The following text looks at first developments and concentrates on the emerging relations between the different states and its institutions on the one hand and Islamic finance and its practices on the other. --
    Date: 2013
  10. By: Kojin, Emi
    Abstract: The objective of this paper is to explore the entities that have developed private farms (trang trai) in Vietnam. Various types of private farms have emerged in the last ten years. It is noteworthy that the owners of private farms are not necessarily agricultural households but also include government officials and the urban rich. Based on data collected from the author’s field surveys in Vietnam from 2006 to 2011, the paper attempts to categorize patterns in the development of private farms and analyze their differences. The paper argues that private farms developed by agricultural households are still limited because of the difficulty of consolidating land.
    Keywords: Vietnam, Land tenure, Agriculture, Private farm, Trang trai, Business history, Agricultural household, Land market
    JEL: O13 Q12 Q15
    Date: 2013–03
  11. By: Baishali Goswami (Institute for Social and Economic change)
    Abstract: Marriage patterns are undergoing discernible change throughout the world, including in several East and South East Asian countries. In India, certain shifts have been observed in the age at marriage. This paper attempts to examine the scenario of delayed marriage in India using data from different rounds of the National Family Health Survey (NFHS). Keeping in view the limitations of census data and age at marriage as an indicator of timing of marriage, the paper also attempts to explore the impact of select predictors on the likelihood of getting married for females in the age groups 20-24 years and 25-29 years. The findings indicate that the reasons underlying delayed marriage with respect to the 20-24 years age group and the 25-29 years age group differ. Multivariate analysis clearly shows that once education is controlled, along with cultural factors, the apparent difference observed in women from Northern India belonging to the age group 20-24 years compared to women from other regions of India in the same age group vanishes. The conventional argument that the cultural milieu of each state decides the timing of marriage may become more prominent, perhaps for women belonging to the age group 25-29 years.
    Keywords: Age of Marriage, Delayed marriage, Education, Culture, India
    Date: 2012
  12. By: Aekapol Chongvilaivan (Department of Economics, National University of Singapore); Shandre M. Thangavelu (Department of Economics, National University of Singapore)
    Abstract: This paper is devoted to empirical investigations of the effects of international outsourcing on labour productivity using the five-digit SIC Singapore’s manufacturing industry data. There are two types of international outsourcing this paper takes into consideration. The first is international outsourcing of materials input, which follows the narrow definition of materials outsourcing put forward by Feenstra and Hanson (1999) and is thus concerned mainly with intraindustry imports of intermediate materials. The other is international outsourcing of services input pertaining to inter-industry imports of services. Our empirical framework reveals that Singapore’s manufacturing sector thrived on international outsourcing of materials input as a key engine of observed labour productivity enhancement.
    Date: 2012–01
  13. By: Filardo , Andrew J. (BOFIT); Siklos , Pierre L. (BOFIT)
    Abstract: This paper examines past evidence of prolonged periods of reserve accumulation in Asian emerging market economies and the direct and indirect implications for monetary stability through the potential impact of such episodes on financial stability. The empirical research focuses on identifying periods of prolonged interventions and correlations with key macrofinancial aggregates. Related changes in central bank balance sheets are also examined, especially in periods when the interventions are linked to strong capital inflows. In particular, we consider whether changes in the central bank's balance sheet from prolonged intervention lead to spillovers to the balance sheet of the private sector. We explore the possible forms of the spillovers and the consequences on asset prices (e.g., housing prices, equity prices, the growth in domestic credit). Policy implications are drawn. Finally, we propose a new indicator of reserves adequacy and excessive foreign exchange reserves accumulation based on a factor model. Two broad conclusions emerge from the stylized facts and the econometric evidence. First, the best protection against costly reserves accumulation is a more flexible exchange rate. Second, the necessity to accumulate reserves as a bulwark against goods price inflation is misplaced. Instead, there is a strong link between asset price movements and the likelihood of accumulating foreign exchange reserves that are costly.
    Keywords: foreign exchange reserves accumulation; monetary and financial stability
    JEL: D52 E44 F32 F41
    Date: 2013–03–28

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