nep-sea New Economics Papers
on South East Asia
Issue of 2013‒06‒30
seven papers chosen by
Kavita Iyengar
Asian Development Bank

  1. The mathematics skills of school children: how does England compare to the high performing east Asian jurisdictions? By John Jerrim; Álvaro Choi
  2. China’s financial linkages with Asia and the global financial crisis By Reuven Glick; Michael Hutchison
  3. The Japanese and Chinese models of industrial organisation : fighting for supremacy in the Vietnamese motorcycle industry By Fujita, Mai
  4. Shariah Governance: Challenges Ahead By Abdul Aziz, Ahmad Faizal
  5. Does One Size Fits All? - Applying Conventional Credit Risk Mitigation to Islamic Financial Institutions By Abdul Aziz, Ahmad Faizal; Mohamad, Shaifulfazlee
  6. Playing with the social network: Social cohesion in resettled and non-resettled communities in Cambodia By Simone Gobien; Björn Vollan
  7. The ICT Landscape in BRICS Countries: Lessons from Emerging Technologies (R&D, Innovation and Trade): Proceedings of the Second International Workshop held in Johannesburg, South Africa, on 5 October, 2011 By Jean Paul Simon

  1. By: John Jerrim (University of London); Álvaro Choi (Universitat de Barcelona & IEB)
    Abstract: English policymakers have been disappointed with children’s performance on TIMSS and PISA, particularly in comparison to the results of young people from East Asia. In this paper we provide new insight into the England – East Asia gap by considering how cross-national differences in math test scores change between ages 10 and 16. Our results suggest that, although average math test scores are higher in East Asian countries, this gap does not increase between ages 10 and 16. Thus, reforming the secondary school system may not be the most effective way for England to ‘catch up’. Rather earlier intervention, during pre-school and primary school, may be needed instead.
    Keywords: PISA, TIMSS, educational policy, primary education, secondary education
    JEL: I20 I21 I28
    Date: 2013
  2. By: Reuven Glick; Michael Hutchison
    Abstract: This paper presents empirical evidence on asset market linkages between China and Asia and how these linkages have shifted during and after the global financial crisis of 2008-2009. We find only weak cross-country linkages in longer-term interest rates, but much stronger linkages in equity markets. This finding is consistent with the greater development and liberalization of equity markets relative to bond markets in China, as well as increasing business and trade linkages in the region. We also find that the strength of the correlation of equity prices changes between China and other Asia countries increased markedly during the crisis and has remained high in recent years. We attribute this development to greater “attentiveness” of international investors to China’s role as a source and destination of equity finance during the crisis rather than to any greater financial deepening and liberalization, as China did not implement any major policy measures during this period. By contrast, the transmission of U.S. equity returns to Asian countries decreased after the crisis.
    Keywords: Global Financial Crisis, 2008-2009 ; China
    Date: 2013
  3. By: Fujita, Mai
    Abstract: This paper explores the consequences of the emerging rivalry between Japanese and Chinese manufacturers. It focuses specifically on industrial organisation, one of the key factors that underlie the competitiveness of manufacturing industries. The question to be asked is what happens when distinctive models of industrial organisation, coming from Japan and China, clash in a developing country. An in-depth longitudinal analysis of the Vietnamese motorcycle industry adopting a modified version of the global value chain governance theory shows that a decade-long industrial transformation resulted in organisational diversity. The implications of the analysis for the literature on industrial organisation are discussed.
    Keywords: Vietnam, China, Japan, Motorcycles, Industrial policy, International competition, Industrial organisation, Motorcycle industry
    JEL: L10 L22 L62
    Date: 2013–06
  4. By: Abdul Aziz, Ahmad Faizal
    Abstract: Bank Negara Malaysia (BNM) had previously issued a number of statutory requirements in making the establishment of Shariah Committee (SC) of a bank mandatory via Islamic Banking Act 1983, Banking & Financial Institution Act 1989, Takaful Act 1984 and Central bank of Malaysia (Amendment) Act 2003. The establishment of SC is important as part of the governance of an Islamic Bank in order to assure the stakeholders that the Bank is doing its business in permissible manner as outlined by the Shariah. Despite the structure, there is still skepticism about the system mainly on the capacity and the capability of the SC as reported in previous publications. This paper shall identify challenges faced by the SC that had impaired their capacity and capability in achieving their objectives. Subsequently, this paper shall recommend alternative measures on issues highlighted in assisting the SC and Shariah Auditors in bridging the public expectations. This study confines to issues pertaining to Islamic Banks operating in Malaysia as published in relevant articles and the author’s personal encounter.
    Keywords: Islamic Finance, Shariah Governance, Shariah Committee, Shariah Audit
    JEL: G28
    Date: 2012–05
  5. By: Abdul Aziz, Ahmad Faizal; Mohamad, Shaifulfazlee
    Abstract: The purpose of this paper is to examine the credit risk mitigation in Islamic Financial Institutions (IFIs). Currently, shariah compliant financing in Malaysia are still dominated by the concept of Bai’ Bithaman Ajil (BBA), Ijarah Thumma Al Bai and Murabahah. These sale-based approaches allow conventional credit risk mitigation to be utilized by IFIs. However, with the emergence of equity-based approach products like Musharakah/Mudharabah business financing and Musharakah Mutanaqisah Home Financing means IFIs need to enhance their perspective of credit risk which means the conventional method is not enough. Thus, this paper illustrates the concept of credit risk and differentiates them with capital impairment risk in line with the risk sharing responsibility of IFIs. This paper suggests some credit risk mitigation techniques to help IFIs create a niche for themselves in the financial market.
    Keywords: Islamic Banking, Risk Management, Credit Risk, Capital Impairment Risk, Default Risk, Musharakah, Mudharabah, Risk Sharing
    JEL: G21 M42
    Date: 2012–12
  6. By: Simone Gobien; Björn Vollan
    Abstract: Mutual aid among villagers in developing countries is often the only means of insuring against economic shocks. We use “lab-in-the-field experiments” in Cambodian villages to study social cohesion in established and newly resettled communities. Both communities are part of a land distribution project. The project participants all signed up voluntarily, and their socio-demographic attributes and pre-existing network ties are similar. We use a version of the “solidarity game” to identify the effect of voluntary resettlement on willingness to help fellow villagers after an income shock. We find a sizeable reduction in willingness to help others. Resettled players transfer on average between 47% and 74% less money than non-resettled players. The effect remains large and significant after controlling for personal network and when controlling for differences in transfer expectations. The costs of voluntary resettlement, not only monetary but also social, seem significantly higher than is commonly assumed by development planners.
    Keywords: Voluntary resettlement, Social cohesion, Risk-sharing networks, Monetary transfers, “Lab-in-the-field” experiment, Cambodia
    JEL: C93 O15 O22 R23
    Date: 2013–06
  7. By: Jean Paul Simon
    Abstract: The Information Society Unit of the JRC-IPTS has been investigating the Information and Communication Technology (ICT) sector and its R&D in Asia for several years as an extension of the PREDICT research project. The workshop was organised as part of this on-going research to gather the most recent information on the growing role of BRICs Countries in the IT sector.
    Keywords: BRIC, Information and Communication Technologies, ICT industry
    JEL: O57
    Date: 2013–03

This nep-sea issue is ©2013 by Kavita Iyengar. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.