nep-sea New Economics Papers
on South East Asia
Issue of 2014‒04‒18
fifteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Income Distributions, Inequality, and Poverty in Asia, 1992–2010 By Duangkamon Chotikapanich; William E. Griffiths; D. S. Prasada Rao; Wasana Karunarathne
  2. Determinants of International Tourism Demand for the Philippines: An Augmented Gravity Model Approach By Deluna, Roperto Jr; Jeon, Narae
  3. Use of National Currencies for Trade Settlement in East Asia: A Proposal By Lee, Il Houng; Park, Yung Chul
  4. The Governance of Knowledge: Perspectives from Brunei Darussalam and Malaysia By Purwaningrum, Farah; Evers, Hans-Dieter; Ariff Lim, Syamimi; Anthony Banyouko, Ndah
  5. Chartbook of economic inequality By Anthony B. Atkinson; Salvatore Morelli
  6. Implications of an EU FTA to the Philippine Labor Market By Lanzona, Leonardo Jr. A.
  7. Product-related environmental regulation and voluntary environmental actions : impacts of RoHS and REACH in Malaysia By Arimura, Toshihide; Iguchi, Hakaru; Michida, Etsuyo
  8. Singapore's state capitalism vs. the Indian economy: comparing the economic systems of two potential allies By Dasgupta, Manjira
  9. Motives for Sharing in Developing Countries: Experimental Evidence from Jakarta By Ado, Akifumi; Kurosaki, Takashi
  10. CGE analysis of trade liberalization in Thailand By durongkaveroj, wannaphong
  11. Environmental Kuznets Curve in Thailand: Cointegration and Causality Analysis By Mohamed Arouri; Muhammad Shahbaz; Rattapon Onchang; Faridul Islam; Frédéric Teulon
  12. Can Latin America tap the globalization upside ? By de la Torre, Augusto; Didier, Tatiana; Pinat, Magali
  13. A numerical model of Philippine population growth: child policy, quantitative insights and challenges By Talabis, Dylan Antonio; Manay, Erick Justine; Babierra, Ariel; Flores, Jabez Joshua; Rabajante, Jomar
  14. Function of Savings and Credit Unions in Laos: From a Village-SCU Survey in Vientiane Vicinity By Mieno, Fumiharu; Chaleunsinh, Chansathith
  15. Cultural Openness, Interpersonal Justice, and Job Satisfaction among Millennials and Seniors: Evidence from Japanese Target Employees following M&A By Ralf Bebenroth; Maimunah Ismail

  1. By: Duangkamon Chotikapanich (Asian Development Bank Institute (ADBI)); William E. Griffiths; D. S. Prasada Rao; Wasana Karunarathne
    Abstract: Income distributions for developing countries in Asia are modeled using beta-2 distributions, which are estimated by a method of moments procedure applied to grouped data. Estimated parameters of these distributions are used to calculate measures of inequality, poverty, and pro-poor growth in four time periods over 1992–2010. Changes in these measures are examined for 11 countries, with a major focus on the People’s Republic of China (PRC), India, and Indonesia, which are separated into rural and urban regions. We find that the PRC has grown rapidly with increasing inequality accompanying this growth. India has been relatively stagnant. Indonesia has grown rapidly after suffering an initial set back from the Asian financial crisis in 1997.
    Keywords: Income Distribution, developing Asia, Pro-poor Growth, method of moments, Inequality, poverty
    JEL: C13 C16 D31
    Date: 2014–03
  2. By: Deluna, Roperto Jr; Jeon, Narae
    Abstract: This study was conducted to investigate the determinants of international tourism demand for the Philippines.This study employed a double-log augmented form of gravity model estimated using the robust random effects model.Results revealed that tourist arrival in the Philippines are generally increasing from 2001 to 2012. Empirical estimation was conducted to determine factors affecting Philippine tourism demand. These factors include income, market size, and distance. Relative prices was also identified which includes cost of living and price of goods and services in the Philippines and other related tourism destination like Malaysia, Indonesia and Thailand. Supporting variables like direct flights, conflict, commonality in language and common colonizer between the Philippines and source of origin of the tourist was also examined. Furthermore, it also includes impact of calamity in the tourist home country and common membership to ASEAN. Empirical results show that tourist inflow is positively and significantly affected by income of the origin country and is reduced by population and distance. Relative low prices of tourism in term of cost of living and prices of goods and services in the Philippines have no effect in attracting inbound tourist. Furthermore, international demand for Philippine tourism is not affected by relative prices of tourism in Malaysia, Indonesia and Thailand as the competing tourist destinations. Conflict and common colonizer between Philippines and country of origin are not significant determinants of international tourism demand. Among the variables, direct flights turned out to be the most significant factor that can contribute to the increase in tourism demand of the Philippines.
    Keywords: Philippine Tourism, augmented gravity, tourism demand
    JEL: C1 C33 F00
    Date: 2014–03
  3. By: Lee, Il Houng (Asian Development Bank Institute); Park, Yung Chul (Asian Development Bank Institute)
    Abstract: This paper develops a multilateral currency system where national currencies are used for trade settlement in East Asia, comprising the Association of Southeast Asian Nations (ASEAN) member countries, the People’s Republic of China, Japan, and the Republic of Korea (ASEAN+3). The currency scheme is expected to mitigate the risks associated with independent attempts at internationalization in non-convertible currency countries. It could also reduce dependence on the US dollar, safeguard against financial spillovers from outside, and deepen trade and financial integration in the region. The patterns and structure of trade and financial openness suggest that East Asia has already established an economic base upon which it could launch such a system. The experience with renminbi internationalization will help the Republic of Korea and ASEAN-5 to emulate this strategy.
    Keywords: currency internationalization; RMB internationalization; trade invoicing and settlement
    JEL: F15 F36 F42
    Date: 2014–04–13
  4. By: Purwaningrum, Farah; Evers, Hans-Dieter; Ariff Lim, Syamimi; Anthony Banyouko, Ndah
    Abstract: The paper revisits the concept of knowledge governance by drawing on the experience of building knowledge clusters in two countries; Malaysia and Brunei Darussalam. It explores the strategies by which a country may take up the governance of knowledge, in the context of avoiding the knowledge trap drawing on experiences of Southeast Asian countries. We posit that an investigation of knowledge governance would require a study of the formal and informal institutional arrangements allowing knowledge flows in a cluster. The flow of tacit knowledge in particular may still require spatial proximity. We move on to explore the different perspectives of learning from the strategies of building knowledge clusters in Penang, Kuala Lumpur, Peninsular Malaysia and Brunei Muara District - Brunei Darussalam. Our research builds the foundation for knowledge governance inquiry by studying the spatial distribution of manpower and the science network of universities, in this case Universiti Sains Malaysia, with external knowledge producing organizations. Learning from the experience of the Northern Corridor and Multi Media Corridor in Malaysia, we have discussed our preliminary analysis of knowledge clusters in Brunei Muara District - Brunei Darussalam. Results of the analysis highlights that indeed there is increasing clustering of organizations such as private companies and government agencies in Brunei Muara District yet knowledge sharing is still lacking. We intend to follow up the study of Brunei Muara District knowledge cluster by focusing on the ICT (Information Communication and Technology) knowledge base. We end with a summary on the conclusions and recommendations for developing a knowledge base in Brunei Darussalam.
    Keywords: knowledge management, knowledge clsusters, knowledge-based economy, Malaysia, Brunei
    JEL: E6 J2 O1 O14 O3 O32 O38
    Date: 2014–01
  5. By: Anthony B. Atkinson (Nuffield College, Oxford, LSE and Institute for New Economic Thinking at the Oxford Martin School); Salvatore Morelli (CSEF – University of Naples – Federico II and Institute for New Economic Thinking at the Oxford Martin School)
    Abstract: The purpose of this Chartbook is to present a summary of evidence about long-run changes in economic inequality – primarily income, earnings, and wealth – for 25 countries covering more than one hundred years. There is a range of countries and they account for more than a third of the world’s population: Argentina, Brazil, Australia, Canada, Finland, France, Germany, Iceland, India, Indonesia, Italy, Japan, Malaysia, Mauritius, Netherlands, New Zealand, Norway, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland, the UK and the US. The results are presented in 25 charts, one for each country, together with a description of the sources. The underlying figures are available for download at
    Date: 2014–03
  6. By: Lanzona, Leonardo Jr. A.
    Abstract: The Philippines is currently negotiating a free trade agreement (FTA) with the European Union (EU). This paper is expected to shed light on these negotiations in terms of the possible effects of the FTA on the employment in particular. Conceptually, the effects of FTA on the labor market may come from two sources. The first is the intensification of free trade which can either be an opportunity or a threat to the workers, depending on whether the trading of goods and services are complementary or substitutable to the goods and services produced in the country. The second source is the proposed set of core labor standards which the EU can impose given the previous FTAs it has forged with other countries. These standards can result in making the country less competitive. Analyzing the experience of the country with its previous FTAs with the ASEAN and Japan, the paper found that FTAs as a whole have a positive impact on employment. While there may be unemployment caused by the entry of more imports from other countries, the effect of the trade commitments found in FTAs is essentially to mitigate such negative effects. It is then proposed that the country should negotiate within the same rules and standards that are set in their previous FTAs and that appropriate taxes and subsidies should be imposed in order to counteract the negative effects of further trade and labor standards.
    Keywords: Philippines, employment, ASEAN Free Trade Agreement (AFTA), Philippines-Japan Economic Partnership Agreement (PJEPA), Philippine labor market, core labor standards
    Date: 2014
  7. By: Arimura, Toshihide; Iguchi, Hakaru; Michida, Etsuyo
    Abstract: Voluntary environmental actions, such as the adoption of ISO 14001, are gaining increasing attention in developing countries. This study examines the mechanism of ISO 14001 diffusion in a developing economy on the basis of a unique corporate survey of manufacturing sectors in Malaysia. Product-related environmental regulations, such as REACH, are contributing to this diffusion indirectly by promoting quality control standards such as ISO 9001. The importance of foreign direct investment and global value chains for ISO 14001 diffusion is also confirmed.
    Keywords: Malaysia, Environmental protection, Environmental policy, Industrial standards, International trade, PRERs (product-related environmental regulations), REACH, RoHS, ISO 14001, ISO 9001, Global value chain
    JEL: F18 Q56
    Date: 2014–03
  8. By: Dasgupta, Manjira
    Abstract: This paper studies the phenomenon of “State Capitalism”, undertaking a comparative analysis of the economies of Singapore and India, two potentially strong Asian allies in today’s global economic order. Practised and adopted in many variants over the world, the “New” variant of “State Capitalism” as pursued in the emerging city-nation of Singapore has enabled it to achieve remarkable successes, posing challenges to bigger economies. India, on the other hand, began its newly independent planned industrialization under a conventional “State Capitalism” regime, but soon got mired in bureaucratic shackling. Subsequent to widespread Structural Adjustment Programmes in 1991, it is only recently that India has started emerging as a strength-gathering and rapidly developing nation, although its successes, compared to Singapore, have been modest on many fronts. This paper compares the two nations’ performances on various aspects including economic, political and a body of “freedom indices” using Time Series data on National Accounts and other selected economic indicators. “Freedom” indices for both countries are found to be correlated to respective economic indicators. Singapore is found to have much healthier economic indicators with higher “freedom” rankings. The lessons India can emulate from Singapore’s development experiences are also highlighted.
    Keywords: State Capitalism, Freedom Index, Fiscal Policy, Singapore, India
    JEL: H5 P5 P51
    Date: 2013–06
  9. By: Ado, Akifumi; Kurosaki, Takashi
    Abstract: We implemented laboratory experiments in Jakarta, Indonesia, to identify motives for sharing, including baseline altruism, directed altruism, sanction aversion, and reciprocity. The study area is located on the periphery of the Metropolis of Jakarta, many of whose residents are migrants and are closely connected with informal institutions such as Arisan, a rotating savings and credit association in Indonesia. Using data from sample households, the experimental results show that transfers based on baseline altruism accounted for the largest amount.Because the difference in the transferred amounts arising from the revelation of dictators' identities was statistically insignificant, we combined the four motives into two: preference-related motives (baseline and directed altruism) and incentive-related motives (sanction aversion and reciprocity) for the examination of their association with real world behavior regarding sharing. The empirical results suggest the importance of incentive-related motives in explaining variations in the amount of income transfers received from and sent to others.
    Keywords: sharing, altruism, reciprocity, network, experimental economics
    JEL: O17 C92 D03 D64
    Date: 2014–03
  10. By: durongkaveroj, wannaphong
    Abstract: As the world becomes interdependent in economic dimension, external sector today is widely accepted as a national economic motivator. Trade polices yield the various effects on economy. The purpose of this paper is to estimate the effects of free trade policy in Thailand to its top 5 trading partners on economic performance and the level of household income through CGE model using GTAP. The study reveals that the most worthy trading policy for Thailand, aimed at raising its national prosperity, is to remove tariff to trading partners, primarily with the E.U., followed by China and the U.S.
    Keywords: computable general equilibrium, trade liberalization, tariff
    JEL: C68 F13
    Date: 2014–04–08
  11. By: Mohamed Arouri; Muhammad Shahbaz; Rattapon Onchang; Faridul Islam; Frédéric Teulon
    Abstract: The study is aim to explore the existence of environmental Kuznets curve (EKC) in case of Thailand over the period of 1971-2010. The EKC relationship posits that as economy grows, measured by per capita income, at the initial stage energy pollutants increase; but starts falling after a certain threshold income has been achieved. The postulated relation produces an inverted U-curve and has been empirically verified for many nations. The paper implements the ARDL bounds testing approach to cointegration in the presence of structural break for a long run relationship among the series; and the error correction mechanism for the short run dynamics. The results confirm cointegration among economic growth, energy consumption, trade openness, urbanization, and energy pollutants and vindicate the presence of an EKC for Thailand. Also, energy consumption and trade openness add to energy emissions while urbanization lowers it. This study provides new insights for policymakers looking for sustainable economic growth and clean environment through a comprehensive economic and environmental policy.
    Keywords: Economic Growth, Energy Consumption, Environmental Kuznets Curve
    JEL: O13 Q25 Q53
    Date: 2014–04–10
  12. By: de la Torre, Augusto; Didier, Tatiana; Pinat, Magali
    Abstract: This paper discusses the theoretical arguments in favor of and against economic globalization and, with a view to ascertaining whether Latin America may be able to capture the globalization upside, examines the trends and salient features of Latin America's globalization as compared with that of Southeast Asia. The paper focuses on trade and financial integration as well as the aggregate demand structures (domestic demand-driven versus external demand-driven) that underpin the globalization process. It finds that Latin America is mitigating some bad side effects of financial globalization by moving toward a safer form of international financial integration and improving its macro-financial policy frameworks. Nonetheless, Latin America's progress in raising the quality of its international trade integration has been scant. The region's commodity-heavy trade structures and relatively poor quality of trade connectivity can hinder growth potential to the extent that they are less conducive to technology and learning spillovers. Moreover, Latin America's domestic demand-driven growth pattern (a reflection of relatively low domestic savings) may become an additional drag to growth by accentuating the risk of a low savings-low external competitiveness trap.
    Keywords: Emerging Markets,Currencies and Exchange Rates,Economic Theory&Research,Debt Markets,Banks&Banking Reform
    Date: 2014–04–01
  13. By: Talabis, Dylan Antonio; Manay, Erick Justine; Babierra, Ariel; Flores, Jabez Joshua; Rabajante, Jomar
    Abstract: The study investigates the effect of imposing an n-child policy by forecasting the population of the Philippines using a discrete age-structured compartmental model. Based on the results of the projection, a policy promoting a maximum of two children per couple leads to a transient stabilization (i.e., the population eventually declines after attaining zero-growth rate). A three-child policy may also lead to stabilization yet may converge beyond the calculated Verhulstian carrying capacity of approximately 200M. However, overshooting the carrying capacity can be resolved by increasing the available resources that can support the escalating population size. A child policy dictating a maximum of four or more children per couple results to a similar population growth as the status quo due to the inherent declining birth rate. With the declining birth rate trend in the Philippines, population stabilization is realizable even without implementing a child policy but only after 100 years. Furthermore, this study estimated the future age structure and the resultant GDP per capita income associated with each child policy.
    Keywords: demography, population projection, child policy, zero growth, economy, logistic, carrying capacity, age-structured model, Philippines
    JEL: J1 J11 J13 J18
    Date: 2013–09–26
  14. By: Mieno, Fumiharu; Chaleunsinh, Chansathith
    Abstract: Savings and Credit Unions (SCUs), a type of self-help group, have been rapidly forming in Laotian villages since the early 2000s.This paper investigates their characteristics, activities, and exogenous determinants of their activity based on an original questionnaire survey.It presents a descriptive analysis of endogenous factors such as member ratios and deposit and loan amounts and exogenous factors such as SCUs' age, location, and village characteristics with descriptive analyses.The results revealed that SCUs' membership is formed early in their operating history and remains generally unchanged. Loans for production purposes are a larger percentage of SCUs' lending during their early years, shifting to consumption loans in later years. SCUs' performance features differ after five years in operation and in villages that have diversified away from agriculture. Economic diversification and SCUs' sustainability are related to immigrants settling in villages since the Laotian civil war. We conclude that SCUs serve obvious social and economic purposes and that prospects for their sustainability are greater in villages with diversified economies.
    Date: 2014–03
  15. By: Ralf Bebenroth (Research Institute for Economics and Business Administration, Kobe University, Japan); Maimunah Ismail (Department of Professional Development and Continuing Education,Faculty of Educational Studies,Universiti Putra Malaysia, Malaysia)
    Abstract: This study compares the perceptions of Millennials with those of senior employees in a cross border acquisition. Literature on Millennials argues that since they are open-minded, it can be assumed they would enjoy greater job satisfaction after their firm is acquired by another company. We investigated how employees perceived interpersonal justice and its influence on job satisfaction, and to what extent employees' culturally open mindedness mediated this relationship. The results showed that employees, regardless of age, enjoyed greater job satisfaction after an acquisition when they perceived that they were being treated fairly by the new management. This study also showed that senior employees, not the Millennials of the target firm were more culturally open-minded. However, culturally open minded seniors were the less job satisfied. Implications for human resource practices are discussed.
    Date: 2014–04

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