nep-sea New Economics Papers
on South East Asia
Issue of 2015‒03‒13
ten papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Social capital, political connections, and household enterprises: Evidence from Vietnam By Kinghan, Christina; Newman, Carol
  2. The Effect of Urbanization, Affluence and Trade Openness on Energy Consumption: A Time Series Analysis in Malaysia By Shahbaz, Muhammad; Sbia, Rashid; Nanthakumar, Loganathan; Afza, Talat
  3. The Labor Market Effects of Skillbiased Technological Change in Malaysia By Marouani, Mohamed Ali; Nilsson, Björn
  4. Comparing the direct human impact of natural disasters for two (surprisingly similar) cases — the Christchurch earthquake and Bangkok flood of 2011 By Noy, Ilan
  5. How do Shocks to Domestic Factors Affect Real Exchange Rates of Asian Developing Countries By Taya Dumrongrittikul; Heather M. Anderson
  6. How Does Health Promotion Work? Evidence From The Dirty Business of Eliminating Open Defecation By Paul Gertler; Manisha Shah; Maria Laura Alzua; Lisa Cameron; Sebastian Martinez; Sumeet Patil
  7. On the Development Gap between Latin America and East Asia: Welfare, Efficiency, and Misallocation By Mendez-Guerra, Carlos
  8. How to Ease the Burden of Poor Household ? : The Role of Raskin Program By Sartika Djamaluddin
  9. Reshaping the financial architecture for development finance: the new development banks. By Rajiv Biswas
  10. Sources of biopharmaceutical innovation: An assessment of intellectual property By Michael S. Kinch; Julio Raffo

  1. By: Kinghan, Christina; Newman, Carol
    Abstract: Social capital and political connections can play an important role in developing countries where markets fail and institutions are weak. This paper explores their role in household micro-enterprise operation and success in the rural low-income setting of
    Keywords: social capital, political connections, household enterprises, Vietnam
    Date: 2015
  2. By: Shahbaz, Muhammad; Sbia, Rashid; Nanthakumar, Loganathan; Afza, Talat
    Abstract: This paper investigates the impact of urbanization on energy consumption by applying the Stochastic Impacts by Regression on Population, Affluence and Technology (STIRPAT) in case of Malaysia. The study covers the time period of 1970Q1-2011Q4. The unit root test and the ARDL bounds testing approach have been applied to examine integrating properties and long run relationship in the presence of structural breaks. Our results validated the existence of cointegration and exposed that urbanization is a major contributor in energy consumption. Affluence raises energy demand. Capital stock boosts energy consumption. Trade openness leads affluence and hence increases energy consumption. The causality analysis finds that urbanization Granger causes energy consumption. The feedback effect is found between energy consumption and affluence and, energy consumption and capital. The bidirectional causality exists between trade openness and energy consumption.
    Keywords: Urbanization, Energy, Malaysia
    JEL: C1
    Date: 2015–03–09
  3. By: Marouani, Mohamed Ali; Nilsson, Björn
    Abstract: During the last half-century, the evolution of educational attainment among Malaysians has been spectacular, and current enrollment rates suggest this progression will continue, albeit at a slower pace. Such a transformation of the educational attainment of labor should bring about macroeconomic effects such as wage compression, sectoral shifts and/or high skill un- employment, unless compensatory mechanisms exist. This article examines the impact of this evolution using a dynamic general equilibrium model applied to Malaysia. We argue that skill biased technological change occurred in Malaysia in recent years, and permitted unemployment figures to remain low and skill premia not to sink, despite the shift in skill structure. We run a retrospective simulation, looking at how unemployment and wages would have reacted had skill biased technological change not been prevalent. We also simulate the effects of a restriction in the supply of education to understand the impact of recent educational policy in Malaysia. The results are fed to a microdata set using a microaccounting technique, addressing distributional concerns. Our results show that the reduction in wage inequalities could have been substan- tially more important had skill biased technological change not been present. Furthermore, they suggest that the open-door higher education policy has contributed heavily to a reduction in wage inequalities
    Keywords: Skills acquisition; CGE; Education and the Labor Market; Technological change; Acquisition de compétences; EGC; Education et marché du travail; progrès technique;
    JEL: E17 O53 I28 E24 H52 O30
    Date: 2014–12
  4. By: Noy, Ilan
    Abstract: The standard way in which disaster damages are measured involves examining separately the number of fatalities, of injuries, of people otherwise affected, and the financial damage that natural disasters cause. Here, we implement a novel way to aggregate these separate measures of disaster impact and apply it to two recent catastrophic events: the Christchurch (New Zealand) earthquakes and the Greater Bangkok (Thailand) floods of 2011. This new measure, which is similar to the World Health Organization’s calculation of Disability Adjusted Life Years (DALYs) lost from the burden of diseases and injuries, is described in detail in Noy (2014). It allows us to conclude that New Zealand lost 180 thousand lifeyears as a result of the 2011 events, and Thailand lost 2,644 thousand years. In per capita terms, the loss is similar, with both countries losing about 15 days per person due to the 2011 catastrophic events in these two countries. We also compare these events to other potentially similar events.
    Keywords: Natural disasters, Disaster impact, Earthquakes, Floods, Christchurch (New Zealand), Greater Bangkok (Thailand), Economic impact,
    Date: 2015
  5. By: Taya Dumrongrittikul; Heather M. Anderson
    Abstract: This paper examines real exchange rate responses to shocks in exchange rate determinants for fourteen Asian developing countries. The analysis is based on a panel structural vector error correction model, and the shocks are identified using sign and zero restrictions. We find that trade liberalization generates permanent depreciation, and higher government consumption causes persistent appreciation. Traded-sector productivity gains induce appreciation but their effects are not immediate and last only for a few years. Real exchange rate responses to unexpected monetary tightening are consistent with the long-run neutrality of money. The evidence suggests that trade liberalization and government consumption have a strong effect on real exchange rates, while the effects of traded-sector productivity shocks are much weaker.
    Keywords: Exchange rate fundamentals, Government consumption, Monetary policy, Panel vector error correction model, Productivity improvement in the traded sector, Real exchange rates, Sign and zero restrictions, Trade liberalization.
    JEL: C33 C51 E52 F31
    Date: 2015
  6. By: Paul Gertler; Manisha Shah; Maria Laura Alzua; Lisa Cameron; Sebastian Martinez; Sumeet Patil
    Abstract: We investigate the mechanisms underlying health promotion campaigns designed to eliminate open defecation in at-scale randomized field experiments in four countries: India, Indonesia, Mali, and Tanzania. Health promotion works through a number of mechanisms, including: providing information on the return to better behavior, nudging better behavior that one already knows is in her self-interest, and encouraging households to invest in health products that lower the marginal cost of good behavior. We find that health promotion generally worked through both convincing households to invest in in-home sanitation facilities and nudging increased use of those facilities. We also estimate the causal relationship between village open defecation rates and child height using experimentally induced variation in open defecation for identification. Surprisingly we find a fairly linear relationship between village open defecation rates and the height of children less than 5 years old. Fully eliminating open defecation from a village where everyone defecates in the open would increase child height by 0.44 standard deviations. Hence modest to small reductions in open defecation are unlikely to have a detectable effect on child height and explain why many health promotion interventions designed to reduce open defecation fail to improve child height. Our results suggest that stronger interventions that combine intensive health promotional nudges with subsidies for sanitation construction may be needed to reduce open defecation enough to generate meaningful improvements in child health.
    JEL: I12 I15 O15
    Date: 2015–03
  7. By: Mendez-Guerra, Carlos
    Abstract: Both long economic stagnation in Latin America and sustained growth and in East Asia imply a rapidly raising development gap between the two regions. Using a series of numerical decompositions, this article documents three facts about this gap. First, differences in welfare-adjusted development are larger than those predicted by per-capita GDP. Second, differences in labor productivity account for most of the differences in both production and welfare-adjusted development. Third, inefficient production is the main factor holding down labor productivity. Furthermore, detailed analysis of the sectorial dynamics suggests that labor misallocation across sectors had been reducing economy-wide efficiency in Latin America. In particular, premature deindustrialization (i.e., workers moving from manufacturing into services) and falling productivity in the service sector had potentially large negative effects on efficiency, productivity, and welfare-adjusted development.
    Keywords: welfare efficiency misallocation
    JEL: O4 O40 O5 O53 O54 O57
    Date: 2014–02–05
  8. By: Sartika Djamaluddin (Department of Economics, Faculty of Economics and Business, University of Indonesia)
    Abstract: The aims of this study is to investigate whether Raskin program can ease the burden of rice expenditure of poor household. The investigation are based on expenditure analysis. This research uses the National Socio-Economic Survey (Susenas) data on households with 15,852 observations. Regression in all region indicates that Raskin program are significant to ease the burden of rice expenditure but the effect is relatively small. In the regions where the percentage Raskin was lower than rice expenditure, Raskin expenditure can ease the burden of rice expenditure but the efeect is very small so we did not found significant evidence. Nevertheless in the province of Maluku, Papua and Papua barat, where the percentage Raskin was higher than the rice expenditure, the role of Raskin actually increase rice spending. However, the effect is relatively small so that there the effect is not significant. In addition, the Raskin program also consequently causes the households' total expenditures to increase. One of such causes is increased expenditures for foodstuffs containing meat and non-meat, and fruits.
    Keywords: raskin program, in-kind transfer, household, consumption
    JEL: H30 H53 H55
    Date: 2015–03
  9. By: Rajiv Biswas
    Abstract: In 2014 several groupings of developing countries agreed to set up a series of new multilateral development finance institutions. These include the BRICS-sponsored New Development Bank, the Asian Infrastructure Investment Bank and the Silk Road Fund. This paper examines the role these new institutions might play in reshaping the international financial architecture of development finance. A key concern of developing countries is the widening gap between the weight of developing countries’ GDP in the global economy and their voting rights in the IMF and World Bank governing structures. Unless substantial reforms are made to the distribution of voting rights, the asymmetry between the importance of developing countries to the world and their governance of the Bretton Woods institutions will continue to worsen, particularly for the Asian BRICS. Recognising that these new development finance initiatives can strengthen its political and economic ties with other developing countries, China has played a significant leadership role in launching these initiatives, and has become the key source of capital for the new institutions. However, a major challenge for these new institutions will be to craft governance structures and decision-making procedures that have a high degree of integrity, transparency and independence from political influence when making lending decisions.
    Keywords: development �nance; BRICS; Bretton Woods system; China; New Development Bank; Asian Infrastructure Investment Bank
    JEL: F3 G3
    Date: 2015
  10. By: Michael S. Kinch (Instituto Nacional da Propriedade Industrial, Assessoria de Assuntos Econômicos, Brazil.); Julio Raffo (Economics and Statistics Division, World Intellectual Property Organization, Geneva, Switzerland.)
    Abstract: An analysis of FDA-approved new molecular entities reveals dynamism in terms of new innovation. An assessment of the first patent for each drug reveals that the pharmaceutical industry, particularly large, established companies in North America, tend to dominate the field. Over the past 10-15 years, European and Asian organizations have begun to close the gap. A dynamic inventive environment in drug discovery is suggested by the fact that NMEs for biologics or awarded to biotechnology companies often have inventors from the pharmaceutical and academic sectors. Whereas inventors continue to found biotechnology companies at a steady rate, recent trends suggest these inventors more often come from the private sector.
    Keywords: FDA, Patent, Intellectual Property, Firm founder.
    Date: 2015–02

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