nep-sea New Economics Papers
on South East Asia
Issue of 2015‒03‒22
34 papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Regional Integration, Inclusive Growth, and Poverty: Enhancing Employment Opportunities for the Poor By Tabuga, Aubrey D.; Mina, Christian D.; Reyes, Celia M.; Asis, Ronina D.
  2. Adoption of ISO9001 through supply chain in Vietnam : impacts of FDI and product-related environmental regulation By Iguchi, Hakaru; Arimura, Toshi H.; Michida, Etsuyo
  3. Managing the ASEAN Economic Integration Process in the Philippines: An Assessment of Progress in Trade Liberalization and Facilitation By Medalla, Erlinda M.
  4. The ASEAN Economic Community Blueprint: Implementation and Effectiveness Assessment for Philippine Agriculture By Israel, Danilo C.; Briones, Roehlano M.
  5. PJD 2012 Special Volume on ASEAN Economic Community - Introduction By Aldaba, Rafaelita M.
  6. Services Liberalization in the Philippines: A Capacity Needs Assessment for AEC 2015 By Aldaba, Rafaelita M.; Aldaba, Fernando T.
  7. AEC 2015: Issues and Challenges in Standards and Conformance By Ledda, Veredigna M.
  8. Investment Liberalization and Facilitation Toward AEC 2015 By Aldaba, Rafaelita M.
  9. How Are Firms Responding to Philippine Free Trade Agreements? By Aldaba, Rafaelita M.; Medalla, Erlinda M.; Yap, Josef T.; Rosellon, Maureen Ane D.; del Prado, Fatima; Mantaring, Melalyn C.; Ledda, Veredigna M.
  10. Choke Points and Opportunities in the Supply Chain of ASEAN Agricultural Products: A Philippine Country Study By Israel, Danilo C.; Briones, Roehlano M.
  11. Analysis of Specific Legal and Trade-related Issues in a Possible PH-EU Economic Partnership: The Philippine Constitution, Competition Policy, Government Procurement, Intellectual Property Rights, Dispute Settlement, and Trade Remedies By Barcenas, Lai-Lynn Angelica B.
  12. The Impact of Trade Liberalization and Economic Integration on the Logistics Industry: Maritime Transport and Freight Forwarders By Llanto, Gilberto M.; Navarro, Adoracion M.
  13. SME Development: Narrowing the Development Gap in the ASEAN Economic Community By Aldaba, Rafaelita M.
  14. AEC 2015: Challenges Affecting Labor Mobility and MRAs on Professional Services By Aldaba, Rafaelita M.
  15. International Migration Opportunities and Occupational Choice: A Case Study of Philippine Nurses 2002 to 2014 By Arends-Kuenning, Mary P.; Calara, Alvaro; Go, Stella
  16. Oil price shocks and domestic inflation in Thailand By Jiranyakul, Komain
  17. A System-wide Study of the Logistics Industry in the Greater Capital Region By Patalinghug, Epictetus E.; Llanto, Gilberto M.; Fillone, Alexis M.; Tiglao, Noriel C.; Salazar, Christine Ruth; Madriaga, Cherry Ann; Arbo, Maria Diyina Gem
  18. Myanmar: Cross-Cutting Governance Challenges By Cullen S. Hendrix; Marcus Noland
  19. China’s Salmon Sanction By Chen , Xianwen; Garcia, Roberto J.
  20. Economic Growth and Poverty: Spatial Regression Analysis. By Waleerat Suphannachart Author-Email :
  21. Finance-growth nexus: insights from an application of threshold regression model to Malaysia’s dual financial system By Alaaabed, Alaa; Masih, Mansur
  22. Economic implications of a potential free trade agreement between India and the United States By Fukase,Emiko; Martin,William J.
  23. The Moderating Effect of Environmental Turbulence in the Relationship between Entrepreneurial Management and Firm Performance By Pratono, Aluisius Hery; Mahmood, Rosli
  24. Do Japanese MNCs use Expatriates to Contain Risk in Asian Host Countries? By Jean-Pascal Bassino; Marion Dovis; Pierre van der Eng
  25. Dynamic Effect of a Change in the Exchange Rate System: From a Fixed Regime to a Basket-Peg or a Floating Regime By Yoshino, Naoyuki; Kaji, Sahoko; Asonuma, Tamon
  26. The effect of index futures trading on volatility: Three markets for Chinese stocks By Martin T. Bohl, Jeanne Diesteldorf, Pierre L. Siklos
  27. Prolonged Reserves Accumulation, Credit Booms, Asset Prices and Monetary Policy in Asia By Andrew J. Filardo, Pierre L. Siklos
  28. Impacts of Cambodia's Tariff Elimination on Household Welfare and Labor Market: a CGE Approach By Heng Dyna; Senh Senghor; Ear Sothy; Kanga Em
  29. Comparing the Costs of Vertical Separation, Integration, and Intermediate Organisational Structures in European and East Asian Railways By Fumitoshi Mizutani; Andrew Smith; Chris Nash; Shuji Uranishi
  30. Assessing Fiscal Sustainability for SAARC and IMT-GT Countries By Syed, Munawar-Shah; Mariani, Abdul-Majid; Syed, Hussain-Shah
  31. Terrorism and international tourism: the case of Germany By Gabriel M. Ahlfeldt; Bastian Franke; Wolfgang Maennig
  32. The Impact of South-South Trade Agreements on FDI By Mondher Cherif; Christian Dreger
  34. Toward an Understanding of Economic Growth in Africa: A Re-Interpretation of the Lewis Model By Xinshen Diao; Margaret McMillan

  1. By: Tabuga, Aubrey D.; Mina, Christian D.; Reyes, Celia M.; Asis, Ronina D.
    Abstract: Regional economic integration in East Asia is characterized initially as a market-driven process of increased trade and foreign direct investment inflows, and eventually by formal arrangements to liberalize trade and integrate economic activities through free trade agreements among East and Southeast Asian countries. This has led to more intensified regional production networks in which East and Southeast Asian countries, including the Philippines, participated. Set against the backdrop of continuing economic integration in the region, economic growth in the Philippines has not been as inclusive as in the other countries as manifested in the increase in the magnitude of poverty incidence. This paper examines how the Philippines can improve its record on poverty reduction by looking at how it can generate greater demand for the labor services of the poor. Specifically, this paper looks into the linkage between regional production networks and inclusive growth in the Philippines through employment generation for the poor. The manufacturing sector can provide employment opportunities for the poor and can offer relatively higher wages. However, expected high-productivity employment opportunities from the manufacturing sector were not fully realized due to some bottlenecks in the sector. This partly explains the persistence of poverty in the Philippines. To promote inclusive growth and reduce poverty, the manufacturing sector has to be made more competitive and, at the same time, productivity in the agriculture sector (the major employer of the poor) has to be increased.
    Keywords: poverty, Philippines, employment, regional economic integration, agriculture, inclusive growth
    Date: 2014
  2. By: Iguchi, Hakaru; Arimura, Toshi H.; Michida, Etsuyo
    Abstract: The objective of the present study is to examine the determinants of ISO 9001 certification, focusing on the effect of Product-related Environmental Regulations on Chemicals (PRERCs) and FDI using the answers to several questions in our Vietnam survey conducted from December 2011 to January 2012. Our findings suggest that PRERCs may help with the improvement in quality control of Vietnamese firms. If Vietnamese manufacturing firms with ISO 9001 certification are more likely to adopt ISO 14001, as well as firms in developed countries, our results indicate that the European chemical regulations may assist in the reduction of various environmental impacts in Vietnam. In addition, we found that FDI promotes the adoption of ISO 9001. If FDI firms in Vietnam certify ISO 14001 after the adoption of ISO 9001, as in the case of Malaysia and the developed economies, FDI firms may also be able to improve environmental performance as a result of ISO 14001.
    Keywords: Vietnam, International trade, Environmental protection, Foreign investments, Business enterprises, ISO 9001, FDI, Product-related Environmental Regulation
    JEL: F18 Q56 D22
    Date: 2015–03
  3. By: Medalla, Erlinda M.
    Abstract: This paper is part of the Philippine study for the Mid-Term Review (MTR) of the ASEAN Economic Community (AEC) Blueprint, a project of the Economic Research Institute for ASEAN and East Asia (ERIA). A milestone in ASEAN economic cooperation is the Cebu Declaration on the Acceleration of the Establishment of an ASEAN Community by 2015 during the 12th ASEAN Summit in 2007, and subsequently the passing of the ASEAN Charter. A midterm review of where the member-countries are in moving toward the AEC is thus timely. At the core of ASEAN integration is the free flow of trade in goods. Accordingly, an essential part of the midterm review is an assessment of progress in the area of trade liberalization and facilitation. Toward this end, two sets of surveys were undertaken: (1) the MTR Questionnaire for Government Officials, and (2) the Firm MTR Survey on Import/Export and Customs Clearance. The questionnaire for government officials gathered information on aspects of ASEAN customs development and integration and the implementation of the national single window and the ASEAN Single Window. The survey of firms provided the view from users, particularly their experiences on the customs clearance and permit release process in other government agencies. This yielded a number of recommendations on the ways forward.
    Keywords: trade liberalization, economic integration, ASEAN, Philippines, trade facilitation
    Date: 2014
  4. By: Israel, Danilo C.; Briones, Roehlano M.
    Abstract: The ASEAN Economic Community (AEC) Blueprint outlines the plan of countries in the Association of Southeast Asian Nations (ASEAN) to unify into a single market and production base. A priority focus for integration is the enhancement of trade among ASEAN member-countries and long-term competitiveness of food and agriculture products produced within ASEAN. Based on key-person interviews, this study identifies the specific gaps in the implementation of the blueprint in the case of Philippine agriculture and makes appropriate recommendations. The widest gaps in AEC Blueprint implementation appear to be in areas of cooperation related to private sector linkages, agricultural cooperatives, research and development (R&D), and technology transfer. For the private sector, a key factor accounting for the gap is preference for own networking and business arrangements. Development of producer cooperatives is at a nascent phase in the country. The following measures are recommended: First, reexamine objectives and targets for cooperation with the private sector, agriculture cooperatives, R&D, and technology transfer. Trade standard harmonization is relatively easily justified; however, the collective rationale for cooperation in the other areas needs to be better articulated. Second, within trade standard harmonization, a couple of action items are: i) expediting completion of the ASEAN GAqP; and ii) highlighting the issue of small producer inclusion. ASEAN-wide mechanisms toward the inclusion of small producers hold a long-term potential for uplifting the livelihoods of millions of small farmers and fishers in Southeast Asia. However, this cannot follow the same modality as standards certification for large exporting companies. The blueprint objectives for cooperatives, including other types of producer associations, should be reexamined toward more collective approaches to gain approval and certification.
    Keywords: Philippines, market integration, trade harmonization, product standards, ASEAN Economic Community (AEC)
    Date: 2014
  5. By: Aldaba, Rafaelita M.
    Abstract: This special volume of the Philippine Journal of Development (PJD) is devoted to discussions and analyses of issues on the ASEAN Economic Community (AEC) 2015 implementation. Except for the services liberalization paper, all the papers were carried out under the AEC Scorecard Project of the Philippine Institute for Development Studies and the Economic Research Institute for ASEAN and East Asia. The project sought to assess the status of Philippine commitments, understand the factors affecting the AEC implementation, and improve the AEC Scorecard. Primary data gathering was conducted through perception surveys, interviews, and focus group discussions among various stakeholders from the government, industry, academe, and civil society groups. The respondents were carefully selected as their responses formed the basis of case studies presented in the papers. The analyses were supplemented with secondary data and existing literature on the core AEC issues. The reports covered trade liberalization, trade facilitation, agriculture, investment facilitation and promotion, services liberalization and the need for capacity building, movement of professional workers, and logistics and transport connectivity. They examined the issues and implications arising from liberalization and crafted measures on the way forward and how the government can facilitate the implementation of the AEC agreements taking into account the country`s own domestic development aspirations and industrial strategy.
    Keywords: Philippines, Philippine Journal of Development (PJD), AEC scorecard, ASEAN Economic Community (AEC)
    Date: 2014
  6. By: Aldaba, Rafaelita M.; Aldaba, Fernando T.
    Abstract: The paper aims to assess and determine the capacity-building needs required to liberalize trade in services in the Philippines. Through the ASEAN Framework Agreement on Services, the Philippines has committed to liberalize various sectors including air transport, maritime transport, construction, financial services, and telecommunications. The overall progress of services liberalization has been modest compared to trade in goods due mainly to constitutional restrictions, limitations on market access, and application of the national treatment principle. Apart from these constitutional and legal constraints, the other obstacles to services liberalization include high cost of doing business, inadequate infrastructure, and governance issues affecting the competitiveness of industries, among others. Clear gaps in the capacity of national agencies and regulators to effectively implement the country`s services liberalization commitments exist. To address these, the paper suggests capacity building and technical assistance as part of a comprehensive trade strategy covering both goods and services, formulating roadmaps for the various services sectors, and enhancing current coordination mechanisms among government agencies, private sector, and civil society.
    Keywords: ASEAN, capacity building, Philippines, ASEAN Economic Community (AEC), services
    Date: 2014
  7. By: Ledda, Veredigna M.
    Abstract: The ASEAN Economic Community (AEC) Blueprint envisions the transformation of the ASEAN region into a single market and production base through the facilitation of the free flow of goods and services. With tariffs declining to near-zero levels, nontariff barriers are increasingly the focus of coordination efforts by ASEAN member-countries. The ASEAN standards and conformance measures aim to harmonize national standards, technical regulations, and conformity assessment procedures to achieve connectivity among similar regulatory institutions in the region and to facilitate trade. The Mid-Term Review of the AEC Blueprint set out surveys and a scorecard mechanism to assess each country`s progress in the implementation of standards and conformance in eight key areas, including automotive and rubber-based products, electrical and electronic equipment, cosmetics, medical devices, pharmaceutical products, prepared foodstuff, and traditional medicine and health supplement sectors. This paper presents the survey results and includes a background on key national institutions in-charge of standards and conformance. Overall, the survey results show that the Philippines is committed to aligning national standards with international benchmarks and has achieved significant progress in most sectors through measures that include the amendment of the relevant laws and regulations. While the Philippines remains committed to the AEC and the AEC blueprint, challenges to implementation remain, including adequate funding and support. The way forward for standards and conformance in the Philippines lies in capacity building and strengthening regulatory institutions.
    Keywords: Philippines, standards and conformance, ASEAN Economic Community (AEC)
    Date: 2014
  8. By: Aldaba, Rafaelita M.
    Abstract: The paper examines the state of investment liberalization and facilitation in the Philippines and suggests policy measures to enable the country to comply with its ASEAN Economic Community (AEC) 2015 commitments. Based on interviews and surveys, the results indicated that investment incentives, low tax rates, and time/cost of starting a business are critical factors affecting firms` decision to invest in the Philippines. The respondents noted significant improvements in political stability and level of corruption. A great majority of the firms also indicated future expansion of their operations and the ASEAN market as significant factors in their investment decisions. To face the challenges and take advantage of the opportunities arising from AEC 2015, the paper suggests the unification and centralization of investment promotion and facilitation efforts by all investment promotion agencies (IPAs) under one agency. It is also necessary to strengthen the current efforts of the Philippine Investment Promotion Plan (PIPP) interagency committee to coordinate the various IPAs` actions and plans. To improve the operational environment and investment climate, IPAs should closely collaborate with national agencies and local government units particularly in the automation and streamlining of business procedures. These reforms must be accompanied by substantial increases in infrastructure investment, particularly in power and logistics, to reduce the cost of doing business in the country. A comprehensive review of the constitutional limitations on foreign equity, particularly the 60-40 rule, should also be pursued.
    Keywords: Philippines, investment facilitation, ASEAN Economic Community (AEC), promotion and liberalization, investment promotion agencies (IPAs)
    Date: 2014
  9. By: Aldaba, Rafaelita M.; Medalla, Erlinda M.; Yap, Josef T.; Rosellon, Maureen Ane D.; del Prado, Fatima; Mantaring, Melalyn C.; Ledda, Veredigna M.
    Abstract: The Philippines has been more cautious in its policy toward free trade agreements (FTAs) than other ASEAN member-states, having signed, so far, only one bilateral agreement with Japan in addition to the various ASEAN+1 agreements. While the government is expected to progressively reduce preferential tariffs to zero, Philippine firms have historically been slow to take advantage of FTAs. This survey reaffirms that this awareness and the usage of FTAs need significant improvement among both manufacturing and services sector firms. Identified as the main source of information for FTAs, the government needs to increase the efficiency, scope, and reach of its promotional and technical training programs and to rely further on technology to deliver results. These efforts to enhance FTA utilization are directly linked with the easing of rules of origin (ROOs) compliance and administration. At the national level, these efforts include reforms toward electronic Certificates of Origin and self-certification, and linkage to the national single window. This will improve timelines and ease the entry of micro, small, and medium enterprises. Regional efforts to harmonize ROOs can increase FTA utilization across ASEAN member-countries and pave the way for the forthcoming Regional Comprehensive Economic Partnership.
    Keywords: Philippines, free trade agreements (FTAs), Certificate of Origin, FTA utilization
    Date: 2015
  10. By: Israel, Danilo C.; Briones, Roehlano M.
    Abstract: This study identifies and examines "choke points" in the supply chain of two selected commodity groups that are of interest to the region of the Association of Southeast Asian Nations: crude coconut oil (which belongs to the HS15 group), and fish and crustacean, mollusks, and other aquatic invertebrates (which belong to the HS03 group). For crude coconut oil, no major choke points were identified from mill site to export stages, but cost and delay factors were found at the farm-to-mill stage, such as low farm productivity, poor postharvest practices (leading to low quality of copra), and inefficiencies in marketing to the mill. For fisheries, several choke points were identified, such as poor quality of domestic roads and low capacity of vehicles, high cost and poor sevice of interisland shipping, inadequate conditions in some ports and weak link in the cold chain, poor compliance with sanitary and phytosanitary (SPS) regulations, and inadequate number of certified laboratories. The study recommends specific types of road investments, a competition policy in domestic shipping (both for crude coconut oil and fisheries), industry restructuring in the case of coconut, and compliance with SPS measures in the case of fisheries.
    Keywords: infrastructure, Philippines, logistics, choke points, agricultural supply chain
    Date: 2014
  11. By: Barcenas, Lai-Lynn Angelica B.
    Abstract: This paper provides an overview of the Philippines` defensive and offensive interests in a free trade agreement with the European Union in the areas of competition policy, government procurement, intellectual property rights, dispute settlement, and trade remedies. It examines these interests in accordance with the mandate of the Philippine Constitution, and the Philippine position vis-a-vis the goals and strategies of the European Union with respect to its trade relations with its trading partners.
    Keywords: Philippines-EU free trade agreement, trade negotiations, Philippine Constitution, competition, government procurement, intellectual property rights, dispute settlement, anti-dumping, countervailing measures, safeguards
    Date: 2015
  12. By: Llanto, Gilberto M.; Navarro, Adoracion M.
    Abstract: The ASEAN Economic Community (AEC) Blueprint targets an ASEAN single market in 2015. This is an ambitious reform agenda that seeks to ensure the free flow of services, investment, and skilled labor, along with the free flow of goods and the freer flow of capital, in the ASEAN region. For logistics services, the target is supposed to be achieved by 2013. An assessment of whether this has been achieved or not is yet to be done. Liberalization and deregulation efforts in the Philippine maritime transport industry are already heading into the direction of greater participation in ASEAN economic integration even though the AEC measures have not yet been formally sanctioned by all members. This paper examines the current status of the logistics industry in the Philippines and finds out how the opening of the economy to global markets through trade and services liberalization and the ongoing process toward economic integration through AEC 2015 impact on the structure, conduct, and performance of the logistics industry. The industry is responding to the changes in a positive way notwithstanding its characterization as a concentrated industry dominated by a few domestic firms. Firms have become more innovative in offering quality service to consumers such as better passenger accommodation, improved ticketing system, and availability of fast craft ferries. Freight forwarders, at least those surveyed for this study, equip themselves with information on how to adjust to a more liberalized and integrated environment. They are aware of the changes that will be brought about by the full implementation of the AEC measures and they also have a good idea of the challenges they will face, such as differences in commercial practices, legal systems, and contracting procedures, when they decide to locate in an ASEAN member-country. The way forward involves continuing the market-oriented reforms, especially liberalization of trade in services, while ensuring a healthy balancing of domestic industry interests with the requirements of regional economic integration.
    Keywords: Philippines, maritime transport, trade facilitation, logistics, ASEAN Economic Community (AEC)
    Date: 2014
  13. By: Aldaba, Rafaelita M.
    Abstract: This paper evaluates the implementation of the 2010–2015 ASEAN Strategic Action Plan for Small and Medium Enterprises (SME) Development and the 2004–2009 ASEAN Policy Blueprint for SME Development. The initial interviews and survey results yielded low average effectiveness scores for the ASEAN Strategic Action Plan for SME Development. The scores ranged from without- to no- or little concrete impacts on the implementation of various programs covering access to financing, facilitation, technology development, promotion, human resource development, and other regional SME initiatives. Results for the ASEAN Policy Blueprint for SME Development also indicated low average effectiveness scores on the implementation of programs covering human resource development and capacity building, enhancing SME marketing capabilities, access to financing, access to technology, and creating a conducive policy environment. In the last decade, manufacturing SMEs have not substantially generated sufficient value added and employment to increase the country`s overall manufacturing growth. This weak performance of SMEs has been largely attributed to barriers particularly access to finance, technology, and skills as well as information gaps and difficulties with product quality and marketing. Within this light, the government can facilitate SMEs` gainful participation in the ASEAN by designing a coherent set of policies and programs that are aligned with regional SME development initiatives to address financing issues; improve the technological capabilities and strengthen supply chains (to enable SMEs to move up the technology scale); and create an enabling environment for SMEs to survive and realize their potentials to grow. To improve the effectiveness of SME program initiatives at the ASEAN level, it is important to complement the implementation of these regional initiatives with domestic or within-the-country policy reforms and programs.
    Keywords: Philippines, small and medium enterprises (SMEs), ASEAN Strategic Action Plan for SME Development, ASEAN Policy Blueprint for SME Development
    Date: 2014
  14. By: Aldaba, Rafaelita M.
    Abstract: The paper aims to identify the facilitating and deterring factors affecting the implementation of the ASEAN mutual recognition arrangements (MRAs) in professional services encompassing engineering, nursing, architecture, surveying, medical, dental practice, and accountancy. Overall, the progress of MRA implementation in the Philippines has been slow. For all professions, the issue of enacting new rules and/or regulations has been difficult due to constitutional and other restrictions. Clear procedures and guidelines should be formulated for the implementation of the reciprocity provision. For temporary special permits, the law needs to be revised to allow complete borderless practice. To move the implementation of the MRAs forward, there is a need to continue efforts to improve the process and create clear criteria for the labor market test and the skill shortage list. The paper also suggests the formulation of clear rules and guidelines in implementing the foreign reciprocity provision, strengthening the capacity of the Professional Regulation Commission as the central body coordinating the different MRA activities, and crafting of a comprehensive and strategic framework on MRA implementation.
    Keywords: labor mobility, professional services, Philippines, ASEAN Economic Community (AEC), ASEAN mutual recognition arrangements
    Date: 2014
  15. By: Arends-Kuenning, Mary P. (University of Illinois at Urbana-Champaign); Calara, Alvaro (affiliation not available); Go, Stella (De la Salle University, The Philippines)
    Abstract: We analyze trends in nursing education in the Philippines during a period of rising and falling demand for Philippine nurses in the developed countries. Based on focus group discussion data obtained in the Philippines, we examine students' motivations to become nurses and to what extent their choices were affected by the possibility of international migration. The number of nursing graduates rose, resulting in brain gain. However, policies promoting the migration of skilled workers such as nurses impose high costs on middle class and lower class families who invest in education hoping that a family member will be able to migrate.
    Keywords: brain drain, brain gain, international nurse migration, Philippines
    JEL: I11 J24 J44
    Date: 2015–02
  16. By: Jiranyakul, Komain
    Abstract: This paper employ monthly data to examine the empirical relationship between oil price shocks and domestic inflation rate during 1993 and 2013. The results show that oil price, domestic or international, does not have the long-run impact on consumer prices. However, oil price shocks cause inflation to increase while oil price uncertainty does not cause an increase in inflation. Furthermore, inflation itself causes inflation uncertainty. The findings of this study encourage the monetary authorities to formulate a more accommodative policy to respond to oil price shocks.
    Keywords: Oil shocks, inflation, bivariate GARCH, causality
    JEL: E31 Q43
    Date: 2015–03
  17. By: Patalinghug, Epictetus E.; Llanto, Gilberto M.; Fillone, Alexis M.; Tiglao, Noriel C.; Salazar, Christine Ruth; Madriaga, Cherry Ann; Arbo, Maria Diyina Gem
    Abstract: The Port of Manila, the largest seaport in the country, has been recognized as the most widely used port in the Greater Capital Region with utilization rate of 71.6 percent compared to only 2.3 percent and 6.1 percent utilization of Batangas and Subic Ports, respectively (NEDA 2012). The ports of Batangas and Subic were developed in order to accommodate excess traffic in the port of Manila and promote growth and development in CALABARZON and Central Luzon. However, port users still opt to operate in the Manila Port. This leads to the congestion of the Manila Port and the underutilization of the other two ports in the Greater Capital Region. The situation was intensified during the implementation of the recently lifted Manila truck ban. The study recognizes that issues and problems still persist in the logistics sector even after the regulation was put off. To address these, the study employs a system-wide approach to analyze the whole logistics industry in the Greater Capital Region. The first part of the study reports the findings of the focus group discussions and key informant interviews with shippers, freight forwarders, logistics service providers, and truckers regarding their port usage. The latter part discusses the rail option model that looks into the revival of the rail system in transporting goods to and from the ports. The study also gives a crude approximation of the economic cost of the seven-month truck ban. In addition, it provides a review of existing policies in the Philippine logistics sector, discussions among concerned agencies, other study recommendations, as well as lessons from other countries. Ultimately, the study provides an extensive list of short, medium, and long-term measures to decongest the Manila Port and to address the underutilization of Batangas and Subic Ports. The list is complemented with a dynamic timeline of the proposed measures and actions with their corresponding implementing agencies.
    Keywords: Philippines, infrastructure, logistics industry, truck ban, port congestion, port utilization, rail connectivity, PNR, Manila Port, Batangas Port, Subic Port
    Date: 2015
  18. By: Cullen S. Hendrix (Peterson Institute for International Economics); Marcus Noland (Peterson Institute for International Economics)
    Abstract: Since 2010, Myanmar has been in the midst of a multifaceted transition, involving economic reforms, the resolution of multiple long-standing civil conflicts, and a nascent transition to democratic rule. These transitions are coinciding with a resource-led economic boom. Hendrix and Noland assess the current status of governance institutions, as well as their performance in comparison to member countries of the Association of Southeast Asian Nations and selected other countries. They discuss outstanding problem areas related to economic governance, particularly in the legal system, the business regulatory framework, and in bureaucratic capacity, as well as the potential use of external policy anchors, particularly in the Extractive Industries Transparency Initiative process, to strengthen Myanmar’s ongoing reform effort.
    Keywords: Myanmar, governance, economic reform, resource curse
    JEL: N45 P28 D72 D73
    Date: 2015–03
  19. By: Chen , Xianwen (School of Economics and Business, Norwegian University of Life Sciences); Garcia, Roberto J. (School of Economics and Business, Norwegian University of Life Sciences)
    Abstract: Angered by the Norwegian Nobel Committee’s awarding of the 2010 Peace Prize to a Chinese dissident, China signalled its displeasure by allegedly applying more stringent regulatory measures and import licensing procedures on Norway’s iconic product, salmon. This has been widely reported in the media internationally, but not formally investigated by the scientific community. Through interviews with stakeholders in the Norway-China salmon trade and examination of trade data, personal accounts corroborate the evidence from trade data that nontariff border measures have been disproportionately applied against Norwegian salmon. These measures have distorted China’s fresh/chilled whole salmon market since 2011, and are likely to have long-term consequences in terms of trade patterns, re-routing and smuggling of salmon, and for quality concerns. Accounting for the transhipped and the smuggled Norwegian salmon via Hong Kong and Vietnam, we challenge the popular misbelief that Norway has lost its majority share in China’s fresh/chilled whole salmon market, but rather has increased its exports, suggesting that these measures have failed to prevent more salmon from entering mainland China’s market. However, the Norwegian government’s refusal to meet the Dalai Lama in May 2014 suggests that the full effect of China’s salmon sanction has made its way upstream to affect Norway’s policy.
    Keywords: China; economic sanction; regulatory border measures; import licensing procedures; non-tariff barriers; trade patterns; transhipment
    JEL: F14 F51 Q22 Q27
    Date: 2015–03–12
  20. By: Waleerat Suphannachart Author-Email : (Department of Agricultural and Resource Economics,Faculty of Economics,Kasetsart University,Thailand)
    Abstract: This article aims at introducing a spatial aspect of analyzing the relationship between economic growth and poverty, in which the geographical disparity plays an important role. A case study of growth poverty elasticity of Sumatra, Indonesia, using district-level data, is provided as an example of how spatial issues can be incorporated in the analysis. An application of spatial regression is introduced as a suitable method. The case study of Sumatra indicates that spatial influence exists in the poverty determinant model and this spatial relationship shall not be ignored in estimating GEP. Poverty incidence in Sumatra tends to be concentrated in particular locations which is influenced by spatial factors such as types of land, soil condition, transportation, and infrastructure. This suggests a poverty alleviation program should be developed targeting larger regional bases, rather than concentrating on various small areas. This method can be applied in a number of topics in agricultural economics as well as other fields relating to location factors and neighborhood influence.
    Keywords: Economic Growth, Poverty, Spatial Regression
    JEL: O49 R11
    Date: 2015–03
  21. By: Alaaabed, Alaa; Masih, Mansur
    Abstract: The purpose of this paper is to test the growing converging views regarding the destabilizing and growthhalting impact of interest-based debt financial system. The views are as advocated by the followers of Keynes and Hyman Minsky and those of Islam. Islam discourages interest rate based debt financing as it considers that it is not conducive to productive activities and to human solidarity. Likewise, since the onset of the crisis of 2007/2008, calls by skeptics of mainstream capitalism has been renewed, to reconsider the dynamics of the prevailing financial system with emphasis on its untamed credit-creating capacity and link (or rather delink) to real sector transactions. The paper applies a threshold regression model to Malaysian data and finds that the relationship between growth and financial development is non-linear. A threshold is estimated, after which credit expansion negatively impacts GDP growth. While the post-threshold negative relationship is found to be statistically significant, the estimated positive relationship at lower levels of financial development is insignificant. The findings are hoped to provide insights to monetary authorities for better growth-promoting policy-making..
    Keywords: Credit, Financialization, Growth, Threshold Regression Model, Islamic Perspective
    JEL: C22 C58 E44
    Date: 2014–06–20
  22. By: Fukase,Emiko; Martin,William J.
    Abstract: This paper explores the economic implications of a potential free trade agreement between India and the United States. A series of simulations is conducted assuming 100 percent ad valorem equivalent tariff cuts for goods and 50 percent cuts for services. The overall impacts are likely to be positive for the United States and India. While gains from trade creation are offset by trade diversion on the import side, both countries appear to gain from improved access on the export side. The United States is likely to gain largely through terms of trade improvements for its goods and services, as initial protection in India is particularly high. India would experience an expansion of exports and output, especially in textiles and apparel. As the United States and India are negotiating other free trade agreements, such as the Trans-Pacific Partnership and India's agreement with the Association of Southeast Asian Nations, the paper also explores how the effects of an India-United States free trade agreement are affected by prior free trade agreements. Adding an India-United States free trade agreement to prior agreements tends to bring additional welfare benefits to both countries. India would also gain substantially if it concluded a free trade agreement with the United States and then extended it to other partners. The results suggest that an India-United States free trade agreement might become a building block toward more liberal trade regimes.
    Keywords: Economic Theory&Research,Trade Law,Trade Policy,Free Trade,Emerging Markets
    Date: 2015–03–10
  23. By: Pratono, Aluisius Hery; Mahmood, Rosli
    Abstract: Contingency theory points out the adaptive management is crucial point to sustainable firm performance. This research aims to determine the relative importance of a set of variables comprising the four entrepreneurial management variables, i.e. strategic orientation, organization culture, organization structure, and reward system, and a set of environmental turbulence variables in predicting firm performance. This research uses firm-level data with observed population of this research is SMEs in Surabaya, Indonesia. Through adopting hierarchical regression approach and partial least square method, this study indicates that moderating effect of environmental turbulence changes the direction of relationship between entrepreneurial management and firm performance. During low environmental turbulence, entrepreneurial management has positive impact on firm performance, but the direction changes. Entrepreneurial management has negative impact on firm performance during high environmental turbulence.
    Keywords: firm performance, entrepreneurial management, environmental turbulence
    JEL: M0 M00 M1 M12 M14 M2 M5 M52
    Date: 2014
  24. By: Jean-Pascal Bassino; Marion Dovis; Pierre van der Eng
    Abstract: We investigate the impact of host country risk on the expatriation strategies of multinational firms, using data on Japanese subsidiary firms in manufacturing industry in 13 host countries in Asia. We find that country risk is negatively correlated wiht the degree of expatriation and that, rather than hostry country risk, firm-specific factors (particularly capital intesity, ownership share of parent firms in subsidiaries and the age of the venture) explain most of the variation in the degree to which subsidiaries rely on Japanese expatriates. Contrary to previous studies, the capital intensity of production is a key explanatory firm-specific variable that correlates positively wiht the degree of expatriation. Japanese MNCs do no rely on expatriates to off-set host country risk, but to mitigate risk to parent investment in subsidiaries
    JEL: G32 M12 M16 N85
    Date: 2015
  25. By: Yoshino, Naoyuki (Asian Development Bank Institute); Kaji, Sahoko (Asian Development Bank Institute); Asonuma, Tamon (Asian Development Bank Institute)
    Abstract: This paper theoretically evaluates the dynamic effects of a shift in an exchange rate system from a fixed regime to a basket peg, or to a floating regime, and obtains transition paths for the shift based on a dynamic stochastic general equilibrium model of a small open economy. We apply quantitative analysis using data from the People's Republic of China and Thailand and find that a small open country would be better off shifting to a basket peg or to a floating regime than maintaining a dollar-peg regime with capital controls over the long run. Furthermore, due to the welfare losses associated with volatility in nominal interest rates, the longer the transition period, the larger the benefits of shifting suddenly to a basket-peg regime from a dollar-peg regime than proceeding gradually. Regarding sudden shifts to desired regimes, the welfare gains are higher under a shift to a basket peg if the exchange rate fluctuates significantly. Finally, shifting to a managed-floating regime is less attractive than moving to a basket peg, as the interventions necessary to maintain the exchange rate for certain periods result in higher losses and the authority lacks monetary policy autonomy.
    Keywords: basket peg; floating regime; exchange rate transition; peoples republic of china; thailand; monetary policy; Finance
    JEL: F33 F41 F42
    Date: 2015–03–09
  26. By: Martin T. Bohl, Jeanne Diesteldorf, Pierre L. Siklos (Wilfrid Laurier University)
    Abstract: This paper examines whether the introduction of Chinese stock index futures had an impact on the volatility of the underlying spot market. To this end, we estimate several Generalized Auto-Regressive Conditional Heteroscedasticity (GARCH) models and compare our findings for mainland China with Chinese index futures traded in Singapore and Hong Kong. Our results indicate that Chinese index futures decrease spot market volatility in all three spot markets considered. In contrast, we do not obtain the same results for the companion index futures markets in Hong Kong and Singapore. China’s stock market is relatively young and largely dominated by private retail investors. Nevertheless, our evidence is favorable to the stabilization hypothesis usually confirmed in mature markets.
    Keywords: Chinese Stock Markets, Index Futures, Volatility Spillovers
    JEL: G10 G14 G15 G18
    Date: 2015–02–01
  27. By: Andrew J. Filardo, Pierre L. Siklos (Wilfrid Laurier University)
    Abstract: This paper examines past evidence of prolonged periods of foreign exchange reserves accumulation in the Asia-Pacific region. Several proxies for this unobserved variable are considered, including a newly proposed one based on a factor model. We focus on identifying periods of prolonged interventions and identify its key macro-financial determinants. 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. Policy implications are also drawn.
    Keywords: foreign exchange reserves accumulation, monetary and financial stability
    JEL: F41 F32 E44 D52
    Date: 2015–02–01
  28. By: Heng Dyna; Senh Senghor; Ear Sothy; Kanga Em
    Abstract: This study builds Cambodia’s social accounting matrix. Using a CGE-based simulation, it then assesses the impacts of Cambodia’s tariff elimination on household welfare and the labour market. Our results show that tariff elimination leads to an expansion in production output and an increase in export/import volumes. Government policy for indirect tax-led revenue compensation results in a structural change of output, favoring manufacturing over the agriculture and services sectors. Those manufacturing industries include textiles, raw metals, fabricated metals, machinery, and office and computing machinery. Tariff removal’s effect favours the textiles industry as it is presently less protected and consumes a large proportion of now cheaper intermediate inputs. This industry will continue to be the backbone for growth and employment over the short and medium term. In terms of effects on labor market, low-skilled labourers see relatively less benefit from tariff elimination. At the household level, the impacts on their incomes and consumption are almost the same. Phnom Penh households are less affected by the indirect tax increase. Overall, welfare gains for the whole country and most representative households are positive but small. The exceptions are households in Kratie, Preah Vihear, Rattanakiri, and Stung Treng; these remote provinces experience a negative welfare effect from the simulations of tariff removal.
    Keywords: Tariff Elimination, Welfare, CGE, Labour Market
    JEL: C63 C67 C68
    Date: 2015
  29. By: Fumitoshi Mizutani (Graduate School of Business Administration, Kobe University); Andrew Smith (Institute for Transport Studies, University of Leeds); Chris Nash (Institute for Transport Studies, University of Leeds); Shuji Uranishi (Graduate School of Economics, Osaka City University)
    Abstract: There is a major policy debate within Europe and more widely on how to structure railway systems to enhance competition, whilst minimising costs. This is the first study in the academic literature to examine, using econometric methods, the cost impacts of three different approaches to structuring railway systems: vertical separation, vertical integration and the intermediate holding company model. Our analysis is based on a panel of European and East Asian railways (1994-2010). We find that the optimal railway structure depends on the intensity and type of traffic running on the network. Our research suggests that, at least on cost grounds, countries should be free to choose between vertical integration, the holding company model or vertical separation.
    Keywords: Vertical Separation, Holding Company, Horizontal Separation, Competition, Railway, Cost
    Date: 2014–11
  30. By: Syed, Munawar-Shah; Mariani, Abdul-Majid; Syed, Hussain-Shah
    Abstract: This study examines the fiscal sustainability of SAARC and Asian Growth-Triangle countries using Fisher and IPS tests of panel unit root and Pedroni test of panel cointegration. The tests are applied to the relationships, in terms of GDP ratios, between, i) the debt and primary surplus, and ii) government expenditure and revenues. Both models show consistent results suggesting that fiscal policy for the low-income countries is sustainable whereas it may not be sustainable for the high-income countries. This also indicates that the fiscal policy can be sustainable (non-sustainable) even for the debt above (below) 60 percent of the GDP.
    Keywords: Debt, Fiscal Policy, Sustainability, Panel Unit Roots, Panel Cointegration
    JEL: E62 H63
    Date: 2014
  31. By: Gabriel M. Ahlfeldt; Bastian Franke; Wolfgang Maennig
    Abstract: We analyse how German tourists react to unanticipated shocks that alter their risk perception of selected tourism destinations. Using a difference-in-difference strategy which flexibly accounts for macroeconomic conditions and also addresses potential problems of serial correlation, we isolate significant effects of the 9/11 (2001) terrorist attacks, as well as for the attacks in Egypt (1997), Tunisia (2002), Morocco (2003) and Indonesia (2003). These terror attacks impacted especially on Islamic countries all over the world, indicating a transmission mechanism driven by ethnic and religious proximity. At the same time, tourism into Islamic countries was temporarily substituted by tourism to (south) European countries.
    Keywords: terrorism; 9/11; Islamic countries; tourism demand
    JEL: L83 Z12
    Date: 2015
  32. By: Mondher Cherif; Christian Dreger
    Abstract: The integration of emerging markets into the global economy is heavily promoted by foreign direct investment (FDI) inflows. Within the factors driving the location of FDI, regional trade agreements (RTAs) become increasingly relevant for emerging markets. We explore the impact of South-South trade agreements on FDI by dynamic panel models. The MENA countries are compared to the better performing regions in Latin America and Southeast Asia. Several striking results emerge from the analysis. First, agglomeration effects are weaker for the MENA region. Second, the impact of the RTA is important. However, RTAs do not generally rise the attractiveness of the region for foreign investors, as the effect interacts with business-friendly regulations. Third, financial deepening in the host country is a crucial factor, often again in combination with the institutional framework. Furthermore, institutional conditions may not be relevant per se, but only in terms of its interaction with the macroeconomic determinants
    Keywords: MENA Region, foreign investment, South-South trade agreements
    JEL: F15 F21 E22
    Date: 2015
  33. By: Supanida Ngiwdee; Ravissa Suchato Author-Email : (Department of Agricultural and Resource Economics,Faculty of Economics,Kasetsart University,Thailand)
    Abstract: The objectives of this research were to 1) study farmers' perceptions on crop insurance of first rice and 2) examine key characteristics of crop insurance as viewed by farmers. A field survey was conducted to interview 246 famers. The research findings were as follows 1) overall perception of 109 farmers who had purchased the insurance in the past on 17 key characteristics is satisfactory 2) a conjoint analysis exercised on desirable characteristics found that bundling insurance premium with credit is the most preferred option. The second characteristic related to the level of indemnity covered. The last characteristic was the level of premium charged. Among all of the attributes offered, the most preferred option containing attributes consisted of 1) bundling insurance premium with production factor, 2) threshold yield of 276 kilogram per rai; 3) premium payable of 100 Baht; and 4) maximum indemnity of 1,700 Baht per rai.
    Keywords: Crop insurance, Area yield index, Major rice, Conjoint analysis
    JEL: Q10 Q13 Q18
    Date: 2015–03
  34. By: Xinshen Diao; Margaret McMillan
    Abstract: Africa’s recent economic growth is at a historical high. The patterns associated with this growth appear to be quite different from the Asian experiences where rapid growth was fueled by labor intensive, export-oriented manufacturing. Because this pattern differs with our typical view of structural transformation, a heated debate has begun over the sustainability of Africa’s growth. One thing is clear: the recent growth is not well understood. Against this background, we adapt Lewis’s (1954) dual-economy model to the economies of Africa to better understand the role that the “in-between” sector as defined by Lewis (1979) has played in Africa’s recent growth. Our framework incorporates the coexistence of a closed and an open modern economy and takes into account the diversity and heterogeneity of the activities that characterize modern African economies. We apply this framework to the economy of Rwanda to assess Rwanda’s future growth prospects based on different levels of foreign capital inflows. We find that higher foreign inflows lead to significantly more growth in the closed modern economy and stagnant growth in the open modern economy, a phenomenon consistent with recently observed patterns of growth across several African countries.
    JEL: O11 O55
    Date: 2015–03

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