nep-sea New Economics Papers
on South East Asia
Issue of 2015‒04‒25
twenty-six papers chosen by
Kavita Iyengar
Asian Development Bank

  1. ASEAN Economic community and climate change By Ditya A Nurdianto; Budy P Resosudarmo
  2. Corporate Tax Convergence in Asian and Pacific Economies By Yang Chen; Juan Cuestas; Paulo Regis
  3. Where does the money go? Assessing the expenditure and income effects of the Philippines' Conditional Cash Transfer Program By Stella Luz A. Quimbo; Joseph J. Capuno; Aleli D. Kraft; Rhea Molato; Carlos Tan, Jr.
  4. Why Has Latin America Sped Up Ahead of the Philippines in Economic and Political Reform? By Rosa Alonso i Terme
  5. Former Foreign Affiliates: Cast Out and Outperformed? By Beata Javorcik; Steven Poelhekke
  6. Asia’s Evolving Role in Global Wine Markets By Anderson, Kym; Wittwer, Glyn
  7. Estimation of Vulnerability to Poverty Using a Multilevel Longitudinal Model: Evidence from the Philippines By Christian D. Mina; Katsushi S. Imai
  8. The nature of innovative activity and the protection of intellectual property: a post TRIPS perspective from Asia By Kamal Saggi; Difei Geng
  9. Changes in source of profits and business strategies? : some evidence from the Philippines' universal banks in the 2000s By Kashiwabara, Chie
  10. Universal Coverage on a Budget: Impacts on Health Care Utilization and Out-Of-Pocket Expenditures in Thailand By Supon Limwattananon; Sven Neelsen; Owen O'Donnell; Phusit Prakongsai; Viroj Tangcharoensathien; Eddy van Doorslaer
  11. Climate Change, Agricultural Production and Civil Conflict: Evidence from the Philippines By Crost, Benjamin; Duquennois, Claire; Felter, Joseph; Rees, Daniel I.
  12. Investment Finance and Financial Sector Development By Ray, Shubhomoy
  13. Tackling Myanmar's Corruption Challenge By Saw, Khaing Sape
  14. N-Poly Viability and Conglopolistic Competition in Small Emerging Market By Raul V. Fabella
  15. Assessment of the Bottom-up Budgeting Process for FY 2015 By Manasan, Rosario G.
  16. Profiteering from the Dot-com Bubble, Sub-Prime Crisis and Asian Financial Crisis By Michael McAleer; John Suen; Wing Keung Wong
  17. Good countries or good projects ? comparing macro and micro correlates of World Bank and Asian Development Bank project performance By Bulman,David Janoff; Kolkma,Walter; Kraay,Aart C.
  18. The Sustainable Development of the National Agro-Industrial Complex as the Basis for Ensuring Food Security By Dudin, Mikhail; Balabanov, Vladimir; Balabanova, Anna
  19. Participation of Developing Countries in Global Value Chains: Implications for Trade and Trade-Related Policies By Przemyslaw Kowalski; Javier Lopez Gonzalez; Alexandros Ragoussis; Cristian Ugarte
  20. Completing Ostrom’s Table : A Note on the Taxonomy of Goods By Emmanuel S. de Dios
  21. The Credit Guarantee System and Policy-based Finance for Small- and Medium-sized Enterprises and a Database of Small- and Medium-sized Enterprises (Japanese) By YOSHINO Naoyuki
  22. Differential Delivery Dates, Retrievability and the Incentives Compatibility of Contracts By Raul V. Fabella
  23. Risk-averse and Risk-seeking Investor Preferences for Oil Spot and Futures By Hooi Hooi Lean; Michael McAleer
  24. Re-Thinking Market Failure in the Light of the Imperfect State By Raul V. Fabella; Vigile Marie Fabella
  25. The Effect of Female and Male Health on Economic Growth: Cross-Country Evidence within a Production Function Framework By Gazi M. Hassan; Arusha Cooray; Mark J. Holmes
  26. Mutual Funds and Information Diffusion: The Role of Country-Level Governance By Chunmei Lin; Massimo Massa; Hong Zhang

  1. By: Ditya A Nurdianto; Budy P Resosudarmo
    Abstract: This paper analyzes the benefits and losses associated with cooperation among ASEAN members in mitigating their CO2 emission, particularly by implementing a uniform carbon tax across ASEAN. To achieve this goal, this paper uses a multi-country CGE model for ASEAN, known as the Inter-Regional System of Analysis for ASEAN (IRSA-ASEAN) model. This study finds that the implementation of a carbon tax scenario is an effective means of reducing carbon emissions in the region. However, this environmental gain could come at a cost in terms of GDP contraction and reduction in social welfare, i.e. household income. Nevertheless, Indonesia and Malaysia can potentially gain from the implementation of a carbon tax as it counteracts price distortions due to the existence of heavy energy subsidies in these two countries.
    Keywords: climate change, computable general equilibrium model, ASEAN, regional economics
    JEL: Q54 Q56 O21 O57
    Date: 2014
  2. By: Yang Chen; Juan Cuestas; Paulo Regis
    Abstract: Countries in the Asia and Pacific region have shown many macroeconomic similarities such as current account surpluses, exchange rate appreciation, export-oriented economies, growth success, etc. This paper argues that there may be one more macroeconomic feature to add to the list: strong tax convergence. Using data on the statutory corporate tax rate in 15 countries from 1980 to 2014, we identify (i) a significant dynamic tax convergence pattern, and (ii) three tax convergence clubs. The latter consist of the small tax haven economies of Hong Kong and Singapore, the East Asian countries (plus one), and the South and Southeast Asian and Oceania countries. These economies, within groups, have been reducing the tax gaps with their neighbours over time.
    Date: 2014–09–16
  3. By: Stella Luz A. Quimbo (School of Economics, University of the Philippines Diliman); Joseph J. Capuno (School of Economics, University of the Philippines Diliman); Aleli D. Kraft (School of Economics, University of the Philippines Diliman); Rhea Molato (School of Economics, University of the Philippines Diliman); Carlos Tan, Jr. (School of Economics, University of the Philippines Diliman)
    Abstract: Evaluation studies on conditional cash transfers (CCT) in the Philippines found small if not insignificantly different from zero effects on household consumption. We use propensity score matching to examine how recipients made use of the money they received, taking into account possible changes in recipient behavior. We find evidence of crowding in—CCT households receive higher transfers from other domestic sources as a positive spillover from becoming CCT beneficiaries Poor CCT households tend to lower their dissavings while non-poor beneficiaries become less indebted. We also find evidence of lower income, lower wages, and lower work-related expenses.
    Keywords: Conditional cash transfers, household income and consumption, Philippines
    JEL: D12 I38 H53
    Date: 2015–02
  4. By: Rosa Alonso i Terme (School of Economics, University of the Philippines Diliman)
    Abstract: This paper compares trends in key economic, political and social development outcomes in the Philippines with those of Latin America, particularly since the 1990s. To do so, it uses standard indicators of development, including measures of institutional quality and good governance. The paper finds that Latin America is not only at a higher level of development, but has also made faster progress in most areas than the Philippines. This is especially the case as regards GDP per capita, poverty, education, health, infrastructure, social protection, right to life and security of the person and corruption. The Philippines, however, performs significantly better as regards gender and race and in some “niche” areas of ICT, including high-tech exports, while posting slightly higher ratings in government effectiveness. Both regions do well in the areas of macro-economic management and financial sector development. Overall performance as regards the quality of democracy is also roughly comparable. The paper argues that key policy drivers of the divergence include Latin America’s: a) higher and better public spending; b) greater transparency and integrity in both the public and private sectors; and c) freer and more competitive markets.
    Keywords: public economics, development economics, political economy, economic systems
    JEL: H11 O11 P16 P51
    Date: 2015–02
  5. By: Beata Javorcik (University of Oxford, United Kingdom); Steven Poelhekke (VU University Amsterdam, the Netherlands)
    Abstract: The literature has documented a positive effect of foreign ownership on firm performance. But is this effect due to a one-time knowledge transfer or does it rely on continuous injections of knowledge? To shed light on this question we focus on divestments, that is, foreign affiliates that are sold to local owners. To establish a causal effect of the ownership change we combine a difference-in-differences approach with propensity score matching. We use plant-level panel data from the Indonesian Census of Manufacturing covering the period 1990-2009. We consider 157 cases of divestment, where a large set of plant characteristics is available two years before and three years after the ownership change and for which observationally similar control plants exist. The results indicate that divestment is associated with a drop in total factor productivity accompanied by a dec line in output, markups as well as export and import intensity. The findings are consistent with the benefits of foreign ownership being driven by continuous supply of headquarter services from the foreign parent.
    Keywords: divestment, foreign direct investment, Indonesia and productivity
    JEL: F23
    Date: 2014–07–24
  6. By: Anderson, Kym; Wittwer, Glyn
    Abstract: Over the past decade Hong Kong and China have become far more important to the world’s wine markets, while Southeast Asia’s imports of fine wine continue to grow steadily. This paper reviews recent developments in the light of comparative advantage theory before drawing on a model of global wine markets to project developments in Asia and elsewhere over the next five years under various economic growth, real exchange rate, and policy assumptions. It concludes that China is set to continue to be by far the most dominant player in Asia, and to change global markets for wines dramatically, just as it has been doing and will continue to do for so many other products.
    Keywords: changes in tastes; global grape and wine model projections; real exchange rate changes; wine comparison advantage
    JEL: C53 F11 F17 Q13
    Date: 2015–04
  7. By: Christian D. Mina (Philippine Institute for Development Studies (PIDS), the Philippines); Katsushi S. Imai (School of Social Sciences, University of Manchester (UK) and RIEB, Kobe University (Japan))
    Abstract: This study estimates household vulnerability in the Philippines using a three-level and longitudinal linear random-coefficient model whereby vulnerability is decomposed into idiosyncratic and covariate components. Our three-wave panel data covering the period 2003-2009 allow us to analyse poverty situations in both vulnerability and poverty persistence dimensions. A majority of the poor and a third of the non-poor are found to be vulnerable to unobservable shocks, while more susceptible to unobservable idiosyncratic shocks than to covariate shocks. Adequate safety nets should be provided for vulnerable households with less-educated and agriculturally-engaged or jobless heads, rural dwellers, or with more members and/or dependents.
    Date: 2015–04
  8. By: Kamal Saggi (Vanderbilt University); Difei Geng (Vanderbilt University)
    Abstract: This paper examines trends in innovative activity in several major Asian countries during 1997-2011 as measured by their filings and grants of various types of intellectual property (IP). By almost all measures, there has been a remarkable increase in innovative activity in China. In fact, in 2011 China accounted for roughly 25% of global patent applications. However, several indirect measures suggest that the quality of this newly created Chinese IP is not (yet) world class. For example, relative to residents of other major Asian countries and the United States, Chinese residents tend to file IP applications in foreign markets at a much lower rate. Similarly, the ratio of royalty payments earned by Chinese residents to the number of patents granted to them is fairly low by international standards. Finally, the ratio of patent to utility model applications (typically granted for relatively minor innovations) in China is also relatively small.
    Keywords: innovation, protection of intellectual property, patents, trademarks, industrial designs, TRIPS, Asia
    JEL: O3 O5
    Date: 2014–05–27
  9. By: Kashiwabara, Chie
    Abstract: In the 2000s, the Philippines' local banking sector have conducted very conservative lending behavior and at the same time, gradually but continuously improved their profitability in terms of ROE (return on equity). A set of analyses on the flow of funds and segment reports (information) of local universal banks, whose loans outstanding to the industrial sector have dominated more than three fourths of the total outstanding, shows that (1) they have actively manage assets overseas, (2) their profitability has come from investment activities in the securities markets, and (3) some universal banks have shifted their resources into the consumer/retail segment. Although further refinement in the dataset is needed for a more detailed analysis, diverse business strategies would be expected among the local universal banks in the near future.
    Keywords: Philippines, Banks, Monetary policy, Credit channel, Bank loan
    JEL: E42 E52 G38
    Date: 2015–03
  10. By: Supon Limwattananon (International Health Policy Program, Ministry of Public Health, Thailand); Sven Neelsen (Institute of Health Policy and Management, Erasmus University Rotterdam); Owen O'Donnell (Erasmus University Rotterdam); Phusit Prakongsai (International Health Policy Program, Ministry of Public Health, Thailand); Viroj Tangcharoensathien (International Health Policy Program, Ministry of Public Health, Thailand); Eddy van Doorslaer (Erasmus University Rotterdam)
    Abstract: We estimate the impact on health care utilization and out-of-pocket (OOP) expenditures of a major reform in Thailand that extended health insurance to one-quarter of the population to achieve universal coverage while keeping health spending below 4% of GDP. Identification is through comparison of changes in outcomes of groups to whom coverage was extended with those of public sector employees and their dependents whose coverage was not affected. The reform is estimated to have reduced the probability that a sick person goes without formal treatment by 3.2 percentage points (11%). It increased the probability of receiving public ambulatory care by 2.7 ppt (5%) and of admission to a public hospital by 1 ppt (18%). OOP expenditures were reduced by one-third on average, as was the probability of spending more than 10% of the household budget on health care, while spending at the very top of the OOP distribution was reduced by one-half representing substantial reductio ns in exposure to medical expenditure risk. Supply-side measures implemented with the coverage extension are likely to have helped realize these effects from an increased, but still very tight, budget.
    Keywords: Health Insurance, Health Care, Medical Expenditures, Universal Coverage, Thailand
    JEL: H42 H51 I18
    Date: 2013–05–16
  11. By: Crost, Benjamin (University of Illinois at Urbana-Champaign); Duquennois, Claire (University of Colorado Denver); Felter, Joseph (Stanford University); Rees, Daniel I. (University of Colorado Denver)
    Abstract: Climate change is predicted to affect global rainfall patterns, but there is mixed evidence with regard to the effect of rainfall on civil conflict. Even among researchers who argue that rainfall reduces civil conflict, there is disagreement as to the underlying mechanism. Using data from the Philippines for the period 2001-2009, we exploit seasonal variation in the relationship between rainfall and agricultural production to explore the connection between rainfall and civil conflict. In the Philippines, above-average rainfall during the wet season is harmful to agricultural production, while above-average rainfall during the dry season is beneficial. We show that the relationship between rainfall and civil conflict also exhibits seasonality, but in the opposite direction and with a one-year lag. Consistent with the hypothesis that rebel groups gain strength after a bad harvest, there is evidence that lagged rainfall affects the number of violent incidents initiated by insurgents but not the number of incidents initiated by government forces. Our results suggest that policies aimed at mitigating the effect of climate change on agricultural production could weaken the link between climate change and civil conflict.
    Keywords: climate change, civil conflict, rainfall
    JEL: H56 O13
    Date: 2015–04
  12. By: Ray, Shubhomoy (Asian Development Bank Institute)
    Abstract: Investment in infrastructure for increasing trade and connectivity in South Asia and Southeast Asia has been impacted by a reduction in commercial bank participation in project financing, which has significantly increased the role of multilateral financial institutions and export credit agencies. The financing model needs to change to more sustainable local market and local currency financing by harnessing domestic savings, and this will be crucial if the region is to procure investments of an estimated $3.6 trillion by 2020 for financing of its infrastructure and connectivity projects. Increased connectivity between South and Southeast Asia can play an important role in improving efficiency and productivity by having more efficient industries based on comparative advantage, enlarging the overall market size, and increasing market access. However, such economic integration faces a multitude of challenges relating to cross-border infrastructure links, weak trade facilitation, shortages of infrastructure financing, non-tariff barriers, restrictions on foreign direct investment, and weak institutional coordination. Improvement in these issues would require large-scale public and private sector investment, supplemented by commercially viable credit. This study analyzes the means and constraints in funding cross-border connectivity projects. Using the most recent data from sources including the World Bank, ADB, and other financing and research institutions, barriers in financing cross-border projects are explored and analyzed with the help of case studies. This research brings to the fore the potential benefits of regional funding platforms and the role of multilaterals in resolving such barriers.
    Keywords: infrastructure; infrastructure financing; project finance; bond markets; public-private partnerships; public finance; multilateral banks
    JEL: G15 G21 G23 H44 H54 H87
    Date: 2015–04–16
  13. By: Saw, Khaing Sape
    Abstract: Corruption is widespread in Myanmar, and this has significant negative effects on the country’s economic development. In response, President U Thein Sein has made fighting corruption a priority. However, despite Myanmar’s gradual improvement in corruption perceptions’ rankings, it still ranks as one of the most corrupt ASEAN countries. Although progress in combating corruption has been made in some areas, there is much still to be done. This piece identifies the key corruption issues still facing Myanmar, and lays out recommendations to strengthen the efforts to tackle them. These include stricter oversight of bureaucrats’ discretionary powers and the removal of restrictive economic measures such as price controls in order to discourage black market activity. Finally, improving basic education about corruption can help raise awareness and serve to dislodge deeply embedded notions that corruption, gift giving etc. are just a normal part of getting things done in Myanmar.
    Keywords: Myanmar; Corruption; FDI; Business; Thein Sein
    JEL: O1 O2 O21 Z0
    Date: 2015–04–16
  14. By: Raul V. Fabella (School of Economics, University of the Philippines Diliman)
    Abstract: The economic catch-up of the East Asian region went hand-in-hand with the emergence and even dominance of large quasi-state or private conglomerates. Such for example were the Zaibatsus in the pre-WWII and the Keiretsus of the post-WWII Japan and the Chaebols of South Korea which enjoyed extensive state sponsorship and the Taipan-led business empires of South and South East Asia which were largely autonomic. The trend continues to this day especially in the People’s Republic of China. This dominance was not just an accidental fixture but the natural result of the economic and social environments prevalent in emerging markets. After reviewing the literature on why a few large private conglomerates tended to dominate the landscape of less developed economies in a rapid catch-up mode, we attempt a game theoretic account for the spread of these firms across different markets. We first define the concept of “n-poly viability” or the number of firms that can profitably Cournot compete in a market of a given the size and fixed capital requirement. We then show that conglopolistic competition (conglomerates competing in many markets) is a subgame perfect equilibrium of an entry game among initial monopolists and that this evolution is consumer welfare-improving. We identify the conditions under which only one firm or no firm benefits from the evolution.
    Keywords: behavioral, polymorphism, Bayesian, cooperation, groups
    JEL: C79 C72
    Date: 2015–04
  15. By: Manasan, Rosario G.
    Abstract: The bottom-up budgeting (BUB) process is one of the major reform initiatives of the Aquino administration and has been tagged as such from several perspectives. First, it is seen as a component of its budget reform thrusts that are aimed at making the national government budgeting process more responsive to local needs. Second, the BUB is viewed as part of the democracy/empowerment reform as it opens another avenue for people`s participation in local planning and budgeting and for generating demand for good governance at the local level. Third, it is also perceived as part of local governance reform in the sense that it provides incentives for good local governance. This paper assesses the conduct of the FY 2015 round of the BUB in 12 municipalities in the provinces of Agusan del Norte, Camarines Sur, Negros Occidental, and Quezon. Specifically, it aims to (1) examine how the key steps in the planning and prioritization of projects under the BUB for the FY 2015 cycle are implemented on the ground in terms of extent of participation, LGU-CSO engagement, and integration of BUB process in local planning process; (2) report on the progress and identify bottlenecks in the implementation of subprojects identified during the FY 2013 BUB process; and (3) provide insights on areas for further improvement for the subsequent rounds. In this sense, this assessment focuses on the process rather than on the outcomes of the BUB.
    Keywords: Philippines, poverty reduction, bottom-up budgeting, civil society organizations, basic sector, local governance, grassroots
    Date: 2015
  16. By: Michael McAleer (Erasmus University Rotterdam, Complutense University of Madrid, Kyoto University); John Suen (Chinese University of Hong Kong); Wing Keung Wong (Hong Kong Baptist University)
    Abstract: This paper explores the characteristics associated with the formation of bubbles that occurred in the Hong Kong stock market in 1997 and 2007, as well as the 2000 dot-com bubble of Nasdaq. It examines the profitability of Technical Analysis (TA) strategies generating buy and sell signals with knowing and without trading rules. The empirical results show that by applying long and short strategies during the bubble formation and short strategies after the bubble burst, it not only produces returns that are significantly greater than buy and hold strategies, but also produces greater wealth compared with TA strategies without trading rules. We conclude these bubble detection signals help investors generate greater wealth from applying appropriate long and short Moving Average (MA) strategies.
    Keywords: Technical analysis, moving average, buy-and-hold strategy, dot-com bubble, Asian financial crisis, sub-prime crisis, moving linear regression, volatility
    JEL: G1 C0
    Date: 2013–06–03
  17. By: Bulman,David Janoff; Kolkma,Walter; Kraay,Aart C.
    Abstract: This paper examines the micro and macro correlates of aid project outcomes in a sample of 3,821 World Bank projects and 1,342 Asian Development Bank projects. Project outcomes vary much more within countries than between countries: country-level characteristics explain only 10?25 percent of project outcomes. Among macro variables, country growth and the policy environment are significantly positively correlated with project outcomes. Among micro variables, shorter project duration and the presence of additional financing are significantly correlated with better project outcomes. In addition, the track record of the project manager in delivering successful projects is highly significantly correlated with project outcomes. There are few significant differences between the two institutions in the relationship between these variables and project outcomes.
    Keywords: Housing&Human Habitats,Development Economics&Aid Effectiveness,Rural Portfolio Improvement,Poverty Monitoring&Analysis,Banks&Banking Reform
    Date: 2015–04–21
  18. By: Dudin, Mikhail (Russian Presidential Academy of National Economy and Public Administration (RANEPA), Russian Academy of Entrepreneurship); Balabanov, Vladimir (Russian Academy of Entrepreneurship); Balabanova, Anna (Russian Academy of Entrepreneurship)
    Abstract: This study aims to determine the key trends in, as well as focus areas in and ways of, ensuring the proper level of global food security – both at the global level and in specific countries of the Asia-Pacific region. What needs to be used as the basis for the food security of particular countries is the sustainable development of their national agro-industrial complexes, while taking account of the experience of and statistical data for other, more developed, countries and regions in Western Europe and the US. Among the major inferences drawn from this study, the author would like to highlight the following: - the state of food security varies significantly by countries and regions. For particular countries within the Asia-Pacific region (above all, India, China, and Russia), ensuring the proper level of food security is a most topical objective to be resolved using a systemic approach; - resolving the objective of ensuring food security in Asian regions ought to be based on the innovation-oriented sustainable development of the national agro-industrial complex using special organizational/economic mechanisms, which should be predicated on a novel understanding of the specificity of the interaction between the state, agro-industrial business, and science; - resolving the objective of ensuring the proper level of food security serves the achievement of common humanistic goals in the development of modern human civilization and is viewed as one of the key obligations of modern socially-oriented states.
    Keywords: agro-industrial complex, sustainable development, food security, triple helix model, institualization, innovations
    Date: 2014
  19. By: Przemyslaw Kowalski; Javier Lopez Gonzalez; Alexandros Ragoussis; Cristian Ugarte
    Abstract: Although global value chains (GVCs) are often considered a defining feature of the current wave of globalisation, little is known about: i) what drives GVC participation; ii) what the benefits associated to growing participation are; or iii) how developing countries engage and benefit from GVCs. This paper tackles these questions empirically. The evidence indicates there are important benefits to be had from wider participation in terms of enhanced productivity, sophistication and diversification of exports. Structural factors, such as geography, size of the market and level of development are found to be key determinants of GVC participation. Trade and investment policy reforms as well as improvements of logistics and customs, intellectual property protection, infrastructure and institutions can, however, also play an active role in promoting further engagement. A more in-depth analysis of GVC participation and policy context in five developing sub-regions in Africa, the Middle East and Asia highlights key differences and similarities, and can be a starting point for policy makers in the regions to assess their countries’ GVC engagement and to consider policy options.
    Keywords: trade policy, investment, global value chains, intermediate inputs, Middle East and North Africa, GVCs, upgrading, West and Central Africa, South East Asia, developing countries, regional trade agreements, East and Southern Africa, South Asia
    JEL: F1 F2
    Date: 2015–04
  20. By: Emmanuel S. de Dios (School of Economics, University of the Philippines Diliman)
    Abstract: A framework is proposed to subsume public goods and common-pool resources, respectively, as specific cases of positive and negative externalities. A pure public good is a positive externality whose appropriable benefits are too small or too uncertain relative to the high private cost for anyone to produce it in any amount. The common-pool problem is a case where each agent’s action imposes a negative externality on everyone else.
    Keywords: public goods, common-pool resources, positive and negative externalities
    JEL: D61 D62 H41 H42
    Date: 2015–03
  21. By: YOSHINO Naoyuki
    Abstract: In this paper, I will explain the construction and analysis of a database of small- and medium-sized enterprises (SMEs), represented by data from the Credit Risk Database (CRD), and the role of the database as a means to provide financial education to SMEs. Then, to develop "assessment" abilities, I will comment on the need to cope with variables using the SME database and the long experience of persons involved in financing. I will also explain why it is hoped to make further progress on a study on the correlation with analysis using microdata and macro variables, including the feature of industry-specific data and an increase in the risk of loan loss due to a change in macro variables.Next, I will discuss and analyze (1) the establishment of a financial institution specializing in providing funds to SMEs in Asia where micro credit plays a major role and the relationship between governmental financial institutions and private financial institutions; (2) the methods of fundraising by governmental financial institutions, which can provide funds at low interest rates for long periods; and (3) difference in credit abilities between governmental financial institutions and private financial institutions, and the competitive yet complementary relationship between governmental financial institutions and private financial institutions.Furthermore, I will describe how German (KfW)-type concerted lending (loans through private financial institutions) is one way to reduce competition between governmental financial institutions and private financial institutions.Finally, I will explain how "Hometown Investment Trust Funds" (vehicles to provide risk money to startups and SMEs in local areas) provide funds to startups and SMEs in local areas using past cases, and describe the potential of these funds.
    Date: 2015–03
  22. By: Raul V. Fabella (School of Economics, University of the Philippines Diliman)
    Abstract: Differential delivery dates (D3) of contract obligations characterize most contracts in real life. D3 puts the contractor who delivers last, in the words of David Hume (1769), in “a position of advantage” because reneging on his/her obligation can be profitable. Ex-ante remedies such as Coase’s “ownership”, Williamson’s “hostage”, Klein et al’s “vertical ownership”, Grossman and Hart’s “assignment of residual rights”, etc have been proposed. The principal’s decision to appropriate the quasi-rent generated by the agent delivering effort first under possibly weak public ordering and non-zero retrievability of delivered effort is explicitly modeled. We give the sufficient conditions for the preservation of the incentives compatibility of the simple P-A effort-in-advance contract in the D3 environment.
    Keywords: incentives compatibility, quasi-rent appropriation, retrievability, incentives contract
    JEL: D52 D86
    Date: 2015–04
  23. By: Hooi Hooi Lean (Universiti Sains, Malaysia;); Michael McAleer (National Tsing Hua University, Taiwan; Erasmus University Rotterdam, The Netherlands; and Complutense University of Madrid, Spain)
    Abstract: This paper examines risk-averse and risk-seeking investor preferences for oil spot and futures prices by using the mean-variance (MV) criterion and stochastic dominance (SD) approach. The MV findings cannot distinguish between the preferences of spot and futures markets. However, the SD tests show that spot dominates futures in the downside risk, while futures dominate spot in the upside profit. On the other hand, the SD findings suggest that spot dominates futures in downside risk, while futures dominate spot in upside profit. Risk-averse investors prefer investing in the spot index. Risk seekers are attracted to the futures index to maximize their expected utility but not expected wealth in the entire period, as well as for both the OPEC and Iraq War sub-periods. The SD findings show that there is no arbitrage opportunity between the spot and futures markets, and these markets are not rejected as being efficient.
    Keywords: Stochastic dominance, mean-variance, risk averter, risk seeker, futures market, spot market
    JEL: C14 G12 G15
    Date: 2013–09–05
  24. By: Raul V. Fabella (School of Economics, University of the Philippines Diliman); Vigile Marie Fabella (Universitaet Konstanz)
    Abstract: We propose a formal re-definition of the concept market failure based on the idea of the imperfect state. In the Neo-classical taxonomy, a decentralized regime of exchange is a market failure if its laissez faire equilibrium solution is welfare-dominated by a technically feasible alternative. If the state is perfect, that is, benevolent and its transactions cost of intervention is zero, every market failure can be remedied/corrected with a welfare gain. If the state is imperfect, that is, either non-benevolent or with non-zero transactions cost, the state intervention to correct the market failure can be welfare-reducing. Extending the logic behind Williamson’s remediableness criterion and Stiglitz’ constrained Paretoness, we introduce a new taxonomy of failures: the concept “proto-failure” now denotes any failure which laissez faire interaction cannot remedy without a welfare gain. The label “market failure” now denotes a proto-failure which the relevant state can correct with a welfare gain. A proto-failure that the relevant state cannot correct with a welfare gain we call “RC efficient.” We use the net welfare metric which explicitly accounts for transactions cost of intervention as efficiency criterion. The new taxonomy is equivalent to the old if the state is perfect, that is, all proto failures are market failures. When the state is imperfect, the set of market failures is smaller than the set of proto-failures. A proto-failure is a necessary--but not a sufficient--condition for a welfare-improving government intervention. This paper follows the Williamson counsel to “push the logic of positive transactions cost to completion.”
    Keywords: proto-failure, market failure, transactions cost, imperfect state, welfare economics
    JEL: D60 D61 D63 D23 D04 H21
    Date: 2015–04
  25. By: Gazi M. Hassan (University of Waikato); Arusha Cooray (University of Nottingham, Malaysia); Mark J. Holmes
    Abstract: Adopting a production function based approach, we model the role of health as a regular factor of production on economic growth, and use disaggregate measures of male and female health capital using principal components analysis. Allowing for the dynamics of TFP to be embedded in the production function, we estimate it both in levels and in growth rates to distinguish between long- and short-run effects. We use appropriate panel cointegration methodology to control for endogeneity, cross-sectional dependence and heterogeneity. Our main finding is that while male and female health capital stock has a significantly positive effect on level of output in the long-run, changes in gender disaggregated health capital has a negative or insignificant effect on output growth in the short-run.
    Keywords: health and economic development; economic growth; endogeneity; panel data; TFP convergence; economics of gender
    JEL: J16
    Date: 2015–04–21
  26. By: Chunmei Lin (Erasmus University Rotterdam); Massimo Massa (INSEAD, France); Hong Zhang (INSEAD, France, and Tsinghua University, Singapore)
    Abstract: We hypothesize that poor country-level governance, which makes public information less reliable, induces fund managers to increase their use of semi-public information. Utilizing data from international mutual funds and stocks over the 2000-2009 period, we find that semi-public information-related stock rebalancing can be five times higher in countries with the worst quality of governance than in countries with the best. The use of semi-public information increases price informativeness but also increases information asymmetry and reduces stock liquidity. It also intensifies the price impact and liquidity crunch during the recent global financial crisis. This paper was accepted for publication in the <I>Review of Financial Studies</I>.
    Keywords: Mutual Funds, Information Diffusion, Country-Level Governance, Semi-public Information,Liquidity
    JEL: G15
    Date: 2014–07–01

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