nep-sea New Economics Papers
on South East Asia
Issue of 2016‒03‒06
twenty papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Economic and Technological Complexity: A Model Study of Indicators of Knowledge-based Innovation Systems By Inga Ivanova; Oivind Strand; Duncan Kushnir; Loet Leydesdorff
  2. Nowcasting Indonesia By Luciani, Matteo; Pundit, Madhavi; Ramayandi, Arief; Veronese, Giovanni
  3. • Promoting Agricultural Growth in Myanmar: A Review of Policies and an Assessment of Knowledge Gaps By Tun, Than; Kennedy, Adam; Nischan, Ulrike
  4. Trading Forests: Quantifying the Contribution of Global Commodity Markets to Emissions from Tropical Deforestation - Working Paper 384 By Martin Persson, Sabine Henders, and Thomas Kastner
  5. Enabling Participation of SMEs in International Trade and Production Networks: Trade Facilitation, Trade Finance and Communication Technology By Yann Duval; Chorthip Utoktham
  6. Privacy Protection Policy for Big Data Analytics in the Malaysian Telecommunications Sector By Chua, Hui Na; Chang, Younghoon; Wong, Siew Fan; Tan, Chor Min
  7. Presentation and Analysis of Recent Developments in Trade in Tuna Products; An EU Perspective By Nicolas Dross
  8. Explaining Foreign Holdings of Asia's Debt Securities: The Feldstein-Horioka Paradox Revisited By Horioka, Charles Yuji; Terada-Hagiwara, Akiko; Nomoto, Takaaki
  9. PENGELOLAAN KEUANGAN PUBLIK DI INDONESIA: Tinjauan Keuangan Publik Islam By Jaelani, Aan
  10. Investing in Human Capital for Inclusive Growth: Focus on Higher Education By Canlas, Dante B.
  11. Ongoing trade facilitation improvement: Its impact on export-oriented small and medium-sized enterprises in Indonesia By Tulus T. H. Tambunan
  12. Revisiting the Macroeconomic Impact of Oil Shocks in Asian Economies By Juncal Cunado; Soojin Jo; Fernando Perez de Gracia
  13. MASA DEPAN IAIN SYEKH NURJATI CIREBON: Strategi Kampus Entrepreuner Berbasis Lokal By Jaelani, Aan
  14. ASEAN+3 Information on Transaction Flows and Settlement Infrastructures By Asian Development Bank (ADB); ; ;
  15. Does inequality cause financial distress? Evidence from lottery winners and neighboring bankruptcies By Agarwal, Sumit; Mikhed, Vyacheslav; Scholnick, Barry
  16. Productivity spillovers from foreign multinationals and trade policy: firm-level analysis of Vietnamese manufacturing By Thuyen, Truong Thi Ngoc; Jongwanich, Juthathip; Ramstetter, Eric D.
  17. Trade Flows and Trade Specialisation: The Case of China By Guglielmo Maria Caporale; Anamaria Sova; Robert Sova
  18. The effect of monetary policy on bank wholesale funding By Choi, Dong Boem; Choi, Hyun-Soo
  19. Estimation of Panel Vector Autoregression in Stata: a Package of Programs By Michael R.M. Abrigo; Inessa Love
  20. Corporate Insolvency Resolution in India: Lessons from a cross-country comparison By Sengupta, Rajeswari; Anjali Sharma

  1. By: Inga Ivanova; Oivind Strand; Duncan Kushnir; Loet Leydesdorff
    Abstract: Hidalgo & Hausmann's (2009) Economic Complexity Index (ECI) measures the complexity of national economies in terms of product groups. Analogously to ECI, we develop the Patent Complexity Index (PatCI) on the basis of a matrix of nations versus patent classes. Using linear algebra, the three dimensions countries, product groups, and patent classes can be combined into an integrated ("Triple Helix") measure of complexity (THCI). We measure ECI, PatCI, and THCI during the period 2000-2014 for the 34 OECD member states, the BRICS countries, and a group of emerging economies (Argentina, Hong Kong, Indonesia, Malaysia, Romania, and Singapore). The positive correlation between ECI and average income claimed as an argument for the predictive value of ECI cannot be confirmed using our data. The three complexity indicators are significantly correlated between themselves, yet each captures another aspect of the complexity. THCI adds the trilateral interaction terms among the three bilateral interactions, and can thus be expected to capture the extent of systems integration between the global dynamics of markets (ECI) and technologies (PatCI) in each national system of innovation. Of the world's major economies, Japan scores highest on all three indicators, while China has been increasingly successful in combining economic and technological complexity. Our empirical results raise questions about the interpretation and empirical fruitfulness of the complexity approach.
    Date: 2016–02
  2. By: Luciani, Matteo (Board of Governors of the Federal Reserve System (U.S.)); Pundit, Madhavi (Asian Development Bank); Ramayandi, Arief (Asian Development Bank); Veronese, Giovanni (Banca d'Italia)
    Abstract: We produce predictions of the current state of the Indonesian economy by estimating a dynamic factor model on a dataset of eleven indicators (also followed closely by market operators) over the time period 2002 to 2014. Besides the standard difficulties associated with constructing timely indicators of current economic conditions, Indonesia presents additional challenges typical to emerging market economies where data are often scant and unreliable. By means of a pseudo-real-time forecasting exercise we show that our model outperforms univariate benchmarks, and it does comparably with predictions of market operators. Finally, we show that when quality of data is low, a careful selection of indicators is crucial for better forecast performance.
    Keywords: Dynamic Factor Models; Emerging Market Economies; Nowcasting
    Date: 2015–11–09
  3. By: Tun, Than; Kennedy, Adam; Nischan, Ulrike
    Abstract: Across Southeast Asia, agricultural growth has historically been a major driver of overall economic growth and poverty reduction (Christiaensen, Demery, and Kuhl 2011).2 Indonesia, Malaysia, Thailand and Vietnam all enjoyed rapid agricultural growth as part of their successful development over the past several decades. Given broad similarities in the economic structures of these countries in the 1970s, 1980s and 1990s in comparison with Myanmar today, the historical evidence suggests that rapid agricultural growth in Myanmar has the potential to be the engine for broad-based economic growth and poverty reduction. Moreover, the current democratic reforms in Myanmar create opportunities for development of agricultural and economic policies for greater food security and poverty reduction.
    Keywords: Agricultural and Food Policy, Food Security and Poverty, International Development,
    Date: 2015–11
  4. By: Martin Persson, Sabine Henders, and Thomas Kastner
    Abstract: This paper aims to improve our understanding of how and where global supply-chains link consumers of agricultural and forest commodities across the world to forest destruction in tropical countries. A better understanding of these linkages can help inform and support the design of demand-side interventions to reduce tropical deforestation. To that end, we map the link between deforestation for four commodities (beef, soybeans, palm oil, and wood products) in eight case countries (Argentina, Bolivia, Brazil, Paraguay, Democratic Republic of the Congo, Indonesia, Malaysia, and Papua New Guinea) to consumption, through international trade. Although few, the studied countries comprise a large share of the internationally traded volumes of the analyzed commodities: 83% of beef and 99% of soybean exports from Latin America, 97% of global palm oil exports, and roughly half of (official) tropical wood products trade. The analysis covers the period 2000-2009. We find that roughly a third of tropical deforestation and associated carbon emissions (3.9 Mha and 1.7 GtCO2) in 2009 can be attributed to our four case commodities in our eight case countries. On average a third of analyzed deforestation was embodied in agricultural exports, mainly to the EU and China. However, in all countries but Bolivia and Brazil, export markets are dominant drivers of forest clearing for our case commodities. If one excludes Brazilian beef on average 57% of deforestation attributed to our case commodities was embodied in exports. The share of emissions that was embodied in exported commodities increased between 2000 and 2009 for every country in our study except Bolivia and Malaysia.
    Keywords: Climate change, Forests, REDD+, Commodities, Commodity supply chains, Energy, Food, Agriculture.
    JEL: Q23 Q54 L73 Q02 Q17
    Date: 2014–10
  5. By: Yann Duval (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)); Chorthip Utoktham (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP))
    Abstract: This study aimed at identifying key factors affecting SME participation in direct export and international production networks (IPNs), both globally and in Asia and the Pacific. A global dataset of firm-level data from developing countries was analyzed to identify the main obstacles to establishment and operation of direct and indirect small and medium size exporters. Logit models of SME export and IPN participation revealed the importance of several trade facilitation and related factors. The importance of modern information technology and international quality certification appear to be particularly crucial to participation in IPNs with SMEs using both at least 13% more likely to be involved in such networks. Exporting SMEs both globally as well as in the Asia-pacific region reported access to finance as the key obstacle to their business operations. Almost 60% of Asia-Pacific exporting SMEs rely exclusively on internal financing, while only 40% do so globally. Access to a variety of external trade finance sources was found to be important to boost SME export participation, with bank financing and supplier credit found to increase likelihood of SME participation in both direct export and IPNs most. The results particularly highlighted the importance of supply chain financing to facilitate direct export participation of Asia-Pacific SMEs. Comparing the marginal effects of various factors on SMEs and large enterprises, a reduction in customs and trade clearance times was also found to increase SMEs likelihood of participation in export or IPNs relatively more than that of larger enterprises.
    Keywords: Export participation, international production network, firm-level data, Asia and the Pacific, trade facilitation, trade finance, small and medium-sized enterprises (SMEs)
    JEL: F1 O5 C1
    Date: 2014–07
  6. By: Chua, Hui Na; Chang, Younghoon; Wong, Siew Fan; Tan, Chor Min
    Abstract: The telecommunications sector has accessed to large amount of data. When use effectively, this Big Data enables the telcos to achieve efficiency and profitability across the entire telecommunications value chain. However, the potential advantage of Big Data may be tempered by increasing privacy concern among users. Countries across different parts of the world including Malaysia have enacted data protection policy. In Malaysia, the Personal Data Protection Act 2010 (PDPA) was officially enforced on November 15th, 2013. To date, its implementation remains challenging and its effect is unclear. This paper attempts to understand the state of data protection policy implementation and its challenges from the viewpoints of three major stakeholders: the users (i.e., the data owners and creators), the telcos (i.e., the data recipients), and the government (i.e., the policy enforcer). Guided by Giddens’ Structuration Theory and the Competing Value Framework, semi-structure interview data will be collected from the three stakeholders to understand how differing perspectives of the stakeholders shape the data protection structure/institution and vice versa.
    Keywords: Privacy protection policy,big data analytics,telecommunications sector,fair information practices,privacy concerns
    Date: 2015
  7. By: Nicolas Dross (European Commission, DG Trade, Brussels, Belgium)
    Abstract: Trade in tuna products with the EU faces systemic changes. In 2013, the EU launched a raft of large-scale negotiations, with countries including the United States and Japan. This comes on top of a number of ongoing negotiations (e.g., Mercosur, Thailand, and Vietnam), as well as recently concluded ones (e.g., Korea, Canada, Andean Community). Equally important for the tuna sector is a cluster of EU development-oriented negotiations known as Economic Partnership Agreements with African, Caribbean and Pacific countries. Finally, it is particularly important that the tuna sector is aware of the modernisation of the EU's scheme of trade concessions for developing countries, known as the Generalised Scheme of Preferences (GSP). The new rules entered into force on 1 January 2014 and will have an impact on the sector. Looking at the most recent trade figures, it seems that for the moment significant changes have not materialised yet. It will take more time before the trade flows are impacted.
    Keywords: international trade, EU trade policy, tariff preferences, duty rates, tuna products, import price.; international trade, EU trade policy, tariff preferences, duty rates, tuna products, import price.
    Date: 2015
  8. By: Horioka, Charles Yuji; Terada-Hagiwara, Akiko; Nomoto, Takaaki
    Abstract: In this paper, we find that home bias is still present in all economies and regions, especially in the case of short-term debt securities, but that there are substantial variations among economies and regions in the strength of home bias, with the Eurozone economies, the US, and developing Asia showing relatively weak home bias and advanced Asia, especially Japan, showing relatively strong home bias. We then examine trends over time in foreign holdings of debt securities and find that capital has been flowing from the US and the Eurozone economies to both advanced Asia (especially Japan) and developing Asia and that foreign holdings of debt securities have been increasing in advanced as well as developing Asia but for different reasons. The main reason in the case of advanced Asia (especially Japan) appears to be higher risk-adjusted returns, whereas the main reason in the case of developing Asia appears to be the growth of debt securities markets combined with relatively weak home bias and (in the case of short-term securities) lower exchange rate volatility. Finally, we find that since the Global Financial Crisis, foreign holdings of debt securities have declined (i.e., that home bias has strengthened) in all economies and regions except developing Asia, where they have increased (except for a temporary decline in 2008) but where their share is still much lower than the optimal share warranted by the capital asset pricing market model.
    Keywords: Capital asset pricing model, cross-border portfolio investments, debt securities, Feldstein-Horioka paradox, Feldstein-Horioka puzzle, foreign debt holdings, Global Financial Crisis, government bonds, government securities, home bias, international capital flows, international capital mobility, international capital movements, safe haven, short-term capital movements, advanced Asia, developed Asia, developing Asia, non-Japan Asia, Eurozone, Japan
    JEL: F21 F32 F34 G01 G15 O53
    Date: 2015–11
  9. By: Jaelani, Aan
    Abstract: Public financial management by the government is very important in view of the level of welfare in Indonesia is still low, as there are still many poverty with the level of fulfillment of the needs of low, corruption that occurs in every area of government, income distribution is uneven, low economic growth, and various irregularities other budget. With a qualitative approach that emphasizes the phenomenon of the social reality and the country's financial management practices in Indonesia, the approach to history and historical analysis is able to provide solutions to the existing problems. Reviewing public financial revenues and government spending become instruments in creating public welfare.
    Keywords: budget management, public finance, the budget, and welfare
    JEL: B15 B2 H0 H20 H6 P5
    Date: 2015–11–01
  10. By: Canlas, Dante B.
    Abstract: What does the Philippines need to do to transform its economy into a high middle-income economy and ensure that the benefits from such a transformation are within reach of every Filipino? Investment in human capital, especially higher education, is one instrument that serves the twin goals of boosting economic growth with broad-based rewards, that is, inclusive growth. Currently, the Philippines is confronted by a low proportion of enrollees and graduates in higher and scientific education, and needs to raise its stock of labor with higher and scientific education amid rising demand for skilled workers and widening gaps in lifetime earnings between college and high school graduates. Several policies are indicated, but priority must be accorded to instituting loan programs for higher education, accelerating rationalization of the state university and college sector based on instituting regional university systems and centers of excellence, and devising grant programs for content standards for subjects and courses and formulating standardized tests for measuring and monitoring compliance with those standards applied to both public and private institutions of higher learning.
    Keywords: Philippines, higher education institutions (HEIs), higher education, inclusive growth, human capital, student loans
    Date: 2016
  11. By: Tulus T. H. Tambunan (Trisakti University)
    Abstract: Trade facilitation refers to all measures that can be taken to facilitate cross-border trade flows, but there is no standard formal definition of trade facilitation. This paper examines whether export-oriented MSMEs have access to trade facilitation and how helpful trade facilitation is in supporting exports by MSMEs. Data shows only a small proportion of MSMEs export their products, and the paper makes recommendations on encouraging export activities through increasing awareness and training of MSMEs regarding trade facilitation information, and promotion of information communications technology.
    Keywords: Development, Indonesia, SME, Trade, Trade Facilitation
    JEL: F13
  12. By: Juncal Cunado; Soojin Jo; Fernando Perez de Gracia
    Abstract: This paper analyzes the macroeconomic impact of oil shocks in four of the largest oil-consuming Asian economies, using a structural vector autoregressive model. We identify three different types of oil shocks via sign restrictions: an oil supply shock, an oil demand shock driven by global economic activity and an oil-specific demand shock. The main results suggest that economic activity and prices respond very differently to oil price shocks depending on their type. In addition, a country’s oil-importing and -exporting status in the world oil market affects the transmission of shocks. Finally, subsample analysis shows a possible structural break in Japan and South Korea for all three types of oil shocks.
    Keywords: Econometric and statistical methods, International topics
    JEL: E32 Q43 O53
    Date: 2015
  13. By: Jaelani, Aan
    Abstract: The improvement of quality of life should be the main objective of higher education, including at IAIN Syeikh Nurjati Cirebon. The globalization of higher education is expected not too concerned with the economic needs through the commodification of the institution. Reforms that still have to create a balance between the ability to collect resources and produce products, which in the context of higher education graduates in the form of human resources, quality, useful, armed with expertise that qualified and helped build community toward a better life , This can be done through the development of academic entrepreneurship in shaping the entrepreneurial spirit of students, including through co-operation program of poverty alleviation between Bank Indonesia Cirebon with IAIN Syekh Nurjati Cirebon
    Keywords: entrepreneurship, poverty aleviation, higher education
    JEL: A13 A23 I23 I25 L31 L53
    Date: 2012–06–10
  14. By: Asian Development Bank (ADB); (Office of Regional Economic Integration, ADB); ;
    Abstract: This report, entitled ASEAN+3 Information on Transaction Flows and Settlement Infrastructure and consisting of three parts, is the result of Phase2 studies of ABMF SF2 and enhances the findings of Phase 1. Part 1 provides an overview of ASEAN+3 bond markets and their infrastructure. Part 2 reports on the bond marketrelated issues of economies in the region. Part 3 contains diagrams of ASEAN+3 bond market infrastructures, domestic bond transaction flows, and cross-border bond transaction flows. The report is the product of the collaborative efforts of the National Members and Experts and International Experts of the ABMF in cooperation with the Asian Development Bank’s Office of Regional Economic Integration.
    Keywords: bond market, capital market, transaction flows, settlement infrastructure, trade matching, securities numbering, straight-through-processing, delivery-versus-payment, matching, harmonization, ABMF, ASEAN, ASEAN+3
    Date: 2014–03
  15. By: Agarwal, Sumit (National University of Singapore); Mikhed, Vyacheslav (Federal Reserve Bank of Philadelphia); Scholnick, Barry (University of Alberta)
    Abstract: We test the hypothesis that income inequality causes financial distress. To identify the effect of income inequality, we examine lottery prizes of random dollar magnitudes in the context of very small neighborhoods (13 households on average). We find that a C$1,000 increase in the lottery prize causes a 2.4% rise in subsequent bankruptcies among the winners’ close neighbors. We also provide evidence of conspicuous consumption as a mechanism for this causal relationship. The size of lottery prizes increases the value of visible assets (houses, cars, motorcycles), but not invisible assets (cash and pensions), appearing on the balance sheets of neighboring bankruptcy filers.
    Keywords: Income inequality; Bankruptcy; Conspicuous consumption; Lottery; Financial distress
    JEL: C14 D31 K35
    Date: 2016–02–11
  16. By: Thuyen, Truong Thi Ngoc; Jongwanich, Juthathip; Ramstetter, Eric D.
    Abstract: This article examines how the presence of foreign multinational enterprises (MNEs) affects productivity in local firms in Vietnamese manufacturing in 2005-2010. The paper also emphasizes how import protection has affected these productivity spillovers and how spillovers from wholly-foreign MNEs and joint ventures differ. The most consistent result suggests wholly-foreign MNEs impart negative spillovers while joint ventures generate positive spillovers. Theory and random effects estimates also indicate that import protection reduces local firm productivity and weakens the effect of spillovers from all MNEs, but this result is not obtained when a fixed effects estimator is used. Results are similar in samples of labour-intensive industries, which include close to three-fourths of all sample firms, but differ markedly for more capital-intensive groups.
    Keywords: Multinational enterprise, spillover, tradepolicy, manufacturing, Vietnam, Multinational enterprise, spillover, tradepolicy, manufacturing, Vietnam
    JEL: F23 L60 O24 O53
    Date: 2014–06
  17. By: Guglielmo Maria Caporale; Anamaria Sova; Robert Sova
    Abstract: Using annual data for the period 1992-2012, this paper examines trade flows between China and its main trade partners in Asia, North America and Europe, and whether increasing trade has led to industrial structural adjustment and changes in China’s trade patterns. The analysis is based on both economic indicators and the estimation of a gravity model, and applies recently developed panel data methods that explicitly take into account unobserved heterogeneity, specifically the fixed effect vector decomposition (FEVD) technique. The findings confirm the significant change in China’s trading structure associated with the fast growth of foreign trade. In particular, there has been a shift from resource- and labour-intensive to capital- and technology-intensive exports.
    Keywords: gravity model, panel data analysis, trade specialisation, comparative advantage
    JEL: C23 F14 F15
    Date: 2015
  18. By: Choi, Dong Boem (Federal Reserve Bank of New York); Choi, Hyun-Soo (Singapore Management University)
    Abstract: We study how monetary policy affects the funding composition of the banking sector. When monetary tightening reduces the retail deposit supply owing to, for example, a decrease in bank reserves or in money demand, banks try to substitute the deposit outflows with more wholesale funding in order to mitigate the policy impact on their lending. Banks have varying degrees of accessibility to wholesale funding sources because of financial frictions, and those banks that are large or that have a greater reliance on wholesale funding increase their wholesale funding more. As a result, monetary tightening increases both the reliance on and the concentration of wholesale funding within the banking sector, indicating that monetary tightening could increase systemic risk. Our findings also suggest that introducing liquidity requirements can bolster monetary policy transmission through the bank lending channel by limiting the funding substitution of large banks.
    Keywords: bank funding; monetary policy transmission; systemic stability; liquidity regulation; bank lending channel
    JEL: E52 E58 G21 G28
    Date: 2016–01–01
  19. By: Michael R.M. Abrigo (University of Hawaii at Manoa and Philippine Institute for Development Studies); Inessa Love (University of Hawaii at Manoa)
    Abstract: Panel vector autoregression (VAR) models have been increasingly used in applied research. While programs specifically designed to estimate time-series VAR models are often included as standard features in most statistical packages, panel VAR model estimation and inference are often implemented with general-use routines that require some programming dexterity. In this paper, we briefly discuss model selection, estimation and inference of homogeneous panel VAR models in a generalized method of moments (GMM) framework, and present a set of Stata programs to conveniently execute them. We illustrate the pvar package of programs by using standard Stata datasets.
    Date: 2016–01
  20. By: Sengupta, Rajeswari (Indira Gandhi Institute of Development Research); Anjali Sharma (Indira Gandhi Institute of Development Research)
    Abstract: In this paper we analyse the corporate insolvency resolution procedures of India, UK and Singapore within a common framework of well-specified principles. India at present lacks a single, comprehensive law that addresses all aspects of insolvency of an enterprise. The presence of multiple laws and adjudication fora has created opportunities for debtor firms to exploit the arbitrage between the systems to frustrate recovery efforts of creditors. This also adversely impacts timeliness of the resolution process. While the importance of a well-functioning insolvency resolution framework can hardly be overstated, there is no single framework with well-defined rules laid out for organizing an efficient insolvency resolution process. Hence we undertake a cross-country comparison, the underlying motivation being to highlight the similarities as well as differences across the laws and procedures of the three countries. The objective is to learn important lessons for India, in context of the formation of the Bankruptcy Law Reforms Committee (BLRC) in 2014. The Committee has recently recommended an Insolvency and Bankruptcy Code that would be applicable to all non-financial corporations in India.
    Keywords: Resolving insolvency, Liquidation, Reorganisation, Adjudicator, Loss given default, Recovery rate, Timeliness, Information system
    JEL: G1 G2 G33 G34
    Date: 2015–12

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