nep-sea New Economics Papers
on South East Asia
Issue of 2016‒03‒23
twenty-six papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Economic Growth and Convergence, Applied Especially to China By Robert J. Barro
  2. Intrageneration Poverty Dynamics in Indonesia: Households’ Welfare Mobility Before, During, and After the Asian Financial Crisis By Dartanto, Teguh; Otsubo, Shigeru
  3. Growing Inclusive Businesses in the Philippines: The Role of Government Policies and Programs By Briones, Roehlano M.
  4. Assessment of Power Sector Reforms in Viet Nam: Country Report By Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB)
  5. Lost in Transition? Declining Returns to Education in Vietnam By Tinh Doan; Tran Quang Tuyen; Le Quan
  6. Financial Soundness Indicators for Financial Sector Stability in Viet Nam By Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB)
  7. Vietnam's labor market institutions, regulations, and interventions : helping people grasp work opportunities in a risky world By Schmillen,Achim Daniel; Packard,Truman G.
  8. ADB Brief No. 41: Financial Inclusion in Developing Asia: Transactional Accounts, Savings, and Borrowing By Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB)
  9. Business and Development in Myanmar: A Policy Handbook for Private Sector Development By Kamile Puusaag; David Abonyi; Masato Abe
  10. Comparative Assessment of Proposals to Amend the Personal Income Tax Law By Manasan, Rosario G.
  11. Bank Charter Value, Systemic Risk and Credit Reporting Systems: Evidence from the Asia-Pacific Region By Wahyoe Soedarmono; Romora Edward Sitorus; Amine Tarazi
  12. Economic Analysis of Climate-Proofing Investment Projects By Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB)
  13. Farm production diversity and dietary quality: Linkages and measurement issues By Sibhatu, Kibrom T.; Qaim, Matin
  14. The effects of oil price and US economy on Thailand's macroeconomy: The role of monetary transmission mechanism By Razmi, Fatemeh; M., Azali; Chin, Lee; Habibullah, Muzafar Shah
  15. Improving Energy Efficiency and Reducing Emissions through Intelligent Railway Station Buildings By Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB)
  16. On the Concept of Green Growth and the Role of Policy and Public Finance By Sudo, Tomonori
  17. The Bank Lending Channel in a Dual Banking System: Evidence from Malaysia By Guglielmo Maria Caporale; Abdurrahman Nazif Catik; Mohamad Husam Helmi; Faek Menla Ali; Mohammad Tajik
  18. The Complexity of Immigrant Generations: Implications for Assessing the Socioeconomic Integration of Hispanics and Asians By Brian Duncan; Stephen J. Trejo
  19. Testing for Monotonicity in Unobservables under Unconfoundedness By Stefan Hoderlein; Liangjun Su; Halbert White; Thomas Tao Yang
  20. A Synthesis of the Status of Agricultural Research and Investment to Support Sustainable Development in Countries of Asia and the Pacific By Jabbar, Mohammad A.; Mal, Bhag; Ghodake, Raghunath
  21. Loan Loss Provisions and Lending Behavior of Banks: Do Information Sharing and Borrower Legal Rights Matter? By Wahyoe Soedarmono; Amine Tarazi; Agusman Agusman; Gary S. Monroe; Dominic Gasbarro
  22. The procyclicality of loan loss provisions in Islamic banks: Do managerial discretions matter? By Wahyoe Soedarmono; Sigid Eko Pramono; Amine Tarazi
  23. Harmonization and Standardization of Bond Market Infrastructures in ASEAN+3: ASEAN+3 Bond Market Forum Sub-Forum 2 Phase 3 Report By Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB)
  24. Results of an Impact Evaluation Study on DepED's School-Based Feeding Program By Tabunda, Ana Maria L.; Albert, Jose Ramon G.; Angeles-Agdeppa, Imelda
  25. "Peer Effects on Vaccination: Experimental Evidence from Rural Nigeria" By RyokoSato; Yoshito Takasaki
  26. Task ordering in incentives under externalities By Murali Agastya; Kanti Parimal Bag; Nona Pepito

  1. By: Robert J. Barro
    Abstract: From the perspective of conditional convergence, China’s GDP growth rate since 1990 has been surprisingly high. However, China cannot deviate forever from the global historical experience, and the per capita growth rate is likely to fall soon from around 8% per year to a range of 3 4%. China can be viewed as a middle-income convergence-success story, grouped with Costa Rica, Indonesia, Peru, Thailand, and Uruguay. Upper-income convergence successes comprise Chile, Hong Kong, Ireland, Malaysia, Poland, Singapore, South Korea, and Taiwan. China’s transition from middle- to upper-income status should not be hindered by a middle-income trap, which seems not to exist. The cross-country dispersion of the log of per capita GDP shows no trend since 1870 for 25 countries with long-term data. This group excludes emerging-market countries such as China and India. For 34 countries with data since 1896, there is clear evidence of declining dispersion starting around 1980. This pattern reflects especially the incorporation of China and India into the world market economy.
    JEL: O11 O4 O47
    Date: 2016–01
  2. By: Dartanto, Teguh; Otsubo, Shigeru
    Abstract: When the economic crisis hit in 1998, and economic growth dropped by 13.7 percent; exacerbated by domestic political turbulence, poverty figures sharply rose from 17.47 percent to 24.20 percent. It began to decline again as the economy quickly recovered from the crisis. The above details demonstrate that poverty is not a pure static phenomenon, but rather is dependent on dynamic characteristics that easily change over time. Households could move into (or out of) poverty in response to fluctuations in the economy. This study then aims to analyze the determinants of households’ shifting welfare during the periods before, during and after the Asian financial crisis in Indonesia. Applying the spell approach of poverty experience and observing four waves of IFLS (Indonesian Family Life Survey) balanced panel datasets, we find that during 1993-1997 (pre-crisis) households could be classified as chronically poor (6.14 percent), transient poor (-) (6.31 percent), transient poor (+) (10.58 percent) and never poor (76.96 percent). However, during 1997-2000 (crisis), the probability of being transient poor (-) had jumped drastically from 5 percent (pre-crisis) to 14 percent (during the crisis). In the post crisis period, roughly 86 percent of the previously poor households could move out of poverty. This study also confirmed that the probability of being poor in the next period highly depends on past experiences with poverty. Moreover, reducing probability of being chronically poor by about half from 4.6 percent to 2.2 percent needs almost fifteen years. Furthermore, our estimations using the ordered logit model confirm that determinants of poverty dynamics include educational attainment, size of the household, share of education expenditure, distance to public transportation, ownership of livestock and liquid assets, and the impact suffered from earthquakes.
    Keywords: chronic poor , transient poor , poverty dynamics , panel data , Asian financial , crisis , Indonesia
    Date: 2016–03–08
  3. By: Briones, Roehlano M.
    Abstract: Inclusive business (IB) is a private sector approach to providing goods, services, and livelihoods on a commercially viable basis, either at scale or scalable, to people at the base of the pyramid by making them part of the value chain of companies' core business as suppliers, distributors, retailers, or customers. There is keen interest in IBs, both in the public and private spheres, as a strategy for inclusive growth. The Department of Trade and Industry is setting up an accreditation system to certify business models as IB, based on an evaluation tool, initially for three priority sectors: agribusiness, housing, and tourism. This paper analyzes the economic and development potential of IBs, and describes existing programs and policies of the government in terms of openness to IB. It then makes several recommendations for short-term IB promotion, as well as long-term measures to support IB in the Philippines.
    Keywords: Philippines, inclusive growth, inclusive business, micro, small, and medium enterprises, small farmers and fishers, base of the pyramid, industry promotion
    Date: 2016
  4. By: Asian Development Bank (ADB); Asian Development Bank (ADB) (Economic Research and Regional Cooperation Department, ADB); Asian Development Bank (ADB) (Economic Research and Regional Cooperation Department, ADB); Asian Development Bank (ADB)
    Abstract: Viet Nam envisions a completely competitive power sector in the long term, including full wholesale and retail competition. To attain this goal, it unbundled its power sector’s monopoly structure and instituted institutional, regulatory, and pricing reforms. Although considerable progress has been made, implementation has not been expeditious, with the government still retaining a strong vested ownership and management interest in the power sector. Further restructuring is needed to ensure complete independence of the system players and to attain pricing transparency. In this country report, the Asian Development Bank assesses Viet Nam’s experience in reforming its power sector for insights that other Asian developing economies could find useful when pursuing their own power sector planning and policy and strategy formulation.
    Keywords: power sector, Viet Nam, power sector reforms, retail competition, privatization, equitization, wholesale power market, competitive power market, transmission and distribution, unbundling, power generation, tariff setting, tariff reform, power supply security, economic outcomes, social outcomes,environmental outcomes, market-based regulation, power sector planning
    Date: 2015–09
  5. By: Tinh Doan (University of Waikato); Tran Quang Tuyen (VNU University of Economics and Business); Le Quan (VNU University of Economics and Business)
    Abstract: There is evidence of a rapid increase in the returns to education in Vietnam in the 1990s and 2000s. There was a substantial change in education policy in the 2000s, especially opening up education opportunities for education providers to expand educational facilities and training. These changes could lead to a decline in the returns to education. To provide up-to-date estimates of the returns, we re-visit the returns using updated large-scale survey data to 2014. We apply the Heckman selection estimators to correct for selection bias and find that the return to education in Vietnam increased quickly up to the global financial crisis in 2008/2009 and declined sharply thereafter. This raises at least two questions: is the higher-educated labour force oversupplied or is there a large distortion in the labour market?
    Keywords: economic transformation; returns to education; education supply; wage setting; Vietnam
    JEL: C52 J21 J31
    Date: 2016–03–07
  6. By: Asian Development Bank (ADB); Asian Development Bank (ADB) (East Asia Department, ADB); Asian Development Bank (ADB) (East Asia Department, ADB); Asian Development Bank (ADB)
    Abstract: Financial soundness indicators (FSIs) are methodological tools that help quantify and qualify the soundness and vulnerabilities of financial systems according to five areas of interests: capital adequacy, asset quality, earnings, liquidity, and sensitivity to market risk. With support from the Investment Climate Facilitation Fund under the Regional Cooperation and Integration Financing Facility, this report describes the development of FSIs for Viet Nam and analyzes the stability and soundness of the Vietnamese banking system by using these indicators. The key challenges to comprehensively implementing reforms and convincingly addressing the root causes of the banking sector problems include (i) assessing banks’ recapitalization needs, (ii) revising classification criteria to guide resolution options, (iii) recapitalization and restructuring that may include foreign partnerships, (iv) strengthening the VAMC, (v) developing additional options to deal with NPLs, (vi) tightening supervision to ensure a sound lending practice; (vii) revamping the architecture and procedures for crisis management, and (viii) strengthening financial safety nets during the reform process.
    Keywords: financial sector, financial soundness indicators, asia, pacific, adb, investment climate, core indicators, encouraged indicators, deposit takers, financial corporations, nonfinancial sectors, viet nam finance, financial institutions, financial markets, viet nam banks, banking, nguyen duc thanh, vu minh long, ngo quoc thai
    Date: 2015–09
  7. By: Schmillen,Achim Daniel; Packard,Truman G.
    Abstract: Over the past 30 years, Vietnam has experienced significant shifts of employment away from agriculture toward manufacturing and services, away from household enterprises toward registered and regulated businesses, and away from state-owned enterprises toward private firms. This paper argues that for these processes to continue in the future, appropriately designed and implemented labor market policies need to be in place, including labor market regulations that protect workers but do not inhibit creative destruction and creation of formal sector jobs; labor market interventions that improve workers'human capital, eliminate information asymmetries, and are fiscally sustainable; and labor market institutions that give voice to workers and employers. As a part of all of these measures, Vietnam will also have to renew its efforts to integrate vulnerable groups into the labor market.
    Keywords: Banks&Banking Reform,Labor Policies,Markets and Market Access,Labor Markets,Labor Standards
    Date: 2016–03–01
  8. By: Asian Development Bank (ADB); Asian Development Bank (ADB) (Economic Research and Regional Cooperation Department, ADB); Asian Development Bank (ADB) (Economic Research and Regional Cooperation Department, ADB); Asian Development Bank (ADB)
    Abstract: Both theory and evidence suggest that financial inclusion can be a powerful tool for empowering the poor, for augmenting their earning potential, and for improving the quality of their lives.
    Keywords: financial inclusion, financial institutions, policy efforts, poverty reduction, finance, financial products, financial systems, savings, adb brief no. 41
    Date: 2015–08
  9. By: Kamile Puusaag (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)); David Abonyi (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)); Masato Abe (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP))
    Abstract: Myanmar holds considerable promise, for businesses both domestic and foreign, as well as for development practitioners, confident of seeing a rapid transformation in economic conditions and quality of life in general. Nevertheless, while the country has attracted substantial interest from around the world, there are still many gaps in knowledge. In-depth information about the conditions facing the private sector, as well as the perspectives of the various members of the private sector, is still in the process of being uncovered. Against this background, the central purpose of this policy handbook is to provide policymakers, business communities, development organizations, and other interested parties with a thorough overview of the private sector environment in Myanmar today. The publication outlines the challenges faced by businesses in Myanmar, elaborates on the nature of the challenges and why they are significant, and offers a set of recommendations to improve the business environment in order to foster greater development of the private sector, and indeed, the country as a whole. Undeniably, the internal economic conditions and business environment will play a key role in determining the private sector’s future. Additionally, however, it is important to note that much of the excitement surrounding Myanmar stems from its 2011 shift towards greater economic openness to the rest of the world. Moreover, the upcoming ASEAN Economic Community 2015 is also likely to have a tremendous impact on the private sector in Myanmar. As a result, this policy handbook puts a sizeable focus on discussing issues affecting trade and investment in goods and services. It is ESCAP’s hope that this publication can serve as a reference point for those seeking such information, and that the publication can provide a wide-ranging understanding of the private sector’s current situation and how to help provide it with an equally-promising future.
    Keywords: Myanmar, business, private sector, development, policy handbook
    JEL: F0 F1 F2 F4 E2
    Date: 2015–02
  10. By: Manasan, Rosario G.
    Abstract: Proposals to reform the personal income tax have gained prominence in recent months. To date, personal income tax reform is part and parcel of the platform of a number of the candidates in the 2016 presidential elections. This paper aims to evaluate the various proposals in both houses of Congress to amend the existing personal income legislation. Proposals to amend the personal income tax schedule appear to be well-justified from the perspective of (i) the need to eliminate the bracket creep and (ii) easing the tax burden on Filipino personal income taxpayers relative to their ASEAN neighbors. In terms of the progressivity of the personal income tax, all of the proposals to amend the personal income tax are progressive. However, two of the proposals, SB 2149 and HB 4829, are less progressive than the existing rate structure. In terms of revenue yield, all of the proposals are estimated to have a negative impact on government revenue. The projected revenue loss from proposals to restructure the personal income tax is best seen in the context of the government's overall revenue and tax effort. Fiscal prudence dictates that new revenue measures be found to compensate for the projected revenue loss that will arise as a result of the implementation of any one of the various proposals to restructure the personal income tax. Thus, the questions that beg to be asked is: What new revenue measure or combination of measures will allow government to recover the revenue loss from the new personal income tax structure? Possibilities include increasing the VAT rate, excise tax on petroleum products, and road user's tax.
    Keywords: Philippines, personal income tax, tax reform, value added tax (VAT), excise tax
    Date: 2015
  11. By: Wahyoe Soedarmono (Universitas Siswa Bangsa Internasional, Faculty of Business / Sampoerna School of Business); Romora Edward Sitorus (Universitas Siswa Bangsa Internasional, Faculty of Business / Sampoerna School of Business); Amine Tarazi (LAPE - Laboratoire d'Analyse et de Prospective Economique - UNILIM - Université de Limoges - IR SHS UNILIM - Institut Sciences de l'Homme et de la Société)
    Abstract: From a sample of publicly-traded banks in the Asia-Pacific region over the 1998-2012 period, we document that banks with higher charter value are able to insulate themselves from systemic risk by acquiring more capital. Nevertheless, we find that the self-disciplining role of bank charter value is more pronounced for countries with lower depth of credit information sharing. Our results also show that in countries with lower quality of private credit bureaus, higher charter value enhances capitalization, and alleviates systemic risk in banking. Overall, these findings suggest that higher bank charter value might be detrimental to systemic stability for countries where the credit reporting system is of better quality.
    Keywords: Asian banks ,credit information sharing,systemic risk,Bank charter value
    Date: 2016–03–08
  12. By: Asian Development Bank (ADB); Asian Development Bank (ADB) (Sustainable Development and Climate Change Department, ADB); Asian Development Bank (ADB) (Sustainable Development and Climate Change Department, ADB); Asian Development Bank (ADB)
    Abstract: Climate change represents an increasing threat to the continued development of the people, preservation of ecosystems, and economic growth of Asia and the Pacific. Mainstreaming climate risk management in all aspects of development is thus key to an effective transition to climate-resilient development pathways. ADB’s climate risk management framework aims to reduce risks resulting from climate change to investment projects in Asia and the Pacific. A key step in this framework is the technical and economic valuation of climate-proofing measures. This report describes the conduct of the cost-benefit analysis of climate proofing investment projects. An important message is that the presence of uncertainty about climate change does not invalidate the conduct of the economic analysis of investment projects, nor does it require a new type of economic analysis. However, the presence of uncertainty does require a different type of decision-making process in which technical and economic expertise combine to present decision makers with the best possible information on the economic efficiency of alternative designs of investment projects.
    Keywords: adb projects, asia, pacific, climate change, climate-proofing, risk analysis, climate risks, economic analysis, project design, project implementation, climate risk resilience, infrastructure development, adaptation costs, cost–benefit analysis, risk management, adaptation, economic analysis
    Date: 2015–09
  13. By: Sibhatu, Kibrom T.; Qaim, Matin
    Abstract: Recent research has analyzed whether higher levels of farm production diversity contribute to improved dietary quality in smallholder households. We add to this literature by using different indicators, thus testing the robustness of previous findings and helping to better understand the underlying linkages. The analysis builds on data from Indonesia, Kenya, and Uganda. Farm diversity measured through a simple species count has a small positive effect on dietary quality, either expressed in terms of dietary diversity scores or micronutrient consumption levels. However, when measuring production diversity in terms of the number of food groups produced, the effect turns insignificant in most cases. Further analysis suggests that diverse subsistence production contributes less to dietary quality than cash income generated through market sales. Much of the food diversity consumed in farm households is purchased from the market. If farm diversification responds to market incentives and builds on comparative advantage, it can contribute to improved income and nutrition. This may also involve cash crop production. On the other hand, increasing the number of food groups produced on the farm independent of market incentives will foster subsistence, reduce cash incomes, and thus rather worsen dietary quality. We conclude that from a nutrition perspective improving market access is more important than farm diversification as such.
    Keywords: dietary diversity, micronutrients, nutrition-sensitive agriculture, smallholder farm households, developing countries, Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, International Development, D13, I15, O13, Q12,
    Date: 2016–03
  14. By: Razmi, Fatemeh; M., Azali; Chin, Lee; Habibullah, Muzafar Shah
    Abstract: This article investigates the channels of monetary transmission mechanism alongside oil price and the US industrial production, as two causes of recent crisis, during the pre-and post-crisis of 2007-2009 in Thailand. The channels of monetary transmission mechanism barely have an effect on consumer price index and industrial production while oil price strongly affects both industrial production and consumer price index and the US industrial production robustly influences consumer price index during pre-crisis. However, oil price and the US industrial production greatly lose their effects on consumer price index and industrial production after the crisis period, the oil price is still mostly explains the variation of the consumer price index. The stock price is most effective conduit for monetary policy to industrial production during post-crisis period.
    Keywords: Monetary transmission, external shocks, global financial crisis, oil price, US economy
    JEL: E0
    Date: 2015
  15. By: Asian Development Bank (ADB); Asian Development Bank (ADB) (East Asia Department, ADB); Asian Development Bank (ADB) (East Asia Department, ADB); Asian Development Bank (ADB)
    Abstract: Buildings in the People’s Republic of China (PRC) consume 21% of the total energy produced in the country. This study analyzes and proposes feasible energy-saving and emission-reducing solutions for domestic railway stations in the PRC. The use of intelligent building controls support reduction of energy consumption, minimization or elimination of energy wastes, and cost savings. Strong institutional mechanisms and railway building management methods and policies also promote technological innovation. Moreover, these are necessary to balance the interests of multiple parties to be able to achieve energy efficiency in railway station buildings in the PRC.
    Keywords: prc railway stations, intelligent railway stations, energy efficiency, energy consumption, emissions reduction, energy savings, policy recommendations, energy assessment, railway station design, adb ta 7916, china railway corporation, case studies
    Date: 2015–09
  16. By: Sudo, Tomonori
    Abstract: This article aims to identify the current discussion on green growth, and focuses on the role of public finance in promoting a transition towards green growth. Terms such as “green economy” and “green growth” have become popular in international policy discourse as ways of describing recent efforts to improve the environmental performance of the economy. In this article, the definitions offered by several international institutions are compared and some commonalities are identified. The rationale behind green growth can be explained within the framework of the growth theory. Investment is indispensable to the practical promotion of green growth activities. Using Vietnam as a case study, we identify the critical factors for encouraging and enabling green investment. However, further theoretical background should be developed. In particular, pricing on environmental goods and services is a critical challenge for both the theoretical and the practical development of green growth. Further theoretical and practical study on green growth may improve the discussion on the growth theory as well as the development of policies that promote investment in green growth. To deepen the discussion, further case studies need to be collected and analyzed.
    Keywords: Green Growth , Growth Theory , Finance , Sustainable Development , Program Loan
    Date: 2016–03–09
  17. By: Guglielmo Maria Caporale; Abdurrahman Nazif Catik; Mohamad Husam Helmi; Faek Menla Ali; Mohammad Tajik
    Abstract: This paper examines the bank lending channel of monetary transmission in Malaysia, a country with a dual banking system including both Islamic and conventional banks, over the period 1994:01-2015:06. A two-regime threshold vector autoregression (TVAR) model is estimated to take into account possible nonlinearities in the relationship between bank lending and monetary policy under different economic conditions. The results indicate that Islamic credit is less responsive than conventional credit to interest rate shocks in both the high and low growth regimes. By contrast, the relative importance of Islamic credit shocks in driving output growth is much greater in the low growth regime, their effects being positive. These findings can be interpreted in terms of the distinctive features of Islamic banks.
    Keywords: Bank lending channel, Malaysia, Monetary transmission, Threshold VAR
    JEL: C32 E31 E42 E58
    Date: 2016
  18. By: Brian Duncan; Stephen J. Trejo
    Abstract: Because of data limitations, virtually all studies of the later-generation descendants of immigrants rely on subjective measures of ethnic self-identification rather than arguably more objective measures based on the countries of birth of the respondent and his ancestors. In this context, biases can arise from “ethnic attrition” (e.g., U.S.-born individuals who do not self-identify as Hispanic despite having ancestors who were immigrants from a Spanish-speaking country). Analyzing 2003-2013 data from the Current Population Survey (CPS), this study shows that such ethnic attrition is sizeable and selective for the second- and third-generation populations of key Hispanic and Asian national origin groups. In addition, the results indicate that ethnic attrition generates measurement biases that vary across groups in direction as well as magnitude, and that correcting for these biases is likely to raise the socioeconomic standing of the U.S.-born descendants of most Hispanic immigrants relative to their Asian counterparts.
    JEL: J15 J61 J62
    Date: 2016–02
  19. By: Stefan Hoderlein (Boston College); Liangjun Su (Singapore Management University); Halbert White (University of California); Thomas Tao Yang (Australian National University)
    Abstract: Monotonicity in a scalar unobservable is a common assumption when modeling heterogeneity in structural models. Among other things, it allows one to recover the underlying structural function from certain conditional quantiles of observables. Nevertheless, monotonicity is a strong assumption and in some economic applications unlikely to hold, e.g., random coefficient models. Its failure can have substantive adverse consequences, in particular inconsistency of any estimator that is based on it. Having a test for this hypothesis is hence desirable. This paper provides such a test for cross-section data. We show how to exploit an exclusion restriction together with a conditional independence assumption, which in the binary treatment literature is commonly called unconfoundedness, to construct a test. Our statistic is asymptotically normal under local alternatives and consistent against global alternatives. Monte Carlo experiments show that a suitable bootstrap procedure yields tests with reasonable level behavior and useful power. We apply our test to study the role of unobserved ability in determining Black-White wage differences and to study whether Engel curves are monotonically driven by a scalar unobservable.
    Keywords: Control variables, Conditional exogeneity, Endogenous variables, Monotonicity, Nonparametrics, Nonseparable, Specification test, Unobserved heterogeneity
    JEL: C12 C14 C21 C26
    Date: 2016–02
  20. By: Jabbar, Mohammad A.; Mal, Bhag; Ghodake, Raghunath
    Abstract: In order to provide background information about the current policies, strategies, priorities as well as current capacities and trends of investment in agricultural research and innovation to support sustainable development in countries of Asia and the Pacific, a structured questionnaire was sent to 25 countries seeking a brief status report. Twenty-two countries responded of which, based on GDP per capita at current prices in 2014, 5 countries were classified as high income, 7 as medium income and 10 as low income. Responses revealed that major policies that have implications for agricultural research in these countries include food security/food supply, productivity improvement, sustainable natural resources management, sustainable development or sustainability, competiveness and market development, rural development, rural income generation and livelihood. Specific meaning and implication of each of the above policies vary across income groups and countries. Among the strategies adopted to implement the policies include two broad categories: one is related to research and technology transfer and the other is related to building organization, market development, and regulations. There are differences between countries and income groups in terms of specific strategies adopted. Among the main focus and priority areas for research and development, top on the list is a broad area encompassing global warming/ climate change/ natural resources management/environment, which is common across income groups. Other areas include frontline research and innovation, strengthening market/value chain/competiveness, stability of food supply/commodity supply, establishment of advanced facilities/services/infrastructure, problems of producers/industry. There are differences between income groups in terms of importance of focus areas. Agricultural research and innovation is primarily a public sector activity in nearly all the countries; in high income countries private sector, NGOs and farmer associations also play some role. Precise information on levels of investment and their sources were not available. However, available cursory information suggests that agricultural research is under-funded and under-invested. Climate change, environmental problems and their consequences are perceived as the most important challenges facing the countries across all income groups. Other perceived challenges fall into two broad categories - technology for productivity improvement and market development, and research staff, facilities and laboratories. All the countries have ongoing plans built on past achievements to address future challenges. It is recommended that in discussion on future agenda and priorities, in addition to the above issues, consideration should be given to alignment with sustainable development goals agenda, the increasing importance of livestock sub-sector in the region, the need for strengthening research-policy-end user partnerships and interactions, and the need for stronger collaboration within regional bodies like the ASEAN and SAARC.
    Keywords: agricultural research, objectives and strategies, investment, sustainable development, Asia-Pacific, APAARI, Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies, Q1, Q16,
    Date: 2015
  21. By: Wahyoe Soedarmono (Universitas Siswa Bangsa Internasional, Faculty of Business / Sampoerna School of Business); Amine Tarazi (LAPE - Laboratoire d'Analyse et de Prospective Economique - UNILIM - Université de Limoges - IR SHS UNILIM - Institut Sciences de l'Homme et de la Société); Agusman Agusman (bank indonesia - bank indonesia); Gary S. Monroe (University of New South Wales - Australia - University of New South Wales [Sydney]); Dominic Gasbarro (Murdoch University, Australia)
    Abstract: In this paper, we examine the role of information sharing and borrower legal rights in affecting the procyclical effect of bank loan loss provisions. Based on a sample of Asian banks, our empirical results highlight that higher non-discretionary provisions reduce loan growth and hence, non-discretionary provisions are procyclical. A closer investigation suggests that better information sharing through public credit registries managed by central banks, but not private credit bureaus managed by the private sector, might substitute the role of a dynamic provisioning system in mitigating the procyclicality of non-discretionary provisions. We also document that higher discretionary provisions in countries with stronger legal rights of borrowers may temper the procyclical effect of non-discretionary provisions. However, these findings only hold for small banks. This suggests that the implementation of a dynamic provisioning system to mitigate the procyclicality of non-discretionary provisions is more crucial for large banks, because such procyclicality cannot be offset by strengthening credit market environments through better information sharing and legal rights of borrowers.
    Keywords: Loan loss provisions,loan growth,information sharing,borrower legal rights
    Date: 2016–03–08
  22. By: Wahyoe Soedarmono (Universitas Siswa Bangsa Internasional, Faculty of Business / Sampoerna School of Business); Sigid Eko Pramono (bank indonesia - bank indonesia); Amine Tarazi (LAPE - Laboratoire d'Analyse et de Prospective Economique - UNILIM - Université de Limoges - IR SHS UNILIM - Institut Sciences de l'Homme et de la Société)
    Abstract: This paper is the first to examine whether the loan loss provisioning behavior of Islamic banks is procyclical. From a dynamic panel data methodology, the empirical results show that loan loss provisioning in Islamic banks is indeed procyclical, as higher economic growth leads to a decline in loan loss provisions. A closer investigation is also conducted to examine whether capital management, income smoothing, or signaling behavior can alter the procyclicality of loan loss provisions. Specifically, our results document that only capital management behavior can overcome the procyclicality of loan loss provisions. This paper therefore advocates the importance of strengthening discretionary behavior in Islamic banks in terms of capital management using loan loss provisions, particularly during economic boom.
    Keywords: Islamic banks,loan loss provisions,procyclicality
    Date: 2016–03–01
  23. By: Asian Development Bank (ADB); Asian Development Bank (ADB) (Sustainable Development and Climate Change Department, ADB); Asian Development Bank (ADB) (Sustainable Development and Climate Change Department, ADB); Asian Development Bank (ADB)
    Abstract: This report is an outcome of Phase 3 discussions under the ASEAN+3 Bond Market Forum Sub-Forum 2, which have focused on making bond market infrastructures in the region more inter-operable through the harmonization of transaction flows, standardization of messaging items, and implementation of international standards. Most markets in the region will have commenced these harmonization and standardization efforts by2020, thus taking a significant step toward the integration of ASEAN+3 bond markets.
    Keywords: regional cooperation, regional integration, bond markets, asean+3, bond market forum, transaction flows, international standards, regional cooperation, integrated bond markets, abmf sf2, iso 20022, iso 15022, dvp settlement, central securities depository, rtgs systems
    Date: 2015–09
  24. By: Tabunda, Ana Maria L.; Albert, Jose Ramon G.; Angeles-Agdeppa, Imelda
    Abstract: The link between malnutrition and poor health among elementary school children and absenteeism, early dropout and poor classroom performance as well as the effectiveness of school-based nutrition and health interventions in improving school performance are well-established in the literature. Thus, the Department of Education has been conducting conditional food transfer programs since 1997. Its current program, the School-Based Feeding Program, as implemented in school year (SY) 2013-2014, fed 40,361 severely wasted pupils enrolled in Kindergarten to Grade Six in 814 public elementary schools in the country. This paper presents the findings from the impact evaluation of the SY 2013-2014 implementation of the program. This is a follow-up on the process evaluation conducted by the PIDS. The study employed mixed methods research, undertaking qualitative surveys while undertaking focus group discussions. The findings indicate that, except for inaccurate measurement of nutrition status variables and improper documentation of the program in all its three phases (prefeeding, feeding, and postfeeding), the program was generally implemented well by the beneficiary schools, and welcomed not only by program beneficiaries and their parents but also by many of the school heads and teachers of the beneficiary pupils.
    Keywords: Philippines, impact evaluation, health and nutrition, school children, school-based feeding program, food for education program
    Date: 2016
  25. By: RyokoSato (Global Asia Institute, National University of Singapore); Yoshito Takasaki (Faculty of Economics, The University of Tokyo)
    Abstract: Understanding how and why social interactions matter for people's vaccination behavior is important for disease control. This paper conducts the first causal analysis of peer effects on vaccination in developing countries. We created exogenous variations in peers' vaccination behaviors by randomizing cash incentives for tetanus vaccine take-up among Nigerian women. Vaccine take-up among friends strongly increased women's take-up; having a friend getting vaccinated increases the likelihood that one receives a vaccination by 18.9 percentage points. The peer effects among friends are heterogeneous by one's belief about vaccine safety and access to health clinics in a way that is consistent with whether or not a woman visits a clinic with her friend. This provides evidence for collective action as a mechanism underlying the positive peer effect.
  26. By: Murali Agastya (University of Sydney, School of economics - University of Sydney); Kanti Parimal Bag (Department of Economics - NUS - National University of Singapore); Nona Pepito (THEMA - Théorie économique, modélisation et applications - Université de Cergy Pontoise - CNRS - Centre National de la Recherche Scientifique, Department of Economics - Essec Business School)
    Abstract: In a two-task team project with observable task outcomes, optimal incentives prioritize tasks differently depending on task externalities. When the tasks are independent, Principal follows a decreasing order by placing more essential task first. A task is more essential if its failure compromises the overall project's chance of success from a task-specific cutoff level by a greater percentage. This definition has no systematic relations to the variance of task outcomes. In particular, a more risky task can be less essential or more essential. Under externalities, essentiality and impact jointly determine the optimal ordering. A task with much higher impact can be performed early even if it is less essential. Optimal task ordering thus raises subtle new issues and forms an integral part in team incentives. Our analysis provides some contrast with recent team incentives results.
    Keywords: externalities in teams,sequencing, essential tasks, joint projects, team incentives
    Date: 2016–01–25

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