nep-sea New Economics Papers
on South East Asia
Issue of 2016‒04‒04
twenty papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Public expenditure, growth and productivity of Vietnam’s provinces. By Duc-Anh Le; Phu Nguyen-Van; Thi Kim Cuong Pham
  2. Pancasila, Globalisasi dan Pasar Bebas: Meneguhkan Kembali Ekonomi Pancasila sebagai Karakter Bangsa By Jaelani, Aan
  3. Poverty Assessment of Ethnic Minorities in Vietnam By Le, Chau; Nguyen, Cuong; Phung, Thu; Phung, Tung
  4. Indonesia; Selected Issues By International Monetary Fund. Asia and Pacific Dept
  5. Migration in Vietnam: New Evidence from Recent Surveys By Coxhead, Ian; Vu, Linh; Nguyen, Cuong
  6. Do Parents Choose the Sex of their Children? Evidence from Vietnam By Hoang, Thu Huong; Nguyen, Viet Cuong
  7. Singapore’s Export Elasticities; A Disaggregated Look into the Role of Global Value Chains and Economic Complexity By Elif Arbatli; Gee Hee Hong
  8. Having an Older Brother Is Good or Bad for Your Education And Health? Evidence from Vietnam By Tran, Dong Quang; Nguyen, Viet Cuong
  9. The EU bio-based industry: Results from a survey By Lucy Nattrass; Clifford Biggs; Ausilio Bauen; Claudia Parisi; Emilio Rodriguez-Cerezo; Manuel GOMEZ BARBERO
  10. Sharing the Growth Dividend; Analysis of Inequality in Asia By Sonali Jain-Chandra; Tidiane Kinda; Kalpana Kochhar; Shi Piao; Johanna Schauer
  11. Impact of the People’s Republic of China’s Growth Slowdown on Emerging Asia: A General Equilibrium Analysis By Zhai, Fan; Morgan, Peter
  12. An update of the Philippine conditional cash transfer?s implementation performance By Acosta,Pablo Ariel; Velarde,Rashiel Besana
  13. The Effects of Market Participation on Farm Households’ Food Security in Cambodia: An endogenous switching approach By Seng, Kimty
  14. Can A School Operational Assistance Fund Program (BOS) Reduce School Drop-Outs During The Post-Rising Fuel Prices In Indonesia? Evidence From Indonesia By Kharisma, Bayu
  15. Improving water management in Myanmar’s dry zone for food security, livelihoods and health By International Water Management Institute, IWMI
  16. Weighting deprivations using subjective well-being: An application to the Multidimensional Child Poverty Index in Vietnam By Dat Vu Hoang; Laure Pasquier-Doumer
  17. China’s Imports Slowdown; Spillovers, Spillins, and Spillbacks By Alexei Kireyev; Andrei Leonidov
  18. Dynamic Connectedness of Asian Equity Markets By Roberto Guimarães-Filho; Gee Hee Hong
  19. Estimation of Large Dimensional Factor Models with an Unknown Number of Breaks By Shujie Ma; Liangjun Su
  20. Financial integration and Japanese stock market By Guesmi, Khaled; Kablan, Sandrine

  1. By: Duc-Anh Le; Phu Nguyen-Van; Thi Kim Cuong Pham
    Abstract: This paper proposes a structural approach to investigate total factor productivity and economic growth of Vietnam’s provinces during the 2000-2007 period. TFP is composed of three components: an autonomous technological change, an observed deterministic part depending on external factors, and an unobserved stochastic part. Estimation results do not show any evidence regarding the impacts of national and local public spending on TFP and economic growth of Vietnam’s provinces. Human capital and the local economy’s structure (shares of industry, services, and agriculture) can play a significant role in explaining the cross-province differences in terms of productivity. Finally, TFP of Vietnam’s provinces does not converge in the long run as it displays a polarization feature around two main groups of provinces, a large group with low TFP levels and much smaller group with high TFP levels. This bipolar pattern of TFP distribution helps to explain the competitiveness disparity among the Vietnam’s provinces.
    Keywords: Structural modeling, national public expenditure; local public expenditure; total factor productivity; Vietnam’s provinces.
    JEL: C23 H50 H70 O40
    Date: 2016
  2. By: Jaelani, Aan
    Abstract: The crisis of economy in Indonesia forces the government to reform its economic development paradigm. The new paradigm development refers to great attention of economic societies such as cooperation. Those involve in the planning of national economic development as well as the planning of society development. This article aims to define the combination between Islamic economic and economic of Pancasila to pressure the identity of Indonesian state in globalization era.
    Keywords: ekonomi Pancasila, ekonomi Islam, globalisasi, pasar bebas
    JEL: A1 A11 B0 G1 G18 H1 I28 N2 O57 P4 Z0 Z12
    Date: 2016–03–15
  3. By: Le, Chau; Nguyen, Cuong; Phung, Thu; Phung, Tung
    Abstract: Ethnic minorities in Vietnam have experienced high income fluctuation over time. This study aims to examine why a number of households experienced an income increase while others experienced an income decrease in poor areas with high density of ethnic minorities in Vietnam. It shows that the increase in household income results from an increase in average income per working hour. That is, the number of working hours did not change significantly but the increase in productivity per working hour helps households to increase their household income. In addition, the increase in number of working hour and increase in income transfers also contribute to the income increase. Our study also indicates that the increase in labor productivity mostly comes from agricultural sector but not from non-agricultural sector. For households with falling income, the major reasons for the income decrease are decreasing labor productivity, especially in agricultural sector.
    Keywords: Ethnic minority; household income; poverty; decomposition, Vietnam.
    JEL: I31 I32 O1
    Date: 2014–05–20
  4. By: International Monetary Fund. Asia and Pacific Dept
    Abstract: Indonesia: Selected Issues
    Date: 2016–03–15
  5. By: Coxhead, Ian; Vu, Linh; Nguyen, Cuong
    Abstract: We investigate determinants of individual migration decisions in Vietnam, a country with increasingly high levels of geographical labor mobility. Using data from the Vietnam Household Living Standards Survey (VHLSS) of 2012, we find that probability of migration is strongly associated with individual, household and community-level characteristics. The probability of migration is higher for young people and those with post-secondary education. Migrants are more likely to be from households with better-educated household heads, female-headed households, and households with higher youth dependency ratios. Members of ethnic minority groups are much less likely to migrate, other things equal. Using multinomial logit methods, we distinguish migration by broad destination, and find that those moving to Ho Chi Minh City or Hanoi have broadly similar characteristics and drivers of migration to those moving to other destinations. We also use VHLSS 2012 together with VHLSS 2010, which allows us to focus on a narrow cohort of recent migrants—those present in the household in 2010, but who have moved away by 2012. This yields much tighter results. For education below upper secondary school, the evidence on positive selection by education is much stronger. However, the ethnic minority “penalty” on spatial labor mobility remains strong and significant, even after controlling for specific characteristics of households and communes. This lack of mobility is a leading candidate to explain the distinctive persistence of poverty among Vietnam’s ethnic minority populations, even as national poverty has sharply diminished.
    Keywords: Migration, migration decision, remittances, household survey, Vietnam.
    JEL: I0 O1 R2
    Date: 2016–03–20
  6. By: Hoang, Thu Huong; Nguyen, Viet Cuong
    Abstract: The paper finds imbalance of sex ratio at birth and analyzes some possible determinants on sex ratio at birth in Viet Nam by using the Vietnam Population Census 2009. This paper concentrates to analyze the parental interference of child sex. Although the magnitude of correlation between the parental characteristics and the gender of children is not high, this correlation is statistically significant. The result of this paper concludes that gender of the firstborn, birth order, ethnicity of parents, the age of parents as well as their education level are associated with the sex of children. More specifically, having the firstborn boy reduces the probability of having boys in the next birth. Children with higher birth order are more likely to be male. It implies that parents follow male-preferring stopping rule. Several households are more likely to have children until they get a boy. Kinh parents with higher education are more likely to have boys than ethnic minority parents with lower education.
    Keywords: Sex selection, gender inequality, population census, Vietnam.
    JEL: I0 O1
    Date: 2014–09–15
  7. By: Elif Arbatli; Gee Hee Hong
    Abstract: Singapore is one of the world’s most open economies, with the size of its trade reaching about 350 percent of its GDP. With the rise of highly diversified cross-border production networks, Singapore has come to play an integral role in the global supply chain with heavy reliance on foreign contents in its exports and production. It has also successfully moved up the value chain, exporting goods with high sophistication and economic complexity. Against this backdrop, in this paper, using disaggregate industry/product level trade data, we revisit Singapore’s export elasticities and find that growing participation in global production chains and rising export complexity are important determinants.
    Keywords: Asia and Pacific;Singapore;Foreign exchange;Trade elasticities, trade structure, global supply chain, economic complexity, trade, value, exports, price, share, Input-Output Analysis, General, Country and Industry Studies of Trade,
    Date: 2016–03–07
  8. By: Tran, Dong Quang; Nguyen, Viet Cuong
    Abstract: This study examines the sex of the first-born children on education and health outcome of later born children. We do not find a significant effect of the sex of the first-born children on health utilization of later born children. However, we find some small effects of education. Once controlled for the number of sibling, having a firstborn brother reduces the probability of school enrolment and the probability of having good academic performance. Although the education outcomes of girls are higher than boys, this evidence still indicates gender bias in education investment of parents in their children in Vietnam.
    Keywords: Gender, birth order, education, household surveys, Vietnam.
    JEL: I1 I2
    Date: 2014–06–20
  9. By: Lucy Nattrass (E4tech); Clifford Biggs (E4tech); Ausilio Bauen (E4tech); Claudia Parisi (European Commission – JRC - IPTS); Emilio Rodriguez-Cerezo (European Commission – JRC - IPTS); Manuel GOMEZ BARBERO (European Commission – JRC - IPTS)
    Abstract: Obtaining regular analysis and data is fundamental for policy makers and stakeholders to monitor the development of an economic sector and make the necessary decisions to maximise the benefits it generates, be they of economic, social or environmental nature. The industrial use of biomass feedstock has the potential to contribute to Europe's industrial and economic growth while significantly reducing greenhouse gas emissions, other environmental burdens, and resource dependency, through the displacement of fossil-based products with bio-based alternatives. To this end, this report contributes to quantifying and benchmarking relevant sectors in the so-called European Union Bioeconomy, the bio-based industries. It looks both at the past and future of the sector by focusing on a list of relevant bio-based products (about 70 chemicals and materials) and measuring the total population producing or about to produce these products. The report presents the result of a survey, based on a structured questionnaire launched in March 2015, of 133 companies constituting the total target population. These companies are diversity terms of size and time in the market. Some companies' operations are entirely bio-based and for some others bio-based products represent a relatively small fraction of their operations. They produce and market commodity and speciality chemicals and material goods to a wide range of sectors. Fifty companies completed the questionnaire and the bio-based products they are involved with are mostly organic acids, polymers (obtained from bio-based monomers) and surfactants. The respondents operate about 100 manufacturing plants for bio-based products mainly located in the established European chemical industry clusters. They also operate production plants in third countries, principally in North America and Asia (China, Malaysia and Singapore). The respondents total bio-based product turnovers account for €6.8 billion globally (24 companies answered) and €1.4 billion in the EU (23 companies answered). Therefore, these companies produce and sell globally, testimony of the global nature of the sector. The survey identified 20 companies using animal fats and vegetable oils, 19 companies using sugar or starch crops, and 11 companies using natural fibres. All respondents are positive about the outlook for growth in the industry. The response also indicates a rise in company activity since 2011, and there appear to be shifts in products being developed and produced, probably as a result of market testing, and technical development.
    Keywords: European Union, Bioeconomy, Bio-based products, Industry survey
    Date: 2016–03
  10. By: Sonali Jain-Chandra; Tidiane Kinda; Kalpana Kochhar; Shi Piao; Johanna Schauer
    Abstract: This paper focusses on income inequality in Asia, its drivers and policies to combat it. It finds that income inequality has risen in most of Asia, in contrast to many regions. While in the past, rapid growth in Asia has come with equitable distribution of the gains, more recently fast-growing Asian economies have been unable to replicate the “growth with equity†miracle. There is a growing consensus that high levels of inequality can hamper the pace and sustainability of growth. The paper argues that policies could have a substantial effect on reversing the trend of rising inequality. It is imperative to address inequality of opportunities, in particular to broaden access to education, health, and financial services. Also fiscal policy could combat rising inequality, including by expanding and broadening the coverage of social spending, improving tax progressivity, and boosting compliance. Further efforts to promote financial inclusion, while maintaining financial stability, can help.
    Keywords: Asia;Inequality, Gini coefficient, income, income inequality, consumption, income share, Personal Income and Wealth Distribution, Equity, Justice, and Other Normative Criteria and Measurement, All Countries,
    Date: 2016–03–04
  11. By: Zhai, Fan (Asian Development Bank Institute); Morgan, Peter (Asian Development Bank Institute)
    Abstract: As an important global and regional economic power, the PRC’s growth slowdown may cause large spillover effects to its neighboring economies. Using a multi-sectoral global computable general equilibrium model, this paper quantitatively investigates the impacts of a growth slowdown in the PRC for emerging Asian economies through trade linkages. The results suggest that a growth slowdown of 1.6 percentage points in the PRC would bring about a growth deceleration of 0.26 percentage points in developing Asia as a whole. However, the impacts vary dramatically by economy within developing Asia, reflecting their difference in economic and trade structure.
    Keywords: People’s Republic of China; economic slowdown; spillover effects; emerging economies
    JEL: C68 F44 F47
    Date: 2016–03–25
  12. By: Acosta,Pablo Ariel; Velarde,Rashiel Besana
    Abstract: The Pantawid Pamilyang Pilipino Program (Pantawid Pamilya) is the Philippines? national conditional cash transfer (CCT) program. The program provides cash grants to poor households that have limited capacity to invest in their children?s future and well-being. This note is the second benefit incidence analysis of the Philippines? conditional cash transfer program conducted by a World Bank team that uses standard measures to assess the implementation performance of the Pantawid Pamilyang Pilipino Program. The authors show that despite the program?s rapid expansion since it was piloted in 2007, it maintains good targeting accuracy, progressivity, and costefficiency in delivering assistance to the poor. The authors also show that Pantawid Pamilya helps reduce short term poverty by closing the income gap of beneficiary households by up to 7.4 percentage points, helping them afford their basic needs. Among beneficiaries, the program reduces food poverty and total poverty by up to 6.7 percentage points. To maintain the program?s relevance, adequacy of assistance, sustained impact on beneficiary welfare, and adjustments in the benefit level and program coverage at a sustainable level are recommended.
    Keywords: Debt Markets,Health Systems Development&Reform,Health Monitoring&Evaluation,Poverty Monitoring&Analysis,Rural Poverty Reduction
    Date: 2015–10–31
  13. By: Seng, Kimty
    Abstract: This paper evaluates the effects of market participation on farm households’ food security in rural Cambodia in terms of household dietary diversity score. The evaluation is carried out with an endogenous switching model built on data from the Cambodia Socio-Economic Survey conducted in 2009. This model accounts for selection bias arising from unobserved factors that potentially affect both the participation and food security. The model also controls for structural differences between participants and nonparticipants in markets in terms of food security functions. The results reveal that by participating in markets, farm households enjoy higher household dietary diversity score, thus confirming the hypothesis that participation in markets exerts positive effects on farm households’ food security.
    Keywords: market participation, farm households, food security, endogenous, rural Cambodia
    JEL: O12 O13 Q02
    Date: 2016–03–15
  14. By: Kharisma, Bayu
    Abstract: This study aims to analyze the impact of school operational assistance fund program (BOS program) on the dropout rate during the post-rising fuel prices using difference in difference approach. BOS program is a further development of the social safety net programs (JPS) education of the government in the period 1998-2003 and a reduction in fuel subsidy compensation program implemented over 2003-2005. The results showed that the impact of BOS on the dropout rate of students aged 7-15 years during the period investigated in this study was lower than those who did not receive BOS fund, but it was not statistically significant. In the meantime, if the account of the research is to be limited to the influenc e of students aged 16-20 years who had previously received the benefit of BOS, it shows that BOS program had a positive influence to the dropout rates. However, children aged 16-20 years who had not previously received benefits BOS negatively affect the dropout rates. Based on this fact, the benefit of the BOS following the fuel price hike in Indonesia during the research period did not seem to be particularly effective in lowering the dropout rate.
    Keywords: School Operational Assistance Fund Program (BOS program), Dropout rate, Rise of fuel price in Indonesia, Difference-in-Difference (DiD)
    JEL: O15 O2
    Date: 2016–03–15
  15. By: International Water Management Institute, IWMI
    Keywords: Water management, Arid zones, Food security, Living standards, Health, Agroecosystems, Rivers, Runoff, Water resources, Water use, Water conservation, Water accounting, Reservoir storage, Ponds, Wells, Domestic water, Multiple use, Groundwater irrigation, Groundwater recharge, Rainwater, Water harvesting, Irrigated land, Irrigation, schemes, Pumping, Investment, Landscape, Land degradation, Rainfed farming, Farmers, Soil conservation, Information management, Myanmar, Agribusiness, Agricultural Finance, Community/Rural/Urban Development, Farm Management, Food Security and Poverty, Health Economics and Policy, Land Economics/Use,
    Date: 2015
  16. By: Dat Vu Hoang (LEDa - Laboratoire d'Economie de Dauphine - Université Paris IX - Paris Dauphine); Laure Pasquier-Doumer (LEDa - DIAL - Laboratoire d'Economie de Dauphine - Economie de la mondialisation et du développement - Université Paris IX - Paris Dauphine)
    Abstract: Although multidimensional approach to study child poverty has received growing attention, weights of different dimensions in constructing single aggregation indices have not been properly investigated. Using Young Livesdata, this study attempts to fill this gap by examining a weight estimation method which takes into account the children’s perspectives. This approach consists of computing analytical weights from estimated parameters of asubjective well-being regression model, where children’s subjective well-being is explained by their achievement in dimensions included in multidimensional poverty indices. By doing so, weights reflect valuejudgments of children on what is a good life and are not based on a normative approach. Estimation resultsindicate that revealed preferences of children change overtime and across sub-groups of children. More importantly, this paper demonstrates that children do not give the same value to all dimensions, contrary to whatthe most common approach to calculate weights is supposing. Children then attach more importance to deprivations such as shelter, water and sanitation deprivations, which impact immediately their well-being thanto deprivations which may affect negatively their well-being in the long-term, with the exception of education for some groups of children.
    Abstract: L’approche multidimensionnelle pour étudier la pauvreté des enfants a reçu une attention croissante. Pourtant, la question de comment pondérer les différentes dimensions de la pauvreté dans la construction d’un indicateursynthétique de pauvreté reste encore largement sous-étudiée. A partir des données Young Lives, cette étude s’attache à combler cette lacune en examinant une méthode d'estimation des poids qui prend en compte lesperceptions des enfants. Cette approche consiste à calculer le poids à partir des paramètres estimés d'un modèle expliquant le bien-être subjectif des enfants par leur réalisation dans les différentes dimensions de la pauvretéincluse dans l’indice synthétique. Les poids ainsi obtenus reflètent les valeurs des enfants sur ce qu’ils considèrent bien vivre, sans apporter de jugement normatif comme le fait l’approche donnant la même valeur àtoutes les dimensions qui est actuellement suivie au Vietnam. Les résultats indiquent que les préférences révélées des enfants varient au cours du temps et entre sous-groupes d'enfants. Surtout, cette étude démontre queles enfants ne donnent pas la même valeur à toutes les dimensions. Ils attachent plus d'importance à des privations qui ont un impact immédiatement leur bien-être telles que celles relatives aux conditions d’habitat, à l’accès à l’eau, à l’assainissement qu’aux privations qui impactent leur bien-être à plus long-terme, à l'exception de l'éducation pour certains groupes d'enfants.
    Keywords: children poverty,weights,Multidimensional poverty index,subjective well-being,Vietnam,bien-être subjectif,pauvreté des enfants,indice de pauvreté multidimensionnelle,pondération
    Date: 2016–03–25
  17. By: Alexei Kireyev; Andrei Leonidov
    Abstract: The paper models international spillovers from a hypothetical drop of China’s imports as a result of China’s rebalancing of its growth model. A network-based model used in the paper allows capturing higher round network effects of the shock, which are largely unaccounted for in the existing literature. Such effects include direct spillovers from China on its trading partners, subsequent spillins among them, and spillbacks on China itself. The paper finds that the network effects most likely will be substantial, may amplify initial shock, and change the direction of its propagation. The impact on Asia and Pacific will be the strongest followed by the Middle East and Central Asia. The impact on sub-Saharan Africa would be noticeable only for some countries. Spillovers on Europe, including the Euro area, will be moderate, and spillovers on the Western Hemisphere, including the United States, would be very marginal. Metal and non-fuel commodity exporters may experience the largest negative impact.
    Keywords: Asia and Pacific;China, People's Republic of;Trade;shocks, spillover, spillin, spillback, network, gdp, revenue, demand, Neural Networks and Related Topics, Country and Industry Studies of Trade, Open Economy Macroeconomics, International Policy Coordination and Transmission, Forecasting and Simulation, and spillback, network.,
    Date: 2016–03–07
  18. By: Roberto Guimarães-Filho; Gee Hee Hong
    Abstract: Understanding how markets are connected and shocks are transmitted is an important issue for policymakers and market participants. In this paper, we examine the connectedness of Asian equity markets within the region and vis-Ã -vis other major global markets. Using time-varying connectedness measures, we address the following questions: (1) How has connectedness in asset returns and volatilities changed over time? Do markets become more connected during crises periods? (2) Which markets are major sources and major recipients of shocks? Has there been a shift in terms of the net shock givers and shock receivers (directional connectedness over time)? Finally, we investigate the connectedness between China’s equity markets and other countries’ equity markets since August 2015 to highlight the growing importance of emerging market economies, particularly China, as sources of shocks.
    Date: 2016–03–09
  19. By: Shujie Ma (Department of Statistics, University of California, Riverside); Liangjun Su (Singapore Management University)
    Abstract: In this paper we study the estimation of a large dimensional factor model when the factor loadings exhibit an unknown number of changes over time. We propose a novel three-step procedure to detect the breaks if any and then identify their locations. In the first step, we divide the whole time span into subintervals and fit a conventional factor model on each interval. In the second step, we apply the adaptive fused group Lasso to identify intervals containing a break. In the third step, we devise a grid search method to estimate the location of the break on each identified interval. We show that with probability approaching one our method can identify the correct number of changes and estimate the break locations. Simulation studies indicate superb finite sample performance of our method. We apply our method to investigate Stock and Watson’s (2009) U.S. monthly macroeconomic data set and identify five breaks in the factor loadings, spanning 1959-2006.
    Keywords: Break point; Convergence rate; Factor model; Fused Lasso; Group Lasso; Information criterion; Principal component; Structural change; Super-consistency; Time-varying parameter.
    JEL: C12 C33 C33 C38
    Date: 2016–03
  20. By: Guesmi, Khaled; Kablan, Sandrine
    Abstract: Our paper tests the conditional version of the International Capital Asset Pricing Model (ICAPM) applying a parsimonious multivariate DCC - GARCH process. By permitting the prices of risk and the level of market integration to vary through time, our results show that Japan experienced increases in the degree of regional integration in last years. The increasing integration into regional financial markets alone is unlikely to provide a sound ground for a currency union in ASEAN+5 at this stage, but improvement in welfare gains in the ASEAN+5 economies by means of further risk sharing is possible.
    Keywords: Financial integration, ICAPM, ASEAN, DCC-GARCH
    JEL: C32 F31 F36 G12
    Date: 2015

This nep-sea issue is ©2016 by Kavita Iyengar. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.