nep-sea New Economics Papers
on South East Asia
Issue of 2016‒12‒04
thirteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Mapping agricultural value chains with international input-output data By Kuroiwa, Ikuo
  2. Furniture Outlook for Asia and the Pacific By Sara Colautti; Cecilia Pisa; Stefania Pelizzari
  3. Cambodia; 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Cambodia By International Monetary Fund. Asia and Pacific Dept
  4. Industrialization and Poverty Reduction in East Asia: Internal Labor Movements Matter By Fukunari Kimura; Mateus Silva Chang
  5. Foreign Direct Investment and Value Added in Indonesia By Sjöholm, Fredrik
  6. Evaluating Asian FTAs: What do Gravity Equation Models Tell Us? By Sunder Ramaswamy; Abishek Choutagunta; Santosh K. Sahu Author-Workplace-Assistant Professor, Madras School of Economics
  7. ICT Dynamics and Regional Trade Bias in Asia: Theory and Empirical Aspects By Tony Irawan; Paul J.J. Welfens
  8. Analyzing the Aid Effectiveness on the Living Standard: A Check-up on South East Asian Countries By Zareena Begum Irfan; Arpita Nehra; Mohana Mondal
  9. China’s Belt and Road Initiative: Can Europe Expect Trade Gains? By Alicia Garcia-Herrero; Jianwei Xu
  10. Brunei Darussalam; Statistical Appendix By International Monetary Fund. Asia and Pacific Dept
  11. Republic of Palau; 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Palau By International Monetary Fund. Asia and Pacific Dept
  12. Israel's Open-Secret Trade By Lorenzo Rotunno; Pierre-Louis Vézina
  13. Understanding attitudes towards congestion pricing: a latent variable investigation with data from four cities By Hess, Stephane; Börjesson, Maria

  1. By: Kuroiwa, Ikuo
    Abstract: In recent years, the analysis of trade in value added has been explored by many researchers. Although they have made important contributions by developing GVC-related indices and proposing techniques for decomposing trade data, they have not yet explored the method of value chain mapping—a core element of conventional value chain analysis. This paper introduces a method of value chain mapping that uses international input-output data and reveals both upstream and downstream transactions of goods and services induced by production activities of a specific commodity or industry. This method is subsequently applied to the agricultural value chain of three Greater Mekong Sub-region countries (i.e., Thailand, Vietnam, and Cambodia). The results show that the agricultural value chain has been increasingly internationalized, although there is still room for obtaining benefits from GVC participation, especially in a country such as Cambodia.
    Keywords: Input-output tables, International trade, Agriculture, Agricultural economies, Value chain mapping, Trade in value added, Agricultural value chains
    JEL: C67 F14 Q17
    Date: 2016–11
  2. By: Sara Colautti (CSIL Centre for Industrial Studies); Cecilia Pisa (CSIL Centre for Industrial Studies); Stefania Pelizzari (CSIL Centre for Industrial Studies)
    Abstract: CSIL market research report Furniture Outlook for Asia and the Pacific provides an overview of the furniture industry for 32 countries in the following geographical regions:West Asia (10 countries): Bahrain, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, United Arab Emirates;Central Asia (5 countries): Azerbaijan, Georgia, Kazakhstan, Turkmenistan, Uzbekistan;South Asia (4 countries): Bangladesh, India, Iran, Pakistan;China (2 markets): China and Hong Kong (China);East Asia (3 countries): Japan, South Korea, Taiwan;South-East Asia (6 countries): Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam;Oceania (2 countries): Australia and New Zealand.Data cover production, consumption, imports, exports for 2015 and consumption forecasts for 2016, 2017 and 2018.This market research report also includes:Apparent furniture consumption by country and by geographical area, current status and prospects;Furniture imports by country and by geographical area including a matrix showing the main countries of origin of furniture imports;Furniture exports by country and by geographical area including a matrix showing the main countries of destination of furniture exports;Furniture production by country;Main urban markets (urbanization will be rapid, with important implications for the growth of furniture consumption).Statistics and outlook data are also available in a country format:Furniture market size;Furniture production;Furniture trade;Origin of furniture imports;Destination of furniture exports;Country rankings to place all statistics in a broad Asia Pacific context.The 32 country tables include additional socio economic indicators:Total household consumption expenditure;Total GNP at purchasing power parity;Per capita GNP at purchasing power parity;Urban population;Internet users and mobile cellular subscriptions.Key features of the study:A picture of the furniture industry in Asia Pacific;A rich collection of key country-data allowing comparisons among countries;Forecasts on the evolution of furniture market in the considered countries in 2016, 2017 and 2018, based on the analysis of furniture industry dynamics and macro-economic indicators.
    JEL: L11 L22 L68
    Date: 2016–11
  3. By: International Monetary Fund. Asia and Pacific Dept
    Abstract: Cambodia is a fast-growing, highly open economy, and attained lower-middle income status this year. Over the last two decades, Cambodia grew rapidly (average real GDP growth of around 8 percent) and its integration with the global economy increased sharply, accompanied by an impressive decline in poverty. Going forward, Cambodia’s strategic location, China’s changing trade patterns, and ongoing regional integration provide further opportunities.1 Important steps have been taken by the government that will help Cambodia capitalize on these opportunities, including energy-related investments to help reduce the cost of doing business and measures to facilitate trade, payments and business registration. Nonetheless, further measures are needed to support sustained growth, including reforms to improve the business climate and policies to mitigate rising financial sector vulnerabilities.
    Keywords: Article IV consultation reports;Economic growth;Fiscal policy;Government expenditures;Wage increases;Public-private sector cooperation;Fiscal reforms;Monetary policy;Bank supervision;Economic indicators;Millennium Development Goals;Debt sustainability analysis;Staff Reports;Press releases;Cambodia;
    Date: 2016–11–03
  4. By: Fukunari Kimura (Graduate School of Economics, Keio University); Mateus Silva Chang (Graduate School of Economics, Keio University)
    Abstract: A number of developing East Asian countries have achieved both rapid economic growth and poverty reduction by effectively utilizing global value chains. An essential, but often neglected, condition for their economic development is smooth labor movements from the rural to urban sectors. This paper demonstrates that such labor movements have played an important role in the process of industrialization with global value chains. After conducting some international comparisons, we examine the case of Thailand for its massive labor movements until the mid-2000s as well as discussing stagnant moves in recent years.
    Keywords: Global Value Chains, Agglomeration, Lewis model, Informal Sector, Thailand
    JEL: F66 J0 O1
    Date: 2016–10–15
  5. By: Sjöholm, Fredrik (Lund University)
    Abstract: Foreign Direct Investment (FDI) has increased in importance over the last decades, globally as well as in Indonesia. We examine how such inflows of FDI affects value added in Indonesia. The effect is positive: foreign firms generate relatively high levels of value added and they also seem to have a positive impact on value added in local firms. Moreover, FDI contribute to a structural change of the economy towards more high-value added activities. High value added could lead to increased investments and higher tax revenues for the government. High value added could also benefit labor through higher wages, an effect that is empirically confirmed in Indonesia.
    Keywords: Foreign Direct Investment; Multinational Firms; Value Added; Industrial Development
    JEL: F23 F61 F63
    Date: 2016–11–22
  6. By: Sunder Ramaswamy (Visiting Distinguished Professor of Economics,Madras School of Economics); Abishek Choutagunta (Madras School of Economics, Chennai); Santosh K. Sahu Author-Workplace-Assistant Professor, Madras School of Economics
    Abstract: This research evaluates the performance of free trade agreements by analyzing the determinants of trade flows of Asian economies for a panel of thirty-one countries during 2007-2014 using a Gravity model. The estimated results suggest that certain Free Trade Agreements (FTAs) negatively contribute to trade flows across the region and that GDP and population, among other factors, can explain the total trade flows. The study also finds that trade costs which uses distance as a proxy, has a significant and negative effect on trade. The results are in-line with the expectations which can be drawn by looking at trends of trade flows in Asia and thus, a case is made for smoothening trade-flows across the region by reducing tariff and non-tariff barriers; pumping in investments on transport infrastructure, and improving productivity of the partners as a whole which has positive effects on GDP and thus trade..
    Keywords: International Trade Flows, Gravity Model, Asia, PPML Classification- F13, F14, C23
  7. By: Tony Irawan (Department of Economics, Faculty of Economics and Management, Bogor Agricultural University, Indonesia); Paul J.J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))
    Abstract: ICT Markets in Asia are characterized by the strong role of sectoral foreign direct investment (FDI) inflows, namely from the US on the one hand, and from the EU on the other. Trade flows (determined here by examining trade flows as a percentage of total merchandise exports) differ in terms of regions: Southeast Asia, East Asia, Southern Africa, EU27 and North America; e.g., Southeast Asia recorded a fairly strong rise in intra-regional trade (relative to total merchandise trade). Also, the trade flows of Asian countries are biased with regard to the regions; the share of interregional trade of Asia’s regions with the EU and North America have increased over time. In some Asian regions, trade in intermediate goods has decreased over time. Bavaria’s regional ICT networks are interesting to consider in light of this finding. The panel data presented sheds new light on the benefits of regional R&D spending.
    Keywords: Techno-globalization, international trade, MNEs, Asia
    JEL: F2 H3 O1 O3
    Date: 2016–10
  8. By: Zareena Begum Irfan (Associate Professor, Madras School of Economics); Arpita Nehra (Madras School of Economics); Mohana Mondal (Research Associate, Madras School of Economics)
    Abstract: The present research work aims to analyse the effect that the disaggregated developmental aid has had on the health status and the standard of living in the urban sector after the MDGs were established. Infant Mortality and Improved sanitation facilities are taken as indicators for health status and urbanisation respectively; and the relationship between disaggregated health aid with infant mortality rate and disaggregated aid for water and sanitation with improved sanitation facilities was analysed for the years from 2002-2012 using data from 8 developing countries of Southeast Asia. Findings suggest that the developmental aid has not been effective in both the health sector and urbanisation sector. Moreover, improvement in health status has been growth driven. With the advent of the Sustainable Development goals; the most important thing to ensure is that the disbursed aid is used effectively to achieve the very purposes it is being given for and to reduce the gaps in various classes of developing countries in the region.
    Keywords: Disaggregated developmental aid, Aid for water and sanitation, Health Aid, Millennium Development Goals (MDG), Infant Mortality Rate, Improves sanitation Facilities, GDP, Health Expenditure, Aid EffectivenessClassification-JEL: I130, O11, Q010, O530, I310, I380
    Date: 2015–10
  9. By: Alicia Garcia-Herrero (NATIXIS; Department of Economics, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Jianwei Xu (Beijing Normal University)
    Abstract: The Belt and Road initiative, recently embarked on by China, aims to improve cross-border infrastructure in order to reduce transportation costs across a massive geographical area between China and Europe. We estimate how much trade might be created among Belt and Road countries as a consequence of the reduction in transportation costs (both railway and maritime) and find that European Union countries, especially landlocked countries, should benefit considerably. This is also true for Eastern Europe and Central Asia and, to a lesser extent, south-east Asia. In contrast, if China were to seek to establish a free trade area within the Belt and Road region, EU member states would benefit less, while Asia would benefit more. Xi Jinping’s current vision for the Belt and Road, centred on improving transport infrastructure, is very good news for Europe as far as trade creation is concerned.
    Keywords: China, Belt & Road initiative, infrastructure, international economic system
    Date: 2016–11
  10. By: International Monetary Fund. Asia and Pacific Dept
    Abstract: Brunei Darussalam: Statistical Appendix
    Keywords: Gross domestic product;Government expenditures;Revenues;Exports;Imports;Financial soundness indicators;Energy sector;Statistical annexes;Brunei Darussalam;
    Date: 2016–10–25
  11. By: International Monetary Fund. Asia and Pacific Dept
    Abstract: Palau is a middle-income micro state in the Pacific (population: 18,000) that relies heavily on tourism and grants, and is exposed to natural disasters. The economy grew strongly at 9.4 percent in FY2015 led by robust tourism and construction activity, but the surge in tourist arrivals strained infrastructure and was tilted to low budget tourism. The fiscal position has improved, but further efforts are needed to ensure long-term fiscal sustainability. The outlook is favorable although subject to significant downside risks. The discussions focused on
    Keywords: Article IV consultation reports;Economic growth;Tourism;Fiscal policy;Infrastructure;Climatic changes;Banks;Nonbank financial sector;Bank supervision;Economic indicators;Balance of payments statistics;Debt sustainability analysis;Staff Reports;Press releases;Palau;
    Date: 2016–10–19
  12. By: Lorenzo Rotunno (AMSE - Aix-Marseille School of Economics - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - EHESS - École des hautes études en sciences sociales); Pierre-Louis Vézina (King's College London)
    Abstract: This paper uncovers and quantifies Israel’s exports to countries that ban trade with Israel. Israel exported a total of $6.4 billion worth of merchandise to boycott countries between 1962 and 2012, and most of this trade is illicit, i.e. not recorded by the importers. We find that electronic exports to Malaysia account for the lion’s share of this trade but it also includes a wide array of products from footwear to fruit and vegetables. Our estimates suggest Israel’s exports to these countries would be 10 times larger without the boycott. On top of providing further evidence on the unintended consequences of unilateral trade bans, this paper provides a case study on the role of politics in international trade.
    Keywords: trade policy,Israel,illegal trade
    Date: 2016–10
  13. By: Hess, Stephane (Institute for Transport Studies, University of Leeds); Börjesson, Maria (KTH)
    Abstract: Numerous cities around the world are considering the implementation of road pricing to ease urban traffic congestion, following on from the success in cities such as London and Singapore. However, policy makers are also all too aware of the generally negative public opinion towards such measures. This study makes use of data collected in four cities (two in Sweden, one in Finland and one in France) using a very consistent survey probing for citizens’ attitudes towards pricing. We find very strong similarities across the four cities in terms of a number of underlying attitudinal constructs that help explain people’s answers in a hypothetical referendum on congestion pricing. The similarities across cities indicate that the increase in the opinion towards congestion pricing once they are introduced is not primarily an effect of changes in underlying attitudes, changes in how the underlying attitudes influence the support for congestion pricing, or differences in anticipated versus experienced or perceived self-interest. Instead this effect seems to be caused by a status quo acceptance, tending to increase the support for the current situation.
    Keywords: Congestion charging; Pricing acceptability; Road user attitudes
    JEL: R41 R42 R48
    Date: 2016–11–28

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