nep-sea New Economics Papers
on South East Asia
Issue of 2016‒12‒11
sixteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Intended vs. unintended consequences of migration restriction policies: evidence from a natural experiment in Indonesia By Makovec, Mattia
  2. Intergenerational mobility of earnings and income among sons and daughters in Vietnam By Dang, Thang
  3. Fiscal policy in Indonesia: Analysis of state budget 2017 in Islamic economic perspective By Jaelani, Aan
  4. Trade, Growth and Economic Inequality in the AsiaPacific Region: Lessons for Policymakers By Theresa Greaney; Baybars Karacaovali
  5. Human Resource Management Practices and Firm Outcomes: Evidence from Vietnam By Dang, Thang; Dung, Thai Tri; Phuong, Vu Thi; Vinh, Tran Dinh
  6. Inter-ethnic Fertility Spillovers and the Role of Forward-looking Behavior: Evidence from Peninsular Malaysia By Beam, Emily A.; Shrestha, Slesh
  7. That's my turf: An experimental analysis of territorial use rights for fisheries in Indonesia By Gallier, Carlo; Langbein, Jörg; Vance, Colin
  8. Health insurance coverage and firm performance: Evidence using firm level data from Vietnam By Yamada, Hiroyuki; VU, Manh Tien
  9. Are Capital Inflows Expansionary or Contractionary in the Philippines? By Rogelio Mercado Jr.
  10. Growth with Equity: Income Inequality in Vietnam, 2002–14 By McCaig, Brian; Benjamin, Dwayne; Brandt, Loren
  11. Funding conservation locally: Insights from behavioral experiments in Indonesia By Nelson, Katherine M.; Schlüter, Achim; Vance, Colin
  12. The Determinants of self-medication: evidence from urban Vietnam By Hoai, Nguyen Trong; Dang, Thang
  13. Key Challenges in Rural Development: Bringing economics, management and social sciences into practice - ELLS Summer School Proceedings. By Hans Karl Wytrzens (ed.); Joseph Edward B. Alegado; Veronika Brecklová; Marcin Chciałowski; Veronika Eretová; Ian Merrell; Petra Šeráková
  14. Universal Exponential Structure of Income Inequality: Evidence from 60 Countries By Yong Tao; Xiangjun Wu; Tao Zhou; Weibo Yan; Yanyuxiang Huang; Han Yu; Benedict Mondal; Victor M. Yakovenko
  15. The demographic transition revisited: a cohort perspective By Tomas Frejka
  16. Advanced Manufacturing Activities of Top R&D investors: Geographical and Technological Patterns By Petros Gkotsis; Antonio Vezzani

  1. By: Makovec, Mattia
    Abstract: We study the consequences of a series of migration policies that restricted the migration of Indonesian female domestic workers towards traditional destinations, namely Malaysia and Saudi Arabia. Our difference-in-differences specification exploits the differential impact across Indonesian villages of this unique natural experiment, intended to stop repeated cases of mistreatment of Indonesians working overseas. Our results suggest that the moratoria had negative effects on economic activity and households’ welfare, and worsened labor market conditions, especially for women, in the origin communities. Our results highlight the unintended effects that migration restrictions may have precisely on those they were intended to benefit.
    Date: 2016–11–24
  2. By: Dang, Thang
    Abstract: This paper empirically examines intergenerational economic mobility in Vietnam. The two-sample two-stage least squares estimation is employed to achieve the research objective using two primary samples of father-son pairs and father-daughter pairs from Vietnam Household Living Standards Survey of 2012, and one secondary sample from Vietnam Living Standards Survey of 1997-1998. The baseline intergenerational elasticity estimates show that Vietnam occupies the intermediate degrees of intergenerational mobility of earnings and income for both sons and daughters. In particular, a rise of 10% in fathers’ individual earnings is on average associated with an increase of 3.61% and 3.94% for sons’ individual earnings and individual income, respectively. The corresponding figures for daughters’ individual earnings and individual income are 2.84% and 3.33%, respectively. This paper also provides evidence on the average degree of inequality of opportunity in Vietnam during its transition from a central planning economy to a market-oriented system.
    Keywords: Intergenerational mobility; Intergenerational elasticity; Two-sample two-stage least squares; Vietnam
    JEL: D31 J31 J62
    Date: 2015–05–01
  3. By: Jaelani, Aan
    Abstract: This study of fiscal policy in State Budget (APBN) 2017 that the task of the Indonesian government to run them to create prosperity for the community. The state budget is prepared using the rules of public economics consisting of state revenues, state expenditures, and budget financing have the posture of the budget, the issues of fiscal policy, and the role of the government in carrying out its functions. With the analysis of Islamic economics, fiscal policy in the State Budget 2017 is the duty of the government to implement the budget for the public welfare with indicators on aspects of religion (religious life), life (justice and security), intellect (education), descent (health and social security family), and treasure (income distribution and access to employment).
    Keywords: fiscal policy, state budget, welfare, maqashid shariah, Islamic economics
    JEL: E62 F52 G18 H61 O23 P43
    Date: 2016–12–01
  4. By: Theresa Greaney (Department of Economics, University of Hawaii); Baybars Karacaovali (Department of Economics, University of Hawaii)
    Abstract: This policy brief is intended to provide policymakers with a summary of the results of our research project entitled “Trade, Growth and Economic Inequality in the Asia-Pacific Region†, which explores and documents the linkages between international trade and inequality in the Asia-Pacific Region (APR). The project’s eleven research papers will appear in a special issue of the Journal of Asian Economics in February, 2017. Overall we conclude that the relationships between international trade, foreign direct investment (FDI), economic growth and inequality are extremely complicated, so no single theory should be relied upon for policy guidance across all APR countries with their varying stages of development and unique characteristics. Our studies find some evidence that trade or FDI contribute to inequality, some evidence that it reduces inequality and some evidence of no causal relationship. These seemingly conflicting results are not at all surprising given the complex relationships involved and the different countries, time periods, and means of measuring inequality, trade and FDI our authors adopted. Our main takeaway for policymakers is to be wary of both anti-trade and pro-trade advocates who provide “one size fits all†advice related to trade, FDI and inequality; these economic relationships are much too complex for that.
    Keywords: International trade, foreign direct investment, economic growth, economic inequality
    JEL: F13 F14 F16 F21 F23 J31
    Date: 2016–12
  5. By: Dang, Thang; Dung, Thai Tri; Phuong, Vu Thi; Vinh, Tran Dinh
    Abstract: Using a panel sample of manufacturing firms from small- and medium-sized enterprise surveys between 2009 and 2013, we estimate the causal effects on firm outcomes of human resource management practices at the firm level in Vietnam. Employing a fixed-effects framework for the estimation, we find that on average a firm that provides the training for new workers gains roughly 13.7%, 10% and 14.9% higher in output value per worker, value added per worker and gross profit per worker respectively than the counterpart. Moreover, an additional ten-day training duration for new employees on average leads to 4.1% increase in output value per worker, 3.0% rise in value added per worker and 3.0% growth in gross profit per worker. We also uncover that a marginal 10% of HRM spending results in about 2% and 1.6% rises in output value per worker and value added per worker, respectively. Nevertheless, we find no statistically significant impacts of incentive measure on firm outcomes. The estimated results are strongly robust to various specifications.
    Keywords: Human resource management; firm outcomes; Vietnam
    JEL: M5
    Date: 2016–09–01
  6. By: Beam, Emily A. (University of Vermont); Shrestha, Slesh (National University of Singapore)
    Abstract: Demographic pressures can create competition for limited private and public resources and exacerbate pre-existing inter-ethnic tensions. At the same time, inter-ethnic competition may influence individual fertility decisions. Using the variation in birth rates in Malaysia induced by the Chinese lunar calendar, we document a 12.7-percent rise in births among ethnic Chinese in dragon years, which are considered auspicious. We find a negative fertility response from Malays – for every additional Chinese new-born child, Malays reduced their fertility by 0.30 children. We estimate the elasticity of this inter-ethnic fertility spillover (-0.15), and we find strongly suggestive evidence that pressure on resources was an important driver of these spillovers. The Malay response was greatest in areas where resources were more limited, and in areas with lower public investments. These results suggest that households are forward-looking in their fertility decisions, and they point to the potential role of governments in reducing ethnic tension through policies that increase private and public resources.
    Keywords: fertility timing, ethnic competition, spillover, Chinese zodiac, public resources, Malaysia
    JEL: D74 J13 J15 O15 O17
    Date: 2016–11
  7. By: Gallier, Carlo; Langbein, Jörg; Vance, Colin
    Abstract: We conduct a framed field experiment in Indonesian fishing communities, with an eye towards evaluating the potential of Territorial Use Rights for Fisheries (TURFs) to preserve coral reef fisheries. Conducted in three culturally distinctive sites, the study assembles groups of five fishers who participate in a common-pool resource game. We implement the game with randomly assigned treatments in all sites to explore whether the extraction decision varies according to three recommended non-binding extraction levels originating from (1) a democratic process, (2) a group leader or (3) an external source that recommends a socially optimal extraction level. In one of the sites - that having the highest levels of ethnic and religious diversity - we find that democratic decision-making as well as information originating from outside the community promotes the cooperative behavior that underpins TURFs, a result that is robust to regressions controlling for individual and community attributes.
    Keywords: Framed field experiment,commons dilemmas,coral reefs,self-governance
    JEL: C93 H43 L31 Q32
    Date: 2016
  8. By: Yamada, Hiroyuki; VU, Manh Tien
    Abstract: In literature, there is limited direct evidence regarding the effect of health insurance coverage on firm performance and worker productivity. In this paper, we study the impacts of health insurance on medium and large-scale domestic private firms’ performance and productivity in Vietnam, using a large firm level census dataset. We deploy propensity-score matching methods, and find statistically positive health insurance effects on both aggregate profit and profit per worker for both complying and non-complying medium and large-scale firms. Given the full sample results, we recommend an improvement in government monitoring as one of the important policy options to induce medium and large-scale firms to contribute to health insurance premiums for their employees.
    Keywords: Health insurance, Medium and large-scale firms, Propensity-score matching, Vietnam, Health insurance, Medium and large-scale firms, Propensity-score matching, Vietnam, D22, I13, I15, I18, O25
  9. By: Rogelio Mercado Jr. (Newcastle Business School, Northumbria University)
    Abstract: This paper sets out to assess whether gross capital inflows to the Philippines are expansionary or contractionary in line with the model predictions and empirical findings of Blanchard et al. (2015). The results indicate that gross inflows are expansionary to output and credit growth. But contrary to the model predictions and empirical findings of Blanchard et al. (2015), we find that private bond inflows to the Philippines are expansionary. Bond inflows may have expansionary impact on output and credit growth if the exchange rate is managed, if the domestic capital market is underdeveloped, if the country receives small bond inflows, and if proceeds from debt issuance are channelled to productive investments. Similar to Blanchard et al. (2015), non-bond inflows have a positive overall impact on output and credit growth despite receiving relatively small foreign direct investment inflows.
    Keywords: capital inflows, output growth, credit growth
    JEL: F32 F41 F43
    Date: 2016–12
  10. By: McCaig, Brian (Wilfrid Laurier University); Benjamin, Dwayne (University of Toronto); Brandt, Loren (University of Toronto)
    Abstract: We use the 2002 through 2014 Vietnam Household Living Standards Surveys to construct comparable measures of household income and estimates of income inequality over this high-growth period. We focus on two questions: How have benefits from growth been distributed; and do changes in the structure of the economy map into changes in inequality? We explore dimensions in which inequality may vary, notably urban versus rural, and by ethnic status. We also decompose inequality by income source to highlight key factors underlying the relatively low levels of inequality during this period. We find that agricultural opportunities played an important role in dampening inequality, but more important has been the steady development of wage-labor markets in both urban and rural areas. An important caveat to the generally rosy picture we paint is the deteriorating position of ethnic minorities. Finally, we draw comparisons with China and document key differences in their growth-inequality experience.
    Keywords: income inequality, Vietnam, decomposition
    JEL: D31 D63 O53
    Date: 2016–11
  11. By: Nelson, Katherine M.; Schlüter, Achim; Vance, Colin
    Abstract: Proximate stressors such as destructive fishing are key drivers of coral reef degradation. Conservation strategies that marshal local action and are tailored to the preferences of the target group are thus needed to sustain coral resources. We experimentally analyze the behavior of marine resource users in a coastal village in Indonesia to gain insight into whether people prefer to donate time or money to environmental or other charitable causes. Each person is subject to one of four treatments: monetary donation, monetary donation match, volunteer time donation, and volunteer time donation match. Contrasting with the existing literature, we find that participants give significantly more when donating money compared to time. We also find that matching donations increases the percent of people giving but does not increase the amount donated. This research furthers our understanding of what motivates resource users in a developing country to contribute to the provision of public goods.
    Abstract: Schädliche Fischerei und Zerstörung von natürlichen Ressourcen im Meeresraum sind entscheidende Faktoren für den Verfall von Korallenriffen. Es werden daher Umweltschutzmaßnahmen benötigt, die auf die Präferenzen von Ortsansässigen abgestimmt sind und darauf abzielen sie zum Handeln zu bewegen. Dafür implementieren wir ein Experiment in einem Dorf an der Küste in Indonesien, welches das Verhalten von Fischern analysiert. Wir untersuchen, ob Leute es bei Umweltschutz oder anderen gemeinnützigen Projekten eher bevorzugen, Zeit oder Geld zu spenden. Jeder Teilnehmer wird dabei einer von vier Treatment-Gruppen zugeteilt: Geldspende, Geldspende, die von uns verdoppelt wird, ehrenamtliche Tätigkeit, bzw. ehrenamtliche Tätigkeit, die verdoppelt wird. Im Unterschied zu existierender Literatur finden wir, dass Teilnehmer signifikant mehr spenden, wenn es um Geld geht, als wenn es um ihre eigene Zeit geht. Wir finden außerdem, dass, wenn wir die Spenden verdoppeln, dies zwar den Anteil der Personen erhöht, die überhaupt etwas spenden, aber nicht die gespendete Gesamtsumme. Diese Studie gibt wichtig Hinweise darauf, wie Ressourcennutzer in Entwicklungsländern motiviert werden können einen Beitrag zur Bereitstellung von öffentlichen Gütern zu leisten.
    Keywords: Behavioral economics,conservation,donation,field experiment,funding,volunteer
    JEL: Q22 Z1
    Date: 2016
  12. By: Hoai, Nguyen Trong; Dang, Thang
    Abstract: This study examines the primary determinants of self-medications among urban citizens in Ho Chi Minh City, Vietnam. To achieve the research objective, the questionnaire is designed to elicit the respondents’ necessary information using in-depth personal interviews. Employing logistic models the paper finds that the probability of self-medication is positively associated with the respondents’ high school degree or vocational certificate, married status, and income while it is negatively related to employed status, the number of children, the geographical distance from home to the nearest hospital, doing exercise, and living in a central region. Meanwhile, using Poisson models the paper finds that the frequency of self-medication is positively associated with the respondents’ high school and vocational, married, income, and chronic disease while the frequency of self-medication is adversely related to male, employed, children number, distance, being close to health professional and central areas.
    Keywords: Self-medication; Ho Chi Minh City; Vietnam
    JEL: I11 I18
    Date: 2016–06–01
  13. By: Hans Karl Wytrzens (ed.) (Institute for Sustainable Economic Development, University of Natural Resources and Life Sciences Vienna); Joseph Edward B. Alegado (International Institute of Social Studies, part of Erasmus University Rotterdam (ISS-EUR), Agrarian, Food and Environmental Studies (AFES), The Haag, the Netherlands); Veronika Brecklová (Czech University of Life Sciences Prague (CULS), Faculty of Economics and Management, Department of Economics, Praha, Czech Republic); Marcin Chciałowski (Warsaw University of Life Sciences – SGGW, Faculty of Economic Sciences, Department of European Policy, Public Finance and Marketing, Division of Agrarian Policy and Law. Warsaw, Poland); Veronika Eretová (Charles University in Prague, Faculty of Science, Department of Social Geography and Regional Development, Prague, Czech Republic); Ian Merrell (Newcastle University, School of Agriculture, Food and Rural Development/Centre for Rural Economy, Newcastle upon Tyne, UK); Petra Šeráková (zech University of Life Sciences Prague (CULS), Faculty of Economics and Management, Department of Economics, Prague, Czech Republic)
    Abstract: The proceedings “Key Challenges in Rural Development: Bringing economics, management and social sciences into practice” highlight some selected aspects of a complex topic presenting individual contributions of six doctoral students who participated in the Euroleague for Life Sciences (ELLS) Summer School in Vienna, Austria from July 3-9, 2016. The facets range from “The global in the local: The role of social movements in food sovereignty diffusion in the Philippines” and “Extensive farming and its impacts on the sustainable development: The thesis of development of economic activities in rural areas in the context of European Union sustainable development” to “The role of local government in the financing of rural development for the example of Garwoliński district” furthermore “Diversification of activities of agriculture holdings: A discussion of the theoretical basis” and “Rural business knowledge exchange and innovation: The contribution of rural enterprise hubs” and finally “Economically motivated adulteration of honey and its incidence in EU-28 in 2002 – 2015".
    Keywords: rural development, global change, spatial research, regional policy
    JEL: R58
    Date: 2016–11
  14. By: Yong Tao; Xiangjun Wu; Tao Zhou; Weibo Yan; Yanyuxiang Huang; Han Yu; Benedict Mondal; Victor M. Yakovenko
    Abstract: Economic competition between humans leads to income inequality, but, so far, there has been little understanding of underlying quantitative mechanisms governing such a collective behavior. We analyze datasets of household income from 60 countries, ranging from Europe to Latin America, North America and Asia. For all of the countries, we find a surprisingly universal rule: Income distribution for the great majority of populations (low and middle income classes) follows an exponential law. To explain this empirical observation, we propose a theoretical model within the standard framework of modern economics and show that free competition and Rawls fairness are the underlying mechanisms producing the exponential pattern. The free parameters of the exponential distribution in our model have an explicit economic interpretation and direct relevance to policy measures intended to alleviate income inequality.
    Date: 2016–12
  15. By: Tomas Frejka (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: The principal focus of this paper is to analyze the fertility transition of the 19 th to early 21 st centuries with cohort fertility measures, and a discussion of key societal conditions shaping the transition. This new approach and procedure reveals that there were four different fertility transition pathways. Arguably equally important is the finding that thus far the demographic transition has not resulted in an equilibrium of relatively stable low mortality and stable low fertility. Early in the 21 st century mortality is continuing to decline steadily, fertility is generally below replacement, and fertility trends are in a flux with a tendency towards further declines. The four types of fertility transition patterns were: a. The “Western” distinguished by major cohort total fertility rate (CTFR) fluctuations; b. The Central and East European characterized by a stable CTFR band around 2.0 births per woman in the 1920s to 1950s birth cohorts; c. The Southern European characterized by a relatively stable secular CTFR decline; d. The East and South-East Asian characterized by rapidly declining CTFRs starting as late as in the middle of the 20 th century. In all four fertility transition pathways almost all CTFRs were below replacement in the youngest cohorts born in the 1960s and early 1970s ending their childbearing early in the 21 st century. The higher CTFRs, mostly between 1.7 and 2.0 births per woman, were in the “Western” populations, the lowest of 1.2 to 1.6 in East and South-East Asia. The exploration of societal conditions shaping mortality and fertility trends confirm Notestein’s conclusions formulated 70 years ago (Notestein 1945 and 1953). This investigation has shown that it was a complex combination of “technological, social, economic, and political developments,” and also of cultural and ideational effects – revealed by subsequent research, especially of Coale (1973) as well as of Lesthaeghe and van de Kaa (1986) – which shape mortality and fertility trends. Furthermore, Notestein observed that it is “impossible to be precise about the various causal factors” generating mortality and fertility trends. Primary causal factors alternated between economic, social, political, policy and other factors. Keywords : Demographic transition – Pathways of the fertility transition – International comparative analysis – Cohort fertility – Causes of the demographic transition
    Keywords: cohort fertility, comparative analysis, demographic transition
    JEL: J1 Z0
    Date: 2016–11
  16. By: Petros Gkotsis (European Commission – JRC); Antonio Vezzani (European Commission – JRC)
    Abstract: Advanced manufacturing technologies (AMTs) and other key enabling technologies (KETs) are expected to have a major impact on productivity, efficiency, profitability and employment in major industrial sectors worldwide. Thus, development of AMTs and KETs is considered essential if the European Union is to achieve the strategic goals set out in the European Commission’s Employment, Growth and Investment priorities. Indeed, AMTs and KETs are among the top priorities identified as necessary to support the competitiveness of European industries in the context of the European flagship on industrial modernisation. This study builds upon and extends results that were obtained in the context of the Advanced Manufacturing Technologies for Competitiveness AMTEC project, in which the technological profiles of the patent portfolios of the EU Industrial R&D Investment Scoreboard companies were constructed using patent-based analysis. In particular, their technological competences were investigated and it was found that European companies invest in KETs, and in particular in AMTs, as these technologies are considered to be vital for maintaining current competitiveness. However, other countries also invest heavily in AMTs and KETs. It is therefore very important for the EU to define a strategy that aims to find a suitable position in the global value and innovation chains and that selectively augments existing capabilities. To this end, a methodology based on patent analysis was applied to assess the capacity of the world’s top R&D investors in developing AMTs. Particular emphasis was placed on complex AMT patents that also pertain to at least one of the five KETs. These patents are considered important because they represent AMT applications used for the development of KETs in general or, conversely, they represent other KET applications that can be incorporated into AMT systems. The main questions addressed by this study were (1) In which countries are the most important inventors of AMTs and applicants for AMT-related patents located? (2) Is it possible to analyse internationalisation patterns and knowledge flows between world regions and countries? and (3) Are there any special patterns and clusters between AMT-related technological fields and the five core KETs and, if so, which companies are responsible for the development of these technological applications? Developing and patenting AMT-related technologies is particularly important for firms in the Aerospace & defence, Industrials, Automobiles & parts and Electronics & electrical equipment sectors. Moreover, the more specialised a sector is in developing AMT-related technologies, the less internationalised the AMT-related activities of the firms in the sector appear to be. In general AMT-related R&D activities of European- and US-based firms are more internationalised than the activities of Japanese- and Asian-based companies. It was found that many Scoreboard firms based in the USA, Japan, Germany, France and the UK own and develop a large number of AMT-related patents. However, there are also many inventors of AMT-related technologies based in other countries, such as China, India, Canada, Italy, Belgium and Spain. Finally, the ratio of complex AMT patents to the total number of AMT-related patents is close to 8%, the vast majority being patents that relate to micro- and nano-electronics, advanced materials or photonics. Companies that own these complex patents are often relatively small firms that are highly specialised in the development of AMT-related applications.
    Keywords: Advanced Manufacturing Technologies, Key Enabling Technologies, Patents, Industry
    Date: 2016–11

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