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on South East Asia |
| By: | Ramez Abubakr Badeeb; Hooi Hooi Lean; Russell Smyth |
| Abstract: | We empirically examine the existence of an oil curse in the finance-growth nexus in Malaysia. We provide new insights into the oil curse phenomenon in Malaysia that challenges the conventional argument that Malaysia is a counter-example of an oil curse country. We do not find any significant evidence of direct effects of financial development on economic growth and TFP. However, there are direct and positive effects on the level of investment due to financial development and oil dependence. While we do not find statistical evidence of a direct negative impact of oil rent on economic growth, our results reveal that the symptoms of an oil curse exist. Specifically, we find that oil rent has a weak, indirect, impact on the finance-growth nexus through the quantitative channel or investment quantity. The policy implications of our findings are that the financial sector should be more involved in productive investment activities that can strengthen its role in economic growth and that policymakers should reduce dependence on oil and promote economic diversification. |
| Keywords: | Oil Curse; Financial Development; Economic Growth; Investment; Malaysia. |
| JEL: | O13 O16 C22 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2016-26&r=sea |
| By: | Dong Dong Zhang |
| Abstract: | In a speech delivered at Nazarbayev University in Astana, Kazakhstan, on 7 September 2013, President Xi invited central Asian countries to work ‘innovatively’ with China to build a ‘Silk Road Economic Belt’ (SREB, or the Belt) for close economic ties, cooperation and joint development to benefit people across the land of Eurasia. In his speech at the Indonesian Parliament on 3 October 2013, President Xi invited ASEAN countries to work with China to build a ‘21st Century Maritime Silk Road’ (MSR, or the Road) for achieving joint development and co-prosperity. These two proposals, put together, were the original ‘One Belt, One Road initiative’. |
| JEL: | F10 F20 F50 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:25995&r=sea |
| By: | John McLaren; Myunghwan Yoo |
| Abstract: | We investigate the effects of inward FDI on income distribution and absolute living standards in Vietnam using census data from 1989-2009. We compute the number of employees of foreign establishments in each of Vietnam's provinces for each year, and use that as a measure of local FDI. We estimate the effects of FDI on local households' living standards as reported in the data, broken down by educational background to allow us to analyze effects on inequality. Estimates based on the repeated cross section indicate that rising FDI in a province is associated with a slight decline in living standards for households there if they do not have a member employed by the foreign enterprises, with only modest gains for households who do have a member employed by the foreign enterprises. These estimates may reflect composition effects, however, since we find large movements of people toward the provinces receiving the FDI. The findings show that measuring the effect of FDI on household welfare is more difficult than measuring the effect of trade policy, and may pose a difficulty for the view of FDI as a general anti-poverty strategy. |
| JEL: | F16 F21 O24 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22930&r=sea |
| By: | Saiki, Ayako (Asian Development Bank Institute); Chantapacdepong, Pornpinun (Asian Development Bank Institute); Volz, Ulrich (Asian Development Bank Institute) |
| Abstract: | This paper explores the impact of advanced countries’ quantitative easing on emerging market economies (EMEs) and how macroprudential policy and good governance play a role in preventing potential financial vulnerabilities. We used confidential locational bank statistics data from the Bank for International Settlements to examine whether quantitative easing has caused an appreciation of EMEs’ currencies and how it has done so, and whether this has in turn boosted foreign-currency borrowing, thus making EMEs vulnerable to balance sheet and maturity mismatch problems. While focusing our analysis on East Asian economies, we compare them with Latin American economies, which were also major recipients of quantitative easing capital inflows. We found that government effectiveness plays an important role in curbing excessive borrowing when the exchange rate is overvalued. |
| Keywords: | Quantitative easing; spillover effects; macroprudential policy; good governance; capital inflows; emerging market economies (EMEs); East Asia; Latin America |
| JEL: | E44 E58 F31 F32 F34 |
| Date: | 2016–12–27 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0604&r=sea |
| By: | Liu, Zheng (Federal Reserve Bank of San Francisco); Spiegel, Mark M. (Federal Reserve Bank of San Francisco); Tai, Andrew (Federal Reserve Bank of San Francisco) |
| Abstract: | Exchange rate shocks have mixed effects on economic activity in both theory and empirical VAR models. In this paper, we extend the empirical literature by considering the implications of a positive shock to the U.S. dollar in a factor-augmented vector autoregression (FAVAR) model for the U.S. and three large Asian economies: Korea, Japan and China. The FAVAR framework allows us to represent a country’s aggregate economic activity by a latent factor, generated from a broad set of underlying observable economic indicators. To control for global conditions, we also include in the FAVAR a “global conditions index,” which is another latent factor generated from the economic indicators of major trading partners. We find that a dollar appreciation shock reduces economic activity and inflation not only for the U.S. economy, but also for all three Asian economies. This result, which is robust to a number of alternative specifications, suggests that in spite of their disparate economic structures and policy regimes, the dollar appreciation shock affects the Asian economies primarily through its impact on U.S. aggregate demand; and this demand channel dominates the expenditure-switching channel that affects a country’s export competitiveness. |
| JEL: | C30 E40 E50 F33 F37 F42 |
| Date: | 2016–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2016-30&r=sea |
| By: | Migheli, Matteo (University of Turin) |
| Abstract: | Access to credit and its cost is a major challenge for farmers in developing countries. Formal moneylenders often ration these economic agents, as they lack assets to give as collateral for the loans. The phenomenon is particularly diffused in the countryside, where the formal moneylenders are less present. Consequently, farmers resort to informal credit. Several studies show that land serves as collateral for accessing formal credit, but they often do not find any significant effect of land size on access to informal credit. Here I study the effects of land ownership on both the demand and the cost of informal credit in the Mekong Delta. Vietnam is an interesting country for studying this issue, as informal credit is widespread in the countryside, despite the government’s effort to eradicate it, also subsidising the formal lenders. The analysis is based on 603 households farming relatively small parcels. The results show that as land ownership increases, both the demand and the cost of informal loans decrease. This result is relevant in developing countries, where land reforms are still ongoing, as it shows that land redistribution may contribute to the development of formal credit markets. In particular, from a policy point of view, design and implementation of appropriate land redistributions appears to be a fundamental way to fight the informal credit market. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:201619&r=sea |
| By: | Johansson, Anders C. (Stockholm China Economic Research Institute) |
| Abstract: | Does social media have the potential to influence the political process more in certain countries? How do political actors and citizens use social media to participate in the political process? This paper analyzes these questions in the context of contemporary Indonesia, a country with a young democracy and a vibrant emerging economy. First, the relationships between traditional and social media and politics are discussed. Then, the current situation in Indonesia’s traditional media industry and how it may have helped drive the popularity of social media in Indonesia is analyzed. Finally, the paper discusses social media in today’s Indonesia and provides examples of how political actors and citizens use social media in the political process. |
| Keywords: | Indonesia; Social media; Media; Politics; Democratic process; Political process; Media industry |
| JEL: | D72 L82 |
| Date: | 2016–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hascer:2016-042&r=sea |
| By: | Johansson, Anders C. (Stockholm China Economic Research Institute) |
| Abstract: | Social media provides political actors, opinion makers, and the electorate with the opportunity to bypass traditional media and engage in direct exchange of political information. This article explores how political candidates in the 2014 legislative election in Indonesia used social media during their political campaign. Exploiting a unique hand-collected data set, the study sheds light on personal characteristics that have explanatory power for political candidates’ choice to engage over social media. It also provides insight into the content of politicians’ messages and drivers for different types of content. The findings suggest that social media is used by a relatively large percentage of politicians in Indonesia and that they use social media platforms such as Twitter to engage with their electorate on several topics related to their campaign during election periods. |
| Keywords: | Indonesia; Social media; Elections; Politics; Democratic process; Political process; Media industry |
| JEL: | D72 L82 |
| Date: | 2016–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hascer:2016-043&r=sea |
| By: | Christopher F. Parmeter (University of Miami); Alan T. K. Wan (City University of Hong Kong); Xinyu Zhang (Academy of Mathematics and Systems Science) |
| Abstract: | Given the concern over the impact of distributional assumptions for the stochastic frontier model, the present research proposes two distinct model averaging estimators, one which can average over distinct distributions for firm specific inefficiency and another that can average over a nested class of distributions. These estimators are shown to produce optimal weights when the criterion is to uncover conditional inefficiency. We study the finite-sample performance of the model average estimator via Monte Carlo experiments and an empirical application focusing on Philippines rice farming. |
| Keywords: | Jackknife, optimal, focus criterion, leave-one-out Publication Status: Under Review |
| JEL: | C1 |
| Date: | 2016–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:mia:wpaper:2016-09&r=sea |
| By: | Katsuo Kogure (Graduate School of Economics, Osaka University); Yoshito Takasaki (Graduate School of Economics, University of Tokyo) |
| Abstract: | This paper examines how the Cambodian genocide under the Pol Pot regime (1975-1979) altered people fs post-conflict behaviors through institutional changes. Combining spatial genocide data and the 1998 Census microdata, we compare the impacts of the genocide on subsequent investments in children fs education between couples who had their first child during and after the Pol Pot era. Because under the Pol Pot regime private ownership was completely denied and spouses and children were owned by the state as collective property, these couples had quite distinct institutional experiences: The former were controlled as family organizations and the latter were not. We find that the genocide adversely influenced children fs education among the former couples, but not the latter ones. We discuss plausible mechanisms underlying these patterns, shedding new light on why institutions which emerged during the conflict persistently shaped people fs post-conflict behaviors. |
| Keywords: | conflict, genocide, institutions, education, Cambodia |
| JEL: | N35 O15 O17 Z13 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1630&r=sea |
| By: | Murat Ungor (University of Otago) |
| Abstract: | Online appendix for the Review of Economic Dynamics article |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:red:append:11-273&r=sea |
| By: | KOGURE, Katsuo; TAKASAKI, Yoshito |
| Abstract: | This paper examines how the Cambodian genocide under the Pol Pot regime (1975-1979) altered people’s post-conflict behaviors through institutional changes. Combining spatial genocide data and the 1998 Census microdata, we compare the impacts of the genocide on subsequent investments in children’s education between couples who had their first child during and after the Pol Pot era. Because under the Pol Pot regime private ownership was completely denied and spouses and children were owned by the state as collective property, these couples had quite distinct institutional experiences: The former were controlled as family organizations and the latter were not. We find that the genocide adversely influenced children’s education among the former couples, but not the latter ones. We discuss plausible mechanisms underlying these patterns, shedding new light on why institutions which emerged during the conflict persistently shaped people’s post-conflict behaviors. |
| Keywords: | conflict, genocide, institutions, education, Cambodia |
| JEL: | N35 O15 O17 Z13 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hiasdp:hias-e-39&r=sea |
| By: | Wang, Wenming (Business School, Hunan University); Keisuke Kawachi (Faculty of Humanities, Law and Economics, Mie University); Hikaru Ogawa (Faculty of Economics, The University of Tokyo) |
| Abstract: | This paper examines how the Cambodian genocide under the Pol Pot regime (1975-1979) altered people's post-conflict behaviors through institutional changes. Combining spatial genocide data and the 1998 Census microdata, we compare the impacts of the genocide on subsequent investments in children’s education between couples who had their first child during and after the Pol Pot era. Because under the Pol Pot regime private ownership was completely denied and spouses and children were owned by the state as collective property, these couples had quite distinct institutional experiences: The former were controlled as family organizations and the latter were not. We find that the genocide adversely influenced children's education among the former couples, but not the latter ones. We discuss plausible mechanisms underlying these patterns, shedding new light on why institutions which emerged during the conflict persistently shaped people's post-conflict behaviors. |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2016cf1035&r=sea |
| By: | Valsecchi, Michele (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Modern state bureaucracies are designed to be insulated from political interference. Successful insulation implies that politicians' electoral incentives do not affect bureaucrats' corruption. I test this prediction by assembling a unique dataset on corruption, promotions and demotions for more than 4 million Indonesian local civil servants. To identify the effect of reelection incentives, I exploit the existence of term limits and a difference-indifference strategy. I find that reelection incentives decrease the corruption behaviour of both top and administrative bureaucrats, which constitutes new evidence of the deep, farreaching effects of politicians' accountability on local civil servants. I explore a mechanism where bureaucrats have career concerns and politicians facing reelection manipulate such concerns by increasing the turnover of top bureaucrats. Consistent with this mechanism, I find that reelection incentives increase demotions of top bureaucrats and promotions of administrative bureaucrats. |
| Keywords: | Corruption; Elections; Bureaucracy |
| JEL: | D72 D73 H83 K40 O17 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0684&r=sea |
| By: | Mustafa, Ghulam; Rizov, Marian; Kernohan, David |
| Abstract: | The paper draws on Ghulam Mustafa’s doctoral research; nevertheless, the authors’ contributions to this paper are equal. We thank Michela Vecchi and John Grahl for contributions to earlier versions of the paper. |
| Keywords: | economic growth, human development, trade, openness, Asia, International Development, F43, O10, O15, O19, O53, |
| Date: | 2016–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ulefwp:250248&r=sea |
| By: | Ayumu Tanaka |
| Abstract: | The rapid growth in the number of temporary workers in Japan during the 2000s gen- erated greater income inequality and greater job insecurity because temporary workers' wages are lower and their jobs are more tenuous than those of permanent workers. How- ever, little is established about the relation between globalization and domestic growth in the temporary workforce. This study examines that relationship. It investigates whether the initiation of foreign direct investment (FDI) into Asia increased temporary workers' share of total wages and employment. This study employs a rst-differenced difference-in- difference estimation with propensity score matching to examine how the initiation of FDI among Japanese manufacturers during 2003{2004 affected domestic employment. Firm- level data cover the period following the 2004 deregulation, which accelerated increases in the number of temporary workers by allowing manufacturers to employ such workers indirectly through employment agencies. Positive effects of vertical FDI are observed on the temporary worker ratio one year after starting FDI, but vanish in subsequent years. Therefore, this study concludes that the relationship between temporary workers and offshoring is complementary in the early stage of FDI and that no persistent effect of offshoring occurs that results in greater income inequality and greater job insecurity through an increase in the number of temporary workers. |
| Keywords: | foreign direct investment; difference-in-difference estimation; propensity score matching; temporary workers |
| JEL: | F16 F21 F23 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:kue:epaper:e-16-011&r=sea |
| By: | Wuyi Wang (School of Economics, Singapore Management University); Peter C.B. Phillips (Cowles Foundation, Yale University); Liangjun Su (School of Economics, Singapore Management University) |
| Abstract: | This paper studies estimation of a panel data model with latent structures where individuals can be classified into different groups where slope parameters are homogeneous within the same group but heterogeneous across groups. To identify the unknown group structure of vector parameters, we design an algorithm called Panel-CARDS which is a systematic extension of the CARDS procedure proposed by Ke, Fan, and Wu (2015) in a cross section framework. The extension addresses the problem of comparing vector coefficients in a panel model for homogeneity and introduces a new concept of controlled classification of multidimensional quantities called the segmentation net. We show that the Panel-CARDS method identifies group structure asymptotically and consistently estimates model parameters at the same time. External information on the minimum number of elements within each group is not required but can be used to improve the accuracy of classification and estimation in finite samples. Simulations evaluate performance and corroborate the asymptotic theory in several practical design settings. Two empirical economic applications are considered: one explores the effect of income on democracy by using cross-country data over the period 1961-2000; the other examines the effect of minimum wage legislation on unemployment in 50 states of the United States over the period 1988-2014. Both applications reveal the presence of latent groupings in these panel data. |
| Keywords: | CARDS, Clustering, Heterogeneous slopes, Income and democracy, Minimum wage and employment, Oracle estimator, Panel structure model |
| JEL: | C33 C38 C51 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2063&r=sea |