nep-sea New Economics Papers
on South East Asia
Issue of 2017‒02‒05
sixteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. BIMP-EAGA Investment Opportunities in Corridor Value Chains By Lord, Montague J.; Tangtrongjita, Pawat
  2. Scoping Study for The Special Border Economic Zone (SBEZ) In The Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) By Lord, Montague J.; Tangtrongjita, Pawat
  3. Philippine Journal of Development 2014-2015 By Various Authors
  4. Sustaining the Competitiveness of Philippine Services By Serafica, Ramonette B.
  5. Strengthening Social Enterprises for Inclusive Growth: Philippines By Ballesteros, Marife M.; Llanto, Gilberto M.
  6. Do farmers with less education realize higher yield gains from GM maize in developing countries? Evidence from the Philippines By Jones, Michael S.; Rejesus, Roderick M.; Brown, Zachary S.; Yorobe, Jose M.
  7. Household Entrepreneurship and Social Networks: Panel Data Evidence from Vietnam By Nguyen, Huu Chi; Nordman, Christophe Jalil
  8. Cost-sharing in health insurance and its impact in a developing country– Evidence from a quasi-natural experiment By Nguyen, Ha; Connelly, Luke B.
  9. Choosing Between Multiple Preferential Tariff Schemes: Evidence from Japan's imports By HAYAKAWA Kazunobu; URATA Shujiro; YOSHIMI Taiyo
  10. Malaysia’s economic success story and challenges By Vincent Koen; Hidekatsu Asada; Stewart Nixon; Habeeb Rahuman, M.R.; Mohd Arif, A.Z.
  11. Does trade contribute to poverty reduction? If it does, where the benefit goes to? By Oh, Saera; Lee, Sang Hyeon
  12. Boosting productivity in Malaysia By Hidekatsu Asada; Stewart Nixon; Vincent Koen
  13. Does Innovation Mediate Good Firm Performance? By Llanto, Gilberto M.; del Prado, Fatima Lourdes E.
  14. Mortgage Interest Deductions and Homeownership: An International Survey By Steven C. Bourassa; Donald R. Haurin; Patric H. Hendershott; Martin Hoesli
  15. Fostering inclusive growth in Malaysia By Stewart Nixon; Hidekatsu Asada; Vincent Koen
  16. Capturing Value from IP in a Global Environment By Juan Alcácer; Karin Beukel; Bruno Cassiman

  1. By: Lord, Montague J.; Tangtrongjita, Pawat
    Abstract: The study examines potential investment opportunities for cross-border value chains in the economic corridors of the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA). offers an investment perspective that is grounded on extensive interviews with company representatives and public sector officials. Qualitative and quantitative-based surveys were conducted over a six-week period by the study team that interviewed 70 companies distributed over 20 industry classifications or divisions in six BIMP-EAGA corridor states and provinces. It presents the results of three approaches to identifying and rating corridor value chains based on (a) provincial and state development priorities along the corridors; (b) business perceptions about corridor-wide opportunities; and (c) mapping the comparative advantages revealed by the exports from corridor provinces and states into different types of industry classifications. Overall, the study finds that opportunities for investment in corridor value chains abound in both BIMP-EAGA corridors. Among the most compelling reasons to invest in these types of cross-border value chains are their internal and external effects generated by knowledge transfers, scale economies, upstream and downstream linkages, the ability of corridor value chains to attract investment from multinational enterprises, the subregion’s favorable policy and regulatory environment, and the ability of these types of investments to substantially broaden existing markets for goods and services in the subregion.
    Keywords: value chains, cross-border investment, cross-border value chains, BIMP-EAGA, Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area
    JEL: F14 F15 L1
    Date: 2016–11–30
  2. By: Lord, Montague J.; Tangtrongjita, Pawat
    Abstract: The report provides a review and analysis of the findings from the scoping study on the proposed Malaysian–Thailand Special Border Economic Zone (SBEZ).Each border crossing has been assessed on the basis of the following components, details of which are presented in the main body of this report: (a) special economic zone (SEZ) potential; (b) cross-border value chains; (c) transport and logistics; (d) socio-economic development strategy for the area; (e) SME development and business development services: (f) linkages to Indonesia.
    Keywords: SBEZ, border economic zones, special border economic zones, Thailand, Malaysia, IMT-GT
    JEL: F14 F15 L6
    Date: 2016–06–01
  3. By: Various Authors
    Abstract: This volume is significant for two reasons. First, it introduces the new Editorial Board members who will be providing direction and guidance to the Philippine Journal of Development (PJD) in the next five years. Second, it also introduces some changes in format. We redesigned the cover, adjusted the journal’s dimensions, and improved the layout. All of these are meant to make the PJD more user friendly to its readers. This combined volume, which consists of eight articles, includes topics on Pacific Alliance for the Free Trade Area of the Asia-Pacific, liberalizing trade in APEC environmental goods, Philippines-United States free trade agreement on trade in goods, services-manufacturing linkage, competitiveness of Philippine services, stock market development in the Philippines, domestic resource cost in Philippine agriculture, and health accounts estimates of the Philippines.
    Keywords: Philippines, APEC, environmental goods, services, TPP, FTA, agriculture, manufacturing, Pacific Alliance, RCEP, free trade agreement, stock market, domestic resource cost, health accounts, Philippine Journal of Development, PJD, FTAAP
    Date: 2016
  4. By: Serafica, Ramonette B.
    Abstract: Competitive services are necessary for attaining inclusive and sustainable growth. Although the Philippines has notably succeeded in developing several globally competitive services, inefficiencies that affect various economic sectors and the economy as a whole still persist. Thus, it is important to sustain the progress achieved and to address the poor performance especially of the services essential to the growth of the agriculture and manufacturing sectors. This paper presents elements of a comprehensive strategy for efficient competitive services using Porter’s diamond of national advantage, which emphasizes the proper role of government in creating an environment for continuous upgrading and innovation.
    Keywords: Philippines, services, competitiveness, competitive services, services sector, labor productivity, comparative advantage, Porter’s diamond of national advantage
    Date: 2016
  5. By: Ballesteros, Marife M.; Llanto, Gilberto M.
    Abstract: Social enterprises have been emerging globally as alternative organizations to achieve inclusive and sustainable growth. Success stories of social enterprises have shown that multiple bottom lines can be achieved; that firms can be vehicles for profit and other moral imperatives. In the Philippines, a resurgence of social enterprises has also been observed. However, the current policy environment in the country is yet unresponsive to the growth of social enterprises. There is a need to understand better the context of social enterprise operations through more rigorous research.
    Keywords: Philippines, inclusive growth, social enterprises, community economies, social and solidarity economy
    Date: 2017
  6. By: Jones, Michael S.; Rejesus, Roderick M.; Brown, Zachary S.; Yorobe, Jose M.
    Abstract: For genetically-modified (GM) maize with genes for insecticidal Bacillus thuringiensis (Bt) toxin expression and glyphosate tolerance, there is ample developing world evidence demonstrating general increases in farmer average yields. However, little work carefully examines farmer profiles to explain mechanisms for heterogeneity in yield effects. In this article, we view Bt and stacked traits as simplifying input components, removing much complexity in farmer pest control needs. With panel data from the Philippines, we test whether these traits serve as substitutes or complements to human capital. We thus examine an oft-discussed but previously unexplored facet of Bt technology impacts. Results indicate GM traits are substitutes with proxies for human capital and pest control knowledge. For every year decrease in formal education and maize farming experience, farmers realize significantly higher yield gains from planting GM maize. This evidence provides additional insights about ‘pro-poor’ claims of many GM proponents, given small-scale, poor farmers tend to have lower levels of education.
    Keywords: genetically modified crops, Bt maize, education, Philippines, Production Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies,
    Date: 2017
  7. By: Nguyen, Huu Chi (University of Paris 13); Nordman, Christophe Jalil (IRD, DIAL, Paris-Dauphine)
    Abstract: Using a unique panel of household businesses for Vietnam, this paper sheds light on the links between households' and entrepreneurs' social networks and business performance. We address two related questions. One first question asks if we can find evidence of a differentiated effect of employment of members of the family versus hired workers on the business performance. A second question tackles the respective effects of various dimensions of social networks on the business technical efficiency. The hypothesis is that, beyond the channel of labour productivity, entrepreneurs that are confronted with an unfavourable social environment may produce less efficiently and realize a lower output than what could be possible with the same amount of resources. We find evidence of a marginal productivity differential between family and hired labour and highlight results consistent with the presence of adverse social network effects faced by households running a business, in particular ethnic minorities. We stress the importance of professional networks for successful entrepreneurship.
    Keywords: family labour, kinship and ethnic ties, sharing norms, social network capital, Informality, household business, panel, Vietnam
    JEL: D13 D61 O12
    Date: 2017–01
  8. By: Nguyen, Ha; Connelly, Luke B.
    Abstract: Though the impact of cost-sharing on health care demand is well documented in developed countries, evidence from developing countries is rare. This paper’s contribution is to analyse the impact of increasing coinsurance in a developing nation -Vietnam – by exploiting a quasi-natural experiment in that country. In 2007, the Vietnam government reintroduced a 20 percent coinsurance for individuals who hold voluntary health insurance policies. As individuals with compulsory health insurance were exempt from this re-imposition of coinsurance, this policy change may be regarded as a quasi-natural experiment. To exploit this change, we use a difference-in-difference approach to examine whether the increase in coinsurance effectively reduced the demand for health care services among those affected. We find it has no statistically significant effect on the quantity of health care demanded. We however find that those who were under 18 or in low income households reduced their health care use after the increase in coinsurance. These findings hold – at least in the short-run, with a variety of different outcomes and estimators.
    Keywords: Health insurance, Difference-in-difference, Cost-sharing, Developing country, Vietnam
    JEL: G22 I13 I18
    Date: 2017–01
  9. By: HAYAKAWA Kazunobu; URATA Shujiro; YOSHIMI Taiyo
    Abstract: Mega regional trade agreements (RTAs), such as the Trans-Pacific Partnership, are likely to overlap with existing RTA networks. When RTA networks overlap, firms are required to choose from multiple RTA schemes when they trade. This study investigates how RTA tariff rates affect the use of both own and other tariff schemes when multiple RTA schemes are available. We first theoretically explore such choice and derive some propositions. Then, we empirically test those propositions for Japan's imports because Japan already has not only bilateral but also multilateral RTAs with some Association of Southeast Asian Nations (ASEAN) countries. The key finding is that the utilization rate of an RTA scheme is higher when its preferential rates are lower compared to the rates in the other RTAs.
    Date: 2017–01
  10. By: Vincent Koen; Hidekatsu Asada (OECD); Stewart Nixon (OECD); Habeeb Rahuman, M.R. (OECD); Mohd Arif, A.Z. (OECD)
    Abstract: Malaysia has sustained over four decades of rapid, inclusive growth, reducing its dependence on agriculture and commodity exports to become a more diversified, modern and open economy. GDP per capita is now higher than in a number of OECD economies, while poverty and income inequality have declined considerably. Growth has also been remarkably resilient in the face of external shocks. Going forward, the Malaysian government's 11th Malaysia Plan (2016-20) emphasises the need for greater inclusiveness. Continued, gradual fiscal consolidation is a key policy priority, building on earlier energy and food subsidy rationalisation and on the introduction of a goods and services tax. So is continued prudent monetary and financial policy. Further reforms are needed for Malaysia to become a high-income nation around 2020: productivity growth needs to be reinvigorated through various structural reforms while growth needs to become more inclusive. Succès et défis économiques de la Malaisie La Malaisie a connu plus de quatre décennies de croissance rapide et inclusive, réduisant sa dépendance à l'égard de l'agriculture et des exportations de matières premières, pour devenir une économie plus diversifiée, moderne et ouverte. Le PIB par tête est désormais plus élevé que dans un certain nombre d'économies de l'OCDE, alors que la pauvreté et les inégalités de revenu ont considérablement reculé. La croissance s'est également montrée résiliente face aux chocs externes. Pour l'avenir, le 11ème plan du gouvernement malaisien (2016-2020) souligne l'importance d'une plus grande inclusion. La poursuite graduelle de la consolidation budgétaire est une priorité majeure, dans la foulée de la rationalisation des subventions énergétiques et alimentaires et de l'introduction d'une taxe sur les biens et services. La continuation d'une politique monétaire et financière prudente en est une autre. La Malaisie doit réformer plus avant pour devenir un pays à haut revenu autour de 2020: diverses réformes sont nécessaires pour stimuler la croissance de la productivité et pour une croissance plus inclusive.
    Keywords: ASEAN, commoditities, competition, education, employment, fiscal consolidation, monetary policy, productivity
    JEL: E20 E50 F1 G15 G3 H11 H20 H30 H50 H60 I0 O1 O40 P48
    Date: 2017–01–31
  11. By: Oh, Saera; Lee, Sang Hyeon
    Abstract: The linkage between trade and poverty reduction is one of the controversial debate topics. Many studies were conducted and focused on national level poverty but this paper aims to investigate how the effect of trade differs in regional level (rural and urban) in developing countries. The result indicates that 1) an increase of export share contributes to national and urban poverty reduction in Asia and Central and South America but not the rural poverty; 2) an increase of import share is found to be beneficial for poverty reduction especially in Central and South America
    Keywords: Trade, poverty reduction, rural poverty, urban poverty, Developing country, International Development, International Relations/Trade, I32, F69,
    Date: 2017
  12. By: Hidekatsu Asada (OECD); Stewart Nixon (OECD); Vincent Koen
    Abstract: Productivity growth is essential to providing sustainable increases in living standards. Malaysia has reached a development stage where growth needs to be driven more by productivity gains than the sheer accumulation of capital and labour inputs. The 11th Malaysia Plan (2016-20) sets an ambitious labour productivity growth target of 3.7% per year, well above the 2% average growth recorded from 2011 to 2015. Co-ordinated structural reforms will be necessary to achieve the productivity improvements needed to attain high-income country status. Areas where reforms would deliver the greatest boost to productivity include increasing the quality of education and skills training, spurring innovation, adopting information technology more widely, fostering a well-functioning competition policy framework, improving the functioning of the labour market and the regulatory framework for small and medium-sized enterprises, fostering regional integration and raising public sector productivity. Renforcer la productivité en Malaisie Une amélioration soutenue du niveau de vie de la population n’est pas possible sans croissance de la productivité. Au stade de développement actuel de la Malaisie, la croissance doit reposer davantage sur des gains de productivité que sur l'accumulation des facteurs de production. Le 11ème Plan Malaisie (2016-2020) a fixé un objectif ambitieux de croissance de la productivité de 3,7% par an, bien au-dessus du taux de 2% enregistré entre 2011 et 2015. Des réformes structurelles coordonnées seront nécessaires pour réaliser les gains de productivité requis pour accéder au statut de pays à revenu élevé. Les réformes qui auraient le plus d’impact à cet égard touchent à la qualité de l’éducation et de la formation, à l’innovation, à un recours plus large aux technologies de l’information, à la politique de concurrence, au fonctionnement du marché du travail, au cadre réglementaire pour les petites et moyennes entreprises, à l’intégration régionale et à la productivité dans le secteur public.
    Keywords: competition, education, innovation, insolvency, performance review, productivity, public sector, regional integration, regulatory reform, skills, SMEs, structural reform, trade
    JEL: E20 F1 G3 H11 I0 O1 O40 P48
    Date: 2017–01–31
  13. By: Llanto, Gilberto M.; del Prado, Fatima Lourdes E.
    Abstract: Aside from physical capital and human resource, private firms are also advised to invest in innovations to be more productive and profitable. However, it is important to ensure such investment is well-spent. This study found that product and process innovations do lead to increase in sales and profits, and improve labor productivity. It also showed that firm size, age, and foreign equity are important factors leading firms to innovate.
    Keywords: Philippines, innovation, small and medium enterprises, process innovation, firm performance, product innovation, SMEs
    Date: 2016
  14. By: Steven C. Bourassa (Florida Atlantic University); Donald R. Haurin (Ohio State University (OSU)); Patric H. Hendershott (University of Aberdeen); Martin Hoesli (University of Geneva, University of Aberdeen, and Swiss Finance Institute)
    Abstract: The aim of this paper is to review the international evidence on the impacts of mortgage interest deductions on homeownership rates. The probability of becoming a homeowner is a function of the relative cost of owning and renting, borrowing constraints, permanent household income, and a set of taste variables. The relative cost of owning and renting is in part a function of house prices and the annual user cost of owner-occupied housing. Tax policies affect the user cost of owner-occupied housing and, in turn, the probability of becoming a homeowner. They also affect the price of housing due to capitalization effects. We draw on a number of empirical studies that have been conducted for several countries in North America, Europe, Australasia, and Asia. The empirical evidence suggests that, contrary to popular wisdom, the MID generally does not increase the ownership rate. This result is likely due to the fact that the MID is capitalized into house prices, especially where housing supply is inelastic.
    Keywords: homeownership, tax policy, house prices
    JEL: R21 R31 G21 H2
  15. By: Stewart Nixon (OECD); Hidekatsu Asada (OECD); Vincent Koen
    Abstract: Malaysia has followed a comparatively equitable development path, largely eliminating absolute poverty and greatly reduced ethnic inequality. Income and wealth inequality have gradually declined since the mid-1970s. With the “people economy” at the centre of Malaysia’s ambition to become a high-income country by 2020, the focus is shifting to the challenges of relative poverty and achieving sustainable improvements in individual and societal well-being through inclusive growth. This shift would be aided by reforms in several policy areas where Malaysia may compare favourably within its region but less so relative to OECD countries. This includes reforms to increase access to quality education, provide comprehensive social protection, raise the labour force participation of women and older persons, maintain universal access to quality public healthcare, improve pension system sustainability and adequacy and move towards a tax and transfer system that does more for inclusiveness. Promouvoir une croissance inclusive en Malaisie La Malaisie a suivi une trajectoire de développement comparativement équitable, éliminant largement la pauvreté absolue et réduisant considérablement l’inégalité ethnique. Les inégalités de revenu et de patrimoine ont diminué graduellement depuis le milieu des années 70. « L’ économie du peuple » étant au coeur de l’ambition de la Malaisie de devenir un pays à revenu élevé d’ici 2020, les efforts portent de plus en plus sur le défi de la pauvreté relative et sur la réalisation de progrès durables en matière de bien-être individuel et sociétal grâce à une croissance inclusive. Cette transition serait favorisée par des réformes dans plusieurs domaines où la Malaisie se compare favorablement par rapport aux pays de la région mais moins bien par rapport aux pays de l’OCDE. Cela inclut des réformes pour un meilleur accès à une éducation de qualité, une protection sociale plus complète, une participation plus grande des femmes et des personnes plus âgées au marché du travail, un accès universel à des soins de santé de qualité, ainsi que pour améliorer la viabilité et l’adéquation du système de retraite et aller vers un système de taxation et de transferts plus inclusif.
    Keywords: healthcare, inclusive growth, inequality, labour market, participation, pensions, regional development, social protection, tax, transfer
    JEL: E20 H20 H50 I0 J0 P48
    Date: 2017–01–31
  16. By: Juan Alcácer (Harvard Business School, Strategy Unit); Karin Beukel (University of Copenhagen); Bruno Cassiman (IESE Business School)
    Abstract: This paper documents the strong growth in tools used by firms to protect their intellectual property (IP), develop their know-how, and build and maintain their reputation globally during the last decades. We focus on three tools: patents, trademarks, and industrial designs. We find that, although most IP applications come from a few countries (the United States, European Union, Japan, China, and South Korea), most growth in IP activity has come from middle-income countries, especially in Asia. We observe important differences in the origins of this growth. For example, while in India most applicants were foreign firms, in China most were local. However, most Indian innovations are also applied overseas, while Chinese innovations rarely made it out of China. Interestingly, growth in applications varies by IP tool, with industrial designs experiencing the most growth.
    Date: 2015–08

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