nep-sea New Economics Papers
on South East Asia
Issue of 2017‒03‒12
fourteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. The Macroeconomic Determinants of Stock Market Development: Evidence from Malaysia By Ho, Sin-Yu
  2. Contracting out the Last-Mile of Service Delivery: Subsidized Food Distribution in Indonesia By Banerjee, Abhijit; Hanna, Rema; Kyle, Jordan; Olken, Benjamin; Sumarto, Sudarno
  3. Value Chain Analysis of the Wood Processing Industry in the Philippines By Israel, Danilo C.; Bunao, David Feliks M.
  4. Globalization and Social Change: Gender-Specific Effects of Trade Liberalization in Indonesia By Kis-Katos, Krisztina; Pieters, Janneke; Sparrow, Robert
  5. Effects of gender, education and health communication on the regularity of physical exercise: a 2016 Vietnamese cross-section survey By Quan-Hoang Vuong; Hiep-Hung Pham; Thu Trang Vuong
  6. The Political Economy of Teacher Management in Decentralized Indonesia By Andrew Rosser; Mohamad Fahmi
  7. Bank Profitability: How Religiosity Shapes Investor Behavior: Sukuk Issuances During Ramadan By Paul-Olivier KLEIN; Rima TURK; Laurent WEILL
  8. Trade in environmental goods: how important are trade costs elasticities? By Lota Dabio Tamini; Sorgho Zakaria
  9. Perception of Work and Commitment toward Employee Satisfaction on Non-Ministerial Government Agencies in Bandung Indonesia By Hardiyana, Aan; Yusup, Maulana; Sidharta, Iwan
  10. Gender matters: Private sector training in Vietnamese SMEs By Benedikte Bjerge; Nina Torm; Neda Trifkovic
  11. Effects of monetary and macro-prudential policies – evidence from inflation targeting economies in the Asia-Pacific region and potential implications for China By Kim, Soyoung; Mehrotra, Aaron
  12. Impact of Financial Crises on Dynamics of Capital Structure: Evidence from Korean Listed Companies By Tsoy, Lyubov; Heshmati, Almas
  13. Digitalization at work, Job Tasks and Wages: Cross-Country evidence from PIAAC1 By De La Rica, Sara; Gortazar, Lucas
  14. Exploring the Trade–Urbanization Nexus in Developing Economies: Evidence and Implications By Zhang, Yuan; Wan, Guanghua

  1. By: Ho, Sin-Yu
    Abstract: This study examines the macroeconomic determinants of stock market development in Malaysia during the period 1981-2015. Specifically, it examines the impact of banking sector development, economic performance, inflation rate, foreign direct investment and trade openness on the development of Malaysian stock market. Currently, while theoretical and empirical literature presents diverse views on the relationship between each macroeconomic determinant and stock market development, no studies have been conducted with particular reference to the Malaysian stock market. Given the significant role the Malaysian stock market plays among the ASEAN 5, there is a need for more understanding of the impacts of macroeconomic factors on its development. This paper contributes to the existing literature by investigating the macroeconomic determinants of stock market development in Malaysia using the ARDL bounds testing procedure. The results find that economic performance and trade openness have positive long-run impacts, whereas banking sector development has a negative long-run impact on stock market development. In the short run, the results find that the previous period of banking sector development, and the current and previous periods of trade openness have positive impacts on stock market development, whereas inflation rate exerts a negative impact. These findings carry important policy implications.
    Keywords: Macroeconomic determinants; Stock market development; Malaysia; ARDL bounds testing
    JEL: C22 E44 G23
    Date: 2017–02–27
  2. By: Banerjee, Abhijit; Hanna, Rema; Kyle, Jordan; Olken, Benjamin; Sumarto, Sudarno
    Abstract: Should government service delivery be outsourced to the private sector? In a randomized field experiment across 572 Indonesian localities, we show that allowing for outsourcing reduced the operating costs of a subsidized food program without sacrificing quality. However, citizens only reaped the gains from efficiency in terms of lower prices in areas where we exogenously increased the level of competition in the bidding process. We find that while the selection among bids during the procurement process appears broadly sensible, elites were sometimes able to block the process entirely, either ex-ante or ex-post, limiting the magnitude of the gains from outsourcing.
    Date: 2017–02
  3. By: Israel, Danilo C.; Bunao, David Feliks M.
    Abstract: Wood processing is an important downstream activity of the Philippine forestry sector because it adds economic value to logs, diversifies the products that can be produced from it, and increases the incomes and employment of involved communities. Despite its many economic contributions, however, the wood processing industry has been on the decline for many years now. This study analyzes the wood processing industry concentrating on its value chain, the major issues and problems it is facing, and recommends actions to address these problems and issues. Among others, the study finds that the wood processing industry is constrained by various technical, financial, economic, marketing, environmental, institutional, and research-related problems and issues. To address these individually, specific recommendations are forwarded. In terms of research, in particular, the study suggests the gathering of more detailed and complete data and information on the wood processing sector by relevant government agencies, and the conduct of relevant studies not just on the whole processing sector but also on specific wood processing activities.
    Keywords: Philippines, value chain, Caraga region, wood processing, problems and issues
    Date: 2017
  4. By: Kis-Katos, Krisztina (University of Goettingen); Pieters, Janneke (Wageningen University); Sparrow, Robert (Wageningen University)
    Abstract: We analyse the gender-specific effects of trade liberalization on work participation and hours of work and primary participation in domestic duties in Indonesia. We show that female work participation increased in relative terms in regions that were more exposed to input tariff reductions, whereas the effects of output tariff changes were much less pronounced. When looking at the potential channels for these effects, we find that in Indonesia the structure of initial protection was considerably more female-biased than skill-biased and hence reductions in input tariffs have especially benefited sectors with a larger initial concentration of female workers. This has led to a relative expansion of more female intensive sectors as well as to a decrease in gender segregation of occupation, especially among the low skilled. We also find that labour markets are a key channel through which trade liberalization affects marriage decisions. Delayed marriage among both sexes is related to input tariff liberalization, especially in the younger cohorts, as the improved labour opportunities for women reduce the returns to marriage.
    Keywords: labour force participation, gender inequality, marriage, trade liberalization, Indonesia
    JEL: F13 F16 J12 J16 J21
    Date: 2017–02
  5. By: Quan-Hoang Vuong; Hiep-Hung Pham; Thu Trang Vuong
    Abstract: Nowadays, physical exercise and sports activities are regarded as the best means for people to keep fit and boost their health. In Vietnam, exercising on a daily basis is still underappreciated as twothirds of the population only exercise at trivial or low levels. Based on applying the baseline category logit model, we conduct an analysis to figure out the factors affecting people’s level of exercise. The findings show that males tend to engage in physical activities more than females, with the difference potentially being as high as 18.9%. In addition, females with a high educational background (university or higher) usually exercise less than those with lower education, perhaps due to their job’s attributes and their different routines. The opposite is the case in males, yet the differences for both genders are relatively small (only about 1%). The study also shows that those with higher BMI have higher activity levels. In particular, those with the highest BMI (BMI = 37.2) have a likelihood of regularly exercising as high as 74%. Furthermore, improved health communication systems and regular health check-ups at home are also associated with more frequent exercise and engagement in sport.
    Keywords: Physical exercise; Sports; Gender; Educational background; Body mass index; Health communication
    JEL: I10
    Date: 2017–03–02
  6. By: Andrew Rosser (University of Adelaide); Mohamad Fahmi (Department of Economics, Padjadjaran University)
    Abstract: Indonesia faces serious challenges in the number, cost, quality, and distribution of teachers. This paper examines the role of political economy factors in producing these challenges and shaping eforts to resolve them. It argues that the challenges have their origins in the way in which political and bureaucratic elites have for decades used the school system to accumulate resources, distribute patronage, mobilize political support, and exercise political control. This orientation has meant that teacher numbers, quality, and distribution have been managed to maximize fows of rents and votes from schools to the elite, lubricate patronage and political networks, and ensure that elites maintain politi- cal control rather than maximize educational performance and equity. The fall of the New Order, the authoritarian and centralized regime that ruled Indonesia from 1965 to 1998, led to eforts to change this situation, but these have had little impact so far. The paper concludes by assessing what can be done by proponents of teacher management reform in this context to promote better outcomes.
    Keywords: political economy, education, teachers, teacher management, Indonesia
    JEL: D73 H75 I28 P16
    Date: 2016–12
  7. By: Paul-Olivier KLEIN (LaRGE Research Center, Université de Strasbourg); Rima TURK (International Monetary Fund); Laurent WEILL (LaRGE Research Center, Université de Strasbourg)
    Abstract: We use an original identification strategy to isolate a potential religious bias in traders’ behavior. We first analyze the stock market reaction to sukuk issuance and then isolate the religious component of the trades by comparing the stock market reaction to sukuk and bond issuance during the holy month of Ramadan. We use the event study methodology to measure abnormal returns for a sample of 2,140 issuances by 133 issuers in Malaysia over the period 2000-2013. We find that sukuk issuance during Ramadan is valued more positively than bond issuance by stock market investors. We observe that the type of securities previously issued by the firm influences the stock market reaction, in the sense that the positive reaction to sukuk issuance during Ramadan rewards firms which only issue sukuk. Our findings support the view that religiosity influences the behavior of investors, suggesting that religiosity should be taken into account in the analysis of financial markets.
    Keywords: religion, Islamic Finance, Ramadan effect, behavioral finance.
    JEL: G14 P51
    Date: 2017
  8. By: Lota Dabio Tamini; Sorgho Zakaria
    Abstract: Negotiations on the liberalization of environmental goods (EGs) and services within the WTO Doha Round (mandated in November 2001) are facing specific challenges. Conflicting interests and differing perceptions of the benefits of increased trade in EGs were reflected in different approaches proposed for determining EGs. Using import data of 34 OECD member countries and from a sample of 167 countries, from 1995 to 2012, we discuss the trade effect of reducing barriers on EGs. We analyze the lists of EGs proposed by the Asia-Pacific Economic Cooperation (APEC) and the Organisation for Economic Co-operation and Development (OECD) using a Translog gravity model. We found that removing tariff barriers for EGs will have a modest impact because for the biggest importers and exporters, elasticities of trade costs are very low while for most trading relationships they are very high, making it difficult for exporters to maintain their markets. Overall, our results suggest that, because of their substantial effect on international trade, future negotiations on EGs should also address the issues of standards and nontariff barriers (NTBs).
    Keywords: Environmental Goods, Translog, Gravity, Trade costs elasticity, Import share
    JEL: F11 F12 F15
    Date: 2016
  9. By: Hardiyana, Aan; Yusup, Maulana; Sidharta, Iwan
    Abstract: Some research indicates the importance of comfort working in an organization, which is expected to provide job satisfaction and can improve work effectiveness. It is thus necessary role of organizational commitment in order to create a comfortable working environment so as to improve the behavior of employees in work efficiency. This study aims to determine the effect of the perception of the work, organizational commitment, and employee attitude and employee satisfaction. Exploratory research methods with data analysis techniques using Structural Equation Modeling, component-based Partial Least Squares (PLS). The number of respondents was 131 employees from non-Ministry of Government agencies in Bandung with data collection simple random sampling. The results showed that employee perceptions regarding significant effect on employee satisfaction and organizational commitment but no significant effect on employee attitudes, while significantly influence the organizational commitment and employee satisfaction. Simultaneously the test results prove that organizational commitment, attitude and employee satisfaction proved significant. This suggests that the need for the implementation of the organization's commitment to implement the working comfort for employees so that employee satisfaction can be improved as well as work more optimal effectiveness.
    Keywords: perception of work, organizational commitment, employee satisfaction
    JEL: D23 L21 M1
    Date: 2015–08
  10. By: Benedikte Bjerge; Nina Torm; Neda Trifkovic
    Abstract: In many developing countries the skill base is a cause of concern with respect to international competition. Firm-provided training is generally seen as an important tool for bridging the skills gap between labour force and private sector demand. Yet little is known about how successful such training may be in closing the gender wage gap. We use a matched employer–employee panel dataset to assess why firms train and whether formal training affects wage outcomes in Vietnamese SMEs. Training is generally found to be firm-sponsored and specific in nature. We find that training is associated with a wage increase of 7–22 per cent for female workers only, depending on the analytical approach taken. We also show evidence that the wage increase is associated only with on-the-job training and that lower ability workers are more likely to be trained. Our findings indicate that, at least in Viet Nam, firm-sponsored on-the-job training helps close the gender wage gap.
    Keywords: training; wage, SME, Viet Nam
    Date: 2016
  11. By: Kim, Soyoung; Mehrotra, Aaron
    Abstract: We examine the effects of monetary and macroprudential policies in the Asia-Pacific region, where many inflation targeting economies have adopted macroprudential policies in order to safeguard financial stability. Using structural panel vector autoregressions that identify both monetary and macro-prudential policy actions, we show that tighter macroprudential policies used to contain credit growth have also had a significant negative impact on macroeconomic aggregates such as real GDP and the price level. The similar effects of monetary and macroprudential policies may suggest a complementary use of the two policies at normal times. However, they could also create challenges for policy-makers, especially during times when low inflation coincides with buoyant credit growth.
    JEL: E58 E61
    Date: 2017–03–02
  12. By: Tsoy, Lyubov (Sogang University); Heshmati, Almas (Jönköping University, Sogang University)
    Abstract: This study examines the impact of 1997 Asian and 2008 Global financial crises on the capital structure of Korean listed companies. Using a data set covering 1,159 Korean listed non-financial firms from 10 industrial sectors over period 1985-2015, the pattern of firms' capital structure before and after the crises is investigated and the speed of adjustment toward the optimal leverage identified. Different effects of the two crises on both capital structure and its adjustment speed is found. The average debt ratio fell significantly, the distance between optimal and observed debt ratios shrank, while the speed of adjustment increased twofold after the Asian crisis. Unlike the Asian crisis, the Global crisis of 2008 had a positive effect on companies' debt ratio and the speed of their adjustment toward optimal leverage. The empirical analysis revealed that Korean non-financial listed companies on average decreased their debt ratios over the entire study period, with leverage being highest before the Asian crisis and lowest after the Global financial crisis. The results also show that the debt ratio of Korean chaebols is higher than that of non-chaebols. Moreover, the high level of leverage is associated with tangible assets, income variability, size and age of the firm, non-debt tax shield, and uniqueness.
    Keywords: capital structure, optimal leverage, speed of adjustment, Korean listed companies, financial crises, chaebols
    JEL: C33 D21 C51 E22 G32
    Date: 2017–02
  13. By: De La Rica, Sara; Gortazar, Lucas
    Abstract: The aim of the paper is threefold. First, we compute differences on job tasks (Abstract, Routine and Manual) across a harmonized and hence comparable sample of Anglo-saxon, many European and even Asian advanced countries. We do so by using very precise information on job contents at the worker level, which allows for job task heterogeneity within occupations. Second we assess the extent to which computer adoption leads to the observed differences of job contents across countries. Third, we test the impact of tasks at work on average wages and wage inequality. Our results show remarkable differences in the degree of polarization of job contents across countries, being computer adoption at work a key significant driver of such differences. In particular, ICT use at work explains 10.0% (7.7%) of the cross-country conditional differences in Abstract (Routine) tasks at work. Finally, our results indicate that although differences in tasks explain an important and significant part of wage differentials (similar to what is found in Autor and Handel, 2013), we cannot find a clear pattern in the explanation of wage inequality gaps by looking at differences in task endowments and task returns.
    Keywords: Digitalization,Job Tasks,RIF-Regressions,Wage Decomposition,PIACC
    JEL: J24 J31 O33
    Date: 2017
  14. By: Zhang, Yuan (Asian Development Bank Institute); Wan, Guanghua (Asian Development Bank Institute)
    Abstract: Developing countries have seen a rapid rise in population urbanization in the past decades. At the same time, they have participated actively in the process of globalization. However, possible interlinks between population urbanization and trade openness in developing economies have been ignored by present literature. We propose a simple framework explaining the cereals trade–population urbanization nexus, showing how cereals supply constrains population urbanization and how international trade can change this constraint. Then, we present historical evidence, empirical tests, and case studies from the People’s Republic of China, and India further highlighting the critical role of cereals trade in population urbanization in developing economies. Policy suggestions that may help developing countries achieve more inclusive and sustainable urban development are discussed in the final section of this paper.
    Keywords: trade; urbanization; trade-urbanization nexus; trade openness; cereals trade; population; developing economies; urban development
    JEL: O18 Q17 R11
    Date: 2017–01–12

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