nep-sea New Economics Papers
on South East Asia
Issue of 2017‒06‒18
sixteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. A study of long- run theoretical relationship between ASEAN stock market indices and developed stock market indices of US and Japan By Majeed, Ayesha; Masih, Mansur
  2. How does urbanization affect energy and CO2 emission intensities in Vietnam? Evidence from province-level data By Nguyen Quan; Makoto Kakinaka; Koji Kotani
  3. Pengembangan Agribisnis Komoditas Kedelai Sebagai Proposal Komoditas Unggulan By Harisman, Kundang; Birnadi, Suryaman
  4. Multi-Country Report; Ensuring Financial Stability in Countries with Islamic Banking-Case Studies-Press Release; Staff Report By International Monetary Fund
  5. The Causal Effect of Retirement on Health Services Utilization: Evidence from Urban Vietnam By Dang, Thang
  6. Thailand; 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Thailand By International Monetary Fund
  7. Thailand; Selected Issues By International Monetary Fund
  8. Monetary policy and wandering overinvestment cycles in East Asia and Europe By Schnabl, Gunther
  9. Dutch Disease Resistance: Evidence from Indonesian Firms By James Cust; Torfinn Harding; Pierre-Louis Vezina
  10. The Effects of Number of Industrial Enterprises, Value of Input, Value of Output, And Regional Minimum Wage on Labor Demand in Indonesia : An Empirical Study on Micro Industrial Enterprises By NABABAN, TONGAM SIHOL
  11. TOLLS VERSUS MOBILITY PERMITS: A COMPARATIVE ANALYSIS By André De Palma; Stef Proost; Ravi Seshadri; Moshe Ben-Akiva
  12. Estimating the Threshold Level of Inflation for Thailand By Jiranyakul, Komain
  13. Most-likely-path in Asian option pricing under local volatility models By Louis-Pierre Arguin; Nien-Lin Liu; Tai-Ho Wang
  14. National Accounts and Household Survey Estimates of Household Expenditures: Why Do They Differ and Why Should We Be Concerned? By Albert, Jose Ramon G.; Asis, Ronina D.; Vizmanos, Jana Flor V.
  15. Samoa; 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Samoa By International Monetary Fund
  16. Capital Investment Decisions of Micro, Small and Medium Enterprises: The Case of Digos City By Relativo, Jona Princess; Sumayang, Mildred; Diasana, Sarah Jean; Murcia, John Vianne

  1. By: Majeed, Ayesha; Masih, Mansur
    Abstract: Over time the current world financial markets have become more closely correlated and interdependent due to increased market integration. One of the important outcomes of globalization has been economic cross-linkages and the increased co-movement of asset prices across international markets. This paper studies the long run relationship of five founding members of ASEAN-5, namely Malaysia, Singapore, Indonesia, Philippines & Thailand (referred to as ASEAN-5) and developed stock market indices of US and Japan. After the 1997 Asian Financial crisis, the stock markets in this region are expected to open up and become more interdependent. An Autoregressive Distributed Lag Model (ARDL) has been used to empirically test if a long run relationship exists among these indices. Our study finds that the ASEAN-5 stock markets are co-integrated along with developed stock markets of US and Japan which is in line with many studies.
    Keywords: ASEAN-5, ARDL, Co-integration, Granger-causality
    JEL: C58 E44 G15
    Date: 2016–12–20
  2. By: Nguyen Quan (The 1st authorã ¯Ministry of Energy, Vietnam); Makoto Kakinaka (Graduate School for International Development and Cooperation, Hiroshima University); Koji Kotani (School of Economics and Management, Kochi University of Technology)
    Abstract: Given the argument that urbanization is closely related to the economic growth with improved the quality of life, the role of urbanization on energy consumption and pollution emission has received attention from regulators and researchers. Recently, Vietnam, as one of the rapid growth emerging countries, has been undergoing a massive urbanization with massive increase in energy consumption and pollution. The purpose of this study is to discuss how urbanization affects energy and CO2 emission intensities in Vietnam by using the province-level data over the period from 2010 to 2013. Our empirical analysis presents clear evidences supportive of the regional disparity of the effect of urbanization. For provinces with the low income level, urbanization would intensify energy and CO2 emission intensities. In contrast, for provinces with the high income level, urbanization would mitigate energy and CO2 emission intensities. This study also discusses related issues for three sectors of the Vietnamese economy: agricultural, industrial, and service sectors.
    Keywords: urbanization, income level, energy and CO2 emission intensities, Vietnam economy
    Date: 2017–06
  3. By: Harisman, Kundang; Birnadi, Suryaman
    Abstract: Abstrak Secara empiris pertumbuhan produksi kedelai domestik lebih lambat jika dibandingkan permintaan. Oleh karena itu, untuk menutup kekuarangan tersebut setiap tahun Indonesia masih mengimpor kedelai. Kebutuhan kedelai tahun 2015, 2.246 juta ton, sementara produksi 780 juta ton, untuk memenuhi kebutuhan, Indonesia mengimpor kedelai 1.466 juta ton. Bagi penduduk Indonesia, kedelai merupakan komoditas pangan sumber protein nabati yang sangat penting. Selain harganya relatif murah, nilai gizinya juga tinggi. Sebagian besar rumah tangga mengkonsumsinya dalam bentuk tahu dan tempe. Oleh karena itu, konsumen terbesar dari industri tahu dan tempe. Penelitian bertujuan untuk mengetahui keragaan sistem agribisnis kedelai terutama pada subsistem on-farm sampai pemasaran oleh petani, juga untuk mengetahui pengembangan komoditas kedelai sebagai komoditas unggulan. Dan mengetahui kontribusi kedelai terhadap Produk Domestik Regional Bruto (PDRB) dan sektor pertanian Kabupaten Sumedang. Abstract. Empirically, domestic soybean production growth is slower than demand. Therefore, to close the annihilation every year Indonesia is still importing soybeans. The need for soybean in 2015, 2.246 million tons, while production 780 million tons, to meet the needs, Indonesia imported 1,466 million tons of soybeans. For the Indonesian population, soy is a food commodity source of vegetable protein is very important. In addition to the relatively cheap price, nutritional value is also high. Most households consume them in the form of tofu and tempeh. Therefore, the largest consumers of tofu and tempe industries. The objective of this research is to know the system of soybean agribusiness especially on the subsystem on-farm until marketing by farmers, also to know the development of soybean commodity as the superior commodity. And know the contribution of soybean to Gross Regional Domestic Product (PDRB) and Sumedang Regency agricultural sector
    Keywords: Kedelai. Komoditas, Unngulan,
    JEL: Q5
    Date: 2017
  4. By: International Monetary Fund
    Abstract: This background paper, which is a supplement to the board paper on “Ensuring Financial Stability in Countries with Islamic Banking (IB) Sectors”, presents country experiences with reforms to strengthen regulatory oversight of the IB sector. It reviews experiences with and the progress made in adapting prudential, safety nets and resolution frameworks to the specifics of IB. The selection of several countries from a range of regions with different levels of development and approaches to IB was designed to provide a representative sample of country experiences so as to enrich the policy conclusions. Such a multiplicity of experiences can help to identify common challenges that countries face in reforming their regulatory frameworks and to distill best practices. The countries, for which detailed case studies have been undertaken, are: Bahrain, Djibouti, Indonesia, Kenya, Kuwait, Malaysia, Nigeria, Pakistan, Sudan, Turkey and the United Kingdom.
  5. By: Dang, Thang
    Abstract: Access to medical services is significantly essential for retaining and improving health status for aging population. Whilst retired individuals tend to have more time for the use of health services, there is only inadequate evidence evaluating the causal effect of retirement on health services utilization. To fulfill this gap in the literature especially from developing countries, this paper estimates the causal effect of retirement on the probability and the frequency of doctor visits at public health facilities in urban Vietnam. Employing authorized retirement ages for both men and women in Vietnam as instruments for the probability to be retired, the paper shows that retirement significantly increases some outcomes of outpatient health services for both male and female. In particular, the baseline 2SLS estimates indicate that men who are retired are more likely to have any outpatient medical visit than those who are not retired by about 36.1%. Meanwhile, retirement rises both the likelihood and the frequency of outpatient visits for female by roughly 31% and 1.75 times respectively. However, this paper finds statistically insignificant impacts of retirement on utilization outcomes for inpatient services.
    Keywords: Retirement; Health services utilization; Developing countries
    JEL: C26 I10 J26
    Date: 2017–06–13
  6. By: International Monetary Fund
    Abstract: The recovery is expected to advance at a moderate pace, but large uncertainty and downside risks cloud the outlook. GDP growth is projected to reach 3.2 percent in 2017 and 3.3 percent in 2018, with inflation at the low end of the tolerance band (2.5±1.5 percent). Headwinds arise from further weakness and volatility in the external environment, as well as from domestic political uncertainty and structural bottlenecks.
    Date: 2017–05–31
  7. By: International Monetary Fund
    Abstract: Thailand: Selected Issues
    Date: 2017–05–31
  8. By: Schnabl, Gunther
    Abstract: The paper analyses the role of monetary policy for cyclical movements of investment and asset markets in East Asia and Europe based on a Mises-Hayek overinvestment framework. It is shown how the gradual global decline of interest rates has triggered wandering overinvestment cycles in Japan, Southeast Asia and China. Similarly, it is shown how a one-size monetary policy within the European Monetary Union has not preserved the European Monetary Union from idiosyncratic economic development and crisis because of uncoordinated fiscal policies. With monetary policy crisis management being argued to impede financial and economic restructuring, a timely exit from ultra-expansionary monetary policies is recommended for both East Asia and Europe to reconstitute economic stability and growth.
    Keywords: Hayek,Mises,East Asia,European Monetary Union,monetary overinvestment theory,fiscal policy,asymmetric shocks,secular stagnation
    JEL: E52 E58 F42 E63
    Date: 2017
  9. By: James Cust; Torfinn Harding; Pierre-Louis Vezina
    Abstract: Oil and gas extraction may lead to the Dutch disease, i.e. the crowding ot of the manufacturing sector due to rising wages when labor is drawn to the expanding extraction and services sectors. In this paper we exploit the fact that oil and gas discoveries contain an element of chance as well as oil price fluctuations to capture random variation in oil and gas windfalls across Indonesia and identify their effects on manufacturing firms. We find that oil and gas windfalls cause wage growth but that the firm exit rate is unaffected. Firms’ output and labor productivity increase along with wages suggesting where firms are able to respond to booming local demand, and raise productivity in response to upward wage pressures, they can overcome the crowding-out effects from resource windfalls.
    Keywords: Dutch disease, firm level, Indonesia, manufacturing firms, oil and gas
    JEL: O13 O14 Q32
    Date: 2017
    Abstract: The purpose of this research is: (1) to identify the effects of variables of: the number of industrial enterprises, the value of input, the value of output, and the regional minimum wage on the labor demand in Indonesia, especially in micro industrial enterprises, (2) to detect the elasticities of the variables toward the labor demand in the micro enterprises. To estimate the data, regression of panel data is used. The results of the research show that the variable of the number of micro industrial enterprises positively and significantly affects the labor demand of micro industrial enterprises. The variable of input value negatively affects the labor demand of micro industrial enterprises but not significant. The variable of output value positively affects the labor demand of micro industrial enterprises but not significant. While the variable of regional minimum wage negatively and significantly affects the labor demand of micro industrial enterprises. All variables are inelastic on the labor demand. The government needs to stimulate the growth of the number of micro industrial enterprises to be able to absorb more labors. The micro industrial enterprises need to build relationships with other companies for the mutually benefit, strengthen and support each other.
    Keywords: labor demand, number of enterprises, regional minimum wage, value of input, value of output
    JEL: J2 J23 J3
    Date: 2017–05–25
  11. By: André De Palma (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Stef Proost (Department of Economics, KU Leuven); Ravi Seshadri (Singapore-MIT Alliance for Research and Technology (SMART) Centre); Moshe Ben-Akiva (MIT - Massachusetts Institute of Technology)
    Abstract: To address traffic congestion, two categories of instruments are used: price regulation (for instance, road pricing or congestion tolling) and quantity regulation (credit-based mobility schemes). Although the comparison of price and quantity regulation has received significant attention in the economics community, the literature is relatively sparse in the context of transportation systems. This paper develops a methodology to compare the toll and mobility permit instruments using a simple transportation network consisting of parallel highway routes and a public transport alternative. The permits can be traded across roads. The demand for each route is determined by a mixed logit route choice model and the supply consists of static congestion. The comparison is based on the optimum social welfare which is computed for each instrument by solving a non-convex optimization problem involving the mixed logit equilibrium constraints. Equity considerations are also examined. Numerical experiments conducted across a wide range of demand/supply inputs indicate that the toll and mobility permit instruments perform very closely in efficiency terms. The permit system is on average more efficient, but only by a small margin.
    Keywords: Social Welfare, Mixed Logit,Tolls, Mobility Permits, Equity, Stochastic Demand
    Date: 2016–11–16
  12. By: Jiranyakul, Komain
    Abstract: This paper analyzes the relationship between inflation and economic growth in Thailand using annual dataset during 1990 and 2015. The threshold model is estimated for different levels of threshold inflation rate. The results suggest that the threshold level of inflation above which inflation significantly slow growth is estimated at 3 percent. The negative relationship between inflation and growth is apparent above this threshold level of inflation. In other words, the inflation rate that is higher than this threshold level can jeopardize the growth rate of the country.
    Keywords: Inflation, growth, threshold model
    JEL: C13 E31
    Date: 2017–06
  13. By: Louis-Pierre Arguin; Nien-Lin Liu; Tai-Ho Wang
    Abstract: This article addresses the problem of approximating the price of options on discrete and continuous arithmetic average of the underlying, i.e. discretely and continuously monitored Asian options, in local volatility models. A path-integral-type expression for option prices is obtained using a Brownian bridge representation for the transition density between consecutive sampling times and a Laplace asymptotic formula. In the limit where the sampling time window approaches zero, the option price is found to be approximated by a constrained variational problem on paths in time-price space. We refer to the optimizing path as the most-likely path (MLP). Approximation for the implied normal volatility follows accordingly. The small-time asymptotics and the existence of the MLP are also recovered rigorously using large deviation theory.
    Date: 2017–06
  14. By: Albert, Jose Ramon G.; Asis, Ronina D.; Vizmanos, Jana Flor V.
    Abstract: Estimates of household expenditures directly obtained from the Family Income and Expenditure Survey (FIES) and household final consumption expenditures from national accounts have discrepancies, with their divergence generally growing across time. Such discrepancies have consequences to policy: poverty can be overestimated and income inequality can be underestimated if survey-based estimates are biased downward. There is no assurance that national accounts estimates, which also have measurement errors (just like survey-based estimates), are more accurate. This paper considers how estimates are derived from both surveys and national accounts, as well as other related measurement issues, i.e., undercoverage of wealthy households and the underestimation of their expenditures. The study recommends the use of an acceptable protocol for triangulating estimates of national accounts and survey-based estimates of household expenditure. Further, it also encourages the conduct of other data collection protocols such as 1) administering special surveys for tracking and monitoring income and expenditure patterns of the missing wealthy, 2) splitting the FIES into a family income survey and household expenditure survey, and 3) asking field enumerators of the Philippine Statistics Authority to directly observe electricity meter readings of households targeted for interview to help researchers model adequately the expenditures (or incomes) of all households.
    Keywords: Philippines, household final consumption expenditure, national accounts, household expenditure, sample surveys, missing wealthy
    Date: 2017
  15. By: International Monetary Fund
    Abstract: The Samoan economy is performing well: growth is strong while inflation remains subdued. Nevertheless, there are sizeable downside risks to the outlook. Samoa is vulnerable to natural disasters, which has led to elevated public debt and financial sector vulnerabilities, including from public financial institutions (PFIs). High levels of remittances expose Samoa to spillovers from the withdrawal of correspondent banking services.
    Keywords: Asia and Pacific;Samoa;
    Date: 2017–05–15
  16. By: Relativo, Jona Princess; Sumayang, Mildred; Diasana, Sarah Jean; Murcia, John Vianne
    Abstract: This paper examined the capital investment decisions of micro, small and medium enterprises, with the aim of assessing its current levels and its conditions across industries in Digos City. Questionnaires measuring the four phases of capital investment decisions were administered to a stratified random sample of 125 owners or managers of micro, small and medium enterprises while further in-depth interviews were done to extract explanatory factors of capital investment decisions that were not accounted in the quantitative phase. Non-parametric test of association revealed no significant association of capital investment decisions and nature of industry being engaged by MSME owners/managers. Pearson r correlation test revealed that generation of investment opportunities, project analysis and approval, and post-implementation audit have significant relationship with years of operation. Further qualitative analysis of interviews revealed that the influential factors affecting financing decisions of MSME’s owners include sources of finances, entrepreneurs’ prior experiences, business trends, and diversification of investments.
    Keywords: capital investment decision, MSME, sequential-explanatory design, Digos City, Philippines
    JEL: D81 G31 L25 L26 M14 M2 M21
    Date: 2016–07–12

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