nep-sea New Economics Papers
on South East Asia
Issue of 2017‒09‒17
fifteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Economic Inequality and Happiness: A quantitative study among the elderly in Rural Vietnam By Quang Tran, Tuyen; Viet Nguyen, Cuong; Van Vu, Huong
  2. Socio-economic impacts of co-firing in Vietnam: The case of Ninh Binh Coal Power Plant By An Ha Truong; Hoang Anh Tran; Minh Ha-Duong
  3. Does Urbanization Reduce Rural Poverty? Evidence from Vietnam By Adel Ben Youssef; Mohamed El Hedi Arouri; Cuong Nguyen-Viet
  4. Measuring Trade Costs and Gains from Trade Facilitation in the Philippines By Ramon L. Clarete
  5. Globalization and State Capitalism: Assessing Vietnam’s Accession to the WTO By Leonardo Baccini; Giammario Impullitti; Edmund J. Malesky
  6. Affordable and reliable power for all in Vietnam progress report By Minh Ha-Duong; Hoai-Son Nguyen
  7. When Prime Depositors Run on the Banks: A Behavioral Approach By Natanael Waraney Gerald Massie; Chaikal Nuryakin
  8. Expansão asiática, corrida científica e tecnológica mundial, desindustrialização no Brasil By Clélio Campolina Diniz
  9. Transition gap in self-rated health By Obrizan, Maksym
  10. On the Efficiency of Racetrack Betting Market: A New Test for the Favorite-Longshot Bias By Jinook Jeong; Jee Young Kim; Yoon Jae Ro
  11. Industrial Organization of China’s Steel Industry and the Restructuring of the Asia-Pacific Iron Ore Market By Xiaochun Huang; Akira Tanaka
  12. Machinery Production Networks and Tariff Evasion By Mateus Silva Chang; Chin-Ho Lin
  13. Awards and Rewards: Evidence from an Evaluation of the Metrobank's Search for Outstanding Teachers By Majah-Leah V. Ravago; Dennis S. Mapa
  14. Absolute Poverty: When Necessity Displaces Desire By Robert C. Allen
  15. Factors Affecting the Intention to Become an Entrepreneur: A Study from Bangladeshi Business Graduates Perspective By S M Kabir; Ahasanul Haque; Abdullah Sarwar

  1. By: Quang Tran, Tuyen; Viet Nguyen, Cuong; Van Vu, Huong
    Abstract: By combining data from the 2011 Vietnam National Aging Survey and the 2011 Rural, Agricultural and Fishery Census, we examined whether expenditure inequality has any effect on happiness or life satisfaction among the elderly in rural Vietnam. We find that individuals who live in the communes with high inequality tend to self-report as being less happy, even after controlling for various individual and household attributes. The results are robust to the choice of inequality measures and the specification of econometric models. We also find that older rural people who are farmers or poor are more sensitive to inequality. Given that these people tend to be less happy than others, the result shows the risk that inequality further lowers their subjective well-being. The result supports the view that rural Vietnam is a less mobile society.
    Keywords: Elderly, Expenditure inequality, Social mobility, Subjective well-being, Rural Vietnam
    JEL: I3 I31 I32 I38
    Date: 2015–09–18
  2. By: An Ha Truong (CleanED - Clean Energy and Sustainable Development Lab - USTH - University of sciences and technologies of hanoi); Hoang Anh Tran (CleanED - Clean Energy and Sustainable Development Lab - USTH - University of sciences and technologies of hanoi); Minh Ha-Duong (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, CleanED - Clean Energy and Sustainable Development Lab - USTH - University of sciences and technologies of hanoi)
    Abstract: Co-firing biomass with coal is a relatively low-cost technology to utilize biomass for electricity production compared to dedicated biomass power plant. Co-firing could help to reduce the negative impact of coal power plants to economy, environment and society. Vietnam has potential to develop co-firing base on the abundant of biomass resources and because Vietnam will continue to build more coal-fired power plant in the next 2 decades as stated in the latest National Power Development Plan. Among the co-firing technologies, direct co-firing is the most suitable for Vietnam context. Despite of low biomass ratio, direct co-firing offers low investment cost and could utilize most of the biomass feedstock. Vietnam has huge biomass potential, especially the agriculture and forestry residues. These biomasses should be considered first as feedstock for co-firing. Biomass pellets is also a good choice in term of technical features and local supply. However, the price of pellets is not yet competitive with coal or agricultural residues. Economic benefit of co-firing would be higher in the plants that has following features: assess to stable biomass supply, biomass price competitive with coal, incentives and support in term of market for renewable energy utilization and waste reduction. Vietnam should start experimenting co-firing in the coal power plants that located in the area where biomass resource is available, easy to collect and deliver to the plant, using imported coal such as Vinh Tan 2, Duyen Hai 1, Long Phuoc 1…; or the plants that are soon or already depreciated such as Ninh Binh, Uong Bi or Pha Lai to utilize the existing infrastructures. The case study of co-firing 5% rice straw with coal in Ninh Binh Coal Power Plant shows that co-firing could bring benefit to the plant owner in the condition that lack supporting mechanism for co-firing as well as with the absent of carbon credit. Farmers and workers that work in biomass supply chain also benefit from co-firing, especially farmers. In addition, co-firing provide significant positive externalities, in which the most notable is health benefit from reducing air-borne pollutants. Greenhouse gas emissions reduction adds a small part to the overall benefit of co-firing.
    Keywords: co-firing, vietnam, straw
    Date: 2016–11
  3. By: Adel Ben Youssef (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique); Mohamed El Hedi Arouri (CRGM - Centre de Recherche Clermontois en Gestion et Management - Université d'Auvergne - Clermont-Ferrand I); Cuong Nguyen-Viet (Chercheur Indépendant)
    Abstract: This paper contributes to the urbanization-poverty nexus by assessing the effect of urbanization on income, expenditure, and poverty in rural households in Vietnam, using data from household surveys. We find that the urbanization process stimulates the transition from farm to non-farm activities in rural areas. More specifically, urbanization tends to reduce farm income and increase wages and non-farm income in rural households. This suggests that total income and consumption expenditure of rural households are more likely to increase with urbanization. Finally, we find also that urbanization helps to decrease the expenditure poverty rate of rural households, albeit by a small magnitude.
    Keywords: rural poverty,urbanization, household surveys, Vietnam, R11, I30,, Asia
    Date: 2016–09–27
  4. By: Ramon L. Clarete (School of Economics, University of the Philippines Diliman)
    Abstract: This paper provides estimates of trade costs of the Philippines with her key trading partners, and develops a framework for assessing their welfare cost. With tariff restrictions reduced significantly following several rounds of multilateral and regional trade negotiations, non-tariff barriers (NTBs) have emerged as key in slowing down trade flows. Given the proliferation of NTMs in the world today, chances are some of those are disguised NTBs. More importantly however, the inefficiencies associated with implementing legitimate NTMs such as the SPS on agricultural imports become unnecessary barriers to trade. This is the fat in trade costs that need to be eliminated through trade facilitation, while policy reforms would have to deal with redundant NTMs, whose claim to resources adds to the cost imposed by inefficient implementation of legitimate NTMs. This paper came up with a CGE model analytical structure for assessing the gains of lowering trade costs.
    Keywords: Trade costs; Economic development; Trade policy
    JEL: F15 O24
    Date: 2017–09
  5. By: Leonardo Baccini; Giammario Impullitti; Edmund J. Malesky
    Abstract: What do state-owned enterprises (SOEs) do? How do they respond to market incentives? Can we expect substantial efficiency gains from trade liberalization in economies with a strong presence of SOEs? Using a new dataset of Vietnamese firms we document a set of empirical regularities distinguishing SOEs from private firms. We embed some of these features characterizing SOEs operations in a model of trade with firm heterogeneity and show that they can hinder the selection effects of openness and tame the aggregate productivity gains from trade. We empirically test these predictions analyzing the response of Vietnamese firms to the 2007 WTO accession. Our result show that WTO accession is associated with higher probability of exit, lower markups, and substantial increases in productivity for private firms but not for SOEs. Domestic barriers to entry and preferential access to credit are key drivers of the different response of SOEs to trade liberalization. Our estimates suggest that the overall productivity gains would have been about 66% larger in a counterfactual Vietnamese economy without SOEs.
    Keywords: State Capitalism, State-Owned Enterprises, Trade Liberalization, Heterogeneous Firms, Gains from Trade, WTO, Vietnam.
    Date: 2017
  6. By: Minh Ha-Duong (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, CleanED - Clean Energy and Sustainable Development Lab - USTH - University of sciences and technologies of hanoi); Hoai-Son Nguyen (CleanED - Clean Energy and Sustainable Development Lab - USTH - University of sciences and technologies of hanoi, CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Keywords: Viet Nam, Energy poverty
    Date: 2016–10–31
  7. By: Natanael Waraney Gerald Massie (University of Indonesia); Chaikal Nuryakin (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta)
    Abstract: This study aims to observe the relationship between withdrawal decisions and individual psychological aspects, namely time and risk preferences. Our sample is a pool of prime depositors in Indonesia, mainly due to the country’s deposit market being heavily concentrated on such depositors. We describe the elicited risk preferences of the aforementioned depositors, along with their preferences on how long they would keep their money deposited. We discuss relationships between their withdrawal decision, which in excessive amount could cause bank run situations, with risk and time preferences under idiosyncratic economic shocks. A cascade effect simulation is also included in our analysis.
    Keywords: Withdrawal Decision — Time Preference — Risk Preference — Bank Run — Prime Depositor
    JEL: D81 G02 G21
    Date: 2017–09
  8. By: Clélio Campolina Diniz (Cedeplar-UFMG)
    Abstract: The accelerated growth of the Chinese economy and of other Asian countries has widened the Asian bloc’s participation in the international production and trade. This process changes economic geography and the global order, creating a strong challenge to western capitalism, which is in structural crisis. The consequence of the competition between the two blocs has been a rapid scientific and technological race. On the other hand, Brazil has been experiencing a fast process of deindustrialization and reduction of investment in R&D. The difficult recovery requires structuring a new and aggressive industrial policy and a correspondent compatibilization of the macroeconomic policy. Among other elements, the new industrial policy needs a great emphasis on science and technology as one of its dimensions.
    Keywords: Chinese growth, Asian expansion, global crisis, technological race, Brazilian deindustrialization, industrial policy, science and technology policy
    JEL: O14
    Date: 2017–09
  9. By: Obrizan, Maksym
    Abstract: Previous literature has shown substantially lower levels of self-reported health in transition countries compared to developed and developing countries. The current paper provides the most recent estimates of the size of the transition gap in self-rated health by using up to 241,698 observations from the World Values Survey (WVS) and the European Values Study (EVS) collected between 1989 and 2014. During the earlier transition period of 1989–2007 transition countries were 0.088 to 0.127 lower on a 0 to 1 scale (from ‘Very poor’ to ‘Very good’ self-rated health). The transition gap remains in place in the second period after the Asian crisis (0.069 to 0.094 lower self-rated health) and even after the Global financial crisis of 2008 (0.062 to 0.105 lower self-rated health). Judging from these estimates the process of transition is far from completion at least based on a subjective evaluation of health, which is one of the key determinants of human development. It is also plausible that poor self-perceived health may ‘justify’ abnormally high health-care utilization and an excessive (and expensive) network of physicians and hospital beds per capita still characterizing transition countries.
    Keywords: Self-rated health, transition countries, World Values Survey, European Values Study
    JEL: I15 N34 P46
    Date: 2017–09–05
  10. By: Jinook Jeong (Yonsei University); Jee Young Kim (Yonsei University); Yoon Jae Ro (University of California at Riverside)
    Abstract: A number of empirical researches on the efficiency of racetrack betting market have shown the ¡®favorite-longshot bias,¡¯ which means longshots are overbet while favorites are underbet. Asian markets such as Hong Kong and Japan, however, have produced some contradictory empirical evidence to the bias. One critical element in the efficiency test procedure is how to assess the unobservable objective winning probability of a horse in a race. This paper proposes a new test framework with a more general evaluation of the objective probability of winning than the traditional method. Unlike the traditional method, our model allows the heterogeneity of the horses and the races. We apply the new empirical method to test whether the favorite-longshot bias is present in racetrack betting market of Korea. We found that the favorite-longshot bias exists in the racetrack market of Korea and the result distinguishes Korean racetrack market from other Asian markets.
    Keywords: Market efficiency test, Favorite-longshot bias, Racetrack betting, Probit regression
    JEL: D81 G14 L83
    Date: 2017–08
  11. By: Xiaochun Huang; Akira Tanaka
    Abstract: The iron ore trading system underwent a transformation in 2010. Until then,long-term contracts dominated the trade and the FOB price was determinedthroughnegotiationsbetween supplierand buyer, with the agreed price applied the following year. This system was changed in 2010 to aquarterly index-linked pricingin which the CFR price was applied. Some studies have suggested that the intervention of the Chinese government was the reason for this change, but this study concludesthat it was thebargaining betweensuppliersand purchasers thatresulted in this transformation.
    Keywords: Long-term contract, spot trading, iron ore price index, the Big Three, China Iron and Steel Association(CISA), dispersed industrial organization, state intervention
    Date: 2017–08
  12. By: Mateus Silva Chang (Graduate School of Economics, Keio University); Chin-Ho Lin (Graduate School of Economics, Keio University)
    Abstract: In this paper we followed Fisman and Wei's (2004) approach to estimate the effects of import tariff rates on import tariff evasion. We focus on East Asian countries import of machinery products. Our main objective is to test if the trade realized inside production networks (intra-regional) is less prone to import tariff evasion than imports from countries outside it (inter-regional). In this study we considered the differences in tariff evasion between intra and inter-regional imports; parts and components and final products; and the heterogeneity between electric machinery and transport equipment. The data provide evidences that intra-regional imports are less prone to tariff evasion than inter-regional imports. Besides this, we identify differences in the channels employed to evade tariff. The results suggest that underreport of quantities was the main channel employed in intraregional imports tariff evasion, while inter-regional import tariffs were evaded through unit price misreport.
    Keywords: Tariff evasion, Import tariff, Machinery Production Networks, East Asia
    JEL: F14 K42 H26
    Date: 2017–08–08
  13. By: Majah-Leah V. Ravago (School of Economics, University of the Philippines Diliman); Dennis S. Mapa (School of Statistics, University of the Philippines Diliman)
    Abstract: We investigate the impact of the "Metrobank Award for Outstanding Teachers" using a unique dataset from a survey of teachers who competed from 1988 to 2010. Our study is one of the firsts to use income as the primary indicator of success. When the sample is limited to those who were actively teaching in 2014, we find that the Award had a higher impact on awardees who were relatively younger. The intuitive explanation is that "younger" awardees have more years in their career to capitalize on the Award.
    Keywords: Impact evaluation; RDD; awards; teacher's professional trajectory
    JEL: A20 C40 I21 I20
    Date: 2017–08
  14. By: Robert C. Allen
    Abstract: A new basis for an international poverty measurement is proposed based on linear programming for specifying the least cost diet and explicit budgeting for non-food spending. This approach is superior to the World Bank’s ‘$-a-day’ line because it is (1) clearly related to survival and well being, (2) comparable across time and space since the same nutritional requirements are used everywhere while non-food spending is tailored to climate, (3) adjusts consumption patterns to local prices, (4) presents no index number problems since solutions are always in local prices, and (5) requires only readily available information. The new approach implies much more poverty than the World Bank’s, especially in Asia.
    Keywords: absolute poverty,diet problem,linear programming,World Bank poverty line
    JEL: I12 I32
    Date: 2017–07
  15. By: S M Kabir (Department of Marketing - Rajshahi University); Ahasanul Haque (Department of Business Administration - International Islamic University Malaysia [Kuala Lumpur]); Abdullah Sarwar (Faculty of Management - Multimedia university of Cyberjaya)
    Abstract: The current stage of entrepreneurial culture in Bangladesh encourages rethinking about the content and approach of teaching in entrepreneurship education. Therefore, this study aimed at identifying the factors influencing Bangladeshi graduates' intention toward becoming entrepreneurs. A sample of 387 business graduate students was selected randomly from both private and public universities located in Dhaka and Rajshahi. Partial Least Squares Structural Equation Modeling (PLS-SEM) has been employed to test the structural relationship among variables that influence respondent's entrepreneurial intention. This study has found that entrepreneurial education will provide skills and knowledge that might help the students to change their typical mind-set from searching job to creating jobs. Hence, focusing on developing entrepreneurial mind through education will have importance for the development of entrepreneurial culture as well as for the sustainable socioeconomic development in Bangladesh.
    Keywords: Intention,Entrepreneurial Education,Self-Efficacy,Attitude,Subjective Norm,Bangladesh
    Date: 2017

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