nep-sea New Economics Papers
on South East Asia
Issue of 2017‒10‒29
six papers chosen by
Kavita Iyengar
Asian Development Bank

  1. A Viable and Cost-Effective Weather Index Insurance for Rice in Indonesia By Aditya Kusuma; Ilan Noy; Bethanna Jackson
  2. Regional Telecommunications Policy and ASEAN's response to Convergence and Over-the-top (OTT) services By Jirakasem, Monarat; Mitomo, Hitoshi
  3. Unity in Diversity? Ethnicity, Migration, and Nation Building in Indonesia By Bazzi, Samuel; Gaduh, Arya; Rothenberg, Alexander; Wong, Maisy
  4. Local broadband initiative and shared duct policy in indonesia By Purnama, Yudi Adhi; Mitomo, Hitoshi
  5. Specification Testing of Production in a Stochastic Frontier Model By Xu Guo; Gao-Rong Li; Wing-Keung Wong; Michael McAleer
  6. Supply and demand sides of mobile payment: A comparative analysis of successful mobile payment adoption in developed and developing countries By Kongaut, Chatchai; Lis, Piotr

  1. By: Aditya Kusuma; Ilan Noy; Bethanna Jackson
    Abstract: The potentially adverse effects of droughts on agricultural output are obvious. Indonesian rice farmers have no financial protection from climate risk via catastrophic weather risk transfer tools. Done well, a weather index insurance (WII) program can not only provide resources that enable recovery, but can also facilitate the adoption of prevention and adaptation measures and incentivise risk reduction. Here, we quantify the applicability, viability, and likely cost of introducing a WII for droughts for rice production in Indonesia. To reduce basis risk, we construct district specific indices that are based on the estimation of Panel Geographically Weighted Regressions models. With these spatial tools, and detailed district level data on past agricultural productivity and weather conditions, we present an algorithm that generates an effective and actuarially sound WII, and measure its effectiveness in reducing income volatility for farmers. We use data on annual paddy production in 428 Indonesian districts, reported over the period 1990-2013, and climate data from 1950-2015. We use the monthly Palmer Drought Severity Index and identify district-specific trigger and exit points for the insurance plan. We quantify the impact of this hypothetical insurance product using past production data to calculate an actuarially-robust and welfare-enhancing price for this scheme.
    Keywords: index insurance, rice, Indonesia
    JEL: Q54
    Date: 2017
  2. By: Jirakasem, Monarat; Mitomo, Hitoshi
    Abstract: This study focuses on the regulations and policy launched by the Association of Southeast Asian Nations (ASEAN) responding to the emerging media convergence and Over-the-top (OTT) services. These issues have become more of a concern due to their huge impact on the digital economy. Regarding the data derived from the three key ICT institutional mechanisms of ASEAN, the results indicate that ASEAN launched policies responding to the rise of convergence and OTT depending on the main agenda set at that period of time. The characteristic of the policy is superficial and intangible. Nevertheless, the market of media convergence and OTT are increasing, so they are recently considered as important issues in the telecommunications area. Nevertheless, it is still in the early stage, so the responding policy is researching and sharing the experiences between members and external dialogue partners.
    Keywords: ASEAN,Media convergence,Over-the-top (OTT) services,regional telecommunications policy
    Date: 2017
  3. By: Bazzi, Samuel; Gaduh, Arya; Rothenberg, Alexander; Wong, Maisy
    Abstract: Throughout history, many governments have introduced policies to unite diverse groups through a shared sense of national identity. However, intergroup relationships at the local level are often slow to develop and confounded by spatial sorting and segregation. We shed new light on the long-run process of nation building using one of history's largest resettlement programs. Between 1979 and 1988, the Transmigration program in Indonesia relocated two million voluntary migrants from the Inner Islands of Java and Bali to the Outer Islands, in an effort to integrate geographically segregated ethnic groups. Migrants could not choose their destinations, and the unprecedented scale of the program created hundreds of new communities with varying degrees of diversity. We exploit this policy-induced variation to identify the nonlinear ways in which diversity shapes incentives to integrate more than a decade after resettlement. Using rich data on language use at home, marriage, and identity choices, we find stronger integration in diverse communities. To understand why changes in diversity did not lead to social anomie or conflict, we identify mechanisms that influence intergroup relationships, including residential segregation, cultural distance, and perceived economic and political competition from migrants. Overall, our findings contribute lessons for the design of resettlement policies and provide a unique lens into the intergenerational process of integration and nation building.
    Keywords: Cultural change; diversity; identity; Language; migration; Nation building
    JEL: D02 D71 J15 O15 R23
    Date: 2017–10
  4. By: Purnama, Yudi Adhi; Mitomo, Hitoshi
    Abstract: The role of government in telecommunication infrastructure provision is important in developing countries as weak demand and high deployment cost exists, limit private initiative. As ICT infrastructure is substantial, some local government implemented a local broadband initiative to provide access both to internal demand as well as public services. The local autonomy Act also grants local government broad authority on regulating the broadband development. The initiative mostly has a positive impact even though some practice hinders broadband expansion, considering the variance of regulation increased administrative cost as well as mandated monopoly in some area. Bandung municipality exercise shared duct policy to accelerating its broadband development and meet city planning as well as gaining direct revenue from broadband business and investment. Despite optimism from the local government, the policy has failed to reach its goal due to the absence of anchor legal framework, diminishing the opportunity for resource allocation and sounded local policy. Moreover, lack of human resources effected on shared duct business sustainability, and discouraged operator in utilising shared duct and questioning the sustainability. The government need to overhaul law on telecommunication, to meet broadband era and provide an opportunity for local authorities in broadband development as well as sounded foundation policy.
    Keywords: local broadband initiative,shared duct,local government,broadband policy,infrastructure sharing
    Date: 2017
  5. By: Xu Guo (School of Statistics, Beijing Normal University, Beijing.); Gao-Rong Li (Beijing Institute for Scientific and Engineering Computing, Beijing University of Technology, Beijing.); Wing-Keung Wong (Department of Finance and Big Data Research Center, Asia University Department of Economics and Finance, Hang Seng Management College Department of Economics, Lingnan University.); Michael McAleer (Department of Quantitative Finance National Tsing Hua University, Taiwan and Econometric Institute Erasmus School of Economics Erasmus University Rotterdam, The Netherlands and Department of Quantitative Economics Complutense University of Madrid, Spain And Institute of Advanced Sciences Yokohama National University, Japan.)
    Abstract: Parametric production frontier functions are frequently used in stochastic frontier models, but there do not seem to be any empirical test statistics for its plausibility. To bridge the gap in the literature, we develop two test statistics based on local smoothing and an empirical process, respectively. Residual-based wild bootstrap versions of these two test statistics are also suggested. The distributions of technical inefficiency and the noise term are not specified, which allows specification testing of the production frontier function even under heteroscedasticity. Simulation studies and a real data example are presented to examine the finite sample sizes and powers of the test statistics. The theory developed in this paper is useful for production mangers in their decisions on production.
    Keywords: Production frontier function; Stochastic frontier model; Specification testing; Wild bootstrap; Smoothing process; Empirical process; Simulations.
    JEL: C0 C13 C14 D81
    Date: 2017–10
  6. By: Kongaut, Chatchai; Lis, Piotr
    Abstract: Mobile payment services are experiencing the fastest growth compared to other payment methods, mainly due to the ever-increasing popularity of smartphones in recent years. Even though the technology has been available for more than a decade, mobile payment has been adopted into widespread usage only in some countries, including Japan, South Korea, Kenya and the Philippines. Nonetheless, other parts of the world appear to be catching up fast and it is important for both public and private sectors to understand the determinants of mobile payment adoption. This study investigates the drivers of mobile payment adoption in the past decade through comparative studies of both developed and developing countries. Conceptual frameworks, including the network effects and broadband ecosystem, are also applied to support the analysis offered in this paper. Moreover, this study explores the similarities and differences between the above mentioned countries and why they have been more successful in adopting the mobile payment technology compared to other states, such as the US and European countries. The key finding is that a successful and widespread adoption of mobile payment requires strongly growing demand and ready availability of infrastructure and technology on the supply side. The rapidly growing popularity of smartphones fueled the demand side by making the new payment technology reachable by large groups of consumers. Nevertheless, the use of mobile payment could not be significantly increased without an introduction of killer applications in each country or region. This is where the regulators in both financial and telecommunication sectors play a crucial role. A good combination of regulation and/or policy on the supply and demand sides is a way forward.
    Keywords: mobile payment,broadband ecosystem,adoption
    Date: 2017

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