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

  1. Dynamics of islamic stock market returns and exchange rate movements in the ASEAN Countries in a regime-switching environment: Implications for the islamic investors and risk hedgers By Mustapha, Ishaq Muhammad; Masih, Mansur
  2. 한국 중소기업의 동남아 주요국 투자실태에 대한 평가와 정책 시사점(Evaluation of Korean Smes’ Management Status in Southeast Asia and Policy Implications) By Kwak, Sungil; Cheong, Jae Wan; Kim, Jegook; Shin, Minlee
  3. Belt & Road Initiative and ASEAN?s energy sector: a ?going out? strategy 2.0? By Lixia Yao
  4. Public Trust and Governance in Public Administration in Thailand By Chanida Jittaruttha
  5. A Holistic Health Care of Thai?s Elderlies in Nursing Home By WIRAWAN KLAYHIRAN
  6. Characterization of Agricultural Workers in the Philippines By Briones, Roehlano M.
  7. Outlook for the Philippine Economy and Agro-Industry to 2030: The Role of Productivity Growth By Briones, Roehlano M.
  8. Interconnectedness of Global Systemically-Important Banks and Insurers By Sheheryar Malik; TengTeng Xu
  9. Considering the Effects of Mobile Phones on Financial Inclusion in Cambodia By Seng, Kimty
  10. Random Mechanism Design on Multidimensional Domains By Chatterji, Shurojit; Zeng, Huaxia
  11. Internationalization Strategies of Russian National Oil Companies towards Asia: Cooperation or Competition? By Garanina, Olga L.
  12. RELATIVE INCOME AND HAPPINESS By Nisachon Leerattanakorn

  1. By: Mustapha, Ishaq Muhammad; Masih, Mansur
    Abstract: This research is motivated by the increasing systemic relevance of Islamic finance and Islamic stock markets beyond the borders of Arabia and other Muslim majority territories. It makes the initial attempt to consider the degree to which the five Islamic stock markets in the original ASEAN-5 and their foreign exchange markets are correlated with a view to assessing the feasibility of policy initiatives to enhance ASEAN Islamic stock market integration and the implications for portfolio investors and risk hedgers. We applied a combination of Wavelet transformation model with appropriate regime-switching models to investigate the dynamic linkages between the foreign exchange and Islamic stock market returns for these ASEAN countries (Malaysia, Indonesia, Thailand, Philippines, Singapore). The analysis tends to indicate that stock returns of the ASEAN countries evolve according to two different regimes: a low volatility regime and a high volatility regime, which explains the bearish and bullish market periods. Furthermore, we investigated what evidence Markov switching analysis unfolds in regard to the dynamic linkage between the Islamic stock markets and exchange rate volatility of the ASEAN countries during both the calm and turbulent periods. This seeks to provide a valuable insight for the Islamic Investors, fund and portfolio managers, and policymakers whether to pay heed to these regime-specific dynamic interactions or not, particularly when they make capital budgeting decisions and implement regulation policies.
    Keywords: ASEAN, Exchange Rates, Islamic Stock Markets, Continuous Wavelet Transformation (CWT), Markov Switching
    JEL: C22 C58 G15
    Date: 2017–08–10
  2. By: Kwak, Sungil (Korea Institute for International Economic Policy); Cheong, Jae Wan (Korea Institute for International Economic Policy); Kim, Jegook (Korea Institute for International Economic Policy); Shin, Minlee (Korea Institute for International Economic Policy)
    Abstract: Korea Abstract: 기존 진출기업 지원정책은 수출촉진을 위해 진출 이전단계에 집중한 나머지 기(旣)진출기업에 대한 지원을 간과했다. 진출기업 지원정책의 새로운 방향으로 동남아 기(旣)진출기업과 신규 진출기업 간의 신(新)생태계 형성을 위한 지원이 필요하다. 본 연구는 동남아 지역에서 활동 중인 중소기업의 경영실태를 분석하여 효과성 높은 해외진출 중소기업 지원정책의 방향성을 제시하는 것을 목적으로 하고 있다. 이를 위해 동남아 주요국의 주요 대내외 경제여건 변화를 정리하고 동남아 진출 한국 중소기업에 미친 영향을 분석할 뿐만 아니라, 설문조사 및 현지 조사를 통해 동남아에 기(旣)진출한 중소기업이 우리나라의 수출확대와 신규로 동남아 진출을 희망하는 중소기업의 안정적인 진출 토대로 기능할 수 있음을 확인한다. 마지막으로 진출기업 지원정책의 새로운 방향성으로 기(旣)진출기업과 신규진출 기업 간의 협업을 통한 새로운 생태계 형성 지원방안을 제시하고 있다. 기존 진출기업 지원정책이 수출촉진을 위해 진출 이전단계에 집중한 나머지 기진출기업을 간과한 측면이 있었다는 점에서 정책적으로 새로운 접근이라 생각한다. English Abstract: The entry pattern of Korean small- and medium-sized enterprises (SMEs) into Southeast Asia was influenced by the ASEAN FTA in 2007 and the global financial crisis in 2008. SMEs that have entered the market with the aim of utilizing the low-wage labor force have been placing the most importance on entering the local market since 2007. In addition, after the global financial crisis in 2008, large corporations reshaped their production network rapidly to Southeast Asia, but not to SMEs, which were vulnerable to risk. Fortunately, since 2014, SMEs’ investment in Southeast Asia has recovered to pre-2008 levels, mainly in Vietnam and Indonesia. As Golovko and Valentini (2011) pointed out, it is possible to measure the business performance of the enterprise to the extent that the small- and medium-sized enterprises enter the overseas market. While many Korean SMEs have moved into Southeast Asia, there are still very few studies that have conducted fundamental research into their management status. Instead, there have been abundant studies about how to enter Southeast Asia in order to meet the needs of Korean companies that want to go there. Considering the shortage of information on the management status of Korean SMEs participating in the regional production network (RPN) Korean large corporations have newly established in the Southeast Asian region, data on the Korean SMEs in Southeast Asia is required to prepare the future direction and the support policies for the SMEs. This study was conducted to meet this demand. The second chapter summarizes how the economy of Southeast Asia is affected by changes in the external environment, such as slowing growth in the Chinese economy, low prices of raw materials, collapse of mega-FTAs, and the recent strengthening of protectionism. Chapter 3 analyzes the investment strategy of Japanese SMEs in Southeast Asia. We examine the response of the Japanese government and SMEs to changes in domestic and international economic conditions in Southeast Asia. Chapter 4 analyzes the management status and business performance of SMEs entering Southeast Asia through surveys.
    Keywords: Korean small- and medium-sized enterprises; SMEs; Southeast Asia
    Date: 2017–11–21
  3. By: Lixia Yao (Energy Studies Institute, National University of Singapore)
    Abstract: In 2013, Chinese President Xi Jinping proposed the building of the New Silk Road Economic Belt and the 21st Century Maritime Silk Road ? now collectively called the Belt and Road Initiative (B&R hereafter). Since the aim of B&R is to increase connectivity, enhance trade flows and spur long-term economic growth, it is a key pillar of China?s ?going out? strategy. In the Southeast Asian region, new opportunities and new challenges arise from B&R. This study will review B&R and assess how it is being implemented, how it will go forward, and what implications it has for ASEAN. Particularly, the study will focus on the implications and opportunities it brings to the energy sectors of the region. Research questions that will be addressed include but not limited to: What is the likely impact of Chinese investment in Southeast Asia?s energy sector on the expansion of its total energy production capacity? How successful is B&R likely to be in facilitating ASEAN?s energy infrastructure connectivity? How the physical connectivity may help energy market integration in ASEAN? And so on and so forth. The study argues that although China?s investment in ASEAN?s energy sector has been encouraged by the B&R, the investment is just an upgraded version of its ?going out? strategy proposed in the early 2000s. B&R will help development in the energy sector of ASEAN, yet not much achievement can be expected in facilitating ASEAN?s energy infrastructure connectivity and its energy market integration.
    Keywords: Belt and Road Initiative, energy sector, ASEAN
    Date: 2017–10
  4. By: Chanida Jittaruttha (Chulalongkorn University)
    Abstract: Public trust is an important topic in "New Democratic Governance? approach of modernising states. Trust in government is deteriorating in many OECD countries. Public administration scholars generally agree that public trust is a keystone of good governance. This article explored public trust that 2,587 Thai citizens perceived on governance in public administration in Thailand. The findings are: (a) public trust and governance in public administration in Thailand are perceived at medium level, (b) relationship between two factors are positively correlated in two ways direction and varied in the same direction at high level (r = .864), (c) seven indicators to cultivate governance in public administration in Thailand are ethics of honesty, merit system, leaders who build trust culture, maintenance of democratic value, law enforcement efficiency, officials professionalism of, and public service ideologies.
    Keywords: Public Trust, Trust Culture, Governance in Public Administration
    Date: 2017–10
  5. By: WIRAWAN KLAYHIRAN (Boromrajajonani College of Nursing, Ratchaburi)
    Abstract: AbstractPurpose: To describe a holistic health care of Thai?s elderlies in nursing home about holistic health care approach in four dimensions included physical health care, mental health care, social health care and spiritual health care. . Design and Methods: Qualitative research with a purposive sample of Thai?s elderlies (n = 15) and Caregivers (n = 3), using in-depth interview to explore rich qualitative data, using content and thematic analysis were conducted. Research ethic was approved by human subjects institutional review board, informed consent was obtained in all key informants.Results: There were 4 key findings as follows: Firstly, physical health care means focusing on hygiene care with love from caregivers like they got it from descendant. Their purposes were clean and comfort body. Secondly, mental health care means they had someone who was ready to be a listener and a good friend in lonely time. Thirdly, social health care means they can see visitors in regularly that improve to get better from a family loss feeling problems. Finally, spiritual health care means they can back their home and enjoy their families in the end of life with dignity. Implications: Nurses and nursing students may apply these data to understand better holistic health care approach of Thai?s elderlies in nursing home. In nursing curriculum may use these data developed learning outcomes of nursing students when they learn this topic. Nowadays, this issue is an important learning subject for young generation because they are a future nurses in aging society of Thailand.
    Keywords: holistic health care, elderly, nursing home
    Date: 2017–10
  6. By: Briones, Roehlano M.
    Abstract: Inclusive growth requires boosting incomes of workers currently in agriculture, either by shifting them to better-paying jobs outside agriculture or raising wages within agriculture. A comprehensive socioeconomic profile of agricultural workers will facilitate identification and prioritization of their problems, opportunities, and constraints. This study undertakes a review of secondary data toward such a profile. The review synthesizes a set of stylized facts about agricultural workers in the Philippines, while identifying the following gaps: 1) spells of underemployment and degree of deficit in work hours; 2) breakdown of activities for which wages are paid; 3) past employment history of agricultural workers; 4) other relevant worker and household characteristics such as memberships in cooperatives and associations, other types of training such as technical and vocational education, other activities including outside agriculture, household assets; and 5) community-level variables such as access to roads and other infrastructure, and technologies such as farm machinery. These gaps will inform the strategy of data gathering using follow-up survey of agricultural households. The primary data thereby gathered, upon suitable analysis, will assist in recommending policies and design of programs that help sustain and accelerate growth of remunerative employment.
    Keywords: Philippines, human capital, agriculture, employment, wage, structural change
    Date: 2017
  7. By: Briones, Roehlano M.
    Abstract: The main driver of long-run economic growth is total factor productivity. Among the basic sectors, namely, agriculture, industry, and services, inclusiveness of economic growth depends most importantly on agriculture. This study provides growth projections for the Philippine agriculture based on growth in productivity differentiated by basic sector, using a computable general equilibrium model. Scenario analysis finds that the current policy thrust for agriculture of subsidizing capital cost slightly accelerates growth of agriculture, but slows down overall growth by reducing capital formation. Meanwhile, maintaining productivity growth for industry-service at trend, notwithstanding weak growth of agriculture, suffices to reach government plan targets. Productivity growth of agriculture impacts strongly on agriculture itself, but not on the industry-services sectors; conversely, productivity growth in the latter strongly impacts on itself and the gross domestic product, but not on agriculture. The study suggests that policies emphasize the acceleration of productivity growth in the long run across all sectors, but especially in agriculture. Currently, forward and backward linkages of agriculture matter little to economic growth, increasing growth interactions across the basic sectors.
    Keywords: Philippines, Philippine economy, agriculture, agro-industry, computable general equilibrium, CGE, total factor productivity, growth projections
    Date: 2017
  8. By: Sheheryar Malik; TengTeng Xu
    Abstract: Interconnectedness among global systemically important banks (GSIBs) and global systemically important insurers (GSIIs) has important financial stability implications. This paper examines connectedness among United States, European and Asian GSIBs and GSIIs, using publicly-available daily equity returns and intra-day volatility data from October 2007 to August 2016. Results reveal strong regional clusters of return and volatility connectedness amongst GSIBs and GSIIs. Compared to Asia, selected GSIBs and GSIIs headquartered in the United States and Europe appear to be main sources of market-based connectedness. Total system connectedness—i.e., among all GSIBs and GSIIs—tends to rise during financial stress, which is corroborated by a balance sheet oriented systemic risk measure. Lastly, the paper demonstrates significant influence of economic policy uncertainty and U.S. long-term interest rates on total connectedness among systemically important institutions, and the important role of bank profitability and asset quality in driving bank-specific return connectedness.
    Keywords: Equity prices;JEL Classification Numbers: G21, G22 and C32 Keywords: Global systemically important banks and insurers, connectedness, volatility, vector autoregression, Global systemically important banks and insurers, Time-Series Models, JEL Classification Numbers: G21 G22 and C32, Keywords: Global systemically important banks and insurers
    Date: 2017–09–29
  9. By: Seng, Kimty
    Abstract: This paper examines the effects of mobile phones on financial inclusion in terms of households’ uptake of microcredit in Cambodia, with data from the Cambodia Socio-Economic Survey conducted in 2014. The analysis is conducted with a propensity score matching approach to address endogeneity issues of the use of mobile phones and to evaluate the effects. The results suggest that mobile phones are very likely to induce households to take up credit offered by microfinance institutions, in particular for non-agricultural investment purpose, but to discourage households from using credit for non-productive purpose.
    Keywords: Mobile phones, financial inclusion, microfinance, Cambodia
    JEL: O10 O12
    Date: 2017–10–27
  10. By: Chatterji, Shurojit (School of Economics, Singapore Management University); Zeng, Huaxia (Lingnan College, Sun Yat-Sen University)
    Abstract: We study random mechanism design in an environment where the set of alternatives has a Cartesian product structure. We first show that all generalized random dictatorships are strategy-proof on a minimally rich domain if and only if the domain is a top-separable domain. We next generalize the notion of connectedness (Monjardet, 2009) to establish a particular class of top-separable domains: connected domains, and show that in the class of minimally rich and connected domains, the multidimensional single-peakedness restriction is necessary and sufficient for the design of a flexible random social choice function that is unanimous and strategy-proof. Such a fl exible function is distinct from generalized random dictatorships in that it allows for a systematic notion of compromise. Our characterization remains valid (under an additional hypothesis) for a problem of voting with constraints where not all alternatives are feasible (Barbera et al., 1997).
    Keywords: Generalized random dictatorships; Top-separable domains; Connected domains; Multidimensional single-peaked domains; Constrained voting.
    JEL: D71
    Date: 2017–10–24
  11. By: Garanina, Olga L.
    Abstract: The intended contribution of this research is to outline the role of domestic constraints for companiesÙ internationalization strategies in natural gas industry. The paper is focused on Russian case. Special emphasis is made on internal natural gas market organization model, its evolution and impacts for natural gas business strategies implemented by Russian National Oil Companies (NOCs). Research is based on case method. The argumentation is structured in three stages which are (i) comparative analysis of Gazprom and Rosneft as NOCs; (ii) study of the evolution of the natural gas industry organizational model in Russia and (iii) the case of Power of Siberia project.
    Keywords: national oil companies, natural gas industry, liberalization of natural gas market, Russia, organizational model, NOCs, Gazprom, Rosneft,
    Date: 2016
  12. By: Nisachon Leerattanakorn (Maejo University)
    Abstract: Most of the literature confirms link between relative real income and happiness, but few research study the link of income perception. This empirical study aims to investigate the linkage between relative income and happiness. We conducted a survey and then estimated happiness using the ordered logit model. Results showed that individual happiness is not only related to absolute relative income, but is also associated with the attitude toward relative income in two dimensions, namely, individual?s needs and compared with those of other people. Moreover, self-esteem, trust, and community specification factors can influence individual happiness. Policy implication should concern real inequality together with perception on inequality.
    Keywords: Happiness, Well-being, Relative income, Attitude, Thailand
    JEL: A12 D01 I31
    Date: 2017–10

This nep-sea issue is ©2017 by Kavita Iyengar. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.