nep-sea New Economics Papers
on South East Asia
Issue of 2018‒04‒16
nineteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. East Asia’s Pattern of Export Specialization: Does Indonesia Compete with Japan, China, Hong Kong, Korea and Singapore? By Ervani, Eva; Widodo, Tri; M. Purnawan, Edhie
  2. Employment and growth in Indonesia (1990–2015) By Nomaan, Majid.; Nayantara, Sarma.
  3. Measurement of Economic Welfare Risk and Resilience of the Philippine Regions By Rio Yonson; Ilan Noy
  4. Spatial Patterns of Sanitation in Rural Vietnam: An Application of Small Area Estimation By Nguyen, Cuong
  5. An Analysis of the Management of Supply Chain Risk: A Study of the Islamic Fashion Industry in Bandung, Indonesia By Katlea Fitriani
  6. Local Competitiveness and Labour Market Returns in a Transition Economy: Evidence from Vietnam By Tinh Doan; Tran Quang Tuyen; Hien Nguyen
  7. Foreign multinationals, selection of local firms, and regional productivity in Indonesia By Saito, Hisamitsu
  8. Liberalization in Southeast Asia: who is capturing the markets? By Nathalie Lenoir; Isabelle Laplace
  9. Floods and Exports: An Empirical Study on Natural Disaster Shocks in Southeast Asia By Kaori Tembata; Kenji Takeuchi
  10. Renewable energy consumption and economic growth in Indonesia. Evidence from the ARDL bounds testing approach By Khobai, Hlalefang
  11. Investigating the Relationship between Work-Life-Balance and Motivation of the Employees: Evidences from the Local Government of Jakarta By Oktosatrio, Suhendro
  12. Monetary policy coordination leader followership By Raputsoane, Leroi
  13. Marketing Communication By Goslar, Alex
  14. Tax Incentives in Cambodia By Manuk Ghazanchyan; Alexander D Klemm; Yong Sarah Zhou
  15. Oplan Tokhang Operation in Police Regional Office XI: An Evaluation By Tamayo, Adrian
  16. China's Footprint in Global Commodity Markets By Christina Kolerus; Papa M N'Diaye; Christian Saborowski
  17. Spillover Implications of China's Slowdown for International Trade By Patrick Blagrave; Esteban Vesperoni
  18. The Role of Governance Quality in Increasing Intra-ASEAN Trade By Setyastuti, Rini; Adiningsih, Sri; Widodo, Tri
  19. Spillovers from China; Financial Channels By Nkunde Mwase; Papa M N'Diaye; Hiroko Oura; Frantisek Ricka; Katsiaryna Svirydzenka; Yuanyan S Zhang

  1. By: Ervani, Eva; Widodo, Tri; M. Purnawan, Edhie
    Abstract: The purpose of this paper is to analyze the comparative advantage of East Asian countries (China, Japan, Hong Kong, South Korea, Singapore and Indonesia) and to investigate whether Indonesia is competing in the similar groups of products - based on the 3-digit SITC Revision 2 for 237 groups of products published by the UN-COMTRADE. First, we calculate the Revealed Symmetric Comparative Advantage (RSCA) index to know the pattern of comparative advantage for each the East Asian countries. Second, we calculate the distribution of RSCA (value of mean, median, standard deviation and skewness of comparative advantage) from each the East Asian countries to analyze the dynamics of comparative advantage. Third, we examine the correlation of Indonesia’s RSCA with the RSCA of each the East Asian countries for the period 1995-2015 to determine whether Indonesia has a similar pattern of specialization and whether competing in the same product market with the East Asian countries. The result of the analysis shows that China is the biggest competitor for Indonesia, and Japan has very different patterns of specialization.
    Keywords: RSCA, Distribution of RSCA, RSCA Correlation, Specialization Pattern
    JEL: F10 F14 F17
    Date: 2018–03–11
  2. By: Nomaan, Majid.; Nayantara, Sarma.
    Abstract: This paper examines the employment situation in Indonesia during and in the aftermath of the Asian Financial Crisis and the Great Recession, including importantly how the quality of work responded to the changing composition of Indonesia’s growth process. The authors find that many labour market indicators have moved in an encouraging direction, but a decomposition of labour productivity indicates that productivity growth has been driven primarily from efficiencies “within” sectors rather than the allocation of labour across sectors. Facilitating and managing the structural transformation process in a fair and inclusive manner can further support Indonesia’s socioeconomic development.
    Keywords: employment, economic growth, economic recovery, poverty alleviation, Indonesia
    Date: 2018
  3. By: Rio Yonson; Ilan Noy
    Abstract: Using an economic model to assess welfare risk and resilience to disasters, this paper systematically tackles the questions: 1) How much asset and welfare risks does each region in the Philippines face from riverine flood disasters? 2) How resilient is each region to riverine flood disasters? and 3) What are the available interventions per region to strengthen resilience to riverine flood disasters and what will be their measured benefit? We study the 18 regions of the Philippines to demonstrate the channels through which macroeconomic asset and output losses from disasters translate to consumption and welfare losses at the microeconomic level. Apart from the prioritization of regions based on resilience and welfare risk, we identify a menu of policy options ranked according to their level of effectiveness in increasing resilience and reducing welfare risk from riverine floods. While there are similarities in the ranking of policies among regions with comparable levels of resilience and welfare risk, the ranking of priorities varies for different regions. This suggests that there are region-specific conditions and drivers that need to be integrated into policies and development processes so that these conditions are effectively addressed. Overall, the results indicate that reduction of adverse disaster impacts, including welfare losses, and reduction of poverty are generally complementary.
    Keywords: disasters, floods, risk, resilience, floods, Philippines
    JEL: Q54
    Date: 2018
  4. By: Nguyen, Cuong
    Abstract: Diarrhea is one of the main causes for mortality of under-five children (Boschi-Pinto et al., 2008), and this disease can be attributed to deficient hygiene, sanitation and water supply (Bartram and Cairncross, 2010). Information on spatial patterns of sanitation is very important for sanitation support programs. In this study, we estimate and construct spatial maps of the proportion of households using sanitary latrines in rural Vietnam using a small area estimation method. It shows that there is a great spatial variation in the sanitary latrine rate. Within the same rural districts, the proportion of households using sanitary latrines varies largely across communes.
    Keywords: Sanitary latrine, poverty mapping, small area estimation, Vietnam
    JEL: I1 O1
    Date: 2017–02–10
  5. By: Katlea Fitriani (Faculty of Economics, Parahyangan Catholic University, Bandung-Indonesia Author-2-Name: Natalia Christi Author-2-Workplace-Name: Faculty of Economics, Parahyangan Catholic University, Bandung-Indonesia)
    Abstract: Objective – This paper aims to analyze Supply Chain Risk (SC Risk) and Supply Chain Risk Management (SCRM) in the Islamic fashion Industry in Bandung, with a particular focus on micro and small enterprises. Moreover, this paper will demonstrate the differences between the way the micro and small enterprises view SC Risk and SCRM. Methodology/Technique – This research uses questionnaires to obtain the data. The population in this study consists of 86 firms representing the center of the hijab fashion industry in BALTOS, Bandung. The data was obtained through observation and in-depth interviews with selected micro and small enterprises in the Islamic fashion industry, as well as the distribution of questionnaires from the hijab fashion industry in BALTOS. Findings – The results of this study raise concerns relating to SC Risk and the SCRM among micro and small enterprises in the Islamic fashion industry in BALTOS. The findings demonstrate that most Muslims consider that certain market conditions involve high levels of risks, which act as a threat to their businesses. Novelty – The global and dynamic evolution of the global market has contributed to increased levels of intense competition in various markets. The analysis of Supply Chain Risk Management (SCRM) strategies, to minimize the frequency of Supply Chain (SC) risk, is therefore important.
    Keywords: Supply Chain Risk Management; Supply Chain Risk; Supply Management; Islamic Fashion Industry; Micro-Small Enterprises.
    JEL: M30 M39
    Date: 2018–02–17
  6. By: Tinh Doan (University of Economics and Business, Vietnam); Tran Quang Tuyen (University of Economics and Business, Vietnam); Hien Nguyen (International Labour Organization)
    Abstract: This paper examines the relationship between the quality of provincial governance and labour market returns in Vietnam. We find that better provincial governance has a positive effect on labour market wages for wage-earning workers. The finding is consistent across estimators, even after controlling for worker characteristics, geographic regions, urban context, economic sector and industry type. A better competitive environment for business attracts more firms to enter the market, which in turn creates greater demand for labour. Subsequently, higher demand for labour pushes up wages. Our unique contribution is that we considered the influence of provincial governance on the business environment and labour market returns.
    Keywords: economic transition; institutional competitiveness; labour market returns;Vietnam
    JEL: J21 J24 J31 L19 P23
    Date: 2018–04–10
  7. By: Saito, Hisamitsu
    Abstract: We examine whether the entry of multinational firms into a region induces the exit of low-productivity local firms from the market and the extent to which this improves regional productivity. For this purpose, we employ establishment-level data on the food manufacturing industry in Indonesia. After controlling for spillover effects, we find a greater left truncation in productivity distribution of local firms in regions with larger number of multinational firms. In addition, we find that this effect has greater impacts on regional productivity than spillover effects. Therefore, in order to maximize the regional benefits of foreign direct investment, governments should facilitate the entry and exit of local firms.
    Keywords: Firm selection; Regional productivity; Spillovers
    JEL: F23 L11 R12
    Date: 2018–03–07
  8. By: Nathalie Lenoir (ENAC - Ecole Nationale de l'Aviation Civile); Isabelle Laplace (ENAC - Ecole Nationale de l'Aviation Civile)
    Abstract: In ten countries of Southeast Asia (ASEAN), in a context of strong traffic growth and development of the airlines in the region, regulations are being changed in order to achieve a regulatory situation similar to that in Europe, both inside the region and on international routes to other countries. A multilateral agreement with China has already led to the development of international routes between China and ASEAN. In this paper, we study recent network and traffic development on international routes and the role of Chinese airlines in the development of the markets. We then focus deal on possible competition distortion between Chinese and ASEAN airlines.
    Keywords: liberalization, air transport economics, competition
    Date: 2016–07
  9. By: Kaori Tembata (Graduate School of Economics, Kobe University); Kenji Takeuchi (Graduate School of Economics, Kobe University)
    Abstract: This study analyzes the effects of climate-related disasters on international trade in Southeast Asia. We use monthly trade data to examine the relationship between disaster shocks and exports. The empirical analysis shows that natural disasters have a significant negative effect on exports. The estimation results suggest that flooding causes immediate export losses of USD 305–557 million. In addition, we find that the effect persists in the post-disaster period, with floods causing annual export losses of USD 2.54 billion in total. We further investigate the impact of disasters by product group and show that disasters are negatively associated with the exports of agricultural and manufacturing products. The findings suggest that extreme weather events have severe repercussions on Southeast Asia, where exports play an important role in economic development.
    Keywords: Climate change; Exports; Extreme weather; Flood; Natural disaster; Southeast Asia; Storm
    Date: 2018–04
  10. By: Khobai, Hlalefang
    Abstract: This study serves to examine the effects of renewable energy consumption on economic growth in Indonesia. Quarterly time series data was used for the period 1990 – 2014. Applying the autoregressive distributed lag (ARDL) bounds testing approach, the study established that there is a long run relationship between economic growth, renewable energy consumption, carbon dioxide emissions, capital and employment. It is established that renewable energy consumption has a significant positive effect on economic growth both in the long run and short run. The findings from the vector error correction model (VECM) technique suggest that there is a long run causality flowing from renewable energy consumption, carbon dioxide emissions, capital and employment to economic growth. The findings of this study suggest that the government, energy policy makers and associated bodies should act together to improve on the renewable energy infrastructure and lower carbon growth in Indonesia
    Keywords: Renewable energy consumption, Economic growth, Co-integration, Causality, Indonesia
    JEL: C32 D04 Q01 Q42 Q47
    Date: 2018–03–09
  11. By: Oktosatrio, Suhendro
    Abstract: This paper examines the relationship between work-life-balance and employees' motivation in the public sector of Jakarta, Indonesia. Through motivational theories and work-life-balance theories, the conceptual framework is developed to explore research variables. This is a descriptive research following qualitative inductive method. The total sample size for this research is 86 respondents working in the local government of Jakarta. Data was gathered through self-administered survey questionnaire. Findings revealed that personal life significantly affect the work. Majority of the respondents prefer flexible work and operating from home. Interestingly, females are more eager to work from home in comparison to males. Furthermore, the findings revealed that females in contrast to males are much more organized in managing professional commitment and personal life agendas. Additionally, all employees seek taking holiday in contrast to extra money or bonus. Lastly, working for longer hours is the most de-motivating job attribute.
    Keywords: Motivation, Job Satisfaction, Public Sector, Qualitative Research, Work-Life-balance
    JEL: H70 H79 J24 M19 O15 Y1
    Date: 2018–01–11
  12. By: Raputsoane, Leroi
    Abstract: This paper analyses the leader followership phenomenon in monetary policy coordination in South Africa, the Advanced, Developed and Emerging counties. The coordination of monetary policy in Advanced counties is examined in individual countries while such coordination in Developed and Emerging countries is examined in groups of countries. These countries comprise South Africa, United States, Euro area, United Kingdom and Japan while the groups of countries comprise the Developed, BRIC, Eastern Europe, East Asia and Latin American countries. The results show that monetary policy coordination is led by the United States and Developed countries, that monetary policy coordination in United Kingdom, Eastern European countries and the Euro area is intermediate while South Africa and Latin America are followers in monetary policy coordination. The results further show that Japan, BRIC and Eastern Europe coordinate monetary policy independent of the rest of the selected countries.
    Keywords: Central bank, Monetary policy, Causal Inference
    JEL: C11 C70 E43 E58
    Date: 2018–04–03
  13. By: Goslar, Alex
    Abstract: Empirical research in the USA and the Asia Pacific suggests that the occasions of miscommunication far outnumber the occasions where communication has been interpreted in the way that it was intended. Though the data is vastly different from region to region and particularly when cross-continental communication has taken place, there are very few cases where attendees to a marketing conference were concluding similar outcomes. It appears that the communication gap is particularly wide when the cultural differences between the communicator and the recipients of the communication, are from the different cultural background. For example delegates from the USA attending a marketing conference in Japan and vice versa.
    Keywords: Marketing; Marketing Communication; Communication
    JEL: M3 M31 M37
    Date: 2016–10–04
  14. By: Manuk Ghazanchyan; Alexander D Klemm; Yong Sarah Zhou
    Abstract: Cambodia, like its regional peers, offers a number of tax incentives to investors. This paper reviews these incentives to assess their costs and benefits, including their likely effectiveness in attracting capital and in supporting the diversification strategy. It finds that an important incentive, the tax holiday, differs materially from practice elsewhere in offering a deferral rather than exempting from tax and may not be very effective. Moreover, other features of the tax system, such as the high withholding rate on dividends, imply relatively high effective tax rates for foreign investors. The paper discusses potential reforms that weigh revenue and other costs of tax incentives against the need for a competitive tax system, including a shift from tax holidays toward investment allowances.
    Date: 2018–03–29
  15. By: Tamayo, Adrian
    Abstract: Oplan Tokhang which was first developed in Davao City Police Office (DCPO) by then Police City Director Police Senior Supt Ronald Dela Rosa was intended to speed up drug-problem solution by visiting houses of the illegal drug personalities and asking them to stop the illicit acts. The system requires that barangay captains will be at the forefront of combating the illegal drugs by submitting a list of their residents who are into drugs. The police intelligence units will verify the list to validate whether the names in the list are really into drugs. Results of the study reveal that OPLAN TOKHANG was able to deliver impressive results in the first three months of implementation of the illegal drugs operation, from July to September 2016. As a whole, infestation rate of the region was posted at 10.76, by province, the highest rate was observed in Davao del Sur while the least was in Davao City.
    Keywords: Anti-illegal drugs, Philippines, Oplan Tokhang
    JEL: H4 K4
    Date: 2018–03–08
  16. By: Christina Kolerus; Papa M N'Diaye; Christian Saborowski
    Abstract: This note assesses empirically the role Chinese activity plays in global commodities markets, showing that the strength of China’s economic activity has a significant bearing on commodity prices, but that the impact differs across commodity markets, with industrial production shocks having a substantial impact on metals and crude oil prices and less so on food prices. The size of the impact on the prices of specific commodities varies with China’s footprint in the market for those commodities; the empirical estimates indicate that, over a one-year horizon, a 1 percent increase in industrial production leads to a 5–7 percent rise in metals and fuel prices. The surprise component in Chinese industrial production announcements has a bearing on commodity prices that is comparable in magnitude to that of industrial production surprises in the United States, and this impact is much larger when global risk aversion is high.
    Keywords: Crude oil;Food prices;Asia and Pacific;Commodities;Commodity prices;China;Spillovers;Industrial production;footprint, global commodity markets, shocks, metals, metals prices, crude oil prices, risk, risk aversion, imports, commodity imports, futures, commodity futures
    Date: 2016–09–27
  17. By: Patrick Blagrave; Esteban Vesperoni
    Abstract: Using a panel vector autoregression and a novel measure of export-intensity-adjusted final demand, this note studies spillovers from China’s economic transition on export growth in 46 advanced and emerging market economies. The analysis suggests that a 1 percentage point shock to China’s final demand growth reduces the average country’s export growth by 0.1–0.2 percentage point. The impact is largest in Emerging Asia, where an export-growth-accounting exercise suggests that China’s economic transition has reduced average export growth rates by 1 percentage point since early 2014. Other countries linked to China’s manufacturing sector, as well as commodity exporters, are also significantly affected. This suggests that trading partners need to adjust to an environment of weaker external demand as China completes its transition to a more sustainable growth model.
    Keywords: Export growth;Exports;Asia and Pacific;China;Commodities;Manufacturing;Spillovers;Trade;export intensity, final demand, economic transition, advanced economies, emerging market economies, Emerging Asia, commodity exporters, external demand, sustainable growth, growth model, slowdown, international trade, GDP, GDP growth, export volume, export volume growth
    Date: 2016–09–27
  18. By: Setyastuti, Rini; Adiningsih, Sri; Widodo, Tri
    Abstract: ASEAN countries have liberalized intra-ASEAN trade over the last 20 years by establishing the ASEAN Free Trade Area (AFTA). Recently, they committed achieving the ASEAN Economic Community (AEC) with the timeline set at 2015. Policy measures are being implemented based on the AEC Blueprint agreed upon 2007. One of the several motives behind this implementation is that they thought that an expansion of intra-ASEAN trade would promote economic development of the ASEAN countries as the expansion of exports would result in output growth and the expansion imports would improve productive efficiency. In the other hand, countries have to strengthen institutions in order to promote economic and trade cooperation. This article focus on exploring the role of institutions (governance quality) in increasing exports between ASEAN countries during the period 2000-2015 using the augmented gravity model. We use data from DOTS (IMF), World Development Indicators (World Bank) and World Governance Indicators (World Bank). The result suggest that institutions of ASEAN countries, as well as the governance quality of the ASEAN countries have positive and significant effect in increasing exports between ASEAN Countries.
    Keywords: Trade, ASEAN, Institutions, Governance Quality, Export, Gravity model
    JEL: F14 F17
    Date: 2018–03–11
  19. By: Nkunde Mwase; Papa M N'Diaye; Hiroko Oura; Frantisek Ricka; Katsiaryna Svirydzenka; Yuanyan S Zhang
    Abstract: Although China’s much-needed transition to a new growth path is proceeding broadly as expected, the transition is still fraught with uncertainty, including regarding the Chinese authorities’ ability to achieve a smooth rebalancing of growth and the extent of the attendant slowdown in activity. Thus, in the short run, the transition process is likely to entail significant spillovers through trade and commodities, and possibly financial channels. This note sheds some light on the size and nature of financial spillovers from China by looking at the impact of developments in China on global financial markets, with a particular emphasis on differentiation across asset classes and markets. The note shows that economic and financial developments in China have a significant impact on global financial markets, but these effects reflect primarily the central role the country plays in goods trade and commodity markets, rather than China’s financial integration in global markets and the direct financial linkages it has with other countries.
    Keywords: Spillovers;China;Asia and Pacific;Commodities;Asset markets;Assets;Trade;Global financial markets;transition, growth path, rebalancing, slowdown, financial channels, financial spillovers, differentiation, asset classes, goods, goods trade, commodity markets, integration, financial integration, global markets, financial linkages, liabilities, financial exposure, reserves, cross-border banking, foreign direct investment, low-income developing countries, exports, shocks, transmission of shocks, transmission, risk, industrial production, commodity dependence
    Date: 2016–09–27

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