nep-sea New Economics Papers
on South East Asia
Issue of 2019‒01‒28
eighteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Development Analysis of Global Competitiveness Index of ASEAN-7 Countries and Its Relationship on Gross Domestic Product By Nababan, Tongam Sihol
  2. Indonesia's Commitment to Reducing GHG and Its Impact on the Indonesian Economy: CGE Approach By Dasih, Kuntari; Widodo, Tri
  3. Effects of weather on human capital in Vietnam By Vu, Tien Manh
  4. Revisiting the Impacts of Exchange Rate Movement on the Dollarization Process in Cambodia By Samreth, Sovannroeun; Sok, Pagna
  5. Applying Tax Rate of 33,33% on Primary Energy in Indonesia By Tri Purwaningsih, Vitriyani; Widodo, Tri
  6. “Land Ownership and Informal Credit in Rural Vietnam" By Matteo Migheli
  7. The Returns to Parental Health: Evidence from Indonesia By Luca, Dara Lee; Bloom, David E.
  8. Impacts of China Coal Import Tariff against US on Global Economy and CO2 Emissions By Septiyas Trisilia, Mustika; Widodo, Tri
  9. The Asian integration agenda of the Eurasian Economic Union By Bagdasaryan, Kniaz (Багдасарян, Княз)
  10. The Environmental Kuznets Curve in ASEAN: The Case of Carbon Emissions By Budhi Utomo, Ginanjar; Widodo, Tri
  11. China's Bond Market and Global Financial Markets By Eugenio M Cerutti; Maurice Obstfeld
  12. Who is an internal migrant? By Sharma, Rasadhika; Grote, Ulrike
  13. Determinantes de la productividad multifactorial: los casos de las principales economías latinoamerica-nas y emergentes de Asia (1960 - 2015) By William Gómez; Carlos Esteban Posada; Remberto Rhenals
  14. Climate Change Mitigation Through Market-based instruments in Large Asian Emitters By Nopiah, Ririn; Widodo, Tri
  15. Behavioural perspectives on subsistence entrepreneurship in an emerging market By Rüschenpöhler, Julius
  16. Main forms of interaction between Russian regions and ASEAN countries By Pakhomov, Alexander (Пахомов, Александр)
  17. The Long-Run Trend of Residential Investment in China By Ding Ding; Weicheng Lian
  18. Is Trust in Companies Rooted in Social Trust, or Regulatory Quality, or Both? By Markus Leibrecht; Hans Pitlik

  1. By: Nababan, Tongam Sihol
    Abstract: The objectives of the research are: (1) to investigate the development of global competitiveness index (GCI) of ASEAN-7 countries as an illustration of economic performance and potentiality, (2) to investigate which factors or pillars are drivers for the improvement of GCI ASEAN-7 countries, and (3) to analyze the effect of Gross Domestic Product (GDP) on GCI of ASEAN-7 countries. The analysis method used in calculating the weight of the contribution of each pillar to changes in the competitiveness index, and determining the effect of GDP on GCI, a Semi-Logarithmic Regression analysis is used. The result shows that during the period of year 2008/2009 to the year of 2016/2017, the rank and index of GCI of each ASEAN-7 countries continue to increase. The pillars of the basic requirement subindex still dominate the largest contribution to the improvement of the competitiveness index for Indonesia, Philippines, Thailand, Cambodia, and Vietnam. As for Malaysia and Singapore sub-indexes of efficiency enhancers and innovation-sophistication have been able to give the largest contribution to the improvement of GCI. The GDP of ASEAN-7 countries has a positive and significant impact on the improvement of global competitiveness index, except for Thailand. The most problematic factors in improving the competitiveness index are corruption, inadequately educated labour, access to financing, tax regulations, and inefficient government bureaucracy.
    Keywords: GCI; GDP; basic requirement; efficiency enhancers; innovation; sophistication
    JEL: O57
    Date: 2019–01–05
  2. By: Dasih, Kuntari; Widodo, Tri
    Abstract: To achieve the carbon emission target in Indonesia in 2030, what trade offs will be carried out if viewed from an economic perspective such as GDP, energy consumption? This study employs the CGE model to see the impact of imposing carbon tax on GDP and GHG emissions in Indonesia. Five scenarios have been applied to gauge the linkage between those factors. The main finding in this study is that carbon tax can reduce emissions in large numbers in Indonesia thus that carbon tax can be used as an effective emission control instrument. However, what needs to be concerned is the impact of carbon tax on decreasing GDP. It is different from Singapore where the impact of carbon tax almost does not affect GDP, in Indonesia even though the tax is applied in small amounts but has a significant effect on changes in GDP.
    Keywords: carbon emission, GHG, carbon tax, CGE
    JEL: Q54 Q56 Q58
    Date: 2019–01–07
  3. By: Vu, Tien Manh
    Abstract: This study examines the effects of concurrent weather, corresponding to test sites as well as three-year consolidated weather conditions at high school time, on the math test scores of census examinees participating in the Vietnamese national entrance examinations to universities and colleges on July 4 and 15, 2009. Using individual first difference, I find that the maximum temperature of the day, 30 to 32°C (86-89.6°F), which is slightly below the usual average in all July between the years 1950-2009, benefitted examinees most. My analysis demonstrates that female testers were more vulnerable to harsh temperature and extreme weather but also more physically adaptive to temperature than males. Extreme weather occurring at the high school, especially during the school calendar, has a negative effect on the test scores.
    Keywords: Temperature, Extreme weather, Test score, Human capital, Gender, Drought, Vietnam, I25, J24, J16, I15, O15, Q56
    Date: 2019–01
  4. By: Samreth, Sovannroeun; Sok, Pagna
    Abstract: Previous studies on factors affecting the substitution process between domestic currency and foreign currency (i.e., the dollarization process) in Cambodia indicate that exchange rate movement is one of its important determinants. These studies tend to assume that the effects of this movement are symmetric. However, domestic currency appreciation and depreciation can have asymmetric impacts on people’s behaviors when substituting between domestic currency and foreign currency. Therefore, this study re-examines the impacts of exchange rate movement on the dollarization process in Cambodia by taking into account the possibility of these asymmetric effects. A cointegration analysis framework is adopted for the estimation of a model that also incorporates a hysteresis effect of the dollarization process. The estimation results of quarterly data between 1994Q2 to 2017Q4 indicate that Cambodian Riel depreciation and appreciation do have asymmetric impacts on its dollarization process. These results provide some implications for policy actions addressing the dollarization issue in Cambodia.
    Keywords: Asymmetric Effects, Currency Substitution, Dollarization
    JEL: E51 F41
    Date: 2018
  5. By: Tri Purwaningsih, Vitriyani; Widodo, Tri
    Abstract: High fuel consumption has a negative impact not only on the environment, but also can have wider impact on the country's economic conditions. Thus, steps need to be taken regarding the use of fuel in order to reduce the negative impact that results. The aims of this study is to analyze the impact that occurred on the industry and the Indonesian economy when a tax of 33,33% was determined on the use of primary energy, that is coal and petroleum products, through three simulations. By using a model from GTAP-E, the region is aggregated into 7 regions and the industrial sector will be aggregated into 11 industries. The result shows that simulation C has a significant impact on the industry and the Indonesian economy. In addition, this simulation is also able to reduce carbon dioxide gas emissions which derive from coal and petroleum.
    Keywords: Tax, Petroleum, Coal, GTAP-E
    JEL: Q43 Q48
    Date: 2019–01–07
  6. By: Matteo Migheli (University of Turin and CeRP-Collegio Carlo Alberto)
    Abstract: Access to credit and its cost is a major challenge for farmers in developing countries. Several studies show that land serves as collateral for accessing formal credit, but they often do not find any significant effect of land size on access to informal credit. I study the effects of land ownership on both the demand and the cost of informal credit in the Mekong Delta. The results show that as land ownership increases, both the demand and the cost of informal loans decrease. Design and implementation of appropriate land redistributions seems a fundamental way to fight the informal credit market.
    Date: 2018–06
  7. By: Luca, Dara Lee (Mathematica Policy Research); Bloom, David E. (Harvard University)
    Abstract: This paper investigates the economic returns to parental health. To account for potential endogeneity between parental health and child outcomes, we leverage longitudinal microdata from Indonesia to estimate individual fixed effects models. Our results show that the economic returns to parental health are high. We show that maternal health not only significantly affects her children's health, but is also intrinsically linked to her spouse's labor market status and earnings. Paternal health appears to be more linked to child schooling outcomes, especially for girls. When both parents are in poor health, the negative effects on their children are compounded. Additionally, the consequences of poor parental health are enduring. Longer-run effects of poor parental health manifest in a lower likelihood of high school completion, fewer years of schooling, and poorer adult health.
    Keywords: parental health, spousal health, child health, education, family economics
    JEL: I12 J13 J16
    Date: 2018–11
  8. By: Septiyas Trisilia, Mustika; Widodo, Tri
    Abstract: This paper examines the impacts of China coal import tariff against US on global economy and CO2 emissions. Using Global Trade Analysis Project Environmental (GTAP-E) model, coal import tariff was found to generate trade deflection and trade depression phenomena. Then, US and China’s would have welfare loss, but Indonesia and Australia would seem gainers from this tariff war. Furthermore, skilled and unskilled labor will decline in coal’s industry in US and increase in China. Finally, it is also found evidence that China coal import tariff was not good policy because not only the global economy, the environment would be disadvantaged by increasing CO2.
    Keywords: Import tariff, Coal, Carbon dioxide emissions, GTAP
    JEL: F18 Q5 Q54
    Date: 2019–01–04
  9. By: Bagdasaryan, Kniaz (Багдасарян, Княз) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The paper considers prospective directions of integration cooperation of the EAEU with the countries and groupings of Asia. The aim of the study is to determine the possibilities and limitations of the common foreign economic policy of the Eurasian Economic Union in this area.
    Keywords: integration, Eurasian Economic Union, preferential agreement, free trade area, trade in services
    Date: 2018–12
  10. By: Budhi Utomo, Ginanjar; Widodo, Tri
    Abstract: Over the past two decades, researchers have sought to establish empirical evidence for an Environmental Kuznets Curve (EKC) for carbon dioxide (CO2), with varied results. This study builds on that research to re-evaluate whether the EKC exists for CO2 emissions, using an improved dataset and the enhanced econometric technique Generalized Methods of Moments (GMM) estimator. The aims determine how various factors like economic growth, and energy use influence CO2 emissions. The CO2 emission rate is the dependent variable and the independent variables of the model include the lagged dependent variable, GDP per capita (constant 2010 US$), and energy use. We find that EKC is based on economic growth for ASEAN countries, and increased energy use actually increase CO2 emissions
    Keywords: ASEAN, CO2, Environmental Kuznets Curve,GMM.
    JEL: Q52 Q53 Q56
    Date: 2019–01–06
  11. By: Eugenio M Cerutti; Maurice Obstfeld
    Abstract: A cross-country comparative analysis shows that there is substantial room for further integration of China into global financial markets, especially in the case of the international bond market. A further successful liberalization of the Chinese bond market would encompass not only loosening bond market regulations, but also further developing of other markets, notably the foreign exchange market. Even though the increased integration of China into international capital markets would increase its exposure to the global financial cycle, the costs in terms of monetary autonomy would not be large given China’s size and especially under a well-articulated macroeconomic framework.
    Keywords: Globalization;Asia and Pacific;China;International financial markets;Bond Market, Market Integration, Financial Aspects of Economic Integration, International Business Cycles
    Date: 2018–12–07
  12. By: Sharma, Rasadhika; Grote, Ulrike
    Abstract: There is no internationally accepted definition of an internal migrant. Different surveys and academic papers use varied definitions that are open to subjectivity. Our paper stresses this issue and tests the sensitivity of results obtained by econometric analysis to the use of different defining criterion. Using four definitions of an internal migrant based on aspects of varied time intervals, purpose of migration and geographical shifts, we examine the determinants of the migration decision and the impact of migration on the household’s income. We employ Probit modelling and difference-in-difference Probability Score Matching to estimate the two questions, respectively. We find that a change in definition alters the target sample and therefore induces identification errors. In case of determinants, the magnitude and significance of variables capturing human and social capital, socio-demography and wealth of the household change across the four definitions. Additionally, having a migrant, increases the household’s income under two definitions, while negatively impacting the household’s income under the other two definitions. Therefore, it is pertinent to standardize the definition of an internal migrant before assessing the impact of migration. Our paper aims to bring this issue to the attention of international organizations and future researchers who work in the area of migration. It advocates for a standardized definition by proposing basic guidelines.
    Keywords: Internal migration, Internal migrant, Vietnam, Measurement
    JEL: O15 R23 J61 I32 O53
    Date: 2019–01
  13. By: William Gómez; Carlos Esteban Posada; Remberto Rhenals
    JEL: C33 E22 E24 F43
    Date: 2018–12–01
  14. By: Nopiah, Ririn; Widodo, Tri
    Abstract: Climate change is responsibility of the economic system like households, firms, and governments that produces Greenhouse Gases (GHG). This paper aims to analyze effectiveness and efficiency of climate change mitigation policies for Japan, China and India that are large Asian emitters through market-based instruments. GTAP-E model is used to analyze the impact of carbon tax policy using their global commitments to reduce carbon emissions. The result shows that carbon tax is best alternative choice for Japan, China, and India to reduce CO2 emissions as a climate change mitigation. The carbon tax provides that in a GDP increase of 0,44% in Japan. But in China and India find that reducing CO2 emission causes GDP is decline around 0,82% for China and 1,98 for India. Thus, all regions can get emission target by cost-effectively and each welfare loss can be compensated by carbon tax revenues. However, carbon tax is not one way fits to climate change mitigation.
    Keywords: Carbon Tax, Fuel Tax, Mitigation, Climate Change
    JEL: Q5 Q52 Q54
    Date: 2019–01–04
  15. By: Rüschenpöhler, Julius (Tilburg University, School of Economics and Management)
    Abstract: This dissertation consists of four chapters devoted to work at the intersection of Development and Behavioural Economics. Chapter 1 provides a review of recent contributions to aspirations theory in the context of the literature on behavioural development economics. It discusses the promise of aspirations theory to usefully contribute to addressing the puzzle of low investment levels at high returns among households and microenterprises in developing countries. The three following chapters study the business practices and growth aspirations of microenterprises using data from a randomised controlled trial conducted among traditional retail businesses in Jakarta, Indonesia. Chapter 2 elicits local microenterprises’ business practices through qualitative interviews and a quantitative survey to disseminate best practices via professionally designed handbooks. It further documents the positive impact of two additional treatments to facilitate adoption among peers: a documentary of successful peers to foster social learning and personalised short-term implementation assistance through local laymen to encourage individual learning. Chapter 3 makes use of the panel structure of the control-group data. It shows that, in the absence of treatment, entrepreneurial aspirations predict forward-looking firm behaviour and performance, but that failures to aspire beyond the status quo and failures to imagine or plan for the entrepreneur’s ideal business are common. Chapter 4 uses the experimental data to directly test predictions from aspirations theory. It shows that exposure to aspirational role models can have differential effects on effort and performance depending on their distance to initial levels of aspirations and the inherent risk of seeing one’s aspirations frustrated.
    Date: 2019
  16. By: Pakhomov, Alexander (Пахомов, Александр) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The article examines main directions of interregional cooperation in economic and social fields between the Russian federal subjects and ASEAN states. This cooperation has a growing trend and positive impact on the development of Russian federal subjects’ foreign economic activity and on the humanitarian sphere.
    Keywords: subjects of Federation, ASEAN States, international cooperation, foreign economic complex, social sphere.
    Date: 2018–12
  17. By: Ding Ding; Weicheng Lian
    Abstract: In this paper we analyze the fundamental drivers of China’s residential investment as a share of its GDP. Our analysis indicates that the economic structural changes that led to rebalancing toward consumption were the key driver of the rising residential investment to GDP ratio in China. We project that residential investment would moderate from the current level of 9 percent of GDP to around 6 percent by 2024, and its contribution to real GDP growth would decline gradually from currently about half percent of GDP to slightly negative over this period, barring policy intervention. The decline in the growth contribution of residential investment reflects the projected somewhat slower pace of rebalancing going forward and the envisaged increases in labor costs due to demographic changes.
    Keywords: Asia and Pacific;China, People's Republic of;Central banks and their policies;China housing market, residential investment, rebalancing, Bayesian Analysis, Time-Series Models, Monetary Policy (Targets, Instruments, and Effects)
    Date: 2018–12–07
  18. By: Markus Leibrecht (Henley Business School, University of Reading Malaysia); Hans Pitlik (Austrian Institute of Economic Research WIFO, Vienna, Austria)
    Abstract: While trust in the business sector is crucial for well-functioning markets, there is surprisingly little empirical work on its sources. Available research recognizes social trust as a major force explaining confidence in political institutions. Regulation is frequently advocated to foster trust in companies as it is supposed to reduce scope for opportunistic behavior. Based on individual level data from World Values Survey/European Values Studies and economic regulation data from the Economic Freedom of the World-project the paper empirically investigates joint effects of social trust, intensity and quality of regulation on public trust in major companies. Our findings suggest that it is not the intensity of economic regulation per se which matters for trust in companies but that the impartiality with which rules are enforced is decisive, even when we control for social trust. Trust in business can be facilitated by an implicit guarantee of governments to fair and impartial treatment.
    Keywords: Social Trust, Trust in Companies, Economic Regulation, World Values Survey
    JEL: D90 L50 P12
    Date: 2018–05

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