nep-sea New Economics Papers
on South East Asia
Issue of 2019‒07‒22
sixteen papers chosen by
Kavita Iyengar
Asian Development Bank

  2. The differences of corporate governance influence on state-owned enterprise and non-state-owned entrerprise’s performance: the case of Indonesia By Irine Herdjiono
  3. E-commerce as a Potential New Engine for Growth in Asia By Tidiane Kinda
  4. Regional Business Cycle Synchronization in Emerging and Developing Countries: Regional or Global Integration? Trade or Financial Integration? By Chi Gong; Soyoung Kim
  5. Long-term Effects from Early Exposure to Research: Evidence from the NIH "Yellow Berets'' By Pierre Azoulay; Wesley H. Greenblatt; Misty L. Heggeness
  6. The Effects of Rising Cabbage Import on Cabbage Production in Thailand By Mahathanaset, Itthipong; Pensupar, Kampanat
  7. Funding Shocks through Cross-border Banking in Asia A Network-based Approach By Estelle Xue Liu; Zijun Liu
  8. Does the Wagner’s Law exist in a strategic national area? An evidence from Kedungsepur - Indonesia By Gatot Sasongko; Andrian Dolfriandra Huruta; Anita Wardani
  9. Opportunities and Challenges of Sharia Technology Financials in Indonesia By Mujahidin, Muhamad
  10. Investment needs to achieve affordable and clean energy By Zhenqian Huang
  11. Costing the transport infrastructure component of SDGs in Asia and the Pacific By Shuvojit Banerjee
  12. Ending hunger and malnutrition - how much would it cost? By Daniel Jeongdae Lee; Kiatkanid Pongpanich
  13. Peluang dan Tantangan Financial Technologi Syariah di Indonesia By Mujahidin, Muhamad
  14. Investing in sustainable infrastructure for all By Daniel Jeongdae Lee; Shuvojit Banerjee; Zheng Jian
  15. Harmonization of Documents for International Transport: A study in the context of South and South-West Asia By Goran Andreev
  16. Do Minimum Wage Increases Benefit Intended Households? Evidence from the Performance of Residential Leases By Agarwal, Sumit; Ambrose, Brent W.; Diop, Moussa

  1. By: Daniela Marconi (Bank of Italy)
    Abstract: The economic and political influence of China in the Asia-Pacific region is growing; the internationalization of the Chinese currency, the renminbi (RMB), add an additional channel of influence. This paper assesses the evolution of exchange rate co-movements against the US dollar within the region and finds that the RMB has been exerting a growing influence. The degree of influence varies considerably across currencies. On the one hand, the Indonesian rupiah, the Korean Won, the Malaysian ringgit, the Singaporean dollar, and the Taiwanese dollar show very strong co-movements with the RMB, while, on the other hand, the Australian dollar and the New Zealand dollar are not affected. Furthermore, the study confirms that Asian currencies move as if driven by an objective to stabilize the effective exchange rate, avoiding excessive appreciation against the USD.
    Keywords: exchange rates, Asia-Pacific, renminbi, China
    JEL: F31 F33
  2. By: Irine Herdjiono (Economy and Business Faculty, MusamusUniversity in Indonesia)
    Abstract: This research aims to analyze the influence of audit committee, institutional ownership, and managerial ownership towards company’svalue. Moreover, it also analyzes the differencesof influenceon state-owned enterprise (SEO)and non SEO companieswhich are registered in Indonesian Stock Exchange. The sample consists of 48 SEO companies and 36 non SEO companiesin Indonesian Stock Exchange. Purposing sampling method is used in this research. The used technique data analysis is linear regression. The result of this research shows that audit committeehassignificant influence on SEO value, while in non SEO it does not influenceperformance. In SEOcompanies, institutional ownership does not influence company value while in non SEOcompany it does. Managerial ownership does not show any influenceson both SEOand non SEOcompanies. This research is the first research which compares the impact of corporate governance implementation on Indonesia SEOand non-SEOcompanies’value. This research implies that strengtheningcorporate governance aspects between SEOand non SEOcompaniesin order to increase the company’svalueis needed.
    Keywords: corporate governance, audit committee, institutional ownership, managerial ownership
    JEL: D4 G30
    Date: 2019–05
  3. By: Tidiane Kinda
    Abstract: The use of e-commerce around the world has accelerated in recent years, with Asia, led by China, spearheading the rise. Using cross-country enterprise survey data, this paper shows that firms engaged in e-commerce have higher productivity and generate a larger share of their revenues from exports than other firms. This is particularly true in Asia, where firms have 30 percent higher productivity and generate about 50 percent more of their revenues from exports. The results presented in this paper are robust to the use of instrumental variables, which highlight possible larger effects of e-commerce on Asian productivity and exports when essential elements are in place for its effective use, such as reliable electricity, telecommunication, and transport infrastructure. Despite the rapid growth of e-commerce in recent years, gaps persist in digital infrastructure and legislation, preventing many Asian countries from fully reaping the potential benefits of e-commerce.
    Date: 2019–07–01
  4. By: Chi Gong (Sichuan University); Soyoung Kim (Seoul National University)
    Abstract: This paper examines the effects of regional versus global integration and trade versus financial integration on regional business cycle synchronization in three regions containing developing and emerging countries (East Asia, Latin America, and Central and Eastern Europe). The main empirical results are as follows: (1) strong and similar common global linkages, especially financial linkages, have significant positive effects on the synchronization of regional business cycles; (2) after controlling global linkages, regional trade integration has a positive effect on regional business cycle synchronization, whereas regional financial integration has a negative effect; and (3) although the direction for the effect of each type of integration is similar across regions, the relative importance of each in explaining regional business cycle synchronization is different. Specifically, while global financial linkages play the most important role in East Asia and Latin America, regional trade integration is most important in Central and Eastern Europe.
    Keywords: regional business cycle synchronization, regional and global economic integration, trade and financial integration, emerging and developing countries
  5. By: Pierre Azoulay; Wesley H. Greenblatt; Misty L. Heggeness
    Abstract: Can a relatively short but intense exposure to frontier research alter the career trajectories of potential innovators? To answer this question, we study the careers and productivity of 3,075 medical school graduates who applied to the Associate Training Programs (ATP) of the National Institutes of Health (NIH) during the turbulent period of the Vietnam War, 1965-1975. Carefully selecting on observables, we compare physicians who attended the program to those who passed a first admission screen but were ultimately not selected. We find that program participants were more likely to initially enter academic medicine, and less likely to switch to purely clinical endeavors as their careers unfolded. Over the life cycle, NIH trainees also garnered publications, citations, and grant funding at a much higher rate than synthetic controls. The direction of their research efforts was also durably imprinted by their training experience. In particular, NIH trainees appear to have acquired a distinct "translational'' style of biomedical research which became an implicit training model for physician-scientists as ATP alumni came to occupy the commanding heights of academic medicine throughout the United States.
    JEL: I23 M53 O31
    Date: 2019–07
  6. By: Mahathanaset, Itthipong; Pensupar, Kampanat
    Abstract: This paper investigates the impact of a higher import of cabbage after Thailand’s FTA with trade partners enacted. A system of cabbage demand, supply and harvested area equations are estimated using time-series data and GMM estimation. The results reveal that an increase in cabbage import quantity will significantly reduce the domestic price, harvested area, and supply as well as farmers’ welfare. Using the producer surplus as a welfare measurement, our calculation shows that Thai cabbage farmers as a whole will lose money of 56,359,884 Baht. In the short run, production subsidies might be needed to alleviate the harmful effects on the farmers. However, in the long run, in order to avoid economic inefficiency due to production subsidies, food safety standards for cabbage import should be established. In addition, government should encourage the farmers to adopt GAP which helps improve their yields as well as product quality and farm gate price, and reduce their production costs, so that they can compete with cabbage imports.
    Keywords: Agricultural and Food Policy, International Relations/Trade
    Date: 2019–07–17
  7. By: Estelle Xue Liu (IMF); Zijun Liu (HKMA)
    Abstract: In recognition of the potential risk arising from the rapidly increasing cross-border interbank funding in Asia, we examine the contagion of funding shocks through the regional interbank network. We find that the breadth and the final impact of the shock crucially hinge on the magnitude of the shock, initial liquidity buffers and the structure of the interbank network. Liquidity hoarding during financial distress aggravates the severity of the shock, while the interconnectedness of the interbank network may either aggravate or mitigate the shock depending on the size of the shock.
    Keywords: funding runs, interbank, network analysis, financial crisis, liquidity ratio, Asia
    JEL: G18 G21 L14
  8. By: Gatot Sasongko (Satya Wacana Christian University); Andrian Dolfriandra Huruta (Satya Wacana Christian University); Anita Wardani (Satya Wacana Christian University)
    Abstract: The Kedungsepur National Strategic Area was formed to realize urban areas as the center of national and international economic activities. In order to realize this goal, government expenditure and economic growth are important variables in the development process. Empirically, the study was conducted to analyze the relationship between government expenditure and economic growth from the perspective of Wagner's Law in 6 regencies or cities in the Kedungsepur National Strategic Area during 2012 to 2017. Methodically, this study used Panel Granger Causality and Panel Data Regression to explain the short-term relationship between both variables. The results showed that there was a negative one-way relationship from economic growth to government expenditure. The increase in economic growth in the previous year would reduce the government expenditure in the short term, resulting the Wegner's Law inapplicable in the Kedungsepur National Strategic Area. This was due to the ineffectiveness of institutions, differences in regional expenditure structures towards state expenditures and the lack of government work programs in the productive sector. Thus, a good and coordinative institutional environment was needed to realize the cooperation in crucial sectors, as well as the distribution of regional expenditures on more productive expenditures based on priority interests, aiming at the welfare of the community.
    Keywords: Wagner's Law,Economic Growth,Government Expenditure,Panel Granger Causality,Panel Data Regression
    Date: 2019–06–30
  9. By: Mujahidin, Muhamad
    Abstract: This article describes how the opportunities and challenges of FinTech Sharia in the face of the industrial revolution 4.0. By using a negation approach, this study concludes that FinTech Sharia which is the development of technological innovations that are in accordance with sharia provisions and becomes a solution to avoid interest transactions. The synergy between the Islamic financial sector and information technology innovation should also be a challenge as well as an opportunity for all actors in the Islamic finance industry to catch up with the conventional financial industry.
    Keywords: Financial Technology, FinTech, FinTech Sharia, Islamic Finance
    JEL: A10 E40 G21 G23 G30 O14 O32
    Date: 2019–07–04
  10. By: Zhenqian Huang (Macroeconomic Policy and Financing for Development Division, ESCAP)
    Abstract: Sustainable Development Goal (SDG) 7 calls for affordable, reliable, sustainable and modern energy for all. The Goal is particularly relevant to the Asia-Pacific region where rapid and sustained economic growth, an increasing population, expanding industrialisation and rapid urbanisation have driven strong growth in energy demand. Ensuring sufficient energy supply while moving to more sustainable energy resources is critical for sustainable development in the region.
    Date: 2019–04
  11. By: Shuvojit Banerjee (Macroeconomic Policy and Financing for Development Division, ESCAP)
    Abstract: Transport is a key component of overall infrastructure in SDG9: “Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation”. Transport cuts across many goals and, instead of being a stand-alone SDG, it is mainstreamed in many of the SDGs, especially those related to food security, health, energy, and cities and human settlements.
    Date: 2019–04
  12. By: Daniel Jeongdae Lee (Macroeconomic Policy and Financing for Development Division, ESCAP); Kiatkanid Pongpanich (Macroeconomic Policy and Financing for Development Division, ESCAP)
    Abstract: Asia-Pacific needs to invest an additional $24 billion annually to end hunger, achieve food security and improved nutrition and promote sustainable agriculture.
    Date: 2019–04
  13. By: Mujahidin, Muhamad
    Abstract: This article describes how the opportunities and challenges of FinTech Sharia in the face of the industrial revolution 4.0. By using a negation approach, this study concludes that FinTech Sharia which is the development of technological innovations that are in accordance with sharia provisions and becomes a solution to avoid interest transactions. The synergy between the Islamic financial sector and information technology innovation should also be a challenge as well as an opportunity for all actors in the Islamic finance industry to catch up with the conventional financial industry.
    Keywords: Financial Technology, FinTech, FinTech Sharia, Islamic Finance
    JEL: A10 E40 G21 G23 G30 O14 O32
    Date: 2019–07–04
  14. By: Daniel Jeongdae Lee (Macroeconomic Policy and Financing for Development Division, ESCAP); Shuvojit Banerjee (Macroeconomic Policy and Financing for Development Division, ESCAP); Zheng Jian (Macroeconomic Policy and Financing for Development Division, ESCAP)
    Abstract: Infrastructure is critical to the achievement of the Sustainable Development Goals. It is represented in Goal 9 along with industrialization and innovation, but also implicit in many other Goals including food security, health, decent jobs and cities and human settlements. Among infrastructure sectors, progress on Goal 7 on clean energy would be critical for limiting global warming to well below two degrees Celsius. ESCAP’s Economic and Social Survey 2019 estimates that developing countries in the Asia-Pacific region would have to invest an additional $196 billion per year in transport, ICT and water and sanitation infrastructure, and new investments of $434 billion to achieve Goal 7 on affordable and clean energy for all.
    Date: 2019–04
  15. By: Goran Andreev (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) South and South-West Asia Office)
    Abstract: Simplification of documentary requirements, an important aspect of international transport facilitation, can have substantial impacts in terms of reducing transport costs and improving trade competitiveness. This is especially so in the case of the South and South-West Asian countries, where procedural reforms for easing cross-border transport remain far behind advanced subregions of the Asia-Pacific region. Against an examination of the existing documentary requirements and legal arrangements in the subregion, this paper provides options for harmonization of road transport documents through a stepby- step approach. It outlines the key elements necessary for such harmonization based on modern electronic information systems. Among various options, the paper highlights solutions for dealing with transport permits and customs transit related documents. Employment of electronic vehicle/cargo tracking based on available models such as the UNESCAP Secure Cross Border Transport Model can strongly support implementation of a subregional road permit system and paperless customs transit system. The paper also provides recommendations for the special case of documentary reforms for transit, which applies to the landlocked countries of the subregion including Afghanistan, Bhutan and Nepal, based on lessons from international models such as the European New Computerized Transit System (NCTS) and ASEAN Customs Transit System (ACTS). Given the complexities of harmonization of cross-border transport documents, the paper calls for cooperation among all competent authorities and stakeholders, including customs and the private sector, at the national and regional levels.
    Keywords: Cross-border transport, trade, South Asia
    JEL: F13 N75 O24
    Date: 2018–10
  16. By: Agarwal, Sumit (National University of Singapore); Ambrose, Brent W. (Federal Reserve Bank of Philadelphia); Diop, Moussa (Federal Reserve Bank of Philadelphia)
    Abstract: Prior studies debating the effects of changes to the minimum wage concentrate on impacts on household income and spending or employment. We extend this debate by examining the impact of changes to the minimum wage on expenses associated with shelter, a previously unexplored area. Increases in state minimum wages significantly reduce the incidence of renters defaulting on their lease contracts by 1.29 percentage points over three months, relative to similar renters who did not experience an increase in the minimum wage. This represents 25.7% fewer defaults post treatment in treated states. To put this into perspective, a 1% increase in minimum wage translates into a 2.6% decrease in rental default. This evidence is consistent with wage increases having an immediate impact on relaxing renter budget constraints. However, this effect slowly decreases over time as landlords react to wage increases by increasing rents. Our analysis is based on a unique data set that tracks household rental payments.
    Keywords: minimum wage increase; lease defaults; rental market; household income
    JEL: G0 G13 G18 G28 R3 R31 R38
    Date: 2019–07–10

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