nep-sea New Economics Papers
on South East Asia
Issue of 2019‒09‒30
ten papers chosen by
Kavita Iyengar
Asian Development Bank

  1. The determinant factors of automotive industry investment decision in Indonesia By Santoso, Muhammad Rifky; Bukit, Rina Br
  2. Is landholding a potential barrier to adopting profitable livelihoods in the Mekong Delta region in Vietnam ? By Van Hoang, Cuong; Quang Tran, Tuyen; Hai Thi Nguyen, Yen; Duc Nguyen, Kien
  3. Looking at Creativity from East to West: Risk Taking and Intrinsic Motivation in Socially and Culturally Diverse Countries By Giuseppe Attanasi; Ylenia Curci; Patrick Llerena; Adriana Carolina Pinate; Maria del Pino Ramos-Sosa; Giulia Urso
  4. An ASEAN Digital Single Market: Boosting the Aspiration for a Single Market in the Digital Era By Paul John, Pena
  5. Deep Neural Networks for Choice Analysis: Architectural Design with Alternative-Specific Utility Functions By Shenhao Wang; Jinhua Zhao
  6. A Test of DMPS and VIIRS Night Lights Data for Estimating GDP and Spatial Inequality for Rural and Urban Areas By John Gibson; Susan Olivia; Geua Boe-Gibson
  7. A stochastic frontier analysis approach for estimating market power in the major U.S. meat export markets By Panagiotou, Dimitrios; Stavrakoudis, Athanassios
  8. Legal Architecture and Design for Gulf Cooperation Council Economic Integration By Bashar H. Malkawi
  9. Incentives to Identify: A Comment By Antman, Francisca M.; Duncan, Brian
  10. The significance of Residential REITs in Japan as an Institutionalized property sector By Robbie Lin; Chyi Lin Lee; Graeme Newell

  1. By: Santoso, Muhammad Rifky; Bukit, Rina Br
    Abstract: Automotive industry contributes directly and indirectly to economic growth in Indonesia. Investment in this industry has increased after declining in the previous years. This paper examines some internal and external factors influencing the investment decision in this industry by using E-views for listed automotive company in Indonesia Stock Exchange from 2013 to 2017. This study finds that both net cash flow from operation and investment opportunity set (IOS) as internal factors have a significant and positive relationship to the investment decision. The capital market pressure as an external factor has a significant and negative relationship to the investment decision. The composition of the independence commissioner as an external factor does not have a significant relationship to the investment decision. By comparing the coefficient of the significant variables, the net cash flow from operation is a dominant factor in the investment decision. This fact relates to the report published by Bank Indonesia, as a central bank, that the increasing free cash flow of corporation enhances the investment in Indonesia. This study contributes as a reference to the free cash flow literatures and the capital market authority especially in the developing country.
    Keywords: investment; cash flow; investment opportunity set; capital market pressure; automotive;
    JEL: D24 L11 L62
    Date: 2019–03
  2. By: Van Hoang, Cuong; Quang Tran, Tuyen; Hai Thi Nguyen, Yen; Duc Nguyen, Kien
    Abstract: Using secondary data on rural households in the Mekong Delta region of Vietnam, our study is the first to identify (i) what livelihoods are adopted by rural households, (ii) which ones are profitable and which are not, and (iii) whether access to various types of land is an important factor affecting households’ choice of remunerative livelihoods. Considering various income sources, we apply cluster analysis techniques to offer the first classification of five types of livelihood adopted by local households. We then compare livelihood outcomes across livelihood groups using Bonferroni pairwise tests and quantile functions (Pen’s parades). It was found that households engaged in farm work, formal wage-earning work and non-wage work livelihoods obtained higher levels of income than did those with livelihoods depending on informal wage-earning work or non-labor income sources. Using a multinomial logit model, we also examine factors affecting choices of income-earning activities, and find that several types of land are positively associated with the choice of high-return livelihoods, implying that lack of access to land is a potential obstacle to adopting profitable livelihoods. Fortunately, education is found to play a major role in the pursuit of remunerative livelihoods, which suggests that better education would help households move from low- to high-return activities.
    Keywords: Cluster analysis; household incomes; land; livelihoods; sustrainable livelihood; Mekong Delta
    JEL: O2 Q1 Q12
    Date: 2019–01–03
  3. By: Giuseppe Attanasi (Université Côte d'Azur, CNRS, GREDEG, France); Ylenia Curci (RECITS - FEMTO, UTBM, Belfort, France); Patrick Llerena (BETA, University of Strasbourg, France); Adriana Carolina Pinate (Department of Neuroscience Imaging, CeSI-MeT, University of G. d'Annunzio, Chieti-Pescara, Italy); Maria del Pino Ramos-Sosa (Departamento de Economía, Universidad Loyola Andalucía, Campus Palmas Altas, Seville, Spain); Giulia Urso (Social Sciences, Gran Sasso Science Institute, L'Aquila, Italy)
    Abstract: This article presents a mixed-methods research in the eld of creativity. By making use of experiments and a questionnaire, it analyses how creativity is aected by three factors: i) motivation, ii) individuals' attitudes towards risk and ambiguity and iii) social context. Each one of these factors has been extensively investigated in the theoretical and empirical literature getting to results still open to discussion. In particular, this research focuses on two aspects. First, we try to shed some light on the controversial ndings linking risk taking and creativity that exist in the economic and psychology literature. To do so, we test the hypotheses that self perception of creative abilities may play a role in establishing a riskcreativity positive correlation. Second, being the three factors strongly inuenced by culture, the study investigates whether the impacts on creativity may dier in diverse geographical locations. Following Attanasi et al. (2019), we exploit data from experiments performed in main cities of one eastern and one western country: Ho Chi Minh city (Vietnam) and Strasbourg (France). The information to build the risk and ambiguity factor derive from risk and ambiguity elicitation via lotteries. To account for motivation, dierent organizational scenarios are set in experimental treatments (nancial incentives vs non nancial incentives to collaborate). Finally, information on social context and self perception of creative abilities are collected through a self administrated questionnaire. In our analysis, we nd that risk aversion, social habits and leisure activities have a positive eect on the creative performance of the French participants, while for Vietnamese the intrinsic motivation and the perception of their own creative capacities are positive correlated with creative scores. Our results suggest that in a country like France, social context has a strong inuence on individual creativity, while for Vietnam individual features play a role in creativity, suggesting that the socio-cultural context has dierent impacts on creativity.
    Keywords: experiments, risk, ambiguity, self-perceived creativity, motivation, geographical location, social context
    JEL: I23 O31 O32
    Date: 2019–08
  4. By: Paul John, Pena
    Abstract: Advancements in information and communications technologies have changed the way individuals, firms, and nations create and exchange value across borders. Value comes in the form of goods, services, information, and data, but may also include talent, capital, ideas, and even culture. Southeast Asia is a thriving digital economy with the prospect of becoming a US$200B economy by 2025. However, new forms of protectionist measures arise, which may impede the free flow of value within the region. An aspirational digital single market concept and the changing dynamics of digital trade are explored. A digital economic integration framework that is interoperable, inclusive, and agile is proposed to address both barriers to the creation of an ASEAN digital single market. Requisite conditions for policy solutions are identified, and an empowered digital transformation board with the task of leading the change agenda is proposed as a critical governance enabler across the region.
    Keywords: ASEAN, digitalization, digital trade, digital transformation, regional integration, single market
    JEL: F15 L81 O33
    Date: 2019–08–13
  5. By: Shenhao Wang; Jinhua Zhao
    Abstract: Whereas deep neural network (DNN) is increasingly applied to choice analysis, it is challenging to reconcile domain-specific behavioral knowledge with generic-purpose DNN, to improve DNN's interpretability and predictive power, and to identify effective regularization methods for specific tasks. This study designs a particular DNN architecture with alternative-specific utility functions (ASU-DNN) by using prior behavioral knowledge. Unlike a fully connected DNN (F-DNN), which computes the utility value of an alternative k by using the attributes of all the alternatives, ASU-DNN computes it by using only k's own attributes. Theoretically, ASU-DNN can dramatically reduce the estimation error of F-DNN because of its lighter architecture and sparser connectivity. Empirically, ASU-DNN has 2-3% higher prediction accuracy than F-DNN over the whole hyperparameter space in a private dataset that we collected in Singapore and a public dataset in R mlogit package. The alternative-specific connectivity constraint, as a domain-knowledge-based regularization method, is more effective than the most popular generic-purpose explicit and implicit regularization methods and architectural hyperparameters. ASU-DNN is also more interpretable because it provides a more regular substitution pattern of travel mode choices than F-DNN does. The comparison between ASU-DNN and F-DNN can also aid in testing the behavioral knowledge. Our results reveal that individuals are more likely to compute utility by using an alternative's own attributes, supporting the long-standing practice in choice modeling. Overall, this study demonstrates that prior behavioral knowledge could be used to guide the architecture design of DNN, to function as an effective domain-knowledge-based regularization method, and to improve both the interpretability and predictive power of DNN in choice analysis.
    Date: 2019–09
  6. By: John Gibson (University of Waikato); Susan Olivia (University of Waikato); Geua Boe-Gibson (University of Waikato)
    Abstract: Night lights, as detected by satellites, are increasingly used by economists, especially to proxy for economic activity in poor countries. Widely used data from the Defense Meteorological Satellite Program (DMSP) have several flaws; blurring, top-coding, lack of calibration, and variation in sensor amplification that impairs comparability over time and space. These flaws are not present in newer data from the Visible Infrared Imaging Radiometer Suite (VIIRS) that is widely used in other disciplines. Economists have been slow to switch to these better VIIRS data, perhaps because flaws in DMSP are rarely emphasized. We show the relationship between night lights and Indonesian GDP at the second sub-national level for 497 spatial units. The DMSP data are not a suitable proxy for GDP outside of cities. Within the urban sector, the lights-GDP relationship is twice as noisy using DMSP as using VIIRS. Spatial inequality is considerably understated by the DMSP data. A Pareto adjustment to correct for top-coding in DMSP data has a modest effect but still understates spatial inequality and misses much of the intra-city heterogeneity in the brightness of lights for Jakarta.
    Keywords: density; DMSP; inequality; night lights; VIIRS; Indonesia
    JEL: O15 R12
    Date: 2019–09–23
  7. By: Panagiotou, Dimitrios; Stavrakoudis, Athanassios
    Abstract: The present study estimates the degree of market power in the major U.S. beef and pork export destinations. The recently developed stochastic frontier (SF) estimator is used. Estimations of market and time specific Lerner indices are provided. Balanced panel data between 1980-2011 were employed. The average Lerner index is 39% for the U.S. beef exports and is the highest in the markets of ASEAN, Hong Kong/China, Japan, South Korea and Taiwan. For the U.S. pork exports, the average Lerner index is 16% and is the highest in the markets of Mexico and Taiwan.
    Keywords: Stochastic frontier; market power; U.S. meat exports
    JEL: D21 L22 L66
    Date: 2018–09–22
  8. By: Bashar H. Malkawi
    Abstract: The Cooperation Council for the Arab States of the Gulf (GCC) is generally regarded as a success story for economic integration in Arab countries. The idea of regional integration gained ground by signing the GCC Charter. It envisioned a closer economic relationship between member states.Although economic integration among GCC member states is an ambitious step in the right direction, there are gaps and challenges ahead. The best way to address the gaps and challenges that exist in formulating integration processes in the GCC is to start with a clear set of rules and put the necessary mechanisms in place. Integration attempts must also exhibit a high level of commitment in order to deflect dynamics of disintegration that have all too often frustrated meaningful integration in Arab countries. If the GCC can address these issues, it could become an economic powerhouse within Arab countries and even Asia.
    Date: 2019–09
  9. By: Antman, Francisca M. (University of Colorado, Boulder); Duncan, Brian (University of Colorado Denver)
    Abstract: Antman and Duncan (2014, 2015) document how racial identity responds to state affirmative action policy. The main contribution of our work was to show that racial identity responds to state affirmative action policy. A coding error was recently brought to our attention that resulted in 0.55% of our sample being misclassified in terms of their African ancestry. This paper provides details of the coding error and explores its implications. Although the error only affected a tiny percent of the overall sample, correcting it changes the conclusion of how multiracial blacks respond to state affirmative action bans, from a negative and statically significant effect to a small positive and statistically significant effect. Correcting the error does not change the conclusions for individuals with only or no African ancestry. None of the Asian ancestry classifications were affected by the coding error and thus none of the results for Asians were impacted. In addition, we present an updated analysis using more detailed ancestry classifications and more recent years of data. We continue to find that racial identity responds to state affirmative action policy, albeit with a different conclusion for multiracial blacks, and are now able to distinguish stronger effects for multiracial individuals with more distant connections to their minority group.
    Keywords: race, affirmative action, identity
    JEL: J15 I28 Z13
    Date: 2019–09
  10. By: Robbie Lin; Chyi Lin Lee; Graeme Newell
    Abstract: Residential Real Estate Investment Trusts in Japan (residential J-REITs) have become an increasingly significant listed property sector recently. The purpose of this paper is to assess the effectiveness of residential J-REITs in a mixed-asset portfolio context in Japan by assessing the significance, risk-adjusted performance and portfolio diversification benefits of residential J-REITs over July 2006-August 2018. The findings showed that residential J-REITs generally delivered superior risk-adjusted returns compared with the other sub-sector J-REITs, stocks and bonds in Japan over July 2006-August 2018, with desirable portfolio diversification benefits in the full mixed-asset portfolio context. Importantly, residential J-REITs are observed as strongly contributing to the mixed-asset portfolio context in Japan across the portfolio risk spectrum, particularly in a post-GFC context. This indicates that residential J-REITs are effective and liquid residential property investment exposure in Japan. This also confirms the effectiveness of institutionalised residential J-REITs. Given the solid residential property market fundamentals in Japan, an increased level of the institutionalisation of residential J-REITs can be expected.
    Keywords: Australia; Interest Rate Sensitivity; Japan; Sector-specific REITs; Singapore
    JEL: R3
    Date: 2019–01–01

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