nep-sea New Economics Papers
on South East Asia
Issue of 2019‒10‒28
fifteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Teacher-Centered and Student-Centered Paradigms: Things Teachers Need to Take into Serious Consideration By Surattana Adipat; Alongkorn Ausawasowan; Warangkana Sewiset; Ratanawadee Chotikapanich
  2. Should the Caribbean Look to the East? An Assessment of Caribbean Export Potential By Lorde, Troy; Alleyne, Antonio; Hosein, Roger; Yifei, Mu
  3. Movements of Islamic Stock Indices in Selected OIC Countries By Nurrachmi, Rininta
  4. Role of social word-of-mouth on emotional brand attachment and brand choice intention: A study on private educational institutes in Vietnam By Charitha Harshani Perera; Rajkishore Nayak; Long Thang Van Nguyen
  5. FACTORS INFLUENCING EMPLOYEE ENGAGEMENT IN THAI SMEs By Sirisuhk Rakthin; Nattawat Pisitsupakarn; Karuna Aksaravut
  7. The SWOT Analysis for Chrysanthemum Farmers Business Development Strategies for Fresh Chrysanthemum Farmers By Helmiatin
  9. Is Price to Earnings Ratio (still) useful for trading strategy? By Dedhy Sulistiawan; Felizia Arni Rudiawarni
  10. The Chilean economy since the return to democracy in 1990. On how to get an emerging economy growing, and then sink slowly into the quicksand of a “middle-income trap” By Palma, J. G.
  11. Health shocks and risk aversion: Panel and experimental evidence from Vietnam By Jan Priebe; Ute Rink; Henry Stemmler
  12. The Potential Industry of Islamic Tourism in ASEAN Countries By Nurrachmi, Rininta
  13. Facing the Tides; Managing Capital Flows in Asia By Harald Finger; Pablo Lopez Murphy
  14. Strengthening of Micro Business Innovation By Tjiptogoro Dinarjo Sohari
  15. Ecosystems and Human Health: The Local Benefits of Forest Cover in Indonesia By Garg, Teevrat

  1. By: Surattana Adipat (Faculty of Education, Ramkhamhaeng University); Alongkorn Ausawasowan (Faculty of Education, Ramkhamhaeng University); Warangkana Sewiset (The Demonstration School of Ramkhamhaeng University); Ratanawadee Chotikapanich (Faculty of Education, Ramkhamhaeng University)
    Abstract: Thailand is among a number of ASEAN member countries including Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, and Vietnam. With an agreement among the countries, English is used as an official language for communication. The 11th policy established by the Thai government in 2013 encourages Thai citizens to English to help prepare the country for the ASEAN Economic Community (AEC). The issue of teacher-centered instruction (TCI) and student-centered instruction (SCI) may appear outdated, but it is necessary and should be considered since it can have a major influence on students? language learning. Both instruction types have benefits and drawbacks to varying extents in terms of students? academic success, learning motivation, and maintaining student attention. This study aims to investigate the pre-service teachers? perspectives towards TCI and SCI. The results yield a significant contribution to the development of English courses which enhance students? knowledge and skills, promote student engagement in the learning process, and enable students to transfer the knowledge they gain in class to their long-term memory. As with any course design and development, properly designed courses that meet students? varying needs are of the utmost importance.
    Keywords: English course, pre-service teachers, student-centered instruction, teacher-centered instruction, perspective
    JEL: I29
    Date: 2019–10
  2. By: Lorde, Troy; Alleyne, Antonio; Hosein, Roger; Yifei, Mu
    Abstract: This study assesses the export potential of East Asia for the Caribbean within the framework of a structural gravity model. Export potential of 30% is estimated to be available to the Caribbean within East Asia. Individual markets with the greatest export potential are Singapore, China, and Japan. Various simulations of a free trade agreement between the two regions suggest the existence of even larger potential. The challenge for the Caribbean is that without significant structural changes, the region will be unable to exploit East Asia’s potential. Greater effort at the industry and policy levels will be critical for export expansion.
    Keywords: export potential, trade complementarity, natural trading partner, non-traditional markets, structural gravity, free trade agreement, Caribbean, East Asia
    JEL: C33 C51 C53 F14 F17
    Date: 2019–06–03
  3. By: Nurrachmi, Rininta
    Abstract: This study reviews the movement of Islamic stock indices in selected countries in the Organization of Islamic Cooperation (OIC) with high number of muslim population namely Indonesia, Malaysia, Turkey, Qatar, Bahrain, and Oman. The objectives are to examine the changes in cross market linkage among six selected OIC countries during crisis and after 2007 crisis and to analyze whether the international investor can gain benefit when allocating their funds across these markets. The set of relationship for each pair of Islamic stock index is analyzed using Engel-Granger (1987) and Autoregressive Distribution Lagged (ARDL) bound testing approach. The analysis is made for the sub period during crisis is 3 September 2007 – 11 January 2010 and post crisis is 18 January 2010 – 30 April 2013. The result depicts that there are evidences of cointegration among the Islamic stock markets after crisis but not during crisis. The long-run relationship indicates that investors can gain portfolio diversification benefit across these six countries
    Keywords: Financial crisis, Islamic finance, Islamic stock index, market integration, OIC countries
    JEL: C1 C3 C32 C5 Z0
    Date: 2018
  4. By: Charitha Harshani Perera (School of Business & Management, RMIT University); Rajkishore Nayak (School of Communication & Design, RMIT University); Long Thang Van Nguyen (School of Communication & Design, RMIT University)
    Abstract: Prospective students are increasingly using social media to gather information about the higher education institutes (HEIs) while seeking the experiences and recommendations from others to evaluate the HEIs in order to make enrolment decision. Although the electronic word-of-mouth (eWOM) in social media is increasingly adopting in Vietnam, the association of social word-of-mouth (sWOM) in the higher education sector in Vietnam is an under-researched area. Accordingly, using users and gratification theory, this study aims to identify the role of sWOM in developing emotional attachment with the brands. This study has focused to examine the prospective students? interaction with sWOM to develop emotional attachment with HEI brands and thus brand choice intention. Based on the survey of a sample of undergraduates in the private institutes in Vietnam, this study develops framework consisting of sWOM as independent variable, emotional brand attachment and brand choice intention as dependent variables, and social media interactivity, perceived information usefulness and sWOM credibility as mediating variables. The results were analysed using correlation and regression analysis. Structural Equation Modelling was adopted to measure the model fit of the framework. The results showed that sWOM has a significant impact on emotional brand attachment and brand choice intention in the higher education sector. Social media interactivity, perceived information usefulness and sWOM credibility strengthened the relationship among sWOM and emotional brand attachment. This paper offers a better understanding of how emotional brand attachment with social media affected is by sWOM and thus brand choice intention.
    Keywords: Social word-of-mouth, Emotional Brand Attachment, Higher Educational Institutes, Brand choice intention, Social media interactivity, Perceived information usefulness, SWOM credibility
    JEL: M31 M39
    Date: 2019–10
  5. By: Sirisuhk Rakthin (College of Management, Mahidol University); Nattawat Pisitsupakarn (College of Management, Mahidol University); Karuna Aksaravut (College of Management, Mahidol University)
    Abstract: Successful organization, in any size or type, must have engaged employees who have high potential, positive attitude, and devotion to do their job well. Employee engagement became more vital to small and medium-sized enterprises (SMEs) since they posses much fewer resources than large organizations. In Thailand, there are currently 2.9 million SMEs, which account for 99.6% of all business entities and employ 10.5 million people, or 77.8% of total Thai workforce. Although SMEs play a critical role in Thai Economy, most Thai SMEs still face many challenges ? limited competency and accessibility to sources of funds, IT competency, government business promotions services, and global markets. Limited resource accessibility for SMEs results in high employee turnover rate. Consequently, it is vital that Thai SMEs should adopt meaningful HR management tools to improve their long-term business sustainability. This research study aims to explore how employee?s 1) self-leadership, 2) interpersonal leadership, 3) process leadership, 4) adaptability, and 5) remuneration satisfaction could influence employee engagement in Thai SMEs. Also, the mediating effects of job satisfaction in these relationships are examined. Data have been collected via questionnaires from 497 employees in Thai SMES and hypotheses were tested using the partial least squares structural equation modeling (PLS-SEM). The results indicate that employee?s 1) self-leadership, 2) interpersonal leadership, 3) adaptability, and 4) satisfaction on existing remuneration have positive impacts on employee engagement. In addition, our results demonstrate that job satisfaction partially mediates relationships between 1) interpersonal leadership and 2) remuneration satisfaction and the SMEs? employee engagement. The research study demonstrates the value of employees? leadership, adaptability and satisfaction in increasing employee engagement, particularly in SMEs context. The research result can pave a path for better HR management in Thai SMEs, e.g., leadership training, compensation package design, and etc.
    Keywords: Leadership, Employee Engagement, Job Satisfaction, SMEs, Thailand
    JEL: J28 C30 M10
    Date: 2019–10
  6. By: Lilis Sulastri (Faculty of Social and Political Sciences, UIN Sunan Gunung Djati Bandung)
    Abstract: Islamic work ethics is a concept of ethics that is based on Islamic teaching and principle which rely on faith. Islamic ethics is a principle of right and wrong which designate to demonstrate what human ought to do taught Quran and shown in the great life of the Prophet Muhammad. This study investigated the influence of Islamic work ethic on intrinsic motivation, organizational culture and job performance in Islamic College in Indonesia. This study used a quantitative model, and it uses a sample of 150 employees of Islamic University in Bandung, Indonesia. Empirical results show that the Islamic work ethic greater effect on intrinsic motivation and organizational culture than their effects on job performance. Furthermore, empirical results suggest intrinsic motivation moderates the relationship of the Islamic work ethic on performance, and organizational culture moderates the relationship of the Islamic work ethic on performance.
    Keywords: Islamic college; Islamic work ethic; Intrinsic motivation; Organizational culture; Performance
    JEL: F15 O52
    Date: 2019–10
  7. By: Helmiatin (Economics, Open University, Indonesia Author-2-Name: Etty Susanty Author-2-Workplace-Name: Economic Faculty, Open University, Jalan Cabe Raya Pondok Cabe, 15418, Indonesia Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: Objective - This paper examines the business strategy at cut flower area. The need for cut flowers, especially chrysanthemums, is very large. The farmers of cut flowers are concentrated in Java, namely Malang, Bandungan, Yogyakarta and Cianjur in West Java.Methodology/Technique - In this study the object is in Bandungan, Semarang area. With large market conditions, it is possible for cut flower farmers to plant various varieties of chrysanthemum that the market likes. In order to fulfil the market prospect that is still wide open, chrysanthemum cut flower farmers must have business strategies that are able to provide guidance on the business being run. Production activities will develop and have an impact on farmers if supported by organizational policies that not only manage internal activities but are also able to face challenges from a dynamic external environment.Findings and Novelty - The SWOT analysis were used at this research. The strategies that should be created are increasing cooperation, maintaining networks, and expanding marketing. The need for cut flowers especially chrysanthemums flowers in Indonesia is very large. This study aims to identify and examine the internal and external factors of the development of chrysanthemum agribusiness in Bandungan Village and to determine the priority of appropriate agribusiness strategies based on the farmer's needs. This study is descriptive analysis research with a sample of 45 Chrysanthemum farmers. Using SWOT analysis, we found the strength, weakness, opportunity, and threat for the farmers and we could design alternative business strategies. Internal Strategic Factor Analysis Summary (IFAS) is used to identify and evaluate the key internal factors of the company, while External Strategic Factor Analysis (EFAS) is used to organize external strategic factors into generally accepted categories of opportunities and threats. Meanwhile, IE matrix is used to define the business strategy at the company level with greater details. The results suggest that the farmers should strengthen the internal conditions of the farmer groups, improve the production of chrysanthemum flower, and maximize the use of production facilities and equipment, These findings imply that production activities will develop and have a positive impact on farmers if supported by organizational policies that not only manage internal activities but are also able to face challenges of a dynamic external environment.Type of Paper - Empirical.
    Keywords: Chrysanthemum Flower; Strategic Management; SWOT Analysis.
    JEL: Q20 Q22 Q29
    Date: 2019–09–22
  8. By: James Alm (Tulane University)
    Abstract: The Indonesian tax system is plagued by a number of problems. Of most importance, the tax system generates an extraordinarily low level of revenues, due to several aspects of the tax system. There is evidence of significant amounts of tax evasion. The tax base has also been reduced by deliberate tax structure decisions, especially the choice of thresholds in the corporate income tax and in the value-added tax, along with the extensive system of fiscal incentives that are available in both taxes. These features of the tax system contribute to an overly complicated system, and they also illustrate the limitations of the tax administration. Indeed, the system has evolved over time in a piecemeal, ad hoc manner with little apparent thought given to the ways in which the pieces of the system need to fit together. This paper analyzes these problems, and it suggests possible options for tax reform.
    Keywords: Indonesia, tax reform.
    JEL: H20 H24 H25 H87
    Date: 2019–10
  9. By: Dedhy Sulistiawan (University of Surabaya); Felizia Arni Rudiawarni (University of Surabaya)
    Abstract: Overreaction phenomena stimulate assets mispricing and return reversals. Investors should build a trading strategy to receive benefits from the anomaly. Developing the classic idea of overreaction hypothesis from DeBondt and Thaler (1985 and 1990), we build stock portfolios based on sentiment and risk to produce higher future stock return. Using Indonesian data, we use financial information from public information to test weak-form efficiency. We believe that investors are not always rational and other groups of investors can use public information to generate excess return. This article finds that lower PER tend to produce higher future return, especially if lower PER accompanied by lower risk. Practically, our study contributes to the use of fundamental analysis in emerging markets. Theoretically, this study supports the idea of behavioral finance theory and reject weak-form efficient market hypothesis in Indonesia Stock Exchange.
    Keywords: Price Earnings Ratio (PER), Price to Book Value (PBV), stock risk, future return, trading strategy
    JEL: G11 G14
    Date: 2019–10
  10. By: Palma, J. G.
    Abstract: The main hypothesis of this paper is that the Chilean economy's poor performance over the last two decades (e.g., average productivity growth collapsed by three quarters vis-à-vis the previous cycle) results from its development strategy having run its course -being now in desperate need of a full “upgrade” (one capable of generating new engines of productivity growth; e.g., the industrialisation of commodities, a “green new deal”, or the spread of the new technological paradigm to the four corners of the economy). The same can be said of the neo-liberal ideology at its foundations, as most of its “absolute certainties” are being shaken to the core. However, neither the (not so) invisible hand of distorted markets, nor centre-left or centre-right governments have had much of a clue as to how to bring this change about. There is also (unlike, say, in some Asian economies) a generalised lack of nerve to do anything about it. Consequently, the Chilean economy is now jammed in a rather transparent -and self-made- “middle-income trap”. In fact, change has come in the opposite direction: in order to reinforce the growingly fragile status quo, a new policy-straightjacket has been added in the form of the Transpacific Treaty, or TPP-11, which gives large corporations (foreign and domestic) a de facto veto against any change in policy. In turn, the advanced countries’ “reverse catching-up” isn’t helping either, as this also helps reinforce the convictions of those in Chile defending the status quo. We are all now indeed converging in the West, north and south, but towards Latin American features such as mobile élites creaming off the rewards of economic growth, and ‘magic realist’ politics that lack self-respect if not originality. In fact, it is now even tempting to say to those in the high-income OECD “Welcome to the Third World”.
    Keywords: Chile, Latin America, emerging Asia, Catching-up, “Reverse catching-up”, Export “upgrading”, Productivity, Immigration, “premature” de-industrialisation, Keynes, Hirschman, Foucault, Neo-liberalism, Inequality, Rent-seeking
    JEL: B52 E20 F13 F53 H54 J20 L52 N16 N66 O16 O40 P50
    Date: 2019–10–16
  11. By: Jan Priebe (German Institute of Global and Area Studies (GIGA), Hamburg, Germany); Ute Rink (University of Goettingen); Henry Stemmler (University of Goettingen)
    Abstract: This paper looks at individual risk behavior and disability in Vietnam, where many households live with a disabled family member. Due to the Vietnam war, disability is a common phenomenon and shapes individuals’ daily life and decision making. Using longitudinal data of 2200 households in Vietnam and an instrumental variable strategy, we show that individuals who live with a disabled family member are more risk averse than others. In addition we employ field experiments and psychological primes to elicit risk and loss behavior of individuals living in the Vietnam province Ha-Thinh. The experimental results, underpin our panel results. We show in addition that a negative recollection of health issues, leads to a lower risk attitude of individuals who do not live with a disabled family member and that individuals who live with a disabled family member are less loss averse. Our findings are causal and contribute to existing studies showing that households who are characterized by higher backward risks are more risk averse than others.
    Keywords: risk, disability, Vietnam
    JEL: I14 D1 Z1
  12. By: Nurrachmi, Rininta
    Abstract: ASEAN countries are rich with natural resources and historical heritage. The high number of Muslim populations in ASEAN countries can be a potential revenue to promote Islamic tourism. This study aimed to examine the potential industry of Islamic tourism as an alternative revenue and it seeks to investigate the effective and efficient way in promoting Islamic tourism in ASEAN. There are many factors that promote Islamic tourism in ASEAN countries. Push and pull factors influence Muslim tourists is deciding which place they want to visit. Collaboration and coordination among ASEAN countries can enhance Islamic tourism in developing Islamic tourism which can provide economic benefit to enhance the countries’ revenue.
    Keywords: Islamic tourism, muslim, southeast countries
    JEL: E2 E24 O1 O11
    Date: 2019–10
  13. By: Harald Finger; Pablo Lopez Murphy
    Abstract: This paper looks empirically at some economic effects of volatile exchange rates and financial conditions and examines policy responses for managing such volatility. It also sheds light on some economic costs that stem from volatile capital flows and exchange rates and analyzes how countries deploy their policy toolkits in response. The data-driven analysis should contribute to ongoing reflections about how to manage volatile capital flows and exchange rates both in Asian EMEs and more broadly.
    Keywords: Exchange rate policy;Real effective exchange rates;Balance of payments;Exchange markets;Balance of payments statistics;DPPP,capital flow,capital inflow,output gap,inflow,currency depreciation
    Date: 2019–10–23
  14. By: Tjiptogoro Dinarjo Sohari (Assistant Professor of Mercu Buana University, Indonesia Author-2-Name: Iffah Budiningsih Author-2-Workplace-Name: Assistant Professor of Asyafi'iyah Islam University, Indonesia Author-3-Name: Alvita Sari Author-3-Workplace-Name: Lecturer of Mercu Buana University, Indonesia Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: Objective - The objective of this study is to produce a model for strengthening micro-businesses innovation through strengthening character and leadership.Methodology/Technique - The method employed in this is explanatory quantitative, multiple regression analysis with SPSS. This is a case study of micro-businesses actors in around Mercu Buana University Campus, Jakarta. The target population is 50 business units and the sample is 49 business units.Findings - The results show that character and leadership simultance have a positive and strong influence as an instrument to strengthen innovation. Further, the correlation between character and leadership simultance and innovation is 0,832; character and leadership simultance 'cannot be ignored' as an instrument to strengthen innovation. Further, innovation can be predicted by character and leadership simultance using a multiple regression model of Y = 0,529 + 0,275 X1 + 0.473 X2.Novelty - The contribution of character and leadership simultance towards innovation is 69%. The remaining 31% is influenced by factors not considered in this paper.Type of Paper - Empirical.
    Keywords: Entrepreneurship; Microenterprise; Innovation; Character; Leadership.
    JEL: M1 M10 M19
    Date: 2019–09–24
  15. By: Garg, Teevrat (University of California, San Diego)
    Abstract: This paper documents the effect of primary forest cover loss on increased incidence of malaria. The evidence is consistent with an ecological response. I show that land use change, anti-malarial programs or migration cannot explain the effect of primary forest cover loss on increased malarial incidence. Falsification tests reveal that the effect is specific to malaria, with forest cover having no discernible effect on other diseases with a disease ecology different from that of malaria. Back-of-the-envelope calculations indicate that the morbidity-related malaria-reducing local benefits of primary forests are at least $1-$2 per hectare.
    Keywords: deforestation, malaria
    JEL: Q53 O13 Q56 Q57 Q20
    Date: 2019–10

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