nep-sea New Economics Papers
on South East Asia
Issue of 2022‒04‒11
nineteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. The Roles of Foreign Ownership and Growth Opportunity amid the Trade War: Evidence from an Emerging Country By 子, 鬼谷
  2. Sharing norm, household efficiency and female demand for agency in the Philippines By Jean-Marie Baland; Ludovic Bequet; Catherine Guirkinger; Clarice Manuel
  3. Real Exchange Rate Misalignment and Business Cycle Fluctuations in Asia and the Pacific By Ambaw, Dessie; Pundit, Madhavi; Ramayandi, Arief; Sim, Nicholas
  4. Asia Digital Common Currency as a Global (International) Currency By Wataru Takahashi; Taiji Inui
  5. Economic and Social Impacts of Social Entrepreneurship Implementation Service to Community By Yusriadi, Yusriadi
  6. Impact of Tourism on Poverty Reduction: Evidence from an Emerging Tourism Market By , Le Thanh Tung
  7. No evidence that siblings’ gender affects personality across nine countries By Thomas Dudek; Anne Ardila Brenøe; Jan Feld; Julia M. Rohrer
  8. A Case for Value-Added Exports in the Estimation of Export Diversification in Asia and the Pacific By Bajaj, Pallavi; Baris, Kristina; Gonzales, Patricia Georgina; Jabagat, Christian Regie; Lazatin, Janine Elora; Tan, Elaine
  9. Agricultural productivity and land inequality. Evidence from the Philippines By Ludovic Bequet
  10. International Migration, Cross-Border Labor Mobility, and Regional Economic Integration in Asia and the Pacific By Aiko Kikkawa; Raymond Gaspar; Cyn-Young Park
  11. A Panel Clustering Approach to Analyzing Bubble Behavior By Yanbo Liu; Peter C. B. Phillips; Jun Yu
  12. Impact of Social Network Usage on Academic Performance of the Vietnamese Students By , Le Thanh Tung
  13. Informal Loans in Thailand: Stylized Facts and Empirical Analysis By Pim Pinitjitsamut; Wisarut Suwanprasert
  14. On the Use of Satellite-Based Vehicle Flows Data to Assess Local Economic Activity: The Case of Philippine Cities By Go, Eugenia; Nakajima, Kentaro; Sawada , Yasuyuki; Taniguchi, Kiyoshi
  15. Bullard Discusses Fed’s Response to Inflation during AIC Remarks By James B. Bullard
  16. Stablecoins and Central Bank Digital Currencies: Policy and Regulatory Challenges By Barry Eichengreen; Ganesh Viswanath-Natraj
  17. Learning Losses from School Closure Due to the COVID-19 Pandemic for Thai Kindergartners By Weerachart Kilenthong; Khanista Boonsanong; Sartja Duangchaiyoosook; Wasinee Jantorn; Varunee Khruapradit
  18. Cattle, seaweed, and global greenhouse gas emissions By Nin-Pratt, Alejandro; Beveridge, Malcolm C. M.; Sulser, Timothy B.; Marwaha, Nisha; Stanley, Michele; Grisenthwaite, Robert; Phillips, Michael J.
  19. Locating Industrial Policy in Developmental Transformation: Lessons from the Past, Prospects for the Future By Ben Fine; Seeraj Mohamed

  1. By: 子, 鬼谷
    Abstract: In recent years investors tend to divert their investment to emerging economies in the Association of Southeast Asian Nations (ASEAN), especially during the U.S.-China trade war. The present study adopts the Weighted Least Square (WLS) and PROCESS macro tool to examine the effects of foreign ownership and growth opportunity on financial performance of Vietnamese listed firms over the period 2011-2018. Our findings show that foreign ownership plays as moderator variable in the relationship between short-term and long-term performance of firms. Empirical results also reveal that mediating effects of growth opportunity on short-term and long-term performance are different before and after the trade war. These findings have important implications for investors and managers in the ASEAN countries.
    Date: 2020–06–19
  2. By: Jean-Marie Baland (Center for Research in the Economics of Development, University of Namur); Ludovic Bequet; Catherine Guirkinger; Clarice Manuel
    Abstract: Households in the Philippines are characterized by durable unions and a relatively high status of women who are entrusted with the management of household finances, a context conducive to intra-household cooperation. We run experimental games with couples in the rural Philippines. We first find the prevalence of a strong sharing norm whereby women secure about two thirds of the total payoffs, in line with their prominent role in the family. Despite a favourable setting, couples incur large efficiency losses of about 46% of potential gains. We interpret this finding as revealing a strong, latent demand for agency by women who express a strong preference for hidden money over (larger) transfers from their husband as the latter involve an implicit control over their use. These findings challenge a naive view of female empowerment that solely focuses on the apparent control over household resources.
    Date: 2022–02
  3. By: Ambaw, Dessie (University of South Australia); Pundit, Madhavi (Asian Development Bank); Ramayandi, Arief (Asian Development Bank); Sim, Nicholas (Singapore University of Social Sciences)
    Abstract: Real exchange rate (RER) misalignment, which is the deviation between the actual real exchange rate from its equilibrium, occurs frequently among developing economies. Studies have shown that RER misalignment may have negative economic implications, such as a reduction in economic growth, exports and export diversification, and an increased risk of currency crises and political instability. Using quarterly data for 22 sample economies from 1990 to 2018, this paper investigates the impact of RER misalignment on business cycles in Asia and the Pacific by employing a panel vector autoregression involving consumer price index (CPI) inflation, output gap, short-term interest rate, and RER misalignment. We find that RER overvaluation may lead to a reduction in CPI inflation and short-term interest rate. We also find that Asia and the Pacific is highly heterogeneous wherein the output gaps of some economies, particularly those in Southeast Asia, are more susceptible to RER misalignment shocks.
    Keywords: real exchange rate misalignment; business cycle fluctuations
    JEL: D74 E32 F31 F41 O11
    Date: 2022–03–08
  4. By: Wataru Takahashi (Faculty of Economics, Osaka University of Economics and Research Fellow, Research Institute for Economics and Business Administration, Kobe University, JAPAN); Taiji Inui (Japan International Cooperation Agency and Asia Development Bank (ADB), JAPAN)
    Abstract: This paper proposes “Asia Digital Common Currency (ADCC)” aiming at fostering Asian financial markets. We are proposing to issue a digital common currency controlled and managed under multilateral governance framework. As a result, the international currency, which should be an international public good, will be governed by a multilateral system. Under our proposed ADCC, each member country can carry out monetary policy independently. It also has a mechanism to maintain currency sovereignty in digital era. In addition, ADCC will contribute to the development of financial market infrastructures in Asia. It will foster the bond markets and standardize the Asian financial system. Asia lags behind Europe in monetary integration, but historically had experiences in common currency circulation. ADCC is an idea that should be thoroughly considered in order to develop the Asian and Japanese economies in the digital age.
    Keywords: Digital currency; Common currency; International currency as an international public good; Currency sovereignty (Münzhoheit); Anonymity; Independence of monetary policy
    JEL: E42 F33 F36
    Date: 2022–03
  5. By: Yusriadi, Yusriadi
    Abstract: The government's policy to prevent the spread of COVID-19 has limited physical interaction between communities, creating problems for various everyday economic activities. One of which is the existence of a grant given by the Ministry of Research and Technology / National Innovation Research Agency of the Republic of Indonesia for the implementation of community service by guiding the development of micro?businesses in society. This type of research is a descriptive method with a qualitative approach. Data collection was conducted by interviewing eight informants consisting of recipients of the Family Hope Program assistance. Documentation and observation were also carried out to strengthen the data. Data analysis used an interactive model following Milles and Huberman's opinion, namely: data reduction, data presentation, and conclusion drawing.
    Date: 2020–07–26
  6. By: , Le Thanh Tung
    Abstract: There are few studies focusing on the effect of tourism on poverty in the emerging tourism markets, however, there is no empirical evidence in Vietnam. Our paper is the first one that aims to investigate the impact of tourism on poverty with a new database collected from 61 provinces in Vietnam over the period 2010–2018. The empirical result strongly shows that tourism has a negative and significant impact on poverty in all estimated models. It means that a higher in tourism revenue can lead to a lower poverty rate in the provinces. Besides, labour force and education are found to have a negative and significant effect on poverty. Although foreign direct investment has a negative impact on poverty, however, the coefficients are not significant. Finally, we have some conclusions and implications for policymakers to sustainably reduce the poverty rate of households in the future.
    Date: 2020–06–08
  7. By: Thomas Dudek; Anne Ardila Brenøe; Jan Feld; Julia M. Rohrer
    Abstract: Does growing up with a sister rather than a brother affect personality? In this paper, we provide a comprehensive analysis of the effects of siblings’ gender on adults’ personality, using data from 85,887 people from 12 large representative surveys covering 9 countries (the United States, the United Kingdom, the Netherlands, Germany, Switzerland, Australia, Mexico, China, and Indonesia). We investigated the personality traits risk tolerance, trust, patience, locus of control, and the Big Five. We found no meaningful causal effects of the gender of the next younger sibling, and no associations with the gender of the next older sibling. Based on high statistical power and consistent results in the overall sample and relevant subsamples, our results suggest that siblings’ gender does not systematically affect personality.
    Keywords: Personality, economic preferences, sibling gender, sibling sex
    JEL: J12 J16 J24
    Date: 2022–03
  8. By: Bajaj, Pallavi (United Nations Conference on Trade and Development); Baris, Kristina (Asian Development Bank); Gonzales, Patricia Georgina (Asian Development Bank); Jabagat, Christian Regie (Asian Development Bank); Lazatin, Janine Elora (Asian Development Bank); Tan, Elaine (Asian Development Bank)
    Abstract: Export diversification, or the breadth of exports of an economy, is increasingly seen as a means of accelerating economic growth, mitigating instability due to price, demand, and exchange rate fluctuations, and stabilizing earnings from exports in the long run. As economies integrate into global and regional value chains, the new fragmented production structures may not be adequately reflected in diversification measurements based on gross exports. This paper develops a new indicator of export diversification based on value added in sectors contributing to exports. For most Asia and the Pacific economies, the gross exports approach underestimates export diversification compared to the value-added approach. Analyzing the trends suggests a strong case for the latter approach to complement the more traditional approach. The relationship between export diversification and growth is complex and is dependent on the diversification indicator and varies by income levels. One general finding is that divergence between diversification in exporting sectors and in sectors contributing to exports narrowed as income levels of economies increased.
    Keywords: export; value added; diversification; global value chains
    JEL: C82 F10 F43 F63
    Date: 2022–03–07
  9. By: Ludovic Bequet (Center for Research in the Economics of Development, University of Namur)
    Abstract: This paper presents the first detailed empirical evaluation of the effect of agricultural productivity on land inequality using the context of genetically modified (GM) corn seeds introduction in the Philippines. Using three waves of census data covering 21 years and 17 million plots, I identify the effect by exploiting exogenous variations in soil and weather, leading to differences in potential gain from GM corn cultivation. Results show that municipalities that benefited more from the technology experienced an increase in landholding inequality, measured by the area farmed by top decile and by the Gini index. This effect is partly driven by a relative increase in agricultural land and more precisely by a lower contraction in more affected areas. While increased land inequality is associated with a higher level of terrorist activity, it does not seem to have any adverse effect on poverty, household income or expenditure.
    Date: 2022–02
  10. By: Aiko Kikkawa (Asian Development Bank (ADB)); Raymond Gaspar (Asian Development Bank (ADB)); Cyn-Young Park (Asian Development Bank (ADB))
    Abstract: International migration is considered an essential element of economic integration. Yet, the intraregional movement of people and labor in Asia and the Pacific has stagnated in recent years in contrast to the steadily rising flow of goods, services, and investment. This paper examines the key factors driving the movement of people from and within the region using bilateral international migrant stock data and evaluates whether some key indicators of economic integration between origin and destination economies have additive effects on this movement/these movements. Our analysis shows that commonly known determinants such as income differences; population size; and political, geographical, and cultural proximities between the migrant origin and destination countries are associated with greater movement, along with the growing share of older population in destination economies and the similarities in the level of educational attainment. The paper also finds that cross-border migration is affected, in varied directions, by the degree of economic integration between the origin and destination economies, especially through bilateral trade and value chain links. The offshoring of production—and hence jobs and other economic opportunities—to migrant origin countries suppresses outmigration, but the expected rise in the origin country income will eventually promote migration by relaxing financial constraints.
    Keywords: international migration, labor mobility, regional economic integration
    JEL: F22 O15
    Date: 2021–12
  11. By: Yanbo Liu (School of Economics, Shandong University); Peter C. B. Phillips (Cowles Foundation, Yale University, University of Auckland, Singapore Management University, University of Southampton); Jun Yu (Singapore Management University)
    Abstract: This study provides new mechanisms for identifying and estimating explosive bubbles in mixed-root panel autoregressions with a latent group structure. A post-clustering approach is employed that combines a recursive k-means clustering algorithm with panel-data test statistics for testing the presence of explosive roots in time series trajectories. Uniform consistency of the k-means clustering algorithm is established, showing that the post- clustering estimate is asymptotically equivalent to the oracle counterpart that uses the true group identities. Based on the estimated group membership, right- tailed self-normalized t-tests and coefficient-based J-tests, each with pivotal limit distributions, are introduced to detect the explosive roots. The usual Information Criterion (IC) for selecting the correct number of groups is found to be inconsistent and a new method that combines IC with a Hausman-type specification test is proposed that consistently estimates the true number of groups. Extensive Monte Carlo simulations provide strong evidence that in finite samples, the recursive k-means clustering algorithm can correctly recover latent group membership in data of this type and the proposed post- clustering panel-data tests lead to substantial power gains compared with the time series approach. The proposed methods are used to identify bubble behavior in US and Chinese housing markets, and the US stock market, leading to new findings concerning speculative behavior in these markets.
    Keywords: Bubbles, Clustering, Mildly explosive behavior, k-means, Latent membership detection.
    JEL: C22 C33 C51 G01
    Date: 2022–02
  12. By: , Le Thanh Tung
    Abstract: Social networks and communication on the Internet have an important role in people's daily life worldwide. This paper examines the impact of Social network usage on the Academic performance of students. The research data were collected from a stratified sampling survey including 576 Vietnamese undergraduate students. The research model has five independent variables (Perceived usefulness, Perceived ease of use, Social influences, Facilitating conditions, Community identity), one mediating variable (Social network usage), and one dependent variable (Academic performance). The study methods include the Cronbach’s alpha test, the Exploratory factor analysis, the Confirmatory factor analysis, and the Structural equation modeling are employed to quantitatively analyze the relationship among variables. The result finds that there are positive and significant impacts of Perceived usefulness, Perceived ease of use, Social influences, Community identity on Social network usage. The impact of Facilitating conditions on Social network usage is positive, however, it is not significant. The result also concludes that there is a positive and significant impact of Social network usage on the Academic performance of students. Besides, the empirical statistical data indicates that social networks are really a popular and familiar tool for helping students to communicate with each other in Vietnam. Finally, the study result suggests that educational managers may use social networks as an informal tool to enhance not only the academic performance of students but also other educational activities in universities.
    Date: 2020–03–08
  13. By: Pim Pinitjitsamut; Wisarut Suwanprasert
    Abstract: This paper examines informal loans in Thailand using household survey data covering 4,800 individuals in 12 provinces across Thailand’s six regions. We proceed in three steps. First, we establish stylized facts about informal loans. Second, we estimate the effects of household characteristics on the decision to take out an informal loan and the amount of informal loan. We find that age, the number of household members, their savings, and the amount of existing formal loans are the main factors that drive the decision to take out an informal loan. The main determinations of the amount of informal loan are the interest rate, savings, the amount of existing formal loans, the number of household members, and personal income. Third, we train three machine learning models, namely K–Nearest Neighbors, Random Forest, and Gradient Boosting, to predict whether an individual will take out an informal loan and the amount an individual has borrowed through informal loans. We find that the Gradient Boosting technique with the top 15 most important features has the highest prediction rate of 76.46 percent, making it the best model for data classification. Generally, Random Forest outperforms the other two algorithms in both classifying data and predicting the amount of informal loans.
    Keywords: Informal Loans; Machine Learning; Shadow Economy; Thailand; Loan Sharks
    JEL: E26 G51 O16 O17
    Date: 2022–02
  14. By: Go, Eugenia (Asian Development Bank); Nakajima, Kentaro (Hitotsubashi University); Sawada , Yasuyuki (University of Tokyo); Taniguchi, Kiyoshi (Asian Development Bank)
    Abstract: The lack of suitable data is a key challenge in ex-post policy evaluations. This paper proposes a novel data to measure local economic activities using vehicle counts in each 500 meter (m) x 500 m tile. The metric is derived from high resolution satellite images using a machine learning algorithm. Using the opening of the new international airport terminal in Cebu, Philippines, as a quasi-experiment, we estimate the impact of the new infrastructure on the local economy of Metro Cebu. Results of the difference-in-differences analysis show that the new terminal significantly increased vehicle traffic in urban Cebu. The effect decays with distance from the airport, is stronger in areas where hotels are located, and is most pronounced in the peak months for international tourists. These findings imply that the opening of the new international terminal has enhanced Cebu's local economy through international tourism.
    Keywords: transportation infrastructure; satellite imagery data
    JEL: R11
    Date: 2022–03–14
  15. By: James B. Bullard
    Abstract: St. Louis Fed President Jim Bullard discussed the upside surprise on inflation in recent months and the Fed’s response. He spoke at the Asian Investment Conference in an interview that was recorded March 22.
    Keywords: inflation
    Date: 2022–03–22
  16. By: Barry Eichengreen; Ganesh Viswanath-Natraj
    Abstract: Stablecoins and central bank digital currencies are on the horizon in Asia, and in some cases have already arrived. This paper provides new analysis and a critique of the use case for both forms of digital currency. It provides time-varying estimates of devaluation risk for the leading stablecoin, Tether, using data from the futures market. It describes the formidable obstacles to widespread use of central bank digital currencies in cross-border transactions, the context in which their utility is arguably greatest. The bottom line is that significant uncertainties continue to dog the region's digital currency initiatives.
    Date: 2022–02
  17. By: Weerachart Kilenthong; Khanista Boonsanong; Sartja Duangchaiyoosook; Wasinee Jantorn; Varunee Khruapradit
    Abstract: This paper presents empirical evidence of learning losses from school closure due to the COVID-19 pandemic for kindergartners using a large-scale school readiness survey in Thailand. Its findings indicate that school closure during the outbreak of COVID-19 causes enormous learning losses in cognitive skills, especially in mathematics and working memory. The negative impact is heterogeneous across several dimensions, including child gender, special needs, wealth, having private tutoring, caregiver’s education and parental absence. This paper also estimates daily learning gains, of which significant results confirm that going to school has significantly benefited young children, especially in receptive language, mathematics and working memory.
    Keywords: Learning Losses; School Closure; School Readiness; Daily Learning Gains; COVID-19; COVID Slide; Disadvantaged Children; Working Memory; Math; Literacy; Receptive Language; Non-cognitive
    JEL: I21 I25 J24
    Date: 2022–03
  18. By: Nin-Pratt, Alejandro; Beveridge, Malcolm C. M.; Sulser, Timothy B.; Marwaha, Nisha; Stanley, Michele; Grisenthwaite, Robert; Phillips, Michael J.
    Abstract: This study is a first attempt to estimate the impact of a red seaweed (Asparagopsis taxiformis) feed additive on total emissions from cattle and the feasibility of scaling up farmed seaweed production to meet projected demand from the livestock sector. The approach used for the analysis combines projections of supply and demand of beef and milk production to 2050 with a cattle herd model that allows calculation of animal categories by age and sex, animal weight and production, and feed intake and methane emissions from cattle. At the time of this study, the seaweed additive showed limited applicability in grazing systems as it has been used experimentally, mostly incorporated in mix rations for each treatment animal, with not enough evidence available at present to determine the time of decay of the active component in seaweed after consumption by animals with limited access to the additive. Given these limitations, this study assumes that the applicability of the seaweed additive could be extended in the future to most dairy systems via slow-release formulations that have already been developed for other CH4 inhibitors and that can be fed daily during milking time. Based on this assumption, the maximum potential reduction of enteric methane emissions of the new technology is analyzed by projecting a scenario where the seaweed additive is supplied globally to dairy cows. Results show that the seaweed additive could result in a reduction of up to 10 percent in total methane emissions from cattle compared to a No-Seaweed scenario. Most of this reduction was driven by decreased emissions in Latin America, South Asia, and sub-Saharan Africa. The estimated reduction in feed intake associated with the seaweed additive was equivalent to an annual reduction in grain consumption of approximately 50 kgs per cow, or US$5 billion in global cost savings per year. The total amount of dry seaweed needed to supply dairy cows in 2050 was estimated at 5 million metric tons per year, representing 18 percent of the world’s seaweed-farmed area. Simply assuming the sector’s long-term historical average growth rates, this production level might be reached in approximately 20 years, although there are still several open questions about production and technologies and high variability in production costs and producer prices, as A. taxiformis is not extensively produced at present. Available knowledge on seaweed production seems to suggest that, at least at the start, production of A. taxiformis will be by nearshore culture. Expansion of nearshore culture could result in site competition with established seaweed production, access to operational license and government approvals in several countries, licenses to use livestock feeds incorporating seaweed as a feed additive, and more research to demonstrate the safety and efficacy of the additive in accordance with country’s regulations. The best possibilities for the development of production A. taxiformis seem to be in South Asia, for its growing demand and production of dairy products, its importance in terms of global emissions, and its location near the best- and well-established seaweed production areas in Southeast Asia.
    Keywords: WORLD; beef; cattle; seaweeds; greenhouse gas emissions; greenhouse gases; milk; livestock production; climate change; livestock; methane
    Date: 2022
  19. By: Ben Fine (Department of Economics, SOAS University of London); Seeraj Mohamed (Parliamentary Budget Office, South Africa)
    Abstract: What can we learn from structural change of countries that successfully industrialised in the 20th and 21st century? This paper explains that current attempts at economic transformation of the structure of countries’ economies, including industrial development, have to be analysed and understood within the shift to the new, financialised phase of capitalism and the imposition of neoliberal practices, interests and ideologies within countries and on their international economic and financial relations. Rather than reflecting an ideology of the reduction of the role of the state, neoliberalism has entailed the redirection and transformation of the control and role of the state in the provision of welfare, social security, industrial development and deregulation of trade, labour and finance as well as reorientation of both domestic macroeconomic policies and the global financial architecture. The lessons that can be learned from studying late industrialising countries, such as the Asian Tigers, that had achieved relatively high levels of industrial transformation, have to take into account this context, including the analytical reduction, even implosion, of concepts such as development and industrial policy. Further, one has to understand the limitation of current mainstream economics approaches in the context of the redefined and degraded notions of development and the roles of the state that neoliberalism deployed defensively in response to ideas that developmental states played key roles in economic transformations of the late industrialisers. First, we revisit the nature and role of industrial policy. Second, we situate these in relation to one another and what lessons we have learned from the developmental state paradigm and how we might take these lessons forward. And, third, we turn to the relationship between economic and social development. We are mindful, as already suggested, that neoliberalism, as the current stage of capitalism – now longer lasting than its “Keynesian†predecessor – is underpinned by financialisation, something that is increasingly acknowledged across the literature but which needs to be taken into account other than treating finance as one amongst many other factors.
    Keywords: Development; Developmental State; Economic Transformation; Financialisation; Industrial Policy; Neoliberalism
    JEL: G00 H11 O1 P10
    Date: 2022–01

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