nep-sea New Economics Papers
on South East Asia
Issue of 2023‒10‒23
nineteen papers chosen by
Kavita Iyengar, Asian Development Bank

  1. ASEAN-5: Further Harnessing the Benefits of Regional Integration amid Fragmentation Risks By Nuri Baek; Kaustubh Chahande; Kodjovi M. Eklou; Mr. Tidiane Kinda; Vatsal Nahata; Umang Rawat; Ara Stepanyan
  2. Free Trade Agreements (FTAs) and Export Structures in Thailand By Juthathip Jongwanich
  3. Factors influencing student citizenship behavior (SCB) and long–term student relationship orientation (LRO) in Vietnamese education sector By Dang, Chau Ngoc Bao; Nguyen, Duc Thai; Le, Tung Thanh; Nguyen, Vu Hoang; Nguyen, Luan Thanh
  4. Asia’s Transition to Net Zero: Opportunities and Challenges in Agriculture By Panda, Architesh; Yamano, Takashi
  5. Vietnam: 2023 IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Vietnam By International Monetary Fund
  6. Export survival for Thailand after the COVID-19 pandemic By Alongkorn Tanasritunyakul
  7. The effect of IMF communication on government bond markets: insights from sentiment analysis By Hamza Bennani; Cécile Couharde; Yoan Wallois
  8. Role of Tourism in Ensuring Gender Equity: An Asian Perspective By Murthi, Srinivash; Zhang, Wen; Shaturaev, Jakhongir
  9. Tác động của trách nhiệm xã hội điểm đến lên ý định quay lại của khách du lịch quốc tế: Bằng chứng thực nghiệm tại Thành phố Hồ Chí Minh By Vuong, Bui Nhat; Giao, Ha Nam Khanh
  10. Hành động không phù hợp của các nhà hoạt động môi trường có thể gây phản tác dụng với nghị sự lớn của nhân loại By La, Viet-Phuong; Nguyen, Minh-Hoang; Vuong, Quan-Hoang
  11. How Does Inflation in Advanced Economies Affect Emerging Market Bond Yields? Empirical Evidence from Two Channels By Kim, Sei-Wan; Park, Donghyun; Tian, Shu
  12. Giải pháp công nghệ trong lối đi tới mục tiêu trung hòa các-bon của Trung Quốc: Thép và xi-măng By Duong, Thi Minh-Phuong; Tri, Nguyen Phuong
  13. Revisiting the Conventional Wisdom of Development, Sustainability and Happy Ageing: The Case of Thailand’s Data By Euamporn Phijaisanit
  14. Health externalities to productivity and efficient health subsidies By Siew Ling Yew; Jie Zhang
  15. Sự nhấn mạnh về “phương tiện” trong phát biểu của Tổng thống Joe Biden tại Hà Nội By La, Viet-Phuong
  16. Chữ “phương tiện” ông Biden bàn luận ở Hà Nội By La, Viet-Phuong
  17. Đánh giá chính sách dầu mỏ trong nghị sự bảo vệ môi trường của Tổng thống Biden By La, Viet-Phuong; Nguyen, Minh-Hoang
  18. Tác động phức hợp của chính sách dầu mỏ trong nghị sự bảo vệ môi trường của Tổng thống Biden By La, Viet-Phuong; Nguyen, Minh-Hoang
  19. Climatic Effects and Farming Performance: An Overview of Selected Studies By Neubauer, Florian; Wall, Alan; Njuki, Eric; Bravo-Ureta, Boris

  1. By: Nuri Baek; Kaustubh Chahande; Kodjovi M. Eklou; Mr. Tidiane Kinda; Vatsal Nahata; Umang Rawat; Ara Stepanyan
    Abstract: The ASEAN-5 region, which comprises Indonesia, Malaysia, the Philippines, Singapore, and Thailand, has benefited substantially from its integration to the world economy, particularly through trade. Rising risks of geoeconomic fragmentation could reverse some gains reaped from globalization over the past decades. In this context, advancing regional integration among ASEAN-5 members has the potential to enhance the region’s resilience against external headwinds. This paper shows that despite sizeable progress, particularly in regional trade integration, there is room to advance financial integration, which also lags trade integration in ASEAN-5. Empirical findings from the paper illustrate that a higher degree of regional financial integration could generate sizeable output gains for the region. Using firm-level data, the paper highlights that digitalization, an area where the region is thriving, can support regional integration by helping firms better integrate into global value chains, with the benefits being stronger for small and medium sized enterprises. The results also suggest that digitalization can help firms move up the value chain through the production of more sophisticated products, often coined as higher export sophistication.
    Keywords: Trade integration; financial integration; digitalization; fragmentation risks
    Date: 2023–09–15
  2. By: Juthathip Jongwanich (Faculty of Economics, Thammasat University)
    Abstract: This study aims to investigate the role of (in-effect) FTAs in influencing export structures, defined as intensive and extensive margins (products and markets) and sophistication at product level using Thailand’s FTA-partner countries as a case study during 2006-2020. The results show that FTAs tended to generate favorable impacts in enhancing export structures in Thailand, except extensive margins in terms of new products. The preferential treatments noticeably expanded (existing) export products of Thailand into the FTA-partner countries (extensive margins in terms of market) while helped maintain traditional products exporting into these countries. Impacts of FTAs in improving intensive and extensive margins were pronounced in Middle-income partners and in manufacturing products. ASEAN and China were export destinations where FTAs driven intensive and extensive margins (markets) played a noticeable role. Regional FTAs, including ASEAN-Japan and ASEAN-Australia-New Zealand showed a limited role in boosting intensive and extensive margins. Apart from FTAs, trade liberalization through unilateral/multilateral liberalization of the partner countries was crucial in expanding (existing) Thai products into these markets. Importance of AFTA and ASEAN-China FTA was also observed when export sophistication is concerned. Imports through FTAs only helped enhance export sophistication, while there is no evidence observed in cases of intensive and extensive margins
    Keywords: Export margins, export sophistication, FTAs
    JEL: F14 F15 O53
    Date: 2022–05
  3. By: Dang, Chau Ngoc Bao; Nguyen, Duc Thai; Le, Tung Thanh; Nguyen, Vu Hoang; Nguyen, Luan Thanh
    Abstract: Student citizenship behavior (SCB) is regarded as one of the most significant variables influencing student orientation and the development of long-term relationships between students and higher educational institutions (LRO). The literature confirms that the issue of SCB in the higher education sector is a challenge that must be addressed. Hence, this study aims to examine the antecedents and outcome of SCB by applying linear and non-linear relationships based on the partial least squares structural equation modeling approach (PLS-SEM) and the artificial neural network model (ANN) through building constructs on the stimulus-organization-response framework (SOR). In addition, data was gathered from 185 students from Ho Chi Minh City’s universities and colleges. The study’s findings indicate that students’ stimuli, such as student satisfaction, trust, and loyalty, have a favorable impact on the expression of their citizenship behaviors, such as advocacy, offering feedback, and helping others. In addition, helping others through SCB has a beneficial influence on LRO for higher educational institutions. Finally, through the ANN model, student trust is the most prominent driver of feedback and advocacy. The results of this research provide important insight into the factors that shape the focus and growth of organizations in Vietnam's education sector through long-term collaborations. In addition, this research sheds new light on the impact that students' actions have on SCB, allowing for the development of concrete recommendations for school administrators concerned with fostering the formation of lasting relationships among their students.
    Keywords: long-term student relationship orientation, Vietnam higher-education, student citizenship behavior, SEM-ANN approach
    Date: 2023
  4. By: Panda, Architesh (United Nations University.); Yamano, Takashi (Asian Development Bank)
    Abstract: Asia is home to 60% of the world's population, 52% of global agricultural production, and 43% of agriculture-related greenhouse gas (GHG) emissions. While a large portion of the Asian population depends on agriculture for their livelihood and food security, the agriculture sector is one of the main sources of GHG emissions in the region. In some Asian economies, it accounts for more than 40% of total emissions. This report identifies the major sources of GHG emissions from the agriculture sector and reviews a variety of tools and technologies to change emission pathways. It also discusses the institutional, political, and economic challenges for achieving progress toward a cost-effective, inclusive, and resilient transition to net-zero agriculture.
    Keywords: climate change; net-zero agriculture; Asia and the Pacific; non-carbon dioxide equivalent; non-CO2e
    JEL: Q01 Q10 Q54
    Date: 2023–09–29
  5. By: International Monetary Fund
    Abstract: After a strong post-pandemic recovery, the economy faces strong headwinds. A weaker external environment led to a sizable decline in exports. In addition, amidst high private debt and rising global interest rates, a liquidity crunch distressed highly leveraged sectors (in particular, real estate), the corporate bond came to a halt, and nonperforming loans rose. As a result, economic activity decelerated sharply in the first half of 2023. While the government managed to stabilize the markets, risks remain elevated.
    Date: 2023–09–27
  6. By: Alongkorn Tanasritunyakul (Faculty of Economics, Thammasat University)
    Abstract: This paper investigates trend and pattern of export survival in Thailand compared to its competitors in the region during the period of 2000-2020. We found that Thailand has high export survival for total merchandise and its product subcategories and has high level of export diversification. Moreover, the COVID-19 pandemic did not cause significantly export failure for the main exporting market of Thailand. In the econometrics results, economic size of bilateral partnerships, average exports, GPNs products, FTAs, and good business environment can reduce hazard rate of exports. Relating to policy implications, government should improve business environment, especially trade facilitation, for supporting higher export survival in Thailand. Also, doing export diversification is a choice of reducing export failures. However, the decision of doing export diversification should be done by exporters, not government, because government cannot bear the risk of export failure from doing export diversification.
    Keywords: Export Survival, International Trade, COVID-19 pandemic
    JEL: F10 F13 O24
    Date: 2023–10
  7. By: Hamza Bennani (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris] - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université - IUML - FR 3473 Institut universitaire Mer et Littoral - UM - Le Mans Université - UA - Université d'Angers - UBS - Université de Bretagne Sud - IFREMER - Institut Français de Recherche pour l'Exploitation de la Mer - CNRS - Centre National de la Recherche Scientifique - Nantes Université - pôle Sciences et technologie - Nantes Univ - Nantes Université - Nantes Univ - ECN - École Centrale de Nantes - Nantes Univ - Nantes Université); Cécile Couharde (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Yoan Wallois (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This article examines whether the IMF sentiment conveyed by the Regional Economic Outlook (REO) provides new information capable of influencing government bond markets. To measure IMF sentiment, we use text mining techniques on an original dataset based on the qualitative content of the REO reports for 16 countries across three regions covered by the REO, Asia and Pacific, Europe, and Western Hemisphere, from 2005 to 2018. Our results suggest that the qualitative content of the REO reports has significant repercussions on bond yields, particularly in the Asia and Pacific region, and provides a positive signal in bond markets of countries participating in an IMF program in the Europe and Western Hemisphere regions. IMF sentiment towards the leading trade partner can also be an essential source of bond markets' reactions. These findings are robust when controlling for IMF quantitative forecasts in the empirical procedure, accounting for an alternative sentiment measure and controlling for other potential determinants of bond yields. They thus shed new light on the importance of IMF communication for guiding and managing markets' expectations.
    Date: 2023
  8. By: Murthi, Srinivash; Zhang, Wen; Shaturaev, Jakhongir
    Abstract: Using data from 20 Asian countries between 2010 and 2022, this study employed a system generalized method of moments estimation approach to examine the impact of tourism on gender equality. The findings indicate that tourism has a notable and positive influence on gender equality. Specifically, this impact was found to be the strongest and most statistically significant in east and southeast Asian countries, followed by west and central Asian countries, and finally south Asian countries. Furthermore, the effects of control variables related to the economy, education, and employment on gender equality varied significantly across these three subsets of countries. Overall, these results can serve as a catalyst for future interdisciplinary research in the field of tourism and gender equality, ultimately enhancing our understanding of this crucial aspect of the tourism industry.
    Keywords: Asian countries; tourism; gender equality; GMM
    JEL: F3 G0 M3 P3
    Date: 2023–02–10
  9. By: Vuong, Bui Nhat (Vietnam Aviation Academy); Giao, Ha Nam Khanh
    Abstract: Nghiên cứu được thực hiện nhằm tiết lộ cơ chế về mối quan hệ giữa trách nhiệm xã hội điểm đến (DSR) và ý định quay lại (RI) của du khách quốc tế thông qua vai trò trung gian của chất lượng mối quan hệ (sự hài lòng điểm đến (DS), và sự tin tưởng điểm đến (DT)). Bên cạnh đó, vai trò điều tiết của danh tiếng điểm đến (DR) cũng được xem xét. Dữ liệu khảo sát đã được thu thập từ 435 khách du lịch quốc tế đã có ít nhất một lần đến thăm TP. HCM, Việt Nam. Kết quả cho thấy DSR đã ảnh hưởng trực tiếp đến RI và mối quan hệ này đã được trung gian một phần bởi DS và DT. Kết quả phân tích tương tác giữa DSR và DR đối với DS, DT, và RI đã có ý nghĩa thống kê. Nói cách khác, mối quan hệ giữa DSR với DS, DT, và RI trở nên mạnh hơn với những điểm đến có danh tiếng tốt. Cuối cùng, tác giả cũng đã đề xuất một số hàm ý quản trị nhằm giúp các nhà quản lý điểm đến có chiến lược DSR phù hợp nhằm thu hút khách du lịch quốc tế trong tương lai.
    Date: 2023–07–01
  10. By: La, Viet-Phuong; Nguyen, Minh-Hoang; Vuong, Quan-Hoang
    Abstract: Hoạt động môi trường đóng vai trò quan trọng trong việc tăng cường nhận thức về biến đổi khí hậu và các vấn đề môi trường, đặc biệt là trong thời gian gần đây khi biến đổi khí hậu và khủng hoảng sinh thái ngày càng trở nên nghiêm trọng hơn. Sự đam mê và cam kết của các nhà hoạt động môi trường là rất đáng ghi nhận, tuy nhiên, đôi khi trong một số trường hợp, sự nhiệt thành của họ có thể dẫn đến những hành động không chỉ làm giảm đi giá trị của mục tiêu lớn hơn mà còn tạo cảm giác xa lánh đối với những người họ muốn thuyết phục. Trong bài viết này, chúng ta sẽ xem xét một số tình huống gần đây trong đó các nhà hoạt động môi trường đã vượt quá giới hạn, thực hiện những hành động không thích hợp, phản cảm, thậm chí vi phạm luật để thu hút sự chú ý. Những hành động này có thể gây ra tác động ngược và có thể làm thay đổi quan điểm của những người ủng hộ môi trường. Các ví dụ về những hành động gần đây có thể bao gồm việc tấn công các tác phẩm nghệ thuật, gây ách tắc giao thông và cản trở các sự kiện công cộng hoặc gián đoạn các sự kiện thể thao lớn.
    Date: 2023–09–13
  11. By: Kim, Sei-Wan (Ewha Womans University); Park, Donghyun (Asian Development Bank); Tian, Shu (Asian Development Bank)
    Abstract: Increasing oil and food prices and persistent supply chain disruptions in 2022 contributed to inflation in advanced economies that had not been seen in decades. This pushed up interest rates, which in turn led to higher yields in global bond markets. This study examines two distinct channels that transmit advanced economy inflation to emerging market bond yields by employing a novel multivariable smooth transition autoregressive–vector autoregressive (STAR-VAR) model. Our empirical analysis yields two new key findings. First, advanced economy inflation has a significant effect on regime changes between expansion and contraction in emerging market bond yields. Second, the shortrun effect of advanced economy inflation on the bond yields of emerging markets is asymmetric between the expansion and contraction regimes. The effect is mostly positive in both regimes but stronger in a bond yield’s contraction regime. This suggests that the response of emerging market bond yields to advanced economy inflation does not necessarily follow a simple Fisher equation relationship.
    Keywords: bond yields; inflation; advanced economy; emerging market; regime change; smooth transition autoregressive model
    JEL: C40 C51 F14
    Date: 2023–09–29
  12. By: Duong, Thi Minh-Phuong; Tri, Nguyen Phuong
    Abstract: Trung Quốc là nền kinh tế lớn hàng đầu thế giới, vận hành với hiệu suất cao để đáp ứng nhu cầu sinh kế của hơn 1, 4 tỷ người dân, và cung cấp một lượng hàng hóa công nghệ, tiêu dùng và cả nông phẩm tới thế giới. Hệ quả tất yếu của quá trình tăng trưởng liên tục hơn 4 thập niên là việc sử dụng tài nguyên, và trong quá trình sản xuất, chế tạo, chế biến cũng sản sinh ra một lượng khí nhà kính (GHG) tích lũy khổng lồ phát thải vào khí quyển. Trong một thống kê được đăng trên The Guardian năm 2017, thế giới đã nhận thấy trong giai đoạn 1988-2015, 100 tổ hợp công nghiệp hàng đầu thế giới chịu trách nhiệm cho việc phát thải tới 71% tổng tồn lượng GHG trong khí quyển. Dẫn đầu danh sách này trên phương diện quốc gia là Trung Quốc, với thống kê chỉ 5 đại công ty Trung Quốc đã chiếm tới gần 17% tổng lượng phát thải, trong đó tổ hợp ngành than có trách nhiệm lớn nhất, tới 14, 32%. Sau những tiến bộ công nghệ vượt bậc cũng như tích lũy thặng dư nền kinh tế, quá trình hiện đại hóa ở Trung Quốc sang thời kỳ Chủ tịch Tập Cận Bình đã chuyển hướng sang bảo vệ môi trường với các mục tiêu phát thải nghiêm ngặt. Chẳng hạn như xác định nhóm ngành sản xuất gang thép với vai trò lớn trong mục tiêu giảm phát thải GHG, chính phủ và lãnh đạo công nghiệp liên tục tìm kiếm giải pháp cho sự hạn chế nguồn tài nguyên, thúc đẩy khuếch tán công nghệ, ứng dụng tiến bộ trong giảm phát thải và thu giữ, chôn lấp các-bon, thích hợp với ngành thép, dựa trên đánh giá bằng hệ thống phân tích hướng tới giải quyết mục tiêu biến đổi khí hậu có tên viết tắt “C3IAM/NET-IS.”
    Date: 2023–09–09
  13. By: Euamporn Phijaisanit (Faculty of Economics, Thammasat University)
    Abstract: This study revisits the conventional wisdom of development, sustainability and happy ageing. The first part explores the existing research frontier on how happiness proceeds with age and assimilates different notions of happiness which influence public policies and global demands. The second part extracts the statistics from the National Statistical Office’s 2021 Survey of the Older Persons in Thailand and presents stylised facts about the characteristics of Thailand’s ageing population in connection with the United Nations Sustainable Development Goals (SDGs). The third part examines happiness in older persons using ordered logistic regression. Happiness is represented by the reported scale based on the respondent’s own value judgment. The finding reveals that the happiness level significantly reflects socio-economic and health well-being and, thus, can potentially be intervened by political commitment and suitable public policies in concert with the SDGs. Happiness can be considered both as an outcome and a useful success indicator of public policies. However, the criteria for happiness can be very subjective. The public sectors must take precautions against political bias and inefficiency in incorporating old-age happiness into their development agenda. An effective policy coherence, particularly in Non-High- Income Countries (NHICs), requires a thorough understanding of old-age happiness in a more local areaspecific context which is an attempt of this study. Policy recommendations from the findings are summoned into four arenas, namely: (i) policy on education and lifelong learning, (ii) policy on income and old-age employment, (iii) policy on healthcare, public services and revenue raising, and (iv) policy on local area disparity.
    Keywords: ageing, old-age happiness, sustainable development, public policy, SDGs
    JEL: F13 F16 O53
    Date: 2022–01
  14. By: Siew Ling Yew (Department of Economics, Monash University); Jie Zhang (School of Economics and Business Administration, Chongqing University and Department of Economics, National University of Singapore)
    Abstract: We explore optimal health subsidies in a dynastic model with health externalities to productivity that cause low health spending, productivity, longevity, savings and labor but high fertility. Public or firms’ health subsidies increase health spending, longevity and productivity and decrease fertility. Labor income taxes reduce the marginal benefit of health spending and the time cost of raising a child, while consumption taxes reduce the relative cost of raising a child. Appropriate public or firms’ health subsidies can internalize the externalities through age-specific labor income taxes and consumption taxes. Calibrating the model to the Australia economy, numerical results suggest policy improvements.
    Keywords: Health externality, Longevity, Productivity, Fertility, Savings
    JEL: H21 I13 I15
    Date: 2023–10
  15. By: La, Viet-Phuong
    Abstract: Ngày 10/9/2023, trong chuyến đi thăm Việt Nam của Tổng thống Hoa Kỳ Joe Biden, những tuyên bố và cam kết mạnh của ông về công cuộc chống tác động nguy hại của khủng hoảng khí hậu do Trái Đất nóng lên trở thành trọng tâm.
    Date: 2023–09–12
  16. By: La, Viet-Phuong
    Abstract: Ngày 10-9-2023, trong chuyến đi thăm Việt Nam của Tổng thống Hoa Kỳ Joe Biden, những tuyên bố và cam kết mạnh của ông về công cuộc chống tác động nguy hại của khủng hoảng khí hậu do Trái Đất nóng lên trở thành trọng tâm. Ông Biden phát biểu rằng nếu có mối đe dọa tồn vong nào với nhân loại mà nguy hiểm hơn cả chiếnh tranh hạt nhân, thì đó là Trái Đất nóng lên 1, 5⁰C trong vòng 10-20 năm tới. Ông tái khẳng định mối nguy hiểm rình rập loài người này: “Đó sẽ là vấn nạn thực. Không có cách nào né tránh cả.” Có lẽ lời phát biểu này của Tổng thống Biden ở Hà Nội đã được tiếp lực bằng dữ liệu công bố mới nhất của cơ quan khí hậu Copernicus Climate Change Service thuộc Liên minh Châu Âu (EU) cho biết Trái Đất đã có 3 tháng liên tiếp đạt kỷ lục về nhiệt độ bình quân trong toàn bộ lịch sử dữ liệu.
    Date: 2023–09–11
  17. By: La, Viet-Phuong; Nguyen, Minh-Hoang
    Abstract: Vấn đề môi trường là trọng tâm của các cuộc thảo luận chính trị trong những năm gần đây, với việc các nhà lãnh đạo trên toàn thế giới thực hiện các biện pháp chống biến đổi khí hậu và giảm phát thải khí nhà kính. Để theo đuổi mục tiêu bảo vệ môi trường và giảm thiểu biến đổi khí hậu, Tổng thống Joe Biden đã thực hiện một loạt hành động nhằm giảm phát thải khí nhà kính và hạn chế sự phụ thuộc của chúng ta vào nhiên liệu hóa thạch. Trong số các sáng kiến này, quyết định của Tổng thống Biden về việc đóng cửa Đường ống Keystone XL, hạn chế hoạt động khoan dầu ở một số khu vực nhất định và cấm cấp phép khai thác dầu khí mới trên các vùng đất và vùng biển công cộng là một động thái quan trọng. Tuy nhiên, những chính sách này đã gây ra cả sự ủng hộ lẫn tranh cãi. Trong bài viết này, chúng tôi đi sâu vào sự phức tạp trong các chính sách môi trường của Tổng thống Biden, đặc biệt tập trung vào lệnh cấm cấp phép khai thác dầu khí mới trên các vùng đất và vùng biển công cộng.
    Date: 2023–09–08
  18. By: La, Viet-Phuong; Nguyen, Minh-Hoang
    Abstract: Trong bài viết này, chúng tôi đi sâu vào sự phức tạp trong các chính sách môi trường của Tổng thống Biden, đặc biệt tập trung vào lệnh cấm cấp phép khai thác dầu khí mới trên các vùng đất và vùng biển công cộng.
    Date: 2023–09–09
  19. By: Neubauer, Florian; Wall, Alan; Njuki, Eric; Bravo-Ureta, Boris
    Abstract: The connection between farm productivity and climatic effects is of growing importance around the globe, as farmers are expected to satisfy a rising demand for food and agricultural products driven by an increasing population and income while contending with mounting uncertainty imposed by climate change. This presentation is a component of a larger project which seeks to establish the connection between the productivity performance of farming units and climatic effects. We seek to shed light on two specific issues: (i) what variables are most commonly-used to capture climatic effects; and (ii) to what extent does the choice of climatic indicators in production models affect the agricultural productivity measures obtained across different types of farming systems. An a priori requirement imposed when searching the literature and selecting the papers included in the analysis is that they apply stochastic production frontier (SPF) methods. The advantages and popularity of this methodology in agricultural productivity studies and beyond is well established (Fried et al., 2008, O’Donnell; 2018). The agricultural productivity literature has seen considerable growth in recent years, motivated by significant methodological developments and the increasing availability of microdata sets in some regions (e.g., LSMS-ISA data for Africa). An increasing body of productivity research is being devoted to the connection between farm output, food security and climatic effects, as well as to the role of different farming technologies or practices that can serve in strategies to promote adaptation. Two clear examples are the adoption of irrigation and improved seed varieties. The specific focus here is on three subsets of studies found in the received literature: (1) Dairy productivity studies published using data from different countries; 2) Water, irrigation, and precipitation studies again using data from different countries; and 3) Total Factor Productivity (TFP) studies that explicitly account for the climatic component in TFP in Latin America (LA) as well as in other geographical areas. Taken together, these studies provide a useful point of departure for our future work. Our choice of papers at this point is somewhat arbitrary but serves as an initial step towards undertaking a systematic search of the literature to cover a more comprehensive set of studies. We justify our current focus by noting the importance of dairy in farming systems in both the developed and developing world (Bravo-Ureta, Wall, and Neubauer 2022) and the critical role water plays in the adaptation of farming to climate change (Bopp et al. 2022). 1. Dairy Productivity Studies The measurement of TFP in dairy farming and its decomposition into different elements (e.g., technical efficiency, allocative efficiency, scale effects and technical change) has been the subject of several stochastic frontier studies going back at least to Ahmed and Bravo-Ureta (1995). Parametric output distance functions have been used to measure and decompose productivity in dairy farming by Brümmer et al. (2002) for Dutch, German and Polish farms, Newman and Matthews (2006) for Irish farms and Emvalomatis (2012) for German farms. All these studies report that TFP growth has been driven fundamentally by technological progress. Cechura et al. (2017) analyze the impact of technological progress in a study of 24 EU Member States. Aside from technical change (and efficiency gains) as drivers of TFP growth, Parikoglou et al. (2022) found that extension services contributed to the productivity growth-of Irish farms. Parametric input distance functions have been used to study dairy farm productivity by Sipiläinen et al. (2014), who investigated the profitability and productivity dynamics of Finnish and Norwegian farms; Sauer and Latacz-Lohmann (2015), who analyzed TFP change for German farms (with a Luenberger index); and Singbo and Larue (2016) for farms from Quebec. The climatic effect has been clearly absent in much of this work. 2. Water, Irrigation and Precipitation Studies Water is critical in the adaptation of farming to climate change. Therefore, we review studies that consider precipitation as a climatic variable in their models. Bravo-Ureta et al. (2016) identify 110 water studies in a meta-analysis of technical efficiency in agriculture and find that most ignore climatic effects. Among the studies that use SPF methods, only five considered a precipitation variable. McGuckin et al. (1992) specify a continuous rainfall variable in a study analyzing maize farmers in the USA. Sherlund et al. (2002) use the number of rainy days and the quantity of rain in a study of rice producers in Ivory Coast. Mariano et al. (2010) define dummies for dry and wet seasons in a rice farming study in the Philippines. Hussain et al. (2012) employ a composite variable for the number of irrigations and rainfall in a sample of wheat farmers in Pakistan. Ndlovu et al. (2014) incorporated a location dummy for high rainfall areas of maize farming in Zimbabwe. We complement these studies with 11 papers that have been published more recently. 3. Total Factor Productivity (TFP) Studies with a Climatic Component. We focus explicitly on work that examines the climatic component in TFP in LA as well as in other geographical areas. Agriculture is a major sector in the economy of most LA countries. To implement effective policies addressing climate change and promoting the adaptation of farming to the rising climatic threat, it is critical to have a thorough understanding of what drives productivity change and the role climatic effects have in the region’s agricultural productivity growth. However, a recent review by Bravo-Ureta (2021) reveals that productivity research for LA is limited and based primarily on aggregate county-level data with scant inclusion of climatic effects. We conjecture that the limited supply of studies for LA is likely due to data limitations and lack of funding to conduct the necessary work. We highlight around 10 recent articles that address the connection between climatic effects and TFP and explicitly quantify the effect of a climatic component in TFP growth.
    Keywords: Agribusiness, Demand and Price Analysis
    Date: 2023

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