Most recent papers:

• Does the Confucius Institute Network Impact Cultural Distance? A Panel Data Analysis of Cross‐Border Flows in and out of China.
  Sucharita Ghosh, Donald Lien, Steven Yamarik.
  Asian Economic Journal. September 20, 2017
  This paper examines the impact of cultural distance in general and the Confucius Institute Network in particular on cross‐border flows of tourists, goods and investment in and out of China. We estimate a panel gravity model of inbound and outbound flows between 2004 and 2012. We find that the presence of Confucius Institute(s) in the source country increases inbound tourism and equity flows and outbound export and FDI flows for China, while other measures of cultural distance have less of an impact.

  September 20, 2017   doi: 10.1111/asej.12125   open full text
• Wealthy Hand‐to‐Mouth Households in China.
  Zhen Cui, Yalan Feng.
  Asian Economic Journal. September 20, 2017
  The wealthy hand‐to‐mouth are households who are poor in liquid wealth (e.g. cash and checking accounts) and rich in illiquid wealth (e.g. housing and retirement accounts), while the poor hand‐to‐mouth are poor in both liquid and illiquid wealth. Data from the China Household Finance Survey reveal the following facts about the country’s wealthy hand‐to‐mouth. First, they represent the majority of the hand‐to‐mouth households in China. Second, they have different wealth portfolios and demographic features from the poor hand‐to‐mouth. Finally, they have larger consumption responses to income fluctuations than non‐hand‐to‐mouth households, after controlling for endogeneity, income, hand‐to‐mouth status and other household characteristics.

  September 20, 2017   doi: 10.1111/asej.12123   open full text
• Input Rigidities and Performance of Vietnamese Universities.
  Carolyn–Dung T. T. Tran, Renato A. Villano.
  Asian Economic Journal. September 20, 2017
  Universities in Vietnam are inclined to have an inefficient mix of input resources because of rigidities restricting the adoption of advanced teaching technology. There has been a deferral of the adoption of new teaching technologies to meet the rest of the world's higher education standards. Using an input‐orientated data envelopment analysis (DEA) method, technical, scale and mix efficiency indicators are estimated for 112 Vietnamese universities over the period 2011–2013 using the Färe–Primont index. The results indicate that the technical, scale and mix efficiency indicators are 0.784, 0.866 and 0.829, respectively. Using the fractional regression model, it is found that location, age, ownership and financial capacity have significant influences on the mix efficiency indicators of universities.

  September 20, 2017   doi: 10.1111/asej.12124   open full text
• Role of Individual Social Capital in Wage Determination: Evidence from China.
  Yang Liu.
  Asian Economic Journal. September 20, 2017
  The present study examines the role of individual‐level social capital in workers’ wage determination in a Nash‐bargaining wage model using Chinese micro‐level data. The study finds a significant contribution of individual‐specific social capital to the wage level. In particular, larger individual social networks and workers’ positive attitudes toward social capital significantly increase the wage level. Moreover, the effect of social capital on the wage level is much larger for men than for women. The results indicate that construction of individual social capital could increase workers’ wages. However, efforts are needed to reduce the unequal contributions of social capital between men and women.

  September 20, 2017   doi: 10.1111/asej.12122   open full text
• Farmers' Access to Markets: The Case of Cotton in Pakistan.
  Akhter Ali, Awudu Abdulai, Dil Bahadur Rahut.
  Asian Economic Journal. June 23, 2017
  Using a cross‐sectional primary dataset collected from a survey of 325 farmers in the seven highest cotton‐producing districts of Punjab Province of Pakistan, the present paper examines cotton farmers' market participation decisions, and the factors driving participation, as well as the impact of participation on net returns. Tobit and censored least absolute deviation models were used to estimate the participation of farmers in markets, and the Heckman two‐stage approach and the propensity score matching method were applied to analyze the impact of participation on net returns, taking into account potential selection bias. The empirical results revealed that households with more education, wealth, and better transport facilities are more likely to participate in the markets. As the distance to market increases, households prefer to sell at the farm gate rather than the market. The results also indicated that households that sell their goods at the market obtain higher net returns than those selling at the farm gate.

  June 23, 2017   doi: 10.1111/asej.12116   open full text
• Evaluation of the Reverse Mortgage Option in Hong Kong.
  Wei Han, Ping Wang, Hao Xu, June‐Sung Choi.
  Asian Economic Journal. June 23, 2017
  The reverse mortgage is a very useful financial product for senior citizens who own homes but do not have a cash income, while it is a high‐risk product from the lender's perspective. One of benefits of reverse mortgages is that the debt limit is restricted to the scope of the disposition price of the collateralized house, which is considered a put option to borrowers. The present study evaluates the option value of the reverse mortgage in Hong Kong through an empirical analysis using the Black–Scholes option‐pricing model. Moreover, the present study shows specific monetary values through option matching to the consumer situation, contributing to the increased understanding of reverse mortgages from the consumer's point of view.

  June 23, 2017   doi: 10.1111/asej.12117   open full text
• Is Decoupling Possible? Association between Affluence and Household Carbon Emissions in the Philippines.
  Moises Neil V. Seriño.
  Asian Economic Journal. June 23, 2017
  This paper investigates whether or not affluence is associated with carbon emissions at the household level in the Philippines. While there is abundant literature on this issue, limited studies are available for developing countries. We estimate household carbon emissions by combining input–output analysis with household expenditure. The results suggest that household carbon emissions are increasing non‐monotonically with a non‐existent turning point as households accumulate more assets. This is further supported by quintile estimates showing huge disparity in emissions between poor and rich households. Although household carbon emissions in the Philippines are not alarming, evidence suggests that it is likely households will lead a carbon‐intensive lifestyle as they become more affluent.

  June 23, 2017   doi: 10.1111/asej.12119   open full text
• Risk‐Coping Measures against Health Shocks during the Process of Penetration of Health Insurance in Vietnam.
  Masako Hasegawa.
  Asian Economic Journal. June 23, 2017
  Does the recent introduction of public health insurance influence households' risk‐coping measures in developing countries? This study investigates risk‐coping measures for health shocks using a Living Standard Measurement Survey in Vietnam where universal health coverage is aimed to be achieved. The estimated results suggest that precautionary savings are the main form of assets in poor households. Health insurance seems to be used by people in poor health, which indicates that the problem of adverse selection exits. Importantly, get well gifts in the form of money play a significant role in helping households cope with health shocks. A traditional informal insurance system still exists in close Vietnamese communities.

  June 23, 2017   doi: 10.1111/asej.12118   open full text
• Factors Influencing the use of Preventive Medical Care in Malaysia: Evidence from National Health and Morbidity Survey Data.
  Yong Kang Cheah, Chor Foon Tang.
  Asian Economic Journal. June 23, 2017
  An increase in the prevalence of modifiable health risk factors, such as diabetes, hypertension and hypercholesterolemia, has become a serious public health issue in developed and developing countries. It is the main contributing factor to the rise in non‐communicable diseases (NCD). The use of preventive medical care remains the best method to prevent NCD. The objective of the present study is to examine the factors affecting the decisions of people to use preventive medical care (e.g. blood glucose tests, blood cholesterol tests and blood pressure test). An ordered logit model is estimated based on a nationally representative sample. The present study finds that income, age, education, ethnicity, employment status, health insurance and smoking are significantly associated with the use of preventive medical care. As a measure towards increasing the prevalence of the preventive medical care usage, the government should pay special attention to low income earners, the young and the elderly, the less‐educated, the ethnic minorities, employed individuals, individuals whose medical expenses are not paid by insurance carriers, as well as smokers.

  June 23, 2017   doi: 10.1111/asej.12115   open full text
• Rise and Fall of Multinational Enterprises in Vietnam: Survival Analysis Using Census Data during 2000–2011*.
  Tien Manh Vu, Hiroyuki Yamada, Tsunehiro Otsuki.
  Asian Economic Journal. March 17, 2017
  This study examined the survival of multinational enterprises (MNE) in Vietnam during 2000–2011 using Cox hazard models. The characteristics and ownership structure of firms and the nationality of foreign partners are found to be associated with the probability of firm exit, with a firm having greater capital share of foreign partners surviving longer. An efficient local government requiring less time for bureaucratic procedures and inspections is found to be associated with a lower probability of MNE exiting. Meanwhile, transparency in business regulations and predictability in implementing central government policies accelerate the survival of highly competitive MNE.

  March 17, 2017   doi: 10.1111/asej.12114   open full text
• Returns to Education Using a Sample of Twins: Evidence from Japan*.
  Makiko Nakamuro, Tomohiko Inui, Shinji Yamagata.
  Asian Economic Journal. March 17, 2017
  The objective of this article is to measure the causal effect of education on earnings using a large dataset of twins compiled in Japan with wide‐ranging socioeconomic information. Recent research conducted in China showed that, contrary to the case in Western countries, ability bias is large in estimating the return to education. It is argued that the low rate of return in China is in part due to the competitive and exam‐oriented education system, which is similar to the system in Japan. The empirical results in our study show that the estimated rate of return to education using the sample of identical twins in Japan is 9.3 percent even after omitted ability bias and measurement errors in self‐reported schooling were corrected. Our findings suggest that the conventional OLS estimate is not significantly contaminated by potential biases in Japan.

  March 17, 2017   doi: 10.1111/asej.12113   open full text
• House Price Dynamics with Household Debt: The Korean Case*.
  Hyun Jeong Kim, Jong Chil Son, Myung‐Soo Yie.
  Asian Economic Journal. March 17, 2017
  This paper revisits the long‐run determinants of house prices, and analyzes the house price dynamics using Korean data taking into account the close relationship between house prices and household debt. The results of cointegrating regression indicate that the major portion of the rise in house prices in Korea over the last 15 years can be explained by changes in macro variables such as household income, the demographic structure, the user cost of home ownership and the housing stock supply. The results also confirm that house prices are, indeed, closely linked to the steep increase in household debt seen over this period. Estimation of an error correction model shows that the extent of convergence of actual house prices to their long‐run equilibrium path has weakened somewhat since the global financial crisis while the speed of convergence has slowed, indicating structural changes in the Korean housing market. Finally, a forecast for house prices over the next several years suggests that they are unlikely to rise as sharply as they did in the 2000s, given the likely changes in the macro‐financial environment, and that their future path will be closely associated with that of the household debt‐to‐income ratio.

  March 17, 2017   doi: 10.1111/asej.12112   open full text
• Impact of Monetary Supply on Chinese Nonferrous Metal Price Movement*.
  Zesheng Sun, Bianxia Sun.
  Asian Economic Journal. March 17, 2017
  Employing both classical vector autoregressive methodology and regression models utilizing shock factors constructed with the Hodrick–Prescott filtering method, this paper empirically studies the influence of monetary factors on the price of nonferrous metals and their expectation formation in the Chinese market. Monetary factors are found to significantly positively influence Chinese nonferrous metal prices, and further empirical research reveals that a structural change occurred near August 2006. There is an expectation formation mechanism of lagged futures prices on spot metal prices, and the risk originating primarily from international market is transmitted to Chinese markets.

  March 17, 2017   doi: 10.1111/asej.12111   open full text
• Trade Effects of US Antidumping Actions against China*.
  Minsoo Lee, Donghyun Park, Antonio Saravia.
  Asian Economic Journal. March 17, 2017
  Using data on US imports, classified at the 10‐digit Harmonized System commodity level, we study the effects of all antidumping investigations initiated by the USA against China between 1998 and 2006. We find that antidumping actions cause a reduction in the volume and value of imports from China as well as an increase in the price of those goods in the US market. Critically, however, we find that these effects are short‐lived and dissipate approximately 2 years after the antidumping decision. Furthermore, antidumping actions against China prompt a substitution effect as they increase US imports from other countries. In general, our results cast doubt on the effectiveness of antidumping actions against China as mechanisms for protecting US producers.

  March 17, 2017   doi: 10.1111/asej.12110   open full text
• Professor Seiji Naya: An Obituary*.
  Shigeyuki Abe, Pearl Imada‐Iboshi, Janis Kea, Sumner La Croix, Craig R. Parsons, Michael G. Plummer, Eric D. Ramstetter.
  Asian Economic Journal. December 15, 2016
  There is no abstract available for this paper.

  December 15, 2016   doi: 10.1111/asej.12109   open full text
• Professor Dr Sumitro Djojohadikusumo: An Obituary*.
  Shinichi Ichimura.
  Asian Economic Journal. December 15, 2016
  There is no abstract available for this paper.

  December 15, 2016   doi: 10.1111/asej.12108   open full text
• A Conversation with Professor Shinichi Ichimura.
  Oleksandr Movshuk, Craig R. Parsons, Hideki Imaoka.
  Asian Economic Journal. December 15, 2016
  There is no abstract available for this paper.

  December 15, 2016   doi: 10.1111/asej.12107   open full text
• Cigarette and Alcohol Expenditures in Malaysia: Implications for Anti‐Smoking and Drinking Policies*.
  Andrew K.G. Tan, Steven T. Yen, Abdul Rahman Hasan.
  Asian Economic Journal. December 15, 2016
  A number of studies have examined alcohol and cigarette consumption, but none have explored demand for both products simultaneously even though consumption decisions are likely often related. The present study uses microdata from the 2009/2010 Malaysian Household Expenditure Survey. A novel bivariate Tobit model that accounts for error heteroscedasticity is used to estimate Malaysian consumers' decisions to purchase cigarettes and alcohol and amount spent for each. The results indicate that household income and regional location, and the age, gender, education level and occupation type of the household head are associated with consumption decisions and expenditure levels, with some variation by ethnic group, suggesting the importance of these characteristics in policy deliberations to reduce consumption.

  December 15, 2016   doi: 10.1111/asej.12106   open full text
• Effects of Educational Mistmatch on Wages in the Korean Labor Market*.
  Hanol Lee, Jong‐Wha Lee, Eunbi Song.
  Asian Economic Journal. December 15, 2016
  Using data on Korean workers from the Programme for the International Assessment of Adult Competencies, the present study empirically investigates the incidence and wage effects of educational mismatch. Among full‐time workers aged 25–54, approximately 27 percent are overeducated and 15 percent are undereducated. Our results reveal that, after controlling for omitted variable bias and measurement errors, return to an additional year of overeducation is significantly less than that to a year of required education, whereas undereducated workers do not appear to suffer wage penalties associated with their deficit schooling. The findings also show that returns to a year of overeducation vary across fields of study. The returns to overeducation for college graduates from health and welfare, engineering and manufacturing, and social sciences, business and law are relatively high compared with those in agriculture, services, and humanities and arts.

  December 15, 2016   doi: 10.1111/asej.12105   open full text
• Exporting and Upgrading of Product Portfolio: Evidence from Korea, Japan and Indonesia*.
  Chin Hee Hahn, Keiko Ito, Dionisius Narjoko.
  Asian Economic Journal. December 15, 2016
  This paper examines the effect of exporting on ‘product portfolio upgrading’ in a plant, using plant–product matched datasets for Korea, Japan and Indonesia. First, we find that a substantial part of aggregate shipments growth is explained by net adding of products for all three countries. Second, export starters are more likely to add products and to change product shares in plants than never exporters. Third, added products tend to have higher product quality than dropped products. Therefore, our results imply that the entry to export markets plays an important role in product portfolio upgrading: the process of reallocation from lower‐attribute to higher‐attribute products.

  December 15, 2016   doi: 10.1111/asej.12104   open full text
• Reflected Glory Versus Repulsive Envy: How Do the Smiths Feel About the House of the Joneses?*.
  Anupam Nanda, Jia‐Huey Yeh.
  Asian Economic Journal. September 04, 2016
  A key question raised regarding conspicuous consumption is whether such consumption leads to positive or negative net externalities. The present paper examines how the presence of luxury and expensive properties within a local area affects the house prices in Taipei City. Positive externalities may be associated with improved urban amenities or reflected glory. Negative externalities may be associated with the adverse reference group effect; that is, repulsive envy. The paper discusses the spillover effects due to changes in neighborhood's housing characteristics, and shows significant spatial patterns in house prices and the importance of socioeconomic influences on house prices.

  September 04, 2016   doi: 10.1111/asej.12095   open full text
• Do Skill Mismatches Create a Wage Penalty? Alternative Estimates for Korea*.
  Hong‐kyun Kim, Seung‐jun Park.
  Asian Economic Journal. September 04, 2016
  In this paper, we estimate the wage penalty of skill mismatches among young Korean workers using propensity score matching (PSM) and ordinary least squares (OLS) methods. OLS estimates suggest that a moderate wage penalty results from skill mismatches: 3.8 percent for men and 5.6 percent for women. In contrast, PSM estimates suggest a weakly significant wage penalty for men and women only when kernel matching (KM) is used, but not when nearest neighbor matching(NNM) or radius matching (RM) techniques are used. These results contradict the findings of previous studies and suggest that there may not be a substantial wage penalty associated with skill mismatches.

  September 04, 2016   doi: 10.1111/asej.12093   open full text
• Multidimensional Poverty and Perceived Happiness: Evidence from China, Japan and Korea*.
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  Asian Economic Journal. September 04, 2016
  We compare multidimensional poverty and its associations with perceived happiness in China, Japan and Korea. Using largely comparable nationwide survey data, we focus on multidimensional poverty in terms of income, schooling, health and social protection. We find multidimensional poverty to be more prevalent in China than in Japan or Korea; sex and age‐based differences are largest in Korea. We further confirm significant associations between multidimensional poverty and perceived happiness. For all three countries, the aggregated poverty dimensions could largely identify unhappy individuals, with both wider coverage and higher odds than is possible through unidimensional analyses.

  September 04, 2016   doi: 10.1111/asej.12094   open full text
• How Much Will China Save? Projecting China's National Savings Through 2040*.
  Shiyu Li, Laurence J. Kotlikoff, Shuanglin Lin, Wing Thye Woo, Yunyun Jiang.
  Asian Economic Journal. September 04, 2016
  This paper projects China's national savings through 2040 based on China's national account data, demographic data, and data on rural and urban life‐cycle income and consumption. Our baseline projections show that China's national saving in 2040 will be 16 times the current national saving. The annual growth rate of wealth will decline from 16.3 percent in 2012 to 9.5 percent in 2040. Lowering the growth rate of wealth accumulation to the current rate of return to wealth increases consumption through 2040; lowering the growth rate of wealth further may increase consumption more in the short run, but less in the long run.

  September 04, 2016   doi: 10.1111/asej.12092   open full text
• Asset Accumulation in Rural Households during the Post‐Showa Depression Reconstruction: A Panel Data Analysis*.
  Motoi Kusadokoro, Takeshi Maru, Masanori Takashima.
  Asian Economic Journal. June 20, 2016
  This paper investigates asset accumulation in Japanese farm households during reconstruction following the Showa Depression. After the Showa Depression, farm households emphasized accumulation of cash and quasi‐money rather than productive assets. The accumulation of cash and quasi‐money is consistent with the buffer stock hypothesis. Evidence regarding accumulation of livestock, which is sometimes used as the buffer stock in modern developing countries, is not conclusive. The presence of well‐developed financial institutions in prewar Japan may have allowed farm households to smooth consumption via cash and quasi‐money.

  June 20, 2016   doi: 10.1111/asej.12091   open full text
• Information Effects on Consumers' Preferences and Willingness to Pay for a Functional Food Product: The Case of Red Ginseng Concentrate*.
  Byeong‐il Ahn, Mo‐Se Bae, Rodolfo M. Nayga.
  Asian Economic Journal. June 20, 2016
  This paper elicits consumers' preferences associated with attributes of a very popular food product in Asia: red ginseng concentrate. The results of a choice experiment suggest that an asymmetric information problem can cause consumers' preferences and valuation for red ginseng concentrate to be significantly influenced by objective information about the product's attributes. The results imply that while objective information can result in differential changes in valuation for different product attributes, it can increase consumers' willingness to pay for red ginseng concentrate. The paper also discuss important policy and marketing implications from the results of the study.

  June 20, 2016   doi: 10.1111/asej.12090   open full text
• Interprovincial Migration and Human Capital Formation in China*.
  Yui Suzuki, Yukari Suzuki.
  Asian Economic Journal. June 20, 2016
  We examine how the rising interprovincial migration of individuals with diverse educational backgrounds affected human capital formation in China in the 1990s. We find that gross outflow migration of those with higher and lower levels of education, respectively, has human capital incentive and disincentive effects. Our estimates suggest that the incentive effect eclipses the disincentive effect in general; however, a surge of migration, particularly among less educated groups, implies more of a disincentive effect in China in the 1990s. We also find that changes in the relative labor supply resulting from net outflow migration mitigate a direct brain drain by both encouraging and discouraging school enrolments.

  June 20, 2016   doi: 10.1111/asej.12089   open full text
• Gender, Sibling Order, and Differences in the Quantity and Quality of Education: Evidence from Japanese Twins*.
  Tien Manh Vu, Hisakazu Matsushige.
  Asian Economic Journal. June 20, 2016
  Using information on 1045 pairs of Japanese monozygotic twins, we examined differences in education by considering both the years of schooling (quantity) and the reputation of the last attended school (quality). We found that a difference in learning performance at 15 years of age is one of the key factors determining the differences. We also found that a female eldest child in the family from the 1950s and 1960s birth cohorts averaged 0.54 years less schooling than did her ‘younger’ twin. However, for the same birth cohorts, a male eldest child in the family generally had access to higher‐quality education than his ‘younger’ twin. Nonetheless, as the Japanese economy matured in the 1970s and thereafter, educational differences between twins disappeared, regardless of gender and sibling order.

  June 20, 2016   doi: 10.1111/asej.12088   open full text
• Regional Characteristics, Industry Agglomeration and Location Choice: Evidence from Japanese Manufacturing Investments in Korea*.
  Ki‐Dong Lee, Seok‐Joon Hwang.
  Asian Economic Journal. June 20, 2016
  Using extensive firm‐level data for the years 1998–2006, we analyze the regional location decision of Japanese manufacturing foreign direct investors in Korea by focusing on the role of agglomeration economies. Our logit estimates indicate that horizontal agglomeration matters in the location decision, but vertical agglomeration does not. Strong evidence of country‐of‐origin effects is found. Japanese foreign direct investments in high‐technology industries show a typical ‘follow‐the‐leader’ pattern, while those in the in low‐technology industries are influenced by regional endowments. In addition, Japan's high‐technology firms are likely to prefer urban locations so that they can enjoy the externalities of business services.

  June 20, 2016   doi: 10.1111/asej.12087   open full text
• Impacts of Road Access on Subjective Well‐being in Timor‐Leste.
  Aekapol Chongvilaivan, Kiyoshi Taniguchi, Rommel Rabanal.
  Asian Economic Journal. March 28, 2016
  The impacts of access to roads on subjective well‐being at the household level are empirically examined using Timor‐Leste's nationally representative surveys. This paper examines not only the quantity, but also the quality of road infrastructure and, thus, extends existing studies that only consider the benefits of road accessibility. It is found that proximity to main roads may not necessarily result in improved welfare. Instead, ensuring all‐weather access to roads appears to be a more significant factor in raising household well‐being. Specifically, road accessibility during the rainy season reduces the probability of households reporting a ‘less than adequate’ (low satisfaction) response by 13–25 percent. This suggests that in Timor‐Leste, and likely in other developing economies under similar conditions, maintenance of existing roads is more essential to well‐being than building more roads.

  March 28, 2016   doi: 10.1111/asej.12086   open full text
• Currency Substitution in Laos.
  Inthiphone Xaiyavong, Toshihisa Toyoda.
  Asian Economic Journal. March 28, 2016
  This study investigates the determinants of currency substitution in Laos based on the function of money demand. The empirical model is estimated using the autoregressive distributed lag approach to cointegration for the period 1993–2012. Our estimation results indicate that the interest rate differential is a significant currency substitution determinant in the Laos economy. Moreover, there is evidence supporting the existence of a ratchet effect in the currency allocation of deposits, implying that particularly strong policies should be pursued over an extended period of time in order to convince depositors to switch back to kip‐denominated assets.

  March 28, 2016   doi: 10.1111/asej.12085   open full text
• Asymmetric Mispricing and Regime‐dependent Dynamics in Futures and Options Markets.
  Jaeram Lee, Doojin Ryu.
  Asian Economic Journal. March 28, 2016
  We examine regime‐dependent price dynamics and mispricing adjustments within the KOSPI200 spot, futures and options markets through an analysis of data from January 2000 to December 2014. Investors exploit mispricing between derivatives and spot markets only if mispricing is sufficiently large. The futures traders take long, rather than short, positions to adjust for mispricing. Mispricing between spot and options markets is adjusted by trading options and not by trading spots. We find the bidirectional information flows between spot and futures markets when the futures‐implied index is sufficiently larger than the spot index. In contrast, no significant lead–lag relationship between spot and options markets exists. Significant asymmetric transaction costs exist in the spot market and this asymmetry has decreased over time.

  March 28, 2016   doi: 10.1111/asej.12084   open full text
• Policy Shocks and Macroeconomic Fluctuations in a Two‐country Dynamic Stochastic General Equilibrium Model: Evidence from China*.
  Yong Ma.
  Asian Economic Journal. March 28, 2016
  In this paper, we construct a two‐country dynamic stochastic general equilibrium model to investigate the sources of business cycles in China and the contributions of policy shocks in economic fluctuations. The empirical results from Bayesian estimation show that, apart from the traditional supply and demand shocks, monetary and fiscal policy shocks also play important roles in determining China's economic fluctuations. In addition, we find significant feedback effects between monetary and fiscal policies in China, indicating that policy coordination is an important feature of China's monetary and fiscal policies. Overall, these results not only shed new light on the policy factors behind China's economic fluctuations, but also provide new evidence that is helpful for understanding the policy transmission mechanisms in China.

  March 28, 2016   doi: 10.1111/asej.12083   open full text
• Explaining Foreign Holdings of Asia's Debt Securities: The Feldstein–Horioka Paradox Revisited*.
  Charles Yuji Horioka, Akiko Terada‐Hagiwara, Takaaki Nomoto.
  Asian Economic Journal. March 28, 2016
  In this paper, we find that home bias is still present in all economies and regions, especially in the case of short‐term debt securities, but that there are substantial variations among economies and regions in the strength of home bias, with the eurozone economies, the USA and developing Asia showing relatively weak home bias and advanced Asia, especially Japan, showing relatively strong home bias. We then examine trends over time in foreign holdings of debt securities and find that capital has been flowing from the USA and the eurozone economies to both advanced Asia (especially Japan) and developing Asia, and that foreign holdings of debt securities have been increasing in advanced as well as developing Asia but for different reasons. The main reason in the case of advanced Asia (especially Japan) appears to be higher risk‐adjusted returns, whereas the main reason in the case of developing Asia appears to be the growth of debt securities markets combined with relatively weak home bias and (in the case of short‐term securities) lower exchange rate volatility. Finally, we find that since the global financial crisis, foreign holdings of debt securities have declined (i.e. that home bias has strengthened) in all economies and regions except developing Asia, where they have increased (except for a temporary decline in 2008) but where their share is still much lower than the optimal share warranted by the capital asset pricing market model.

  March 28, 2016   doi: 10.1111/asej.12082   open full text
• Call For Papers and Preliminary Information.
  
  Asian Economic Journal. March 04, 2014
  There is no abstract available for this paper.

  March 04, 2014   doi: 10.1111/asej.12027   open full text
• Socioeconomic Determinants of Child Health: Empirical Evidence from Indonesia.
  Subha Mani.
  Asian Economic Journal. March 04, 2014
  This paper characterizes the socioeconomic determinants of child health using height‐for‐age z‐score (HAZ), a long‐run measure of chronic nutritional deficiency. We construct a panel data that follows children between ages 3 and 59 months in 1993 through the 1997 and 2000 waves of the Indonesian Family Life Survey. We use this data to identify the various child‐level, household‐level and community‐level factors that affect children's health. Our findings indicate that household income has a large and statistically significant role in explaining improvements in HAZ. We also find a strong positive association between parental height and HAZ. At the community level, we find that provision of electricity and the availability of paved roads are positively associated with improvements in HAZ. Finally, in comparison to community‐level factors, household‐level characteristics play a large role in explaining the variation in HAZ. These findings suggest that policies that address the demand‐side constraints have greater potential to improve children's health outcomes in the future.

  March 04, 2014   doi: 10.1111/asej.12026   open full text
• Effects of Knowledge Spillovers on Knowledge Production and Productivity Growth in Korean Manufacturing Firms.
  Taegi Kim, Keith Maskus, Keun‐Yeob Oh.
  Asian Economic Journal. March 04, 2014
  Using Korean firm‐level data, this paper studies the effects of knowledge spillovers on knowledge production and productivity growth. Data from 213 Korean firms for the years 1985 to 2007 are used, and the number of patent applications is used as a proxy variable for knowledge. The results show that all the growth rates of output, patents, and productivity are higher in high‐technology firms. Regression results show that the spillover effect on knowledge production and productivity growth is very significant, and that the spillover effect is larger in small firms than in large firms. Moreover, spillover effects on productivity growth are larger after 1995, when Korean intellectual property rights were strengthened. Our findings suggest that the effects of knowledge spillover on productivity are positively correlated with strong intellectual property rights.

  March 04, 2014   doi: 10.1111/asej.12025   open full text
• Intergenerational Transfers and Asset Inequality in Japan: Empirical Evidence from New Survey Data.
  Junya Hamaaki, Masahiro Hori, Keiko Murata.
  Asian Economic Journal. March 04, 2014
  This paper quantitatively examines the impact of intergenerational transfers on asset inequality among Japanese households. We estimate an intergenerational asset transfer function with various control variables, using a unique micro dataset taken from a survey conducted by the Economic and Social Research Institute, Cabinet Office. Employing three different models, a Tobit model, an interval regression model and an ordered probit model, to ensure that our results are independent of the specific econometric approach used, we investigate whether asset transfers received are correlated with households’ financial strength. We find that higher income households are likely to receive larger asset transfers. However, the contribution of intergenerational transfers to asset inequality appears to be small.

  March 04, 2014   doi: 10.1111/asej.12024   open full text
• Lending Rate Spread Shock and Monetary Policy Arrangements: A Small Open Economy Model for ASEAN Countries.
  Taiyo Yoshimi.
  Asian Economic Journal. March 04, 2014
  We investigate the welfare implications of monetary policy arrangements in a small open economy, considering firms' bank‐based finances that are widely observed in emerging ASEAN countries. The impact of an unexpected change in the lending rate spread, or a lending rate spread shock, depends on the presence of banking activity in the economy. This presence is important in Malaysia and Vietnam, where welfare effects of this type of shock are at least comparable to those of foreign monetary policy shocks. We also find that a rigid exchange rate arrangement amplifies the effect of a shock.

  March 04, 2014   doi: 10.1111/asej.12023   open full text
• Does East Asia Have a Working Financial Safety Net?
  Jayant Menon, Hal Hill.
  Asian Economic Journal. March 04, 2014
  Financial safety nets in Asia have come a long way since the Asian financial crisis (AFC) of 1997/1998. With Asian countries not wanting to rely solely on the IMF again, the Chiang Mai Initiative (CMI) was created in 2000. When the CMI also proved inadequate following the global financial crisis, it was first multilateralized (CMIM), and then doubled in size to US$240bn, while the IMF de‐linked portion was increased to 30 percent of the available country quotas. A surveillance unit, the ASEAN+3 Macroeconomic Research Office, was set up in 2001. These are impressive developments, but are they enough to make the CMIM workable? Without clear and rapid‐response procedures to handle a fast‐developing financial emergency, we argue that it is unlikely that the CMIM will be used even as a complement to the IMF. To serve as a stand‐alone option, however, its size or the IMF de‐linked portion of funds needs to be further increased, as does its membership, to add diversity. Only if the ASEAN+3 Macroeconomic Research Office can develop into an independent and credible surveillance authority would it then perhaps be in a position to lead the next rescue.

  March 04, 2014   doi: 10.1111/asej.12022   open full text
• Effect of Interest Rate Subsidies on Firm Performance and Investment Behavior during Economic Recession: Evidence from Vietnam.
  Tuan‐Minh Dinh, Edmund Malesky, Trung‐Thanh To, Duc‐Thanh Nguyen.
  Asian Economic Journal. June 05, 2013
  This paper aims to quantitatively evaluate the microeconomic consequences of the 4‐percent interest rate subsidy program, the main component of the Vietnamese Government's economic stimulus package in 2009, which was intended to assist recovery from the global economic and financial recession. Our analyses based on the Provincial Competitive Index 2009 survey and accounting data of firms listed on Vietnam's two stock exchanges show that firms that received subsidized loans were more likely to increase labor, to expand investment and to possess optimistic business plans. However, we find evidence that not all business activity generated by the stimulus led to productivity increases: a non‐trivial proportion of subsidized loans were not used to invest in production or expansion, but for speculative activities such as real estate and stock market trading.

  June 05, 2013   doi: 10.1111/asej.12009   open full text
• Impact of Foreign Maids on Female Labor Force Participation in Malaysia.
  Peck‐Leong Tan, John Gibson.
  Asian Economic Journal. June 05, 2013
  Demand for foreign maids by households in Malaysia has increased rapidly and expected to affect female labor force participation. Simple comparisons of households with maids and those without suggest that maids raise the participation rate of their female employers by 26 percentage points. However, such comparisons are not directly comparable. Households employing maids differ in many ways from those that do not. When propensity score matching methods are used to estimate the treatment effect of having a foreign maid, the female labor force participation rate is estimated to be only 18 percentage points higher in 1993/1994 and 13 percentage points higher in 2004/2005. This decline over time in the treatment effect is not apparent when simpler but potentially biased methods are used. The small and declining impact of hiring maids suggests financial losses to the host households.

  June 05, 2013   doi: 10.1111/asej.12008   open full text
• Wage Effects of Employment Protection Legislation in Taiwan.
  Yen‐Ling Lin.
  Asian Economic Journal. June 05, 2013
  This study investigates the effects of employment protection on wages. The implementation of employment protection legislation increases employers' firing costs and reduces labor turnover, and, therefore, results in lower wages. Our empirical results show that the implementation of Taiwan's leads to a reduction in wages, the effects of which varies with the stringency of the law's enforcement. In addition, employment protection can lead to a decrease in wage dispersion, implying the worsening of job matches.

  June 05, 2013   doi: 10.1111/asej.12007   open full text
• Effects of Imported Intermediate Varieties on Plant Total Factor Productivity and Product Switching: Evidence from Korean Manufacturing.
  Yong‐Seok Choi, Chin Hee Hahn.
  Asian Economic Journal. June 05, 2013
  By utilizing previously unexplored plant–product data on Korean manufacturing, and detailed import data for 1991–1998, this paper empirically investigates whether greater access to imported intermediate varieties enhanced plant total factor productivity and product‐switching behavior. First, consistent with previous empirical studies, we find that a plant that belonged to industries with higher imported intermediate variety growth experienced higher productivity growth. Second, our empirical results suggest that increased imported intermediate varieties stimulated the product‐switching behavior of domestic plants. Because product‐switching behavior (i.e. simultaneously adding and dropping products) could be understood as a part of the continual process of ‘creative destruction’ within plants, our results imply that imported intermediate variety growth may be one of the channels through which resource reallocation within plants can be promoted.

  June 05, 2013   doi: 10.1111/asej.12006   open full text
• Vertical Trade Maps.
  Benno Ferrarini.
  Asian Economic Journal. June 05, 2013
  We develop a method to map global network production and vertical trade. Based on product‐level trade data across a matrix of 75 countries, an index measures the intensity of bilateral vertical trade and a force‐directed algorithm lays it out for visualization as a world map of production networks. Three major hubs in the global networks are identified: the USA, Germany and China–Japan. Outside Asia and apart from Mexico, mainly because of its maquiladoras network ties to the USA, we find that developing countries are not yet fully part of the global production networks.

  June 05, 2013   doi: 10.1111/asej.12005   open full text