Most recent papers:

• Host countries’ growth opportunities and China's outward FDI.
  Jun Shen, Li Li.
  Asian-Pacific Economic Literature. October 11, 2017
  In 2014, China proposed the Belt and Road policy, which has pushed China's outward foreign direct investment (OFDI) to over tens of billions of US dollars. However, existing studies have not reached a consensus about the decisive factors in China's OFDI. To verify whether China's OFDI activities are motivated by profits, this paper applies a measure of country‐specific growth opportunities adopted by Bekaert et al. (2007) to measure the growth opportunities of the target countries for China's OFDI. A multinational panel data model, based on data from 51 countries from 2003 to 2012, is used to explore the relationship between host countries’ growth opportunities and China's OFDI. Overall, the analysis finds that China's OFDI does not follow the host countries’ growth opportunities but exhibits different features toward developed countries and developing countries. For developed countries, China's OFDI follows host countries’ growth opportunities to some extent. In the case of developing countries, China's OFDI does not follow host countries’ growth opportunities. When we consider factors such as a host country's financial development and political stability, improvement in these factors improves the attractiveness of the host country to China's OFDI. It is also found that the 2008 global financial crisis did not have a very significant impact on China's OFDI activities.

  October 11, 2017   doi: 10.1111/apel.12192   open full text
• The emerging core characteristics of Vietnam's political economy.
  Adam Fforde.
  Asian-Pacific Economic Literature. October 05, 2017
  This paper offers an understanding of the core drivers of the political economy of the ruling Communist Party in Vietnam. In the absence of political reform, the regime does not possess the powers required by the new conditions of a market economy and an increasingly open society. Designed for Soviet totalitarianism, and without popular support or authority, the formal political institutions are anachronistic and thus limit the range of powers available to the Party. As the regime is thus unable to reliably deploy policy unless it feels threatened, politics becomes a competition over spoils. Thus, if macroeconomic instability actually or potentially threatens the regime, the Politburo gains authority to act, and policy is deployed. Yet, as popular discontent mounts over corruption, favourable treatment of politically connected businesses, public education and health, and other areas not seen as regime‐threatening, the disequilibrium leads to use of the security forces and increasing violence against popular opposition.

  October 05, 2017   doi: 10.1111/apel.12191   open full text
• The Asian crisis: what did we learn and when did we learn it?
  Stephen Grenville.
  Asian-Pacific Economic Literature. October 05, 2017
  This paper steps back from the detail of the Asian crisis, to ask whether the 1997 crisis advanced our broad understanding of the age‐old problem of economic crises. Some immediate lessons were learned from the failures of the crisis‐response in Indonesia, which was the worst‐affected economy. It is notable, however, how little changed to address the ongoing systemic weaknesses. Three areas of unresolved vulnerability can be identified. First, the sudden stops and reversals of international capital flows. Second, the intrinsic fragility of a financial system that borrows short and lends long. Third, unanchored exchange rates, where the market's price‐discovery can take the rate to levels far from equilibrium, for sustained periods. For more than a decade after the Asian crisis, international capital flows continued to be seen as unambiguously beneficial, with any attempts at capital flow management rejected. At a global level, it was not until the 2008 financial crisis that widespread financial fragility was addressed through tighter regulation and higher capital requirements. On exchange rates, misleading advocacy of corner solutions—either pure floating exchange rates or immutable fixed rates—continued in the face of the real‐world experience that sometimes intervention is needed to maintain an exchange rate close to equilibrium.

  October 05, 2017   doi: 10.1111/apel.12194   open full text
• How growth deceleration in the PRC affects other Asian economies.
  Minsoo Lee, Donghyun Park, Arief Ramayandi.
  Asian-Pacific Economic Literature. October 04, 2017
  Developing Asia has benefited greatly from the rise of the People's Republic of China (PRC), primarily through the trade channel. The PRC and its neighbours have collectively formed a regional production network, and the PRC is becoming an increasingly important source of final demand. Two empirical techniques are used to examine the likely economic impact of growth deceleration in the PRC on other Asian economies: (1) a single‐equation approach that captures the trade channel; and (2) a global vector autoregressive model that captures the effects beyond the trade channel. The results of both analyses confirm that deceleration in the PRC will have a non‐negligible negative effect on other economies, especially on East and Southeast Asian economies. An out‐of‐sample analysis to tease out the effects of slower growth in the PRC from the recent growth performance of selected Southeast Asian economies suggests that the PRC effect is contributing to the growth dynamics of this region but is not always dominant.

  October 04, 2017   doi: 10.1111/apel.12193   open full text
• Industry competition in China: an external governance mechanism or an external incentive.
  Tingting Zhang, Weiqiang Zeng, Ruohan Zhong, Yanxi Li.
  Asian-Pacific Economic Literature. September 07, 2017
  We focus on the impact of industry competition on earnings management in listed companies in China. Empirical analysis reveals the following: (1) When competition within an industry is relatively low, it lowers the extent of earnings management; (2) when competition is relatively high, earnings management is promoted.; (3) within an industry, the more intense the competition, the more companies manipulate earnings when in an inferior competitive position; and (4) state‐owned enterprises that are at a competitive disadvantage within an industry rely more on real earnings management strategies, whereas these effects are insignificant in private firms.

  September 07, 2017   doi: 10.1111/apel.12187   open full text
• TBT and SPS impacts on Korean exports to China: empirical analysis using the PPML method.
  Jacob Wood, Jie Wu, Yilin Li, Jungsuk Kim.
  Asian-Pacific Economic Literature. August 29, 2017
  Since diplomatic relations were established between China and Korea, the two countries have expanded their relationships, especially in trading commodities and services. However, in recent years, as tariff levels have fallen, China has sought to implement other protectionist mechanisms. The use of non‐tariff measures has added another dimension to international trade activities that need to be better understood. The paper analyses the impacts that two forms of non‐tariff measures, technical barriers to trade (TBT) and sanitary and phytosanitary measures, have on Korean exports to China. To measure the impacts, we use an adapted version of the gravity model and the Poisson pseudo‐maximum likelihood method. The results show that Chinese sanitary and phytosanitary measures, estimated using both the coverage ratio and the frequency index, have positive correlations with Korean agricultural exports; however, Chinese TBT measures, when estimated by the coverage ratio, were found to depress Korean manufacturing exports and exports as a whole. However, using the frequency index, Chinese TBT measures were found to have a statistically insignificant negative impact on Korean exports to China.

  August 29, 2017   doi: 10.1111/apel.12186   open full text
• Determinants of bilateral trade: evidence from ASEAN+3.
  Dong Phong Nguyen, Xuan Vinh Vo.
  Asian-Pacific Economic Literature. July 27, 2017
  In this research, we investigate the determinants of international trade, employing a dataset of bilateral trade and economics characteristics in the ASEAN+3 countries. We include a large number of dependent variables that potentially drive international trade. We also use various standard gravity model variables to maintain consistency with the current literature. The results provide some important insights into the determinants of bilateral trade and offer policy implications regarding the promotion of international trade for governments worldwide. In particular, we find that output asymmetry between countries positively explains bilateral trade. Moreover, the findings suggest that making use of comparative advantage by differentiating the export product structure is important in promoting international trade. We do not find a consistent impact from bilateral exchange rate volatility on bilateral trade. This result points to the importance of providing opportunities for the hedging of currency uncertainty to avoid its adverse effects on trade. The results for other standard gravity model variables are consistent with the results of previous theoretical and empirical research.

  July 27, 2017   doi: 10.1111/apel.12185   open full text
• The impact of tax rebates on export performance: China's textile exports to the USA.
  Qun Bao, Jack Hou, Kunwang Li, Xiaosong Wang.
  Asian-Pacific Economic Literature. May 22, 2017
  The paper evaluates the effectiveness of China increasing its tax rebate on textile exports to the USA. Using the difference‐in‐differences technique and employing The Harmonized System six‐digit data, it is found that the tax rebate policy boosted the growth of textile exports to the USA. Approximately 6 to 25 per cent of the growth can be attributed to this policy. The difference‐in‐differences technique appears useful in evaluating such policies and opens the door to studies measuring the impact of polices. The effectiveness of the export tax rebate policy should be a lesson for policymakers facing slumps in their exports in economic downturns and perhaps become part of the standard trade policy arsenal.

  May 22, 2017   doi: 10.1111/apel.12175   open full text
• Privatisation and trade performance: evidence from China.
  Jing Yan.
  Asian-Pacific Economic Literature. May 22, 2017
  Many studies have shown that privatisation has the potential to apply the forces of competition and high‐powered incentives to reduce costs and innovate. However, few studies investigate whether privatisation can enhance export performance through higher levels of efficiency. Using China's National Bureau of Statistics surveys and customs trade data, we explore the causal effect of privatisation on trade. The wave of 2002 Chinese state‐owned enterprise reforms provided a natural experiment that enables us to use the difference‐in‐differences approach to examine this question. Consistent with the theoretical predications, the empirical results show positive and significant effects of privatisation on all the examined indicators of export performance, including total export value, the intensive margin, and the extensive margin.

  May 22, 2017   doi: 10.1111/apel.12176   open full text
• Impacts of household loan regulation on financial stability: evidence from Korea.
  Dong Jin Shin, Brian H.S. Kim.
  Asian-Pacific Economic Literature. May 22, 2017
  The paper examines whether banking regulations and monetary policy contributed to controlling the fragility of household debt in Korea. The results show that housing loan regulations such as debt to income regulation contributed to a lower household debt delinquency ratio. Lowering the target interest rate provided additional stabilisation of the delinquency ratio. It is recommended that the government adopt an appropriate mix of regulation and monetary policy to control household financial fragility. The financial supervisory services need to be involved in managing debt to income regulation and minimising financial instability and financial market distortions. Further, the monetary authority has to adopt a more effective position in controlling the real lending interest rate and the delinquency ratio of household loans. Such a policy mix will improve effectiveness in controlling financial fragility, especially at a time of financial crisis.

  May 22, 2017   doi: 10.1111/apel.12177   open full text
• Real exchange rate misalignment of Asian currencies.
  Dosse Toulaboe.
  Asian-Pacific Economic Literature. May 22, 2017
  This paper examines the size of real exchange rate (RER) misalignment in seven developing Asian counties and Japan. An analytical framework is developed to estimate the equilibrium RERs, which are then used to derive the RER misalignments. The estimation results from the model indicate that RERs have been misaligned in most of the Asian countries during the sample period, although not to the extent claimed in some studies. The real exchange behaviour in these countries is mostly consistent with the economic fundamentals and the magnitude of measured RER misalignment is not alarming.

  May 22, 2017   doi: 10.1111/apel.12173   open full text
• Exporter responses to FTA tariff preferences: evidence from Thailand.
  Juthathip Jongwanich, Archanun Kohpaiboon.
  Asian-Pacific Economic Literature. May 22, 2017
  This paper focuses on how exporters respond to free trade agreement (FTA) preferential schemes by analysing the administrative records of FTA implementation at the product level in Thailand. The key finding is that while there is growth in the number of FTAs with a potentially larger membership than existing FTAs, firms tend to prioritise existing FTAs. Moreover, only a narrow range of products are involved in applications for FTA preferential schemes. As a result, only one‐third of exports are covered by such arrangements. The key determinants of firms applying for preferential schemes include tariff margins, the ability to comply with rules of origins (ROOs) and the economic fundamentals influencing trade. Hence, it is less likely for FTAs to open up export opportunities for products that are either yet to be traded or of low prospective trade volume. Estimates of the costs of complying with ROOs average 8.6 per cent of tariff equivalence. The cost approaches zero for developed countries but is substantially higher for developing nations. The key policy inference is that the export‐enhancing effects of FTAs are passive at best, working only after economic fundamentals are established. For us to harness the trade‐inducing effects of FTAs, reducing costs incurred from the presence of ROOs from both exporting and importing countries should be the prime focus.

  May 22, 2017   doi: 10.1111/apel.12172   open full text
• Exchange rate policy in the pacific: an evaluation of currency basket regimes.
  Naoyuki Yoshino, Matthias Helble, Ahmad Danu Prasetyo.
  Asian-Pacific Economic Literature. May 22, 2017
  The Pacific island countries have opted for exchange rate regimes with varying degrees of flexibility. Whereas several microstates have adopted an external currency as their legal tender, others have decided to use a basket currency, and yet others have chosen a managed float. The choice of exchange rate regime can have far reaching economic consequences. In the paper, we study the basket currency arrangements by Fiji, Samoa, the Solomon Islands, and Tonga. We first build a new four‐country exchange rate model that illustrates how monetary authorities should best determine the weights of the basket currencies given certain macroeconomic objective functions. In this model, we explicitly include tourism flows. In the second part of the paper, we estimate the de facto weights of foreign currencies in the currency basket of the four countries. We show how the composition has changed amid the global financial crisis. Finally, we demonstrate that the current weights are not optimal compared with the predictions of our model.

  May 22, 2017   doi: 10.1111/apel.12174   open full text
• From share issue privatisation to non‐tradable share reform: a review of privatisation in China.
  Feng Xie, Jing Chi, Jing Liao.
  Asian-Pacific Economic Literature. November 24, 2016
  Privatisation in China has proceeded on a gradual path over 30 years. In this paper, we present a detailed review of China's privatisation programmes from its Share Issue Privatisation (SIP) to its Non‐tradable Share (NTS) reform. The SIP was a primary offering process with state‐owned enterprises (SOEs) issuing new shares to private investors, but after their Initial Public Offering (IPO) approximately two‐thirds of the shares remained non‐tradable and were mainly held by the government. The SIP achieved only limited success because of its partial trading and partial privatisation, which led to the implementation of the NTS reform in 2005. The NTS reform aimed to dismantle the split share structure and provide opportunities for improving corporate governance and further privatisation. The review shows that the NTS reform has yielded greater success in improving firm performance and corporate governance than the SIP.

  November 24, 2016   doi: 10.1111/apel.12149   open full text
• Assessing the trade impacts of the ASEAN + 6 FTA for Lao PDR.
  Sithanonxay Suvannaphakdy, Hsiao Chink Tang, Alisa DiCaprio.
  Asian-Pacific Economic Literature. November 24, 2016
  Using an unbalanced panel dataset of bilateral exports from 1992 to 2009, we assess the potential trade impacts of the expansion of the Association of Southeast Asian Nations (ASEAN) to ASEAN + 3 and ASEAN + 6 on the Lao People's Democratic Republic (Lao PDR). It is found that bilateral exports are positively related to overall bilateral country size and similarity in country size but inversely related to the factor endowment differences, transportation costs, and import tariffs. Simulation results show that the formation of preferential trade agreements (PTAs) between ASEAN and the Plus‐6 economies (the People's Republic of China, Japan, and the Republic of Korea in East Asia; and the other three economies of Australia, India, and New Zealand) could increase bilateral trade between the Lao PDR and ASEAN + 6 by US$1 billion, and ASEAN + 3 by US$981 million. Nonetheless, the trade balance of the Lao PDR is likely to worsen in both the ASEAN + 3 and ASEAN + 6 PTAs because they stimulate more imports than exports.

  November 24, 2016   doi: 10.1111/apel.12148   open full text
• Understanding FDI and production networks in East Asia.
  Willem Thorbecke, Nimesh Salike.
  Asian-Pacific Economic Literature. November 24, 2016
  We provide evidence from the electronics industry in East Asia supporting Kojima's (1973) hypothesis that FDI moves from capital‐exporting countries' disadvantaged industries into host countries' advantaged industries. These results imply that FDI and trade are complementary, unlike in Mundell's (1957) model where they are substitutes. The results also indicate that exchange rate volatility deters trade, implying that reductions in the service link costs between production blocks can promote fragmentation. These findings imply that host countries in East Asia can receive technology transfers by lowering service link costs.

  November 24, 2016   doi: 10.1111/apel.12147   open full text
• Union relevance in the Malaysian labour market.
  Hazrul Shahiri, Zulkifly Osman, Kihong Park.
  Asian-Pacific Economic Literature. November 24, 2016
  The study estimates the effect of union membership on workers' wages using individual‐level data from a survey conducted among employees in various sectors in Malaysia in 2012. Initial results show that union membership has a positive effect on wages. However, after controlling for endogeneity, union membership or the presence of a labour union within a firm is not statistically significant for individual wage levels. Because there is no trade union wage premium, the study suggests that the revival of labour union membership is not going to be an easy task.

  November 24, 2016   doi: 10.1111/apel.12153   open full text
• Trade openness and income inequality in China and the SAARC Region.
  Muhammad Zakaria, Bashir Ahmed Fida.
  Asian-Pacific Economic Literature. November 24, 2016
  The paper empirically examines the effects of trade liberalisation on income inequality in China and the South Asian Association for Regional Cooperation countries. Panel data analysis is conducted for the period of 1973 to 2012. The results show that liberal trade policies have increased income inequality in these countries. These results are robust to alternative liberalisation measures. The control variables used have differing effects on income distribution. Per capita income has an increasing effect on income inequality, while education, financial development, financial openness, democracy, and government size are shown to reduce income inequality. These outcomes can be expected to have important policy implications for the use of trade liberalisation in these countries.

  November 24, 2016   doi: 10.1111/apel.12152   open full text
• Trade facilitation in ASEAN countries: harmonisation of logistics policies.
  Anh T. Nguyen, Thuy T. Nguyen, Giang T. Hoang.
  Asian-Pacific Economic Literature. May 31, 2016
  This paper studies the effectiveness of the implementation of trade facilitation measures in member countries of the Association of Southeast Asian Nations (ASEAN). We evaluate trade facilitation performance and indicate trade facilitation needs and priorities that vary between ASEAN members. In particular, we examine logistics‐related costs in ASEAN and whether the current level of logistics‐related costs could be a burden or an advantage for ASEAN countries. We also identify critical barriers that have impacts on logistics services related to foreign investment and customs across ASEAN. Finally, we propose recommendations for the harmonisation of logistics policies in ASEAN countries aimed at the development of the ASEAN Economic Community.

  May 31, 2016   doi: 10.1111/apel.12130   open full text
• The ‘trilemma’ hypothesis and policy implications for Fiji.
  Hyeon‐seung Huh, Philip Inyeob Ji, Cyn‐Young Park.
  Asian-Pacific Economic Literature. May 31, 2016
  This paper examines the trilemma constraint for Fiji; that is, we investigate how trilemma policy variables were used to address policy trade‐offs among the three objectives of exchange rate stability, monetary autonomy, and financial openness. Fiji makes an interesting case because of its policy orientation towards a stable exchange rate and adequate foreign reserves. Our results suggest that the trilemma constraint is binding for Fiji and policy priority is given to exchange rate stability and monetary policy independence, while less emphasis is placed on financial market openness. We also find that the actual policy levels do not deviate substantially from optimal levels, which evidences that Fiji's policy management has been efficient under the trilemma constraint. Finally, we also study the effects of various trilemma policy combinations and foreign reserve holdings on output growth and inflation.

  May 31, 2016   doi: 10.1111/apel.12136   open full text
• Firm agglomeration and local poverty reduction: evidence from an economy in transition.
  Long Thanh Giang, Cuong Viet Nguyen, Tuyen Quang Tran.
  Asian-Pacific Economic Literature. May 31, 2016
  We examine the linkages between firm agglomeration and the welfare of households in Vietnam. We measured firm agglomeration by per capita firm output at the district level and household welfare by per capita income, expenditure, and poverty. We find that firm agglomeration helps households move from the informal sector to the formal sector. As a result, there is a positive effect of firm agglomeration on per capita income, per capita expenditure, and poverty reduction, albeit of a small and time‐decreasing magnitude. The effect of firm agglomeration on per capita expenditure tends to be higher for households with men, younger, and more educated heads than households with women, older, and less educated heads. Households in rural areas and those that do not have crop land are more likely to benefit from firm agglomeration than those living in urban areas and having crop land.

  May 31, 2016   doi: 10.1111/apel.12131   open full text
• Death of linkages in host countries? A firm‐level study on the channels of productivity spillovers in the Malaysian manufacturing sector.
  Andrew Jia Yi Kam.
  Asian-Pacific Economic Literature. May 31, 2016
  Productivity spillovers from multinational corporations (MNCs) to local firms have been an area of keen research interest in developing economics. Claims of positive spillovers in the form of technology transfers have been questionable, in part because of the many ambiguous conclusions obtained. The paper argues that the lack of focus in the mechanisms underpinning spillovers may be one of the reasons for the ambiguity. Using local input–output linkages as the mechanism for technology transfer, this study examines the presence and the enabling conditions for spillovers. Accounting for the variations in firms' characteristics, the findings show that skills‐oriented MNCs participating in international production networks transmit horizontal spillovers to local establishments. Vertical spillovers from MNCs are mostly relevant only to lower‐skilled establishments. For skilled and export‐oriented local establishments, technologies learned from producing for international production networks are more significant than forming linkages with MNCs in the domestic market.

  May 31, 2016   doi: 10.1111/apel.12135   open full text
• Myanmar: building economic foundations.
  Ronald Findlay, Cyn‐Young Park, Jean‐Pierre A. Verbiest.
  Asian-Pacific Economic Literature. May 31, 2016
  Myanmar began a multifaceted economic reform process in 2011, soon after its political opening. The reform process is far from complete, and its impacts remain questionable. The paper examines progress to date and assesses opportunities and challenges for further reforms. Given the extensive list of development challenges remaining and the limited resources, careful prioritising of reforms is essential. Understanding of its strengths and weaknesses will help identify and sequence reforms and investments so as to maximise the growth dividends. This paper briefly reviews Myanmar's history and its legacy, examines the economy and some of the main policy reforms undertaken since 2011, assesses development potential and weaknesses, and outlines medium and long‐term growth strategies based on the country's specific context and international experiences and practices.

  May 31, 2016   doi: 10.1111/apel.12133   open full text
• ‘Thailand‐plus‐one’: a GVC‐led development strategy for Cambodia.
  Ikuo Kuroiwa.
  Asian-Pacific Economic Literature. May 31, 2016
  This paper discusses the location choices of export‐oriented firms in the context of a global value chain‐led development strategy. The results of a firm survey are used to examine, for the case of Cambodia, how less developed countries can participate in global value chains by specialising in a niche segment of the value chain. The survey results, which focus on the location choices of Cambodian firms that have mother factories in Thailand, show that the border region has advantages for access to suppliers and markets, while there are disadvantages for recruiting and retaining workers. Metropolitan areas, on the other hand, have advantages in the pooling of human resources, expatriates' living conditions, and access to government services, while inland transport costs are a burden for firms located in metropolitan areas. Policy implications are developed.

  May 31, 2016   doi: 10.1111/apel.12134   open full text
• A state‐level analysis of the economic impacts of medical tourism in Malaysia.
  Jeroen Klijs, Meghann Ormond, Tomas Mainil, Jack Peerlings, Wim Heijman.
  Asian-Pacific Economic Literature. May 31, 2016
  In Malaysia, a country that ranks among the world's most recognised medical tourism destinations, medical tourism is identified as a potential economic growth engine for both medical and non‐medical sectors. A state‐level analysis of economic impacts is important, given differences between states in economic profiles and numbers, origins, and expenditure of medical tourists. We applied input–output (I–O) analysis, based on state‐specific I–O data and disaggregated foreign patient data. The analysis includes nine of Malaysia's states. In 2007, these states were visited by 341,288 foreign patients, who generated MYR1,313.4 m ($372.3 m) output, MYR468.6 m ($132.8 m) in value added, and over 19,000 jobs. Impacts related to non‐medical expenditure are more substantial than impacts related to medical expenditure, and indirect impacts are a substantial part of total impacts. We discuss management and policy responses and formulate recommendations for data collection.

  May 31, 2016   doi: 10.1111/apel.12132   open full text
• Export survival pattern and its determinants: an empirical study of Chinese manufacturing firms.
  Dahai Fu, Yanrui Wu.
  Asian-Pacific Economic Literature. April 27, 2014
  While empirical studies of export entry have proliferated, less attention has been devoted to the study of export survival in foreign markets. This paper explores the patterns and determinants of export survival using data on Chinese manufacturing firms for the period 1998–2007. The analytical methods used include non‐parametric techniques and the estimation of a discrete‐time duration model. Our results show the high probability of exit of exporters at the start of the period. We also find that large, highly productive and more export‐oriented firms are more likely to export for a longer period. In addition, foreign ownership is found to be an important determinant of export survival, while state ownership increases the risk of export failure.

  April 27, 2014   doi: 10.1111/apel.12050   open full text
• Commodity prices and monetary policy in emerging East Asia during the global financial crisis.
  Hsiao Chink Tang.
  Asian-Pacific Economic Literature. April 27, 2014
  In the first phase of the global financial crisis, rising inflation was a major concern for emerging East Asian central banks. Coupled with a slowing US economy, regional central banks faced a monetary policy dilemma of either addressing higher inflation or supporting moderate growth. Higher food and fuel prices were the major drivers of headline inflation. Their causes, however, were a confluence of mutually reinforcing cyclical and structural factors. Understandably, different economies faced a different balance of risks between price stability and growth; but to attribute the inflation to supply shocks alone was misleading. This was unsettling given that inflation and inflation expectations were on the rise, and without much credibility, the reluctance of many central banks to raise interest rates risked repeating the mistake the advanced economies made in the 1970s. Without credibility, inflation expectations are unlikely to be well anchored. To gain credibility, a central bank must ‘walk‐the‐talk’, and understandably it must have the autonomy to do so.

  April 27, 2014   doi: 10.1111/apel.12049   open full text
• Poverty identification: practice and policy implications in Vietnam.
  Cuong Viet Nguyen, Anh Tran.
  Asian-Pacific Economic Literature. April 27, 2014
  To identify poor households, the government of Vietnam applies a combination of proxy means tests and quick collection of income data. This paper examines how well the government's poverty identification reaches the really poor in Vietnam. It is found that there is a large difference between the poverty rate for provinces and districts reported by the government and the rates estimated using expenditure and income data from independent household surveys. There is also a large difference between the poverty status of households identified by local authorities and the poverty status identified by income or expenditure data. More than 50 per cent of the poor households identified by local authorities are not poor in terms of income or expenditure measures. A better identification approach would be to use only proxy means tests and not income data collected using the simple questionnaire.

  April 27, 2014   doi: 10.1111/apel.12046   open full text
• Is there income mobility in the Philippines?
  Arturo Martinez, Mark Western, Michele Haynes, Wojtek Tomaszewski.
  Asian-Pacific Economic Literature. April 27, 2014
  Despite a more robust economic performance over the past decade compared with the 1980s and 1990s, growth in average household income is still far below what might be expected given the pace of economic expansion in the Philippines. Inequality of household income has also remained high, which leads to the question: is there income mobility in the Philippines? Using longitudinal data from three years of the redesigned Philippine Family Income and Expenditure Survey (2003, 2006, and 2009) and a variety of analytical tools, we examine the mobility of Filipino household income and show that it is less stagnant than is conventionally perceived. Empirical evidence suggests that significant positive and negative mobility exists; albeit, the two tend to offset each other, contributing to slow household income growth at the aggregate level. In addition, there is some evidence that transitory fluctuations contribute significantly to the observed level of income mobility. Overall, the findings are robust across different analytical tools used in measuring income mobility.

  April 27, 2014   doi: 10.1111/apel.12047   open full text
• Developing ASEAN‐5 bond markets: what needs to be done?
  Simon Gray, Joshua Felman, Ana Carvajal, Andreas A. Jobst.
  Asian-Pacific Economic Literature. April 27, 2014
  This paper examines development challenges facing bond markets in the ASEAN‐5 (Indonesia, Malaysia, Philippines, Singapore, and Thailand). It first assesses their level of development, finding that bond market frameworks—that is, the quality of the physical infrastructure, monitoring, and regulation—compare favourably with those in other emerging markets. The paper then considers possible further enhancements, including changes in disclosure practices as well as reforms of ratings agencies, central bank liquidity management, and taxation. It also considers steps to develop derivatives markets, which in some countries remain quite small. Finally, the article draws lessons from the global financial crisis in developed markets for the future development of ASEAN‐5 markets.

  April 27, 2014   doi: 10.1111/apel.12069   open full text
• ASEAN‐5 bond market development: Where does it stand? Where is it going?
  Joshua Felman, Simon Gray, Mangal Goswami, Andreas A. Jobst, Mahmood Pradhan, Shanaka Peiris, Dulani Seneviratne.
  Asian-Pacific Economic Literature. April 27, 2014
  Since the late 1990s' Asian crisis, ASEAN‐5 countries have expended considerable effort in developing their bond markets. However, the size of these markets relative to GDP has hardly changed. Can we explain this? And does it mean that domestic markets have not, in fact, developed? The article argues that bond market growth has been held back by a sharp fall in business investment, which has left firms with little need for bond borrowing. Even so, markets have developed in other ways, to such an extent that substantial amounts of foreign portfolio investment have begun to flow into ASEAN‐5 bonds. These developments have important ramifications. With the investor base growing and infrastructure investment likely to rise, ASEAN‐5 bond markets could expand rapidly, holding out the prospect that the region could finally achieve ‘twin engine’ financial systems in the near future.

  April 27, 2014   doi: 10.1111/apel.12051   open full text
• Legal frameworks and credit information systems in China, Korea, and Singapore.
  Kwangsuk Han, Yeonho Lee, Chanil Park.
  Asian-Pacific Economic Literature. May 14, 2013
  We analyse the relationship between Public Credit Registries and Credit Bureaus in East Asia by observing credit information markets, in particular, in China, Singapore, and Korea. Singapore's credit information system consists of only a Credit Bureau. China and Korea have gone in different directions. Public Credit Registries play the role of credit information sharing in China, while Public Credit Registries and Credit Bureaus coexist in Korea. The results suggest an important relationship between the development of financial markets and credit information systems. The lower the income level and the heavier the government's hand in financial markets, the greater the need for Public Credit Registries; whereas, financial liberalisation and rising incomes encourage Credit Bureaus.

  May 14, 2013   doi: 10.1111/apel.12007   open full text
• International production networks and host country productivity: evidence from Malaysia.
  Andrew Jia‐Yi Kam.
  Asian-Pacific Economic Literature. May 14, 2013
  In the 1990s, Malaysia, along with other East Asian countries, achieved rapid economic growth rates. Research has yet to ascertain the extent to which this rapid economic growth was due to the development of global production networks. The main objective of the paper is to examine the impact of international production fragmentation on productivity growth. The paper hypothesises that international production fragmentation increases productivity growth through trade and foreign direct investment, and that productivity growth increases due to skill‐intensive industries producing within an international production network.

  May 14, 2013   doi: 10.1111/apel.12006   open full text
• Real exchange rate appreciation, resource boom, and policy reform in Myanmar.
  Koji Kubo.
  Asian-Pacific Economic Literature. May 14, 2013
  Over the six‐year period 2006‐11, the real exchange rate of the Myanmar kyat appreciated 200 per cent, resulting in the value of the US dollar in Myanmar falling to one‐third of its pre‐2006 level. While the resource boom is suspected to be the source of the real exchange rate appreciation, administrative controls on foreign exchange and imports had much more impact. Foreign exchange controls limited the convertibility of the kyat to foreign currencies and spurred negotiated transactions of foreign exchange outside the banking sector, hampering the foreign exchange market interventions of the government and Central Bank. Import controls repressed imports, aggravating excess supplies of foreign exchange. Relaxation of administrative controls is necessary for moderating currency appreciation.

  May 14, 2013   doi: 10.1111/apel.12005   open full text
• Corruption in Southeast Asia: a survey of recent research.
  Krisztina Kis‐Katos, Günther G. Schulze.
  Asian-Pacific Economic Literature. May 14, 2013
  This paper surveys the empirical literature on corruption in Southeast Asia with a focus on the methodological approach that the contributions take to identify the extent, determinants, and consequences of corruption and the remedies against it. We present the major topics that empirical corruption research has focused on and point out the methodological challenges that this line of research has to address. We discuss the empirical corruption studies on Southeast Asia and describe the empirical approach that they have taken.

  May 14, 2013   doi: 10.1111/apel.12004   open full text
• Gender exclusion in social security protection: evidence from Korea.
  Joonmo Cho, Jaeseong Lee, Taehee Kwon.
  Asian-Pacific Economic Literature. May 14, 2013
  This study provides an evaluation of the impact of Korea's stratified labour market on the gaps in wages and social security coverage using the raw data from the supplementary surveys conducted by the Korean National Statistics Office. The study confirms the existence of a labour market stratified by employment type/gender/unionised or non‐unionised/firm size. The labour market structure is not only reflected in the distribution of wages but also in the social security coverage. The empirical result suggests that gender and employment type are the key variables determining the likelihood of social security exclusion. With the other conditions controlled, the female worker has a 65 per cent likelihood of exclusion, and the non‐standard worker has a 40.9 per cent likelihood. For female non‐standard workers, the situation is worse. Their likelihood of exclusion from social security soars to 80.1 per cent. The empirical results with respect to other fringe benefits not mandated by law exhibit the same pattern of social security exclusion. The empirical results emphasise the limitations of gender policy intended to rectify gender discrimination or exclusion alone and suggest a matrix policy that takes into consideration the complex labour market structure.

  May 14, 2013   doi: 10.1111/apel.12003   open full text
• Education and human capital development in the giants of Asia.
  Gavin Jones, Divya Ramchand.
  Asian-Pacific Economic Literature. May 14, 2013
  Educational development has proceeded at a different pace and under different planning regimes in India, China, and Indonesia. This paper provides an overview of the role of education in their recent development—in particular their ability to capitalise on favourable trends in dependency ratios—and presents some key issues facing education planners and policy hurdles to overcome in further improving their level and quality of human capital. Common findings and useful strategies are highlighted in the conclusion, as well as the importance of seizing the opportunity of low dependency ratios to effect policies that will help develop human capital.

  May 14, 2013   doi: 10.1111/apel.12002   open full text
• Development trajectories: Hong Kong vs. Shanghai.
  Niv Horesh.
  Asian-Pacific Economic Literature. May 14, 2013
  Over the past three decades, Shanghai and Hong Kong, leading cities in China's Yangzi River Delta and Pearl River Delta, respectively, have seen rapid economic development and institutional transformation. Shanghai has experienced a major breakthrough in its export‐driven economy and in industrial upgrading since the opening of the Pudong area in the 1990s. Shanghai has also ramped up its efforts to catch up with Hong Kong and has already become one of the world's foremost manufacturing and export hubs. At the same time, and particularly following the 1997 Asian economic crisis, Hong Kong has redoubled efforts to identify shortcomings in its economic architecture; and has explored plans to transcend its traditional role as a financial hub, to attract entrepreneurial hi‐tech talent, and to overcome inequitable income growth. This paper explores the development trajectories of these two cities and how they depart from the pre‐1978 development models. The paper also examines the extent to which the current trajectories are complementary or in competition.

  May 14, 2013   doi: 10.1111/apel.12001   open full text
• Coastal‐inland interactions in Burmese history: a long‐term perspective.
  Ronald Findlay.
  Asian-Pacific Economic Literature. May 14, 2013
  The history of Burma, like that of many Southeast Asian countries, can be viewed in terms of the interaction between coastal regions and kingdoms, on the one hand, and more densely populated inland agrarian states on the other. In the case of Burma this division also largely coincides with ethnic differences between the Mon and the Arakanese in the former category and the Burmans and the Shans in the latter. External influences have typically been transmitted through overseas contact, with India and Ceylon as in the case of the pervasive cultural force of Buddhism, and later with the impact of firearms introduced by the Portuguese during the 16th century, that formed the background to the protracted conflicts between the Burmese Toungoo, Ava and Konbaung kingdoms and the Thai kingdom of Ayuthia. The beginning of the 19th century saw the start of the three wars between the Konbaung Dynasty and India‐based British imperialism in which the major role was played by disputes over trade and the Bengal‐Arakan frontier. British rule in Lower Burma after 1826 and 1854 transformed the economic system of the country even before the complete occupation after 1885 by integrating it with the expanding world economy through rice and teak exports. Between 1885 and the Japanese invasion of 1942 the impact of international trade, foreign direct investment and immigration was the major force of both expansion and contraction of the economic system, as well as of social and political change and instability, eventually culminating after 1945 in the achievement of independence. The economic policy of independent Burma, during both the civilian and subsequent military regimes, was largely shaped by the fraught legacy of overseas contact in Burmese history as noted above. The recent change of the capital from the commercial port of Rangoon to the new inland ‘city’ of Naypyidaw is thus of more than merely symbolic significance since it may reflect a desire to return to the apparently safe isolation of the interior ‘heartland’ over the vicissitudes of international trade and overseas contacts. But is that a wise choice in the increasingly globalized world of the 21st century?

  May 14, 2013   doi: 10.1111/apel.12000   open full text