2024-03-29T04:41:21Z http://oai.repec.org/oai.php
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article HAS ENVIRONMENTAL REGULATION RESTRAINED SMOG POLLUTION: EVIDENCE FROM CHINA We studied how environmental regulation affects the ecological environment from the perspective of an underground economy. The theoretical model shows that environmental regulation exerts both direct and indirect effects — via the underground economy — on environmental pollution, and that the underground economy is unfavorable for the environment. Empirical results show that all the effects (direct, indirect, and total) of environmental regulation are insignificant, and the enforcement of environmental regulation may increase smog emissions with the expansion of the underground economy; smog pollution will increase with the strengthening of environmental regulation. Moreover, the underground economy shows a remarkable spatial effect when using spatial distance or spatial economics weights matrix. Environmental regulation, underground economy, smog pollution, spatial durbin model 03 2020 65 June The Singapore Economic Review 555 575 http://www.worldscientific.com/doi/abs/10.1142/S0217590817410053 SHOUFENG HUANG Department of Public Economics, School of Economics, Xiamen University, Xiamen 361005, China†Division of Economics, Nanyang Technological University, 50 Nanyang Ave, 639798, Singapore‡School of Economics and Management, Wuhan Polytechnic University, Wuhan 430023, China DENGTA CHEN MAXCHEN@xmu.edu.cn #xA7;The Wang Yanan Institute for Studies in Economics, Xiamen University, Xiamen 361005, China
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article THE DETERMINANTS OF WASTE-SORTING INTENTION AND BEHAVIOR AMONG CHINESE UNDERGRADUATE STUDENTS: A CASE STUDY IN BEIJING In China, waste sorting has been tested in eight pilot cities for more than a decade. However, these pilot programs have shown little success. Given that waste sorting is a prerequisite for waste recycling, more attention and financial resources must be provided. Considering that among the entire population undergraduate students might be the most active and willing to engage in recycling, in this paper, the waste-sorting intention and behavior of undergraduate students in Beijing are investigated in depth. By adopting a model that comprehensively incorporates the expanded Theory of Planned Behavior (TPB) and the Attitude–Behavior–Condition (A–B–C) theory, a questionnaire survey with data from 536 undergraduate students at eight universities in Beijing is analyzed by employing logistic and probit models. The estimation results indicate that the most important factors that affect students’ waste-sorting intention and behavior include the attitudes of the surrounding people, a moral sense when failing to sort waste, and knowledge based on the students’ subjective judgments. In comparison, situational factors have less impact on the dependent variables; however, some demographic factors may influence intention or actual behavior significantly. Waste sorting, China, undergraduate students, moral norms, subjective norms 03 2020 65 June The Singapore Economic Review 627 652 http://www.worldscientific.com/doi/abs/10.1142/S0217590817410077 YU HAO Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, P. R. China†School of Management and Economics, Beijing Institute of Technology, Beijing 100081, P. R. China‡Collaborative Innovation Center of Electric Vehicles in Beijing, Beijing 100081, P. R. China§Beijing Key Lab of Energy Economics and Environmental Management, Beijing 100081, P. R. China¶Sustainable Development Research Institute for Economy and Society of Beijing, Beijing 100081, P. R. China LING-OU WANG iris_wang99@qq.com #x2020;School of Management and Economics, Beijing Institute of Technology, Beijing 100081, P. R. China XI-SHENG CHEN hixonchen@qq.com #x2020;School of Management and Economics, Beijing Institute of Technology, Beijing 100081, P. R. China LU WANG Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, P. R. China†School of Management and Economics, Beijing Institute of Technology, Beijing 100081, P. R. China
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article LIVELIHOOD IN BHITARKANIKA WILDLIFE SANCTUARY, INDIA: AN IMPACT ASSESSMENT OF ECOTOURISM PRACTICES The present study examines the livelihood impact of ecotourism policy in Bhitarkanika Wildlife Sanctuary (BKWS), Odisha, India. Results confirm that ecotourism has created several employment opportunities for the locals and the participants earn better compared to the non-participants. However, the locals suffer due to man-animal conflict and the non-participants suffer the most as farming is their major occupation. Crop damage and livestock depredation by wild animals cause a great economic loss to the villagers. The losses often result in aggravating poverty, food insecurity, additional expenses for investing on mitigating measures and consequently diminished state of socio-economic wellbeing. Thus proper measures can go a long way in founding a better relationship between the forest department and the villagers. Ecotourism, livelihood, man-animal conflict, Bhitarkanika Wildlife Sanctuary 03 2020 65 June The Singapore Economic Review 653 681 http://www.worldscientific.com/doi/abs/10.1142/S0217590817410065 MADHUMITA DAS Department of Humanities and Social Sciences, Indian Institute of Technology Kharagpur, India BANI CHATTERJEE bani@hss.iitkgp.ernet.in Department of Humanities and Social Sciences, Indian Institute of Technology Kharagpur, India
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article HUMAN CAPITAL AND ENERGY: A DRIVER OR DRAG FOR ECONOMIC GROWTH This paper examines a causal relationship between energy consumption, human capital and GDP for the ASEAN-5 (namely, Malaysia, Indonesia, Thailand, Singapore and the Philippines) over the period 1965–2011. It differs from the existing energy-growth nexus literature greatly by taking into consideration the role of human capital across countries. Both the single-equation estimation and the Johansen’s cointegration analysis suggest the presence of a long-run relationship among these variables. The exclusion test finds that human capital is a crucial factor in the cointegration space as much as conventional inputs of physical capital; and energy seems to play a less important role when human capital increases, indicating a possible substitution effect between the two variables. Using the Toda–Yamamoto test, it finds no long-run Granger causal link between energy use and economic development in the two net energy-exporter countries Malaysia and Indonesia and the city state Singapore, while in the Philippines economic growth Granger causes energy use and in Thailand a feedback effect is identified. Based on these results, policy implications are drawn. Energy-growth nexus, human capital, cointegration, Toda–Yamamoto causality, ASEAN-5 03 2020 65 June The Singapore Economic Review 683 714 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500163 YOUNGHO CHANG yhchang@suss.edu.sg School of Business, Singapore University of Social Sciences, 461 Clementi Rd, Singapore, 599491, Singapore ZHENG FANG School of Business, Singapore University of Social Sciences, 461 Clementi Rd, Singapore, 599491, Singapore SHIGEYUKI HAMORI hamori@econ.kobe-u.ac.jp Graduate School of Economics, Kobe University, 2-1 Rokkodai, Nada-ku, Kobe 657-8501, Japan
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article SPECIAL ISSUE ON ENVIRONMENTAL GOVERNANCE IN ASIA: INTRODUCTION 03 2020 65 June The Singapore Economic Review 551 553 http://www.worldscientific.com/doi/abs/10.1142/S0217590820020014 FUHAI HONG Lingnan University, Hong Kong NORI TARUI University of Hawaii at Manoa, USA
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article TRACEABILITY INFORMATION AND WILLINGNESS TO PAY: THE CASE OF PORK Willingness to pay (WTP) for pork with different traceability information was investigated in 143 consumers in Wuxi, Jiangsu Province, China, using experimental auctions combined with real choice experiments based on incentive compatibility and external validity of non-hypothetical elicitation. The results indicated that participants had the highest WTP for government certification information, attached the greatest importance to farming information and comprehensive traceability information on the whole. Therefore, emphasis of Chinese government should be placed on prevention and regulation of potential safety risks in pig farming. Also, effective transfer of traceability information should be guaranteed through government certification. Random nth price auction, real choice experiment, traceability information, willingness to pay 03 2020 65 June The Singapore Economic Review 737 754 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500108 JIAO LU School of Management, Shanxi Medical University, No. 56, Xinjian South Road, Taiyuan, Shanxi 030001, P. R. China†Food Safety Research Base of Jiangsu Province, School of Business Jiangnan University, No. 1800, Wuhu Avenue, Wuxi, Jiangsu 214122, P. R. China‡Synergetic Innovation Center of Food Safety and Nutrition, No. 1800, Lihu Avenue Wuxi, Jiangsu 214122, P. R. China HONGSHA WANG #x2020;Food Safety Research Base of Jiangsu Province, School of Business Jiangnan University, No. 1800, Wuhu Avenue, Wuxi, Jiangsu 214122, P. R. China‡Synergetic Innovation Center of Food Safety and Nutrition, No. 1800, Lihu Avenue Wuxi, Jiangsu 214122, P. R. China LINHAI WU #x2020;Food Safety Research Base of Jiangsu Province, School of Business Jiangnan University, No. 1800, Wuhu Avenue, Wuxi, Jiangsu 214122, P. R. China‡Synergetic Innovation Center of Food Safety and Nutrition, No. 1800, Lihu Avenue Wuxi, Jiangsu 214122, P. R. China XIUJUAN CHEN #x2020;Food Safety Research Base of Jiangsu Province, School of Business Jiangnan University, No. 1800, Wuhu Avenue, Wuxi, Jiangsu 214122, P. R. China‡Synergetic Innovation Center of Food Safety and Nutrition, No. 1800, Lihu Avenue Wuxi, Jiangsu 214122, P. R. China
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article POLICY CHOICES FOR AIR POLLUTION ABATEMENT IN BEIJING: STATUS QUO OR CHANGE In order to control air pollution in Beijing, China has introduced a number of policy measures. However, the policy costs have never been well evaluated from the perspective of the residents. We conducted a survey of 633 Beijing residents with a choice experimental setting, and evaluate the current air pollution control policies. The main findings include: (1) Restriction of private vehicle driving does increase utility of residents; (2) Replacing coal-dominated heating system with natural gas has a better effect on air pollution control than replacement with electricity; (3) Beijing residents demand more radical policies to control air pollution and, according to our estimation, are willing to pay 5.1% of their income for more such policy measures; (4) The capital city function of Beijing yields many economic and political advantages for the residents, and the economic benefit is equal to 8.3% of their income. Beijing city, air pollution, choice experiment, status quo, policy choices 03 2020 65 June The Singapore Economic Review 715 736 http://www.worldscientific.com/doi/abs/10.1142/S0217590817410028 SHAOJIE ZHOU zhoushaojie@tsinghua.edu.cn School of Public Policy and Management, Tsinghua University, China XIAOHUA YU College of Economics and Management, Jilin Agricultural University, Changchun, China3Department of Agricultural Economics and Rural Development, University of Goettingen, Wilhelm-Weber-Str. 2, Goettingen 37073, Germany DIETER KOEMLE dkoemle@gwdg.de Department of Agricultural Economics and Rural Development, University of Goettingen, Wilhelm-Weber-Str. 2, Goettingen 37073, Germany
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article DOES MEDIA ATTENTION AFFECT FIRMS’ ENVIRONMENTAL PROTECTION EFFORTS? EVIDENCE FROM CHINA Using data from publicly traded firms in China, we examine the relationship between media attention and firms’ environmental protection efforts. We show that: (1) media attention induces firms to exert more effort in environmental protection, (2) state-owned firms are more responsive to media attention than non-state-owned firms regarding environmental protection and (3) firms are more responsive when faced with local media attention and negative media reports. The results are robust to the subsample of heavily polluting industries. Overall, this study illustrates the use of media attention to regulate corporate behavior. Media attention, environmental protection, China 03 2020 65 June The Singapore Economic Review 577 600 http://www.worldscientific.com/doi/abs/10.1142/S021759081741003X GAOWEN KONG konggaowen@gmail.com School of Economics and Statistics, Guangzhou University, Guangzhou 510006, China DONGMIN KONG #x2020;School of Economics, Huazhong University of Science and Technology, China MAOBIN WANG wangmaobin@uibe.edu.cn #x2021;School of Banking and Finance, University of International Business and Economics, Beijing 100029, China
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article CROSS-BOUNDARY AIR POLLUTION CONTROL UNDER “ONE COUNTRY, TWO SYSTEMS”: PERSPECTIVES FROM HONG KONG–GUANGDONG COLLABORATION This study aims to examine how “One Country, Two Systems” has shaped and influenced the collaboration on cross-boundary air pollution control between the governments of the Hong Kong Special Administrative Region and the Guangdong province. The presence of the Chinese central government significantly fostered the start of this collaboration, but the implementation and collaborative relationship were relatively weak and unsustainable due to the two local governments’ largely different interests, goals and political demands. We found that the emphasis on “One Country” especially after 2003 led to the signature of more joint agreements in comparison with what the emphasis on “Two Systems” did between 1997 and 2003. Joint agreements appear to be necessary conditions for effective collaboration, but too many of them without satisfying implementation could have resulted in less concrete benefits. A balanced stress on “One Country” and “Two Systems” might bring an appropriate number of joint agreements with good implementation for more effective collaboration. Cross-boundary air pollution, One Country Two Systems, governance, collaboration theory 03 2020 65 June The Singapore Economic Review 601 625 http://www.worldscientific.com/doi/abs/10.1142/S0217590817410016 TING YIN TIFFANY WONG tiffanywonghello@gmail.com Department of Geography and Resource Management and Institute of Environment, Energy and Sustainability, The Chinese University of Hong Kong, Hong Kong, P. R. China YUAN XU Department of Geography and Resource Management and Institute of Environment, Energy and Sustainability, The Chinese University of Hong Kong, Hong Kong, P. R. China YOUNGHO CHANG yhchang@suss.edu.sg #x2020;School of Business, Singapore University of Social Sciences, Singapore
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article DOES FISCAL DEFICIT CROWD OUT PRIVATE CORPORATE SECTOR INVESTMENT IN INDIA? This paper examines the impact of fiscal deficit and its financing pattern on private corporate sector investment in India, for the period from 1970–1971 to 2012–2013. Using Autoregressive Distributed Lag (ARDL) Models, the study finds that fiscal deficit crowds out private investment both in the long run and in the short run. The results also show that internal (domestic) financing of fiscal deficit has significant negative impact on private investment but external (foreign) financing of fiscal deficit has insignificant effect. In the short run, availability of bank credit plays a more important role in investment decision making than the rate of interest in India. The study suggests that government should maintain the fiscal deficit within a sustainable level by reducing its unnecessary non-developmental expenditure, subsidies etc. The government should restructure its financing pattern of fiscal deficit since internal financing has a significant negative impact on private investment. Fiscal deficit, private investment, crowding out, autoregressive distributed lag models, bound testing approach 05 2016 64 November The Singapore Economic Review 1201 1224 https://www.worldscientific.com/doi/abs/10.1142/S0217590816500302 RANJAN KUMAR MOHANTY ranjanmohanty85@gmail.com National Institute of Public Finance and Policy, New Delhi, 110067 India
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article GEOGRAPHIC DISTANCE, INCOME AND CHARITABLE GIVING: EVIDENCE FROM CHINA Using data from a nationwide donation program and a follow-up survey, this paper examines how geographic distance between donors and recipients and the capability to give measured by donors’ income affect the amount of charitable giving (conditioned on having given). We find that an increase in geographic distance significantly reduces donation amounts for 15% of the donors. The sensitivity of donation to distance decreases with total monthly disposable income for 62% of the donors. We further find that donation amounts increase with donors’ income for 4% of the donors when evaluating at the mean or median distance. Charitable giving, geographic distance, income, China 05 2018 64 May The Singapore Economic Review 1145 1169 https://www.worldscientific.com/doi/abs/10.1142/S0217590818500212 QIAN WENG qian.weng@ruc.edu.cn School of Labor and Human Resources, Renmin University of China, No. 59, Zhongguancun Street, Haidian District, Beijing 100872, P. R. China HAORAN HE Business School, Beijing Normal University, Xinjiekouwai St. 19, Haidian District, 100875 Beijing, P. R. China
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article AN EARLY WARNING OF AN IMPENDING CURRENCY CRISIS IN CHINA Are there early warnings of an impending financial crisis in China? Our analysis using the Kaminsky–Lizondo–Reinhart (KLR) signal approach reveals that the probability of China having a currency crisis in the 24 months to October 2017 could be increased assuming no remedial action by the authorities to avert an impending crisis. Notwithstanding the above, our analysis shows that nine out of 15 economic indicators are effective in predicting a currency crisis. Loss function of policymakers and evaluation of usefulness are then employed to verify their validity. The results show that bank deposits and M2/international reserves are the most powerful indicators. KLR approach, currency crisis, loss function, usefulness evaluation, China 05 2018 64 July The Singapore Economic Review 1101 1125 https://www.worldscientific.com/doi/abs/10.1142/S021759081850025X RUOXI ZHANG School of Finance, Academic of Financial Risk Research, Capital University of Economics and Business, 121 Zhangjialukou, Beijing 100070, P. R. China XUE LI snowlovehome@163.com School of Finance, Academic of Financial Risk Research, Capital University of Economics and Business, 121 Zhangjialukou, Beijing 100070, P. R. China SATISH CHAND s.chand@adfa.edu.au #x2020;School of Business, University of New South Wales, Canberra, ACT, Australia
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article REAL EXCHANGE RATE RETURNS AND REAL STOCK PRICE RETURNS IN THE STOCK MARKET OF MALAYSIA This study examines the relationships between real exchange rate returns and real stock price returns in the stock market of Malaysia. The Kwiatkowski, Phillips, Schmidt and Shin (KPSS) and Dickey and Fuller (DF) unit root test statistics show that all the variables examined are found to be stationary in the first differences. The constant conditional correlation (CCC)-multivariate generalized autoregressive conditional heteroskedasticity (MGARCH) model shows that real exchange rate return of Malaysian ringgit against the United States dollar (RM/USD) and real stock price return of Kuala Lumpur Composite Index (KLCI) are found to be negative and significantly correlated. However, there is insignificant correlation between real exchange rate return of Malaysian ringgit against Japanese Yen (RM/¥) and real stock price return of KLCI. Moreover, the CCC-MGARCH models show that real exchange rate returns and real stock price returns of some stocks are found to be significantly correlated. The KPSS unit root test statistics show that the time invariant conditional variances of real exchange rate returns and real stock price returns are mostly found to be stationary in the levels. There is no evidence of Granger causality between the time invariant conditional variances of real exchange rate returns and real stock price return of KLCI but some evidence of Granger causality between the time invariant conditional variances of real exchange rate returns and real stock price returns. There is a link between the exchange rate market and the stock market in Malaysia but not every real stock price return is significantly linked with real exchange rate return. Real exchange rate return, real stock price return, constant conditional correlation (CCC)-multivariate generalized autoregressive conditional heteroskedasticity (MGARCH) model, Granger causality 05 2016 64 December The Singapore Economic Review 1319 1349 https://www.worldscientific.com/doi/abs/10.1142/S0217590816500387 HOCK TSEN WONG htwong@ums.edu.my Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Jalan UMS, 88400 Kota Kinabalu, Sabah, Malaysia
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article FISCAL POLICY, INSTITUTIONS AND GROWTH: NEW INSIGHTS The paper attempts to analyze the impact of fiscal policy on economic growth while considering level of development and controlling for state of institutions. We extend the Solow growth model by incorporating fiscal policy and institutions through using total factor productivity. Our empirical analysis includes a panel of 56 countries. The empirics demonstrate that impact of fiscal policy on growth is statistically insignificant in the full sample. However, splitting the sample into developed and developing economies, positive association with economic growth in developed economies and negative association in developing economies observed. Our findings thus inform that fiscal policy contributes positively to growth only in developed economies. The reason for this seems to be an enabling institutional environment in developed economies. This kind of enabling institutional environment allows fiscal policy to play positive role in developed economies and absence of such environment contributes to the negative impact of fiscal policy in developing economies. Fiscal policy, Institutions, Economic growth, Stages of development 05 2016 64 December The Singapore Economic Review 1251 1278 https://www.worldscientific.com/doi/abs/10.1142/S0217590816500296 SAIMA NAWAZ Department of Management Sciences, COMSATS Institute of Information Technology, Park Road, Tarlai Kalan, Islamabad 4550, Pakistan M. IDREES KHAWAJA idreespide1@gmail.com Pakistan Institute of Development Economics (PIDE), Quaid-i-Azam University Campus, Islamabad, Pakistan
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article CAUSALITY-IN-VARIANCE BETWEEN THE STOCK MARKET AND MACROECONOMIC VARIABLES IN SINGAPORE The present study investigates the causality-in-variance between macroeconomic variables and the stock market in Singapore from November 1990 to March 2013. This study utilizes the [Sanso, A, V Arago and JL Carrion (2004). Testing for change in the unconditional variance of financial time series. Revista de Economia Financiera, 4, 32–53.] test to detect the structural break in variance; a generalized autoregressive conditional heteroskedasticity (GARCH) process to model volatility; and the cross correlation function (CCF) causality method. The results demonstrate that the most important macroeconomic causes of stock market volatility in Singapore is exchange rate volatility. The findings provide preliminary insights on risk elements for policy makers monitoring the stability of financial markets by providing insights about volatility spillovers and risk transmission between the stock market and macroeconomic variables in Singapore. Causality-in-variance, spillovers, stock market volatility, structural break in variance, macroeconomic volatility 05 2016 64 December The Singapore Economic Review 1299 1317 https://www.worldscientific.com/doi/abs/10.1142/S0217590816500363 LIDA NIKMANESH School of Economics, Faculty of Economics and Management, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor ABU HASSAN SHAARI MOHD NOR ahassan@ukm.edu.my School of Economics, Faculty of Economics and Management, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor
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article IMPACT OF GOVERNMENT SPENDING ON INFLATION IN ASIAN EMERGING ECONOMIES: EVIDENCE FROM INDIA, CHINA, AND INDONESIA This paper investigates the long-run and short-run impacts of government spending on inflation in three Asian emerging economies of India, China and Indonesia by applying the cointegration and Vector Error Correction Model to time series data from 1970 to 2010. The results confirm a cointegrating causal link between government spending and inflation in the long run in these countries, regardless of their institutional governance differences. In the short run, government spending (as a percentage of GDP) appears to have a negative impact on inflation in China, while a positive impact in Indonesia and India. The implication is that governments of emerging economies should be prudent with their decisions on government spending. Inflation, government spending, Asian emerging economies, cointegration, vector error correction model 05 2016 64 December The Singapore Economic Review 1171 1200 https://www.worldscientific.com/doi/abs/10.1142/S0217590816500338 TAI DANG NGUYEN tai.nguyen@anu.edu.au Crawford School of Public Policy, J.G. Crawford Building, #132 Lennox Crossing, Australian National University, Canberra, ACT, 0200, Australia
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article AN INVESTIGATION INTO THE DYNAMIC RELATIONSHIP BETWEEN CPI AND PPI: EVIDENCE FROM THE UK, FRANCE AND GERMANY This paper examines the dynamic relationship between the consumer price index (CPI) and the producer price index (PPI) in the UK, France and Germany from 1997 to 2013. We employ the momentum-threshold autoregressive (MTAR) cointegration model for empirical analysis. The results show that the CPI and the PPI are cointegrated with bi-directional long-run Granger causality between CPI and PPI, signifying the existence of both demand-pull and the cost-push nature of inflation. The estimates of threshold vector error correction models (TVECMs) indicate asymmetric adjustments to equilibrium, where upward adjustments are statistically significant but downward adjustments are sluggish and insignificant. Moreover, we generate the unconditional half-life estimates as a measure of persistence, which reveal robust evidence of complex non-linearities in the adjustment process. Our overall results provide valuable information for policymakers to formulate inflation-control policies and optimal policy horizons under a non-linear framework. Threshold cointegration, MTAR adjustment, Granger causality, mean bias, unconditional half-life 05 2018 64 July The Singapore Economic Review 1081 1100 https://www.worldscientific.com/doi/abs/10.1142/S0217590818500261 KAI-YIN WOO Department of Economics and Finance, Hong Kong Shue Yan University, 10 Wai Tsui Crescent, Braemar Hill, North Point, Hong Kong SAR SHU-KAM LEE sklee@hksyu.edu Department of Economics and Finance, Hong Kong Shue Yan University, 10 Wai Tsui Crescent, Braemar Hill, North Point, Hong Kong SAR CHO-YIU JOE NG joecyng-c@my.cityu.edu.hk #x2020;Department of Economics and Finance, City University of Hong Kong, Tat Chee Avenue, Kowloon, Hong Kong SAR
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article DOES INNOVATION ENHANCE PRODUCTIVITY IN CASE OF SELECTED INDIAN MANUFACTURING FIRMS? This study examines the effects of innovation on productivity of Indian Manufacturing firms. Despite the voluminous literature on this area, the demanding line, i.e., various types of innovation effects on productivity growth, received little attention particularly in the Indian context; hence, our study fills the gap by employing firm-level data from Hyderabad and Bengaluru cities of India from 2011 to 2013. The estimated results confirm the significant impact of innovation on productivity upsurge in Indian manufacturing firms. Further, we investigate the spatial aspects of innovation considering the two cities separately. However, such city-based analysis does not produce any different findings. Innovation, total factor productivity, Leveinsohn–Petrin approach, panel data model, Indian manufacturing 05 2018 64 November The Singapore Economic Review 1225 1250 https://www.worldscientific.com/doi/abs/10.1142/S0217590818500340 SEENAIAH KALE seenaiah@isid.org.in Institute for Studies in Industrial Development, 4, Institutional Area, Vasant Kunj, New Delhi 110 070, India BADRI NARAYAN RATH Department of Liberal Arts, Indian Institute of Technology Hyderabad, India
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article FUNDING LIQUIDITY RISK, SYNDICATION BEHAVIOR AND THE RISK CULTURE OF THE AUSTRALIAN VENTURE CAPITAL INDUSTRY Venture capital (VC) is usually invested in high risk technology companies at their early stages of development. In response to the industry risk environment, the VC fund managers have developed a set of risk management practices appropriate for the industry which include investment syndication. Furthermore, the VC funds are supplied by individual and institutional investors with different risk profiles and investment focus, usually in finite amounts and for a limited period of time. The funding agreement between the VC firms and the fund investors combined with the limited amount and time can lead to additional funding liquidity risks as the VC funds are invested in the portfolio companies. In this paper, we develop a simple two period model from a VC firm’s perspective with funding liquidity constraints to demonstrate how funding liquidity risk can influence syndication decisions. We subsequently analyze the implication of the model, derive a set of predictions and validate them with VC investment data from Australia. The analysis shows that syndication has both instrumental function in risk management and behavioral implications on risk culture essential for addressing the emerging frontiers of sustainability risks. Venture capital, syndication decision, funding liquidity, risk culture and ESG risk 05 2016 64 December The Singapore Economic Review 1279 1297 https://www.worldscientific.com/doi/abs/10.1142/S0217590816500405 ASIF IQBAL SIDDIQUI Curtin University Sustainability Policy Institute, Building 209 (Lvl 1), Kent St, Bentley WA 6102 Perth, Australia DORA MARINOVA d.marinova@curtin.edu.au Curtin University Sustainability Policy Institute, Building 209 (Lvl 1), Kent St, Bentley WA 6102 Perth, Australia
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article THE WAGE EFFECTS OF OVER-EDUCATION AMONG YOUNG STEM GRADUATES Using data from the 2010 Graduates Occupational Mobility Survey, this paper examines the wage effects of over-education (OE) among graduates in science, technology, engineering, and mathematics (STEM) disciplines at the early stage of their careers. In the pooled OLS analysis, the negative correlation between OE and wages remains even if we were to estimate an augmented specification where OE is disaggregated according to perceived skill mismatch. However, the pooled OLS estimates are changed dramatically when we control for unobserved individual heterogeneity (i.e., ability) using the panel FE estimation procedure; namely, reduced coefficients in the wage equation compared to pooled OLS estimation. Over-education, educational mismatch, skill mismatch, STEM, wages 05 2017 64 June The Singapore Economic Review 1351 1370 https://www.worldscientific.com/doi/abs/10.1142/S0217590817500059 KIHONG PARK Department of Economics, Korea Army Academy at Yeong-cheon (KAAY), South Korea DOOSEOK JANG jangds@kaist.ac.kr School of Humanities & Social Sciences, Korea Advanced Institute of Science Technology (KAIST), South Korea
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article CONSPICUOUS CONSUMPTION OF ONLINE SOCIAL NETWORKING DEVICES AND SUBJECTIVE WELL-BEING OF BANGKOKIANS Empirical evidence of the conspicuous consumption theory is limited and ambiguous. It has been shown, however, that the consumption of life experiences makes people happier than the consumption of material goods. Yet, these studies typically conduct dichotomous comparisons and do not distinguish between conspicuous and inconspicuous consumption. Conspicuous and inconspicuous online social networking devices (OSND) are experiential goods and as such fall between life experiences and material goods. The objective of this paper, thus, is to examine the relationship between conspicuous consumption of OSND and subjective well-being, which is proxied by happiness and mental health. Cross-sectional data (n=500) were collected in 2015 using probability sampling. The ordered logistic regression results reveal that conspicuous consumption of OSND is negatively related with happiness and mental health in all regressions as hypothesized, while the coefficient on inconspicuous consumption of OSND is positive. Also, the number of virtual friends is negatively associated with happiness. Among the control variables, it is noteworthy that respondents with high blood pressure, used to capture physical health, have lower happiness and mental health, while respondents with higher education and high own monthly income exhibit higher happiness and mental health. Respondents, whose personality can best be characterized as “agreeable”, have lower happiness and mental health which is in line with the old saying that “nice guys finish last”. Conspicuous consumption, online social networking devices, happiness, mental health, social comparison 05 2017 64 June The Singapore Economic Review 1371 1395 https://www.worldscientific.com/doi/abs/10.1142/S0217590817500060 CHANTAL HERBERHOLZ Faculty of Economics, Chulalongkorn University, 254 Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand NATTAYA PRAPAIPANICH nattayapr@g.swu.ac.th School of Economics and Public Policy, Srinakharinwirot University, Bangkok, Thailand
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article UPSTREAM INCENTIVES TO ENCOURAGE DOWNSTREAM COMPETITION IN A VERTICALLY SEPARATED INDUSTRY We show in this paper that a dominant supplier, under observable two-part tariff contracts and an alternative, less efficient supply of the input, could benefit from more intense competition downstream provided that it has strong enough market power upstream. This implies that the incentives of upstream suppliers to foreclose downstream firms are less important than the previous literature had suggested. In fact, we find that the result also holds under observable linear contracts when we consider free entry in the downstream market. Dominant upstream firm, downstream competition, wholesale price, two-part tariff contracts 03 2018 63 June The Singapore Economic Review 619 627 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500903 JOEL SANDONÍS Economics Department, University of Alicante, Campus de Sant Vicent del Raspeig, E-03071, Alicante, Spain JAVIER M. LÓPEZ-CUÑAT cunyat@ua.es Economics Department, University of Alicante, Campus de Sant Vicent del Raspeig, E-03071, Alicante, Spain
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article THE EFFECTS OF TAX CHANGES ON TOBACCO CONSUMPTION IN THAILAND The purpose of this study is to examine the factors affecting the likelihood of consuming and the amount spent on tobacco in Thailand. Heckman’s sample selection model is applied to data from the 2009 socio-economic survey of Thailand in order to determine the factors determining the decision to consume tobacco. Demand elasticities are then calculated using the Extended Linear Expenditure System (ELES). Age, household size, gender, occupation and tenure are found to be common factors that influence both the probability of tobacco smoking and expenditure on tobacco products. Income also plays a key roles in explaining the amount spent on tobacco. Demand for tobacco is found to be inelastic for Thai smokers. Heckman’s sample selection method, demographic characteristics, tobacco expenditures, extended linear expenditure system, demand elasticities 03 2018 63 June The Singapore Economic Review 629 646 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500848 BIRD CHONVIHARNPAN bird.chonviharnpan@canberra.edu.au Faculty of Business, Government and Law, University of Canberra, ACT 2601, Australia PHIL LEWIS #x2020;Centre for Labour Market Research, University of Canberra, ACT 2601, Australia
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article PATTERNS AND DETERMINANTS OF INTRA-INDUSTRY TRADE IN SOUTHEAST ASIA: EVIDENCE FROM THE AUTOMOTIVE AND ELECTRICAL APPLIANCES SECTORS Using finely disaggregated data at six-digit harmonized code classification level, this paper examines the patterns and determinants of horizontal and vertical intra-industry trade in the automobile and electrical appliances sectors during the past few decades among the six major Southeast Asian countries. It is found from the analysis of the data that intra-industry trade is much higher than the inter-industry trade in each of these two sectors. Further, the determinants of these two types of trade are found to differ somewhat in terms of sign and magnitude across the sectors, implying the importance of sector-specific factors as influences on the pattern of trade. Intra-industry trade, gravity model, Southeast Asia 03 2018 63 June The Singapore Economic Review 647 665 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500836 RUHUL SALIM School of Economics & Finance, Curtin Business School, Curtin University, Perth WA 6845, Australia AMIRUL ISLAM amiruli@yahoo.com Department of Economics, Faculty of Social Sciences, University of Chittagong, Chittagong, Bangladesh HARRY BLOCH harry.bloch@cbs.curtin.edu.au School of Economics & Finance, Curtin Business School, Curtin University, Perth WA 6845, Australia
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article THE IMPACT OF COAL RESOURCE TAX REFORM ON THE CHINESE ECONOMY: A CGE ANALYSIS China’s coal resource tax reform, introducing an ad valorem tax to replace previous volume-based tax from December 2014, marked a new stage of the resource pricing mechanism reform. In particular, coal, as a pollution-intensive energy, is the main source of energy for China. With this in mind, it is the time to ask what the impacts of this reform would be on Chinese economy. A computable general equilibrium (CGE) model is applied to explore the impact of a 5% ad valorem coal resource tax on Chinese economy under four scenarios involving distinguished electricity pricing mechanisms and tax revenue recycling scheme by deducting consumption tax. Simulation results show that levying ad valorem tax will reduce the output of energy-intensive industries with minor negative impact on economy. A consumption tax deduction can offset the negative impact on real GDP and help the economy to restructure. The concern that reform will push up inflation is unnecessary, even under the market price mechanism of electricity. In terms of winners, export-oriented industries benefit when no tax revenue recycling, while industries producing private consumption goods benefit when ad valorem coal resource tax revenue is used to deduct consumption tax. Coal resource tax reform, electricity pricing mechanism, tax revenue recycling, CGE model 03 2018 63 June The Singapore Economic Review 555 565 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400161 YU LIU Institute of Policy and Management, Chinese Academy of Sciences, No. 15, Zhongguancun Beiyitiao, Haidian District, Beijing 100190, China MEIFANG ZHOU zhou@bit.edu.cn School of Management and Economics, Beijing Institute of Technology, China
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article BOOK REVIEW: “Charting the Economy: Early 20th Century Malaya and Contemporary Malaysian Contrasts” 03 2018 63 June The Singapore Economic Review 787 792 http://www.worldscientific.com/doi/abs/10.1142/S0217590818800012 CHONG YAH LIM National University of Singapore (NUS), Singapore2Nanyang Technological University (NTU), Singapore EUSTON QUAH ecsquahe@ntu.edu.sg Nanyang Technological University (NTU), Singapore
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article DETERMINANTS OF FEMALE FERTILITY IN ASEAN-5: EMPIRICAL EVIDENCE FROM BOUNDS COINTEGRATION TEST The ASEAN countries have been experiencing drastic declines in fertility of more than 10 percent, particularly since the 1990s. Though the literature on fertility has clearly delineated the importance of income, female labor force participation and infant mortality as key determinants of fertility rates (FRs), the empirical findings from previous studies remains at best mixed. This study therefore identifies the determinants of female fertility for the countries, namely Indonesia, Malaysia, Philippines, Singapore and Thailand (ASEAN-5 countries), spanning the period 1980–2010. Using the Autoregressive Distributed Lag (ARDL) cointegration and causality techniques, the main findings of the study are summarized as follows: First, a long-run (LR) stable relationship is evident between female fertility, female labor force participation, income and infant mortality for ASEAN-5. Second, there is a deviation of FRs from the short-run (SR) to the LR equilibrium for ASEAN-5, with the highest and lowest speed of adjustment recorded for Malaysia and Thailand, respectively. Third, FR and economic stability are found to be complementary in the LR for ASEAN-5. When the joint LR and SR causalities are considered, we found that female labor force participation, income and infant mortality have dynamic relationships with FR for all the five ASEAN countries. Female fertility, female labor force participation, ARDL bounds test, causality, ASEAN-5 03 2018 63 June The Singapore Economic Review 593 618 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500939 THIRUNAUKARASU SUBRAMANIAM Faculty of Arts and Social Sciences, University of Malaya, 50603 Kuala Lumpur, Malaysia2Warwick Institute for Employment Research, The University of Warwick, Coventry CV4 7AL, United Kingdom NANTHAKUMAR LOGANATHAN n4nantha@yahoo.com Faculty of Management, Universiti Teknologi Malaysia, 81310 Johor Bahru, Johor, Malaysia EVELYN S. DEVADASON evelyns@um.edu.my Faculty of Economics and Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia
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article BOOK REVIEW: “Capital Mobility in Asia: Causes and Consequences” 03 2018 63 June The Singapore Economic Review 805 807 http://www.worldscientific.com/doi/abs/10.1142/S021759081880005X PAITOON WIBOONCHUTIKULA paitoonwiboon@gmail.com Chulalongkorn University, Thailand
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article THE ECONOMIC EFFECTS OF ANTI-DUMPING AND ANTI-SUBSIDY POLICIES AMONG CHINA, THE U.S. AND THE EU: THE PHOTOVOLTAIC INDUSTRY Since the end of 2011, the U.S., the European Union (EU) and China have been searching for a trade remedy regarding each other’s photovoltaic (PV) industry. Based on the perspective of the value chain of Global Solar Energy PV industry, this paper examines related factors including the tax rate imposed on the PV industry, and uses the global simulation model (GSIM) to predict the trade impact and welfare effects generated from the “double-anti” policy (anti-dumping laws with countervailing duties). The results of the research showed that China has not yet formed a complete value chain of the PV industry that is internationally competitive. The economic effect of the “double-anti” policy on China as a result of the EU is more pronounced than that with the U.S. The “double-anti” policy will have a negative impact on China’s low carbon economy development. The authors conclude that the development of polycrystalline silicon in China needs to be supported by forcible policy measures and targeted measures are proposed. Value chain of the photovoltaic industry, “double-anti” investigations, policy simulation, GSIM, anti-dumping laws, countervailing tariffs 03 2018 63 June The Singapore Economic Review 513 534 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400136 HUA WANG School of Economics and Finance, Xi’an Jiaotong University, Xi’an, Shaanxi 710061, China†School of Foreign Studies, Xi’an Jiaotong University, Xi’an, Shaanxi 710061, China JUE WANG School of Economics and Finance, Xi’an Jiaotong University, Xi’an, Shaanxi 710061, China ZHONGXIAN FENG globalxsc@126.com #x2020;School of Foreign Studies, Xi’an Jiaotong University, Xi’an, Shaanxi 710061, China
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article DOES INVESTOR ATTENTION MATTER TO RENMINBI TRADING? Given that renminbi always breaks the historical high against USD, psychological literature on limited investor attention motivates me to consider whether this eye-grabbing event would have an impact on renminbi trading. Empirical evidence suggests that both nearness to the historical high and hitting the historical high negatively affect renminbi future returns. This result survives from a variety of robustness checks. My findings are consistent with the conservatism theory and suggest that investors tend to under-react in response to the news of breaking the historical high. Investor attention, technical analysis, renminbi trading, foreign exchange markets 03 2018 63 June The Singapore Economic Review 667 689 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500721 TAO CHEN tchen@ouhk.edu.hk Lee Shau Kee School of Business and Administration, Open University of Hong Kong, 30 Good Shepherd Street, Homantin, Kowloon, Hong Kong
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article BOOK REVIEW: “Singapore Chronicles: Energy” 03 2018 63 June The Singapore Economic Review 799 800 http://www.worldscientific.com/doi/abs/10.1142/S0217590818800036 JOERGEN OERSTROEM MOELLER ISEAS Yusof Ishak Institute, Singapore2Singapore Management University, Singapore3Copenhagen Business School, Denmark
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article DETERMINANTS OF SOUTH KOREA’S INTRA-INDUSTRY TRADE WITH HER MAJOR TRADING COUNTRIES IN THE MANUFACTURING SECTOR This paper analyzed how South Korea’s intra-industry trade (IIT) with her major trading countries (i.e., China, the USA, and Japan (CUJ)) in the manufacturing sector changed over time for the period of 1994–2011. It was found that South Korea’s IIT with China mainly increased through economies of scale (ES), the ratio of inward and outward foreign direct investment to total investment (FDI), the ratio of intermediate cost to total cost (II), and R&D intensity (RD). On the other hand, South Korea’s IIT with the USA was found to mainly increase through ES, FDI, and RD. Finally, RD, FDI, and II variables are found to be the most important determinants for South Korea’s IIT with Japan. Intra-industry trade (IIT), horizontal IIT, vertical IIT, product differentiation, economies of scale 03 2018 63 June The Singapore Economic Review 731 758 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500915 SEUNG JIN KIM Department of East Asian Studies, University of Malaya, 50603 Kuala Lumpur, Malaya BYUNG TAK CHO btcho@naver.com Korea Productivity Center, Seoul, South Korea
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article IMPACT OF CLIMATE CHANGE ON CHINA’S RICE PRODUCTION — AN EMPIRICAL ESTIMATION BASED ON PANEL DATA (1979–2011) FROM CHINA’S MAIN RICE-PRODUCING AREAS Climate change is attracting increasing attention from the international community. To assess the impact of climate change on China’s rice production, this paper re-organizes the main rice-producing areas by adding up the annual production of the provincial level regions between 1979 and 2011, utilizes Cobb–Douglas function using daily weather data over the whole growing season. Our analysis of the panel data shows that minimum temperatures (Tmin), maximum temperatures (Tmax), temperature difference (TD) and precipitation (RP) are the four key climate determinants of rice production in China. Among these, temperature difference is surprisingly significant and all except maximum temperatures have positive effects. However, because the actual minimum temperatures and precipitation in China’s main rice-producing areas declined while the maximum temperatures and the temperature difference increased during our sample period, climate change has actually provided a negative contribution to the increase in China’s rice production. Climate change, main rice-producing area, rice production, impact, panel data 03 2018 63 June The Singapore Economic Review 535 553 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400240 DAN WANG School of Economics, Environment and Resources, Hubei University of Economics, Wuhan 430205, China2Center of Hubei Cooperative Innovation for Emissions Trading System, Wuhun 430205, China YU HAO Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, China4School of Management and Economics, Beijing Institute of Technology, Beijing 100081, China5Collaborative Innovation Center of Electric Vehicles in Beijing, Beijing 100081, China JIANPEI WANG 13971238567@163.com School of Business Administration, Hubei University of Economics, Wuhan 430205, China
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article IS THERE J-CURVE EFFECT IN THE COMMODITY TRADE OF SINGAPORE WITH MALAYSIA? AN EMPIRICAL STUDY A previous study that investigated the impact of exchange rate changes on the trade balance of Singapore with each of its 13 largest trading partners on bilateral basis found significant long-run effects in four out of 13 cases. In the trade balance between Singapore and Malaysia as a major partner, the real exchange rate had neither short-run nor long-run significant effects. To reduce the aggregation bias, in this paper, we disaggregate the trade flows between the two countries by industry and consider the trade balance of each of the 136 industries that trade between the two countries. We find that the trade balance of 79 industries are affected by exchange rate changes in the short run. However, short-run effects last into the long run in only 19 industries which mostly happen to be small industries. J-curve, bounds testing, Singapore, Malaysia, commodity trade 03 2018 63 June The Singapore Economic Review 567 591 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500235 MOHSEN BAHMANI-OSKOOEE The Center for Research on International Economics and Department of Economics, The University of Wisconsin-Milwaukee, Milwaukee, WI 53201, US HANAFIAH HARVEY hhh10@psu.edu Department of Economics, Penn State University, Mont Alto, PA 17237, US
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article BAILOUTS, FRANCHISE VALUE AND MORAL HAZARD IN BANKING Policy discussions are dominated by the view that governmental safety nets offered to banks cause moral hazard and encourage risk-taking. However, [Cordella, T and E Levy Yeyati (2003). Bank bailouts: moral hazard vs. value effect. Journal of Financial Intermediation, 12, 300–330.] proposed that government support offered during crises may increase bank franchise value, resulting in less risk-taking. This paper presents additional theoretical results on the franchise value effect. The franchise value effect can dominate over the moral hazard effect even when there are no specific crisis periods. The franchise value effect dominates if bank shareholders have a weak time preference and if the decision on the intensity of risk monitoring is a long-term choice. Franchise value, moral hazard, bailouts, banking 03 2018 63 June The Singapore Economic Review 691 699 http://www.worldscientific.com/doi/abs/10.1142/S0217590815501052 KARLO KAUKO karlo.kauko@bof.fi Bank of Finland, P.O. Box 160, 00101 Helsinki, Finland
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article MEASURING THE JOINT DISTRIBUTION OF HOUSEHOLD’S INCOME, CONSUMPTION AND WEALTH USING NESTED GENERALIZED MEAN Following recommendations from the Stiglitz et al. (2009) Commission, this paper proposes the use of a new methodology to measure the joint distribution of households’ income, consumption and wealth. Based on a multi-dimensional extension of the generalized mean framework, the paper justifies the application of this methodology based on a set of standard and acknowledged properties. The derived multi-dimensional index has an intuitive structure, which allows evaluating the overall material conditions of households under different perspectives and with varying sensitivity to distributional issues. Under its general form, the index encompasses a class of sub-indices that impose various restrictions on its parameters; the paper discusses the extent to which different restrictions on parameters affect the multi-dimensional assessments of various population groups, and provides some empirical illustrations using those different specifications. The question addressed by the multi-dimensional measure presented here is whether the joint consideration of household income, consumption and wealth modifies substantially the picture of material living standards of different individuals and groups relative to the one provided by income alone. Based on the dataset used here, the paper provides strong evidence on the importance of such a multi-dimensional assessment. Material conditions, inequality 03 2018 63 June The Singapore Economic Review 759 785 http://www.worldscientific.com/doi/abs/10.1142/S0217590815501040 NICOLAS RUIZ nicolas.ruiz@oecd.org Organisation for Economic Co-Operation and Development (OECD), Economic Department, Paris
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article BOOK REVIEW: “Asian Port Cities: Uniting Land and Water Worlds” 03 2018 63 June The Singapore Economic Review 801 803 http://www.worldscientific.com/doi/abs/10.1142/S0217590818800048 LINDA LOW lindalowls@suss.edu.sg ingapore University of Social Sciences, Singapore
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article FLOAT, SPECULATION AND STOCK PRICE: EVIDENCE FROM THE SPLIT SHARE STRUCTURE REFORM IN CHINA The Split Share Structure Reform in China offers a unique opportunity to test whether the supply of tradable shares (i.e., float) has a significant impact on the degree of speculation. After firms completed the reform, their float increased by 31% on average, while turnover and trading volume also increased substantially. We use information from firms’ reform plan to derive an estimate of the price premium of tradable shares over non-tradable shares before the reform and find that, after controlling for differences in liquidity and profitability, the price premium is significantly related to proxies for the level of speculative trading in tradable shares. Moreover, firms that were highly speculated before the reform had significantly smaller increase in turnover and trading volume than firms that were less speculated. Overall, our evidence confirms that there is a significant speculative component in the market price of tradable shares in China and a large increase in float dampens speculative trading. Bubble, float, heterogeneous beliefs, split share structure reform in China, speculative trading 03 2018 63 June The Singapore Economic Review 701 729 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500260 CHUAN-YANG HWANG cyhwang@ntu.edu.sg Nanyang Business School, Nanyang Technological University, S3-01B-46 Nanyang Avenue, Singapore 639798, Singapore SHAOJUN ZHANG afszhang@inet.polyu.edu.hk #x2020;School of Accounting and Finance, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong YANJIAN ZHU #x2021;College of Economics, Zhejiang University, 38 Zheda Road, Hangzhou 310027, China
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article BOOK REVIEW: “Global Inequality: A New Approach for the Age of Globalization” 03 2018 63 June The Singapore Economic Review 793 797 http://www.worldscientific.com/doi/abs/10.1142/S0217590818800024 WANNAPHONG DURONGKAVEROJ Wannaphong.durongkaveroj@anu.edu.au Australian National University, Australia
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article INFORMATION DISCLOSURE IN THE TWO-SIDED MARKET This paper analyzes information disclosure in the two-sided market with one monopolistic platform and competing platforms. We find that pertaining to the monopoly platform, greater network externalities tend to increase the information being disclosed, but with competing platforms, increasing network externalities may decrease or increase the disclosed information, depending on the information disclosure cost. However, the relation between the competitiveness of either side and the amount of disclosed information is ambiguous. We show that under certain conditions, the welfare and disclosure cost demonstrate a U-shaped relation, which cautions against the policy aiming at decreasing the information disclosure cost. Two-sided market, monopoly platform, competing platforms, information disclosure 05 2021 66 September The Singapore Economic Review 1373 1396 http://www.worldscientific.com/doi/abs/10.1142/S0217590821500028 YAXIAN GONG gyx8869@cufe.edu.cn School of Economics, Central University of Finance and Economics, P. R. China YUANZHU LU International School of Business and Finance, Sun Yat-Sen University, P. R. China
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article PROSPERITY OR STAGNATION: THE ROLE OF GOVERNMENT EXPENDITURES The focus of this paper is to examine the effects and mechanism of government expenditures (GEs) in determining the long-term inflation differentials across countries. For this purpose, we formulate a theoretical model and the related regression system. The models allow us to understand and quantify the supply-side (SS) and demand-side (DS) effects of GEs in determining prosperity or stagnation across countries. This study provides cross-country evidences and related mechanisms supporting the hypothesis and conclusion that active short-term AD policies and over-estimated potential output, as argued in Orphanides (2003), were contributive to the Great Inflation. Inflation, government expenditures, growth, investment, prosperity, stagnation, supply-side, demand-side 05 2021 66 September The Singapore Economic Review 1153 1176 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500242 PAK HUNG MO phmo@hkbu.edu.hk Department of Economics, School of Business, Hong Kong Baptist University, Kowloon Tong, Hong Kong
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article IDIOSYNCRATIC RISK AND ACYCLICALLY INCREASING PUBLIC DEBT Observed public debt of developed economies is not only countercyclical but also acyclically increasing for fairly long peacetime. This paper proposes a politico-economic theory of public debt which coherently rationalizes both acyclical and countercyclical behaviors of public debt. An office-seeking policymaker decides fiscal policies to win over finitely-lived voters who face uninsurable idiosyncratic risk on their disposable incomes. The equilibrium public debt is (i) acyclically increasing, or (ii) countercyclical, or (iii) acyclically decreasing. An increase in the idiosyncratic risk can change public debt behavior to acyclically increasing from countercyclical, entailing rises in public debt. Government debt, cyclicality of public debt, idiosyncratic risk, acyclical public debt 05 2021 66 September The Singapore Economic Review 1177 1203 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500368 INSOOK LEE islee@phbs.pku.edu.cn Beijing Normal University, 18 Jinfeng Road, Tangjiawan, Xiangzhou District, Zhuhai, Guangdong 519087, P. R. China
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article A NOTE ON ASYMMETRIES IN FRIENDSHIP NETWORKS We generalize the analysis of Brueckner’s [(2006). Friendship networks. Journal of Regional Science, 847–865] friendship networks under different types of asymmetries. We first study cost asymmetries by allowing for cost-magnetic agents. These are players whose linking costs are the lowest. Next we focus on network-based asymmetries by allowing for knows-everyone agents. We identify conditions under which Nash networks are interlinked stars in both these cases. We also find that for asymmetric situations (whether in costs, values, or architectures), the equilibrium effort choices regarding the links between different types of agents are robust across the various friendship network models. Nash networks, cost-magnetic agent, knows-everyone agent, network asymmetry 03 2019 64 June The Singapore Economic Review 799 811 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500351 QUQIONG HE School of Economics and the Center for Econometric Analysis and Forecasting, Dongbei University of Finance and Economics, China SUDIPTA SARANGI ssarangi@vt.edu #x2020;Virginia Tech, Blacksburg VA 24061-0316 and DIW Berlin, 10117 Berlin, Germany ZHENGJIA SUN sunzhengjia_szu@163.com #x2021;Louisiana State University, Baton Rouge LA 70803, USA
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article CAPITAL ACCUMULATION, VINTAGE AND PRODUCTIVITY: THE JAPANESE EXPERIENCE We empirically examine the relationship between capital accumulation, vintage and productivity of industries in Japan using firm-level microdata. Our analyses confirm that vintage significantly influenced productivity during the period of economic expansion. The effect was particularly notable during the upturn that started in 2000, when most examined industries displayed strong vintage effects. The rejuvenation of capital equipment during this period clearly resulted from a strong productivity effect. During the economic bubble of the late 1980s, by contrast, vintage exerted no observable effects on productivity despite significant increase in investment. This finding shows that an increase in capital stock during this period was not necessarily productive and likely produced a merely temporary boom. We reconfirm that the relation between vintage and productivity changed in subtle ways in response to the phases of business cycles. Vintage, embodied technology, productivity, business cycle 03 2019 64 June The Singapore Economic Review 747 771 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500211 TAIJI HAGIWARA hagiwara@econ.kobe-u.ac.jp Graduate School of Economics, Kobe University, Rokkodai, Nada-ku Kobe 657-8501, Japan YOICHI MATSUBAYASHI Graduate School of Economics, Kobe University, Rokkodai, Nada-ku Kobe 657-8501, Japan
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article OWNERSHIP-RELATED WAGE DIFFERENTIALS BY OCCUPATION IN VIETNAMESE MANUFACTURING This paper examines ownership-related wage differentials for four types of workers employed by medium–large (20 or more employees) wholly foreign multinational enterprises (WFs), joint-venture multinationals (JVs), state-owned enterprises (SOEs) and domestic private firms in Vietnamese manufacturing in 2009. When all sample firms were combined, unconditional JV-private and WF-private wage differentials were 106–124% for managers, 78–87% for professionals and technicians, 56–68% for clerical and support workers and 22–48% for production workers. Correspondingly, conditional wage differentials which account for influences of worker education and sex, in addition to firm capital intensity and size, were smaller and usually significant: 72–78% for managers, 32–36% for professionals and technicians, 23–28% for clerical and support workers and 15–16% for production workers. SOE-private differentials were all much smaller. There was substantial variation at the industry level, but conditional WF-private differentials were positive and significant for most occupations and industries and JV-private differentials were also positive and significant in most industries for highly paid managers or professionals and technicians, but not for lowly paid clerical and support workers or production workers. Most industry-level SOE-private differentials were also insignificant. Multinational enterprises, manufacturing, wage differentials, state-owned enterprises, ownership 03 2019 64 June The Singapore Economic Review 625 645 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500303 KIEN TRUNG NGUYEN School of Economics, The University of Danang, Danang City, Vietnam ERIC D. RAMSTETTER Asian Growth Research Institute (AGI), 11-4 Otemachi, Kokura-Kita, Kitakyushu, Fukuoka, Japan3Faculty of Economics, Kyushu University, 6-19-1 Hakozaki, Higashi-Ku, Fukuoka 812-8581, Japan4Faculty of Economics, Thammasat University, 2 Prachan Road, Phranakorn, Bangkok, 10200, Thailand
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article THE NEXUS BETWEEN ECONOMIC GROWTH, STOCK MARKET DEPTH, TRADE OPENNESS, AND FOREIGN DIRECT INVESTMENT: THE CASE OF ASEAN COUNTRIES Many studies have investigated the causal relationship between economic growth and the depth in the stock market, between economic growth and trade openness, or between economic growth and foreign direct investment. Advancing on earlier work, this paper uses vector error-correction and cointegration techniques in order to establish whether there is a long-run equilibrium relationship between all four variables. We consider a sample of 25 ASEAN Regional Forum (ARF) countries which are studied over the period 1961–2012. Our analysis, which combines various strands of the literature, establishes the direction of causality between the variables. Policy recommendations include the encouragement of mutual fund investment by smaller investors to increase stock market depth as well as methods to increase foreign direct investment, such as tax holidays. Economic growth, stock market depth, trade openness, foreign direct investment, panel Granger causality tests, ASEAN countries 03 2019 64 June The Singapore Economic Review 461 493 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500175 RUDRA P. PRADHAN Vinod Gupta School of Management, Indian Institute of Technology Kharagpur, IIT, Karagpur, West Bengal 721302, India MAK B. ARVIN marvin@trentu.ca Department of Economics, Trent University, 1600 W Bank Dr, Peterborough Ontario K9J OG2, Canada JOHN H. HALL john.hall@up.ac.za Department of Financial Management, University of Pretoria, Pretoria 0028, Republic of South Africa
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article EXTERNAL SHOCKS, STRUCTURAL BREAKS AND UNEMPLOYMENT HYSTERESIS IN SELECTED ASIAN COUNTRIES This paper re-examines the hypothesis of unemployment hysteresis using panel data for 11 Asian countries for the period from 1980 to 2008. This study employs a variety of panel data unit root tests recently advanced by Bai and Ng (2004), Pesaran (2007) and Chang and Song (2009). The advantage of these tests is that they are able to exploit the cross-section variations of the series. In addition to these tests, a new powerful panel stationarity test proposed by Carrión-i-Silvestre et al. (2005) is applied which exploits the cross-section variations of the series and also allows for different numbers of endogenous breakpoints in the series. Our findings stress the importance of accounting exogenous shocks in the series and provide stronger evidence against the hypothesis of unemployment hysteresis for the countries analyzed. We also discover critical economic affairs which may cause the unemployment rates to fluctuate significantly. Policy implications are proposed through our observations. Hysteresis, unemployment rate, panel stationarity tests, structural breaks, Asian countries, cross-sectional dependence 03 2019 64 June The Singapore Economic Review 575 600 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500259 QAISER MUNIR Department of Economics, Institute of Business Administration (IBA), University Road, Karachi, 75270, Pakistan SOOK CHING KOK emily@ums.edu.my #x2020;Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Locked Bag 2073, 88999 Kota Kinabalu, Sabah, Malaysia KASIM MANSUR kmansur@ums.edu.my #x2020;Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Locked Bag 2073, 88999 Kota Kinabalu, Sabah, Malaysia
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article EXPLORING DIVERSIFICATION BENEFITS IN ASIAN EQUITY MARKETS This paper examines the benefits of international diversification from the perspective of local investors in 15 Asian markets whose initial portfolio holdings consist of assets from the respective domestic markets. We employ the step-down approach of the mean–variance spanning test to examine the statistical significance of regional and global diversification benefits. The analysis is conducted using three portfolio groups based on relative strength ranking technique. The empirical evidence suggests greater benefits from regional diversification compared to global diversification, in most instances. For Asian economies with restrictions on international investing, these findings suggest a further liberalization of their markets. Asian region, sectoral diversification benefits, relative strength ranking, mean–variance spanning test, step-down test 03 2019 64 June The Singapore Economic Review 517 542 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500284 JONES ODEI MENSAH jones.mensah@wits.ac.za Wits Business School, University of the Witwatersrand, 2 St Davids Place, Parktown, Johannesburg 2193, South Africa GAMINI PREMARATNE #x2020;School of Business and Economics, Universiti Brunei Darussalam, Jalan Tungku Link, Gadong, BE 1410, Brunei Darussalam
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article SPATIAL PANEL ANALYSIS ON ASEAN–CHINA TRADE LINKS The change of trade structures from the dynamic development of production networks globally had caused processing trade to become more prominent in China. This change drives ASEAN5 to be more aggressive in developing vertical intra-industry trade (VIIT) with China. This study aims to identify the catalysts that strengthened the VIIT relationship between ASEAN5 and China for manufacturing sub-sectors. Both decomposition-type threshold method and spatial panel econometric modelling are used and the results show that foreign direct investment (FDI) and difference in gross domestic products (DGDP) are the influential determinants of VIIT although their impacts vary across manufacturing sub-sectors. The results also confirm the presence of spatial interaction effects among ASEAN5 countries in relation to China’s trade. These suggest that deeper economic integration among ASEAN5 countries is vital in strengthening bilateral VIIT with China. Moreover, to foster the value chain between the two regions, emphasis on performing similar tasks with differentiated varieties of products is essential as the two regions have similar comparative advantages. Vertical intra-industry trade, spatial panel model, ASEAN–China bilateral trade, manufacturing sub-sectors 03 2019 64 June The Singapore Economic Review 709 726 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500272 CHEN-CHEN YONG ccyong@um.edu.my Department of Economics, Faculty of Economics and Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia SIEW-YONG YEW yewsy@um.edu.my Department of Economics, Faculty of Economics and Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia MUI-YIN CHIN Economics and Corporate Administration Department, Faculty of Accountancy, Finance and Business, Tunku Abdul Rahman University College, Jalan Genting Kelang, 53300 Setapak Kuala Lumpur, Malaysia
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article HOW DOES FINANCIAL DEVELOPMENT INTERACT WITH ECONOMIC GROWTH IN FIVE ASEAN COUNTRIES? This study examines the causal relationship between financial development, liberalization and economic growth through technological innovation channel in five South East Asia countries during the period 1980–2012, using a fully modified ordinary least square estimation technique. We find that technological deepening is driven by deepening in the financial system and financial liberalization rather than changes in a country’s market capitalization. We also find a negative effect from the financial openness, and a positive effect from financial deregulation. Financial development, economic growth, FMOLS, South East Asia, financial liberalization 03 2019 64 June The Singapore Economic Review 441 460 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500120 PHAN THANH CHUNG thanh.phan@my.jcu.edu.au Economics Department, Tay Nguyen University, Daklak, Vietnam SIZHONG SUN College of Business Law and Governance, James Cook University, QLD, Australia DIEM THI HONG VO thihongdiem.vo@my.jcu.edu.au Economics Department, Tay Nguyen University, Daklak, Vietnam
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article DETERMINANTS OF DEFENCE INDUSTRY CORRUPTION RISK: FIRM LEVEL EMPIRICAL EVIDENCE USING TRANSPARENCY INTERNATIONAL’S ANTI-CORRUPTION INDEX Since there is a general perception that the defence industry is more susceptible to corruption compared to other sectors, using a unique database provided by Transparency International (TI), we examine the role of firm level antecedents on firm level corruption risk in the defence industry. We find that larger firms have lower levels of firm level corruption risk. Managerial shareholding is associated with higher levels of corruption risk. Firms that voluntarily disclose more information regarding their corruption control systems tend to have lower levels of corruption risk. Finally, listed firms also have lower levels of firm level corruption risk. We find that the “listing effect” is stronger among firms in financially developed countries ostensibly due to the better scrutiny and monitoring by market participants. In our analysis, we control for country level variables such as a composite index of government effectiveness in controlling defence industry corruption. Corruption risk, institutional quality, visibility, monitoring 03 2019 64 June The Singapore Economic Review 675 708 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500053 CHANDRASEKHAR KRISHNAMURTI chandra.krishnamurti@unisa.edu.au School of Commerce, University of Southern Queensland, Toowoomba QLD, 4350, Australia DOMENICO PENSIERO School of Commerce, University of Southern Queensland, Toowoomba QLD, 4350, Australia ESWARAN VELAYUTHAM eswaran.velayutham@usq.edu.au School of Commerce, University of Southern Queensland, Toowoomba QLD, 4350, Australia
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article AN EMPIRICAL ANALYSIS OF MARITAL STATUS IN JAPAN This study analyzed the interdependent relationships among marital status, fertility rate and other socioeconomic factors in Japan in the 2000s by using fixed-effect 2SLS. In addition to higher fertility due to an increase in the number of married females, we demonstrated that economic conditions of males and the male co-residence rate have positive and negative co-relation on the married rate, respectively. We also found a downward convex co-relation between co-residence and parental economic condition, indicating that greater parental assets promote co-residence because of independence of children; however, poor independent parents also promote co-residence in case of less parental assets. Non-marriage rate, low fertility rate, unmarried adult children, co-residence rate, fixed effects 2SLS, simultaneous equation 03 2019 64 June The Singapore Economic Review 773 798 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500181 KOJI YASUDA yasuda.h.m.k@iris.eonet.ne.jp Graduate School of Economics, Kobe University, 2-1 Rokkodai, Nada-Ku, Kobe 657-8501, Japan TOMOKO KINUGASA kinugasa@econ.kobe-u.ac.jp Faculty of Economics, Kobe University, 2-1 Rokkodai, Nada-Ku, Kobe 657-8501, Japan SHIGEYUKI HAMORI Faculty of Economics, Kobe University, 2-1 Rokkodai, Nada-Ku, Kobe 657-8501, Japan
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article ESTIMATING MALAYSIA’S OUTPUT GAP: HAVE WE CLOSED THE GAP? The concepts of potential output and output gap are central to the policymakers’ analytical work in providing guidance to policy decisions. This paper presents three different estimation approaches for the Malaysian economy, namely, the univariate, multivariate and structural models. While the multivariate and structural models are mainly underpinned by theory and captured the concept of potential output better, most policymakers still maintain a suite of models to preserve diversity. Diversity provides a greater scope for cross-checking the robustness of results. The paper attempts to contribute by first, providing a critical assessment of the different models in estimating potential output and the output gap, and, second, the usefulness of each models in terms of assessing the drivers of future potential output, predicting price trends and identifying sources of inflation in the economy. Output gap, multivariate filter, structural VAR, inflation and prices, productivity 03 2019 64 June The Singapore Economic Review 647 674 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500217 NUR AIN SHAHRIER Department of Economics and Finance, Sunway University Business School, Malaysia CHUAH LAY LIAN llchuah@worldbank.org World Bank’s Development Research Group, Sasana Kijang, 50480, Kuala Lumpur, Malaysia
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article FINDING THE DRIVER: A CASE STUDY OF INDONESIAN GOVERNMENT BOND MARKET We investigate the relationships among credit default swap (CDS), government bond yield, foreign investors’ ownership, and exchange rate by conducting Vector Error Correction Model and Vector Auto Regression. We compare the relationships in the period of 2008 to 2013 and in the sub period when financial crisis happened in 2008. Using daily data from April 28, 2008 to December 31, 2013 in Indonesian government bond market, we find government bond yield plays a significant role; and drives the movement of the other variables. However, during the 2008 crisis, the yield loses its dominance and tends to follow the movement of CDS. Government bonds, credit default swap, foreign ownership, exchange rate, financial market 03 2019 64 June The Singapore Economic Review 543 574 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500193 ARIF P. SULISTIONO Directorate General of Budget Financing and Risk Management, Ministry of Finance, Indonesia MIKI ISHIDA #x2020;Graduate School of Social Sciences, Hiroshima University, Japan
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article THE ROLE OF INSTITUTIONAL QUALITY IN THE RELATIONSHIP BETWEEN FDI AND ECONOMIC GROWTH IN VIETNAM: EMPIRICAL EVIDENCE FROM PROVINCIAL DATA All investigations into the role of institutions in the relationship between foreign direct investment (FDI) and economic growth conclude the impact of interaction between FDI and institutional quality on economic growth is significantly positive. Contrary to the conclusion of these studies, this paper finds it is significantly negative for a panel data of 43 provinces in Vietnam over the period 2005–2012 via the estimation method of difference panel GMM Arellano–Bond. In addition, the estimated results also show: (1) FDI inflows significantly foster economic growth; (2) Good institutional quality has a significantly positive impact while bad institutional quality has a negative albeit insignificant effect on economic growth. From the policy perspective, these findings signal an important message to developing countries that governments should carefully adjust policies and institutions because aside from attracting more FDI inflows and promoting the economic activities, it can also be detrimental to economic growth. FDI inflows, institutional quality, economic growth, panel difference GMM, provinces of Vietnam 03 2019 64 June The Singapore Economic Review 601 623 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500223 NGUYEN VAN BON bonvnguyen@yahoo.com School of Public Finance, University of Economics Ho Chi Minh, 180/20A Lac Long Quan St., Ward 10, District 11, Ho Chi Minh City, Vietnam
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article CAPITAL STRUCTURE AND DYNAMIC PERFORMANCE: EVIDENCE FROM ASEAN-5 BANKS In today’s dynamic economy, banks should focus on improving their dynamic performance to stay competitive. Using a dataset for the period 2007–2013, this paper evaluates the dynamic performance of ASEAN-5 banks through a data envelopment analysis (DEA) model, called the dynamic slacks-based measure (DSBM) model. The DEA results indicate that banks in Malaysia perform better than those in Singapore, Thailand, Indonesia and the Philippines. Frontier projections through DEA indicate that banks in the ASEAN-5 countries underutilize their long-term assets, resulting in inefficiencies. Furthermore, this study finds that capital structure as a whole is positively related to bank performance. OR in banking, data envelopment analysis, dynamic slacks-based measure, bank performance, capital structure 03 2019 64 June The Singapore Economic Review 495 516 http://www.worldscientific.com/doi/abs/10.1142/S021759081650034X MOHAMMAD NOURANI Department of Economics, Faculty of Economics and Administration, University of Malaya, Jalan Universiti, 50603 Kuala Lumpur, Malaysia IRENE WEI KIONG TING irene@ump.edu.my Faculty of Industrial Management, Universiti Malaysia Pahang, Lebuhraya Tun Razak, 26600 Gambang, Kuantan Pahang, Malaysia WEN-MIN LU wenmin.lu@gmail.com Department of Financial Management, National Defense University, No. 70, Sec. 2, Zhongyang North Rd. Beitou, Taipei 112, Taiwan QIAN LONG KWEH qlkweh@gmail.com Faculty of Management, Canadian University Dubai, P. O. Box 117781, 1st Interchange, Sheikh Zayed Road, Dubai, United Arab Emirates
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article HEALTH INSURANCE AND MEDICAL IMPOVERISHMENT IN RURAL CHINA: EVIDENCE FROM GUIZHOU PROVINCE We analyze the effects of the New Rural Cooperative Medical Scheme (NCMS) on poverty, using micro-level household data from 17 villages in a poor area of China’s Guizhou province. A four-wave panel dataset allows us to follow NCMS through its reforms. First-order impact assessments suggest NCMS helps reduce the poverty rate by up to 3 percentage points, and the poverty gap by up to 15 percentage points. It also reduces the contribution of health expenditures to inequality as measured by Gini coefficient. The benefits of NCMS in terms of poverty and inequality appear considerably larger after major reforms in 2009, which expanded benefits and coverage. Health insurance, medical expenditure, poverty, inequality 03 2019 64 June The Singapore Economic Review 727 745 http://www.worldscientific.com/doi/abs/10.1142/S021759081650017X YUMEI ZHANG zhangyumei2006@126.com Agricultural Information Institute of Chinese Academy of Agricultural Sciences, #12 Zhong Guan Cun Nan Da Jie, Haidian District, Beijing, China, 100081, China MATEUSZ J. FILIPSKI m.filipski@cgiar.org Development Strategy and Governance Division, International Food Policy Research Institute, 2033 K Street NW, Washington, DC 20815, USA KEVIN Z. CHEN k.chen@cgiar.org International Food Policy Research Institute, #12 Zhong Guan Cun Nan Da Jie, Haidian District, CAAS, Mailbox F16, Beijing, China, 100081, China
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article ADAPTATIONS AND MITIGATION POLICIES TO CLIMATE CHANGE: A DYNAMIC CGE-WE MODEL Recently, South Asian countries have committed their mitigation targets to the United Nations Framework Convention on Climate Change. This study examines the effectiveness of these efforts by developing a dynamic computable general equilibrium-water-energy (CGE-WE) model. Using the GTAP database version 9, it examines how different sectors respond to these policies in South Asia. Besides, it argues that an improved irrigation system can reduce the output losses caused by the mitigation policies. In a nutshell, the cost of improving irrigation system is USD 159.7 million in Bangladesh, 224 million in India, 9.1 million in Nepal, 38.5 million in Pakistan and 10.4 million in Sri Lanka. The proposed adaptation strategy can save more than USD 76.43 billion in the region after fulfilling the region’s commitment toward the global mitigation efforts. Fossil fuels, mitigation, adaptation, climate change, dynamic CGE 06 2023 68 December The Singapore Economic Review 2169 2193 C68 D58 F64 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500654 MUHAMMAD ZESHAN Norwegian University of Science and Technology (NTNU), Trondheim, Norway2Pakistan Institute of Development Economics (PIDE), Islamabad, Pakistan MUHAMMAD SHAKEEL m.shakeel32@gmail.com Independent Researcher, Islamabad, Pakistan
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article A STUDY ON THE NEGATIVE EXTERNALITY OF USD LIQUIDITY — BASED ON THE ASSET ALLOCATION EFFICIENCY OF US TREASURY SECURITIES At the macro-level, whether US dollar (USD) spillover could sustain the prosperity and stability of international economic and financial systems should become a key basis for judging the rationality of the current USD standard international monetary system. As the main contributor to USD liquidity externalities, US Treasury securities have long been favored by major economies worldwide due to their perceived safety and reliability, and their yield should be a key indicator for measuring the effect of USD liquidity spillover and the rationality of the international monetary system. However, the discussion in previous studies concerning the efficiency of holding US Treasury securities on the microeconomic level is insufficient. This study considers the negative externality of asset allocation behavior when analyzing its rationality at the macro-level. According to the empirical results, we find a clear negative relationship between the efficiency and the risk of USD assets and the holding scale of USD foreign exchange reserves. This finding indicates the dilemma faced by major economies in managing international liquidity without a sound replacement for USD assets. We argue that the current USD standard monetary system needs to be reformed and diversified to optimize the benefit of liquidity holdings globally. An internationalized RMB could play a more important role on the global and regional stages in strengthening and reforming the current monetary ecosystem. Negative spillover effect, liquidity, US Treasury securities, asset allocation efficiency, risks and dilemma, global monetary system reform 06 2023 68 December The Singapore Economic Review 2051 2079 E52 F50 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500149 CHANG RONG LU narcissu1113@hotmail.com School of Foreign Languages, Tongji University, Shanghai, P. R. China JIA XIANG LI alex.lijiaxiang@foxmail.com State University of New York at Binghamton, USA YI SHENG Tilburg University, The Netherlands
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article TRADE OPENNESS AND THE PHILLIPS CURVE: EVIDENCE FROM ASEAN COUNTRIES A flattening of the Phillips curve in recent decades has attracted a considerable interest of researchers and central bankers. As trade openness might be among the main causes of this phenomenon, this study puts forward a testable ‘openness–Phillips curve’ hypothesis. Two methods — a static and a dynamic approaches — were employed to test the hypothesis by estimating slope coefficients of the new Keynesian Phillips curve (NKPC) and hybrid NKPC in ten ASEAN countries. A notable empirical finding is that in the periods of a higher trade openness, the Phillips curve tended to be flatter in the close economies and steeper in the open economies. These findings have some economic and political implications. The main one is that central banks in the ASEAN countries where the flattening of the Phillips curve takes place would not be able to employ the Phillips curve as an effective policy tool. Besides, countries with high inflation and unemployment rates could face some political uncertainty. New Keynesian Phillips curve, openness, monetary policy, ASEAN 06 2023 68 December The Singapore Economic Review 1891 1915 E31 E24 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500599 FUMITAKA FURUOKA Asia-Europe Institute, University of Malaya, Kuala Lumpur, Malaysia KIEW LING PUI Faculty of Economics and Administration, University of Malaya, Kuala Lumpur, Malaysia MA TIN CHOMAR Faculty of Arts and Social Sciences, University of Malaya, Kuala Lumpur, Malaysia LARISA NIKITINA Faculty of Languages and Linguistics, University of Malaya, Kuala Lumpur, Malaysia
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article A LOOK AT THE U.S. BUSINESS CYCLES THROUGH THE LENS OF A TANK MODEL This paper sets up a two-agent new Keynesian model to explore the role of financial frictions over the post-war U.S. business cycle. The estimated model via maximum likelihood shows that the share of constrained households which has been substantial since the 1960s has significantly increased during the Great Recession. It also finds that the cost-push shock has been most important in explaining the behavior of the detrended output. The cost-push shock has also played a pivotal role in the fluctuation of inflation during the Great Recession, while the monetary policy shock which has been important in the behavior of inflation before the financial crisis has a negligible role during the Great Recession. Business cycles, great recession, maximum likelihood estimation, sticky price, TANK 06 2023 68 December The Singapore Economic Review 1991 2009 E32 http://www.worldscientific.com/doi/abs/10.1142/S021759082050068X YONGSEUNG JUNG jungys@khu.ac.kr Department of Economics, Kyung Hee University, Kyungheedae-ro, Dongdaemun-gu, Seoul 02447, Republic of Korea
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article DIVISION OF LABOR UNDER PERFECT COMPETITION This paper develops a simple model of division of labor under perfect competition. The model shows under that the division of labor is compatible with perfectly competitive markets if coordination costs are increasing with the number of teams. We also show under what conditions interior solutions for the division of labor exist under imperfect competition. Division of labor, increasing returns, market size, perfect competition 06 2023 68 December The Singapore Economic Review 1943 1951 D00 D20 D40 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500265 PUQING LAI School of Economics, Zhejiang University, HangZhou 310058, P. R. China TILL REQUATE requate@economics.uni-kiel.de ��Department of Economics, Kiel University, Kiel 24098, Germany
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article DOES CARBON EMISSION, ENERGY CONSUMPTION AND INCOME MATTER? INVESTIGATING FACTORS AFFECTING HEALTHCARE EXPENDITURE AMONG 61 NATIONS Empirical studies on the effects of carbon emissions on population health are still in their infancy and its true implications have not yet been fully understood. The purpose of this study is to conduct a comparative analysis on the relationship between carbon emissions, energy consumption, income and public healthcare expenditure in Organisation for Economic Co-operation and Development (OECD) and non-OECD countries. The empirical research employs the dynamic common correlated effects of mean group (DCCEMG) and two-stage least square estimators. The findings indicate that carbon emissions increase healthcare spending only in non-OECD countries. The relationship between energy consumption and health expenditure varies significantly between OECD and non-OECD countries. Income increases health expenditure; however, the correlation is more robust in the OECD than in non-OECD countries. As a result, the findings recommend that non-OECD governments implement strategic environmental management policies that prioritize clean and healthy air to reduce healthcare costs. Carbon emission, energy consumption, healthcare expenditure, economic growth, dynamic common correlated effects mean group 06 2023 68 December The Singapore Economic Review 2151 2167 http://www.worldscientific.com/doi/abs/10.1142/S0217590823500030 SABINA AMPON-WIREKO Faculty of Health and Allied Science, Catholic University College, Box 363, Sunyani, Ghana2School of Management, Jiangsu University, Zhenjiang 212013, P. R. China LULIN ZHOU Faculty of Health and Allied Science, Catholic University College, Box 363, Sunyani, Ghana2School of Management, Jiangsu University, Zhenjiang 212013, P. R. China LAMINI DAUDA Faculty of Health and Allied Science, Catholic University College, Box 363, Sunyani, Ghana2School of Management, Jiangsu University, Zhenjiang 212013, P. R. China XINGLONG XU Faculty of Health and Allied Science, Catholic University College, Box 363, Sunyani, Ghana2School of Management, Jiangsu University, Zhenjiang 212013, P. R. China EBENEZER LARNYO Faculty of Health and Allied Science, Catholic University College, Box 363, Sunyani, Ghana2School of Management, Jiangsu University, Zhenjiang 212013, P. R. China EDMUND NKRUMAH NANA KWAME Faculty of Health and Allied Science, Catholic University College, Box 363, Sunyani, Ghana2School of Management, Jiangsu University, Zhenjiang 212013, P. R. China
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article FACTORS LEADING TO INCREASED CARBON DIOXIDE EMISSIONS OF THE APEC COUNTRIES: THE LMDI DECOMPOSITION ANALYSIS This paper explores the factors that lead to increased carbon dioxide emissions in the 18 countries of the APEC. We apply the LMDI multiplicative decomposing method to 18 countries between 1971 and 2012. We summarize these factors that are as follows: (1) population increase and economic growth play a key role in increased carbon dioxide emissions. (2) All the 18 countries of the APEC have improved their energy efficiency as manifested in the change of energy intensity (ΔI), which is less than 1 in the 42 years; (3) In terms of energy substitution effect (ΔM) and fuel coefficient effect (ΔCE), the decomposition results point out that Hong Kong, Indonesia, and Malaysia witnessed growth in ΔM and ΔCE, indicating the only factor to reduce the emissions for these three countries is intensity effect, which gives rise to relatively higher emission for these three countries during the period. In the case of Peru, the Philippines, Singapore, Thailand, and Vietnam, we witnessed increases in ΔM, but decreases in ΔCE; In the case of Australia, Canada, Chile, China, Japan, South Korea, Mexico, New Zealand, Taiwan, and the US, there seem to decrease in ΔM, but increases in ΔCE during the 42-year period. Index decomposition analyzing, CO2 emission, energy intensity, substitution effect, coefficient effect, economic activity effect 06 2023 68 December The Singapore Economic Review 2195 2214 C43 Q53 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500125 YU-FANG CHANG Department of Marketing Management, Takming University of Science & Technology, Taipei 114, Taiwan BWO-NUNG HUANG Department of Economics, National Chung Cheng University, Chia-Yi 621, Taiwan
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article AN ANALYSIS OF THE INITIAL PRESALE RATE IN HOUSING PROJECTS USING A REGIME-SWITCHING MODEL We analyzed to identify the determinants affecting the presale rate in the housing projects and verified whether there are differences in the determinants of that by regimes. We found that the effects of determinants, such as the ratio of the new apartments’ sales price to existing apartments’ prices, educational environment, the number of unsold houses, and the interest rate of a mortgage on the initial presale rate, could have been different depending on which regime the housing market belongs to. This suggests that the government in Korea and Asian countries should consider the differentiation in effects of the determinants depending on the regime when the government tries to make housing policies. Regime change, Hamilton model, Markov process, the determinants of the initial presale rate, presale 06 2023 68 December The Singapore Economic Review 2105 2126 C32 R31 http://www.worldscientific.com/doi/abs/10.1142/S0217590823500078 MYEONG HYEON KIM Seoul National University of Science & Technology, Korea DOO WON BANG Korea Housing & Urban Guarantee Corporation, Korea HYUCK SHIN KWON Korea Housing & Urban Guarantee Corporation, Korea
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article NOISY HIGH FREQUENCY DATA-BASED ESTIMATION OF VOLATILITY FUNCTION WITH APPLICATIONS Diffusion models have been widely used to describe the stochastic dynamics of the underlying economic variables. Renò (2008) introduced a nonparametric estimator of the volatility function, which is based on the estimation of quadratic variation between observations by means of realized variance. However, they may be misleading when one uses intraday data to implement directly the estimator, because intraday data display microstructure effects that could seriously distort the estimation. To filter out the impact of microstructure noise on the estimation of the volatility function, in this paper we propose an improved estimator when there is microstructure noise in the observed price. Also, we show that the proposed estimator has the same asymptotic properties as the Renò estimator when the step of discretization inclines to zero. Some simulations and empirical applications on Shanghai Stock Exchange data from March 3, 2002 to December 31, 2008 are used to illustrate the finite sample performance of the proposed estimator. Volatility function, nonparametric estimation, high-frequency data, microstructure noise 06 2023 68 December The Singapore Economic Review 2127 2150 C13 C14 C22 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500721 JINGUAN LIN jgLin@seu.edu.cn School of Statistics and Mathematics, Nanjing Audit University, Nanjing, P. R. China XUGUO YE ��School of Science, Kaili University, Kaili, P. R. China YANYONG ZHAO zhaoyanyong1987@163.com School of Statistics and Mathematics, Nanjing Audit University, Nanjing, P. R. China HONGXIA HAO 230149413@seu.edu.cn School of Statistics and Mathematics, Nanjing Audit University, Nanjing, P. R. China
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article A FORECASTING APPROACH TO REAL EFFECTIVE EXCHANGE RATE-OIL PRICE NEXUS IN CHINA Motivated by the theoretical link between real exchange rates and oil prices, we utilize a univariate moving average (MA) and an augmented MA (A-MA) model to generate multi-period forecasts of China’s real effective exchange rate for 2008–2018. The MA model utilizes past information in real exchange rates, and the A-MA model utilizes past information in both real exchange rates and oil prices. We show that the A-MA forecasts are unbiased and embody useful predictive information beyond that contained in the MA forecasts. In addition, the A-MA forecasts are directionally accurate under asymmetric loss. Such accurate forecasts are useful as inputs for policymakers to design an optimal real exchange rate policy to promote trade and attract foreign investment, and for foreign entities that regard China as an attractive environment for investing in various sectors. Oil prices, foreign exchange, predictive power, directional accuracy, asymmetric loss 06 2023 68 December The Singapore Economic Review 2011 2027 F31 Q43 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500745 HAMID BAGHESTANI Department of Economics, School of Business Administration, American University of Sharjah, Sharjah, 26666, UAE SEHAR FATIMA Department of Economics, School of Business Administration, American University of Sharjah, Sharjah, 26666, UAE
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article INDIVISIBLE LABOR SUPPLY AND INVOLUNTARY UNEMPLOYMENT: MONOPOLISTIC COMPETITION MODEL This paper is an attempt to provide a micro-theoretical basis for Keynesian economics while maintaining as much of the neoclassical framework as possible, such as utility maximization for consumers and profit maximization for firms. We show the existence of involuntary unemployment without assuming wage rigidity when labor supplies of individuals are indivisible. We derive involuntary unemployment using an overlapping generations model under monopolistic competition with constant returns to scale technology and indivisible labor supply. Monopolistic competition, overlapping generations model, involuntary unemployment, indivisible labor supply 06 2023 68 December The Singapore Economic Review 1953 1966 E12 E24 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500307 YASUHITO TANAKA yasuhito@mail.doshisha.ac.jp Faculty of Economics, Doshisha University, Kamigyo-ku, Kyoto, 602-8580, Japan
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article FACTOR MISALLOCATION, INDUSTRIAL STRUCTURE AND LABOR INCOME SHARE IN CHINA By presenting a two-sector DGE model, this paper investigates the relative misallocation coefficients for capital and labor within three industries in China from 1993 to 2018, then discusses the effect of factor misallocation and factor substitution elasticity on the labor income share. The following three conclusions were reached. (1) The overall labor income share reduced due to the industrialization before 2007, but after 2007 it increased by promoting the proportion of services. (2) Compared with the situation without barriers, the cross-industry factor misallocation reduced the proportion of labor in manufacturing by 44% during industrialization and in services by 5.05% during de-industrialization, respectively. (3) Eliminating the factor misallocation could raise the labor income share by 4.6% in industrialization, but it shows a weak effect during de-industrialization. Industrial structure, labor income share, factor substitution elasticity, factor misallocation 06 2023 68 December The Singapore Economic Review 1967 1990 D58 E64 L16 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500290 MINGHUI XIN Shanghai Gold Exchange, Shanghai 200001, P. R. China†School of Management, Fudan University, Shanghai 200433, P. R. China§International Business School, Shaanxi Normal University, Xi’an, Shaanxi 710119, P. R. China MIN GONG mgong@xmu.edu.cn ��Centre for Macroeconomic Research, Xiamen University, Xiamen, Fujian 361005, P. R. China PAN XIE xiepan@snnu.edu.cn �International Business School, Shaanxi Normal University, Xi’an, Shaanxi 710119, P. R. China
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article SOCIAL PREFERENCES OF YOUNG ADULTS IN JAPAN: THE ROLES OF AGE AND GENDER Deviations from self-interest in economic behavior have recently been featured in models of “social preferences.†This study examines the social preferences of Japanese university students using Charness and Rabin’s [(2002). Understanding social preferences with simple tests. Quarterly Journal of Economics, 117, 817–869] experimental design and Martinsson et al.’s [(2011). Social preferences during childhood and the role of gender and age: An experiment in Austria and Sweden. Economics Letters, 110, 248–251] empirical methodology. The obtained distributions of preference types are as follows: self-interest — 14%, competitive — 23%, difference aversion — 73% and social-welfare — 22%. I find a significant age effect for the self-interest preference alone, and a gender difference for the self-interest, difference aversion and social-welfare preferences. Social preference, young adult, age, gender, distributional experiment 06 2023 68 December The Singapore Economic Review 2215 2223 C91 D63 D64 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500770 AKIHIRO KAWASE kawase@toyo.jp Faculty of Economics, Toyo University, 5-28-20 Hakusan, Bunkyo-ku, Tokyo 112-8606, Japan
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article INTERGENERATIONAL TRANSMISSION OF MARRIED WOMEN’S EMPLOYMENT IN JAPAN Using the 2011–2016 Japan Household Panel Survey, this study examines the intergenerational transmission of married women’s employment in Japan. The study also analyzes two driving mechanisms. The findings suggest that the wife’s labor supply is positively associated with the mother-in-law’s former employment and the mother’s former employment. The preference mechanism reveals the effect of the wife’s employment on her husband’s satisfaction differs between men raised by a working mother and those with an unemployed mother in the past. The endowment mechanism suggests that married man with working wife cooperates to do domestic tasks regardless of his mother’s former employment. Intergenerational transmission, female employment, preference, endowment 06 2023 68 December The Singapore Economic Review 2225 2242 D1 J21 J22 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500551 AYSENUR AYDINBAKAR aysenur.aydinbakar@asbu.edu.tr Department of Economics, Social Sciences University of Ankara, Turkey
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article CAN WINNERS KEEP WINNING? AN ANALYSIS OF PERFORMANCE PERSISTENCE OF MUTUAL FUNDS AND HEDGE FUNDS IN CHINA This paper investigates the performance persistence of both mutual funds and hedge funds using China’s data covering the period from January 2010 to December 2019. We first use a nonparametric method to examine the performance persistence with net return and Sharpe ratio over monthly, quarterly, semiannual, and annual intervals. We first find evidence that performance persistence exists in some years for both mutual funds and hedge funds. Then we construct portfolios based on lagged one-year returns and estimate their performance. We find top-performing portfolios of hedge funds that can get significantly positive alpha while no portfolio of mutual funds can get positive alpha. Performance persistence, mutual funds, hedge funds 06 2023 68 December The Singapore Economic Review 2029 2050 G2 G23 G11 G15 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500642 LIANGBO ZHAI School of Economics, Zhejiang University, Hangzhou, P. R. China WEI WANG School of Economics, Zhejiang University, Hangzhou, P. R. China
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article EFFECTS OF ELECTRIFICATION ON THE COAL INDUSTRY’S PRODUCTION AND DISTRIBUTION: EVIDENCE FROM 1900S JAPAN This study examines how electrification affected the economic performance of the Japanese coal mining industry in the 1900s. Using difference-in-differences estimation, we find that electrification considerably improved labor productivity and increased the number of workers, but had statistically zero effects on miners’ wages and caused a significant decline in the labor income share. We explain this phenomenon by using the “superstar firm†hypothesis, which provides a consistent explanation of the recent declines in labor income share in the US economy. Electrification, labor income share, productivity, industrial revolution, technological change, coal mining 06 2023 68 December The Singapore Economic Review 1917 1942 D24 L94 O13 O14 Q40 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500526 MAYO MORIMOTO morimoto@iss.u-tokyo.ac.jp Institute of Social Science, The University of Tokyo, Hongo 7-3-1, Bunkyo, Tokyo 113-0033, Japan
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article HOW DOES THE WTO DISPUTE SETTLEMENT MECHANISM WORK FOR WTO MEMBERS? A COMPARATIVE ANALYSIS OF DEVELOPED AND DEVELOPING COUNTRIES The WTO dispute settlement mechanism (DSM) is now facing a crisis of paralysis. Given such a challenging environment, this study examines factors affecting the participation of the WTO DSM by using bilateral data of WTO members from 1995 to 2017. Moreover, we provide a comparative analysis of the factors affecting the filing of cases at the WTO DSM between developed and developing countries across this period. By conducting the rare-event logistic regression method, we find that the export intensity, retaliation capability, economic power and economic threat are the main factors determining the initiation of trade disputes by WTO members. Moreover, the results from seemingly unrelated regressions suggest that economic power, proxied by the complainant country’s gross national income, is not a vital issue of importance that developed countries need to consider when deciding to initiate trade disputes; however, in contrast, developing countries still see it as an important factor affecting the use of DSMs, especially when the target countries are developed countries. Nonetheless, it is worth noting that in the later stage of the WTO, the impact of economic power no longer has any differential influence. On balance, these results reflect the efforts of the WTO to build a fair and rule-based DSM while also highlighting the urgent practical significance of maintaining a solid and effective mechanism for handling international trade disputes. WTO, Dispute settlement mechanism, participation, comparative analysis 06 2023 68 December The Singapore Economic Review 1829 1850 F02 F13 http://www.worldscientific.com/doi/abs/10.1142/S0217590823500066 JIE WU wujie91@zjut.edu.cn Department of International Economics and Trade, College of Economics, Zhejiang University of Technology, P. R. China JACOB WOOD JCU Singapore Business School, James Cook University, Singapore, 149 Sims Drive, Singapore ZECHU LUO luozechu@qq.com Department of International Economics and Trade, College of Economics, Zhejiang University of Technology, Hangzhou, P. R. China SHENGLAN CHEN chenshenglan@zjut.edu.cn Department of International Economics and Trade, College of Economics, Zhejiang University of Technology, P. R. China
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article FORECASTING WAGES INEQUALITY IN RESPONSE OF TRADE OPENNESS IN PAKISTAN: AN ARTIFICIAL NEURAL NETWORK APPROACH Pakistan liberalized its trade in different regimes and the recent trade reforms is CPEC project which is expected to reduce wages inequality of skilled and unskilled labor. This study forecasts wages inequality as a result of trade openness in Pakistan by using artificial neural network approach for the period 1991–2017. The empirical outcomes revealed that trade liberalization is influential factor for reducing wages inequality in Pakistan, and the forecasting results for 2019–2026 show a dynamic trend of wages inequality in the response to trade liberalization; however, in many of the years, the positive implication has been witnessed for the inequality. Trade openness, wages inequality, an artificial neural network, Pakistan 06 2023 68 December The Singapore Economic Review 1875 1890 F14 D60 E24 E27 F16 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500058 IRFAN ULLAH Reading Academy, Nanjing University of Information Science and Technology, P. R. China XUEFENG QIAN xfqian@126.com School of Business Administration, Zhongnan University of Economics and Law, P. R. China MUHAMMAD HAROON SHAH haroonmwt786@outlook.com School of Finance, Zhongnan University of Economics and Law, P. R. China ALAM REHMAN amrehman@numl.edu.pk Faculty of Management Sciences, National University of Modern Languages, Islamabad, Pakistan SHER ALI drali@icp.edu.pk Department of Economics, Islamia College University, Peshawar, Pakistan ZEESHAN AHMED zeeshan.ahmed@lbs.uol.edu.pk Lahore Business School, University of Lahore, Gujart Campus, Pakistan
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article IMPLICATIONS OF PLATFORM FINANCE ON MONETARY POLICY TRANSMISSION The emergence of a decentralized peer-to-peer platform that matches lending and borrowing without collateral requirements has called the bank lending and balance-sheet channels for monetary transmission into question. Via a standard New Keynesian macroeconomic model expanded with two-sided platform and group identity, we put forward a novel platform density channel of monetary transmission, which could overshadow the conventional channels. An increase in policy rate, for instance, would instigate a shift toward platform borrowing. Increasing borrowers’ density attracts participation in platform deposits, which in turn further enhances borrowers’ benefit of joining the platform, making liquidity available at decreasing platform loan rates. Business investment and hence the inflation rate gets lifted despite monetary tightening. The implication of platform density channel diminishes, however, when platform borrowings complement bank borrowings, and pose nontrivial risk of default. P2P lending, digital finance, two-sided platform, group identity, monetary transmission 06 2023 68 December The Singapore Economic Review 2081 2103 E43 E44 E52 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500253 CHIN-YOONG WONG Department of Economics, Universiti Tunku Abdul Rahman, Jalan Universiti, Bandar Barat, 31900 Kampar, Perak, Malaysia YOKE-KEE ENG engyk@utar.edu.my Department of Economics, Universiti Tunku Abdul Rahman, Jalan Universiti, Bandar Barat, 31900 Kampar, Perak, Malaysia
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article DO IMPORT TECHNOLOGY SPILLOVERS IMPACT ECO-EFFICIENCY IN MANUFACTURING INDUSTRIES: A SPILLOVER DECOMPOSITION ANALYSIS Technology spillovers in an open economy, a source of innovation, potentially contribute to reducing environmental pollution and improving environmental quality; however, few studies have explored this issue in detail. Based on the heterogeneous industrial R&D expenditure data issued by the OECD structural analysis database and the trade data collected from statistics on international trade by commodity in the OECD, this study evaluates the diversified channels of the import-related technology spillovers in manufacturing industries in China. Moreover, the study empirically investigates the eco-efficiency impact of technology spillovers via decomposed diversified spillover channels. The findings show that import-related technology spillovers positively affect the eco-efficiency of manufacturing industries. Inter-industrial technology spillovers, rather than intra-industrial technology spillovers, contribute more to aggregate technology spillovers and, accordingly, have played a more prominent role in promoting eco-efficiency. Import technology spillovers, eco-efficiency, spillover decomposition, manufacturing industries 06 2023 68 December The Singapore Economic Review 1851 1874 F18 F43 O14 O33 http://www.worldscientific.com/doi/abs/10.1142/S0217590823500017 JIAN CHEN School of Economics and Management, Southeast University, Nanjing 211189, P. R. China DI ZHAO ��School of Business, Jinling Institute of Technology, Nanjing 211169, P. R. China TAIMOOR HASSAN ��School of Economics and Management, Anhui Polytechnic University, Wuhu 24100, P. R. China YANG ZHAO School of Economics and Management, Southeast University, Nanjing 211189, P. R. China
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article CREDIT CARD ADOPTION AND USAGE IN CHINA: URBAN–RURAL COMPARISONS This study examines the differences in credit card behaviors between rural and urban households in China. Using data from a national survey of Chinese households, results show distinct differences between rural and urban respondents in credit card adoption and usage even after controlling for relevant demographic, financial, attitude, and expectation variables. Rural households are less likely to possess a credit card, possibly due to supply side limitations such as lack of financial institutions and low rate of credit card acceptance in rural areas. No urban–rural difference is found in credit card payment behavior. Implications for policymakers and credit card issuers are discussed. China, consumer behavior, credit card, urban–rural comparisons 01 2019 64 March The Singapore Economic Review 41 56 http://www.worldscientific.com/doi/abs/10.1142/S021759081743010X NILTON PORTO Department of Human Development and Family Studies, University of Rhode Island, Transition Center #212, 2 Lower College Road, Kingston, RI 02881, USA YU HUANG huangyu@hrsec.com.cn Department of Market Research, Huarong Securities Co., Ltd, 15F, PICC Life Building, 18 North Chaoyangmen Avenue, Chaoyang District, Beijing, China, 100020, China JING JIAN XIAO xiao@uri.edu Department of Human Development and Family Studies, University of Rhode Island, Transition Center #202, 2 Lower College Road, Kingston RI 02881, USA
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article ARE THE JAPANESE UNIQUE? EVIDENCE FROM SAVING AND BEQUEST BEHAVIOR In this paper, we attempt to shed light on whether Japanese households are rational or if their behavior is influenced by culture and social norms by examining their saving and bequest behavior. To summarize our main findings, we find that Japan’s household saving rate showed great volatility, was often low and even negative and was high only during the 25-year period from around 1960 until the mid-1980s (if we exclude the war years) and that we can explain the high level of, and trends over time in, Japan’s household saving rate via various socioeconomic and policy variables. This seems to suggest that the Japanese are not a saving-loving people and that their saving behavior is not governed by culture and social norms. Moreover, the bequest behavior of the Japanese suggests that they are less altruistic toward their children and less reliant on their children than other peoples, suggesting that the alleged social norm of strong family ties in Japan is largely a myth, and that the Japanese do not appear to be appreciably more concerned about the continuation of the family line or the family business than other peoples, suggesting that the influence of the “ie” (family) system is apparently not so pervasive either. However, we argue that these findings do not necessarily mean that culture and social norms do not matter. Altruism, bequest behavior, bequest division, bequest motives, Confucianism, culture, economic rationality, family ties, frugality, households, household behavior, household saving, “ie” system, Japan, Nihonjinron, parent–child relations, rationality, saving, saving behavior, saving promotion, selfishness, social norms, values 01 2019 64 March The Singapore Economic Review 5 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590817430020 CHARLES YUJI HORIOKA Asian Growth Research Institute, 11-4 Otemachi, Kokura-kita, Kitakyushu, Fukuoka 803-0814, Japan2National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138, USA3Institute of Social and Economic Research, Osaka University, 6-1 Mihogaoka, Ibaraki, Osaka 567-0047, Japan
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article MODELING HOUSEHOLD PARTICIPATION DECISIONS BETWEEN DOMESTIC AND INTERNATIONAL TRIPS BY SEMI-NONPARAMETRIC REGRESSIONS Globalization has caused many countries to experience significant slowdown, thus, tourism development becomes the primary policy to stimulate the economy. Investigating the demand of leisure activities is necessary for the development of a tourism industry with sound policies. This research adopts demographic data to allocate the factors affecting participation decisions and utilizes semi-nonparametric (SNP) regressions to analyze household decision regarding domestic and international trips. By combining a parametric component with a nonparametric component, the SNP method increases the flexibility of participation decision models from relaxing distributional assumptions. The results of this study reveal that decision-making for both domestic and international trips is jointly determined. Various factors, including income, capital gain ratio, age and education, are decisive to trip types, indicating the market segmentation of tourism businesses. Moreover, SNP regression performs superior to the traditional bivariate probit model, suggesting that the model developed in this research can provide comprehensive results for policy implications. Household participation decision, semi-nonparametric regression, bivariate probit model, domestic trip, international trip, Taiwan 01 2019 64 March The Singapore Economic Review 191 211 http://www.worldscientific.com/doi/abs/10.1142/S0217590817430056 CHIA-YU YEH yehchiayu@ncnu.edu.tw Department of Economics, National Chi Nan University, No. 1, Daxue Road, Puli Township, Nantou County, Taiwan KANG ERNEST LIU Department of Agricultural Economics, National Taiwan University, No. 1, Section 4, Roosevelt Road, Da’an District, Taipei 10617, Taiwan3Department of Economics, National Chung Cheng University, No. 168, Section 1, Daxue Rd, Minxiong Township, Chia-Yi 62102, Taiwan
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article INTRODUCTION AND EDITORIAL OVERVIEW 01 2019 64 March The Singapore Economic Review 1 4 http://www.worldscientific.com/doi/abs/10.1142/S0217590819020016 CHE CHEONG POON ccpoon@hksyu.edu Hong Kong Shue Yan University, Hong Kong CHI HO TANG chtang@hksyu.edu Hong Kong Shue Yan University, Hong Kong
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article THE “MODEL MINORITY” MYTH: ASIAN AMERICAN MIDDLE CLASS BEFORE, DURING, AND AFTER THE GREAT RECESSION Data from the Consumer Expenditure Survey (2003–2014) were used to both investigate trends in Asian American middle class status attainment before, during, and after the Great Recession and compare such attainment to that of non-Hispanic Whites. Using three different operational definitions of the middle class, we show that middle class size estimates during recession and post-recession were lower than pre-recession estimates for both Asian Americans and Whites. For all three periods, Asian Americans were substantially less likely to have achieved middle class status compared with Whites. The racial gap did not narrow or widen due to the Great Recession. Our analysis also found that basic demographic and socioeconomic differences explained a little over a quarter of this middle class attainment gap. Middle class, Asian Americans, Great Recession, Consumer Expenditure Survey 01 2019 64 March The Singapore Economic Review 23 39 http://www.worldscientific.com/doi/abs/10.1142/S0217590817430044 JESSIE X. FAN Department of Family and Consumer Studies, University of Utah, Alfred Emery Building 228, 225 S. 1400 E, Salt Lake City, UT 84112, USA HUA ZAN hzan@hawaii.edu Center on the Family, College of Tropical Agriculture and Human Resources, University of Hawaii at Manoa, 2515 Campus Road, Miller Hall 103, Honolulu, HI 96822, USA
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article EMPLOYMENT TYPE, RESIDENTIAL STATUS AND CONSUMER FINANCIAL CAPABILITY: EVIDENCE FROM CHINA HOUSEHOLD FINANCE SURVEY Research on consumer financial capability is important for consumer financial wellbeing and emerging in the literature. However, studies on consumer financial capability in the Chinese context remain limited. To fill up the research gap, we used data from the 2011 China Household Finance Survey to investigate whether employment type and residential status were associated with consumer financial capability in China. Consumer financial capability was measured by the range of financial assets. Results from OLS and Poisson regressions showed that people employed in the government-managed system, with urban residence registration and with non-local rural residence registration had a better financial capability than their respective counterparts. The results have policy implications for improving consumer financial education and supporting vulnerable consumers. China Household Finance Survey, financial capability, the government-managed system, household residence registration 01 2019 64 March The Singapore Economic Review 57 81 http://www.worldscientific.com/doi/abs/10.1142/S0217590817430032 XU CUI School of Business, Renmin University of China, China2Department of Human Development and Family Studies, University of Rhode Island, RI, USA JING JIAN XIAO jjxiao@uri.edu Department of Human Development and Family Studies, University of Rhode Island, RI, USA JINGTAO YI School of Business, Renmin University of China, China
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article FACTORS RELATED TO THE RISK OF A SUBSTANTIAL INCOME DECREASE BETWEEN 2006 AND 2008 IN SOUTH KOREA Between 2006 and 2008, 9% of Korean households had an income decrease of 50% or more, a rate almost identical to the U.S. despite the much lower impact of the global financial crisis on Korea. We ran a logistic regression to determine factors related to the likelihood of a substantial income decrease between 2006 and 2008 for Korean households. The likelihood of a substantial decrease was low for households below the 75th percentile of 2006 income, probably due to differences in composition of income. Households with college education were less likely than those without college to have a substantial decrease. Household income, global economic crisis, Korean households, Korean labor and income panel study 01 2019 64 March The Singapore Economic Review 157 173 http://www.worldscientific.com/doi/abs/10.1142/S0217590817430068 EUNICE JIHYUN HONG eunicehong84@gmail.com Korean Women’s Development Institute, 225 Jinheung-ro Eunpyeong-gu, Seoul 03367, Korea SHERMAN D. HANNA Ohio State University, 1787 Neil Avenue, Columbus OH 43210, USA
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article CONSUMPTION INEQUALITY IN INDIA AFTER LIBERALIZATION: A CASTE BASED ASSESSMENT We analyze the consumption inequality in India among different caste groups namely SC, ST, OBC and Others using three rounds of Household Level Consumption Expenditure Survey Data from 1993–94 to 2009–10. Regression analysis shows disparity in consumption expenditure across various caste groups. Values of Gini coefficient, Theil’s Index and overlapping index display an increasing trend in both within- and between-group inequality over time. The possibility of stratification among “Others” is identified. It is found that SCs and STs in particular bear the burden of increasing inequality, indicating possible inefficient implementation of the welfare schemes aimed at these communities. Inequality, caste, India, Gini, Anogi, Theil, decomposition 01 2019 64 March The Singapore Economic Review 139 155 http://www.worldscientific.com/doi/abs/10.1142/S0217590817430123 ANOOP S. KUMAR Department of Economics, BITS Pilani KK Birla Goa Campus, Goa 403726, India P. YAZIR yasinbox@gmail.com School of Economics, University of Hyderabad, Hyderbabad 500046, India G. G. GOPIKA gopikagg@gmail.com Department of Economics, Govt. College Nedumangadu, Kerala, India
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article THE VALUE OF CHINESE SUPERSTITIONS IN MALAYSIA: EVIDENCE FROM CAR PLATE AUCTIONING The purpose of this paper is to examine Malaysian motorists’ willingness to pay for Chinese lucky plate numbers. Regression analyses reveal that the Chinese bidders are more likely to win and pay significantly more for the Chinese lucky numbers than their non-Chinese counterparts. Consistent with resale motive considerations, the non-Chinese bidders impose the same discount for unlucky numbers as their Chinese counterparts but do not pay a premium for the lucky numbers. We also document the influence of peer effects on the winning bid price. Specifically, Chinese bidders tend to pay more for the same plate numbers won by their peers in the previous auction, whereas both Chinese and non-Chinese bidders are less averse to the unlucky numbers if there are precedents of such ownership among their peers. Overall, our findings suggest that policymakers and marketers need to be sensitive to the subtle differences in the cultural cues of consumers in a multiracial society such as Malaysia. Superstitions, auction, consumer psychology, behavioral economics, peer effects 01 2019 64 March The Singapore Economic Review 115 137 http://www.worldscientific.com/doi/abs/10.1142/S0217590817430081 WOEI-CHYUAN WONG School of Economics, Finance and Banking, UUM COB, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah Darul Aman, Malaysia NUR ADIANA HIAU ABDULLAH diana897@uum.edu.my School of Economics, Finance and Banking, UUM COB, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah Darul Aman, Malaysia HOCK-EAM LIM lheam@uum.edu.my School of Economics, Finance and Banking, UUM COB, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah Darul Aman, Malaysia
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article LOW FERTILITY RATE AND CONSUMPTION BEHAVIOR OF HOUSEHOLDS IN TAIWAN Since the economic consequences of a low fertility rate, such as a change in consumption patterns, might affect the path of economic growth, this study investigates how the relationship between the low fertility rate and consumption behavior in Taiwan has changed over time. Using county-level panel data from 1995 to 2014 to examine the impact of the low fertility rate on the consumption behavior of households in Taiwan, the major finding of this study is that a low fertility rate will change the behavior and the composition of consumption. A low fertility rate will increase the share of the total consumption expenditure in a household’s disposable income, in particular, in relation to the consumption categories of food, health care, education, and transportation and communication, but will decrease the share of expenditure on clothing in the household’s disposable income. Consumption behavior, fertility rate, panel data model, Taiwan 01 2019 64 March The Singapore Economic Review 175 190 http://www.worldscientific.com/doi/abs/10.1142/S021759081750014X JR-TSUNG HUANG jthuang@nccu.edu.tw Department of Public Finance, College of Social Sciences, National Chengchi University, Taipei 116, Taiwan JIUN-NAN PAN #x2020;Discipline of Accounting, College of Management, Yuan Ze University, Taoyuan 320, Taiwan MING-LEI CHANG minglei@cycu.edu.tw #x2021;Department of Accounting, College of Business, Chung Yuan Christian University, Taoyuan 320, Taiwan SHIH-YI YOU youshiyi@mail.sysu.edu.cn #xA7;Institute of Guangdong, Hong Kong and Macao, Development Studies, Sun Yat-sen University, Guangzhou 510275, P. R. China
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article EMPIRICAL STUDY ON WORK–FAMILY CONFLICT AMONG HONG KONG FEMALE EMPLOYEES WHO HAVE CHILDREN WITH SPECIAL EDUCATION NEEDS (SEN) With the recent education reforms in Hong Kong, students with special education needs (SEN) are gradually returning to mainstream schools. There are high expectations on the next generation, especially in terms of education achievements to build a successful path for growth; however, when children have SEN that affect their learning, what problems are faced by their working mothers? Findings provide an overview of the latest work–family conflict situation faced by working mothers of children with SEN. Given the financial burden, they suffer from high work–family conflict, as they are forced to work but are also required to spend more time helping their children. Gender, work–family conflict, special education needs (SEN), human resource management 01 2019 64 March The Singapore Economic Review 213 234 http://www.worldscientific.com/doi/abs/10.1142/S0217590817430111 LAI-KUEN LAW lklaw@hksyu.edu Department of Business Administration, Hong Kong Shue Yan University, 10 Wai Tsui Crescent, Braemar Hill, North Point, Hong Kong
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article PERCEPTION TYPES OF HOME BUYERS BY Q METHODOLOGY: A COMPARATIVE STUDY OF HONG KONG, TAIWAN, AND THE USA It is commonly accepted that purchasing a home is one of the most important decisions that people can make in their lifetimes, and that perception types of home-buying decisions are critical constructs in housing market research. However, despite the large body of extant literature that has examined objective factors determining housing demand, few have analyzed home-purchase intention from a subjective perspective using a cross-sectional approach. To fill this research gap, this paper aims to distinguish and compare different perception types of home buying in Hong Kong, Taiwan, and the USA by using Q methodology, which utilizes subjective views and perceptions to capture general responses to a phenomenon. After analyzing the 30 samples of home buyers selected from each of these three areas being surveyed, the research results demonstrate that most home buyers in Hong Kong, Taiwan, and the USA are aggressive investors, pragmatists and lifelong financial planners, respectively. Perception types, Q methodology, statement set, inversion of conventional factor analysis, PQMethod Software 01 2019 64 March The Singapore Economic Review 235 257 http://www.worldscientific.com/doi/abs/10.1142/S0217590817430093 CHUNG-CHU LIU Department of Business and Administration, National Taipei University, San Shia Campus, 151, University Rd., San Shia District, New Taipei City 23741, Taiwan JASON C. H. CHEN chen@gonzaga.edu School of Business Administration, Gonzaga University, 502 East Boone Avenue, Spokane, WA 99258-0102, US CHE-CHEONG POON ccpoon@hksyu.edu Department of Economics and Finance, Hong Kong Shue Yan University, 10 Wai Tsui Crescent, Braemar Hill, North Point, Hong Kong
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article USING BAIDU INDEX TO NOWCAST MOBILE PHONE SALES IN CHINA Most of the official data are released with a lag period, which increases the difficulties for decision-makers assessing the situation. To solve the problem of data lag, we used real-time Baidu Index to nowcast the Chinese consumer behavior of buying the best-selling smartphone, Huawei Mate 7. We introduced keywords like “Mate 7” and “Huawei” in Baidu Index search queries to examine whether the introduction of real-time data can improve the efficiency of benchmark model. Overall, our finding is that the introduction of Baidu Index, both in-sample and out-of-sample, can improve the prediction accuracy of the model significantly. The extended model provided a 55.2% outperformance relative to benchmark one. This can not only make up for official data release lag, but also help firms gain near-real-time insight into the consumer demand trends and reduce inventory costs. The findings suggest that firms can improve marketing performance by use of search engine promotion campaign. Search query data, Huawei, MIDAS 01 2019 64 March The Singapore Economic Review 83 96 http://www.worldscientific.com/doi/abs/10.1142/S021759081743007X JIANCHUN FANG School of Economics, Zhejiang University of Technology, Hangzhou, Zhejiang Province 310023, P. R. China†Institute of World Economics and Politics, Chinese Academy of Social Sciences, Beijing 100732, P. R. China‡School of Economics, Zhejiang University, Hangzhou, Zhejiang Province 310027, P. R. China WANSHAN WU School of Economics, Zhejiang University of Technology, Hangzhou, Zhejiang Province 310023, P. R. China‡School of Economics, Zhejiang University, Hangzhou, Zhejiang Province 310027, P. R. China ZHOU LU luzhou59@gmail.com #xA7;School of Economics, Tianjin University of Commerce, Tianjin City 300134, P. R. China EUNHO CHO echo@kean.edu #xB6;School of Accounting and Finance, Kean University, Zhejiang Province 325060, P. R. China
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article INTERNET USE, FINANCE ACQUISITION AND RETURNING MIGRANT WORKERS’ HOME ENTREPRENEURSHIP — EMPIRICAL ANALYSIS BASED ON CLDS2016 Whether Internet use can inspire returning migrant workers’ home entrepreneurship is of great practical significance for promoting rural revitalization. Based on the data of China Labor Dynamic Survey (CLDS) in 2016, this paper empirically studies the impact of Internet use on returning migrant workers’ home entrepreneurship. The results show that, firstly, Internet use can significantly improve the entrepreneurial probability of migrant workers returning home by 8%. The results remain significant after using the instrumental variables method for endogenous problem solving and propensity score matching, changing the sample size for robustness testing. Secondly, Internet use promotes migrant workers returning home to make entrepreneurial choices mainly through expanding informal finance and obtaining formal finance. However, the mechanism of expanding informal finance has only been effective for returning migrant workers with higher level of social trust. Thirdly, Internet use has heterogeneous impact on returning migrant workers’ home entrepreneurship, which is reflected in the fact that Internet use will more significantly promote the entrepreneurial probability of migrant workers returning home with necessity entrepreneurship motivation, close to banks, eastern and central regions and developed areas, and internet use will also significantly promote the probability of opportunity entrepreneurship among migrant workers returning home who are satisfied with their household economic situation. Therefore, it is necessary to further improve the construction of broadband infrastructure in rural areas, especially western and developing areas, set up training platforms for returning migrant workers’ home entrepreneurship, promote employment through entrepreneurship and stimulate regional economic vitality, so as to accelerate rural revitalization. Internet use, returning migrant workers’ home entrepreneurship, rural vitalization 05 2023 68 September The Singapore Economic Review 1787 1813 O18 J43 J61 R23 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500709 HONGMIN FAN School of Public Management Liaoning University, 110036, Shenyang, P. R. China†Dongbei University of Finance and Economics, 116025, Dalian, P. R. China NAN ZHANG ��Dalian University of Technology Graduate School of Education, 116024, Dalian, P. R. China CHUNYU MENG School of Public Management Liaoning University, 110036, Shenyang, P. R. China
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article LARGE SHAREHOLDERS AND INFORMATION ASYMMETRY IN A TRANSITION ECONOMY – EVIDENCE FROM VIETNAM A growing volume of studies indicate that the information asymmetry problem is a serious issue which significantly hinders stock market development. This problem is more pronounced in emerging markets with weak institutions. The domination of large shareholders in a firm might be a cause of information asymmetry because they are commonly believed to have access to private and value-relevant information. The current paper offers insight into the relationship between multiple large shareholder ownership and stock market information asymmetry in the context of Vietnam, an important emerging market. Employing fixed effects and GMM estimators for a panel data sample of firms listed on the Ho Chi Minh City stock exchange covering the period 2007–2015, the results suggest that the concentration of large shareholder ownership is positively and significantly associated with information asymmetry. This finding has strong implications for policy making process in promoting stock market development. Emerging market, information asymmetry, large shareholder ownership, liquidity, ownership concentration, Vietnam stock market 05 2023 68 September The Singapore Economic Review 1551 1567 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500462 XUAN VINH VO vinhvx@ueh.edu.vn Institute of Business Research and CFVG Ho Chi Minh City, University of Economics Ho Chi Minh City, Vietnam, 59C Nguyen Dinh Chieu Street – District 3, Ho Chi Minh City, Vietnam
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article WHAT CAME FIRST, TRANSPORTATION OR URBANIZATION? This paper proposes new perspective on the nexus between transportation and urbanization in China to test the search-matching theory. We find that the linkage between transportation and urbanization has both frequency and time-varying features. We find that transportation improves urbanization in the short term, while urbanization plays the importation role in transportation during the period 1969–1996. This result obviously supports search-matching theory that in the subsample periods, the transportation infrastructure exerts positive effects on urbanization in the short term but not in the long term. In the long term, urbanization will promote the development of transportation, while short-term traffic infrastructure investment can effectively improve the transfer of population to urban regions. It would be beneficial for the government to formulate the scientific traffic planning policy and adjust the transport structure to improve urbanization. Transportation, urbanization, wavelet analysis, time domain, frequency domain 05 2023 68 September The Singapore Economic Review 1715 1730 L91 P25 C22 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500693 TIE-YING LIU School of Economics and Management, Beijing Jiaotong University, Beijing, P. R. China CHI-WEI SU Department of Economics, Qingdao University, Shandong, P. R. China MENG QIN Graduate Academy, Party School of the Central Committee of the Communist Party of China, (National Academy of Governance), Beijing, P. R. China XIAO-YAN ZHANG National Academy of Economic Strategy Chinese Academy of Social Sciences, School of Finance Shanxi University of Finance & Economics Shanxi, P. R. China
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article DATA SUBJECT TO MULTIPLE TREATMENT EFFECTS — DISENTANGLE THE IMPACTS OF GLOBAL PANDEMIC AND A SPECIFIC DISEASE CONTROL POLICY Most literature works on estimating treatment effects assume that the observed data are either under the specific “treatment†or not. However, in many cases, the observed data could be subject to multiple treatments. We propose to combine econometric methods developed for different purposes to disentangle the multiple treatment effects. We illustrate this strategy by considering the impact of global pandemic v.s. the strictest “lockdown†policy of Hubei, China implemented in January, 2020. We show that although the strictest “lockdown†policy quickly contained the spread of COVID-19, it also inflicted huge economic loss on Hubei economy. It lowered Hubei GDP by about 37% compared to the level had there been no “lockdown†under the pandemic. However, even though Hubei economy managed to recover from the “lockdown†, it could not escape the global impact of pandemic. Its economy is still about 90% of the level had there been no pandemic. ARIMA, COVID-19, counterfactual, epidemic, panel data, predictions 05 2023 68 September The Singapore Economic Review 1507 1527 C23 C22 I18 R11 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500758 XIAO KE Collaborative Innovation Center for Emissions Trading System, Co-constructed by the Province and Ministry, Hubei University of Economics, Wuhan, P. R. China†School of Low Carbon Economics, Hubei University of Economics, Wuhan, P. R. China CHENG HSIAO ��Department of Economics, University of Southern California, CA, United States§Wang Yanan Institute for Studies in Economics, Xiamen University, Xiamen, P. R. China
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article THE OPTIMAL LAND SUPPLY POLICY OF CHINESE LOCAL GOVERNMENT This paper constructs a DSGE model to study the relationship between the Chinese local government’s land policy, social welfare and economic fluctuations. I find that increasing the supply of residential land by the local government will reduce housing price and increase social welfare, but it crowds out the amount of industrial land and decreases final output and social welfare as well. This trade-off brings out an optimal supply ratio of residential land, 40%, in deterministic steady-state equilibrium. Besides, the local government is able to use dynamic pro-cyclical residential land supply policy to dampen economic fluctuations in China’s macroeconomy. Land supply, social welfare, economic fluctuations, local government 05 2023 68 September The Singapore Economic Review 1731 1750 E10 E23 I31 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500644 YIYAO HE heyiyao@zju.edu.cn School of Economics, Zhejiang University, Hangzhou, P. R. China
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article EFFECTS OF CAPITAL INFLOWS ON FISCAL BALANCE IN AN EMERGING ECONOMY: EVIDENCE FROM PAKISTAN This paper examines the effect of capital inflows on fiscal deficit in an emerging economy of Pakistan. To obtain this objective, a fiscal deficit model is estimated using annual data for the period 1984–2017. The model is estimated using Generalized Method of Moments (GMM) technique. Three measures of capital inflow variables are taken, i.e., remittances, foreign direct investment (FDI) and foreign debt. The findings reveal that capital inflows increase fiscal deficit in the country. The findings show that 1% increase in remittances will increase fiscal deficit by 0.312%, while 1% increase in FDI will deteriorate budget deficit by 0.250%. Similarly, 1% increase in foreign debt will worsen fiscal balance by 0.073%. Remittances and FDI have more effect on fiscal deficit compared to foreign debt. It implies that both remittances and foreign debt deteriorate fiscal balance in the country more than foreign debt. The study suggests that remittances, FDI and foreign debt should be used for productive purposes as they will help in improving fiscal balance in the country. Fiscal balance, capital inflows, Pakistan 05 2023 68 September The Singapore Economic Review 1585 1598 C32 F24 H62 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500474 MUHAMMAD ZAKARIA mzakariadr@gmail.com School of Economics and Finance, Xi’an Jiaotong University, Xi’an, Shaanxi, P. R. China WEN JUN wjun1978@163.com School of Economics and Finance, Xi’an Jiaotong University, Xi’an, Shaanxi, P. R. China AROOJ KHAN arooj_khan@comsats.edu.pk Department of Management Sciences, COMSATS University Islamabad, Islamabad, Pakistan
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article WHAT IS THE RELATION BETWEEN NON-PERFORMING LOANS, CORPORATE GOVERNANCE, AND LENDING BEHAVIOR FACTORS? This research highlights the special problems facing the corporate governance of financial intermediaries and combines this theoretical perspective with bank observations in order to offer policy recommendations for their industry. The standard agency theory defines the corporate governance problem in terms of how equity and debt holders influence managers to act in the best interests of those providers of capital to firms. The results show that the relationship between directors’ collateralized shares, loan concentration and a bank’s non-performing loans has a significant positive, indicating that bad corporate governance and loan concentration are important warning signs for banks. Loan concentration, non-performing loans, corporate governance, lending behavior 05 2023 68 September The Singapore Economic Review 1637 1650 C23 D24 G21 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500590 JOE-MING LEE jmlee@mail.fgu.edu.tw Department of Applied Economics, Fo Guang University, Add. No. 160, Linwei Rd., Jiaosi Shiang, Yilan County 26247, Taiwan, ROC
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article ANALYZING THE ASYMMETRIC EFFECTS OF CRUDE OIL PRICE CHANGES ON CHINA’S PETROLEUM PRODUCT PRICES As the world’s second-largest crude oil consumer, China depends on imports for approximately 60% and domestic production for approximately 40%, of its oil demand. Therefore, it is very interesting to assess the pass-through effects of both domestic and international crude oil prices to gasoline and diesel prices. After the short- and long-run investigations using the nonlinear autoregressive distributed lag (ARDL) methodology of Shin et al. [Shin, Y, BC Yu and M Greenwood-Nimmo (2014). Modelling asymmetric cointegration and dynamic multipliers in a nonlinear ARDL framework†Festschrift in Honor of Peter Schmidt: Econometric Methods and Applications, R Sickels and W Horrace (eds.), pp. 281–314. Springer.], we find overwhelming evidence supporting the asymmetric price transmission mechanism between crude oil prices and gasoline prices in both the short- and long-run. In the case of diesel prices, on the other hand, the asymmetry effects seem likely to be a long-run phenomenon. Asymmetry, China, crude oil, nonlinear ARDL 05 2023 68 September The Singapore Economic Review 1751 1770 C22 Q4 http://www.worldscientific.com/doi/abs/10.1142/S021759081950070X XIANCHUN LIAO Business School and Institute of Green Development University of Jinan, Jinan, P. R. China JUNGHO BAEK ��Department of Economics, School of Management University of Alaska Fairbanks Fairbanks, Alaska, USA
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article LEARNING TO BE OVERCONFIDENT AND UNDERCONFIDENT This paper analyzes the overconfident and underconfident trading behavior simultaneously in the context extended from Gervais and Odean (2001) [Learning to be overconfident. Review of Financial Studies, 14(1), 1–27]. We find that the overconfidence level will be first decreasing, then increasing and finally decreasing as the number of the successful predictions increases when the underconfident behavior is sufficiently prominent and the expected trading volume in the future will first decrease then increase and finally decrease as the number of successes increases. Furthermore, the insider’s expected profits in the future are a monotonically increasing function of the number of successes when the number of successes is sufficiently small or large but monotonically decreasing function of this number when it is in the intermediate range. This completes the analysis of the investors’ biased behavior. Overconfidence, underconfidence, trading volume, insider’s profits 05 2023 68 September The Singapore Economic Review 1815 1827 G12 G14 G41 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500801 YUANZHU LU yuanzhulu@ustb.edu.cn School of Economics and Management, University of Science and Technology Beijing, Beijing, P. R. China JINMING HU National Equities Exchange and Quotations, Beijing, P. R. China YAXIAN GONG gyx8869@cufe.edu.cn School of Economics, Central University of Finance and Economics, Beijing, P. R. China
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article THE DRIVERS OF ENVIRONMENTAL DEGRADATION IN ASEAN + China: DO FINANCIAL DEVELOPMENT AND URBANIZATION HAVE ANY MODERATING EFFECT? This study examines the drivers of environmental degradation in ASEAN + China. It focusses on three unresolved questions: (i) Does the inclusion of China in ASEAN panel aggravate environmental degradation, given that China is a high carbon emissions country? (ii) Does financial development moderate the impact of energy consumption on environmental degradation in ASEAN? (iii) Does urbanization moderate the impact of energy consumption on environmental degradation in ASEAN? It employs empirical strategies that account for heterogeneity, endogeneity and cross-sectional dependence. The results show that economic growth, energy consumption and non-renewable energy aggravate environmental degradation, whereas renewable energy, foreign direct investment and trade openness mitigate it. The inclusion of China in ASEAN panel weakens the EKC hypothesis. Financial development favorably moderates the effect of energy consumption on environmental degradation in ASEAN, but adversely moderates the effect in ASEAN + China. Urbanization adversely moderates the impact of energy consumption on environmental degradation in both panels. Hence, efforts to address environmental degradation should consider these different drivers. Environmental degradation, energy consumption, economic growth, financial development, urbanization, ASEAN 05 2023 68 September The Singapore Economic Review 1671 1714 Q53 Q56 O44 F14 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500241 KIZITO UYI EHIGIAMUSOE ehiuyikizexcel@yahoo.com School of Accounting and Finance, Taylor’s University Selangor, Malaysia
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article AN AI APPROACH TO MEASURING FINANCIAL RISK AI artificial intelligence brings about new quantitative techniques to assess the state of an economy. Here, we describe a new measure for systemic risk: the Financial Risk Meter (FRM). This measure is based on the penalization parameter (λ) of a linear quantile lasso regression. The FRM is calculated by taking the average of the penalization parameters over the 100 largest US publicly-traded financial institutions. We demonstrate the suitability of this AI-based risk measure by comparing the proposed FRM to other measures for systemic risk, such as VIX, SRISK and Google Trends. We find that mutual Granger causality exists between the FRM and these measures, which indicates the validity of the FRM as a systemic risk measure. The implementation of this project is carried out using parallel computing, the codes are published on www.quantlet.de with keyword  FRM. The R package RiskAnalytics is another tool with the purpose of integrating and facilitating the research, calculation and analysis methods around the FRM project. The visualization and the up-to-date FRM can be found on hu.berlin/frm. Systemic risk, quantile regression, value at risk, lasso, parallel computing, financial risk meter 05 2023 68 September The Singapore Economic Review 1529 1549 C21 C51 G01 G18 G32 G38 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500668 LINING YU Ladislaus von Bortkiewicz Chair of Statistics, C.A.S.E. - Center for Applied Statistics and Econometrics, Humboldt-Universität zu Berlin, Unter den Linden 6, 10099 Berlin, Germany WOLFGANG KARL HÄRDLE ��C.A.S.E. - Center for Applied Statistics and Econometrics, Humboldt-Universität zu Berlin, Unter den Linden 6, 10099 Berlin, Germany‡Wang Yanan Institute for Studies in Economics, Xiamen University, 422 Siming Road, Xiamen 361005, P. R. ChinaffSim Kee Boon Institute for Financial Economics, Singapore Management University, 90 Stamford Road, Singapore 178903, Singapore¶Department of Mathematics and Physics, Charles University Prague, Ke Karlovu 2027/3, 12116 Praha 2, Czech LUKAS BORKE lukas@borke.net Ladislaus von Bortkiewicz Chair of Statistics, C.A.S.E. - Center for Applied Statistics and Econometrics, Humboldt-Universität zu Berlin, Unter den Linden 6, 10099 Berlin, Germany THIJS BENSCHOP thijs.benschop@hu-berlin.de Ladislaus von Bortkiewicz Chair of Statistics, C.A.S.E. - Center for Applied Statistics and Econometrics, Humboldt-Universität zu Berlin, Unter den Linden 6, 10099 Berlin, Germany
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article HOW LARGE ARE PRODUCTIVITY DIFFERENCES BETWEEN ISLAMIC AND CONVENTIONAL BANKS? Despite the enormous growth in Islamic banking, most studies, using DEA/Stochastic Frontier Analysis, find Islamic banks are either equally or less productive than conventional banks. We apply the Olley–Pakes (OP) and Ackerberg–Caves–Frazer (ACF) approaches for estimating the production functions of conventional, Islamic and mixed banks in Bahrain and Malaysia between 1990 and 2011. The ACF results are the most plausible. Though Islamic banks tend to be less efficient than conventional banks the difference is not statistically significant. In Malaysia, mixed banks are significantly more productive than other banks and tend to have faster productivity growth. Productivity, Islamic banking, oligopoly 05 2023 68 September The Singapore Economic Review 1651 1670 D24 G21 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500656 WAHIDA AHMAD wahida@uitm.edu.my Arshad Ayub Graduate Business School, Universti Teknologi MARA, 40450 Shah Alam Selangor Darul Ehsan, Malaysia DAVID PRENTICE Infrastructure Victoria, Level 33, 140 William Street, Melbourne, VIC 3000, Australia
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article DIRECTIONAL ACCURACY OF SINGAPORE’S MACROECONOMIC FORECASTS This study examines the directional accuracy of Singapore’s macroeconomic forecasts by professional forecasters, government agencies (i.e., central bank and Ministry of Trade and Industry, MTI), and international organizations. The results show that government agencies provide the most directionally accurate forecasts, suggesting that the macroeconomic and monetary policies are effective. Current-year forecasts are generally directionally accurate, with disparities among forecasters for next-year forecasts. Regarding GDP growth, the MTI and International Monetary Fund (IMF) provide directionally accurate forecasts up to four quarters ahead, whereas other forecasters provide them for at most three quarters ahead. For consumer price index inflation, except for the IMF, all others provide directionally accurate forecasts up to four quarters ahead. Macroeconomic forecast, directional accuracy, professional forecast, government forecast 05 2023 68 September The Singapore Economic Review 1569 1583 C53 D84 E37 E69 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500541 YOUNG BIN AHN School of Economics, Henan University, Kaifeng, Henan, P. R. China YOICHI TSUCHIYA ��Graduate School of International Cultural Studies, Tohoku University, Sendai, Japan
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article EFFECTS OF SOCIO-ECONOMIC FACTORS ON GOVERNMENTAL TAX EXPENDITURES FOR PRIVATE PENSIONS IN SELECTED OECD COUNTRIES With the advent of an aging society all over the world, there has been a growing policy interest in the pension system that can guarantee old-age income at some level. Many countries also encourage people to join public pensions as well as private pensions. As a result, there has been a phenomenon of substituting private pensions. This study investigates the effects of various socio-economic factors on tax benefits for private pensions at the country level. The results of this study show that lower total income replacement rate of public pension and private pension assets leads to increasing tax expenditures on private pensions. And also, higher individual tax burden and governmental social welfare expenditure causes to increase tax expenditures on private pensions. Despite differences in the type of old-age income security systems by country, it is recognized that attempts to resolve the public pensions crisis caused by socio-economic changes take the form of expanding the roles of private pensions. So, this study provides politic implications that lower benefits from public pensions lead to expanded roles of private pensions supported by the government. Tax expenditures, income replacement rate, public pensions crisis, old-age income security 05 2023 68 September The Singapore Economic Review 1599 1611 H24 H55 J32 http://www.worldscientific.com/doi/abs/10.1142/S021759081950053X BYUNG WOOK JUN Graduate School of Science in Taxation, University of Seoul, Seoul, South Korea SOO JEAN PARK ��Ph.D. in Taxation, Korea Institute of Public Finance, South Korea SUNG MAN YOON ��Seoul National University of Science and Technology, Seoul, South Korea
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article DOES THE CAUSAL RELATIONSHIP BETWEEN THE TWIN DEFICITS VARY OVER TIME? EVIDENCE FROM A BOOTSTRAP ROLLING WINDOW APPROACH This paper uses the bootstrap rolling window approach to analyze the dynamic causal relationship between the fiscal deficit and the trade deficit in the US from 1901 to 2018. We find the origination and termination of each causality period by considering the structural breaks. The results show that the fiscal deficit had a positive impact on the trade deficit from 1946 to 1956, from 1982 to 1998, in 2000 and from 2002 to 2008, which is in accord with the results of the Mundell–Fleming model, while it had a negative impact from 1937 to 1945. The trade deficit had a positive impact on the fiscal deficit from 1940 to 1942, from 1959 to 1975 and from 1981 to 1994, mainly due to the World War II, oil crisis and trade friction with Japan. It means that the fiscal policy of American federal government can affect the external imbalance. Fiscal deficit, trade deficit, rolling window approach 05 2023 68 September The Singapore Economic Review 1613 1635 C32 E62 F41 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500435 TIE-YING LIU School of Economics and Management, Beijing Jiaotong University, No. 3, Shangyuancun, Haidian District, Beijing 100044, P. R. China ZI-CHEN GU School of Economics and Management, Beijing Jiaotong University, No. 3, Shangyuancun, Haidian District, Beijing 100044, P. R. China
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article COORDINATION OF TRADE AND INTELLECTUAL PROPERTY RIGHTS POLICIES We employ a bilateral R&D spillover model to analyze how a domestic government coordinates its intellectual property rights (IPR) and trade policies and hence affects a foreign firm’s choice between export (EX) and foreign direct investment (FDI). We find that both firms’ profits increase with IPR protection if the IPR protection level in the domestic country is loose. The domestic country can coordinate trade and IPR policies and reach a high welfare level by affecting foreign firm’s entry decisions. The profitability and desirability may decrease with the strength of IPR protection and correspond to a welfare-reducing R&D. Intellectual property rights, tariff, R&D spillover, entry mode 05 2023 68 September The Singapore Economic Review 1771 1785 F12 F13 F21 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500747 TE-CHENG LU 486563249@qq.com School of Accounting and Finance, Tan Kah Kee College, Xiamen University, P. R. China JIN-LI HU jinlihu@gmail.com Institute of Business and Management, National Chiao Tung University, ROC YAN-SHU LIN Department of Economics, National Dong Hwa University, No. 1, Sec. 2, Da Hsueh Rd., Shoufeng, Hualien 97401, ROC
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article ANALYSIS OF GENDER WAGE DIFFERENTIAL IN CHINA’S URBAN LABOR MARKET This paper estimates the gender wage gap and its composition in China’s urban labor market. The traditional Blinder–Oaxaca (1973) decomposition method with different weighing systems is employed. To correct for potential selection bias caused by women’s labor force participation, we employ the Heckman’s two-step procedure to estimate the female wage function. A large proportion of the gender wage gap is unexplained by differences of productive characteristics of individuals. Even though women have higher level of education attainments on average, they receive lower wages than men. Both facts suggest a potential discrimination against women in China. Discrimination, wage gap, decomposition, selection bias, gender, China’s labor market 02 2017 62 June The Singapore Economic Review 423 445 http://www.worldscientific.com/doi/abs/10.1142/S021759081550071X ALMAS HESHMATI Department of Economics, Room k526, Sogang University, 35 Baekbeom-ro (Sinsu-dong #1), Mapo-gu, Seoul 121-742, Korea2Jönköping International Business School (JIBS), Jönköping University, Gjuterigatan 5, 553 18 Jönköping, Sweden BIWEI SU Department of Economics, Room k526, Sogang University, 35 Baekbeom-ro (Sinsu-dong #1), Mapo-gu, Seoul 121-742, Korea2Jönköping International Business School (JIBS), Jönköping University, Gjuterigatan 5, 553 18 Jönköping, Sweden
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article ASEAN’s TRADE AND FOREIGN DIRECT INVESTMENT: LONG-TERM CHALLENGES FOR ECONOMIC INTEGRATION This paper explores the long-term challenges for economic integration of the Association of Southeast Asian Nations (ASEAN) through trade and foreign direct investment (FDI). The region has emerged as an important production base for global multinational corporations by joining East Asia’s supply chains. While proceeding to establish the ASEAN Economic Community (AEC) by the end of 2015, ASEAN has also forged five major free trade agreements (FTAs) with its dialogue partners (China, India, Japan, Republic of Korea, and Australia–New Zealand) and is currently negotiating the Regional Comprehensive Economic Partnership. In addition, four ASEAN member states have completed Trans-Pacific Partnership negotiations. Econometric evidence suggests that (i) trade flows and inward FDI mutually reinforce each other, i.e., an increase in trade flows stimulates inward FDI and vice versa; (ii) a larger market tends to attract more inward FDI; (iii) FTAs tend to help stimulate inward FDI; and (iv) strong institutions, good physical infrastructure, and low costs of doing business are critical in boosting inward FDI. The paper suggests that in the long run it is ASEAN’s interest to further integrate itself with the rest of Asia and the world (through a Free Trade Area of the Asia-Pacific and an Asia–Europe FTA), while substantially deepening its internal integration (by moving from the AEC to a customs and economic union) and thereby maintaining ASEAN centrality. ASEAN economic integration, ASEAN Economic Community, ASEAN+1 FTAs, RCEP, gravity model for trade and FDI 03 2017 62 June The Singapore Economic Review 643 680 http://www.worldscientific.com/doi/abs/10.1142/S0217590818400040 MASAHIRO KAWAI mkawai@pp.u-tokyo.ac.jp Graduate School of Public Policy, University of Tokyo, 7-3-1 Hongo, Bunkyo-ku, Tokyo 113-0033, Japan KANDA NAKNOI #x2020;Department of Economics, University of Conneticut, 365 Fairfield Way, U-1063 Storrs, CT 06269-1063, USA
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article CHALLENGES FACING CHINA IN THE “NEW NORMAL”? AN INTRODUCTORY REVIEW 04 2017 62 September The Singapore Economic Review 761 764 http://www.worldscientific.com/doi/abs/10.1142/S0217590817020039 ROLAND CHEO blangah@live.cn Center for Economic Research, Shandong University, China
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article ENVIRONMENTAL TAX AND RETURN URBAN–RURAL MIGRATION This paper will set up a dynamic adjustment system of a specific-factor model of a closed Harris and Todaros’ (1970) economy to explore the effects of environmental tax on return migration meaning that labor moves back from the manufacturing sector to the agricultural sector. We find that when the government raises environmental tax, return migration would happen and the urban unemployment would decrease. Environmental tax, return urban–rural migration 02 2017 62 June The Singapore Economic Review 447 458 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500642 SHENG-HUEI KO ksh@faculty.pccu.edu.tw Department of International Trade, Chinese Culture University, No. 55, Hwa-Kang Road, Yang-Ming-Shan, Taipei City 11114, Taiwan KUO-HSING KUO kuo@faculty.pccu.edu.tw Department of International Trade, Chinese Culture University, No. 55, Hwa-Kang Road, Yang-Ming-Shan, Taipei City 11114, Taiwan CHENG-TE LEE Department of International Trade, Chinese Culture University, No. 55, Hwa-Kang Road, Yang-Ming-Shan, Taipei City 11114, Taiwan CHEN FANG fangchen@mail.nou.edu.tw Department of Business, National Open University, No. 172, Zhongzheng Rd., Luzhou Dist., Xinbei City 247, Taiwan
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article A SPATIAL REGRESSION APPROACH TO FDI IN VIETNAM: PROVINCE-LEVEL EVIDENCE Foreign direct investment (FDI) flows into Vietnam have increased significantly in recent years and are distributed unequally between provinces. This paper aims to investigate the locational determinants of FDI in 62 Vietnamese provinces and whether spatial dependence is a significant factor that both researchers and policy-makers should take into account. We report that province-specific per-capita income, secondary education enrolment, labor costs, openness to trade, and domestic investment affect FDI directly within the province itself and have indirect effects on FDI in neighboring provinces. The direct and indirect effects coexist with spill-over effects and spatial dependence between provinces. Our findings indicate that FDI in Vietnam reflects a combination of complex vertical and export platform motivations on the part of foreign investors; and an agglomeration dynamics that may perpetuate the existing regional disparities in the distribution of FDI capital between provinces. Foreign direct investment, spatial dependence, agglomeration, Vietnam 02 2017 62 June The Singapore Economic Review 459 481 http://www.worldscientific.com/doi/abs/10.1142/S0217590815501155 BULENT ESIYOK Faculty of Economics and Administrative Sciences, Baskent University, Ankara, Turkey MEHMET UGUR M.Ugur@gre.ac.uk Business School, University of Greenwich, Old Royal Naval College, 30 Park Row, London, SE10 9LS, UK
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article HAS THE INDUSTRIAL STRUCTURE OF WESTERN PROVINCES IN CHINA BEEN DIFFERENTIAL? EVIDENCE FROM THE SIP FRAMEWORK The Structure–Industry–Project (SIP) framework is developed to account for the evolution of industrial structure in less-developed regions. The dynamic relationship between structure, industry and project is investigated from an integrative perspective, which is utilized to assess the role of national policy in reshaping the regional industrial structure. A new indicator is constructed to measure the differentiation of industrial structure of a province by employing data from 29 secondary industries of western provinces of China from 2000 to 2010. The basic result shows that the differentiation of industrial structure decreased instead of increasing during the past decade. Empirical evidence demonstrates that the dysfunction of the SIP interaction leads to decreasing differentiation of the industrial structure in a province. Specifically, the change of key industry is positively associated with the differentiation of industrial structure, whereas the role of project works in a contingent way. Moreover, the project in resource-industries plays a significant role in facilitating the differentiation of industrial structure while the projects in technology-intensive and high-tech industries do nothing. The findings in this study can provide suggestion for the government to improve the effect of development policies on the optimization of industrial structure in less-developed economies. SIP framework, secondary industrial structure, western development, China 04 2017 62 September The Singapore Economic Review 905 928 http://www.worldscientific.com/doi/abs/10.1142/S021759081740032X JUNWEI SHI jwshi@znufe.edu.cn Center for Industrial Economic Research (CIER), Zhongnan University of Economics and Law, Wuhan 430073, China HAIYAN FU School of Finance, Zhongnan University of Economics and Law, Wuhan 430073, China
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article SMALL REWARDS OR SOME ENCOURAGEMENT? USING AN EXPERIMENT IN CHINA TO TEST EXTRINSIC MOTIVATION ON ACADEMIC PERFORMANCE Extrinsic motivation can play a healthy role in influencing student performance, however, in the developing world without outside intervention, the provider of such extrinsic motivation is usually one with limited means, such as the village school teacher, or a parent struggling to make ends meet. Hence, this paper asks the question: Can limited extrinsic motivation affect academic performance? In particular, we look at two types of extrinsic motivation: small rewards and some encouragement and examine which does a better job to motivate students. We find in this study that the promise of a reward leads to improvement in scores during the treatment period, however, encouragement improves student performance in the post-treatment period (during the national primary school leaving examination). Encouragement, rewards, academic performance, China 04 2017 62 September The Singapore Economic Review 797 808 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400276 ROLAND CHEO blangah@live.cn The Center for Economic Research, Shandong University, 27 Shanda Nanlu, Jinan 250100, China
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article ASEAN ECONOMIC INTEGRATION COMPARED: WHAT DO THE NUMBERS TELL US? In the comparative literature on regional (economic) integration processes, the ASEAN experience is often contrasted with the European (EU) integration process. More than any other integration process in the world, the ASEAN case is singled out as a counter-model for the EU. The ASEAN model is thereby associated with features such as: low levels of institutionalization, pragmatism, bottom-up or de facto regionalization, regional production platforms, and so on. The positive features of this ‘model’ are often emphasized; however, in recent years there have also been calls for deepening the institutionalization of ASEAN, including from the ADB.The purpose of our paper is double: On the one hand, we present a long-term meta-analysis of available indicators in order to compare more accurately the ASEAN experience with other integration experiences worldwide, and complement (and test) the mostly qualitative approaches in the comparative literature. This should allow to better identify convergences and divergences between ASEAN and other integration processes. On the other hand, by comparing ASEAN with benchmark cases, we shed new light on the potential for further deepening the economic integration process in Southeast Asia. The latter comparison is complemented with gravity-type model estimations to assess the potential for further developing intra-ASEAN trade.It is shown that ASEAN’s export space is expanding faster than the world average and that there is still space for ASEAN countries to further develop the role of its intra-regional trade. ASEAN can further improve the region’s competitiveness by reducing the non-tariff barriers and technical barriers, trade facilitation, strengthening regional value chains, facilitating factor mobility and enhancing regional cooperation. ASEAN, market potential, regional integration, Asian regionalism 03 2017 62 June The Singapore Economic Review 619 641 http://www.worldscientific.com/doi/abs/10.1142/S0217590818400039 LURONG CHEN Lurong.chen@eria.org The Economic Research Institute for ASEAN and East Asia (ERIA), Jakarta, Indonesia LUDO CUYVERS Center for ASEAN Studies, University of Antwerp, Belgium3North-West University (Potchefstroom Campus), South Africa PHILIPPE DE LOMBAERDE philippe.de-lombaerde@neoma-bs.fr Neoma Business School, Paris-Rouen-Reims, France
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article HETEROGENEOUS OR HOMOGENEOUS INFLATION EXPECTATION FORMATION MODELS: A CASE STUDY OF CHINESE HOUSEHOLDS AND FINANCIAL PARTICIPANTS This paper attempts to identify whether the inflation expectation formation models adopted by Chinese agents are heterogeneous or homogeneous. A Gaussian mixture model is developed assuming that agents form inflation expectations by selecting a model from alternatives. Analysis results reveal that only adaptive expectation (AE) model is significant, indicating that both households and financial participants are fairly homogeneous in selecting inflation expectation formation models. Therefore, the mechanism of heterogeneous models is inoperative in explaining the heterogeneous inflation expectations in China, and the AE is the main driver of Chinese agents’ perceptions about cost. Inflation expectation, model uncertainty, heterogeneous expectations, adaptive expectation 04 2017 62 September The Singapore Economic Review 859 874 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400306 YINGYING XU School of Economics and Management, Beihang University, No. 37 Xueyuang Road, Haidian District, Beijing, P. R. China ZHIXIN LIU liuzhixin@buaa.edu.cn School of Economics and Management, Beihang University, No. 37 Xueyuang Road, Haidian District, Beijing, P. R. China XING ZHANG zhangxing0326@163.com School of Economics and Management, Beihang University, No. 37 Xueyuang Road, Haidian District, Beijing, P. R. China
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article HEDGING OF CREDIT DERIVATIVES, SYSTEMATIC FLUCTUATION AND BANKING STABILITY IN CHINA The objective of this paper is to theoretically and empirically identify the effects of hedging and systematic fluctuation on banking stability in China. First, theoretical propositions indicate that the impact of credit derivative hedging and systematic fluctuation on banking stability in China is derived on the basis of a newly established theoretical model. Then, empirical research based on one-stage and two-stage GMM methods suggests that ascending hedging degrees leads to a linearly improving condition for banking stability with respect to overnight lending swap hedging, an improving-then-worsening condition for compensation swaps and an improving–worsening–improving condition for deposit swap hedging; at the same time, the ascending level of systematic fluctuation associated with hedging improves banking stability. Moreover, the trade-off between loan expansion and the stability maintenance of banking sectors can be managed by hedging compensation swaps and overnight lending swaps. In general, the empirical results support the applicability of the theoretical model, and the hedging of certain swaps can be used as a tool for stability maintenance purposes. Hedging, systematic fluctuation, banking stability, credit derivatives 04 2017 62 September The Singapore Economic Review 809 836 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400288 QI-AN CHEN Department of Finance, School of Economics and Business Administration, Chongqing University, 174 Shazheng Street, Shapingba District, Chongqing, China FANGZHOU DU 963884343@qq.com Department of Finance, School of Economics and Business Administration, Chongqing University, 174 Shazheng Street, Shapingba District, Chongqing, China
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article THE HETEROGENEOUS IMPACT OF CHILDREN ON THE PARTICIPATION OF MARRIED WOMEN IN THE LABOR MARKET IN TAIWAN This paper is an attempt to investigate how children affect married women’s decision to participate in the Taiwanese labor market. The effect of children on the female labor supply is usually negative for most married women; however, it might also be positive for some subpopulations. Thus, herein, we use a local likelihood logit regression to detect the heterogeneity in the effects of children on married female employment that cannot be detected by parametric (e.g. probit or logit models) or semiparametric estimation. Our empirical findings provide evidence of some heterogeneity in the response related to children on the participation of Taiwanese married women in the work force. Since, we find evidence of heterogeneous effects, we suggest that different government policy instruments should be precisely targeted at different specific subpopulations in order to effectively increase the participation of married women in the labor force. When comparing these average characteristics of married women with positive versus negative employment effects due to having children, we find that the average married woman’s educational attainment and the logarithm of the husband’s wage income differ significantly between women with positive effects of children and those with negative effects of children. Local logit model, heterogeneous response, female labor participation 02 2017 62 June The Singapore Economic Review 297 323 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500800 CHUN-LI TSAI tchunLi@mail.ncku.edu.tw Department of Economics, National Cheng Kung University, 1 University Road, Tainan 701, Taiwan
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article THE IMPACT OF POPULATION AGEING ON ECONOMIC GROWTH: A BIBLIOMETRIC SURVEY Population ageing and its influence on the economic growth has long been the focus of major concern. Using bibliometric techniques we found that: (1) although ageing has increasingly attracted more researchers within economics literature, the relative weight of ageing and economic growth related papers does not evidence a clear positive trend; (2) recent studies reveal the willingness of researchers to evaluate less immediate mechanisms relating ageing and economic growth; (3) the increase in the use of empirical methods reflects a trend to test economic phenomena with real-world data against the theory; (4) very few studies focus on developing and less developed countries. Ageing population, economic growth, bibliometrics, less developed countries 02 2017 62 June The Singapore Economic Review 275 296 http://www.worldscientific.com/doi/abs/10.1142/S021759081550068X RENUGA NAGARAJAN renuga_nagarajan@yahoo.com CEF.UP, Faculdade de Economia, Universidade do Porto, Rua Dr Roberto Frias, 4200-464, Porto, Portugal AURORA A. C. TEIXEIRA CEF.UP, Faculdade de Economia, Universidade do Porto; INESC TEC, OBEGEF, Rua Dr Roberto Frias, 4200-464, Porto, Portugal SANDRA SILVA sandras@fep.up.pt CEF.UP, Faculdade de Economia, Universidade do Porto, Rua Dr Roberto Frias, 4200-464, Porto, Portugal
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article OPTIMAL TERM LENGTH FOR AN OVERCONFIDENT CENTRAL BANKER This paper discusses the implications of overconfidence when it affects a monetary policy maker. We consider two forms of overconfidence: the illusion of precision and the illusion of control. Incorporating them into a standard New Keynesian framework, we consider the optimal term length of a central banker and examine how it depends on the types and degrees of overconfidence. In particular, we show that the legal mandate should always be lengthened when these two types of biases increase by the same percentage magnitude. Central banker, overconfidence, legal mandate, optimal term length 01 2017 62 March The Singapore Economic Review 179 192 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500107 ETIENNE FARVAQUE LEM, CNRS (UMR 9221), Université Lille 1 Sciences et Technologies, Cité Scientifique, Bâtiment SH2, 59655 Villeneuve d’Ascq Cedex, France†Skema Business School, Campus de Lille, Avenue Willy Brandt 59777 Euralille, France‡CIRANO, 1130 Rhe Sherbrooke O 1400, Montreal, QC, Canada H3A2M8, Canada NORIMICHI MATSUEDA nmatsued@kwansei.ac.jp #xA7;Kwansei Gakuin University, School of Economics, 1-1-155 Uegahara, Nishinomiya 662-8501, Japan
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article CHINA’S IMBALANCED SEX RATIO AND SATISFACTION WITH MARRIAGE China’s imbalanced sex ratio has increased the prevalence of hypergamous (marrying up) and hypogamous (marrying down) marriages. We explore the implications of this phenomena for satisfaction with one’s spouse in terms of sexual satisfaction along a range of dimensions, care received from one’s spouse, affection expressed to, and received from one’s spouse and the prevalence of domestic violence in the home. The main argument that we develop in the paper is that assortative mating is associated with higher satisfaction levels with one’s spouse because those involved in homogamous marriages will have more shared values, have more empathy for each other and be better able to communicate with each other, both in terms of everyday living and in terms of their sex lives. We test this argument using data from the China Health and Family Life Survey. We find considerable support for the argument that marrying up, or down, lowers satisfaction with one’s spouse. China, assortative mating, sex ratio, marriage 04 2017 62 September The Singapore Economic Review 765 782 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400252 ZHIMING CHENG zhiming.cheng@mq.edu.au Centre for the Health Economy, Macquarie University, New South Wales 2109, Australia RUSSELL SMYTH Department of Economics, Monash Business School, Monash University, 3800 Victoria, Australia
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article EMPLOYMENT CHOICE AND OWNERSHIP STRUCTURE IN TRANSITIONAL CHINA This paper investigates the determinants of employment choice of rural migrant workers across state-owned enterprises (SOEs) and various subtypes of non-state owned enterprises (non-SOEs) by taking into account of the unobservable characteristics that link the choice to migrate with the choice of employer. Using pooled cross-section data for 1995 and 2002, the results indicate that the decisions for migration and the choice of employment are related, suggesting that estimating employment choices without considering migration status leads to biased estimates. We find that both higher paid wages and broader pension benefits are major determinants of employment choice. Of these, pension benefits have a larger impact than high-level wages in increasing the employment probability for either type of enterprise. Rural migrants, employment choice, SOEs, non-SOEs, China 02 2017 62 June The Singapore Economic Review 325 344 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500885 YULING CUI Faculty of Economics and Management, Xi’an University of Technology, Xi’an, 710048, P. R. China DAEHOON NAHM daehoon.nahm@mq.edu.au Department of Economics, Macquarie University, Sydney, NSW 2109, Australia MASSIMILIANO TANI m.tani@adfa.edu.au School of Business, UNSW Canberra, Northcott Dr, Campbell ACT 2612, Australia
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article FINANCIAL CRISIS, MACROPRUDENTIAL POLICIES AND DEPOSITOR DISCIPLINE This paper examines to what extent macroprudential policies in the Turkish banking sector affected the functioning of depositor discipline. Our results suggest that depositors’ responses for poor bank performance get stronger after the 2008 crisis, when various macroprudential measures were implemented to preserve financial stability. In the aftermath of the crisis, bank behavior toward depositors also alters. Ahead of the crisis, banks did not significantly respond to the discipline exerted by depositors, however, banks begin offering higher rates to curb deposit withdrawals afterwards. Our findings suggest that the implementation of macroprudential tools seem to have a positive impact on financial stability, since, in the post-2008 period, regulatory supervision have been more firmly assisted by the market. Depositor discipline, financial crisis, macroprudential policies 01 2017 62 March The Singapore Economic Review 5 25 http://www.worldscientific.com/doi/abs/10.1142/S021759081740001X AHMET FARUK AYSAN ahmet.aysan@tcmb.gov.tr Central Bank of the Republic of Turkey, Anafartalar Mah. İstiklal Cad. No MUSTAFA DISLI mustafa.disli@ugent.be #x2020;Ghent University, St. Pietersnieuwstraat 33, 9000 Gent, Belgium HUSEYIN OZTURK Central Bank of the Republic of Turkey, Anafartalar Mah. İstiklal Cad. No
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article UNIT ROOT TESTS IN THE PRESENCE OF MULTIPLE BREAKS IN VARIANCE Spurious rejections of the standard Dickey–Fuller (DF) test caused by a single variance break have been reported and some solutions to correct the problem have been proposed in the literature. Kim et al. (2002) put forward a correctly-sized unit root test robust to a single variance break, called the KLN test. However, there can be more than one break in variance in time series data as documented in Zhou and Perron (2008), so allowing only one break can be too restrictive. In this paper, we show that multiple breaks in variance can generate spurious rejections not only by the standard DF test but also by the KLN test. We then propose a bootstrap-based unit root test that is correctly-sized in the presence of multiple breaks in variance. Simulation experiments demonstrate that the proposed test performs well regardless of the number of breaks and the location of the breaks in innovation variance. Dickey–Fuller test, variance break, wild bootstrap 02 2017 62 June The Singapore Economic Review 345 361 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500496 SOO-BIN JEONG School of Economics, Yonsei University, 134 Shinchon-dong, Seodaemun-gu, Seoul 120-749, South Korea†Korea Maritime Institute, 26 Haeyang-ro, 301 Beon-gil, Yeongdo-gu, Busan 606-080, South Korea BONG-HWAN KIM inthemood00@gmail.com #x2021;Department of Economics, University of California, San Diego, 9500 Gilman Dr. La jolla, CA 92093, USA TAE-HWAN KIM School of Economics, Yonsei University, 134 Shinchon-dong, Seodaemun-gu, Seoul 120-749, South Korea HYUNG-HO MOON hmun.econ@gmail.com #x2021;Department of Economics, University of California, San Diego, 9500 Gilman Dr. La jolla, CA 92093, USA
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article A NEW ERA FOR MONETARY POLICY: CHALLENGES FOR THE EUROPEAN CENTRAL BANK Since the start of the global financial crisis, the European Central Bank (ECB) has faced exceptional challenges in fulfilling its price stability mandate, marking the start of a new era of monetary policy-making for the eurozone. This paper reviews the ECB’s evolving response from mid-2007 to early-2015, showing how it combined the standard tool of adjusting its policy interest rates with non-standard passive and active balance-sheet measures, accompanied by a forward guidance of its intended monetary stance. Altogether, the ECB stayed focused on price stability while fulfilling the two classical roles of lender of last resort to resolve money market tensions and market maker of last resort to repair monetary transmission. Addressing the many challenges was complicated by the nexus between fragile banks and vulnerable governments, the ensuing financial fragmentation and the complex institutional and political structure of the eurozone. Looking ahead, the new reinforced European financial architecture could make the ECB’s monetary policy task of maintaining price stability for the eurozone easier to accomplish. Eurozone crisis, financial fragmentation, unconventional monetary policy, financial stability 01 2017 62 March The Singapore Economic Review 57 86 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400033 AD VAN RIET ad.van_riet@ecb.europa.eu Directorate Monetary Policy of the European Central Bank, Sonnemannstrasse 20, 60314 Frankfurt am Main, Germany
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article REALIZING AN ASEAN ECONOMIC COMMUNITY: PROGRESS AND REMAINING CHALLENGE Launched as a political bloc and security pact in the aftermath of the Viet Nam War, the Association of Southeast Asian Nations (ASEAN) has evolved to embrace an ambitious economic agenda. Its latest project was the establishment of the ASEAN Economic Community (AEC) on 31 December 2015. Fulfilling these commitments would promote predictability in ASEAN, as well as strengthen its credibility. But to what extent has ASEAN met this deadline? The blueprint for achieving the goal envisages the AEC standing on four pillars and meeting the deadline depends on progress on each of them. Each pillar presents a demanding set of challenges to be met before the AEC can be fully realized. We find that although ASEAN has come a long way toward realizing its goal, considerable challenges remain. Accommodating AEC accords will not be easy when they require changes to domestic laws or even the national constitution. The flexibility that characterizes ASEAN cooperation, the celebrated “ASEAN way”, may hand member states a convenient pretext for non-compliance. How to enforce the accords remains an issue. If the AEC is to be more than a display of political solidarity, ASEAN must find a way to give the commitments more teeth. The real test for the community, therefore, will lie in the years ahead. ASEAN economic community, AEC 2015, economic integration, ASEAN economic integration, ASEAN trade and investment, post-2015 agenda 03 2017 62 June The Singapore Economic Review 681 702 http://www.worldscientific.com/doi/abs/10.1142/S0217590818400052 JAYANT MENON Office of the Chief Economist and Director-General, Economic Research and Regional Cooperation Department, Asian Development Bank, Mandaluyong City 1550, Metro Manila, Philippines ANNA CASSANDRA MELENDEZ acmelendez.consultant@adb.org Economic Research and Regional Cooperation Department, Asian Development Bank, Mandaluyong City 1550, Metro Manila, Philippines
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article HOW CBN CONFRONTED THE MELTDOWN: THE GLOBAL FINANCIAL CRISIS AND THE CENTRAL BANK OF NIGERIA’S RESPONSE This paper provides an analysis of policy responses to the Global Financial Crisis by the Central Bank of Nigeria (CBN). Given its unique position as a major commodity exporter with a large population, Nigerian authorities utilized a mixture of policies including reductions in the monetary policy rate and capital reserve requirement, lending through the expanded discount window, money market interbank transactions guaranty and limitations on deposit money banks’ (DMBs) foreign exchange net open positions. CBN also rolled over margin loans that were extended to equity investors. As a result the country weathered the financial crisis with limited damage and recorded positive growth rates between 2008 and 2010. Central bank of Nigeria, central bank governance, global financial crisis 01 2017 62 March The Singapore Economic Review 147 161 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400070 EMRE OZSOZ Center for International Policy Studies (CIPS), Fordham University 441 E. Fordham Road, Bronx, NY 10458, USA MUSTAPHA AKINKUNMI info@lagosstate.gov.ng Lagos State Government, Ministry of Finance, Ikeja, Lagos, Nigeria ISMAIL CAGRI AY cagri.ay@gediz.edu.tr Department of International Trade and Marketing, Gediz University Seyrek, Izmir 35665, Turkey ADEMOLA BAMIDELE abamidele@cbn.gov.ng Central Bank of Nigeria, PMB 0187 Garki, Abuja, Nigeria
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article SAVING–INVESTMENT DYNAMICS AND CAPITAL MOBILITY IN THE NEWLY INDUSTRIALIZED COUNTRIES This paper examines the dynamics of saving–investment (S–I) relationship in a group of 10 newly industrialized countries (NICs) over the period from 1970 to 2010 using a panel error correction model. By applying the Pedroni and Westerlund cointegration tests, we find that the saving and investment are cointegrated. We apply the fully modified OLS and dynamic OLS to a set of panel error correction models to estimate the short-and long-run relationship between S–I rates and interest rate differentials. We find that the degree of capital mobility is higher when the NICs are more open to their capital control policies after 1980s. Capital mobility, saving, investment, error correction models 02 2017 62 June The Singapore Economic Review 403 422 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500976 SMRUTI RANJAN BEHERA smrutibehera2003@gmail.com Department of Humanities and Social Sciences, Indian Institute of Technology Ropar, Nangal Road, Rupnagar, Punjab 140001, India
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article SPECIAL ISSUE OF THE SINGAPORE ECONOMIC REVIEW — ASEAN’S LONG TERM ECONOMIC POTENTIAL AND VISION 03 2017 62 June The Singapore Economic Review 555 559 http://www.worldscientific.com/doi/abs/10.1142/S0217590818020010 PRADUMNA BICKRAM RANA prana@ntu.edu.sg Centre for Multilateralism Studies, S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore 639798, Singapore
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article SPAIN AND THE CRISIS: HOUSING PRICES, CREDIT AND MACROPRUDENTIAL POLICIES In this paper, we propose a two-country, two sector monetary union DSGE model with housing. One of the countries is calibrated to represent the Spanish economy while the other one is the rest of the European monetary union. First, we illustrate how looser credit conditions coming from the Euro area, together with increases in housing demand, lead to an increase in house prices and credit in Spain. Then, we analyze to what extent, macroprudential policies could have avoided the excess in credit that triggered the financial crisis in Spain. We find that a countercyclical loan-to-value (LTV) rule that mainly responds to house prices would have mitigated the credit boom in Spain. These results can also be applied to other countries facing similar problems in the housing sector and thinking about implementing macroprudential policies. Housing boom, house prices, macroprudential policy, dynamic provisioning 01 2017 62 March The Singapore Economic Review 109 133 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400057 MARGARITA RUBIO margarita.rubio@nottingham.ac.uk University of Nottingham, Sir Clive Granger Building, University Park, Nottingham, NG7 2RD, UK JOSÉ A. CARRASCO-GALLEGO #x2020;Universidad Rey Juan Carlos, P. de los Artilleros, Madrid, Spain
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article MODALITIES FOR ASEAN ECONOMIC INTEGRATION: RETROSPECT AND GOING FORWARD The stages and economic effects of economic integration in the theoretical literature draws from the empirical integration experiences in Europe and may not be entirely suited to developing country groupings. Economically, ASEAN comprises largely middle and low income countries with priority on national and economic development, emphasizing attracting investment and technological resources and globally competitiveness. ASEAN and the ASEAN Economic Community (AEC) is characterized as a region with wide geographic expanse, diverse economic development levels and pursuing economic integration led by its leadership rather than the private sector. Economic integration has proceeded on two simultaneous fronts — the market-driven proliferation of regional production networks and value chains and the FTA-driven trade and investment facilitation and liberalization. Economic cooperation and integration has been pursued with increasing intensity since the late 1970s. Much has been achieved as seen in the growing density of movements of goods, services, capital and investments and movements of labor and people well as schemes for closer and deeper cooperation. The still-incomplete AEC will be declared on 31 December 2015. But there is still much “work in progress”. The AEC Blueprint 2025 highlights the priorities for the AEC for the next decade, eschewing deeper integration through customs union (CU) or common market but taking due consideration of the challenges from globalization and digitization and the clarion call for inclusive and sustainable development. Economic integration, ASEAN economic community 03 2017 62 June The Singapore Economic Review 561 591 http://www.worldscientific.com/doi/abs/10.1142/S0217590818400015 SIOW YUE CHIA chiasy@singnet.com.sg Singapore Institute of International Affairs, Singapore
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article THE EVOLUTION OF ENVIRONMENTAL ECONOMICS: A VIEW FROM THE INSIDE This essay provides one economist’s perspective on the two-decade evolution of the field of environmental economics, by tracing it through personal reflections on the professional path that has led to my research and writing. Also, the article summarizes the highlights of some of my research and writing during this period. Environmental economics, natural resource economics, energy economics, public policy 02 2017 62 June The Singapore Economic Review 251 274 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500399 ROBERT N. STAVINS John F. Kennedy School of Government, Harvard University, 79 John F. Kennedy St, Room L-306, Box 11, Cambridge, MA 02138, USA2National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138, USA3Resources for the Future, 1616 P St. NW, Suite 600, Washington, DC 20036, USA
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article A CONTEMPORARY RE-EXAMINATION OF MALAYSIA’S ECONOMIC GROWTH: THE ISSUES OF EQUITY, EFFICIENCY AND LIBERALIZATION This paper is an empirical investigation on economic growth for Malaysia, with focus on income inequality, foreign direct investment (FDI), financial development and trade. Co-integrating regression procedures namely, fully modified ordinary least squares (FMOLS), canonical co-integrating regression (CCR) and dynamic ordinary least squares (DOLS) were employed. Positive relationship between growth with financial development and trade are found to be consistent across all estimations. Income inequality on the other hand though negative, does not seem to exhibit robust significant statistical relationship with growth. The orders of integration for variables used have been demonstrated to be governed such that a long-run relationship prevails. Economic growth, income inequality, foreign direct investment, financial development, trade 02 2017 62 June The Singapore Economic Review 509 530 http://www.worldscientific.com/doi/abs/10.1142/S0217590815501167 AZFAR HILMI BAHARUDIN Department of Economics, Universiti Teknologi MARA, Shah Alam, Malaysia YAP SU FEI g2yss@um.edu.my Department of Economics, University of Malaya, Kuala Lumpur, Malaysia
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article THE BEHAVIOR OF FISCAL POLICY IN INDONESIA IN RESPONSE TO ECONOMIC CYCLES The current general wisdom regarding fiscal policy in response to fluctuations in economic cycles is to adopt countercyclical strategies: contractive during a boom to avoid overheating the economy and expansive during a recession to stimulate economic activity. This paper attempts to investigate the practical behavior of fiscal policy in Indonesia in response to economic cycles to establish whether it follows general fiscal wisdom (countercyclical) or amplifies the cycle (procyclical). An error correction model (ECM) and an alternative model to deal with the possible endogeneity problem are utilized. This paper shows that fiscal policy in Indonesia tends to be procyclical. Observations of some other ASEAN countries, namely Malaysia, the Philippines, Singapore and Thailand, indicate that Singapore could be the only country in ASEAN that is able to implement a countercyclical fiscal policy. Fiscal policy, business cycle, development economics 02 2017 62 June The Singapore Economic Review 377 401 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500041 ABDUROHMAN Abdurohman@fickat.dept.cu.go.id Indonesian Ministry of Finance, Indonesia BUDY P. RESOSUDARMO #x2020;Arndt-Corden Department of Economics, Crawford School of Economics and Government, The Australian National University, 9 Fellows Rd, Commbs Bld., Canberra, Australia
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article INCOME INEQUALITY, HOUSEHOLD CONSUMPTION AND CO2 EMISSIONS IN CHINA This paper analyzes the relationship between household income disparity and CO2 emissions based on a panel dataset in China over the period from 1995 to 2010 by employing a two-step, generalized method of moments estimation (GMM-3SLS estimator) to estimate the simultaneous equation model (SEM). The main findings of this study reveal that there is a U relationship between per capita CO2 emissions and income in China. The indirect effect that household income inequality affects CO2 emissions through household consumption is positive. The reasons for this positive effect are as follows: (1) an increase in household income inequality results in lower consumer demand and higher scale of investment, which leads to excess capacity, a rise in the waste of energy consumption and an increase in CO2 emissions. (2) The total consumption amount is inhibited and the consumption structure is influenced by household income inequality. The energy-intensive and low-quality-preferred consumption structure is an obstacle to the upgrading of the industrial structure and to technological innovation from the demand side. Thus, reducing CO2 emissions by upgrading the industrial structure and developing energy-saving technologies is inhibited by the consumption structure. Carbon emissions, household income inequality, household consumption, investment driven growth, excess capability of production 02 2017 62 June The Singapore Economic Review 531 553 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400239 LIN GUO linguo211@uibe.edu.cn School of International Trade and Economics, University of International Business and Economics, No. 10, Huixin Dongjie, Chaoyang District Beijing 100029, China
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article Introduction and Editorial Overview 01 2017 62 March The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590817020015 AHMET FARUK AYSAN ahmet.aysan@tcmb.gov.tr Central Bank of the Republic of Turkey, Ankara, Turkey HAKAN DANIS hakan.danis@unionbank.com MUFG Union Bank, San Francisco, CA, USA HUSEYIN OZTURK huseyin.ozturk@tcmb.gov.tr Central Bank of the Republic of Turkey, Ankara, Turkey
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article SINGLE VERSUS MULTIPLE BANKING RELATIONSHIPS-EVIDENCE FROM CHINESE LENDING MARKET Using Chinese firm level data for 2003–2012, this paper determines the factors that drive firms to switch from single bank loan providers to multiple bank loan providers. The results show that large firms are more likely to switch from single to multiple lending relationships. This study finds that medium size and small firms of high quality are more likely to have a single borrower relationship while large and high quality firms are more likely to have multiple bank relationships. Increasing market competition decreases the probability of single bank-firm relationship. Chinese firms, bank switching, single and multiple credit provider 01 2017 62 March The Singapore Economic Review 227 250 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500247 WEI YIN School of Economics and Management, Jiulonghu Campus, Southeast University, Jiangning District, Nanjing, China, 211189, China KENT MATTHEWS matthewsk@cardiff.ac.uk Cardiff Business School, Aberconway Building, Cardiff University, Colum Road, Cardiff CF10 3EU, United Kingdom
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article THE IMPACT OF GLOBALIZATION ON CO2 EMISSIONS IN CHINA This paper examines the environmental kuznets curve (EKC) hypothesis for China in the presence of globalization. We have applied Bayer and Hanck combined cointegration test as well as the auto regressive distributed lag (ARDL) bounds testing approach to cointegration by accommodating structural breaks in the series. The causal relationship among the variables is investigated by applying the vector error correction method (VECM) causality framework. The study covers the period of 1970–2012. The results confirm the presence of cointegration among the variables. Furthermore, the EKC hypothesis is valid in China both in short and long runs. Coal consumption increases carbon dioxide (CO2) emissions significantly. The overall index and sub-indices of globalization indicate that globalization in China is decreasing CO2 emissions. The causality results reveal that economic growth causes CO2 emissions confirming the existence of the EKC hypothesis. The feedback effect exists between coal consumption and CO2 emissions. CO2 emissions Granger causes globalization (social, economic and political). China, coal consumption, globalization, CO2 emissions 04 2017 62 September The Singapore Economic Review 929 957 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400331 MUHAMMAD SHAHBAZ www.ciitlahore.edu.pk Department of Management Sciences, COMSATS Institute of Information Technology, Lahore, Pakistan SALEHEEN KHAN saleheen.khan@mnsu.edu Department of Economics Minnesota State University, Mankato 121 Morris Hall, Mankato, MN 56002, Saskatchewan, Canada AMJAD ALI chanamjadali@yahoo.com Department of Economics, University of the Punjab, Lahore, Pakistan MITA BHATTACHARYA Mita.Bhattacharya@monash.edu Department of Economics, Monash University, Caulfield, Victoria 3145, Australia
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article EXCHANGE RATE AND US MACROECONOMY: EVIDENCE FROM THE FACTOR-AUGMENTED VECTOR AUTOREGRESSIVE MODEL This paper aims to examine the macroeffects of exchange rate movements on a wide array of real economic variables in the US in a unifying model. By employing the non-linear factor-augmented vector autoregressive (FAVAR) model with simulation methods, we could trace the effects of exchange rate appreciation and depreciation on a wide array of macroeconomic variables through the impulse response function (IRF). The main findings are: (1) In response to dollar depreciation, import price index (IMP), producer price index (PPI) and CPI increase significantly. The pass-through ratio declines along the distribution chain. (2) Merchandise trade balance, current account balance and output improve facing dollar depreciation. (3) Savings decreases in response to dollar depreciation. (4) Employment and average hourly earnings increase in times of exchange rate depreciation and vice versa. The effects on macroeconomy from appreciation and depreciation seem symmetric. Many other interesting findings are also documented. Exchange rate, macro economy, factor-augmented vector autoregression 02 2017 62 June The Singapore Economic Review 483 508 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500691 LIAN AN Coggin College of Business, University of North Florida, Jacksonville, FL 32224, USA XIAOMEI REN christina201314@hotmail.com Reliant Energy, 1201 Fannin St, Houston, TX 77002, USA HUIMIN LI hli@wcupa.edu College of Business and Public Management, West Chester University, West Chester, PA, 19383, USA JING XU n00926845@unf.edu Brooks College of Health, University of North Florida, USA
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article GLOBALIZATION AND ECONOMIC GROWTH IN CAMBODIA For the past two decades, since the political situation became stable, Cambodia has recorded a very rapid economic growth rate. In the meantime, globalization has progressed both in terms of the expansion of international trade and foreign direct investment (FDI) inflows. This paper applies small sample cointegration tests and error correction models to reveal the determinants of Cambodia’s rapid economic growth. The cointegration test results support the existence of a long-run equilibrium relationship among the variables concerned. The error-correction models show that expansion of international trade values has caused the rapid economic growth in Cambodia, regardless of the measure of international trade used. Globalization, economic growth, Cambodia 02 2017 62 June The Singapore Economic Review 363 375 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500708 JAI S. MAH jsmah@ewha.ac.kr Division of International Studies, Ewha Womans University, Seodaemun-gu, Seoul 120-750, South Korea
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article CATALYST OF BUSINESS CYCLE SYNCHRONIZATION IN EAST ASIA The essential question this paper seeks to answer is whether the business cycle co-movement in East Asia are fostered by internal bilateral trade within the region, specifically, intra-industry trade or by external forces like the influence of the world’s largest economy, namely, the United States. This paper examines the extent and robustness of the relationship between trade intensity and business cycle synchronization for nine East Asian countries in the period 1965–2008. Unlike previous studies which assume away the region’s concurrent connection with the rest of the world, in our regressions we control for both the US effect and the exchange rate co-movement in the region. We find that the coefficient estimates for intra-industry trade intensity remain robust and significant even after controlling for the US effect and the exchange rate co-movement. The findings confirm that regional intra-industry trade fosters business cycle correlations among countries in East Asia. Business cycle co-movement, trade integration, inter-industry trade, intra-industry trade, exchange rate co-movement, East Asia 03 2017 62 June The Singapore Economic Review 703 719 http://www.worldscientific.com/doi/abs/10.1142/S0217590818400064 HUI-YING SNG Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Singapore LIYU DOU ldou@princeton.edu #x2020;Department of Economics, Princeton University, Princeton, NJ 08540, USA PRADUMNA BICKRAM RANA Prana@ntu.edu.sg #x2021;S. Rajaratnam School of International Studies, Nanyang Technology University, Singapore
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article ARE MAJOR CENTRAL BANKS BLINDED BY THE ANALYTICAL ELEGANCE OF THEIR MODELS? POSSIBLE COSTS OF UNCONVENTIONAL MONETARY POLICY MEASURES We survey the possible costs of the unconventional monetary policy measures undertaken by major central banks after the outbreak of the global financial crisis in 2008. We argue that these costs are not easily discernable in the new Keynesian (NK) model, which defines a theoretical framework for monetary policy. First, the costs may result from the effects of unconventional monetary policy measures on the intensity of restructuring and the persistence of uncertainty (which increased after the outbreak of the crisis). However, neither of these processes is considered in the new Keynesian model. Second, costs may be generated not only by distortions in the choices made by economic agents but may also be a result of the decisions made by governments, particularly in terms of the fiscal deficit level. However, the new Keynesian model does not consider the effects of unconventional monetary policy measures on the quality of fiscal policy. Without carefully considering the costs, there is a significant risk that unconventional monetary policy measures could become a conventional response to recurrent crises. Unconventional monetary policy measures, new Keynesian analytical framework, restructuring, uncertainty; fiscal policy 01 2017 62 March The Singapore Economic Review 87 108 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400045 PIOTR CIŻKOWICZ Warsaw School of Economics, aleja Niepodleglości 162, 00-001, Warszawa, Poland ANDRZEJ RZOŃCAZ Warsaw School of Economics, aleja Niepodleglości 162, 00-001, Warszawa, Poland†Monetary Policy Council, Poland
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article CAPITAL REQUIREMENT AND LOAN SUPPLIERS OF THE REGIONAL BANKS IN CHINA This paper tries to check whether capital requirement policy has significant influence on bank loan growth by using a sample of regional banks in China from 2005–2008. The paper develops a simultaneous equation models to analyze the endogenous relationship between capital changes, loan growth and non-performing loans. The paper finds that during the sample years, capital condition indeed became a strict constraint for the loan growth of these banks This constraint also became more and more strict and significant across the sample years as the implementation of the policy carried on. Capital adequacy ratio, China, Loan supply, Non-performing loan, Regional banks, simulataneous equation model 04 2017 62 September The Singapore Economic Review 837 858 http://www.worldscientific.com/doi/abs/10.1142/S021759081740029X DAI JIANZHONG djz@njy.edu.cn School of Business, Nanjing University, Nanjing, Jiangsu, China
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article REAL EXCHANGE RATE AND ECONOMIC GROWTH IN EAST ASIAN COUNTRIES: THE ROLE OF FINANCIAL INTEGRATION This study examines the role of financial integration in determining the relationship between the real exchange rate (RER) and economic growth in East Asian countries. It hypothesizes that a competitive RER could play a greater role in promoting economic growth in countries with a low degree of financial integration. A growth model was specified using a RER misalignment index and its interaction terms with financial integration as explanatory variables. Different proxies for financial integration were employed to verify the interaction. The empirical results demonstrate the significance of the interaction terms and largely validate the hypothesis. This result demonstrates that a competitive RER policy is not a general solution for economic growth and its effectiveness could largely depend on a country’s degree of financial integration. Real exchange rate misalignment, economic growth, financial integration, East Asian countries 01 2017 62 March The Singapore Economic Review 163 177 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500168 PHAM VAN DAI Vietnam Institute for Economic and Policy Research, 144 Xuan Thuy Street, Cau Giay, Hanoi, Vietnam SARATH DELPACHITRA UTS Business School 14-28, Ultimo Rd, Ultimo, NSW 2007, Australia SIMON COTTRELL simon.cottrell@finders.edu.au Flinders Business School, Flinders University, Adelaide 5001, Australia
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article GLOBAL FINANCIAL INTEGRATION AND CENTRAL BANK POLICIES IN SMALL, OPEN ECONOMIES Global financial integration intensified in the period leading up to the Great Financial Crisis, as was witnessed by the growth of cross-border banking, capital flows, and gross external capital positions. For small, open economies (SOEs) that have lifted restrictions on capital movements, global financial integration seems to have undermined the scope for independent monetary policy, even if these countries had adopted a flexible exchange rate regime. Monetary policy transmission was weakened through the interest rate channel, as long-term rates in SOEs became increasingly correlated with long rates in large, advanced countries. The exchange rate channel was unstable, however, with exchange rates diverging from fundamentals as uncovered interest rate parity failed to hold over relevant periods and capital flows were volatile. These tendencies can contribute to monetary and financial instability when they interact badly with other economic and financial risks that can face small, open, and financially integrated economies. This was the case in Iceland. A fundamental rethinking of policy frameworks and tools has been underway in SOEs in the wake of the crisis. Potential policy instruments include foreign exchange intervention, enhanced prudential rules on foreign exchange risks, macroprudential tools, better alignment of fiscal and monetary policy, and even selective capital flow management tools. Capital flows, exchange rates, financial integration, financial stability, monetary policy 01 2017 62 March The Singapore Economic Review 135 146 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400069 MÁR GUDMUNDSSON mar.gudmundsson@sedlabanki.is Central Bank of Iceland, Kalkofnsvegur 1, 150 Reykjavík, Iceland
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article A PARTIAL ASEAN CUSTOMS UNION POST 2015? This paper explores the feasibility of the ASEAN Economic Community (AEC) moving forward to the next step of economic integration, i.e., towards an ASEAN Customs Union (ACU) post-2015. Effectively, the way to progress towards an ACU is by forming it among ASEAN-9 members with Singapore maintaining its existing zero tariffs against non-members, thereby creating a Partial ACU. Using applied general equilibrium modeling exercise based on GTAP, the findings suggest that there are potential net positive welfare gains to be collectively reaped by ASEAN if it moves from an AFTA to a partial ACU post-2015. However, not all ASEAN members will individually gain from such an ACU and members may need to devise a feasible mechanism wherein some member country welfare losses in an ACU can be compensated by the members who gain. The paper argues that in spite of political economy challenges due to ASEAN’s unique characteristics and diversity in the levels of economic development among members, such a Partial ACU could be considered by ASEAN leaders due to its strategic imperatives. ASEAN, customs union, common external tariffs, GTAP 03 2017 62 June The Singapore Economic Review 593 617 http://www.worldscientific.com/doi/abs/10.1142/S0217590818400027 SANCHITA BASU DAS Economic Affairs, ASEAN Studies Centre, ISEAS-Yusof Ishak Institute, Singapore RAHUL SEN rahul.sen@aut.ac.nz #x2020;School of Economics, Auckland University of Technology (AUT), Auckland, New Zealand SADHANA SRIVASTAVA sadhana.srivastava@aut.ac.nz #x2020;School of Economics, Auckland University of Technology (AUT), Auckland, New Zealand
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article MONETARY SHOCKS AND STOCK MARKET FLUCTUATIONS: WITH AN APPLICATION TO THE CHINESE STOCK MARKET Using a simple theoretical model, this paper provides a micro-foundation of applying vector auto-regressive (VAR) models to explore the effects of monetary shocks on stock market fluctuations. We analytically show that, when monetary shocks change investors’ wealth and portfolio liquidity, their degree of risk aversion associated with wealth and liquidity changes accordingly, which is then channeled to their investment decision and finally to the stock market fluctuations. Both the wealth effect and liquidity effect of monetary shocks have inter-temporal impacts on stock pricing. Therefore, monetary shocks and stock price fluctuations should be treated as a unified vector system that is auto-correlated. Based on the theoretical analysis, this paper further studies the impacts of different forms of monetary shocks on the Chinese stock market over the period 2005 to 2012 with a non-linear VAR model. We find that monetary shocks in China have significant and asymmetric effects on the stock market performance over different market cycles. Our estimation suggests that changes in monetary policy may increase stock market volatility, even though these monetary policies are often aimed at stabilizing the Chinese macro-economic activities. Monetary shocks, stock market fluctuations, MSVAR-EGARCH model 04 2017 62 September The Singapore Economic Review 875 904 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400318 BO ZHANG blogzhang@hotmail.com School of Economics, Shandong University, 27 Shanda Nanlu, Jinan, 250100, P. R. China JINYAN HU hwx@sdu.edu.cn School of Economics, Shandong University, 27 Shanda Nanlu, Jinan, 250100, P. R. China MINGMING JIANG School of Economics, Shandong University, 27 Shanda Nanlu, Jinan, 250100, P. R. China FENG GUO bryant_1108@163.com People’s Bank of China, Jinan Branch, 382 Jingqi Road, Jinan, Shandong Prov, 250021, P. R. China
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article MONETARY SHOCKS, POLICY TOOLS AND FINANCIAL FIRM STOCK RETURNS: EVIDENCE FROM THE 2008 US QUANTITATIVE EASING We extend the work of Bernanke and Kuttner [(2005). What explains the stock market’s reaction to federal reserve policy? Journal of Finance, 60, 1221–1257] by examining the impact of monetary shocks and policy tools on aggregate stock returns as well as the stock returns of financial institutions during the recent period of quantitative easing (QE) in the US. Specially, we test for the effectiveness of a major non-conventional monetary policy tool, the use of special asset purchase programs by the Federal Reserve, in impacting the financial markets. Estimates from vector auto-regression (VAR) analyses show that the impact of both unexpected and expected monetary shocks on aggregate stock returns is magnified several times during periods of QE. In addition, traditional monetary policy tools, like the Federal Funds rate, have no impact on aggregate stock returns, neither leading up to, nor during QE, while our non-conventional policy measure does appear to have some impact. In an extension of our results, we find that unexpected monetary shocks have an increased marginal impact on the stock returns of financial firms during QE. In addition, the stock returns of financial institutions have significant reactions to both changes in non-conventional monetary policy tools and announcements surrounding non-conventional policy actions. Financial crisis, monetary policy, quantitative easing 01 2017 62 March The Singapore Economic Review 27 56 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400021 ALI ASHRAF aashraf@frostburg.edu Department of Marketing & Finance, Frostburg State University, MD 21532, USA M. KABIR HASSAN #x2020;Department of Economics & Finance, University of New Orleans, New Orleans, LA 70148, USA WILLIAM J. HIPPLER whippler@laverne.edu #x2021;College of Business and Public Management, University of La Verne, La Verne, CA 91750, USA
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article BEYOND THE SECRETARIAT: ADDRESSING GOVERNANCE ISSUES IN ASEAN ECONOMIC COMMUNITY This article investigates interactions between institutional designs and values upheld by states on institutional effectiveness, for the purpose of understanding why particular institutions perform better than the others in extracting compliance and cooperation from countries. I contend that institutional effectiveness — defined as the ability to extract states’ compliance and foster cooperation — is explained by dynamics between institutional functions and actors’ governing principles. The higher the compatibility between these two factors, the higher the degree of institutions’ effectiveness, and vice versa. This argument was validated through cases of non-tariff barrier (NTB) elimination and trade facilitation under the ASEAN Economic Community framework. ASEAN, ASEAN secretariat, ASEAN economic community, governance, instituitions 03 2017 62 June The Singapore Economic Review 741 759 http://www.worldscientific.com/doi/abs/10.1142/S0217590818400088 KAEWKAMOL PITAKDUMRONGKIT iskaewkamol@ntu.edu.sg S Rajaratnam School of International Studies, National Technological University, Block S4, Level B4, 50 Nanyang Avenue, Singapore 639798, Singapore
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article RETHINKING “ASEAN CENTRALITY” IN THE REGIONAL GOVERNANCE OF EAST ASIA Of late, the principle of ASEAN centrality has come under strain as various stakeholders of East Asia’s evolving regional architecture have questioned ASEAN’s ability and will to lead the region effectively. Recent signs of disunity among ASEAN member countries and the slow progress made towards establishing the ASEAN Community have not helped ASEAN’s case either. On the other hand, even critics of ASEAN grudgingly admit that no regional arrangement in East Asia would likely succeed without ASEAN’s involvement in a leading capacity. Against that backdrop, there are at least five interrelated ways ASEAN centrality has been understood and appropriated by its devotees and detractors alike. Centrality has been defined in terms of ASEAN as leader or driver, as convener or facilitator, as hub or key node, as an agent of (proposed) progress (and not just process), and as little more than an expedient device to preserve ASEAN’s primacy in Asian regionalism and to ward off any form of architectural renovation which could lead to its marginalization. ASEAN, centrality, East Asian regionalism, regional architecture 03 2017 62 June The Singapore Economic Review 721 740 http://www.worldscientific.com/doi/abs/10.1142/S0217590818400076 SEE SENG TAN issstan@ntu.edu.sg S. Rajaratnam School of International Studies, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore
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article INTERVENTION AND SIGNALING: INTERACTION BETWEEN CENTRAL BANKS AND FX MARKETS IN AN EMERGING MARKET The paper analyzes the effectiveness of intervention and of signals on future intervention on the foreign exchange market of an emerging market (EM) facing large capital flows. A model of strategic interaction between speculators and the Central Bank shows the speculative demand curve to be downward sloping under greater uncertainty about fundamentals, which is common in EMs. Tests with Indian data confirm a stable speculative demand curve. The domestic currency appreciates when net dealer demand is positive. Intervention influences exchange rate levels and volatility. Anticipated intervention decreases dealer turnover, so expectations are stabilizing and signals on future intervention effective. FX markets, market microstructure, central bank intervention, signaling, emerging markets 01 2017 62 March The Singapore Economic Review 193 225 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500326 ASHIMA GOYAL ashima@igidr.ac.in Indira Gandhi Institute of Development Research, Gen. Vaidya Marg, Santosh Nagar, Goregaon (E), Mumbai-400 065, India
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article THE EFFECTS OF REPLACING CHINA’S TWO-EXAM COLLEGE ENTRANCE SYSTEM WITH A ONE-EXAM SYSTEM Since its inception in 1978, the China National College Entrance Exam has consisted of two different exams: the humanities exam and the science exam. In September 2014, the State Council decided to abolish the two-exam system in 2017 to adopt a single-exam system. This paper studies if and how abolishing the two-exam system would affect both humanities and science students in terms of their probabilities of being qualified for the first-tier university pool and ultimately being admitted to their respective first choice, first-tier universities. Based on micro-level student data from an anonymous province from 2004 to 2007, we find that adopting a one-exam system is likely to significantly help the humanities students in their probability of being admitted to their first choice institutions. College entrance exam, humanities exam, science exam 04 2017 62 September The Singapore Economic Review 783 796 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400264 FENG LI School of Securities and Futures, Southwestern University of Finance and Economics, Chengdu, Sichuan, P. R. China LI GAN Department of Economics, Texas A&M University, College Station, TX 77843-4228, US3National Bureau of Economic Research (NBER), 1050 Massachusetts Ave., Cambridge, MA 02138, USA
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article ISLAMIC BANKS’ MARKET POWER, STATE-OWNED BANKS, AND RAMADAN: EVIDENCE FROM INDONESIA We use a monthly dataset to analyze whether Islamic banks have greater market power compared with their conventional counterparts. Using a sample of Indonesian banks, we find that Islamic banks possess greater market power than conventional banks. This condition does not hold, however, when we compare state-owned Islamic and conventional banks. We also find some specific determinants of Islamic banks’ market power: the Ramadan holy month (positive impact), the proportion of profit-and-loss sharing in their financing (negative impact), and the presence of a Sharia board (positive impact). Interestingly, Ramadan benefits not only Islamic banks but also conventional banks. Our findings support prior literature emphasizing the role of religiosity in Islamic banks’ behavior. Lerner index, Islamic banks, ownership, religiosity, Ramadan, Indonesia 02 2019 64 March The Singapore Economic Review 423 440 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500229 TASTAFTIYAN RISFANDY tastaftiyan.risfandy@staff.uns.ac.id Faculty of Economics and Business, Universitas Sebelas Maret, Jl. Ir. Sutami 36A, Surakarta 57126, Indonesia WAHYU TRINARNINGSIH wahyutri@staff.uns.ac.id Faculty of Economics and Business, Universitas Sebelas Maret, Jl. Ir. Sutami 36A, Surakarta 57126, Indonesia HARMADI HARMADI harmadiharsowardoyo@yahoo.co.id Faculty of Economics and Business, Universitas Sebelas Maret, Jl. Ir. Sutami 36A, Surakarta 57126, Indonesia IRWAN TRINUGROHO Faculty of Economics and Business, Universitas Sebelas Maret, Jl. Ir. Sutami 36A, Surakarta 57126, Indonesia
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article ARE PRICES STICKY IN LARGE DEVELOPING ECONOMIES? AN EMPIRICAL COMPARISON OF CHINA AND INDIA By employing the factor augmented vector autoregression (FAVAR) model, this paper compares the role of macroeconomic and sector-specific factors in price movements for China and India, taking into account the features unique to developing economies. We find that fluctuations in the aggregated prices in China are more persistent than the underlying disaggregated prices. Compared to China, prices in India respond more promptly to macroeconomic and monetary policy shocks. We also show that the urban CPI in China responds more sharply than rural CPI when facing sector-specific shocks, while the opposite is valid for India. Disaggregated prices, persistence, common factors 02 2019 64 March The Singapore Economic Review 341 363 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500314 TERENCE TAI LEUNG CHONG Department of Economics and Lau Chor Tak Institute of Global, Economics and Finance, The Chinese University of Hong Kong, Sha Tin, N.T., Hong Kong2Department of International Economics and Trade, Nanjing University, P. R. China M. S. RAFIQ Asia & Pacific Department, International Monetary Fund, 700 19th Street, N. W. Washington, DC 20431, USA TINGTING JUNI ZHU tzhu@worldbank.org Trade and Competitiveness Global Practice, World Bank, Washington, DC, USA ZHANG WU zhangwu1224@gmail.com Department of Economics, The Chinese University of Hong Kong, Sha Tin, Hong Kong
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article PEACE AND TOURISM: A NEXUS? EVIDENCE FROM DEVELOPED AND DEVELOPING COUNTRIES The paper empirically examines the nexus between tourism and peace. To do so, it uses in the analysis the recently developed composite Global Peace Index. The sample employed consists of 113 countries and covers the period 2008–2014. The methodology adopted includes PVAR Granger causality tests and impulse response functions. The sample was split into two income groups to allow for the possibility that the nexus differs between developed and developing countries. Findings reported herein indicate a temporary, very short-term adverse effect on tourism as a result of worsening levels of peacefulness only for the former group of countries. A peace promoting effect by tourism is established in the case of the latter group. Panel VAR, peace, tourism 02 2019 64 March The Singapore Economic Review 323 339 http://www.worldscientific.com/doi/abs/10.1142/S0217590817470038 CHRISTOS KOLLIAS Department of Economics, University of Thessaly, Greece STEPHANOS PAPADAMOU stpapada@uth.gr Department of Economics, University of Thessaly, Greece
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article MUTUAL FUND PERFORMANCE IN DEVELOPING AND ADVANCED WORLD NETWORKS We propose a new determinant of mutual fund performance persistence. We argue that different funds have different abilities to generate persistent performance and that such heterogeneity across funds can be explained by fund manager access to market information. To justify this hypothesis, we construct a network of mutual funds based on the commonality of their stock holdings and use network features to characterize how well a fund acquires and utilizes market information. Based on a sample of U.S. equity funds from 2001 to 2014, we find that a mutual fund with more complete information is more likely to possess momentum in performance. Network, mutual fund, performance persistence, limited attention 02 2019 64 March The Singapore Economic Review 399 421 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500254 KEYI ZHANG keyiz@sfu.ca Department of Economics, Simon Fraser University, Canada RAMAZAN GENÇAY Department of Economics, Simon Fraser University, Canada
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article FOREIGN BIAS OF SOVEREIGN WEALTH FUND AND SPATIAL SPILLOVER EFFECTS This study explores a foreign bias model to examine if the degree of foreign bias of sovereign wealth fund depends on the spatial spillover effects of cultural distances. Using the spatial panel data of foreign investment by sovereign wealth fund in 2008–2014, we empirically test (1) whether the relationships between return, risk and foreign bias of sovereign wealth fund are statistically significant and (2) whether this relationship depends on the spatial spillover effects of cultural distances. The evidence strongly supports our hypotheses across six target countries (Australia, Canada, China, Germany, the United Kingdom and the United States). Sovereign wealth fund, foreign bias, risk, spatial spillover effects 02 2019 64 March The Singapore Economic Review 377 397 http://www.worldscientific.com/doi/abs/10.1142/S021759081747004X HONGXIA ZHANG lymyzhx1016@daum.net College of Economics, Shandong Normal University, 88 East Wenhua Road, Jinan, Shandong, 250014, P. R. China HEEHO KIM #x2020;Kyungpook National University, Daehak Ro 80, Bukgu, Daegu, Korea
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article AID TO AGRICULTURE AND AGGREGATE WELFARE In this paper, we focus on foreign aid-effectiveness in developing aid-recipient countries. By disaggregating total aid into sub-categories, we develop a model in which aid affects the welfare of the poor, as measured by a human development index. Our estimates (robust for different specifications) show that an increase in aid to the agricultural sector, one of our aid sub-categories, can improve the welfare of the poor, both directly and indirectly, through pro-poor public expenditure. Accordingly, more attention to the agricultural sector and reversing the decline in agricultural aid may improve the overall effectiveness of aid and achieve a sustainable transition out of poverty by increasing aggregate welfare. Foreign aid, agricultural aid, aggregate welfare, human development index, pro-poor public expenditure, poverty reduction, economic development 02 2019 64 March The Singapore Economic Review 281 300 http://www.worldscientific.com/doi/abs/10.1142/S0217590817470026 OZGUR KAYA okaya@aus.edu Department of Economics, School of Business Administration, American University of Sharjah, Sharjah 26666, UAE ILKER KAYA Department of Economics, School of Business Administration, American University of Sharjah, Sharjah 26666, UAE
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article INTERNAL MIGRATION RESTRICTIONS AND LABOR ALLOCATION IN DEVELOPING COUNTRIES We develop a simple model with endogenous rural–urban migration to analyze the implications of migration restrictions for economic welfare. The model reveals that a combination of an efficient urban bias in public service provision and internal migration restrictions can raise social welfare. Our results suggest that migration restrictions should be carefully assessed as a policy choice rather than immediately dismissed as suboptimal. However, even when restrictions raise social welfare, they increase urban households’ welfare at the expense of rural households’ welfare, creating an equity tradeoff for policy-makers to consider. Urban bias, migration restrictions, fiscal policy, efficiency, China 02 2019 64 March The Singapore Economic Review 263 279 http://www.worldscientific.com/doi/abs/10.1142/S0217590817470051 PETER RANGAZAS Economics Department, Indiana University — Purdue University Indianapolis (IUPUI), 420 University Blud, Indianapolis, IN 46202, USA XIAOBING WANG wang-xiaobing@manchester.ac.uk Economics Department, University of Manchester, Oxford Rd, Manchester M13 9PL, UK
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article LIQUIDITY AND FIRM VALUE IN AN EMERGING MARKET This paper investigates the link between stock market liquidity and firm value in an important emerging market, Vietnam. Specially, we examine this relationship using a sample of firms listed on the Ho Chi Minh City stock exchange for the period 2006–2014. We show that there is a negative relation between liquidity and firm value. This outcome is contrary to previous results for many developed countries. Further, we demonstrate that this result may be explained by differences in leverage effects and pricing-based theories, where stock liquidity influences firm performance via an illiquidity premium or mispricing. Emerging markets, firm value, financial leverage, liquidity, Vietnam 02 2019 64 March The Singapore Economic Review 365 376 http://www.worldscientific.com/doi/abs/10.1142/S0217590817470063 JONATHAN BATTEN School of Economics, Finance and Banking, University Utara Malaysia, 06010 UUM Sintok, Kedah Darul Uman, Malaysia†School of Business, East China University of Science and Technology, Shanghai, 200237, China XUAN VINH VO #x2021;University of Economics Ho Chi Minh City, Vietnam§CFVG Ho Chi Minh City, Vietnam
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article THE EFFECTS OF ENVIRONMENTAL REGULATION ON EXPORTERS’ EXITING BEHAVIOR: THE EVIDENCE FROM CHINA This study investigates the impact of stricter environmental regulation on export exit behavior of Chinese manufacturing firms from 1998 to 2009. After controlling heterogeneous firm, we find that (i) on average, the stricter regulation has not significantly caused more export exit; (ii) under stricter policy, foreign invested pure (or pollution intensive) exporters are not more likely to exit export than domestic pure (or pollution intensive) exporters; (iii) only weak evidence supports the pollution haven hypothesis for domestic pure exporters. All our robustness checks such as difference in difference analysis, different regulation measurement, and matched firm analysis show similar results. Environmental regulation, export exiting behavior, TCZ 02 2019 64 March The Singapore Economic Review 301 321 http://www.worldscientific.com/doi/abs/10.1142/S0217590817470014 DONGMEI TU tudongmei@std.uestc.edu.cn School of Management and Economics, University of Electronic Science and Technology of China, Chengdu, Sichuan 611731, P. R. China YAO LI School of Management and Economics, University of Electronic Science and Technology of China, Chengdu, Sichuan 611731, P. R. China†East Asian Institute, National University of Singapore, Singapore YONG ZENG zengy@uestc.edu.cn School of Management and Economics, University of Electronic Science and Technology of China, Chengdu, Sichuan 611731, P. R. China
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article SPECIAL ISSUE ON CURRENT ISSUES IN DEVELOPING ECONOMIES: INTRODUCTION AND EDITORIAL OVERVIEW 02 2019 64 March The Singapore Economic Review 259 261 http://www.worldscientific.com/doi/abs/10.1142/S021759081902003X MEHMET HUSEYIN BILGIN mehmet.bilgin@medeniyet.edu.tr Faculty of Political Sciences, Istanbul Medeniyet University, Istanbul, Turkey
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article LONG RANGE DEPENDENCE AND STRUCTURAL BREAKS IN THE GOLD MARKETS The price of gold and its determining factors have been studied extensively in the literature. However, there is a lack of research on structural break in the long memory of the gold markets. This paper examines the long memory properties of gold prices. In particular, it attempts to test the stability of the long range dependence of gold returns and volatility. The results suggest that long memory exists in gold returns and volatility, and that the volatility of daily gold futures returns can be characterized by a hyperbolic decaying long memory process. Three episodes of structural breaks are found. Long memory, modified R/S statistic, FIGARCH, spot gold, gold futures 02 2017 65 June The Singapore Economic Review 257 273 https://www.worldscientific.com/doi/abs/10.1142/S0217590817500096 TERENCE TAI LEUNG CHONG Department of Economics and Lau Chor Tak Institute of Global Economics and Finance, The Chinese University of Hong Kong, The People’s Republic of China2Department of International Economics and Trade, Nanjing University, P. R. China CHENXI LU luchenxi@chinamoney.com.cn Department of Economics, The Chinese University of Hong Kong, Shatin, NT, Hong Kong, SAR, The People’s Republic of China WING HONG CHAN wchan@wlu.ca Lazaridis School of Business and Economics, Wilfrid Laurier University, Canada
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article AGGLOMERATION ECONOMIES AND PERFORMANCE IN KNOWLEDGE-INTENSIVE BUSINESS SERVICES Most studies on the relationship between agglomeration economies and economic performance have focussed on regions in general or manufacturing. Very few papers have considered the impacts of agglomeration economies on the economic performance of knowledge-intensive business services (KIBS) firms. We propose a theoretical framework based on the characteristics of KIBS to study the precise channels through which KIBS firms benefit from specialization externalities and diversity externalities. The empirical evidence based on the software and IT services industry in China, a very dynamic branch of KIBS, shows that firms benefit from service diversity externalities but not specialization externalities, consistent with the idea of “nursery cities”. Agglomeration externalities, knowledge-intensive business services, firm performance 02 2019 65 May The Singapore Economic Review 457 469 https://www.worldscientific.com/doi/abs/10.1142/S0217590819500048 CUI ZHANG zzzhangcui@126.com School of Economics, Jinan University, Guangzhou 510632, P. R. China
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article THE STATUS QUO IN DISCRETE CHOICE EXPERIMENTS: IS IT RELEVANT? An issue in environmental economics is how respondents make choices in discrete choice experiments (DCEs), and whether different strategies impact on the reliability of willingness-to-pay (WTP) results. Do individuals make choices with reference to their status quo (SQ) position, or can they make simulated market choices amongst only hypothetical scenarios? This study uses a split sample to test whether the inclusion or exclusion of the SQ on a choice card in DCEs affects the WTP estimates, based on visitors’ preferences for tourist facilities at Kenyir Lake, Malaysia. The results indicated little difference between both the samples in terms of goodness-of-fit, size and significance of the attribute coefficients, and WTP estimates for the Conditional Logit (CL) and Mixed Logit (MXL) models. Status quo, discrete choice experiments, willingness-to-pay, conditional logit model, mixed logit model 02 2019 65 March The Singapore Economic Review 507 532 https://www.worldscientific.com/doi/abs/10.1142/S0217590819500036 WAN NORHIDAYAH W MOHAMAD Department of Economics, Faculty of Economics and Management, Universiti Putra Malaysia, 43400, Serdang, Selangor, Malaysia KEN WILLIS ken.willis@newcastle.ac.uk School of Architecture, Planning and Landscape, Newcastle University, Newcastle upon Tyne, NE1 7RU, United Kingdom NEIL POWE n.a.powe@newcastle.ac.uk School of Architecture, Planning and Landscape, Newcastle University, Newcastle upon Tyne, NE1 7RU, United Kingdom
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article VOLUNTARY VERIFIABLE INFORMATION DISCLOSURE AND LOAN FUNDING PERFORMANCE: EVIDENCE FROM PAIPAIDAI IN CHINA We investigate what mechanism helps to motivate the willingness of Chinese people to lend money to strangers online in the peer-to-peer (P2P) lending market. We argue that the voluntary verifiable information disclosure created by Chinese P2P practitioners helps to mitigate the asymmetric information problem and facilitates lending transactions between lenders and borrowers. We exploit a unique individual level data set obtained from Paipaidai, a leading Chinese P2P company, and evaluate the extent that the voluntary verifiable information disclosure helps to ease adverse selection problems. We find that information disclosure does increase the probability that a loan listing will be successfully funded by around 10% on average. We also find that the voluntary verifiable information disclosure helps to decrease the equilibrium interest rate by around 0.2% on average. Information asymmetry, voluntary information disclosure, verifiable information, online peer-to-peer lending 02 2018 65 March The Singapore Economic Review 419 441 https://www.worldscientific.com/doi/abs/10.1142/S0217590818500066 YING LI yili@must.edu.mo Department of Accounting and Finance, Macau University of Science and Technology, Macau JACKY SO #x2020;Department of Finance and Business Economics, University of Macau, Macau JIA YUAN jiayuan@umac.mo #x2020;Department of Finance and Business Economics, University of Macau, Macau
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article DOES GOLD INVESTMENT OFFER PROTECTION AGAINST STOCK MARKET LOSSES? EVIDENCE FROM FIVE COUNTRIES This study aims to analyze the characteristics of gold as a diversifier, a hedge or a safe haven against the stock market collapse in five countries. We propose the standard and quantile techniques in the volatility models, with the time-varying conditional variance of the regression residuals based on the TGARCH specifications. Gold exhibits considerable evidence of the strong hedge in India and the US and diversified role in China. With regards to its role as a safe haven, gold retains its status as a key investment particularly in a country where gold has a preeminent cultural role, i.e., India, as well as in the US and the UK. On the contrary, gold only plays a minor role in emerging markets like in Malaysia. Therefore, investors in India and the US can use gold to protect against losses in the stock market at all times, whereas in the UK, gold is only viewed as a profitable asset to own during the stock market collapse. Contrariwise, Chinese investors should hold a well-diversified portfolio to earn sustainable returns and offer protection against the stock market collapse. We conclude that the recent worldwide financial crises have increased the investment demand for gold over the last 17 years at least. Gold, diversifier, hedge, safe haven, financial turmoil 02 2019 65 August The Singapore Economic Review 275 301 https://www.worldscientific.com/doi/abs/10.1142/S021759081950036X MOHD FAHMI GHAZALI fahmi@ums.edu.my Labuan Faculty of International Finance, Universiti Malaysia Sabah, 87000 Federal Territory of Labuan, Malaysia HOOI HOOI LEAN #x2020;Economics Program, School of Social Sciences, Universiti Sains Malaysia, 11800 Penang, Malaysia ZAKARIA BAHARI bzak@usm.my #x2021;Centre for Islamic Development Management (ISDEV), Universiti Sains Malaysia, Malaysia
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article FINANCIAL STABILITY AND THE ROLE OF ECONOMIC AND FINANCIAL INTEGRATION IN SOUTH ASIA: EVIDENCE FROM TIME-SERIES DATA Using the aggregate financial stability index (AFSI) which measures the gradual progression and changes in financial market stability, this paper empirically evaluates the impact of financial and economic integration on financial stability in South Asian countries using time-series data for the period 1980–2012. Auto-regressive distributed lag (ARDL) Bounds testing approach to cointegration is applied to ensure long-run relationship between variables. Bound F-test results confirm the long-run relationship between selected variables. The estimated results show that economic and financial integration has exerted a significant negative effect on financial stability in long run. Financial stability, economic integration, financial integration, AFSI, South Asia 02 2017 65 March The Singapore Economic Review 303 333 https://www.worldscientific.com/doi/abs/10.1142/S0217590817500011 SAMIA NASREEN Government College Women University Faisalabad, Faisalabad, Punjab, Pakistan SOFIA ANWAR sofia_eco@gcuf.edu.pk Government College University Faisalabad, Kotwali Rd, Faisalabad 38000, Pakistan
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article THE CAPITAL FLIGHT FROM INDIA: A CASE OF MISSING WOODS FOR TREES? The surge of capital inflow into emerging markets since the 1990s has attracted much research, but capital flight from these economies has received scant attention in research and policy debates, despite its severe implications. The present study attempts to address the issue of capital flight and gap in the literature. Our estimates show a steep increase in the magnitude of capital flight from India since 2003, and empirical results suggest that the significant determinants of capital flight are GDP and exchange rate. We find that higher interest rates discourage capital flight; while keeping interest rates high may partially restrict capital flight, it is infeasible, and may impede future economic growth. Our findings suggest the need for interventions and changes in the current policy framework to improve investment opportunities for residents and arrest capital flight. Capital flight, unrecorded capital flows, residual method, ARDL, emerging markets, India, financial liberalization 02 2017 65 January The Singapore Economic Review 365 383 https://www.worldscientific.com/doi/abs/10.1142/S0217590816500429 ASHIS KUMAR PRADHAN ashiskumarpradhan@iitkgp.ac.in Department of Humanities and Social Sciences, Indian Institute of Technology Kharagpur, Kharagpur – 721302. India GOURISHANKAR S. HIREMATH Department of Humanities and Social Sciences, Indian Institute of Technology Kharagpur, Kharagpur – 721302. India
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article BEQUEST AND MORAL HAZARD IN FAMILY Observed bequest patterns of widely diverse societies are polarized into unigeniture (giving all to one child) and equigeniture (dividing bequests equally). Over time, inheritance custom evolves from unigeniture to equigeniture. To explain these two observations, this paper proposes a model of bequest behavior that a parent cares welfare of his children while he wants them to expend costly and unverifiable efforts for family. All the stable equilibrium inheritance customs comprise unigeniture and equigeniture only, being consistent with the observed polarization. Moreover, a rise in the productivity of efforts for family can cause the evolution to equigeniture from unigeniture. Unigeniture, equigeniture, bequest motive 02 2019 65 March The Singapore Economic Review 533 550 https://www.worldscientific.com/doi/abs/10.1142/S0217590819500127 INSOOK LEE islee@phbs.pku.edu.cn Peking University HSBC Business School, University Town, Nanshan District, Shenzhen 518055, P. R. China
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article EVALUATION OF COMPLEMENTARITY EFFECT OF INNOVATION POLICIES: VENTURE CERTIFICATION AND INNO-BIZ CERTIFICATION IN KOREA In this paper, we analyze effects of overlapping policy support. Specifically, we examine two Korean policies related to innovative SMEs, Venture certification and Inno-Biz certification, which have similar goals, targets and benefits. Methodologically, we use the difference in difference method with the propensity score matching method to reduce the selection bias that can occur in policy impact assessment studies. Our results show that in this case of overlapping homogeneous policies, Venture certification and Inno-Biz certification, the complementarity effect is negative. That is, simultaneously supporting these two policies produces no synergy. This result implies that rather than offering multiple supports through double certification of a single firm, offering Inno-Bizcertification to non-supported firms could better increase performance. In other words, policy makers have to consider overlapping policy support before implementing any new policies, and they should not support homogeneous policies for a single group of firms. Government support, certification policy, complementarity effect, selection bias, propensity score matching 02 2017 65 February The Singapore Economic Review 385 402 https://www.worldscientific.com/doi/abs/10.1142/S0217590816500430 SEUNGHWAN OH ohsh@stepi.re.kr Science and Technology Policy Institute (STEPI), 370, Sicheong-daero, Sejong-si, 30147, Republic of Korea DONGNYOK SHIM #x2020;Technology Management, Economics and Policy Program (TEMEP), Institute of Engineering Research, Seoul National University, 1, Gwanak-ro, Gwanak-gu, Seoul, 08826, Republic of Korea DAEHO LEE daeho.lee@skku.edu #x2021;Department of Interaction Science, Sungkyunkwan University, 25-2, Sungkyunkwan-ro, Jongno-gu, Seoul, 03063, Republic of Korea
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article THE REGIONAL ASYMMETRIC RESPONSES TO CENTRAL BANK’S MONETARY POLICY IN PAKISTAN Literature on differential impacts of monetary policy across regions discusses several factors which may be responsible for asymmetrical effects of monetary policy. As far as Pakistan is concerned, limited evidence is available for both mechanism and impact of monetary policy. In this study, we examine asymmetries in responses of real output of provinces to central bank’s monetary policy in Pakistan. We also attempt to explore the potential sources of these asymmetries. The Structural Vector Autoregression (SVAR) model is employed to examine each province’s response to unanticipated monetary policy shocks. The generalized impulse response functions from SVAR reveal that monetary policy has varied effects across the provinces. In two regions — Punjab and Sindh — monetary policy shocks cause variations in provincial outputs in similar ways. These responses are also comparable to the response of national output to changes in monetary policy but with considerable differences in magnitudes. While other provinces Khyber Pakhtunkhawa (KPK) and Balochistan show less sensitivity to unanticipated change in monetary policy. The less sensitive regions exhibit dissimilar responses both in timings and magnitudes. These dissimilarities in regional responses draw attention to devise an effective national monetary policy that might consider the cross-provincial differences in responses to central monetary policy in Pakistan. Monetary policy, asymmetries in effects, provincial outputs, Pakistan 02 2017 65 March The Singapore Economic Review 351 364 https://www.worldscientific.com/doi/abs/10.1142/S0217590817500035 NASEEM FARAZ Department of Economics, Clark University, Worchester 01610, MA, USA†Pakistan Institute of Development Economics (PIDE), Quaid-i-Azman University Campus, Islamabad, Pakistan ZAINAB IFTIKHAR #x2020;Pakistan Institute of Development Economics (PIDE), Quaid-i-Azman University Campus, Islamabad, Pakistan‡Université Catholique de Louvain, 1, Place de l’Université, B-1348 Louvain-la-Neuve, Belgium
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article REAL WAGE STAGNANCY: EVIDENCE FROM TAIWAN This study examines how and why the gap between economic growth and real wage growth in Taiwan is widening, a phenomenon that contrasts sharply with South Korea, which has a similar industrial structure to that of Taiwan. We empirically demonstrate that, despite the continued growth of labor productivity, the benefits from economic growth allocated to workers have been falling, and that this process has accelerated following the 2008–2009 financial crisis. The labor market institutional effect contributed partially to the problem. Workers’ purchasing power, measured by the real consumption wage rate, has been declining for a relatively long period, implying significant deterioration of terms-of-trade, and cutting real wage growth by as much as 2.23% per year. The terms-of-trade effect is particularly prominent in the manufacturing sector, which is highly export-oriented. Moreover, we found cash wages to be very sensitive to the rise in the rate of unemployment, and to the changes in output performance of the industry in which the workers are employed. The latter factor significantly reduced the cash wages paid to workers in the manufacturing sector, which highlighted the waning of workers’ bargaining power regarding wages, as well as the negative impact of globalization on the labor market. We therefore conclude that the deterioration of terms-of-trade, increases in the aggregate unemployment rate, the adverse globalization effect and the institutional effect might be the main driving forces for real wage stagnancy in Taiwan. Real wage stagnancy, labor productivity, nonwage labor cost, Taiwan, South Korea 02 2017 65 April The Singapore Economic Review 485 506 https://www.worldscientific.com/doi/abs/10.1142/S0217590816500417 LI-HSUAN HUANG Department of Economics, National Central University, 300 Chungda Road, Chungli 320, Taiwan HSIN-YI HUANG juliahuang0828@gmail.com Department of Economics, National Central University, 300 Chungda Road, Chungli 320, Taiwan
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article THE IMPACT OF DEMOGRAPHIC CHANGE ON ECONOMIC GROWTH This paper evaluates the impact of demographic change on the economic growth of OECD and non-OECD countries. An annual panel dataset of 71 countries, consisting of 27 advanced economies and 44 emerging economies over the period of 1981–2014, is used. Two types of regression models (panel regression model and panel continuous threshold model) including several demographic variables are used to investigate the effects of demographic structure. The results of this study show the significant difference of the impact of demographic transition on the economic growth of OECD and non-OECD economies. Demographic change, economic growth, nonlinearity, threshold 02 2019 65 August The Singapore Economic Review 471 484 https://www.worldscientific.com/doi/abs/10.1142/S0217590819500401 DIEU THANH LE jane.dieulethanh@gmail.com Economic Division, Embassy of the Republic of Korea, Hanoi, Vietnam HAIL PARK Department of International Business and Trade, Kyung Hee University, Seoul, Republic of Korea
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article FRAGMENTATION, SKILL FORMATION AND INTERNATIONAL CAPITAL MOBILITY During the last few decades an important feature of the on-going process of globalization is production fragmentation. Owing to the growing importance of international fragmentation of production processes the composition of international trade has indeed altered in recent years. Here we want to focus on production fragmentation which actually implies that the requirement for the intermediate goods can be met by producing it domestically or it can be imported from abroad. In this paper we want to examine the probable causes for a developing economy to switchover from a regime of no fragmentation to fragmentation. Here the impact of such a regime change has also been examined on wage inequality as well as on the incidence of skill formation within the economy. Moreover, we have examined here the impact of perfect international capital mobility on the economy in the context of regime change between fragmentation and no fragmentation. Production fragmentation, skilled-unskilled wage gap, skill formation, liberalization, international capital mobility 02 2017 65 March The Singapore Economic Review 335 350 https://www.worldscientific.com/doi/abs/10.1142/S0217590817500023 SUDESHNA MITRA Department of Economics, St. Paul’s C. M. College, 33/1, Raja Rammohan Roy Sarani, Kolkata-09, India KAUSIK GUPTA kausik2k1@rediffmail.com Department of Economics, University of Calcutta, 56A B. T. Road, Kolkata-700050, India
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article CONTRACTING-OUT OF HOUSEHOLD WASTE COLLECTION SERVICES IN JAPAN We first report three empirical findings from our survey on the contracting-out of municipal waste collection services in Japan: (1) the rate of contracting-out and the contract price are inversely related, (2) this inverse relationship tapers out as the contracting rate becomes sufficiently high, and the contract price even tends to go up as the contracting rate approaches 100% and (3) there is a significant disparity in the contracting rates between the eastern and western parts of Japan. In order to account for these observations, we then set up a simple analytical model and examine its implications. Also, we discuss the issues that a potential hold-up situation could give rise to when the services are completely contracted out to private firms. Waste collection, contracting-out, contract price, hold-up 02 2017 65 May The Singapore Economic Review 443 455 https://www.worldscientific.com/doi/abs/10.1142/S0217590817410041 NORIMICHI MATSUEDA School of Economics, Kwansei Gakuin University, 1-1-155 Uegahara Nishinomiya, Hyogo 662-8501, Japan JUN’ICHI MIKI j_miki@koeki-u.ac.jp #x2020;Faculty of Humanities and Social Sciences, Tohoku University of Community Service and Science, 3-5-1 Iimoriyama, Sakata, Yamagata 998-8580, Japan
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article STUDY ON CHINA’S ECONOMIC DEVELOPMENT FROM THE PERSPECTIVE OF STRONG SUSTAINABILITY Theoretical researchers and policy makers have been using both traditional production factors and relatively new production factors to explain the different growth rates in different countries and regions. However, as pollution becomes more serious, the ecological environment gradually becomes an important part of the national (regional) development strategy. Few scholars have laid their hands on energy and environmental factors in the study of China’s economic growth. On the contrary, they have frequently considered physical and human capital accumulation as the main sources of China’s economic growth. Thus, strong sustainability should attract more attention from researchers. This article attempts to shed light on the sources of China’s economy from the perspective of strong sustainability. Employing a Cobb–Douglas production function, this paper introduces environment pollution, as a key natural capital, and energy consumption into the economic accounting framework. We also introduce government intervention, financial structure, industrial structure and degree of openness into the framework of total factor productivity to examine the effectiveness of the Chinese government’s direct and indirect participation in the markets. Then, we use the long-term growth accounting equation of China to decompose its economic growth and to analyze the decomposition results dynamically. In addition, this paper analyzes the short-term change of China’s economic growth by using a VAR model. The results revealed three facts. First, we find an inverted U-shaped relationship between the degree of openness and the industrial structure and their marginal growth effects, a U-shaped relationship between the financial structure and its marginal growth effect and a negative relationship between the government intervention and gross domestic product growth. Secondly, China’s economic development approach was still extensive and unsustainable, and it should follow a model that relies more on total factor productivity and relies less on ecological factors. China’s economic growth mainly depended on physical capital and energy consumption, and environment pollution was also a necessary byproduct of economic growth, however, the contribution of human capital and total factor productivity were small. Last but not the least, in the short term, the total factor productivity was an important source of China’s economic growth. Total factor productivity, economic growth, ecological loss, strong sustainability 01 2018 65 April The Singapore Economic Review 161 192 https://www.worldscientific.com/doi/abs/10.1142/S021759081746002X WANPING YANG wanpingyang@mail.xjtu.edu.cn School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710061, P. R. China JINKAI ZHAO School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710061, P. R. China
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article DEMOCRACY AND GROWTH: A DYNAMIC PANEL DATA STUDY In this paper, we investigate the idea whether democracy has a direct effect on economic growth. We use a system GMM framework that allows us to model the dynamic aspects of the growth process and control for the endogenous nature of many explanatory variables. In contrast to the growth effects of institutions, regime stability, openness, geography and macro-economic policy variables, we find that measures of democracy matter little, if at all, for the economic growth process. Democracy, growth, institutions, openness, dynamic panel 01 2018 65 August The Singapore Economic Review 41 80 https://www.worldscientific.com/doi/abs/10.1142/S0217590817470075 JEFFRY A. JACOB j-jacob@bethel.edu Department of Business and Economics, Bethel University, 3900 Bethel Dr., St. Paul, MN 55112, USA THOMAS OSANG Department of Economics, Southern Methodist University, 3300 Dyer St., Dallas, TX 75275, USA
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article CORRUPTION AND INNOVATION: LINEAR AND NONLINEAR INVESTIGATIONS OF OECD COUNTRIES Employing annual data over the period 1996–2013 for 29 OECD countries, this paper explores the impact of corruption on domestic innovative activity, measured by the number of patent and trademark applications, via a linear panel fixed effect model and a nonlinear panel smooth transition regression with all lagged explanatory variables as instrumental variables and under the consideration of potential endogeneity biases. The results indicate several important findings. First, there exists a strong threshold effect between the control of corruption and levels of innovative activity across nations. Second, we note that corruption only has a substantial positive impact on innovation when it is over the threshold level, but not when a country has a seriously corrupt government with low bureaucratic quality, no matter for patent or trademark applications. Hence, heterogeneous beliefs about low transition speed show that OECD countries may not take actions instantly and identically to pursue better bureaucratic quality. Finally, we discover that an improvement over corruption presents greater impacts on patent applications than on trademark applications. Taken together, we confirm that corruption plays a fundamental role in determining innovation activities in OECD countries, offering meaningful policy implications for those policymakers and industries in accordance with our findings. Innovation, patent, trademark, corruption, OECD countries 01 2018 65 July The Singapore Economic Review 103 129 https://www.worldscientific.com/doi/abs/10.1142/S0217590818500273 JUN WEN wjun1978@163.com School of Economics and Finance, Xi’an Jiaotong University, Shaanxi, P. R. China MINGBO ZHENG mingbo1992@126.com #x2020;Shih Chien University, Kaohsiung, Taiwan GEN-FU FENG fgf@mail.xjtu.edu.cn School of Economics and Finance, Xi’an Jiaotong University, Shaanxi, P. R. China SUNWU WINFRED CHEN winfred@gz.usc.edu.cn #x2020;Shih Chien University, Kaohsiung, Taiwan CHUN-PING CHANG #x2020;Shih Chien University, Kaohsiung, Taiwan
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article A FRAMEWORK FOR ANALYZING THE IMPACT OF FISCAL DECENTRALIZATION ON MACROECONOMIC PERFORMANCE, GOVERNANCE AND ECONOMIC GROWTH This study analyzes the direct impact of fiscal decentralization on economic growth and broadens the scope of assessment by examining the indirect impact of fiscal decentralization on economic growth via its impact on macroeconomic performance and quality of governance institutions. The study uses a panel data set of 53 developed and developing countries over the period of 1996–2014. The empirical findings show that the indirect impact, rather than the direct impact of fiscal decentralization on growth, that is, the effect of decentralization on economic growth through its effect on macroeconomic performance and quality of governance institutions significantly matters for growth. Further, the results show that fiscal decentralization is growth enhancing when supported by stable macroeconomic performance in terms of stability in prices, budget deficit and exchange rate. The effect of fiscal decentralization on per capita gross domestic product (GDP) growth rate is positive when it is complemented by sound institutional structure in terms of rule of law, low corruption in government institutions, high-bureaucratic quality and democratic accountability. All these conclusions hold for developed as well as for developing countries. Fiscal decentralization, growth, macroeconomic performance, governance, public policy 01 2018 65 May The Singapore Economic Review 3 39 https://www.worldscientific.com/doi/abs/10.1142/S0217590818500194 UMAIMA ARIF Economics Department, Quaid-i-Azam University Islamabad, Islamabad, Pakistan EATZAZ AHMAD eatzaz@qau.edu.pk Economics Department, Quaid-i-Azam University Islamabad, Islamabad, Pakistan
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article THE INFLUENCE OF RELIGION AND SOCIAL INEQUALITY ON FINANCIAL INCLUSION We examined the influence of religious and social inequality factors on financial inclusion based on the fact that Muslim countries mostly have the lower level of financial inclusion around the globe. To do that, first, we calculated the financial inclusion indices (FIIs) of 152 countries including 48 OIC countries. Then, we examined the effect of religious and social inequality factors on financial inclusion using ordinary least square (OLS). Subsequently, we examined the Moran’s-I test in the OLS models and estimated spatial autocorrelation (SAR) models and spatial error model (SEM) in order to include the spatial correlation effect on the estimate models. Through these estimations, we found that the religious factors, such as whether OIC or non-OIC, religious diversity and Muslim population, have obvious effects on determination of financial inclusion. In addition, we also verified social inequality factors, such as gender inequality, education level and social opportunity level, work as determinants of financial inclusion. Moreover, we found the evidence that financial inclusion itself and unknown factors of neighbor countries have effects on financial inclusion by identifying the spatial effects of analysis models. Financial inclusion index, religious factors, social inequality factors, spatial autoregressive model, spatial error model 01 2018 65 July The Singapore Economic Review 193 216 https://www.worldscientific.com/doi/abs/10.1142/S0217590817460031 DAI-WON KIM dw2613@gmail.com Incheon Metropolitan City Development Corporation, 42, Inju-daero 914 beon-gil, Nandong-gu, Incheon, 21591, South Korea JUNG-SUK YU jsyu@dankook.ac.kr #x2020;School of Urban Planning & Real Estate Studies, College of Social Science, Dankook University, 152, Jukjeon-ro, Suji-gu, Yongin-si, Gyeonggi-do, 16890, South Korea M. KABIR HASSAN #x2021;Department of Economics and Finance, College of Business Administration, University of New Orleans, LA 70148, USA
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article TAX STRUCTURE AND ECONOMIC GROWTH: DO DIFFERENCES IN INCOME LEVEL AND GOVERNMENT EFFECTIVENESS MATTER? We examine the effects of both overall tax rate and changes in tax structure on growth by using data for more than 100 high, middle, and low income countries by employing the GMM estimation methods. In general, our results do not support the argument that overall tax rates or changes in tax structure have a significant effect on growth. However, we find that a shift from income to consumption and property taxes leads to a positive and significant effect on growth rate while a shift from consumption and property taxes to income taxes has a positive effect for low-income countries. Taxation, growth, tax structure, government effectiveness, dynamic panel data 01 2018 65 May The Singapore Economic Review 217 237 https://www.worldscientific.com/doi/abs/10.1142/S0217590818500170 HALIT YANIKKAYA Department of Economics, Gebze Technical University, 41400, Gebze/Kocaeli, Turkey TANER TURAN tturan@gtu.edu.tr Department of Economics, Gebze Technical University, 41400, Gebze/Kocaeli, Turkey
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article ASSESSING THE DOUBLE-EDGED SWORD OF USING IMITATION AS A STEPPING STONE TO INNOVATION: A CASE OF MALAYSIA’S K-ECONOMY PUZZLE Policy prescription for middle-income economies struggling to achieve innovation-driven growth has often been rapid promotion of skills-driven industrial transformation. However, Malaysia, an upper middle-income economy aspiring to achieve innovation-led growth, presents a near decade of K-Economy Growth Puzzle in the 2000s, when its aggressive skills-driven transformation initiatives had somehow resulted in decline to a lower output growth path despite successful expansion in skilled labor and innovation production. We present a continuous time growth model with industrial transformation based on an existing model advocating rapid skills transformation. By solving the model as a two-point boundary value problem, coupled with country-specific calibration strategies, vastly different results are obtained for this middle-income economy with fixed, imitation-heavy production structure. There may be a double-edged sword to using imitation as stepping stone to innovation, which then requires a much different industrial transformation approach. By examining transformation with different labor market configurations in a stylized manner using numerical experiments, we find that a delicate reordering of labor incentives would have been enough to help Malaysia navigating through the output growth–skills transformation trade-off. Growth puzzle, imitation, industrial transformation, human capital 01 2017 65 November The Singapore Economic Review 131 159 https://www.worldscientific.com/doi/abs/10.1142/S0217590817460018 KING YOONG LIM k.y.lim3@lancaster.ac.uk Department of Economics, Lancaster University Management School, Bailrigg, Lancaster LA1 4YX, UK
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article THE ROLE OF EDUCATED LEADERS IN ECONOMIC GROWTH AND DEVELOPMENT: EVIDENCE FROM CENTRAL AFRICAN REPUBLIC AND SINGAPORE This paper postulates that highly educated leaders matter in economic growth and development and that this is one of the fundamental causes of the differences in income between countries. To verify this assertion, we examine Central African Republic and Singapore within the neoclassical growth model that incorporates educational attainments of leaders as the functionally relevant explanatory variable. We found the mean years of schooling of educated leaders to be statistically and significantly different in both countries, but more importantly, educational attainments of leaders have a positive and statistically significant effect on economic growth in Singapore, but negative in Central African Republic. Educated leaders, economic growth, development, Central African Republic, Singapore, policy choices 01 2018 65 November The Singapore Economic Review 81 102 https://www.worldscientific.com/doi/abs/10.1142/S0217590818500364 OLUWOLE OWOYE Department of Social Sciences/Economics, Western Connecticut State University, Danbury, CT 06810, USA OLUGBENGA A. ONAFOWORA onafowor@susqu.edu Department of Economics, Susquehanna University, Selinsgrove, PA 17870, USA
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article THE IMPACTS OF BIASED RESOURCE ALLOCATION ON THE EFFECTIVENESS OF OFFICIAL DEVELOPMENT ASSISTANCE Many developing countries are receiving official development assistance (ODA). Whether ODA is beneficial or harmful to the receiving country is controversial in the literature. This paper analyzes this issue from a new angle by adopting the framework of competitiveness which allows us to link resource allocation with economic growth. Under this framework, we point out that the mechanism of resource allocation influences the effectiveness of ODA on economic growth. By applying data envelopment analysis (DEA) to competitiveness, we capture the effects of inefficient and biased allocation of resources on ODA. The data confirm the co-existence of positive and negative impacts of ODA. Finally, we conclude that current ODA is not efficient in helping most of the receiving countries. Official development assistance, data envelopment analysis, endowment effect, misallocation effect, biased effect 01 2018 65 July The Singapore Economic Review 239 256 https://www.worldscientific.com/doi/abs/10.1142/S0217590818500285 SUNG-KO LI Department of Economics, Hong Kong Baptist University, The Wing Lung Bank Building for Business Studies, 34 Renfrew Road, Kowloon Tong, Kowloon, Hong Kong, P. R. China CHUN-KEI TSANG Department of Economics, Hong Kong Baptist University, Hong Kong, P. R. China3Business, Economic and Public Policy Research Centre, Hong Kong Shue Yan University, Hong Kong, P. R. China
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article BOOK REVIEW: "The New Economic Policy in Malaysia: Affirmative Action, Ethnic Inequalities and Social Justice" No abstract received. 02 2015 60 1580001 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590815800016 GUANIE LIM National University of Singapore, Singapore
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article JAPAN'S DEFLATIONARY HANGOVER: WAGE STAGNATION AND THE SYNDROME OF THE EVER-WEAKER YEN Japan still suffers a deflationary hangover from the great episodic yen appreciations of the 1980s into the mid-1990s. Money wages are still declining, and short-term interest rates remain trapped near zero. After Japan's "lost decade" from 1992 to 2002, however, output has begun to grow modestly — but through export expansion and associated investment rather than domestic consumption. This export-led growth has been helped by a passive real depreciation of the yen: prices and wages in Europe and the United States have grown, and are growing, faster than in Japan. As the yen becomes weaker in real terms, American and European industrialists and politicians are again complaining that the yen is too weak (Japan bashing II?) — although the pressure on Japan to appreciate is not yet as great as it now is on China.But Japan is trapped. If it does appreciate the yen, its fragile economy will be driven back into outright deflation. The only solution is to stabilize the nominal dollar value of the yen over the long-term, but this step will not necessarily be immediately effective in placating foreign mercantilists. Under foreign pressure to appreciate the renminbi, China, with its booming economy, is now in a similar position to Japan's of more than 20 years ago. Policymakers in China should resist pressure to go down the same deflationary road as Japan. Japan, exchange rate risk, deflation 03 2007 52 The Singapore Economic Review 309 334 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002749 RONALD MCKINNON mckinnon@stanford.edu Economics Department, Landau Economics Building, Stanford University, Stanford, California 94305-6072, USA
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article TOURISM AND GROWTH IN SINGAPORE: NEW EXTENSION FROM BOUNDS TEST TO LEVEL RELATIONSHIPS AND CONDITIONAL GRANGER CAUSALITY TESTS This paper empirically investigates the tourism-led growth (TLG) hypothesis in the case of Singapore by employing the bounds test to cointegration, error correction models and Granger causality tests using annual data from 1960 to 2007. Results confirm the existence of long-term equilibrium relationship between international tourism and economic growth in the case of Singapore; real income growth converges to its long-term equilibrium level significantly by 51.4% in the TLG model. The major finding of this study is that the TLG hypothesis is confirmed for the Singaporean economy in the long-term as a result of conditional Granger causality tests. Tourism-led growth, economic growth, bounds test, conditional causality, Singapore 03 2011 56 The Singapore Economic Review 441 453 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004365 SALIH TURAN KATIRCIOǦLU salihk@emu.edu.tr Department of Banking and Finance, Eastern Mediterranean University, P.O. Box 95, Famagusta, North Cyprus, Via Mersin 10, Turkey
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article ARE ISLAMIC BANKS SUBJECT TO DEPOSITOR DISCIPLINE? We look at market discipline in the Islamic deposit market of Turkey for the period after the 2000 crisis. We find support for quantity based disciplining of Islamic banks through the capital ratio. The evidence for price disciplining is, however, less convincing. In addition, we also look at the effect of the deposit insurance reform in which the dual deposit insurance was revised and all banks were put under the same deposit insurance company in December 2005. We observe that the reform increased quantity based disciplining in the Turkish Islamic deposit market. Depositor discipline, Islamic banks, G23, G28, O52 01 2015 60 1550007 The Singapore Economic Review 1 16 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500071 AHMET F. AYSAN ahmet.aysan@tcmb.gov.tr Central Bank of the Republic of Turkey, Istiklal Caddesi 10, Ulus, 06100 Ankara, Turkey MUSTAFA DISLI mustafa.disli@ugent.be Department of General Economics, Ghent University, Tweekerkenstraat 2, 9000 Gent, Belgium HUSEYIN OZTURK huseyin.ozturk@hazine.gov.tr The Undersecretariat of the Turkish Treasury, İnonu Bulvarı 36, Emek, 06510, Ankara, Turkey IBRAHIM M. TURHAN ibrahim.turhan@borsaistanbul.com Borsa Istanbul, Resitpasa Mahallesi, Tuncay Artun Caddesi, Emirgan, 34467 İstanbul, Turkey
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article DETERMINANTS OF LABOR-INTENSIVE EXPORTS BY THE DEVELOPING COUNTRIES: A CROSS COUNTRY ANALYSIS It is widely acknowledged that the export-oriented garment and textile industries have been playing important role on the overall economic development in developing countries. However, the performance of the developing countries in exporting garment and textiles is in fact, highly heterogeneous. While some of the developing countries such as, China, Vietnam and Bangladesh have been highly successful in exporting highly labor-intensive garment and textiles products, not all of the developing countries have been equally successful in doing so. Using cross-country panel data, an attempt has been made in this paper to ascertain the importance of infrastructure and business environment in explaining the heterogeneous performance in exporting garment and textiles by the developing countries. The paper empirically demonstrates that in addition to the availability of cheap labor, the availability of basic infrastructure, and a business friendly environment significantly affect the export of labor-intensive garment and textiles by the developing countries. The paper, thus, suggests to invest on infrastructure, and to develop a business friendly environment in developing countries to strongly link the growth potentials of labor-intensive products and economic growth. Developing country, garment and textile export, infrastructure, business environment, L67, F14, O14 05 2014 59 1450043 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S021759081450043X KHONDOKER ABDUL MOTTALEB k.mottaleb@cgiar.org Cereal Systems Initiatives for South Asia-Mechanization and Irrigation (CSISA-MI), International Maize and Wheat Improvement Center (CIMMYT), Road 53, House 10B, Gulshan-2, Dhaka, Bangladesh KALIAPPA P. KALIRAJAN Kaliappa.kalirajan@anu.edu.au Crawford School of Economics and Government, Crawford Building, Lennox Crossing, Building #132, Canberra ACT 0200, The Australian National University, Australia
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article WAGE SPILLOVERS IN INDIAN MANUFACTURING The presence of foreign firms might lead to movement of skilled labor from domestic firms. To prevent such movement, domestic firms could increase their wages. Also, productivity spillovers from foreign firms may increase the productivity of domestic firms and possibly the wages given in domestic firms. In this paper, we try to answer whether the wages offered by domestic firms to their labor is affected by the presence of foreign firms. We carry out our analysis for an unbalanced firm-level panel dataset for 6 two-digit industries in Indian manufacturing. We find some evidence for positive wage spillover in three industries. Domestic firms, foreign firms, wage spillovers, F23, J31 01 2012 57 1250006 The Singapore Economic Review 1 19 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500063 G. CHIDAMBARAN IYER chidambaran.iyer@gmail.com School of Social Sciences, National Institute of Advanced Studies, Indian Institute of Science Campus, Bangalore 560012, India
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article BOOK REVIEW: "International Regulatory Rivalry in Open Economies: The Impact of Deregulation on the US and UK Financial Markets", by Doha M. Abdelhamid No abstract received. 02 2005 50 The Singapore Economic Review 285 287 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002013 VAN LONG NGO McGill University, Montreal, Canada; National University of Singapore, Singapore
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article DIFFERENCES IN DECLINE: QUANTILE REGRESSION OF MALE–FEMALE EARNINGS DIFFERENTIAL IN MALAYSIA Semiparametric estimation has gained significant attention in the study of wage inequality between men and women in recent years. By extending the wage gap at the mean towards the entire wage distribution using quantile regression, it enables researchers to ascertain the direction and the proportions of differences in characteristics and returns to these characteristics at different parts of the wage distribution. This line of research has been prominent in western society but has not yet been explored in the context of the Malaysian labor market. To fill the gap, this paper examines the gender earnings gap in Malaysia between 1994 and 2004 using Malaysia Population and Family Survey data. The gender earnings differential, as measured by the log percentage point is 53% in 1994. The difference reduces to 45% for a restricted sample and 42% for the unrestricted sample in 2004. However, it was found that the gender wage gap reduces as we move up the wage distribution. This suggests that women suffer from a sticky floor effect, i.e., the gender wage gap is bigger at the bottom of distribution. More importantly, the observed gender wage differentials do not reflect differences in the productive characteristics of the workers. In fact, it accounts for very little, if any, of the gap in Malaysia. However, the extent of the price effect is larger at the bottom end of the distribution than at the top. Earnings, discrimination, gender, J16, J31, J71 04 2015 60 1550054 The Singapore Economic Review 1 20 http://www.worldscientific.com/doi/abs/10.1142/S021759081550054X SIEW CHING GOY scgoy@fss.unimas.my Faculty of Social Sciences, Universiti Malaysia Sarawak, Kota Samarahan 94300, Sarawak, Malaysia GERAINT JOHNES g.johnes@lancs.ac.uk Department of Economics, Management School, Lancaster University, Lancaster LA1 4YX, UK
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article A MATHEMATICAL MODEL OF A MACRO-FOCUSED LABOR UNION This paper investigates the roles played by a macro-focused union in the stabilization of the employment level and wages during periods of demand shocks. A macro focused union sets the wage at the level which maximizes employment and provides union benefits to union members to counter free ridership. We set up a solid micro-foundation to derive the industry labor demands in normal periods and in periods with shocks. We argue that the roles played by the macro focused union lead to a more stable employment level which is beneficial to both the employers and employees. Labor demand, labor supply, cooperative bargaining, shifts of the labor demand curve, J01, J51, C02, C71 04 2014 59 1450036 The Singapore Economic Review 1 10 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500362 SHUNTIAN YAO School of International Business and Trade, Tan Kah Kee College, Xiamen University, China SOON BENG CHEW asbchew@ntu.edu.sg Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Singapore
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article THE APPROPRIATE CHOICE OF VALUATION MEASURE IN USUAL CASES OF LOSSES VALUED MORE THAN GAINS People's common propensity to value losses more than otherwise commensurate gains, gives rise to different values of positive and negative changes in entitlements depending on the measure used to assess them. A major implication of the differing valuations is a need to choose an appropriate measure for particular changes. The appropriate choice of measure appears to turn on the reference state that people use to weigh the values of gains and losses: the distinction between the compensating and equivalent variation measures of values. If people view the present state as expected and normal, then the compensating measures apply; the equivalent variation measures are appropriate if they view the changed state as the reference. Endowment effect, welfare measures, valuation spec0 2005 50 The Singapore Economic Review 393 406 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002104 JACK L. KNETSCH knetsch@sfu.ca Department of Economics, Simon Fraser University, Burnaby, British Columbia, Canada V5A 1S6, Canada
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article BOOK REVIEW: "Working Smart and Small: The Role of Knowledge-based and Service Industries in Growth Strategies for Small States" edited by Mahvash Qureshi and Dirk Willem te Velde No abstract received. 03 2011 56 The Singapore Economic Review 455 457 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004286 ERNIE G. S. TEO Division of Economics, School of Humanities and Social Science, Nanyang Technological University, Singapore
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article BOOK REVIEW: "Energy Efficiency. The Definitive Guide to the Cheapest, Cleanest, Fastest Source of Energy" by Steven Fawkes No abstract received. 02 2014 59 1480003 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590814800034 PHILIP ANDREWS-SPEED Energy Studies Institute, National University of Singapore, Singapore
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article THE ECONOMICS OF OFFSHORING: THEORY AND EVIDENCE WITH APPLICATIONS TO ASIA This paper is a non-technical survey of the literature on offshoring and outsourcing, with special focus on the relevance of this literature for Asia. We first see how and to what extent this new literature helps us understand firms' tradeoffs between outsourcing and integration, the variation in the mixes of organizational forms and the location of outsourced activities. We also explore what plausibly triggers offshoring and thereafter what determines its dynamics. Finally, we draw inferences from the existing theory and empirical work about the developmental impact of offshoring on Asia, with special attention to issues related to inequality and poverty. Offshoring, outsourcing, fragmentation, Asia, inequality, poverty 03 2008 53 The Singapore Economic Review 357 369 http://www.worldscientific.com/doi/abs/10.1142/S0217590808003038 DEVASHISH MITRA dmitra@maxwell.syr.edu Department of Economics, The Maxwell School, Syracuse University, Eggers Hall, Syracuse, NY 13244, USA PRIYA RANJAN University of California – Irvine, USA
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article INTRODUCTION TO THE SPECIAL ISSUE No abstract received. 01 2008 53 The Singapore Economic Review 1 4 http://www.worldscientific.com/doi/abs/10.1142/S021759080800280X DAVID REISMAN aardavid@ntu.edu.sg Box 01B-43, Nanyang Business School, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore
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article THE PROFITS OF FIRMS AND COUNTERVAILING DUTIES IN VERTICALLY RELATED MARKETS This paper studies the relationship between the profits of firms and countervailing duties in vertically related markets characterized by oligopolies. It is shown that a countervailing duty equal to the foreign export subsidy is required to neutralize the impact of foreign export subsidies on the profits of domestic firms. The domestic country has an incentive to impose a countervailing duty on foreign final goods even though foreign governments only subsidize exports of intermediate goods. In addition, foreign exporting firms may benefit from a countervailing duty more than a foreign export subsidy. Profits, countervailing duties, foreign export subsidies, vertically related markets, F12, F13, L13 04 2010 55 The Singapore Economic Review 749 756 http://www.worldscientific.com/doi/abs/10.1142/S0217590810004036 YU-TER WANG ytwang@mail.mcu.edu.tw Department of Economics, Ming Chuan University, Taiwan
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article FOREIGN LABOR AND ECONOMIC GROWTH POLICY OPTIONS FOR SINGAPORE Prior to the Asian economic crisis in 1997, Singapore's official projected medium-term GDP growth target was set at 7% per annum. Since then, the targeted growth rate has been reduced to 5%. This paper examines the implications of the 5% growth target on the labor requirements of the Singapore economy. It is shown that the projected resident labor force will not be able to keep pace with the increased labor demand and the share of foreigners in the labor force will increase significantly even under the most favorable scenario. Some implications of the increased dependence on foreign labor in Singapore are discussed. With permanent immigration fixed at the current level, various policy options and their effects on the demand for foreign labor are considered. These include improving labor productivity, raising the total fertility rate, increasing labor force participation of older workers and lowering the targeted rate of economic growth. Singapore labor market, foreign labor, growth 01 2007 52 The Singapore Economic Review 53 72 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002567 WENG-TAT HUI spphwt@nus.edu.sg Lee Kuan Yew School of Public Policy, National University of Singapore, 469C Bukit Timah Road, Singapore 259772, Singapore AAMIR RAFIQUE HASHMI aamir.hashmi@gmail.com Department of Economics, National University of Singapore, 10 Kent Ridge Crescent, Singapore 119260, Singapore; Department of Economics, University of Toronto, 150 St George St, Toronto, ON M5S 3G7, Canada
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article A NOTE ON THE FUTURE POPULATION OF SINGAPORE RESIDENTS This paper examines the population trends in Singapore over the next 50 years. The component method is employed in the projection calculations. The aging of Singapore's resident population is well-known. The projections show that the Singaporean population will reach a maximum of about 3.63 million in the year 2025 before steadily declining to reach 3.32 million by the year 2050. The population projections were also done in terms of gender and ethnic groups. Dependency ratios, weighted and unweighted were also calculated assuming different retirement ages. Remarks on some policy implications of these projections are provided. Singapore, population projection, dependency ratios, aging, ethnicity 02 2005 50 The Singapore Economic Review 269 280 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002049 YOKE WAI WONG awongyw@ntu.edu.sg Nanyang Business School, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore UDITHA BALASOORIYA Nanyang Business School, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore KHYE CHONG TAN School of Humanities and Social Science, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore
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article BOOK REVIEW: "Review of Southeast Asia The Long Road Ahead, Third Edition" edited by Lim Chong Yah No abstract received. 02 2010 55 The Singapore Economic Review 417 418 http://www.worldscientific.com/doi/abs/10.1142/S021759081000381X HANK LIM Singapore Institute of International Affairs (SIIA), Singapore TAI WEI LIM SIIA, Singapore
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article BOOK REVIEW: "Review of "South Asia", Rising to the Challenge of Globalization" edited by Pradumna B Rana and J Malcolm Dowling No abstract received. 02 2010 55 The Singapore Economic Review 415 416 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003808 JOERGEN OERSTROEM MOELLER Institute of Southeast Asian Studies, Singapore; Singapore Management University & Copenhagen Business School, Singapore
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article BOOK REVIEW: "Due Diligence: An Impertinent Inquiry into Microfinance" by Roodman, David Malin No abstract received. 05 2014 59 1480005 The Singapore Economic Review 1 2 http://www.worldscientific.com/doi/abs/10.1142/S0217590814800058 NIKOLAUS AXMANN Duke University, USA
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article ENERGY CONSUMPTION AND GDP IN ASEAN COUNTRIES: BOOTSTRAP-CORRECTED PANEL AND TIME SERIES CAUSALITY TESTS This study reexamines the relationship between energy consumption per capita and real GDP per capita for Indonesia, Malaysia, the Philippines, Singapore and Thailand using both panel data causality which is taking into account cross-sectional dependence and heterogeneity among the countries and time series causality tests for the period 1971–2009. The findings indicate that taking into account cross-sectional dependence has a substantial effect on the achieved results. The conservation hypothesis is supported for Indonesia, Malaysia and the Philippines. Although a bidirectional relation is found in the case of Thailand, since there is no positive effect of energy consumption on GDP, the conservation hypothesis is supported. In the pattern of Singapore, the neutrality hypothesis is supported. In addition, the increase in investment and labor force lead to more energy consumption in Indonesia, Malaysia and Thailand. Energy consumption, economic growth, causality, panel data, ASEAN countries, Q43 02 2014 59 1450010 The Singapore Economic Review 1 16 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500106 ERTUGRUL YILDIRIM yildirimertugrul@hotmail.com Bulent Ecevit University, Department of Economics, 67100 Zonguldak, Turkey ALPER ASLAN alperaslan@nevsehir.edu.tr Nevsehir Haci Bektas Veli University, Faculty of Economics and Administrative Sciences, 50300 Nevsehir, Turkey ILHAN OZTURK ilhanozturk@cag.edu.tr Cag University, Faculty of Economics and Business, Adana-Mersin Karayolu Uzeri, Yenice, 33800 Mersin, Turkey
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article PROVINCIAL DISPARITIES, CONVERGENCE AND EFFECTS ON POVERTY IN THAILAND Thailand's rapid economic development brought about remarkable wealth and poverty reduction over the past three decades. However, the problem of inequality continues to challenge Thailand's development process. The country has long been known for its concentration of growth in and around Bangkok. Despite that, studies on inequality focusing on geographical dimension have been limited. This paper therefore explores disparities as well as convergence in Gross Provincial Product (GPP)-per-capita over the past two decades. It also investigates growth determinants at provincial level. Finally, the disparities in poverty and the extent to which provincial growth and inequality affect poverty are analyzed. Income inequality, growth convergence, poverty, determinants, Thailand, I32, O49, R12 02 2015 60 1550015 The Singapore Economic Review 1 21 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500150 SUPHANNADA LIMPANONDA suphannada@nesdb.go.th Office of the National Economic and Social Development Board, 962 Krung Kasem Road, Pomprab, Bangkok 10100, Thailand
oai:RePEc:wsi:serxxx:v:50:y:2005:i:01:n:s02175908050018832021-07-25RePEc:wsi:serxxx
article THE EFFECT OF THE SEMICONDUCTOR TRADE AGREEMENT ON JAPANESE FIRMS This paper investigates the impact of the 1986 US-Japan Semiconductor Trade Agreement (STA) and antidumping actions by the US on Japanese firms. We conduct an event study employing WLS and OLS estimations on the daily returns of eight large electronics firms over roughly a two year period. We find that the STA had a positive effect on the daily returns while the antidumping rulings were found to be insignificant. These results are consistent with some authors' views that the STA policy may have facilitated collusive behavior to the benefit of not only US, but Japanese firms as well. These results shed some light on the ambiguous results found in the Voluntary Import Expansion (VIE) literature. VIE, STA, event study, semiconductors, antidumping 01 2005 50 The Singapore Economic Review 117 129 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001883 CRAIG PARSONS parsons@ynu.ac.jp Faculty of Economics, Yokohama National University, 79-1 Tokiwadai, Hodogaya, Yokohama, Japan 240-8501, Japan
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article THE FOG ENCIRCLING THE RENMINBI DEBATE We assess some recently advanced arguments for the claim that the RMB is undervalued. These arguments are those based on the direct valuation of the RMB, trade imbalances, the accumulation of foreign exchange reserves, and the degree of policy dependence. The extant evidence does not support a strong verdict regarding RMB undervaluation that meets the statistical standards of academic empirical studies. One interpretation is that the evaluation of the equilibrium RMB exchange rate is far more complicated than it appears. Another view is that the data are insufficiently informative. Some related policy concerns are also discussed. Exchange rate uncertainty, trade surplus, international reserves, policy dependence 03 2007 52 The Singapore Economic Review 403 418 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002750 YIN-WONG CHEUNG cheung@ucsc.edu Department of Economics, E2, University of California, Santa Cruz, CA 95064, USA MENZIE D. CHINN University of Wisconsin, Madison and NBER, USA EIJI FUJII University of Tsukuba, Japan
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article EMERGING EAST ASIAN ECONOMIES AS FOREIGN INVESTORS: AN ANALYTICAL SURVEY This paper documents and analyzes the rise of emerging East Asian economies as major international investors. Foreign direct investment (FDI) from these economies is rising faster than their economic growth, trade and inward FDI, and the region is by far the most important investor from the developing world. We develop an analytical interpretation of the behavior and competitive strategies of major developing East Asian outward investors. We conclude that the drivers of this outward FDI (OFDI) are generally consistent with the international investment literature. But in addition, particular factors are at work, including the desire for natural resource security, and exceptionally high domestic savings rates. The major challenge for the rest of the world is to accommodate these FDI flows, as part of the global reorientation of economic activity toward East Asia. East Asia, outward foreign investment, emerging economies, JEL Classification: F21, JEL Classification: F23, JEL Classification: O33, JEL Classification: O53 03 2014 59 1450019 The Singapore Economic Review 1 26 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500192 HAL HILL hal.hill@anu.edu.au Arndt-Corden Department of Economics, Crawford School, CAP, Coombs Building, Australian National University, Canberra, ACT, 0200, Australia JUTHATHIP JONGWANICH jjongwanich@ait.ac.th School of Management, Asian Institute of Technology, Klong Luang, Pathumthani, 12120, Thailand
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article A CONSISTENT ESTIMATE FOR THE IMPACT OF SINGAPORE'S EXCHANGE RATE ON COMPETITIVENESS Services form a larger part of the Singapore economy. However, it is difficult to analyze the exchange rate impact on services due to the lack of price data. Regression of output or export on exchange rate, while highly intuitive, is likely to suffer from the endogeneity problem since Singapore's exchange rate is used as a counter-cyclical policy tool. This results in inconsistent estimates. I propose a novel approach to overcome these limitations by using Hong Kong as a control for Singapore's economy to implement a pseudo "difference-in-difference" method, exploiting time variation in output, to achieve consistent estimates. Exchange rate, exports, endogeneity, E52, E41, C20 02 2010 55 The Singapore Economic Review 321 334 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003742 JANG PING THIA thia_jang_ping@mti.gov.sg Ministry of Trade and Industry of Singapore, 100 High Street #11-01, The Treasury, Singapore 179434, Singapore
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article EDITORIAL No abstract received. 02 2006 51 The Singapore Economic Review 109 111 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002329 SOUGATA PODDAR ecssp@nus.edu.sg Department of Economics, National University of Singapore, Singapore
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article MANAGING FLEXIBILITY: JAPANESE EXCHANGE RATE POLICY, 1971–2007 The paper reviews Japan's exchange rate policy from the end of the Bretton Woods era to the present. The Japanese authorities used various tools to manage the yen–dollar exchange rate over much of this period. The most dominant was official foreign exchange intervention, which in most instances took the form of "leaning against the wind". Capital controls were also used but, with full capital account convertibility, ceased to exist as an instrument of exchange rate policy by the mid-1980s. Following the post-Plaza appreciation of the yen, the authorities eased monetary policy to arrest the appreciating pressure. The possible role of exchange rate policy in the great asset inflation that followed, however, remains unanswered. More recently, exchange rate policy during the period of prolonged stagnation and fragile recovery was made subordinate to the overall stance of macroeconomic policy. In this regard, particularly striking in terms of scale and frequency was the "great intervention" of 2003–2004. Equally striking has been the total absence of official intervention since. It would require a renewed substantial volatility of the yen to know whether this indeed marks a permanent shift in Japan's exchange rate policy. Japanese exchange rate policy, exchange rate management, Japanese economic policy 03 2007 52 The Singapore Economic Review 335 361 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002762 SHINJI TAKAGI takagi@econ.osaka-u.ac.jp Graduate School of Economics, Osaka University, 1-7 Machikaneyama, Toyonaka, Osaka 560-0043, Japan
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article CURRENCY LINKAGES AMONG ASEAN The purpose of this study is to examine the potential linkages among ASEAN-5 currencies, in particular the possibility of a Singapore dollar bloc during the pre- and post-crisis periods by using the Johansen multivariate cointegration test and the Granger causality test. Significant nonstationarity and the presence of unit roots were documented for each currency under both study periods. Using ASEAN-4 exchange rates against the Singapore dollar, the Johansen cointegration test showed that there was no cointegrating relationship during the pre-crisis period. However there were two statistically significant cointegrating vectors among ASEAN exchange rates for the post-crisis period. These findings imply that there is low financial integration before the crisis, but that ASEAN countries are financially more integrated after the crisis. This finding also indicates increasingly role of the Singapore dollar in ASEAN. Therefore, the Singapore dollar may be a possible candidate as the common currency for ASEAN. The analysis is repeated by adding the US dollar to the model. The finding ascertains the influence of the US dollar on ASEAN currencies before the crisis. Exchange rate, cointegration, Granger causality, ASEAN, F31, F33 03 2010 55 The Singapore Economic Review 459 470 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003845 CHIN LEE leechin@putra.upm.edu.my Department of Economics, Universiti Putra Malaysia, 43400 UPM, Serdang, Selangor, Malaysia M. AZALI Department of Economics, Universiti Putra Malaysia, 43400 UPM, Serdang, Selangor, Malaysia
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article BOOK REVIEW: "APEC at 20: Recall, Reflect, Remake" edited by K Kesavapany and Hank Lim No abstract received. 01 2011 56 The Singapore Economic Review 149 151 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004146 SEE SENG TAN Institute of Defence and Strategic Studies, S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore
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article A CRITICAL ASSESSMENT OF PAST INVESTIGATIONS INTO SINGAPORE'S SAVING BEHAVIOR This article aims to show that the literature so far has not been able to present a statistically robust answer to the question of what drove Singapore's spectacular savings rates. A substantial part of the literature — particularly earlier studies — must be rejected on methodological grounds since the time-series properties of the respective data series were not taken into consideration when choosing the appropriate testing method. Others have omitted potentially crucial determinants of savings or have wrongly disaggregated Gross National Savings. This unsatisfactory state of investigation into Singapore's saving behavior is unfortunate because savings play such a central role in Singapore's economic history since the country's independence. For future research the article also supplies new data series, which disaggregate Singapore's national savings after taking the country's peculiarities into consideration. The critical assessment is also intended as a guideline to future researchers of which mistakes to avoid and where potential pitfalls lie. Singapore, savings, growth, macroeconomics, Asia 01 2006 51 The Singapore Economic Review 67 90 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002238 GREGOR HOPF ghopf@lycos.de Goodenough College, Mecklenburgh Square, London, WC1N 2AB, UK
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article ASYMMETRIC INTERNATIONAL TRANSMISSION IN THE CONDITIONAL MEAN AND VOLATILITY TO THE JAPANESE MARKET FROM THE US: EGARCH VERSUS SV MODELS This paper investigates whether the upturns and downturns of the US market exert asymmetric influence on the conditional mean and volatility of the Japanese market using the daily returns on stock price indices. Using both the EGARCH and SV models, which simultaneously allow two kinds of asymmetric international transmissions across the markets, the result reconfirms the symmetric transmission in the conditional mean obtained by Bahng and Shin (2003) and the asymmetric transmission in the conditional volatility obtained by Koutmos and Booth (1995) although each of them analyzed only one spillover effect separately. Although the EGARCH and SV models lead to similar results for the spillover effects, the SV model is preferred to the EGARCH model based on Lagrange Multiplier test for the hypothesis of the EGARCH against the SV. The shock to volatility in the US market with the SV model is asymmetrically transmitted to the volatility in the Japanese market. Asymmetric transmission, conditional mean and volatility, Japan and the US stock markets, EGARCH and SV models 01 2009 54 The Singapore Economic Review 123 134 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003227 JUNJI SHIMADA School of Management, Aoyama Gakuin University, Japan YOSHIHIKO TSUKUDA tsukuda@econ.tohoku.ac.jp Graduate School of Economics, Tohoku University, Kawachuchi, Aoba-ku, Sendai City, 890-8576, Japan TATSUYOSHI MIYAKOSHI Graduate School of Economics and Osaka School of International Public Policy (OSIPP), Osaka University, Japan
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article SUBCONTRACTING, RENEGOTIATION OF CONTRACT AND QUALITY PROVISION In a principal-agent framework under moral hazard, when the monopolist can pass on the liability of any defect of the product to the subcontractors, and cannot credibly commit to a high level of investment, he actually chooses a low investment level and supplies a low quality product if the product replacement cost is below a critical level. However, under contract renegotiation, when the monopolist is taking the entire risk of replacing the defective product, he will profitably choose high investment level and serves high quality product. But the results show that the monopolist will choose to renegotiate the contract only for limited values of product replacement cost, even if renegotiation is socially optimal. Quality, subcontracting, monopolist, renegotiation, L15, L12 01 2011 56 The Singapore Economic Review 113 144 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004171 TANMOYEE BANERJEE (CHATTERJEE) tanmoyee@hotmail.com Department of Economics, Jadavpur University Kolkata 700032, India AJITAVA RAYCHAUDHURI Department of Economics, Jadavpur University Kolkata 700032, India
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article IMPACTS OF EXTERNAL SHOCKS ON ASIAN ECONOMIES: PANEL VECTOR AUTOREGRESSIVE REGRESSION WITH LATENT DYNAMIC COMPONENTS APPROACH This paper analyzes the effects of external shocks on emerging Asian economies. Since the Asian crisis of 1997–1998, the impact of external shocks on regional economies has grown important in the Asian business cycles as well as in the decision-making process of macroeconomic policies, as emerging Asian economies have become more integrated with the global economy. This paper designs a state-space representation of the panel vector autoregressive model with latent dynamic components in order to show the impulse response function of three external shocks including real income shock, financial shock, and long-term real interest rate shock. This paper finds the external real gross domestic product shock as a dominant one in emerging Asia. The shock has been persistent and has carried long-term effects on emerging Asia before and after the Asian crisis. Second, the external equity shock has also been an important factor influencing the business cycles in the region after the Asian crisis, while the effect has been insignificant before the Asian crisis. Last, the external monetary shock has presumably mitigated effectively by Asia's macroeconomic policy, but it has forced to give up monetary independency in the region. External shocks, panel vector autoregressive model with latent components, F30, C23 04 2013 58 1350026 The Singapore Economic Review 1 19 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500264 DOO YONG YANG yangdy@khu.ac.kr College of International Studies, Kyung Hee University, 1 Seo Heon Dong, Gyeonggi-Do, Yongin-si, 100-6008, Republic of Korea
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article BOOK REVIEW: "Income Inequality in Singapore" by Pundarik Mukhopadhaya No abstract received. 04 2015 60 1580004 The Singapore Economic Review 1 4 http://www.worldscientific.com/doi/abs/10.1142/S0217590815800041 PAUL VANDENBERG Asian Development Bank Institute, Tokyo, Japan
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article ELECTRICITY RESTRUCTURING IN CHINA: HOW COMPETITIVE WILL GENERATION MARKETS BE? The continuation of China's remarkable economic growth will depend on continued increases in electricity supply. China has commenced a program of electricity sector restructuring, with the announced aim of relying on markets and competition to provide incentives for attracting private investment and encouraging efficiency. However, a close examination of the generation markets being created suggests that truly free wholesale prices are likely to be both high and volatile. This may be the reason that these prices have not yet been freed — and it may not bode well for true market liberalization in the future. Electricity restructuring, competition, China, L94, O13, P28, Q48 02 2010 55 The Singapore Economic Review 377 400 http://www.worldscientific.com/doi/abs/10.1142/S021759081000378X RUSSELL PITTMAN russell.pittman@usdoj.gov Antitrust Division, U.S. Department of Justice, LSB 9446, Washington, DC 20530, USA; New Economic School, Nakhimovskii Prospekt 47, 117418, Moscow, Russia VANESSA YANHUA ZHANG vzhang@lecg.com LECG, LLC, 33 W. Monroe Street, Suite 2300, Chicago, IL 60603, USA
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article FOREIGN WORKERS AND WITHIN INDUSTRY DYNAMICS Using a services firm-level dataset for Singapore, we find that different services industries have different industry dynamics with regards to work-permit foreign workers (FWs). In the retail industry, higher FW use is associated with lower firm-level profitability. This suggests that greater industry consolidation through tighter FW allocation could improve overall productivity in the sector. On the other hand, greater FW use in the hotel industry is associated with higher firm-level productivity. This suggests that FWs represent a critical input that supports more productive firms in this tradable sector. Hence, for this sector, FW policy should be more accommodative. Labor markets, firm heterogeneity, allocative efficiency, J31, J48, L25 04 2012 57 1250026 The Singapore Economic Review 1 15 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500269 DOMINIC SOON Dominic_soon@mti.gov.sg Ministry of Trade and Industry, 100 High Street #11-01, Singapore 179434, Singapore JANG PING THIA thia_jang_ping@mti.gov.sg Ministry of Trade and Industry, 100 High Street #11-01, Singapore 179434, Singapore
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article IMPACT OF TRADE UNIONS ON ECONOMIC PERFORMANCE: THE CASE OF SINGAPORE Trade unions may exact a heavy cost on an economy, but there is one mode of trade unionism that will enable the trade union to play a positive role in economic development. This mode of unionism, which may be characterized as macro-focused, requires the trade union to work closely with the ruling party in order to contribute to economic development. The required symbiosis between such a trade union and the ruling party may not be sustainable when there is a change in government. This paper argues that a union can remain macro-focused as long as it is not part of any political party and therefore can work with any government regardless of which political party is in power. The paper will examine the various conditions, both economic and non-economic, under which such an outcome can exist and be sustainable. The paper will also analyze how a macro-focused union induces workers to join the union based on the results of a field survey of 690 respondents in Singapore. Strategic collective bargaining, union social responsibility, macro-focused union 04 2014 59 1450035 The Singapore Economic Review 1 13 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500350 SOON BENG CHEW asbchew@ntu.edu.sg Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Singapore
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article BOOK REVIEW: "Review of Nowhere to Hide: The Great Financial Crisis and Challenges for Asia" Michael Lim Mah-Hui and Lim Chin No abstract received. 01 2012 57 1280005 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590812800057 Charles Adams Lee Kuan Yew School of Public Policy, Singapore
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article FORECASTING FORWARD EXCHANGE RATE RISK PREMIUM IN SINGAPORE DOLLAR/US DOLLAR EXCHANGE RATE MARKET In this research, monthly forward exchange rates are evaluated for possible existence of time varying risk premia in Singapore forward foreign exchange rates against US dollar. The time varying risk premia in Singapore dollar is modeled using non-Gaussian signal plus noise models that encompass non-normality and time varying volatility.The results from signal plus noise models show statistically significant evidence of time varying risk premium in Singapore forward exchange rates although we failed to reject the hypotheses of no risk premium in the series. The results from Gaussian versions of these models are not much different and are in line with Wolff (1987) who also used the same methodology in Gaussian settings.Our results show statistically significant evidence of volatility clustering in Singapore forward exchange rates. The results from Gaussian signal plus noise models also show statistically significant evidence of volatility clustering and non-normality in Singapore forward foreign exchange rates. Additional tests on the series show that exclusion of conditional heteroskedasticity from the signal plus noise models leads to false statistical inferences. Forward foreign exchange rates, non-normality, risk premium, spot foreign exchange rates, signal extraction, volatility persistence 02 2009 54 The Singapore Economic Review 283 298 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003288 KHURSHID M. KIANI mkkiani@yahoo.com Department of Economics, The University of the West Indies, Mona, Kingston 7, Jamaica
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article VECTOR AUTOREGRESSION EVIDENCE ON MONETARISM: A FOCUS ON SOME DEVELOPING ECONOMIES IN SOUTH ASIA The objective of this paper is to test the validity of two views of monetarism in Bangladesh, India, and Pakistan. A Structural Vector Autoregressive (SVAR) model is developed and the objective is accomplished by conducting Granger causality tests and estimating variance decompositions and impulse response functions. The first view of monetarism that changes in the quantity of money cause, lead and are positively related to changes in prices at least in the medium to long time horizon is supported in Bangladesh, India, and Pakistan. The second view of monetarism that changes in the quantity of money cause, lead and are positively related to changes in output at least in the short to medium time horizon is not supported. The implication of such a result is that an expansionary monetary policy only fuels prices with insignificant effects on output. It supports the view of real business cycle theorists who postulate that policy changes only affect prices. Monetarism, Structural Vector Autoregressive (SVAR) model, Granger causality, variance decomposition, impulse response function, Monte Carlo simulation 01 2006 51 The Singapore Economic Review 53 66 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002226 MUDABBER AHMED mudabber_ahmed@yahoo.com Economics Department, University of Chittagong, Chittagong-4331, Bangladesh U. L. G. RAO Economics Department, Dalhousie University, Halifax, NS, B3H 3J5, Canada
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article THE FOREIGN BANK EFFECT ON VALUE CREATION IN COMMERCIAL BANKS INCORPORATED IN THAILAND Using quarterly bank-level data over the period 1997–2005, this paper examines the effect of foreign bank presence on commercial banks incorporated in Thailand, using traditional and value-based performance measures as indicators of the degree of competition and proxies for the efficiency in the provision of banking services. The findings suggest that foreign bank presence is not only beneficial in terms of traditional performance measures, but also in terms of economic profit. The results with respect to economic value added and cash value added, however, cast some doubt over the presumed benefits of opening up, underlining the importance of using a proxy that considers the cost of equity and departs from standard accounting principles. Furthermore, the results indicate that foreign entry through the acquisition of domestic banks appears to have a stronger and more beneficial impact on locally incorporated banks than through the establishment of branches, with majority ownership by a foreign blockholder being of importance. Foreign bank entry, value creation in banks, Thai banking sector 02 2008 53 The Singapore Economic Review 215 244 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002914 CHANTAL HERBERHOLZ chantal.h@chula.ac.th Faculty of Economics, Chulalongkorn University, Phayathai Road, Bangkok 10330, Thailand
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article DOES CHINA SAVE TOO MUCH? This paper, through simulating an open economy model of China, investigates whether the current rate of saving in China is excessive. The model incorporates the major factors that influence optimal saving, namely demographic change, the catch-up of total factor productivity in China to the level of high-income OECD countries, and an endogenous world rate of interest. The paper finds that the rate of time preference that would imply the current rate of saving is optimal is very low; in fact, it is negative. Thus, to justify China's current rate of saving, the social planner would have to put a higher weight on the economic welfare of future generations relative to the current generation, indeed up to 19 times the weight. This suggests that the current rate of saving in China is excessive. Saving, China, living standards 03 2006 51 The Singapore Economic Review 283 301 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002469 LAN LU llu@treasury.gov.au Australian Treasury, Langton Crescent, Parkes ACT 2600, Australia IAN M. McDONALD i.mcdonald@unimelb.edu.au Department of Economics, University of Melbourne, Victoria 3010, Australia
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article ESTIMATING A LINEAR SIMULTANEOUS EQUATION MODEL WITH PANEL DATA In this paper we consider a class of the GMM estimators for a linear simultaneous equation model with panel data. The model is characterized by the presence of unobserved individual effects as part of structural disturbances and by the correlation of certain time-varying and time-invariant exogenous variables with the individual effects. A class of single-equation and system GMM estimators is proposed on the basis of a class of instruments as a unifying theme. Small-sample performance of this class of estimators is also investigated by a series of sampling experiments. Panel data, simultaneous equations, fixed effects spec0 2005 50 The Singapore Economic Review 475 494 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002165 SOO-BIN PARK sbpark@ccs.carleton.ca Department of Economics, Carleton University, Ottawa, Canada K1S 5B6, Canada
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article "WHY NOT A VOLUNTEER ARMY?" REEXAMINING THE IMPACT OF MILITARY CONSCRIPTION ON ECONOMIC GROWTH FOR SINGAPORE This paper evaluates the economic merits of a conscript or an all-volunteer military force for Singapore, focusing on military conscription as a subset of military expenditure. While many papers investigate the relationships between economic growth and conscription or defence spending, no concrete study has linked them to provide a new argument for or against conscription. This paper relates these three research areas to examine the economic costs and benefits of a conscript and an all-volunteer force for Singapore, taking into account the effects of military spending on the growth of the economy. Conscription, economic growth, government expenditure 01 2005 50 The Singapore Economic Review 47 67 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001871 PAK SHUN NG pakshun@gmail.com Singapore Armed Forces, MINDEF Building, Gombak Drive, Singapore 669645, Singapore
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article BOOK REVIEW: "The Economic Prospects of Singapore", edited by W. T. H. Koh and R. S. Mariano No abstract received. 01 2006 51 The Singapore Economic Review 91 95 http://www.worldscientific.com/doi/abs/10.1142/S021759080600224X DAVID REISMAN Division of Economics, Nanyang Technological University, Singapore
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article CHINA'S NEW EXCHANGE RATE POLICY: WILL CHINA FOLLOW JAPAN INTO A LIQUIDITY TRAP? Todays' American mercantile pressure on China to appreciate the renminbi against the dollar is eerily similar to the American pressure on Japan to appreciate the yen that began over 30 years ago. There are some differences between the two cases, but downward pressure on Chinese interest rates from foreign exchange risk could lead China into a zero interest rate liquidity trap much like the one that Japan has suffered since the mid-1990s. Exchange rates, China, Japan, interest rates, liquidity trap, deflation spec0 2005 50 The Singapore Economic Review 463 474 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002153 RONALD I. MCKINNON McKinnon@stanford.edu Department of Economics, Landau Economics Building, Stanford University, Stanford, CA 94305-6072, USA
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article PRIVATE INVESTMENT IN INFRASTRUCTURE IN ASIA: THE IMPACT OF REGULATION This paper provides an empirical analysis of the impact of economic regulation on the inflow of private foreign investment in the infrastructure sector in Asian economies over the period 1988 to 2002. The results confirm that foreign investment in infrastructure has responded positively to the establishment of an effective regulatory framework which provides regulatory credibility to the private sector. The main policy implication of the findings is the need to support capacity building and institutional strengthening for robust and independent regulation in the developing countries of Asia. Infrastructure, private investment, economic regulation, Asia spec0 2005 50 The Singapore Economic Review 369 391 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002098 COLIN KIRKPATRICK Colin.Kirkpatrick@manchester.ac.uk Institute for Development Policy and Management, School of Environment and Development, University of Manchester, Manchester, UK DAVID PARKER David.Parker@cranfield.ac.uk School of Management, Cranfield University, Cranfield, UK YIN-FANG ZHANG Yin-Fang.Zhang@manchester.ac.uk Institute for Development Policy and Management, School of Environment and Development, University of Manchester, Manchester, UK
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article MALAYSIAN ECONOMIC DEVELOPMENT, LEADING INDUSTRIES AND INDUSTRIAL CLUSTERS This paper briefly reviews six decades of Malaysia's economic development strategy, which may be described as bounded industrial policy that favors export-led growth. The objective of the current Tenth Malaysia Plan (2011–2015) is to achieve high-income status by 2020 by promoting high-value-added production through increased investments in human capital, adopting new technologies, promoting entrepreneurship to drive innovation and creativity, and elevating domestic demand as an engine of economic growth. Principal components analysis (PCA) and medoid partitioning applied to inflation-adjusted industrial production suggests that Malaysia satisfies the necessary, although not necessarily the sufficient, conditions to achieve this goal. Country studies, economic development, industrial policy, industrial clusters, Malaysia, medoid partitioning, principal component analysis, O14, O16, O25, O47, O53 05 2014 59 1450044 The Singapore Economic Review 1 19 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500441 THOMAS J. WEBSTER twebster@pace.edu Department of Finance and Economics, Lubin School of Business, Pace University, One Pace Plaza, New York, NY 10038, USA
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article SKILL-BIASED EXPORT GROWTH: ACCOUNTING FOR THE CHANGES IN LABOR CONTENTS ACROSS ETHNIC GROUPS IN MALAYSIA (1991–2000) This paper quantifies the extent to which trade liberalization in Malaysia between 1991 and 2000 has contributed to the expansion in the most skilled labor, which in turn can validate the trade-enhanced quality upgrading hypothesis. By using an input–output structural decomposition analysis (SDA), results confirm the theoretical predication that skills help to upgrade the quality of exporting commodities, by documenting that trade growth is associated with increases in the use of the higher skilled labor. We observe that Chinese and Indian ethnic groups contribute the most to the quality upgrading of exporting commodities, more so than the Malays, which imply productivity differentials among the ethnic groups. Labor content, skills, structural decomposition analysis (SDA), ethnic groups, C67, F16, C51 02 2013 58 1350010 The Singapore Economic Review 1 25 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500100 M. YUSOF SAARI yushanim@econ.upm.edu.my mysaari@gmail.com Faculty of Economics and Management, Universiti Putra Malaysia, 43400 Serdang, Selangor, Malaysia JIANSUO PEI School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China
oai:RePEc:wsi:serxxx:v:60:y:2015:i:01:n:s02175908155000952021-07-25RePEc:wsi:serxxx
article THE IMPACT OF WORLD ENERGY PRICE VOLATILITY ON AGGREGATE ECONOMIC ACTIVITY IN DEVELOPING ASIAN ECONOMIES This paper analyzes the impact of volatility in the world energy price on aggregate economic activity in an unbalanced panel data framework for 10 developing Asian countries: Bangladesh, PR China, India, Indonesia, Malaysia, Pakistan, the Philippines, Thailand, Turkey and Vietnam. We use both the realized volatility and the generalized autoregressive conditional heteroskedasticity models to measure the volatility in the world energy price. Empirical findings from dynamic panel data estimations show that the volatility in world energy price is negatively associated with the aggregate economic activity. Using the common correlated effects panel estimation techniques, we also systematically examine uncertain transmission channel of the world energy price volatility on the aggregate economic activity in each economy and obtain the most impressive negative effects in Turkey, PR China and India, respectively. Developing asian economies, world energy price, volatility models, aggregate economic activity, panel data estimation techniques, Q43, C33, O53 01 2015 60 1550009 The Singapore Economic Review 1 20 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500095 MEHMET HUSEYIN BILGIN mehmet.bilgin@medeniyet.edu.tr Istanbul Medeniyet University, Unalan Mah. Unalan Sok. D-100 Karayolu Yanyol, Uskudar 34700, Istanbul, Turkey GIRAY GOZGOR ggozgor@dogus.edu.tr Dogus University, Zeamet Sk. No: 21, Acibadem, Kadikoy 34722, Istanbul, Turkey GOKHAN KARABULUT gbulut@istanbul.edu.tr Istanbul University, Sulemaniye Mah., No: 1, Beyazit, Fatih 34452, Istanbul, Turkey
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article GLOBALIZATION AND REGIONALIZATION: SINGAPORE'S TRADE AND FDI The Singapore economy has undergone rapid growth and structural transformation from a Third World laggard to a First World sophisticated and dynamic economy. It has overcome constraints of land and natural resources by adopting free trade and investment strategies and building on its global and regional maritime and air links. However, despite its very high per capita income, Singapore's technological, innovative and entrepreneurial capabilities are not on par with the most advanced economies. High dependence on foreign multinational corporations (MNCs) and government-linked-companies (GLCs) has contributed to the underdevelopment of local private enterprise and innovation. High dependence on "foreign talent" has also contributed to the underdevelopment of local talent. For future sustainable development, Singapore has to succeed as an innovative economy, and the state will have an important role as facilitator of local innovation and enterprise. ASEAN economic integration, Singapore trade, Singapore FTAs, Singapore inward FDI, Singapore outward FDI, Singapore economic restructuring 03 2015 60 1550034 The Singapore Economic Review 1 23 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500344 SIOW YUE CHIA chiasy@singnet.com.sg Singapore Institute of International Affairs, 60A Orchard Road, #04-03 Tower 1, The Atrium@Orchard International Involvement Hub Singapore 236690, Singapore
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article CREDIT CARD OWNERSHIP AND DEBT STATUS IN MALAYSIA This paper examines the role of socio-demographic and credit consumption tendencies in affecting credit card ownership and debt status. Based on a sample of 938 individuals from three major cities in Malaysia, card holders' debt status is measured in relation to credit card expenditure, which in turn is categorized into convenience users, low-risk credit revolvers and high-risk credit revolvers. While socio-demographic factors play significant roles in determining card ownership, card holders' credit consumption tendencies, such as past debt history and type of loan possessed, have varying adverse effects on the card holder's debt status. Credit card debt, credit card ownership, credit revolver, convenience user, ordered probit model, sample selection, D12, D14, E51, G20 03 2013 58 1350016 The Singapore Economic Review 1 26 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500161 YIING JIA LOKE yjloke@usm.my School of Social Sciences, Universiti Sains Malaysia, 11800 Penang, Malaysia STEVEN T. YEN syen@utk.edu Department of Agricultural and Resource Economics, The University of Tennessee, Knoxville, TN 37996-4518, USA ANDREW K. G. TAN atan@usm.my School of Social Sciences, Universiti Sains Malaysia, 11800 Penang, Malaysia
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article BOOK REVIEW: "India and South Asia: Economic Developments in the Age of Globalization" edited by A Siddiqui No abstract received. 03 2010 55 The Singapore Economic Review 589 595 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003924 DAVID REISMAN Nanyang Technological University, Singapore
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article SOME POLICY IMPLICATIONS OF BEHAVIORAL ECONOMICS AND HAPPINESS STUDIES FOR SINGAPORE: WITH SPECIAL REFERENCE TO CASINOS Behavioral economics is the study of economic behavior beyond the traditional simple economic models of constrained maximization with purely economic objectives (consumption/profits). Some policy implications of the findings of behavioral economics, happiness studies and beyond are outlined, with special reference to excessive volatility in business cycles and the optimal level of public spending. Though behavioral economics potentially provides more support for the restriction of gambling, an outright ban need not be optimal. Though legal casinos may increase some crimes, it will decrease crimes associated with illegal gambling. Some restrictions of problem gambling will be needed. Apart from (if not rather than) the attraction of tourists/visitors, the consumer surplus associated with responsible pleasure gambling is likely to be the major benefits of legalizing casinos. The proposed entry fee may be better replaced by a membership system, as the former is unfair to locals and will lead to unhealthy gambling. Singapore, casinos, behavioral economics, happiness studies, public spending, business cycles 01 2006 51 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002196 YEW-KWANG NG Kwang.Ng@buseco.monash.edu.au Department of Economics, Monash University, Clayton 3800, Australia
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article POST-CRISIS EXCHANGE RATE REGIMES IN ASEAN: A NEW EMPIRICAL TEST BASED ON INTRA-DAILY DATA The purpose of this paper is to investigate what affected the post-crisis exchange rates of three ASEAN countries: Singapore, Thailand and Malaysia. Our critical departure from previous studies is the use of intra-daily exchange rates. The use of the intra-daily data is useful in removing possible estimation biases which the choice of numéraire may cause. It also contrasts exchange rates when official intervention is active with those when it is not active. We find significant structural breaks in the correlations when the East Asian market is open, which suggest strong monetary and real linkages among the ASEAN countries. Exchange rate regime, intra-daily data, currency basket, ASEAN 02 2008 53 The Singapore Economic Review 191 213 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002902 SHIN-ICHI FUKUDA sfukuda@e.u-tokyo.ac.jp Faculty of Economics, University of Tokyo, 7-3-1, Hongo Bunkyo-ku, Tokyo 113-0033, Japan SANAE OHNO sanaeon@cc.musashi.ac.jp Faculty of Economics, Musashi University, 1-26-1, Toyotamaue, Toshima-ku, Tokyo 176-8534, Japan
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article BOOK REVIEW: "Review of Economic Growth of Singapore in the Twentieth Century: Historical GDP Estimates and Empirical Investigations" edited by Ichiro Sugimoto No abstract received. 01 2012 57 1280002 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590812800021 CHOY KEEN MENG Economic Policy Group, Monetary Authority of Singapore, Singapore
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article BOOK REVIEW: "Re-inventing the Asian Model: The Case of Singapore", by Manu Bhaskaran No abstract received. 02 2005 50 The Singapore Economic Review 281 283 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002001 KEEN MENG CHOY Department of Economics, National University of Singapore, Singapore
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article SOME CONCEPTUAL AND METHODOLOGICAL ISSUES ON HAPPINESS: LESSONS FROM EVOLUTIONARY BIOLOGY Despite recent intense interest, happiness studies have been impeded by some conceptual and methodological problems, including viewing happiness (well-being/welfare) as different over different persons, as relative, multi-dimensional, non-cardinally measurable, interpersonally non-comparable and using non-cardinal and interpersonally non-comparable methods of happiness measurement. Using the evolutionary biology of happiness, this paper argues that happiness is absolute, universal, and uni-dimensional and is also cardinally measurable and interpersonally comparable. This is needed to make choices motivated by reward (pleasure) and punishment (pain) consistent with fitness maximization. However, happiness indices obtained by virtually all existing methods of happiness measurement are largely non-cardinal and non-comparable, making the use of averaging in group happiness indices of dubious philosophical validity. A method of measuring happiness to give cardinal and interpersonally comparable indices is discussed. These may contribute towards the more scientific study of happiness that is based on sounder methodological grounds as well as yielding more useful results. Evolutionary biology, happiness, interpersonal comparison, measurability, well-being, welfare 04 2015 60 1540001 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590815400019 YEW-KWANG NG Division of Economics, Nanyang Technological University, Singapore
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article EFFICIENCY AND PRODUCTIVITY OF SINGAPORE'S MANUFACTURING SECTOR 2001–2010: AN ANALYSIS USING BOOTSTRAPPED TRUNCATED APPROACH This paper seeks to explain the lagging productivity in Singapore's manufacturing noted in the statements of the Economic Strategies Committee (ESC) Report 2010. Two methods are employed: the Malmquist productivity to measure total factor productivity (TFP) change and Simar and Wilson's (2007) bootstrapped truncated regression approach which first derives bias-corrected efficiency estimates before being regressed against explanatory variables to help quantify sources of inefficiencies. The findings reveal that growth in TFP was attributed to efficiency change with no technical progress. Sources of efficiency were attributed to quality of worker and flexible work arrangements while the use of foreign workers lowered efficiency. Bootstrap truncated regression, technical efficiency, data envelopment analysis, Malmquist productivity, Singapore manufacturing, C14, D24, L60, O14, O33 05 2014 59 1450039 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500398 BOON L. LEE bl.lee@qut.edu.au School of Economics and Finance, Queensland University of Technology, GPO Box 2434, Brisbane, QLD 4001, Australia
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article CHINA'S EXPORT MARGINS AND THEIR GROWTH SOURCES: AN ANALYSIS OF EXTENSIVE MARGIN AND INTENSIVE MARGIN Based on the theoretical methods by Feenstra and others, this paper applies the empirical panel data of years 2000–2007 to measure the growth of China's provincial import and export for both extensive and intensive margins. Extensive margin reflecting the level of variety becomes a significant factor for China's export and is slightly higher than intensive margin. The empirical results indicate that emerging industrial countries have gradually become the important new markets for China's export variety. As for the variables affecting variety growth, trade barriers are found to play a dominant role as invisible constraints, and small and medium enterprises contribute significantly to variety growth, while foreign investment and market-oriented reforms have become the driving force. Moreover, trade variety has been identified as the third factor of economic growth, in addition to the two traditional factors (capital and labor). Trade variety, technological progress, economic growth 04 2013 58 1350029 The Singapore Economic Review 1 20 http://www.worldscientific.com/doi/abs/10.1142/S021759081350029X YONG-LIANG ZHAO ericjue@sohu.com College of Economics, Jinan University, Guangzhou 510632, P. R. China DE-XUE LIU College of Economics, Jinan University, Guangzhou 510632, P. R. China HUA-LIN PU College of Economics, Jinan University, Guangzhou 510632, P. R. China ZI-HUI YANG Lingnan College, Sun Yat-sen University, Guangzhou 510632, P. R. China
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article THE EFFECTS OF FOREIGN DIRECT INVESTMENT ON THE HOST COUNTRY'S ECONOMIC GROWTH: THEORY AND EMPIRICAL EVIDENCE Foreign direct investment (FDI) influences host country's economic growth through several channels. Empirically, a variety of studies considers that FDI generate economic growth but others conclude that FDI is a source of negative effects. By reviewing existing theoretical and empirical literature, we intend to shed light on the main explanations for the mixed results. The main conclusion is that the effects of FDI on economic growth depend on the domestic conditions of the host country (e.g., human capital, economic and technological conditions, degree of openness of its economy). Thus, the host countries governments have a key role in creating the conditions that allow for the leverage of the positive effects or for the reduction of the negative effects of FDI on the host country's economic growth. Foreign direct investment, economic growth, literature survey, F21, O40 03 2013 58 1350017 The Singapore Economic Review 1 28 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500173 ROSA FORTE rforte@fep.up.pt CEF.UP (CEF.UP — Center for Economics and Finance at University of Porto is financially supported by FCT (Fundação para a Ciência e a Tecnologia).); Faculdade de Economia, Universidade do Porto, Rua Dr. Roberto Frias, 4200 Porto, Portugal RUI MOURA Faculdade de Economia, Universidade do Porto, Rua Dr. Roberto Frias, 4200 Porto, Portugal
oai:RePEc:wsi:serxxx:v:57:y:2012:i:02:n:s02175908128000702021-07-25RePEc:wsi:serxxx
article BOOK REVIEW: "Review of Management of Success: Singapore Revisited" edited by Terence Chong No abstract received. 02 2012 57 1280007 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590812800070 BHANOJI RAO Lee Kuan Yew School of Public Policy, National University of Singapore, Singapore
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article BOOK REVIEW: "The Politics of Knowledge" edited by Saw Swee-Hock and Danny Quah No abstract received. 02 2011 56 The Singapore Economic Review 287 289 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004274 JOHN MALCOLM DOWLING University of Hawaii, USA
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article RESERVE POOLING AND ITS IMPLICATION ON OPTIMUM CURRENCY AREA IN ASEAN Regional economic integration in ASEAN, ASEAN Free Trade Area (AFTA), is expected to produce positive outcomes on economic growth in ASEAN especially through its impact on trade and investment. This idea can be strengthened if regional monetary integration is followed. Therefore, focusing on reserve pooling, which is one of the proxy for Optimum Currency Area (OCA) variables, this study intends to examine the feasibility of a common currency in ASEAN. In addition, this study also investigates this idea in the presence of external shock. Optimum Currency Area (OCA), international reserve, external shock 02 2009 54 The Singapore Economic Review 299 312 http://www.worldscientific.com/doi/abs/10.1142/S021759080900329X TAJUL ARIFFIN MASRON tams@usm.my School of Management, Universiti Sains Malaysia, 11800 USM Penang, Malaysia ZULKORNAIN YUSOP Zolyusop@ecan.upm.edu.my Faculty of Economics and Management, Universiti Putra Malaysia, 43400, Serdang, Selangor, Malaysia
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article BETWEEN BERLUSCONI AND MONTI: TRADE UNIONS AND ECONOMIC CRISIS IN ITALY The recent labor reforms implemented in Italy by the so-called "technocratic" Monti Government have challenged the traditional role of trade unions. On one side, the reforms in the pension and labor market have been approved without real consultation or bargaining with social parties, under the pressures from the financial and economic crisis and the austerity demanded by the EU central authorities. On the other side, the Government is urging trade unions to contribute to stimulating labor productivity in order to produce more growth and escape from such a long period of recession. The main aim of this article is to analyze the changing role of trade unions and then the real opportunities to open a new phase of social concertation, also taking into account the historical background of Italian industrial relations. Trade unions, economic crisis, Italy, austerity, concertation, social pacts 04 2014 59 1450031 The Singapore Economic Review 1 21 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500313 SERAFINO NEGRELLI serafino.negrelli@unimib.it Department of Sociology and Social Research, University of Milano Bicocca, Via Bicocca degli Arcimboldi 8, 20126 Milano, Italy ANDREA SIGNORETTI andrea.signoretti20@gmail.com Department of Economics and Management, University of Brescia, Via delle Battaglie, 50 25122, Province of Brescia, Brescia, Italy
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article MEASURING TRADE COSTS FROM RELATIVE PRICES: THE ROLE OF LOCATION AND GOODS CHARACTERISTICS This paper estimates the trade costs from international relative prices, and studies the economic determinants of implied trade costs. We find that the magnitude of trade costs depends on the characteristics of both the type of good and set of locations under examination. In particular, it is found that higher non-traded input share and trade barriers, and lower tradability of goods lead to a larger trade cost, as does a lower proximity of geographic distance between locations. Trade costs, threshold autoregressive, non-traded input, trade share, real exchange rates, F30, C20 05 2014 59 1450041 The Singapore Economic Review 1 10 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500416 IN HUH inhuh@jnu.ac.kr School of Economics, Chonnam National University, 77 Yongbong-ro, Buk-gu, Gwangju, Republic of Korea 500-757, Republic of Korea INKOO LEE Iklee1120@ssu.ac.kr Department of International Trade, Soongsil University, 369 Sangdo-ro, Dongjak-gu Seoul, Republic of Korea 156-743, Republic of Korea
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article TAIWAN'S EXCHANGE RATE AND MACROECONOMIC POLICIES OVER THE BUSINESS CYCLE This paper investigates exchange rate and monetary policies over the business cycle in Taiwan. We first characterize the business cycle dynamics in Taiwan and identify foreign shocks as the main cause of any fluctuations. We then briefly review the exchange rate system and policy operating in Taiwan since the early 1980s. Finally, we investigate the current recession, and discuss how the Taiwanese government is dealing with the economic slowdown. Exchange rate policy, macroeconomic policy, business cycles, F31, E32, E63 03 2010 55 The Singapore Economic Review 435 457 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003833 SHIU-SHENG CHEN sschen@ntu.edu.tw Department of Economics, National Taiwan University, No. 21, Hsu-Chow Road, Taipei, Taiwan TSONG-MIN WU Department of Economics, National Taiwan University, No. 21, Hsu-Chow Road, Taipei, Taiwan
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article EXAMINING THE RISK OF BRAIN DRAIN AND LOWER REMITTANCES Developing countries could be facing two linked trends that are potentially detrimental to their development prospects: outmigration of high-skilled professionals and the potential decline in remittances as migrants with higher skills may be less likely to remit or may remit less if they do. This paper examines this policy issue by empirically analyzing a cross-national dataset spanning 70 countries during the period 1985–2000, as well as a country-specific dataset for the Philippines. It finds little evidence that high-skilled migration is linked to lower remittances at the aggregate level. This finding coheres with more recent studies leveraging microlevel data. Brain drain, brain gain, diaspora, remittances, migration, F22, J61, O15 01 2013 58 1350006 The Singapore Economic Review 1 13 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500069 RONALD U. MENDOZA rumendoza@aim.edu Asian Institute of Management, 123 Paseo de Roxas, Makati City, Philippines
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article THE IMPACT OF FISCAL DECENTRALIZATION ON TAX EFFORT OF CHINA'S LOCAL GOVERNMENTS AFTER THE TAX SHARING SYSTEM The purpose of this study is to investigate whether and to what extent fiscal decentralization affects tax effort of local governments in China after the Tax Sharing System (TSS). This research provides different indexes of tax effort and fiscal decentralization in analysis. By using the panel data of 31 regions in China during the period of 1996–2006 and the two-way fixed-effect model, the empirical results show that fiscal decentralization has a significantly positive impact on tax effort of local governments. In addition, this positive influence of fiscal decentralization on tax effort increases over time. Finally, trade openness and industrialization level also will enhance the local government's tax effort. Fiscal decentralization, tax effort, tax sharing system, China, C33, H11, H77 01 2012 57 1250005 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500051 JR-TSUNG HUANG Department of Public Finance, National Chengchi University, No. 64, Sec. 2, Zhi-nan Rd., Wenshan, Taipei 11605, Taiwan KUANG-TA LO Department of Public Finance, National Chengchi University, No. 64, Sec. 2, Zhi-nan Rd., Wenshan, Taipei 11605, Taiwan PO-WEN SHE Department of Economics, University of Essex, UK
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article BOOK REVIEW: "Review of Community, Market and State in Development", edited by Keijiro Otsuka and Kaliappan Kalirajan No abstract received. 04 2013 58 1380010 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590813800106 FRANCIS E. HUTCHINSON Institute of Southeast Asian Studies, Singapore
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article INTRODUCTION AND EDITORIAL OVERVIEW No abstract received. 01 2010 55 The Singapore Economic Review 1 6 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003687 PRADUMNA B. RANA prana@ntu.edu.sg S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore 639798, Singapore
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article BOOK REVIEW: "The Singapore Economy: An Econometric Perspective" by Tilak Abeysinghe and Keen Meng Choy No abstract received. 02 2008 53 The Singapore Economic Review 339 340 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002999 SAM OULIARIS Department of Business Policy, National University of Singapore, Singapore
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article ON ASPECTS OF FOOD SAFETY AND INTERNATIONAL TRADE International supply chains in the food industry have lengthened in recent years and new sources of risk have arisen. With increased consumers' incomes, perceptions about food safety have become sharper and food safety has become an important issue in public policy both domestically and internationally. The safety of food is a credence characteristic which gives rise to a particular form of market failure involving either asymmetric information and moral hazard or symmetric imperfect information. An example from a recent experience in the UK was used to illustrate the issue of moral hazard, as well as the possible responses to it. A partial equilibrium model of an open economy was developed to investigate how the moral hazard problem that is caused for importing firms by the actions of exporting firms could be solved by the market rather than by government intervention. Food safety, credence characteristic, moral hazard, international trade 02 2006 51 The Singapore Economic Review 135 145 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002317 DONALD MACLAREN d.maclaren@unimelb.edu.au Department of Economics, The University of Melbourne, VIC 3010, Australia
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article OPTIMAL PATENT LENGTH IN A NORTH-SOUTH FRAMEWORK: A COMMENT We show that under some conditions, it is optimal for the non-innovating south to give patent protection for a longer period than the innovating north. However, a cooperative patent agreement involves a larger protection by each country compared to the non-cooperative situation. Patent protection, innovation, cooperative agreement, O34, F23, L14 01 2011 56 The Singapore Economic Review 51 59 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004092 SWAPNENDU BANERJEE swapnendu@hotmail.com Gokhale Institute of Politics and Economics, BMCC Road, Deccan Gymkhana, Pune-411004, Maharashtra, India TARUN KABIRAJ tarunkabiraj@hotmail.com Economic Research Unit, Indian Statistical Institute, Kolkata, 203, B.T. Road, Kolkata–700108, India
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article BOOK REVIEW: "Ageing in Southeast and East Asia: Family, Social Protection, and Policy Challenges" No abstract received. 04 2009 54 The Singapore Economic Review 713 716 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003537 David Reisman Nanyang Technological University, Singapore
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article MODELING PROPORTIONS: RANDOM EFFECTS MODELS OF UK FIRM ENTRY A long-standing issue in industrial economics is the understanding of the relative prevalence of labor-managed firms (LMFs) and capitalist firms across industries. In proportionate terms, LMF entry tends to be highly concentrated in particular industries. We provide empirical evidence on this by modeling the proportions of industry entrants that are LMFs, using a panel of UK manufacturing industries. Random effects proportions models indicate the role and importance of risk and capital requirements as potential deterrents to LMF entry. Proportions data, random effects, panel data, firm entry, C23, L11 03 2009 54 The Singapore Economic Review 367 377 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003380 JAN M. PODIVINSKY Economics Division, University of Southampton, Southampton SO17 1BJ, The United Kingdom GEOFF STEWART Economics Division, University of Southampton, Southampton SO17 1BJ, The United Kingdom
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article PUBLIC FINANCIAL MANAGEMENT IN SINGAPORE: KEY CHARACTERISTICS AND PROSPECTS Public financial management (PFM) has played an important role in Singapore's remarkable economic success since its independence. This paper analyzes select characteristics of Singapore's PFM strategy and prospects for their continuation. An underlying theme has been ensuring that PFM is consistent with and enables Singapore's location-based growth strategy. Other characteristics include conducting economic activities outside the conventional government budget giving rise to a much larger role for the public sector than reflected in the budget; extensive use of non-conventional sources of revenue such as from the lease of land, creating property and usage rights to generate tax-like revenue; and limited social risk pooling in financing national spending on healthcare and pensions. As Singapore's business-location-based strategy reaches its limits, and an affluent and ageing population aspires for greater economic and social security, transparency, and effective participation in public policies, current PFM practices will need to undergo significant changes towards a more citizen-centric governance focus. Policymakers' response will not be constrained by lack of fiscal resources, or by institutional and organizational capacities. Singapore, public financial management, tax policy, growth strategy, budget system, social protection, unconventional revenue generation, E6, H2, H5, H6 03 2015 60 1550032 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500320 MUKUL G. ASHER sppasher@nus.edu.sg Lee Kuan Yew School of Public Policy, National University of Singapore, Singapore AZAD SINGH BALI a.bali@murdoch.edu.au School of Management & Governance, Murdoch University and LKY School of Public Policy, National University of Singapore, Singapore CHANG YEE KWAN cykwan@e.ntu.edu.sg
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article BOOK REVIEW: "Review of 'Innocent Bystanders': Implications of an EU-Indian Trade Agreement for Excluded Countries", edited by L Allan Winters and others No abstract received. 04 2010 55 The Singapore Economic Review 767 768 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003985 JOERGEN OERSTROEM MOELLER Institute of Southeast Asian Studies Singapore, Singapore; Singapore Management University & Copenhagen Business School, Singapore
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article BOOK REVIEW: "The Price of Everything: Solving the Mystery of Why We Pay What We Do" by Eduardo Porter No abstract received. 03 2012 57 1280010 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590812800100 YOONHYUN ALLISON CHO Duke University, USA
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article EXCHANGE RATE MISALIGNMENT AND ECONOMIC GROWTH: EVIDENCE FROM PAKISTAN'S RECENT FLOAT The paper empirically evaluates growth effects of real exchange rate misalignments in Pakistan for the flexible exchange rate period (1983Q1 to 2005Q4). First, real exchange rate misalignment is calculated as the deviation of the actual real exchange rate from its equilibrium value. It is found that the actual real exchange rate in Pakistan remained undervalued. Second, using the GMM estimation technique, it is found that undervaluation of the Pak-rupee has improved output growth in Pakistan and this result is robust to alternative growth equation specifications. The results also stress the role of other factors in determining output growth rate; particularly, capital per worker, democracy, corruption, human capital and deeper financial markets have the theoretical predicted signs and are statistically significant. Real exchange rate, misalignment, output growth, C13, C22, F41, O41 03 2010 55 The Singapore Economic Review 471 489 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003857 MUHAMMAD ZAKARIA mzakaria80@yahoo.com Department of Economics, Quaid-i-Azam University, Islamabad, Pakistan
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article ENERGY CONSUMPTION AND GROWTH: NEW EVIDENCE FROM A NON-LINEAR PANEL AND A SAMPLE OF DEVELOPING COUNTRIES This paper investigates the relationship between economic growth and energy consumption through non-linear causality tests. Eight developing countries from Europe and Central Asia spanning the period 1993 to 2008 are selected for the purpose of panel empirical analysis. Panel unit root and panel cointegration tests with and without considering cross section dependency (CD) problems are implemented. Next, linear panel cointegration tests are employed and, finally, a two-regime Dynamic Panel Smooth Transition Vector Error Correction (PSTRVEC) model is estimated for testing the presence of non-linear short- and long-run causality. To this end, a new estimator, called the Dynamic Non-linear Pooled Common Correlated Effect Estimator (DNPCCEE) is proposed. The empirical findings indicate that short and long-run causalities are regime-dependent. Energy consumption, growth, non-linear panel cointegration and panel vector error correction, cross section dependency, developing countries, C12, C22 02 2015 60 1550018 The Singapore Economic Review 1 30 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500186 TOLGA OMAY Department of Banking and Finance, Çankaya University, Eskisehir Yolu 29. Km, 06790, Ankara, Turkey NICHOLAS APERGIS nicholas.apergis@northumbria.ac.uk Business School, Northumbria University, Newcastle upon Tyne, NE1 8ST, UK HÜLYA ÖZÇELEBI Çankaya University, Eskisehir Yolu 29. Km, 06790, Ankara, Turkey
oai:RePEc:wsi:serxxx:v:51:y:2006:i:03:n:s02175908060024082021-07-25RePEc:wsi:serxxx
article BOOK REVIEW: "New East Asian Regionalism: Causes, Progress and Country Perspectives", edited by Charles Harvie, Fukunari Kimura and Hyun-Hoon Lee No abstract received. 03 2006 51 The Singapore Economic Review 409 410 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002408 CHRISTOPHER M. DENT University of Leeds, UK
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article LONGEVITY INSURANCE: A MISSING MARKET More than half of the world's old live in Asia, and around 35% in India and China alone. As demographic transition proceeds regionally and globally, the development of a robust and reliable longevity insurance market will become essential. Although the need for such insurance is most pressing in Asia, longevity risk is poorly managed practically everywhere. This paper reviews theory and practice relating to longevity risk and insurance, amid a rapidly changing demographic and policy landscape. It analyzes the reasons for the failure of longevity insurance markets, and examines possible innovations in both markets and public policy that may lead to a more vibrant market and a greater variety of longevity insurance products. These include risk sharing between the buyer and seller, "deductibles", reverse mortgages, and securitization. Annuity, retirement, pension, longevity risk spec0 2005 50 The Singapore Economic Review 417 435 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002128 ADAM CREIGHTON School of Economics, University of New South Wales, Sydney 2052, Australia HENRY HONGBO JIN School of Economics, University of New South Wales, Sydney 2052, Australia JOHN PIGGOTT J.Piggott@unsw.edu.au School of Economics, University of New South Wales, Sydney 2052, Australia EMILIANO A. VALDEZ School of Actuarial Studies, University of New South Wales, Sydney 2052, Australia
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article INTRODUCTION AND EDITORIAL OVERVIEW No abstract received. 01 2014 59 1402001 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590814020019 Yuko Arayama Graduate School of Economics, Nagoya University, Japan
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article THE ROLE OF FOREIGN DIRECT INVESTMENT IN INDIA'S SERVICES EXPORTS: AN EMPIRICAL INVESTIGATION Export-oriented FDI is increasingly being perceived as an instrumental tool to strengthen country's export-competitiveness in developing countries. The theoretical literature suggests that both FDI and trade can be substitutive or complementary to each other depending on the nature of investment, industry-mix and host country's characteristics. In this context, the experience of the Indian economy is particularly instructive. Although some empirical studies have supported the view that FDI inflows in the Indian economy have not been export-oriented, it is important to note that none of these have studied the impact of FDI inflows on service exports, in spite of service sector emerging as a key driver of India's export growth. This paper examines the causal relationship between FDI inflows and service exports in the Indian economy during the post liberalization period since 1991. It uses a multivariate VAR framework for the analysis. The empirical results confirm the presence of short-run unidirectional Granger causality from FDI to services exports in the Indian economy. Services exports, FDI, Indian economy, Granger-causality 02 2006 51 The Singapore Economic Review 175 194 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002342 SADHANA SRIVASTAVA artp0320@nus.edu.sg South Asian Studies Programme, 3 Arts Link, National University of Singapore, Singapore 117570, Singapore
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article BOOK REVIEW: "Review of Realizing the ASEAN Economic Community: A Comprehensive Assessment" Edited By Michael G. Plummer and Chia Siow Yue No abstract received. 01 2013 58 1380002 The Singapore Economic Review 1 4 http://www.worldscientific.com/doi/abs/10.1142/S0217590813800027 AEKAPOL CHONGVILAIVAN Institute of Southeast Asian Studies, Singapore
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article THE PARADIGM OF CAPITALISM UNDER A DEVELOPMENTAL STATE: DOES IT FIT CHINA AND INDIA? No abstract received. 02 2010 55 The Singapore Economic Review 243 251 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003699 PRANAB BARDHAN bardhan.econ@berkeley.edu University of California at Berkeley, 508-1, Evans Hall #3880, Preckeley, CA 94720 3880, USA
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article UNIQUELY SINGAPORE'S BUDGETARY SYSTEM AND SOCIAL PROTECTION FINANCING SCHEMES This paper examines Singapore's fiscal position and its unique way of financing targeted welfare programs. We examine how reserves are accumulated through fiscal discipline during times of phenomenal economic growth in Singapore and when Singapore was enjoying demographic dividend. The existence of the large accumulated reserves has resulted in particular features of the Singapore's budgetary process, such as fiscal rules, which govern the utilization of revenues from the reserves. Innovative budget implementation, such as Block Budgeting, has helped Singapore to ensure fiscal sustainability. The accumulation of reserves throughout its economic history has afforded Singapore a unique way to fund social protection through special transfers and funds, without having to raise taxes. Fiscal sustainability, reserves, endowment and trust funds, social investment, JEL Classification: E62, JEL Classification: H11, JEL Classification: H20 03 2014 59 1450024 The Singapore Economic Review 1 21 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500246 NGEE CHOON CHIA ecscnc@nus.edu.sg Department of Economics, National University of Singapore, 1 Arts Link, A52#06-02, Singapore 117570, Singapore
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article LABOR, PRODUCTIVITY AND SINGAPORE'S DEVELOPMENT MODEL This paper discusses how Singapore's labor market policies since independence have been molded by the state-driven, foreign investment-led, export-oriented, manufacturing-focused development model the country has followed over the past fifty years. The literature we review shows that high GDP growth has been achieved through factor accumulation rather than productivity increase, a strategy of extensive growth that has now run into diminishing returns as well as political, social and resource constraints. Prolonged heavy dependence on imports of foreign labor and skills to attract foreign investment has contributed to low, declining and even negative productivity growth, with low real GDP growth in recent years. In response, the government is pursuing renewed economic restructuring, limiting foreign labor inflows, targeting investments more selectively, and promoting productivity and innovation, so far with uncertain results. This paper suggests that Singapore should let market forces propel the economy toward services, domestic consumption and regional trade, led by domestic private enterprise. But the retreat from established state industrial and social policies will be difficult. Labor markets, labor policy, productivity, economic development, J, O 03 2015 60 1550033 The Singapore Economic Review 1 30 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500332 ENG FONG PANG efpang@smu.edu.sg Lee Kong Chian School of Business, Singapore Management University, 50 Stamford Road, Singapore 178899, Singapore LINDA Y. C. LIM lylim@umich.edu Stephen M. Ross School of Business, University of Michigan, 701 Tappan, Ann Arbor, Michigan 48109-1234, United States
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article EXOGENOUS OR ENDOGENOUS MONEY SUPPLY: EVIDENCE FROM AUSTRALIA This paper investigates the nature of money supply in Australia over two separate monetary policy regimes: monetary and inflation targeting. The post-Keynesian theory on endogenous money was tested with the aim of investigating whether endogenous money supply, if it did exist, followed the accomodationist, structuralist or liquidity preference viewpoints. Data used are quarterly series from 1977 to 2007 and we used vector error-correction model for long-run and short-run causality tests. We found that money supply is endogenous in Australia even when the central bank targeted monetary aggregates during the period 1977 to 1993. Post-Keynesian, endogenous money supply, vector error-correction model, E12, E51 04 2012 57 1250025 The Singapore Economic Review 1 12 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500257 ZATUL E. BADARUDIN badarudin@corporatefile.com.au Toll Corporation Pty Ltd, Melbourne, Vic 3000, Australia AHMED M. KHALID akhalid@bond.edu.au School of Business, Bond University, Gold Coast, QLD 4229, Australia MOHAMED ARIFF mariff@bond.edu.au School of Business, Bond University, Gold Coast, QLD 4229, Australia
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article WHY DO MIGRANTS DO BETTER THAN NON-MIGRANTS AT DESTINATION? MIGRATION, CLASS AND INEQUALITY DYNAMICS IN INDIA The puzzle that we address in this paper is why migrants at their destination fare better than non-migrants, across different socio-economic classes in India, while the general perception of migrants is that they are less endowed than the locally residing population. We explain this by the relatively high elite presence among migrants, dualism of Indian migration (between long-term and circular ones), but mainly by the differences in the levels of education. In India, migration has taken an overall color of increasing the nation-wide inequalities (mainly by heightening the rural–urban gap and urban disparities). Migration, inequality, development, rural–urban, labor mobility, JEL Classifications: J61, JEL Classifications: O15, JEL Classifications: O53 01 2014 59 1450003 The Singapore Economic Review 1 13 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500039 VAMSI VAKULABHARANAM vamsi.vakul@gmail.com School of Economics, University of Hyderabad, Gachibowli, Hyderabad, AP-500046, India SASWATA GUHA THAKURATA School of Economics, University of Hyderabad, Gachibowli, Hyderabad, AP-500046, India
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article FACTORS AFFECTING FOREIGN DIRECT INVESTMENT IN MALAYSIA'S MANUFACTURING SECTOR: AN ANALYSIS ACROSS STATES This paper examines the effects of market demand, labor productivity, socio-economic development and provision of industrial estates on foreign direct investment (FDI) across 13 states and 1 federal territory in Malaysia. The analysis uses FDI data of the manufacturing sector and data on independent variables for the years 1990, 1995, 2000 and 2005. Results indicate positive relationships between these factors and FDI inflows in the manufacturing sector. FDI inflows are found to be most sensitive to labor productivity and GDP. The significance of socio-economic development for FDI is viewed in a long-term perspective. Foreign direct investment, manufacturing sector, econometric analysis, regional development, F21, R58 04 2012 57 1250015 The Singapore Economic Review 1 14 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500154 NOOR AL-HUDA ABDUL KARIM nooralhuda@fpe.upsi.edu.my Department of Economics, Block 10, Faculty of Management and Economics, Sultan Idris Education University, 35900 Proton City, Perak, Malaysia EUAN FLEMING School of Business, Economics and Public Policy, University of New England, Australia
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article EXTENT OF EXCHANGE RATE COORDINATION IN ASIA High level of intra-regional trade and negative spillovers from competitive devaluation make exchange rate coordination extremely desirable in Asia. Employing a hypothetical Asian Currency Unit we evaluate the degree of coordination among Asian currencies. Traditional empirical tests yield little evidence of coordination among real and nominal exchange rates. However, introducing endogenously determined structural breaks to account for changes in exchange rate regimes provides more mixed evidence. While there is still little evidence for coordination in nominal terms, some degree of coordination among real rates emerges. The limited evidence for exchange rate coordination can be explained by the diverse exchange rate regimes prevailing in these economies, signaling differences in policy objectives. Asian currency unit, currency coordination, structural breaks, exchange rate regimes, panel unit root, F33, F36, N15, E58 02 2015 60 1550013 The Singapore Economic Review 1 25 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500137 ABHIJIT SEN GUPTA asengupta@adb.org India Resident Mission, Asian Development Bank, 4 San Martin Marg, Chanakyapuri, New Delhi 110021, India
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article DEVELOPMENT STATUS AND PROSPECTS FOR AVIATION HUBS — A COMPARATIVE STUDY OF THE MAJOR AIRPORTS IN SOUTH-EAST ASIA This paper benchmarks the key performance measures of the hub airports in Southeast Asia. Our investigation suggests that (1) Hong Kong has been a leader in terms of network connectivity, traffic growth, hub airline developments, and cargo logistics. (2) Bangkok airport's growth has been constrained by political instability and weak hub airline development; in the long-run, the airport, however, has great potential. (3) The development of low-cost carriers have become a major driver for traffic growth, but the implications to airport connectivity have been unclear. (4) Despite limited progress on regional liberalization, intra-Asian routes have clearly contributed to traffic growth and hub airport connectivity. (5) Governments should safeguard airline competition by promoting market liberalization and airport capacity investments. Airport competition, network connectivity, regional aviation hub 04 2011 56 The Singapore Economic Review 573 591 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004420 WINAI HOMSOMBAT win.homsombat@polyu.edu.hk Department of Logistics and Maritime Studies, Faculty of Business, Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong SAR ZHENG LEI z.lei@cranfield.ac.uk Department of Air Transport, Cranfield University, College Road, Cranfield, Bedfordshire, MK43 0AL, United Kingdom XIAOWEN FU lgtxfu@polyu.edu.hk Department of Logistics and Maritime Studies, Faculty of Business, Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong SAR
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article CONFLICTS AND DELAYS IN INTERNATIONAL TRADE AGREEMENTS Motivated by the current delay in WTO negotiations, we consider a model of a bilateral trade agreement in the presence of asymmetric cross-border externalities. In this model, we show that both countries conflict in their preferred set of policy agendas and thus have incentives to delay their negotiations. We also find that the extent of delay depends on the level of transfer between them. These results imply an importance of bilateral compensation scheme between developing and developed countries in the current WTO negotiations so as to reduce the delays. International trade agreement, negative externality, a war of attrition, delay, F13, C72 02 2012 57 1250010 The Singapore Economic Review 1 20 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500105 JUNG HUR ecsjhur@sogang.ac.kr Department of Economics, Sogang University, #1 Shinsu-Dong, Mapo-Gu, Seoul, 121-742, Korea
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article IN SEARCH OF A STABLE NARROW MONEY-DEMAND FUNCTION FOR INDONESIA, 1970–2007 This paper adopts the Johansen approach to cointegration to estimate a narrow money-demand function for Indonesia with annual data for the period 1970–2007. Empirical results suggest that there exists a cointegral relationship between real narrow balances, real permanent income and the deposit rate of interest. The recursive and rolling regression results suggest that the narrow money-demand function has remained largely stable irrespective of ongoing financial reforms in Indonesia since the late 1980s and/or financial crises in the late 1990s. The Quandt-Andrews breakpoint and the Hansen-Johansen stability tests results however suggest that the narrow money-demand relationship had a structural break in the early 1990s. This corresponds to a period of time when the banking and financial reforms in Indonesia took effect. The Chow breakpoint test results suggest that there was also a structural break in the money-demand relationship during the financial crises of the late 1990s. Indonesia, narrow money-demand, Johansen cointegration approach, Quandt-Andrews breakpoint test, Chow's breakpoint test, the Hansen-Johansen stability test 01 2011 56 The Singapore Economic Review 61 77 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004109 AKHAND AKHTAR HOSSAIN akhtar.hossain@newcastle.edu.au Newcastle Business School, University of Newcastle, NSW 2308, Australia
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article INTERNATIONAL LENDING AND THE SAMARITAN'S DILEMMA We analyze how the altruism of an International Financial Institution (IFI) towards its Low-Income member Countries (LICs) alters the effectiveness of its loans. We study IFI loans to a credit-constrained LIC. The IFI's repayment policy is determined by the interplay of its concerns for the welfare of the loan recipient and its fiduciary responsibilities to creditor countries. If the IFI is unable to commit to either the size of future loans or the repayment terms on past loans, conditional loans are superior to unconditional loans. Thus, IFI altruism and the inability to commit are sufficient reasons to equip loans with conditions. Conditional loans produce an efficient allocation of resources, so altruism is not a fundamental reason that loans fail to increase welfare. Conditional lending, human capital investment, economic efficiency 01 2015 60 1550002 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500022 ALEXANDROS MOURMOURAS Asia and Pacific Department, International Monetary Fund, Washington, DC, USA PETER RANGAZAS prangaza@iupui.edu IUPUI, CA 518, Department of Economics, IUPUI 46202, USA
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article HAS INFLATION PERSISTENCE IN INDIA CHANGED OVER TIME? The temporal movement of reduced form inflation persistence for India was estimated using time-varying autoregressive models with stochastic volatility, using monthly data from April 2004 to June 2012. The results suggested an increasing trend in inflation persistence in India during 2004–2009, which had fallen down subsequently. Structural persistence was studied using a time-varying vector auto regression (VAR) model with inflation, output growth and interest rate as variables using quarterly data from 1996–1997 to 2011–2012. The results suggested that the inflation persistence which was higher in 2009 and 2010, had subsequently moderated. Reduced form inflation persistence, structural inflation persistence, time-varying parameter models, stochastic volatility, E31, C32, E52 04 2015 60 1550095 The Singapore Economic Review 1 16 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500952 JOICE JOHN joicejohn@rbi.org.in Reserve Bank of India, Mumbai, India
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article INTERNATIONAL TRANSMISSION OF INTEREST RATES AND THE OPEN ECONOMY TRILEMMA IN ASIA There has recently been much discussion on the relevance of the open economy trilemma in the context of deepening financial integration of countries across the world (see for instance, Rey (2013) and Devereux and Yetman (2014)). The open economy trilemma is an important issue for the countries in Asia not least because their financial systems are small and exchange rate stability is crucial to their economic growth. This paper investigates whether the economies in Asia are still bound by the "impossible trinity" by examining the interest rate transmission from the US to the region before and after the onset of the global financial crisis. We make a distinction between long-run versus short-run transmission of interest rates by conducting the Peseran bounds test of cointegration and Wald test of joint significance respectively on autoregressive distributed lag models estimated with data from nine Asian economies. The findings on the strength of interest rate pass-through are related to each country's trilemma configuration. Overall, our empirical results provide some supporting evidence that the Asian economies are still constrained by the open economy trilemma. Interest rate transmission, open economy trilemma, global financial crisis, JEL Classification: C32, JEL Classification: E52, JEL Classification: F42 03 2014 59 1450020 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500209 HWEE KWAN CHOW hkchow@smu.edu.sg Singapore Management University, School of Economics, 90 Stamford Road, Singapore 178903, Singapore
oai:RePEc:wsi:serxxx:v:53:y:2008:i:01:n:s02175908080028842021-07-25RePEc:wsi:serxxx
article LOCATION, LOCATION, LOCATION: SELECTING SITES FOR CONTROVERSIAL FACILITIES While a large literature exists on the siting of controversial facilities, few theories about spatial location have been tested on large samples. Using a new dataset from Japan, this paper demonstrates that state agencies choose localities judged weakest in local civil society as host communities for controversial projects. In some cases, powerful politicians deliberately seek to have facilities such as nuclear power plants, dams and airports placed in their home constituency. This paper then explores new territory: how demographic, political and civil society factors impact the outcomes of siting attempts. It finds that the strength of local civil society impacts the probability that a proposed project will come to fruition; the greater the concentration of local civil society, the less likely state-planned projects will be completed. Spatial location, controversial facilities, nuclear power plant, airport, dam, civil society, Japan, NIMBY 01 2008 53 The Singapore Economic Review 145 172 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002884 DANIEL P. ALDRICH daniel.aldrich@gmail.com Purdue University, Department of Political Science, Beering Hall of Liberal Arts and Education, 100 N. University Street, West Lafayette, IN 47907-2098, USA
oai:RePEc:wsi:serxxx:v:54:y:2009:i:01:n:s02175908090031972021-07-25RePEc:wsi:serxxx
article BOOK REVIEW: "World Investment Prospects to 2010: Boom or Backlash?" No abstract received. 01 2009 54 The Singapore Economic Review 149 151 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003197 DONGHYUN PARK
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article ECONOMIC INTEGRATION IN EAST ASIA AND EUROPE: LESSONS FROM A COMPARATIVE ANALYSIS This paper compares the economic integration processes of the European Union and the East Asian nations and comments on the possible reciprocal lessons, if any, that can be drawn to smooth the future paths of the two groups. The most relevant lessons on the EU side rely on strong institutionalization, structural policies, and the monetary union. Lessons from East Asia can be found in regional production networks, trade patterns, and the recent developments in financial cooperation. Both entities are presently facing difficult challenges to progress and growth. East Asia, European Union, regional integration, economic cooperation 01 2010 55 The Singapore Economic Review 163 184 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003651 GIOVANNI CAPANNELLI gcapannelli@adb.org Office of Regional Economic Integration, Asian Development Bank, 6, ADB Avenue, Mandaluyoung City, Metromanila, Philippines CARLO FILIPPINI carlo.filippini@unibocconi.it Dipartimento di Economia Politica, Universita' L. Bocconi, Via Sarfathi, 25, 20136 Milano, Italy
oai:RePEc:wsi:serxxx:v:58:y:2013:i:04:n:s02175908135002882021-07-25RePEc:wsi:serxxx
article IS THERE A POSITIVE ASSOCIATION BETWEEN MERGER AND ACQUISITION AND NON-MERGER AND ACQUISITION FDI? FIRM-LEVEL EVIDENCE FROM JAPANESE FOREIGN DIRECT INVESTMENT INTO UNITED STATES Japanese firms undertake multiple foreign direct investments (FDIs) in the United States. When Japanese firms undertake merger and acquisition (M&A) FDI, they acquire indivisible assets in the United States. To utilize their acquired assets fully, these firms may undertake additional non-M&A FDI. This implies a positive association between the number of M&As and the number of non-M&A FDIs because they may be complements. In contrast, the literature on the choice of modes of FDI examines the tradeoff between M&A and non-M&A FDI. This may suggest a negative association between the number of M&As and non-M&A FDIs because they may be substitutes. The authors examine whether the number of M&As and non-M&A FDIs are positively associated or not by proposing an econometric model that tests the contemporaneous association and the lagged complementary effect between M&A and non-M&A FDI. Using firm-level data, the authors find evidence that M&A and non-M&A FDI of Japanese firms in the United States are positively associated. Particularly, the findings indicate that given all other things equal, a one unit increase in the number of the firm's M&A FDI (non-M&A) projects in a given year will increase the firm's average non-M&A (M&A) FDI by 28.1% (15.8%) the following year. Foreign direct investment, Gaussian copula, hidden Markov model, indivisibility of asset, merger and acquisition, C33, D21, G34 04 2013 58 1350028 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500288 JOSEPH D. ALBA ajoalba@ntu.edu.sg School of Humanities and Social Sciences, Nanyang Technological University, Singapore 639798, Singapore PETER X. K. SONG pxsong@umich.edu School of Public Health, University of Michigan, M4140 SPH II, 1420 Washington Heights, Ann Arbor, Michigan 48109-2029, USA PEIMING WANG peiming.wang@aut.ac.nz Faculty of Business and Law, Auckland University of Technology, Private Bag 92006, Auckland 1142, New Zealand
oai:RePEc:wsi:serxxx:v:53:y:2008:i:02:n:s02175908080029262021-07-25RePEc:wsi:serxxx
article IMPACTS OF AGEING POPULATION ON MONETARY AND EXCHANGE RATE MANAGEMENT IN SINGAPORE This policy note finds that the ageing of the population in Singapore will cause a reversal of the current net Central Provident Fund (CPF) contribution into a substantial net CPF withdrawal from 2025, with a peak occurring at 2035. The result is qualitatively robust to changes in the underlying assumptions of the projection. The paper then highlights the implications of this change on the exchange rate and monetary management in Singapore. Finally, the paper proposes policy measures that can help (a) mop up the excess liquidity due to the net CPF withdrawals; and (b) maintain the Monetary Authority of Singapore (MAS)'s influence on Singapore's exchange rate at a reasonable level in the longer future. Ageing population, Central Provident Fund, exchange rate system, monetary policy, Singapore 02 2008 53 The Singapore Economic Review 245 259 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002926 PAUL S. L. YIP aslyip@ntu.edu.sg Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore K. C. TAN akctan@ntu.edu.sg Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore
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article ECONOMIC GROWTH EFFECTS OF AN INTERNATIONAL CRISIS We develop a general equilibrium endogenous growth model where final goods are produced in either the exporter sector or the importer sector, in order to analyze the short, medium and long-run growth effects of an external demand shock induced by an international crisis, such as the current one. Depending on the policy response, such a shock might (or might not) severely affect competitiveness, wage inequality, the economic growth rate and the technological-knowledge bias. This bias controls the paths towards the new steady state. The model shows that countries with balanced public finances can accommodate the external shock and that the intervention should be prompt, as the delay is costly. Results appear to be supported by empirical evidence. External demand shock, economic growth, public accounts, competitiveness, wages, C63, J31, O31 02 2015 60 1550012 The Singapore Economic Review 1 16 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500125 OSCAR AFONSO oafonso@fep.up.pt Universidade do Porto, Faculdade de Economia, OBEGEF and NIFIP, Rua Roberto Frias 4200-464 Porto, Portugal RUI HENRIQUE ALVES Universidade do Porto, Faculdade de Economia, OBEGEF and NIFIP, Rua Roberto Frias 4200-464 Porto, Portugal
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article SYSTEM DYNAMICS APPROACH AS A RISK MANAGEMENT TOOL IN ANALYZING PENSION EXPENDITURE: THE CASE OF MALAYSIAN EMPLOYEES PUBLIC PENSION PLAN Malaysian employees' public pension plan was studied to analyze pension expenditure due to salary risk and demographic risk. By integrating risk management and System Dynamics (SD) approach, the risk factors involved were identified, a causal loop diagram was constructed, and the SD model was developed. By using a sample of actual data, the proposed model was then validated through behavior validity test and a risk analysis was conducted. Then, risk monitoring was performed through policy evaluation in which the impact of different policy scenarios on pension expenditure was analyzed. Risk management and dynamics simulation approach in analyzing pension expenditure were shown to be useful in evaluating the impact of changes and policy decisions on risk. Demographics and salary risk, dynamics modeling and simulation, pension expenditure, public policy, risk management, system dynamics 05 2014 59 1450046 The Singapore Economic Review 1 24 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500465 HASIMAH SAPIRI hasimah@uum.edu.my School of Quantitative Sciences, UUM College of Arts and Sciences, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia ANTON ABDULBASAH KAMIL anton@usm.my Department of Mathematics, School of Distance Education, Universiti Sains Malaysia, 11800 Pulau Pinang, Malaysia RAZMAN MAT TAHAR razman779@ump.edu.my Department of Technology Management, Faculty of Manufacturing Engineering and Technology Department, Universiti Malaysia Pahang, 26300 Kuantan, Pahang, Malaysia
oai:RePEc:wsi:serxxx:v:57:y:2012:i:03:n:s02175908125001422021-07-25RePEc:wsi:serxxx
article IMPACT OF INCOME INEQUALITY AND DEFENCE BURDEN ON ECONOMIC GROWTH This study explores how income inequality and defence burden affects economic growth in different parts of the world. We follow an endogenous growth model that proposes a negative relationship of growth with income inequality and defence burden. The implications of the model are tested using panel data. The results suggest a negative relationship of growth with income inequality and defence burden. A by-product of this analysis is the conclusion regarding convergence. Our study finds no support for convergence across the world. Defence burden, income inequality, economic growth, convergence, endogenous growth model, D30, E60, O40 03 2012 57 1250014 The Singapore Economic Review 1 15 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500142 ZAINAB IFTIKHAR zainab.kkhan@gmail.com Pakistan Institute of Development Economics, P.O. Box 1091, Quaid-e-Azam University Campus, 44000 Islamabad, Pakistan AMANAT ALI School of Economics, Quaid-e-Azam University, 44000 Islamabad, Pakistan
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article BOOK REVIEW: "Population Policies and Programmes in Singapore", by Saw Swee-Hock No abstract received. 01 2006 51 The Singapore Economic Review 103 104 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002275 CHEOLSUNG PARK Department of Economics, National University of Singapore, Singapore
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article PROTECTING THE DOMESTIC MARKET: INDUSTRIAL POLICY AND STRATEGIC FIRM BEHAVIOR Asian firms frequently have to undercut domestic prices and subsidize switching costs in order to obtain a positive market share when entering European and the US markets. Such practices constitute dumping under Article VI of the General Agreement on Tariffs and Trade. We demonstrate that the mere existence of an administratively set minimum price, which is frequently used in assessing dumping allegations, protects domestic firms and has the effect of an additional entrance barrier for Asian firms. Consequently, competition policy should reassess GATT's antidumping regulation in order to keep markets open and domestic competition healthy. Industrial policy, antidumping, switching costs, market entry, D21, L13, L52 02 2011 56 The Singapore Economic Review 159 174 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004183 JENS METGE Chemnitz University of Technology, Germany PIA WEISS pia.weiss@nottingham.ac.uk Nottingham University Business School, Jubilee Campus, Wollaton Rd, Nottingham NG8 1BB, United Kingdom
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article IMPORT PROTECTION AND FEMALE LABOR This study empirically investigates the impact of import protection on female labor using a panel dataset of 211 countries. Our findings suggest that import protection increases female labor participation rate in capital abundant countries, whereas decreases in labor abundant ones. This result is also in line with the stylized view that female labor benefits from labor intensive production which requires less formal training and lower job skills. Import protection, trade policy, trade, female labor participation 05 2014 59 1450038 The Singapore Economic Review 1 8 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500386 VEYSEL AVSAR veysel.avsar@antalya.edu.tr Department of Economics, Antalya International University, Turkey
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article ASIAN MONETARY COOPERATION: PERSPECTIVES FROM THE OPTIMUM CURRENCY AREA ANALYSIS We argue that a number of recent studies have overstated the economic case for the creation of a common Asian currency by focusing on only a few of the relevant criteria. We also conclude that endogenous forces are unlikely to be sufficiently strong that adopting a common currency would quickly turn Asia into an optimum currency area (OCA) as some have suggested. We argue that more attention needs to be devoted to issues of monetary, fiscal, and exchange rate coordination under a fairly flexible exchange rate system and that OCA analysis is a valuable framework for analyzing such issues. Asian monetary integration, OCA 01 2010 55 The Singapore Economic Review 103 124 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003638 THOMAS D. WILLETT Thomas.Willett@cgu.edu Claremont Graduate University and Claremont McKenna College, Harper East 206, School of Politics and Economics, 160 E. 10 street, Claremont, 91711, USA; Economic Policy Studies, Harper East 206, School of Politics and Economics, 160 E. 10 street, Claremont, 91711, USA ORAWAN PERMPOON orawan.cgu@gmail.com Politics and Economics at Claremont, Graduate University, USA LALANA SRISORN lalana.srisorn@cgu.edu Politics and Economics at Claremont, Graduate University, USA
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article RISKY CHOICES IN A RISK-TAKING EXPERIMENT: ARE SINGAPOREANS DIFFERENT FROM THE REST OF THE WORLD? This paper introduces a rich experimental environment which allows one to control for possible status quo effects as well as the "anticipatory fear of loss" inherent in gambles by framing scenarios in terms of gains and losses. A total of 162 undergraduates — Africans, Caucasians, Singaporeans and Chinese — are recruited for this study. From the risk choices that students take, we can see how Singaporeans differ from their counterparts elsewhere. The results show that Singaporeans are less risk averse than African or Caucasian exchange students. In terms of risk seeking behavior, when using Caucasians as a reference group, Singaporeans and Chinese undergraduates are also relatively more risk seeking as well. The majority of the players are risk neutral in this experiment. Singaporeans, like the Caucasians and Chinese in the sample, are all more likely to favor risk neutral strategies if their default gamble is one with higher expected payoffs. Cross-cultural, Singaporeans' risk attitudes, gambling experiment, J15, C91, D03 03 2013 58 1350015 The Singapore Economic Review 1 16 http://www.worldscientific.com/doi/abs/10.1142/S021759081350015X ROLAND CHEO blangah@live.cn Center for Economic Research, Shandong University, 27 Shanda Nanlu, Jinan, China 250100, China
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article OCCUPATIONAL SEGREGATION IN THE MALAYSIAN LABOR MARKET: EVIDENCE ON THE L INDEX Empirical research on occupational segregation has conventionally measured it with Duncan dissimilarity index. This paper adopts an alternative approach — the L index — using the multivariate analysis introduced by Spriggs and Williams, which we extend to explore the impact of economic development on occupational segregation. This enables us to investigate the importance of individuals' attributes in explaining the segregation. Using data from the Labor Force Survey between 1985 and 2005, our results indicate that the L index controlling only for sex is substantial and persistent. However, the full model L index generally implies that occupational segregation has widened after controlling for individuals' attributes. It is found that segregation in the Malaysian labor market is mainly explained by gender, which, on average, accounts for 82% of the segregation. When a measure of macroeconomic conditions and a time variable economic are factored into the model that controls for gender only, the L index remains unchanged. Occupation, segregation, gender, J16, J24, J71 03 2011 56 The Singapore Economic Review 397 421 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004341 SIEW CHING GOY s.goy@lancaster.ac.uk Department of Economics, Lancaster University Management School, Lancaster LA1 4YX, UK GERAINT JOHNES g.johnes@lancaster.ac.uk Department of Economics, Lancaster University Management School, Lancaster LA1 4YX, UK
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article THE ECONOMIC VOTING HYPOTHESIS IN THE PRESENCE OF THRESHOLD EFFECTS: EVIDENCE FROM ASYMMETRIC MODELING The issue of asymmetry and nonlinearity in the context of economic voting was proposed as far back as the 1970s. The aim of this paper is to revisit the economic voting phenomenon by investigating the asymmetric cointegration between government popularity and economic conditions in Taiwan over the period from 1992 to 2007. We employ an advanced threshold autoregressive model and find strong evidence of threshold cointegration relationships between our observed variables. Furthermore, an asymmetric error correction model indicates that voters use different economic indicators to evaluate government popularity in different regimes and the speed of adjustment to the long-run equilibrium is more rapid in the lower regime and slower in the higher regime. Finally, the evidence shows that the economic voting behavior is supported by the presence of the threshold effects. Based on the nonlinear, asymmetric and threshold effects, we are able to provide several critical implications concerning the governance of the incumbent political party, particularly, in relation to the promotion of economic policy aimed at improving its popularity. Economic voting, government popularity, threshold autoregressive model, threshold effect, asymmetric vector error-correction, C52, D72, P16, C32 01 2013 58 1350004 The Singapore Economic Review 1 29 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500045 CHUN-PING CHANG Department of Marketing Management, Shih Chien University at Kaohsiung, Kaohsiung, Taiwan CHIEN-CHIANG LEE cclee@cm.nsysu.edu.tw Department of Finance, National Sun Yat-sen University, Kaohsiung, Taiwan
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article DOES GOVERNMENT OWNERSHIP MATTER? COMPARATIVE STUDY BETWEEN GLCS AND NGLCS IN MALAYSIA This study investigates whether government participation in firm ownership leads to better firm performance of publicly listed companies in Malaysia. The sample covers 257 companies listed on the Bursa Malaysia from 1997 to 2009. Multiple regression models with balanced panel data are used to examine the impact of government ownership (GOVN) on firm performance. We find a negative relationship between GOVN and firm performance, a finding that supports the negative public perception of government-linked companies (GLCs) in Malaysia. We conclude that government ownership is not an effective tool for improvement of firm performance in Malaysia. GLCs, NGLCs, government ownership, firm performance, public listed, Malaysia, G32, G38 02 2015 60 1550019 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500198 IRENE WEI KIONG TING irene@uniten.edu.my College of Business Management and Accounting, Universiti Tenaga Nasional, Malaysia HOOI HOOI LEAN hooilean@usm.my Economics Program, School of Social Sciences, Universiti Sains Malaysia, Malaysia
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article HOUSING POLICIES IN SINGAPORE: EVALUATION OF RECENT PROPOSALS AND RECOMMENDATIONS FOR REFORM The Singapore housing market is unusual in its high homeownership rate, the dominance of HDB housing, and the extensive intervention of the government in regulating housing supply and demand in both the HDB and private housing sectors. Recent rapid population increases in a low interest rate and high global liquidity environment has resulted in accelerated house prices increases in Singapore. Earlier this year, the government launched "Our Singapore Conversation" of which discussion on housing policies constitutes one major component. This "conversation" comes in the wake of several consecutive rounds of measures to stabilize housing prices using various instruments. This paper evaluates the main policy changes proposed and makes recommendations for housing market reforms: (i) the government need to clarify goals of housing policies and make available more detailed data on the foreign component of our population for better analysis of housing markets; (ii) the housing supply regime should target an overall effective vacancy rate that encompasses both the Housing and Development Board (HDB) and private sector; (iii) policy makers need to monitor carefully excess demand indicators for housing in addition to housing affordability indicators over the entire spectrum of incomes and household types; (iv) housing REITs should be established to provide an alternative investment option as well as to develop an efficient and affordable rental sector; and (v) in addition to macroprudential measures, owner-occupancy requirements and fiscal measures such as stamp duties and property taxes could be further utilized to reduce the foreign demand for Singapore housing and real estate. Singapore, Housing Policies, Housing Reform, HDB, REITs, JEL Classification: R21, JEL Classification: R31, JEL Classification: R38 03 2014 59 1450025 The Singapore Economic Review 1 14 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500258 SOCK-YONG PHANG syphang@smu.edu.sg Singapore Management University, Singapore DAVID LEE Singapore Management University, Singapore ALAN CHEONG Savills Singapore, Singapore KOK-FAI PHOON Singapore Management University, Singapore KAROL WEE Singapore Management University, Singapore
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article BOOK REVIEW: "Bank Indonesia and the Crisis: An Insider's View", by J Soedradjad Djiwandono No abstract received. 03 2006 51 The Singapore Economic Review 415 418 http://www.worldscientific.com/doi/abs/10.1142/S021759080600238X BEOY KUI NG Economics Division, School of Humanities and Social Science, Nanyang Technological University, Singapore
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article ECONOMIC IMPACT ASSESSMENT OF PUBLIC–PRIVATE MATCHING FUND PROGRAMS USING FIRM-LEVEL DATA In the intermediate goods industry, largely made up of small and medium enterprises (SMEs), a government can use a matching fund to execute policies that, for example, provide funds to promote and support firms' innovative activities. This study performs an empirical analysis to investigate the additional effects when a government uses a matching fund in this way and, in particular, to analyze the growth of firms. Methodologically, to deal with the selectivity issue, we adopt a propensity score matching (PSM) estimator. We also investigate the performance of the matching fund according to changes in private shares. Our findings show that supported firms invested larger amounts in R&D and procured external financing through an overall improvement in their level of reliability. However, the results also show that this was not connected to further improvements in business performance. Moreover, although our results show some positive impact on assets and R&D expenditure from private investment in the matching fund, the relationship between sales and fixed assets was non-significant. Government support, intermediate goods industry, matching fund, selection bias, propensity score matching, venture capital, C40, G20, H20, H81, L60, O38 04 2015 60 1550060 The Singapore Economic Review 1 25 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500605 YOUNGKYU KIM ifrit99@gmail.com Korea Electronics Technology Institute, 68 Yatap-dong, Bundang-gu Seongnam, Kyonggi-do 463-816, Republic of Korea INHA OH inhaoh@konkuk.ac.kr Department of Advanced Industry Fusion (AIF), Konkuk University, 120 Neungdong-ro, Gwangjin-gu, Seoul 143-701, Republic of Korea JEONG-DONG LEE leejd@snu.ac.kr Technology, Management, Economics and Policy Program, Seoul National University, San 56-1, Shillim9-Dong, Kwanak-Gu, Seoul 151-742, Republic of Korea
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article BOOK REVIEW: "Review of How Asia Can Shape the World — From the Era of Plenty to the Era of Scarcities" by Jorgen Oerstrom Moller No abstract received. 03 2013 58 1380007 The Singapore Economic Review 1 4 http://www.worldscientific.com/doi/abs/10.1142/S0217590813800076 OMKAR L SHRESTHA Institute of Southeast Asian Studies, Singapore
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article INDIA AND SERVICES OUTSOURCING IN ASIA This paper examines India's role in services outsourcing within Asia. It provides a brief overview of the global as well as Indian services outsourcing industry. The core section examines India's relationship with other Asian countries such as China, the Philippines, Vietnam, and Malaysia in service outsourcing. It examines the extent to which these countries pose a competitive challenge to India and concludes that at this time, India is far ahead although it is likely to face growing competition as its costs rise. The paper highlights the need to move beyond this comparative paradigm and to examine the complementary and collaborative opportunities that exist between India and other Asian countries in services outsourcing. It concludes that there is considerable scope for such synergies and that India and other Asian countries can form different parts of a larger regional or global delivery model. Regional and bilateral agreements within Asia can also facilitate this process. Services, outsourcing, offshoring, information technology (IT), IT-enabled services, business process outsourcing 03 2008 53 The Singapore Economic Review 419 447 http://www.worldscientific.com/doi/abs/10.1142/S0217590808003051 RUPA CHANDA rupa@iimb.ernet.in Indian Institute of Management, Bannerghatta Road, Bangalore 560076, India
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article THE INTERNATIONAL MONETARY FUND AND EXCHANGE RATE CRISIS MANAGEMENT The article analyzes the limits of the IMF as a global multilateral economic agency to handle serious balance of payments disequilibria. Capital control and growth rates in developing Asia and the twin deficit problem of the United States are also discussed. It also assesses the probability of the reemergence of an exchange rate crisis in Southeast Asia and the wisdom of having an Asian IMF. Exchange rate crisis, capital control, growth rates in China and ASEAN, East Asian financial crisis, US twin deficits, IMF, AMF 03 2007 52 The Singapore Economic Review 285 294 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002725 CHONG-YAH LIM acylim@ntu.edu.sg Economic Growth Centre (EGC), School of Humanities and Social Sciences (HSS), Nanyang Technological University (NTU), S3-01B-38, Nanyang Avenue, Singapore 639798, Singapore
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article BOOK REVIEW: "Poverty and Inequality in Vietnam, Spatial Patterns and Geographic Determinants" No abstract received. 01 2009 54 The Singapore Economic Review 153 154 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003215 SHUBHASREE SESHANNA Nanyang Technological University, Singapore
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article SOURCES OF HAPPINESS IN INDONESIA Using the Indonesian Family Life Survey, this paper elucidates the factors related to happiness in Indonesia. Some factors yield results consistent with those in the literature, but other factors such as unemployment and the female gender turn out not to be robust. Some attempts are made to purge endogeneity for past income mobility, social trust, and political environment. Also, measures with a more immediate impact on happiness are exploited for social trust and political environment. The sign of the coefficient on past income mobility is reversed once the variable has been purged of endogeneity. In addition, social trust and political environment are found to have little relationship with happiness. Happiness, development, Indonesia, D10, D60, I31, J01, O53 02 2013 58 1350014 The Singapore Economic Review 1 27 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500148 KITAE SOHN ksohn@kookmin.ac.kr Department of Economics, Kookmin University, 77 Jeongneung-ro, Seongbuk-gu, Seoul, 136-702, South Korea
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article LONG-RUN RELATIONSHIP BETWEEN IMPORTS AND EXPORTS: EVIDENCE FROM ASIAN COUNTRIES We used Engle–Granger cointegration test to investigate and compare the long-run performance of imports and exports in Pakistan, India, Sri Lanka, Korea and Thailand. Graphical analysis demonstrates an inherent tendency of imports and exports to move together in the long run. Cointegration and error correction results support the graphical analysis that these countries do not violate on the average the international budget constraint, and trade disequilibrium is a short-run phenomenon that is sustainable in the long run. Macroeconomic policies in the sample countries have been adequately effective to affect long-run equilibrium between imports and exports. The international events had differential impact on each country of our sample. Imports, exports, trade disequilibrium, cointegration, error correction 02 2008 53 The Singapore Economic Review 261 278 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002938 MOHAMMAD AFZAL mafzalgu@yahoo.com profafzal@gmail.com Department of Economics, Gomal University, City Campus, D.I.Khan 29090, Pakistan
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article BEING POOR IN A RICH "NANNY STATE": DEVELOPMENTS IN SINGAPORE SOCIAL WELFARE This paper reviews the trends in poverty and inequality in Singapore since independence, as well as policy recommendations adopted through the years, and their results. Poverty is discussed not only in terms of wage earnings, but also in relation to employment conditions, social challenges that pile up together with income poverty, and intergenerational mobility. The paper finds that notwithstanding improvements in early decades, after fifty years, the problems of a social divide and poverty have come full circle. Social policy in Singapore retains its fundamentally productivist philosophical orientation, but the recent deterioration in poverty, inequality and mobility trends is leading to adoption of more welfare-oriented and universalist policy solutions. Social inclusion is now a national priority, and policy redirection for the future needs to take place in wide-ranging policy domains, including the labor market and economic growth. Poverty, inequality, social welfare, Singapore 03 2015 60 1550038 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500381 IRENE Y. H. NG swknyhi@nus.edu.sg Department of Social Work, Faculty of Arts and Social Sciences, National University of Singapore, Singapore
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article OPTIMAL INVESTMENT, EDUCATION, AND CONSUMPTION UNDER DEMOGRAPHIC CHANGES FOR A SMALL-OPEN ECONOMY It is shown, using a vintage model of education which is developed in this paper, that given the assumptions of the model, the optimal path of investment in education is to keep the level of investment per student constant and the optimal path of investment in physical capital is to keep the capital-labor ratio constant over time. The pressure to reduce current consumption caused by population ageing is partly mitigated by the fact that a younger population, in the current time, is relatively more efficient in producing utility than an older one, in the future. Optimal investment, physical capital, human capital, fertility, life expectancy 01 2009 54 The Singapore Economic Review 41 59 http://www.worldscientific.com/doi/abs/10.1142/S021759080900315X HOAN XUAN PHAM hoanpham@vgb.com.vn Insurance Commission, Ministry of Finance, Vietnam, 24 Tran Hung Dao, Hanoi, Vietnam
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article PREDICTING LOW EMPLOYABILITY GRADUATES: THE CASE OF UNIVERSITI UTARA MALAYSIA The persistence of the graduate unemployment problem warrants the need for predicting factors that are associated with low employability graduates. It is found that ethnicity, English language proficiency and types of degree obtained are significant predictors of graduates' employability which is measured either by the number of days being unemployed or probability of being unemployed. Compared to the Tobit model, the Probit model which does not accommodate the right censoring bias is found to have less predictive power in terms of the number of days being unemployed. Statistical prediction model, early identification, graduate unemployment, J64, I29 03 2010 55 The Singapore Economic Review 523 535 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003870 HOCK-EAM LIM lheam@uum.edu.my Faculty of Economics, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia; Department of Economics, Monash University, Clayton, Victoria 3800, Australia
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article THE IMPACT OF TAXATION ON INCOME DISTRIBUTION: EVIDENCE FROM INDONESIA The Indonesian economy has grown significantly since 2000, but income inequality has increased since 2001. One of the possible government tools to improve income inequality is through taxation. This paper evaluates household income, income tax, taxes on production, and their impact on income distribution. The major data sources are the National Socioeconomic Survey and the Input–Output Table. The key finding is that income tax only slightly improves income distribution, but taxes on production worsen income distribution. The other important finding is that both forms of taxation are regressive, especially for lower and middle income household. The results suggest that Indonesian taxation worsens income inequality. Income tax, income distribution, taxes on production, H20, H22, H23 04 2013 58 1350024 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500240 KUNTA NUGRAHA Centre for Labour Market Research, University of Canberra, ACT, Australia PHIL LEWIS phil.lewis@canberra.edu.au Centre for Labour Market Research, University of Canberra, ACT, Australia
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article INSTITUTIONS, INVESTMENT AND ECONOMIC GROWTH: A CROSS-COUNTRY AND PANEL DATA STUDY In this study, both cross-country and panel techniques have been used to analyze the long-term impact of institutions on investment and economic growth in the context of neoclassical model. The empirical results indicate that both physical and human capital investment have positive impact on economic growth. Economic freedom has a direct impact on economic growth by enhancing factor productivity and indirect by increasing investment. Political and civil liberties also exert positive impact on investment. Further, an important relationship exists between institutional freedom and human capital investment in both cross-country and panel data analysis. Economic growth, investment, economic freedom, civil liberties, political liberties 04 2015 60 1550061 The Singapore Economic Review 1 19 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500617 SAMIA NASREEN sami_lcu@yahoo.com Department of Economics, Government College University Faisalabad, Faisalabad, Punjab (Pakistan), Pakistan SOFIA ANWAR Sofia_ageconomist@yahoo.com Department of Economics, Government College University Faisalabad, Faisalabad, Punjab (Pakistan), Pakistan MASOOD QADIR WAQAR Masood.qadir@hotmail.com
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article WINDOWS OS VERSUS MAC OS: COULD ONE-WAY COMPATIBILITY BE AN EQUILIBRIUM OUTCOME? One-way compatibility is a phenomenon often observed in reality and Windows OS versus Mac OS is a good example. A vertical differentiation model is presented herein to analyze system firms' compatibility choices. This paper differs from the existing literature in two aspects: (1) The purebred and hybrid systems are vertically differentiated; (2) Since one-way compatibility is a phenomenon often observed in real life, this paper considers compatibility as being unilateral rather than bilateral and the possibility of one-way compatibility. We find that, depending on the quality of the hybrid system, any state of compatibility could be an equilibrium outcome. When the quality of a hybrid system is very small, both firms adopt compatibility. Second, despite the fact that firms always earn higher profit under full compatibility than they do under incompatibility, the equilibrium outcome is incompatibility when the quality of a hybrid system is very high, which means firms face a prisoners' dilemma under this situation. Finally, since a firm favors incompatibility more when its rivals adopt compatibility than when its rival adopts incompatibility, the equilibrium outcome is one-way compatibility when the quality of a hybrid system is intermediate. From this point of view, this paper provides a theoretical interpretation of one-way compatibility between Windows OS versus Mac OS. We also show that the market outcome is socially inefficient when the hybrid system's quality is relatively high. One-way compatibility, horizontal differentiation, vertical differentiation, prisoners' dilemma, L1 05 2014 59 1450042 The Singapore Economic Review 1 23 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500428 CHUNG-HUI CHOU chchou@isu.edu.tw Department of Finance, I-Shou University, Kaohsiung City, Taiwan 84001, Republic of China
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article BOOK REVIEW: "Foreign Direct Investment in Nepal", by Raghu Bir Bista No abstract received. 01 2006 51 The Singapore Economic Review 105 106 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002287 KHAY BOON TAN Division of Economics, Nanyang Technological University, Singapore
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article THE PRECAUTIONARY PRINCIPLE REVISITED: ITS INTERPRETATIONS AND THEIR CONSERVATION CONSEQUENCES The precautionary principle was included in 1992 in the Rio Declaration and is part of important international agreements such as the Convention on Biological Diversity. Yet, it is not a straight-forward guide for environmental policy because many interpretations are possible as shown in this paper. Its different economic versions can result in conflicting policy recommendations about resource conservation. The principle does not always favor (natural) resource conservation (e.g., biodiversity conservation) although it has been adopted politically on the assumption it does. The principle's consequences are explored for biodiversity conservation when the introduction of new genotypes is possible. Biodiversity, conservation, climate change, flexibility, learning, precautionary principle, uncertainty, Q2, Q28, Q3, H43 02 2010 55 The Singapore Economic Review 335 352 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003754 CLEM TISDELL c.tisdell@economics.uq.edu.au School of Economics, The University of Queensland, St Lucia Campus, Brisbane, 4072, Queensland, Australia
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article EFFECTS OF QUANTITATIVE EASING ON ASIA: CAPITAL FLOWS AND FINANCIAL MARKETS This paper studies the effects of US quantitative easing (QE) on Asia by examining capital flows and financial markets. After the global financial crisis (GFC), Asian economies with more open and developed capital markets experienced greater swings in capital inflows. In particular, large capital flows manifest more in portfolio investment and other investment such as bank loans than in foreign direct investment. Empirical analysis shows QE, QE1 in particular, significantly contributed to the rebounding of capital inflows to the region after the onset of the crisis by lowering domestic yield rates as well as CDS premiums. Although the currency value responses differed across countries, it appears that economies with stable exchange rates roughly coincide with those in which house prices have been rising, suggesting that monetary easing of advanced countries have affected Asian countries through either appreciation of currency values or increases in the prices of housing. Quantitative easing, capital flows, financial market, JEL Classification: E52, JEL Classification: E44, JEL Classification: F32 03 2014 59 1450018 The Singapore Economic Review 1 23 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500180 DONGCHUL CHO dccho@kdischool.ac.kr KDI School of Public Policy and Management, Republic of Korea CHANGYONG RHEE crhee@adb.org Asian Development Bank, Philippines
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article THE IMPACT OF THE GOODS AND SERVICES TAX (GST) IN MALAYSIA: LESSONS FROM EXPERIENCES ELSEWHERE (A NOTE) The recent Malaysian attempt to introduce the Goods and Services Tax (GST) was thwarted by public concerns about: (i) its impact on the price level; (ii) its regressivity; (iii) the possibility of the rate increases once the tax is in place; and finally, the disincentive large revenues from the GST would be in addressing the underlying causes of wasteful public expenditures and leakages. The experiences of countries that have implemented a similar tax are surveyed to assess these concerns. It is concluded that within the Malaysian context, all the concerns are well-founded and measures are therefore suggested to ameliorate them. VAT, regressive tax, price level, consumption, permanent income, H25 02 2014 59 1450009 The Singapore Economic Review 1 15 http://www.worldscientific.com/doi/abs/10.1142/S021759081450009X SURESH NARAYANAN nsuresh@usm.my School of Social Sciences, Universiti Sains Malaysia, 11800 USM, Penang, Malaysia
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article REGIONAL CONVERGENCE OF ECONOMIC GROWTH DURING POST-REFORM PERIOD IN INDIA This paper examines the club-convergence and conditional convergence of economic growth of the major 15 states in India over the periods from 1993–1994 to 2004–2005 by using dynamic fixed effect growth models. The result finds that there is club-convergence within the middle income states. There is also evidence of the convergence of per capita income among Indian states by conditioning private investment and public investment along with other factors of economic growth. This paper is innovative in separating the significance of private investment from the public investment in the long-run dynamics of income in Indian states. This paper suggests that regional disparity in income can be reduced by equitable allocation of private investment and equitable distribution of public investment. Private investment, convergence, regional growth, panel data methods, E22, R11, C23 02 2014 59 1450012 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S021759081450012X JAGANNATH MALLICK mallickjagannath@gmail.com Faculty of Economics and Administration, University of Pardubice, Czech Republic
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article EXPANSIONARY FISCAL CONTRACTION: GOVERNMENT SPENDING FINANCED BY MONEY SEIGNIORAGE This paper determines the conditions required for fiscal contractions to be expansionary when government spending is financed by money seigniorage. It shows that the expansionary effects of permanent fiscal contractions are dependent on the initial rates of inflation prevailing in the economy and that the set of initial inflation rates under which fiscal contractions are expansionary is affected by the degree of substitutability between public and private consumption. Starting from the benchmark case where public and private consumption are independent, introducing complementarity between public and private consumption gives rise to a weaker set of conditions for fiscal contractions to be expansionary. This implies that economies that print money to finance government spending complementary with private consumption are more likely to experience expansions if they pursue fiscal contractions. Expansionary fiscal contractions, inflation, money seigniorage, substitutability, complementarity 02 2007 52 The Singapore Economic Review 179 189 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002634 KIM-HENG TAN akhtan@ntu.edu.sg Division of Economics, Nanyang Technological University, S3-B2A-05 Nanyang Avenue, Singapore 639798, Singapore
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article ECONOMIC INTERDEPENDENCE IN ASIA: DEVELOPING INDICATORS FOR REGIONAL INTEGRATION AND COOPERATION We develop indicators to measure the degree of economic integration and cooperation among East Asian economies and compare these with similar measures for other regions. Our indicators cover regional integration in trade, investment, financial assets, and people-to-people exchange. We also analyze measures of regional cooperation such as the density of free trade agreements and official policy dialogues. We find that in various Asian groupings, and especially in a group of 16 integrating Asian economies, interdependence in trade, direct investment, financial flows, and other forms of economic and social exchange has increased significantly over time, and now approaches that in the European Union. Nonetheless, Asia's official cooperation remains weak and formal regional institutions remain relatively underdeveloped. To provide insight into the causes of this discrepancy, we also develop quantitative measures of political and cultural similarity of nations, and find that Asian countries have relatively low levels of political and cultural proximity compared to regions such as Europe. The diversity of political interests and cultural values may have hindered more intense cooperation among Asian economies in the past. But if regional economic and social interactions continue to grow, requirements for joint decision-making are also likely to expand, leading to stronger frameworks of official cooperation. Regional integration, economic cooperation, East Asia 01 2010 55 The Singapore Economic Review 125 161 http://www.worldscientific.com/doi/abs/10.1142/S021759081000364X GIOVANNI CAPANNELLI gcapannelli@adb.org Office of Regional Economic Integration, Asian Development Bank, 6, ADB Avenue, Mandaluyoung City, Metromanila, Philippines JONG-WHA LEE jwlee@adb.org Economics and Research Department, Asian Development Bank, 6, ADB Avenue, Mandaluyoung City, Metromanila, Philippines PETER A. PETRI ppetri@brandeis.edu International Business School, Brandeis University, 415 South Street, Waltham, MA 02454, USA
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article ESTIMATING A PREDICTION MODEL FOR THE EARLY IDENTIFICATION OF LOW EMPLOYABILITY GRADUATES IN MALAYSIA This paper describes the development of a prediction model for the early identification of low employability graduates in Malaysia. A total of five proportional hazard models are estimated and using the criteria of percentage correctly and wrongly predicted, a prediction model is selected based on the percentage correctly predicted. The percentile of the predicted hazard rate is used as the employability index (EI). In the context of Malaysia, it is recommended that the 5th percentile graduates be considered as low employability graduates. With this early identification tool, specific intervention programs can be tailored for the right target groups. Early identification, low employability graduate, proportional hazard model, out-of-sample prediction, I23, J64 04 2015 60 1550027 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500277 ROSNA AWANG-HASHIM School of Education and Modern Languages, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia HOCK EAM LIM lheam@uum.edu.my School of Economics, Finance and Banking, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia BIDIN YATIM School of Quantitative Sciences, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia TENGKU FAEKAH TENGKU ARIFFIN School of Education and Modern Languages, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia AINOL MADZIAH ZUBAIRI Kulliyyah of Education, International Islamic University Malaysia, Jalan Gombak 53100 Kuala Lumpur, Malaysia HANIZA YON Psychometrics Cluster, MIMOS Berhad, Technology Park Malaysia, 57000 Kuala Lumpur, Malaysia OMAR OSMAN School of Housing, Building and Planning, Universiti Sains Malaysia, 11800 Penang, Malaysia
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article BOOK REVIEW: "Review of Misunderstood Myanmar — An Introspective Study of a Southeast Asian State in Transition" by Koh Kim Seng No abstract received. 01 2013 58 1380003 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590813800039 INGA GRUß Cornell University, USA
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article WHAT HINDERS CROSS-BORDER PORTFOLIO INVESTMENT IN EAST ASIA? We examine statistical importance of a number of institutional factors, which have been alleged by market investors and policy commentators as significant barriers on cross-border portfolio investment in East Asian economies, but never been put to empirical tests yet. Taking advantage of the novel data set constructed by the ABMI-GoE, we empirically investigate the explanatory power of such institutional factors as market access-hindering regulations, foreign exchange controls, credit controls, taxation and inefficient post-trading infrastructure. We find that these alleged barriers indeed have significantly negative impacts on cross-border portfolio investment in East Asian economies. In addition, we find some support for the "pecking order" hypothesis in barriers on cross-border portfolio investment in the sense that barriers on post-trading efficiency and cost barriers are not effective unless barriers on market access are significantly lowered. Cross-border portfolio investment, barriers to cross-border investment, Asian Bond Markets Initiative, foreign exchange controls, settlement infrastructure, F3, G15 02 2013 58 1350012 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500124 DAEKEUN PARK parkdk@hanyang.ac.kr College of Economics and Finance, Hanyang University, Seoul, Korea INSEOK SHIN ishin@cau.ac.kr College of Business, Chung-Ang University, Seoul, Korea
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article EDITORIAL OVERVIEW: IMPORTANT LESSONS FROM SOME MAJOR EXCHANGE RATE AND MONETARY EXPERIENCES IN ASIA No abstract received. 03 2007 52 The Singapore Economic Review 269 283 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002786 PAUL S. L. YIP aslyip@ntu.edu.sg Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore
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article OIL PRICE VOLATILITY AND THE SINGAPORE MACROECONOMY We construct a realized volatility measure, using prices of daily West Texas Intermediate (WTI) crude oil futures and illustrate the robustness of this oil price volatility–macroeconomy relationship under a multivariate co-integrated vector autoregressive (VAR) model. Empirical results suggest that a spike in oil price volatility leads to investments and aggregate output to decline and inflation to rise over the period from 1983Q2 to 2009Q2. Furthermore, the gradual decline of Singapore's oil intensity signals a weakening relationship between oil price and the macroeconomy that supports our empirical findings. Oil price volatility, Singapore macroeconomic performance, multivariate VAR, impulse response function, oil intensity, C32, E32, Q43 03 2012 57 1250022 The Singapore Economic Review 1 26 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500221 WEIWEN NG weiwen.ng.2006@economics.smu.edu.sg Singapore Management University, Singapore
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article AN EMERGENCE OF A COMMON CURRENCY AREA IN THE SELECTED EAST ASIAN ECONOMIES: A REVISIT The study attempts to re-investigate the possibility of emergence of a single currency area in East Asian (EA) countries by comparing both pre- and post-financial crisis periods. Using variance decomposition and impulse analyses, we investigated whether the selected EA economies — Hong Kong, Indonesia, Korea, Malaysia, the Philippines, and Singapore — are heavily segmented or instead integrated by focusing on the three different shocks, namely global-, regional-, and country-specific shocks. This paper finds that most economies could be described as heavily segmented, especially during the pre-crisis period (before July 1997). However, over time, the degree of segmentation experienced by some of these economies has declined significantly, particularly that of Hong Kong, Korea, and Singapore. The analyses also indicate that few economies, especially Indonesia and the Philippines, are being influenced by the performance of the Japanese economic growth to a greater extent than they were previously. Optimum currency area, shocks, East Asian financial crisis, A15, C32, F36, F42 02 2010 55 The Singapore Economic Review 353 376 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003778 SIEW-CHOO SOO Soo.Siew.Choo@buseco.monash.edu.my Department of Econometrics and Business Statistics, School of Business, Monash University, Sunway Campus, Jalan Lagoon Selatan, 46150 Bandar Sunway, Selangor D. E., Malaysia CHEE-KEONG CHOONG choongck@utar.edu.my Department of Economics, Faculty of Business and Finance, Universiti Tunku Abdul Rahman (Perak Campus), Jalan Universiti, Bandar Barat, 31900 Kampar, Perak Darul Ridzuan, Malaysia
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article FINANCIAL STRESS IN ASEAN-5 ECONOMIES FROM THE ASIAN CRISIS TO THE GLOBAL CRISIS We construct four market-specific Financial Stress Indices (FSIs) and overall FSIs for the ASEAN-5 economies from 1997 to 2009. Using the FSIs, we establish stylized features of financial stress and characterize the connectivity of financial markets. The results show that stress was most severe during the Asian Crisis, followed by the Tech Burst and the recent Global Crisis. Principal component analysis (PCA) demonstrates that regional connectivity is strongest in equity markets, implying their predominant role in the transmission of stress within the region. Meanwhile, Singapore possesses the lowest connectivity within the ASEAN cluster, but the highest to international markets. Financial stress index, financial crisis, financial networks, E51, G01, G32 02 2012 57 1250013 The Singapore Economic Review 1 24 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500130 BOON HWA TNG boonhwa@bnm.gov.my Bank Negara Malaysia, Jalan Dato' Onn, 50480 Kuala Lumpur, Malaysia KIAN TENG KWEK ktkwek@um.edu.my Faculty of Economics and Administration, Department of Economics, University of Malaya, 50603 Kuala Lumpur, Malaysia ANDREW SHENG as@andrewsheng.net Faculty of Economics and Administration, Department of Economics, University of Malaya and Graduate School of Economics and Management, Tsinghua University, 50603 Kuala Lumpur, Malaysia
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article EXCHANGE RATE VOLATILITY AND MNCs' PRODUCTION AND DISTRIBUTION NETWORKS: THE CASE OF JAPANESE MANUFACTURING MNCs This paper empirically examines the impacts of exchange rate volatility on the location choice by Japanese multinational corporations (MNCs) and their intra-firm trade. We use affiliate-level data for Japanese MNCs for 1995, 1998 and 2001. We found that high exchange rate volatility discourages the establishment of an affiliate by MNCs. Moreover, the high exchange rate volatility causes the shift from inter-firm to intra-firm transactions. These findings imply the importance of maintaining a stable exchange rate environment in order for MNCs to expand their production and distribution networks. Exchange rate volatility, location choice, intra-firm trade 03 2008 53 The Singapore Economic Review 523 538 http://www.worldscientific.com/doi/abs/10.1142/S0217590808003087 KOZO KIYOTA Yokohama National University, Japan TOSHIYUKI MATSUURA Institute of Economic Research, Hitotsubashi University, Japan; Research Institute of Economy, Trade and Industry, Japan SHUJIRO URATA surata@waseda.jp Graduate School of Asia-Pacific Studies, Waseda University, Nishi-Waseda Bldg. 7F, 1-21-1 Nishi-Waseda, Shinjuku-ku, Tokyo 169-0051, Japan
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article THE INDONESIAN ECONOMY: GROWTH, CRISIS AND RECOVERY Indonesia, Southeast Asia's most populous state and its largest economy, was deeply affected by the economic crisis of 1997–1998. Its economic contraction in 1998, of over 13%, was the sharpest among all four crisis-affected East Asian economies. This followed three decades of virtually uninterrupted, rapid economic growth. The country's economic crisis was accompanied by regime collapse, resulting in the departure of then President Suharto after 32 years of authoritarian rule. This paper examines the country's socioeconomic development in the decade since the crisis, in the context of the earlier growth, and the very different institutions of economic governance operating under the new democratic regime of weakened central authority and many more economic policy actors. The main conclusions are that growth and macroeconomic stability have been restored surprisingly quickly, but that microeconomic policy and the investment climate are less predictable. Indonesia, economic development, crisis, recovery 02 2007 52 The Singapore Economic Review 137 166 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002610 HAL HILL hal.hill@anu.edu.au Division of Economics, Research School of Pacific and Asian Studies, Australian National University, Canberra, Australia 0200, Australia
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article THE ROLE OF THE STATE IN SINGAPORE: PRAGMATISM IN PURSUIT OF GROWTH This paper looks at how government intervention shapes the evolution of the Singapore economy and accounts for its successes and failures over the past 50 years. Compared with other dynamic Asian economies, the Singapore government's approach to intervene in the economy is both more extensive and more intrusive, but with a narrow focus on GDP growth and surplus accumulation as the primary objectives. The ruling government's near complete dominance in politics has enabled it to mobilize resources to create the preconditions for strong GDP growth and high savings. But the impact on the broader development of the economy and the long term sustainability of growth is less obvious. High GDP growth and strong savings have been achieved without developing the inherent production and indigenous innovation capacity, securing a larger hinterland and providing a less skewed income distribution and higher quality of life for residents. As the economy enters a new phase where more complex and multi-faceted development is needed, the Singapore government will require more than its vaunted competency in mobilizing resources to deliver the outcome. State role, economic development, Singapore, growth model, E6 03 2015 60 1550030 The Singapore Economic Review 1 30 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500307 KIM SONG TAN kstan@smu.edu.sg School of Economics, Singapore Management University, 90 Stamford Road, Singapore 178903, Singapore MANU BHASKARAN manu@centennialasia.com Centennial Asia Advisors Pte Ltd, UEN 200203905Z, 79 Anson Road #11-03, Singapore 079906, Singapore
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article COMPARING COURNOT DUOPOLY AND MONOPOLY WITH ASYMMETRIC COMPLEMENTARY GOODS This paper concerns an industry with two complementary goods. It is demonstrated that if a good is active in Cournot equilibrium, then it is active in either one of the socially optimal solution and the monopoly solution; but, the converse is not true. When demands are linear, a good is active in the monopoly solution if and only if it is socially desirable. Therefore, the monopoly would be socially better than the Cournot duopoly in selecting products. We establish that each Cournot output falls below its corresponding monopoly output regardless of whether the solutions are interior or not. However, in the monopoly solution, a good should be cross-subsidized if and only if it is a supplemental good. This result has two implications. First, a small decrease in the output level of a supplemental good raises the welfare, implying that when there exists a supplement good, lower quantities are not necessarily worse in welfare terms. Second, if each good is a base good, then the Cournot equilibrium indeed is less welfare-efficient than the monopoly solution. In order to verify whether it is possible to have a welfare reversal, we consider the case where demands are linear. We demonstrate that prices are lower in the monopoly solution, and that lower prices are better in the welfare terms. These two results imply that welfare is higher in the monopoly solution. Again, these results hold regardless of whether the solutions are interior or not. Cournot duopoly, monopoly, base good, supplemental good, horizontal merger, L12, L13, L41 02 2013 58 1350011 The Singapore Economic Review 1 16 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500112 MING CHUNG CHANG mcchang@mgt.ncu.edu.tw Graduate Institute of Industrial Economics, National Central University, No. 300, Chung-Ta Road, Chung-Li City 32001, Taiwan YUN-CHIEH LIN Department of Applied Economics and Management, National I-Lan University, No. 1, Sec. 1, Shen-Lung Road, Yi-Lan City 26047, Taiwan CHIU FEN LIN Graduate Institute of Industrial Economics, National Central University, No. 300, Chung-Ta Road, Chung-Li City 32001, Taiwan
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article FREE TRADE AND GROWTH IN THE WORLD ECONOMY This paper explores the relationship between free trade and the rate of economic growth. It is argued that freeing trade has both a level effect and a growth effect. Most empirical studies ignore the growth effect and, therefore, considerably understate the beneficial effects of freeing trade. Progress towards free trade in the GATT/WTO era is far from complete. Regionalism has had a limited effect on freeing trade globally. The completion of the Doha Development Round is needed to restart trade as the engine of growth. 03 2011 56 The Singapore Economic Review 291 306 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004377 PETER LLOYD pjlloyd@unimelb.edu.au Department of Economics, University of Melbourne, Parkville, Vic. 31010, Australia
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article REDUCING INCOME INEQUALITY WHILE BOOSTING ECONOMIC GROWTH: CAN IT BE DONE? EVIDENCE FROM OECD COUNTRIES This paper identifies inequality patterns across Organisation for Economic Co-operation and Development (OECD) countries and provides new analysis of their policy and non-policy drivers. One key finding is that education and anti-discrimination policies, well-designed labor market institutions and large and/or progressive tax and transfer systems can all reduce income inequality. On this basis, the paper identifies several policy reforms that could yield a double dividend in terms of boosting GDP per capita and reducing income inequality, and also flags other policy areas where reforms would entail a trade-off between both objectives. Income inequality, tax and transfer systems, education policy, labor market policy, JEL Classification: D31, JEL Classification: H23, JEL Classification: H53, JEL Classification: I24, JEL Classification: J68 01 2014 59 1450001 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500015 PETER HOELLER Organisation for Economic Co-operation and Development (OECD), OECD, 2, rue André Pascal, 75775 Paris CEDEX 16, France ISABELLE JOUMARD Organisation for Economic Co-operation and Development (OECD), OECD, 2, rue André Pascal, 75775 Paris CEDEX 16, France ISABELL KOSKE isabell.koske@oecd.org Organisation for Economic Co-operation and Development (OECD), OECD, 2, rue André Pascal, 75775 Paris CEDEX 16, France
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article BOOK REVIEW: "Review of Pension Systems and Old-Age Income Support in East and Southeast Asia" by Donghyun Park No abstract received. 02 2013 58 1380005 The Singapore Economic Review 1 2 http://www.worldscientific.com/doi/abs/10.1142/S0217590813800052 JIE ZHOU Nanyang Technological University, Singapore
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article WHY IS FINANCE IMPORTANT? SOME THOUGHTS ON POST-CRISIS ECONOMICS The global financial crisis of 2008 challenges some relevant aspects of macroeconomic theory such as the neutrality of money. This paper shows that this neutrality is based on the unrealistic assumption of perfect competition. Relaxing this alone (without time lags, price rigidities, menu costs and other frictions) makes money no longer necessarily neutral and hence makes financial crises and institutions much more important. The presence of increasing returns to scale at the firm level and to specialization at the economy level due to the division of labor also makes finance much more important than suggested by traditional economics. Finance, financial institutions, financial crisis, money supply, macroeconomics, G00, E00, D4 05 2014 59 1450037 The Singapore Economic Review 1 20 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500374 YEW-KWANG NG ykng@ntu.edu.sg Nanyang Technological University, 14 Nanyang Drive, Singapore 637332, Singapore
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article DO MACROECONOMIC CONDITIONS MATTER FOR AGRICULTURE? THE INDIAN EXPERIENCE Macroeconomic instability, characterised by high inflation, fragile foreign exchange positions and high rates of interest, increases uncertainty and hence slows down economic growth. While this is generally accepted, the usual perception about the agricultural sector, particularly in India, is that it is immune to general macroeconomic shocks. In this paper, we examine this perception using a vector autoregressive model. The findings show that the agricultural sector is not insulated from macroeconomic shocks. Macroeconomic shocks, vector autoregression, agricultural output, agricultural investment, agricultural exports, E60, Q180, Q200 04 2010 55 The Singapore Economic Review 647 670 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003997 SHASHANKA BHIDE sbhide@ncaer.org National Council of Applied Economic Research, New Delhi, India B. P. VANI Institute for Social and Economic Change, Bangalore, India MEENAKSHI RAJEEV meenakshi@isec.ac.in Institute for Social and Economic Change, Bangalore, India
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article COMPETITION POLICY AND LAW IN ASEAN The focus of this paper is on competition policy and law in the ASEAN countries. The paper begins with a descriptive evaluation of competition policy in the ASEAN countries. We then look at the effect of economic structure on the probability of early adoption of competition law among the ASEAN countries after which the competition laws of the ASEAN countries are evaluated in terms of objectives, jurisdictional exception, horizontal agreements, vertical agreements, definition and abuse of dominant position and mergers. We find that the competition laws of the four ASEAN countries that have implemented competition law are not completely harmonized. Competition, policy, law, ASEAN, agreements, dominant position, mergers 02 2006 51 The Singapore Economic Review 241 265 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002354 G. SIVALINGAM sivalingam.vglingam@buseco.monash.edu.my Monash University Malaysia, No. 2, Jalan Kolej, Bandar Sunway, 46150 Petaling Jaya, Selangor, Malaysia
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article REAL SHOCK OR NOMINAL SHOCK? EXCHANGE RATE MOVEMENTS IN CAMBODIA AND LAO PDR This paper studies sources of fluctuations in real and nominal US dollar exchange rates in Cambodia and Lao PDR by decomposing them into the components induced by real and nominal factors. These shocks affecting real and nominal exchange rates are identified by using a structural vector autoregression (SVAR) model with the long-run neutrality restriction of Blanchard and Quah (1989). The empirical analysis demonstrates that real shocks in direction of depreciation lead to real and nominal depreciation, while nominal shocks induce long-run nominal depreciation but real appreciation in the short-run. Several economic implications are also discussed. Real and nominal exchange rates, real and nominal shocks, SVAR analysis, Cambodia and Lao PDR, F30, F41, O53 04 2010 55 The Singapore Economic Review 685 703 http://www.worldscientific.com/doi/abs/10.1142/S0217590810004012 SEIHA OK National Audit Authority of Cambodia, No. 16, Street 240, 12301 Phnom Penh, Cambodia MAKOTO KAKINAKA kakinaka@iuj.ac.jp Graduate School of International Relations, International University of Japan, 777 Kokusai-cho, Minami-Uonuma, Niigata 949-7277, Japan HIROAKI MIYAMOTO hmiyamot@iuj.ac.jp Graduate School of International Relations, International University of Japan, 777 Kokusai-cho, Minami-Uonuma, Niigata 949-7277, Japan
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article HEALTH SYSTEM REFORM IN CHINA: AN ASSESSMENT OF RECENT TRENDS In this paper, we first briefly review the changes that the Chinese health care system has undergone since the early 1980s. We then describe the major current health policy initiatives in urban and rural areas and discuss likely scenarios for their evolution over time. Using comparisons with international experience regarding different institutional arrangements in the health care sector, we also discuss whether the approaches taken in China are likely to strengthen the health care system in terms of efficiency and equity. Our conclusion is that in order to predict how effectively China's future health care system will perform in the future, one must have more information about what role the state (central government) will play, as regulator, partial funder and direct provider in the system. We believe that the best strategy at present is to allow the development of a mixed model with significant roles for both the state and the private sector, in both the supply of health care services and the provision of health insurance. China, social policy, health insurance, health policy, health sector reform, health financing 01 2008 53 The Singapore Economic Review 5 26 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002811 ǺKE BLOMQVIST ecsbag@nus.edu.sg Department of Economics, 1 Arts Link, National University of Singapore, Singapore 117570, Singapore JIWEI QIAN Department of Economics, 1 Arts Link, National University of Singapore, Singapore 117570, Singapore
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article TOWARDS OIC ECONOMIC COOPERATION: IMPACT OF DEVELOPING 8 (D-8) PREFERENTIAL TRADE AGREEMENT The Developing 8 (D-8) comprises of eight developing countries (Turkey, Malaysia, Indonesia, Bangladesh, Pakistan, Iran, Egypt and Nigeria), all of which are OIC members with large Muslim populations. The D-8 has formed a freer trade alliance with the objectives to create new opportunities and enhance intra-trade relations while providing better standards of living for its citizens. This paper examines the trade impact of possible trade liberalization among the D-8 countries using a multi-country computable general equilibrium model, i.e., GTAP. Results indicate that while the D-8 intra-trade is expected to increase very substantially, not all member countries will experience a welfare gain under a free trade arrangement. Likewise, the impact on economic sectors differs substantially across countries. Developing 8, organization of Islamic countries, trade liberalization, preferential trade arrangement, economic integration, GTAP, F15, F17, F13 02 2013 58 1350009 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500094 JAMAL OTHMAN School of Economics, Faculty of Economics and Business, National University of Malaysia, 46000 BANGI, Malaysia MUSTAFA ACAR Department of Economics, Kirikkale University and Aksaray University, 68100 Aksaray, Turkey YAGHOOB JAFARI School of Economics, Faculty of Economics and Business, National University of Malaysia, 46000 BANGI, Malaysia
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article CAUSALITY BETWEEN EXPORTS AND PRODUCTIVITY IN THE MALAYSIAN ECONOMY Empirical evidence linking exports and productivity growth has been mixed and inconclusive. This study re-examines the direction of the causality between them for Malaysian industries by using the error-correction mechanism and Granger causality models. In a panel of 63 manufacturing industries, for the period of 1981 to 1999, it is found that these industries support the export-led growth and the growth-driven export hypotheses. A further look into the results indicates that there are possibilities of indirect causalities between productivity growth and export through size and capital intensity, as both exports and labor productivity have bidirectional causality with size and capital intensity. Exports, productivity growth, causality, panel data, manufacturing industries, C33, D24, L60, O40 03 2011 56 The Singapore Economic Review 377 395 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004304 NURHANI ABA IBRAHIM nurhani.ai@gmail.com Universiti Teknologi MARA, Malaysia
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article THE CREATIVE TENSION BETWEEN STATISTICS AND ECONOMICS This paper warns the risks of uncritically adopting the mind set of statisticians in empirical analysis. The examples of vector autoregressions, forecast combinations and measurement of treatment effects are used to illustrate the fragility of statistical inference when sample observations are limited. Time series modeling, non-parametric modeling, high dimensional data, structural approach, forecasting, C01, C10, C50 03 2012 57 1250017 The Singapore Economic Review 1 11 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500178 CHENG HSIAO chsiao@usc.edu Department of Economics, University of Southern California, Los Angeles, California, USA; Nanyang Technological University, Singapore; City University of Hong Kong, Hong Kong, China
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article WHAT MATTERS FOR THE EXTENSIVE AND INTENSIVE MARGINS OF INTERNATIONAL TRADE? EVIDENCE FROM KOREAN EXPORTS Recently, there has been increased interest in the distinction between the extensive margin (EM) and the intensive margin (IM) of international trade. Between 1988 and 2006, the growth of the EMs and IMs of Korean exports has been diverse across its destinations. This paper links each component of the trade value (EM, IM, price index and quantity index) to factors that have been identified as trade determinants in the suggested model. This paper finds that the destination GDP, distance, tariffs, language, existence of an export promotion agency (EPA), local infrastructure and import procedures have an effect on the EMs and IMs of Korea's exports, and the effect works largely through the IM. This paper examines the external environment that shapes the contributions of each of these margins of a country's exports. Extensive margin, intensive margin, trade determinants, Korea, F10, F14 03 2012 57 1250018 The Singapore Economic Review 1 21 http://www.worldscientific.com/doi/abs/10.1142/S021759081250018X KICHUN KANG kikang@ynu.ac.kr School of Economics and Finance, Yeungnam University, 214-1 Dae-Dong Kyeongsan-si Gyeongsangbuk-do 712-749, Korea
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article BOOK REVIEW: "Review of Public Sector Power and Public Sector Pay in Hong Kong: A Survey of the Political Economy of Pay Determination in a British Colony (1965–1985)", edited by Tushar K Ghose. No abstract received. 04 2010 55 The Singapore Economic Review 763 765 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003973 ROSALIND CHEW Division of Economics, HSS, Nanyang Technological University, Singapore
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article ENHANCING ECONOMIC INTEGRATION IN SOUTH ASIA: ISSUES AND PROSPECTS FOR CLOSER MONETARY COOPERATION Though SAARC has the stated goal of an economic union and a common currency, after a quarter of a century, these remain distant goals as political tensions between India and Pakistan have hindered any real progress on a regional scale. Barriers to trade and factor mobility are high in the region as a whole, though considerable liberalisation has been achieved through various bilateral agreements involving India and some of its neighbours. The conventional economic conditions for a common currency are also currently absent as patterns of shocks are non-synchronised, trade links are weak and factor mobility much constrained. Deeper intraregional economic integration requires much more comprehensive trade and investment liberalisation among member nations. While the political conditions for a single currency are unlikely to emerge in the foreseeable future, steps towards closer monetary cooperation through a South Asian Monetary System — building on the existing SAARCFINANCE network — may provide an institutional framework for enhancing regional integration. However, such cooperation will have to be conceived as a component of a sustainable transitional strategy which commits to a serious programme of deeper trade liberalisation to facilitate greater integration with the rest of the world, and most importantly, with East Asia. South Asia, monetary integration, economic integration, monetary system, F33 01 2010 55 The Singapore Economic Review 185 206 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003663 SISIRA JAYASURIYA S.Jayasuriya@Latrobe.edu.au La Trobe University, Melbourne, Australia NEPHIL MATANGI MASKAY Nepal Rastra Bank, Nepal
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article INSTANTANEOUS INFORMATION ALWAYS STABILIZES? The impact of information improvement on local stability is examined for continuous dynamics. It is conventionally believed that removal of uncertainty always brings additional stability to an existing equilibrium. This paper shows that the relation between information and equilibrium stability may not be monotonic. Removal of information lag may sometimes destabilize the otherwise stable continuous model. Economic applications to Cournot and Bertrand competition are examined where the role of improved information on stability is shown to be cost-structure specific. Elimination of lags may cause stability loss. The conclusion drawn on two-dimensional continuous dynamics is briefly generalized to multidimensional system. Information lag, dynamic stability, oligopoly, delayed-differential systems, continuous dynamics, D21, C61, C73, L13 02 2011 56 The Singapore Economic Review 239 253 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004195 YANG ZHANG yzhang@umac.mo Faculty of Business Administration, University of Macau, AV. Padre Tomás Pereira, Taipa, Macau, China WEIHONG HUANG awhhuang@ntu.edu.sg School of Humanities and Social Sciences, Nanyang Technological University, HSS-04-61, Nanyang Avenue, Singapore-639798, Singapore
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article BOOK REVIEW: "Review of Malaysia's Development Challenges: Graduating from the Middle" by Hal Hill, Tham Siew Yean and Ragayah Haji Mat Zin No abstract received. 02 2013 58 1380006 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590813800064 JOERGEN OERSTROEM MOELLER Institute of Southeast Asian Studies, Singapore
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article BOOK REVIEW: "Asian Development Experience, Volume 1: External Factors for Asian Development" No abstract received. 01 2005 50 The Singapore Economic Review 135 137 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001913 AMINA TYABJI Department of Economics, National University of Singapore, Singapore
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article BOOK REVIEW: "Review of the Indonesian Economy: Entering a New Era" by Aris Ananta, Muljana Soekarni and Sjamsul Arifin No abstract received. 02 2013 58 1380004 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590813800040 ARIANTO A PATUNRU Australian National University, Australia
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article BOOK REVIEW: "Climate Change Begins at Home: Life on the Two-Way Street of Global Warming" by Dave Reay No abstract received. 02 2008 53 The Singapore Economic Review 337 338 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002987 CHEW HUNG CHANG Humanities and Social Studies Education Academic Group, National Institute of Education, Nanyang Technological University, Singapore
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article INCREASING RETURNS AND THE SMITH DILEMMA The Smith dilemma refers to the inconsistency ("strictly an error") between the Smith theory on the efficiency of the market based on the absence of increasing returns and the Smith theorem on the facilitation of the economies of specialization (which gives rise to increasing returns) by the extent of the market. This paper argues that, despite the prevalence of increasing returns, Adam Smith was largely right on the efficiency of the invisible hand and hence that the Smith dilemma does not really exist. Ignoring separate issues such as environmental disruption, the market is very efficient in coordinating the allocation of resources even in the presence of increasing returns. The efficiency due to the automatic and incentive-compatible adjustments, free trade and enterprise (entry/exit) largely prevails. The Dixit–Stiglitz model shows that the free-entry market equilibrium coincides with the (non-negative profit) constrained optimum when the elasticity of substitution between products is constant. For non-constant elasticities, the divergences between the market equilibrium and the constrained optimum in output levels, in the numbers of firms and in utility levels are shown to be small. Increasing returns, the Smith dilemma, invisible hand, economic efficiency, market spec0 2005 50 The Singapore Economic Review 407 416 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002116 YEW-KWANG NG Kwang.ng@buseco.monash.edu.au Department of Economics, Monash University, Clayton, Victoria, Australia 3800, Australia DINGSHENG ZHANG Dingsheng.zhang@buseco.monash.edu.au Department of Economics, Monash University, Clayton, Victoria, Australia 3800, Australia
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article DOES ELECTRONIC TOLL COLLECTION TECHNOLOGY MATTER TO ECONOMIC AND FINANCIAL VIABILITY OF ROADS? The provision and management of transport infrastructure is extremely important for economic development and economic competitiveness as facilitators of trade. However, it is becoming increasingly difficult for governments to publicly fund transport infrastructures given the current economic uncertainty. Revenues from road tolls are thus an important financial source for road investment and management. Financial sustainability in an era of scarce financial resources requires authorities or concessions (under some form of Public–Private Partnership) to adopt some form of maximization of potential toll revenues as well as to benefit the national economy. The role of technology is often overlooked as it can affect financial and economic viability of road infrastructure investment. This paper explores the role and impact of technology such as GNSS and DSRC on cost-benefit outcomes. The results suggest that DSRC technology has the edge in efficient technology in toll collection. Tolling technology, cost-benefit ratio, highway financial sustainability, D61, R41 04 2011 56 The Singapore Economic Review 561 572 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004468 TOMAZ KRAMBERGER tomaz.kramberger@fl.uni-mb.si University of Maribor, Faculty of Logistics, Mariborska cesta 7, 3000 Celje, Slovenia ANDREJA CURIN andreja.curin@uni-mb.si University of Maribor, Slomskovtrg 15, 2000 Maribor, Slovenia
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article ENERGY AND ENVIRONMENTAL POLICY Energy and environmental policies in Singapore have had two goals — to help the Singapore economy grow, and to keep Singapore clean and green. Energy policies such as development of an energy industry and an energy trading hub have contributed to economic growth and high per capita income, while enhancing energy security. There has been clear success toward achieving water self-sufficiency while providing water for all, and Singapore has become a global leader in the development and commercialization of water reclamation technologies. On the environmental front, indicators such as the share of green space, the ratio of wastes recycled, and decrease in some air pollutants show progress toward being clean and green. Per capita energy consumption has jumped to a high level by international standards, due to industrial structure, but energy efficiency and carbon emissions (per capita and per $ of GDP), have improved. Energy efficiency and conservation, energy for growth, keep Singapore clean and green, sustainable water supply, water for all, Q28, Q38, Q48, Q58 03 2015 60 1550039 The Singapore Economic Review 1 19 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500393 YOUNGHO CHANG isyhchang@ntu.edu.sg Division of Economics, School of Humanities and Social Sciences, College of Humanities, Arts and Social Sciences, Nanyang Technological University, Singapore
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article A REGIME SWITCHING ANALYSIS OF INDONESIA'S EXCHANGE MARKET PRESSURE This paper examines the extent to which the Indonesia's currency crisis can be accounted for by macro and micro economic fundamentals by employing Markov-switching approach under cross-generation crisis models. In order to represent the speculative attack in the economy, the study utilized one of the measures that is most widely adopted to signal the breakup of a crisis, the Exchange Market Pressure Index (EMPI). This paper found the following. First, liquidity (DC), real exchange rate (RER2) and ratio of banking credit to GDP (BCred) were found to significantly influence the EMPI, indicating that the behavior of EMPI has the characteristic that is predicted by the first, second, and third generation of crisis model found to significantly influence the EMPI, indicating that the behavior of EMPI has the characteristic that is predicted by the first, second and third generation of crisis models. Second, the LR test showed that regime switching dynamic model is more robust than ordinary dynamic model in explaining the EMPI, suggesting that speculative attacks tend to have the characteristics of multiple equilibria. Third, the transition probability matrix results showed that the tranquility regime was more persistent than the volatile regime. Exchange market pressure, regime switching, currency crisis, money supply, credit, F30, F31, F33, E51 02 2014 59 1450013 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500131 UNGGUL HERIQBALDI u.heriqbaldi@feb.unair.ac.id Faculty of Economics and Business, Airlangga University, Airlangga 4, Surabaya, East Java 60286, Indonesia MUNAWAR ISMAIL Faculty of Economics and Business, Brawijaya University, Mayjen Haryono 165, Malang 65145, Indonesia DAVID KALUGE Faculty of Economics and Business, Brawijaya University, Mayjen Haryono 165, Malang 65145, Indonesia DWI BUDI SANTOSO Faculty of Economics and Business, Brawijaya University, Mayjen Haryono 165, Malang 65145, Indonesia
oai:RePEc:wsi:serxxx:v:60:y:2015:i:03:n:s02175908155003192021-07-25RePEc:wsi:serxxx
article MONETARY POLICY AND FINANCIAL SECTOR DEVELOPMENT This paper reviews Singapore's monetary policy and financial development since independence, including the immediate challenges in the 1960s, the turbulent years of the 1970s with the collapse of the Bretton Woods fixed exchange rate system and the global oil shocks of 1973 and 1979, the introduction of a unique exchange rate-centered monetary policy in 1981, the Asian financial crisis of 1997–1998 and the global financial crisis of 2007–2009. Despite being a late starter (1971) and given a number of obstacles, not least the high degree of openness of the Singapore economy to trade and capital flows, the Monetary Authority of Singapore has built up a high degree of credibility within a relatively short space of time and delivered low and stable inflation. Although financial development has been "government made" rather than market-driven, proactive and sensible policies have built on Singapore's long history as a regional trading hub to turn Singapore into a premier financial center in terms of foreign exchange trading, offshore money market intermediation and asset management. Nonetheless, some challenges remain: How monetary policy can deal with asset price bubbles and deflationary pressures and steer a careful course to maintain price stability without jeopardizing Singapore's transitory restructuring process to achieve sustainable economic growth. Singapore, monetary policy, financial development, E5, F4, G1 03 2015 60 1550031 The Singapore Economic Review 1 25 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500319 PETER WILSON peterwilson@smu.edu.sg Singapore Management University, School of Economics, 90 Stamford Road, Singapore 178903, Singapore
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article BOOK REVIEW: "Monetary and Currency Management in Asia" by Masahiro Kawai, Peter J. Morgan and Shinji Takagi No abstract received. 02 2014 59 1480002 The Singapore Economic Review 1 4 http://www.worldscientific.com/doi/abs/10.1142/S0217590814800022 CHOW HWEE KWAN Singapore Management University, Singapore
oai:RePEc:wsi:serxxx:v:60:y:2015:i:01:n:s02175908155000582021-07-25RePEc:wsi:serxxx
article CONDITIONAL JUMP DYNAMICS IN STOCK RETURNS: EVIDENCE FROM MIST STOCK EXCHANGES This paper applies a conditional jump model that was proposed by Chan and Maheu (2002) to examine the stock market dynamics of Mexico, Indonesia, South Korea, and Turkey (MIST). We find that the conditional jump intensity parameter estimates are statistically significant and change dramatically between two sample periods. We show that a high probability of jumps today predicts a high probability of jumps in the next period. The impact of a previous shock to the next period's jump intensity is found to be higher in Turkey compared to other MIST countries. Contrary to the previous literature, we discover that after a stock market crash, it is more likely to see a negative jump (drop) again in the stock exchanges of Mexico and Indonesia. Only in Turkey, it is more likely to see a positive jump after market crashes. Stock return, conditional jump, ARJI-GARCH, MIST countries, C32, G15 01 2015 60 1550005 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500058 HAKAN DANIS hdanis@uga.edu Union Bank (Subsidiary of Bank of Tokyo — Mitsubishi UFJ), San Francisco, CA 94104, USA ENDER DEMIR ender.demir@medeniyet.edu.tr Istanbul Medeniyet University, Istanbul, Turkey MEHMET HUSEYIN BILGIN mehmet.bilgin@medeniyet.edu.tr Istanbul Medeniyet University, Istanbul, Turkey
oai:RePEc:wsi:serxxx:v:56:y:2011:i:04:n:s02175908110044072021-07-25RePEc:wsi:serxxx
article THE RELATIVE EFFICIENCY OF MARITIME FIRMS: EVIDENCE FROM CONTAINER LINES It has been stated that the meaning of higher efficiency is equivalent to being more competitive and profitable for enterprise operations. Using insights from fundamental analysis, the purpose of this study is to investigate the relative operational performance and market efficiency of liner shipping firms. The paper applies Data Envelopment Analysis (DEA) to calculate an efficient frontier that corresponds to the optimal relationship between financial data and market value. Stocks at the frontier are optimally priced in the market. Stocks falling behind the frontier are valued less favorably. The models developed incorporate inputs and outputs related to operating performance and market efficiency consistent with the prior financial accounting literature. Our sample consists of 18 major (leading) international liner shipping firms that have been found to exhibit average market efficiency and a high degree of operational performance. Efficiency, data envelopment analysis, fundamental analysis, liner shipping, L25, L91 04 2011 56 The Singapore Economic Review 503 522 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004407 PHOTIS M. PANAYIDES photis.panayides@cut.ac.cy Department of Commerce, Finance and Shipping, Cyprus University of Technology, PO Box 50329, 3603, Lemessos, Cyprus NEOPHYTOS LAMBERTIDES Department of Commerce, Finance and Shipping, Cyprus University of Technology, PO Box 50329, 3603, Lemessos, Cyprus
oai:RePEc:wsi:serxxx:v:53:y:2008:i:03:n:s02175908080030142021-07-25RePEc:wsi:serxxx
article INTRODUCTION TO THE SPECIAL ISSUE No abstract received. 03 2008 53 The Singapore Economic Review 345 346 http://www.worldscientific.com/doi/abs/10.1142/S0217590808003014 RAMKISHEN S. RAJAN rrajan1@gmu.edu School of Public Policy, George Mason University, USA SHANDRE M. THANGAVELU ecssmt@nus.edu.sg Department of Economics, National University of Singapore, Singapore
oai:RePEc:wsi:serxxx:v:52:y:2007:i:03:n:s02175908070027742021-07-25RePEc:wsi:serxxx
article CHINA'S EXCHANGE RATE SYSTEM REFORM This paper first documents the rationales behind the transitional exchange rate system reform adopted by China on 21 July 2005. It then outlines the theory behind the medium- and long-term exchange rate arrangements that could be adopted. Thereafter, the paper provides recommendations on supplementary packages that could increase the chance of a successful reform, and increase China's immunity and resilience against financial crises in the future. Finally, the paper discusses the market and economic developments after the transitional reform, and highlights that failure to check the stock market bubble and rampant property inflation could turn the initial success of the reform to an eventual failure and bring disasters to China in the longer future. Exchange rate system, financial crisis, Asia, China 03 2007 52 The Singapore Economic Review 363 402 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002774 PAUL S. L. YIP aslyip@ntu.edu.sg Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore
oai:RePEc:wsi:serxxx:v:54:y:2009:i:01:n:s02175908090031482021-07-25RePEc:wsi:serxxx
article REGIONAL INTEGRATION AND INTRA-INDUSTRY TRADE IN MANUFACTURES BETWEEN THAILAND AND OTHER APEC COUNTRIES This article investigates the impact of regional integration on intra-industry trade in manufactures between Thailand and other APEC countries. The study uses pooled cross-sectional and time-series data spanning the period 1980–1999 at a 3-digit Standard International Trade Classification (SITC) level. After accounting for trade imbalance and following Thailand's entry into APEC, intra-industry trade in manufactures between Thailand and countries in Oceania and America decreased, while trade with other Asian countries grew marginally. Results indicate that, in the post APEC era, trade openness stimulated increased intra-industry trade levels with countries in Northeast and Southeast Asia, but decreased trade with countries in America. Regional integration, intra-industry trade, manufactures, Thailand 01 2009 54 The Singapore Economic Review 135 148 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003148 SUJINDA CHEMSRIPONG sujindac@hotmail.com Faculty of Management and Information Sciences, Naresuan University, Phitsanulok, Thailand FRANK W. AGBOLA Frank.Agbola@newcastle.edu.au Newcastle Business School, Faculty of Business and Law, The University of Newcastle, Callaghan NSW, Australia JULIE E. LEE Newcastle Business School, Faculty of Business and Law, The University of Newcastle, Callaghan NSW, Australia
oai:RePEc:wsi:serxxx:v:60:y:2015:i:02:n:s02175908158000282021-07-25RePEc:wsi:serxxx
article BOOK REVIEW: "The Environments of the Poor in Southeast Asia, East Asia and the Pacific" No abstract received. 02 2015 60 1580002 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590815800028 MAXENSIUS TRI SAMBODO Institute of Southeast Asian Studies (ISEAS), Singapore; The Indonesian Institute of Sciences, Indonesia
oai:RePEc:wsi:serxxx:v:58:y:2013:i:01:n:s02175908135000702021-07-25RePEc:wsi:serxxx
article DOES THE BALASSA–SAMUELSON THEORY EXPLAIN THE LINK BETWEEN RELATIVE POPULATION GROWTH AND PURCHASING POWER PARITY? Relative population growth affects relative prices through the so-called Balassa–Samuelson (BS) mechanism and that in turn impacts PPP. This paper empirically investigates the relationship between the PPP exchange rate and relative population growth in a panel of 80 selected countries. Following the BS hypothesis, this paper argues that relative population growth affects nominal wages that impact price levels and thereby impacts PPP. Using panel cointegration and fully modified ordinary least square (FMOLS), the empirical results show that there is a stable relationship between PPP exchange rate and relative population growth in the long run. These empirical findings suggest that population growth have an important role in exchange rate determination through PPP. Balassa–Samuelson hypothesis, purchasing power parity, population growth, panel cointegration, F31, F29, C23 01 2013 58 1350007 The Singapore Economic Review 1 19 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500070 A. F. M. KAMRUL HASSAN afmkamrulru@yahoo.com Department of Finance, Murdoch Business School, Murdoch University, 90 South Street Murdoch, Western Australia 6150, Australia RUHUL SALIM Ruhul.Salim@cbs.curtin.edu.au School of Economics & Finance, Curtin Business School (CBS), Curtin University, P. O. Box U1987, Perth, WA 6845, Australia
oai:RePEc:wsi:serxxx:v:55:y:2010:i:04:n:s021759081000395x2021-07-25RePEc:wsi:serxxx
article ARE ASIAN MIGRANTS DISCRIMINATED AGAINST IN THE LABOR MARKET? A CASE STUDY OF AUSTRALIA This paper explores the issue of discrimination against Asian migrants relative to their non-Asian counterparts in the Australian labour market. A unique and consistent data set from three waves of the Longitudinal Survey of Immigrants to Australia (LSIA, 1993–95) is used to estimate probit models of the probability of being unemployed separately for males and females of Asian and non-Asian origins. The unemployment probability gap between the two migrant groups is decomposed into two components, the first associated with differences in their human capital and other demographic characteristics, and the second with differences in their impacts (called discrimination). The results provide an evidence of discrimination against Asian male migrants in all three waves. Discrimination against Asian females is detected only in the first wave. The Asian females who are professionals and can speak English 'well' are rather favoured relative to their non-Asian counterparts. Thus, the empirical evidence on discrimination against migrants of Asian origin is mixed. Asian migrants, discrimination, unemployment probability, labor market, J7, J61, J64, J31 04 2010 55 The Singapore Economic Review 619 646 http://www.worldscientific.com/doi/abs/10.1142/S021759081000395X P. N. JUNANKAR School of Economics and Finance, Parramatta Campus, Room # EDG 136, University of Western Sydney, Locked Bag 1797, Penrith South DC, NSW 1797, Australia SATYA PAUL s.paul@uws.edu.au School of Economics and Finance, Parramatta Campus, Room # EDG 136, University of Western Sydney, Locked Bag 1797, Penrith South DC, NSW 1797, Australia WAHIDA YASMEEN St. Francis Xavier University, Canada
oai:RePEc:wsi:serxxx:v:58:y:2013:i:03:n:s02175908138000882021-07-25RePEc:wsi:serxxx
article BOOK REVIEW: "Review of Harnessing Production Network Impacts and Policy Implications from Thailand's Manufacturing Industries" by Aekapol Chongvilaivan No abstract received. 03 2013 58 1380008 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590813800088 KORNKARUN CHEEWATRAKOOLPONG Faculty of Economics, Chulalongkorn University, Thailand
oai:RePEc:wsi:serxxx:v:56:y:2011:i:02:n:s02175908110042372021-07-25RePEc:wsi:serxxx
article GENDER DIFFERENCES IN REMITTANCE BEHAVIOR: EVIDENCE FROM VIETNAM This paper investigates the role of gender in remittance behavior among migrants using the 2004 Vietnam Migration Survey data. The gender dimension to remittance behavior has not featured strongly in the existing literature and our findings thus contain novel appeal. In addition, we use estimates from both homoscedastic and heteroscedastic tobit models to decompose the raw gender difference in remittances into treatment and endowment components. We find little evidence that gender differences in remittances are attributable to behavioral differences between men and women, and this finding is invariant to whether the homoscedastic or heteroscedastic tobit is used in estimation. Gender, internal migration, remittances, Vietnam, J16, J61 02 2011 56 The Singapore Economic Review 215 237 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004237 YOKO NIIMI yniimi@adb.org Asian Development Bank, 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines BARRY REILLY Department of Economics, University of Sussex, Falmer, Brighton, BN1 9RF, United Kingdom
oai:RePEc:wsi:serxxx:v:50:y:2005:i:01:n:s02175908050018102021-07-25RePEc:wsi:serxxx
article HOW EFFECTIVE ARE PRONATALIST BENEFITS? A LITERATURE SURVEY AND A STUDY ON SINGAPORE'S QUALIFIED CHILD RELIEF This paper reviews the existing literature on impacts of pronatalist benefits on fertility in various countries, and estimates the impact of the Qualified Child Relief (QCR) on the total fertility rate (TFR) of Singapore. The studies surveyed in this paper generally find that pronatalist incentives contribute to raising the fertility rate, but only to a limited extent. In Singapore, a 1% increase in the QCR is estimated to increase the TFR by 0.1–0.2%. Singapore's fertility rate is also found to be positively correlated with men's earnings and the infant mortality rate, while negatively correlated with women's earnings and the unemployment rate. Evidence that the New Population Policy of 1987 has been effective in raising the fertility rate is also found. Fertility, tax exemption, pronatalist benefits, Singapore, Qualified Child Relief 01 2005 50 The Singapore Economic Review 9 23 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001810 CHEOLSUNG PARK ecspc@nus.edu.sg Department of Economics, National University of Singapore, 1 Arts Link, Singapore 117570, Singapore
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article THE IMPACT OF R&D ON THE SINGAPORE ECONOMY: AN EMPIRICAL EVALUATION This paper provides empirical estimates for the impact of R&D on economic growth in Singapore. The Cobb–Douglas based analysis found that R&D investment had a significant impact on total factor productivity performance in the last 20 years and established a long-term equilibrium relationship between R&D investments and TFP. However, compared to OECD countries, the impact of R&D on growth in Singapore is not as strong. To catch up with the developed nations in terms of R&D productivity not only requires increasing R&D intensity in Singapore but also more efficient exploitation of domestic R&D activity. Economic growth, R&D expenditure, Total factor productivity 01 2009 54 The Singapore Economic Review 1 20 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003239 YUEN PING HO yuenping@nus.edu.sg NUS Entrepreneurship Centre, National University of Singapore, Level 5, 21 Heng Mui Keng Terrace, Singapore 119613, Singapore POH KAM WONG pohkam@nus.edu.sg NUS Entrepreneurship Centre, National University of Singapore, Level 5, 21 Heng Mui Keng Terrace, Singapore 119613, Singapore MUN HENG TOH biztohmh@nus.edu.sg NUS Business School, National University of Singapore, Business Link, Singapore 117591, Singapore
oai:RePEc:wsi:serxxx:v:50:y:2005:i:02:n:s02175908050019502021-07-25RePEc:wsi:serxxx
article FRACTIONAL INTEGRATION AT ZERO AND THE CYCLICAL FREQUENCIES IN THE SPECIFICATION OF US PRICES In this paper we show that US prices can be specified in terms of a time series model that contains roots simultaneously at zero and the cyclical frequencies. Using a general procedure for testing this type of hypothesis, the results show that the secular component in the US prices is nonstationary, with an order of integration ranging between 0.7 and 1.4. However, the cyclical part seems to be stationary, with the order of integration fluctuating around 0. This implies that shocks affecting the long run component will be highly persistent, while those affecting the cyclical part will disappear quickly. Fractional integration, business cycles, long-range dependence 02 2005 50 The Singapore Economic Review 169 173 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001950 L. A. GIL-ALANA alana@unav.es Facultad de Ciencias Economicas, Universidad de Navarra, Edificio Biblioteca, Entrada Este, E-31080 Pamplona, Spain
oai:RePEc:wsi:serxxx:v:56:y:2011:i:01:n:s02175908110041582021-07-25RePEc:wsi:serxxx
article BOOK REVIEW: "Political Economy in a Globalized World" edited by Jorgen Orstrom Moller No abstract received. 01 2011 56 The Singapore Economic Review 153 155 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004158 HAL HILL Australian National University, Australia
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article PRE AND POST CHINESE NEW YEAR HOLIDAY EFFECTS: EVIDENCE FROM HONG KONG STOCK MARKET This paper investigated the existence of pre-Chinese New Year (CNY) and post-CNY holiday effect in the Hong Kong stock market for the period covering January 1988 to July 2012. The generalized autoregressive conditional heteroscedasticity (GARCH)-M model is adopted to examine the average returns and associated with symmetrical behavior. Then, asymmetric effect will be identified by using the Threshold GARCH-M (TGARCH-M) and Exponential GARCH-M (EGARCH-M) models. Results obtained indicate the significant two days pre-CNY and one day post-CNY holiday effects. Results also showed that post-CNY is found to be more volatile than the pre-CNY. Besides, the study found evidence of asymmetrical market reactions towards positive and negative news. The CNY holiday effects can be explained with the arguments drawn from behavioral finance, where the Chinese superstition and tradition cultures can alter investors' attitudes toward risk and affect investors' decision making in stock trading. Pre-holiday, post-holiday, symmetrical, asymmetrical behavior, G10 04 2015 60 1550023 The Singapore Economic Review 1 14 http://www.worldscientific.com/doi/abs/10.1142/S021759081550023X RICKY CHEE JIUN CHIA ricky_chia82@hotmail.com Labuan Faculty of International Finance, Universiti Malaysia Sabah, Malaysia SHIOK YE LIM Labuan Faculty of International Finance, Universiti Malaysia Sabah, Malaysia PUI KHUAN ONG Labuan Faculty of International Finance, Universiti Malaysia Sabah, Malaysia SIEW FONG TEH Labuan Faculty of International Finance, Universiti Malaysia Sabah, Malaysia
oai:RePEc:wsi:serxxx:v:56:y:2011:i:04:n:s02175908110044562021-07-25RePEc:wsi:serxxx
article A THEORETICAL FRAMEWORK FOR THE EVALUATION OF COMPETITION BETWEEN CONTAINER TERMINAL OPERATORS This paper presents a conceptual framework for analyzing the outcomes of potential competitive strategies and their expected payoffs for container terminal operators in the container handling industry. The framework is based on the integration of Bowley's linear model of aggregate demand of product differentiation with Porter's "Diamond" model. It focuses on the number of containers handled, prices charged, and profits earned to analyze a variety of strategies that could be employed by container terminal operators to enhance their competitive position. The findings suggest that strategies to build complementary relationships and stimulate greater demand are more desirable than alternatives because they generate benefits that accrue to the entire container port cluster. Conversely, strategies that are intended to raise entry barriers, employ strategic pricing mechanisms, and/or involve collusion are found to lead to the formation of insular clusters and retard competitive advantage in the long-run. Container terminal, port competition, port competitiveness, port complementarity, product differentiation, oligopoly, C51, D43, L11, L13, L41 04 2011 56 The Singapore Economic Review 535 559 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004456 WEI YIM YAP yapweiyim@gmail.com Institute of Transport and Maritime Management Antwerp (ITMMA), University of Antwerp, Keizerstraat 64, B-2000 Antwerp, Belgium JASMINE SIU LEE LAM sllam@ntu.edu.sg Division of Infrastructure Systems and Maritime Studies, School of Civil and Environmental Engineering, Nanyang Technological University, 50 Nanyang Avenue, Singapore, 639798, Singapore KEVIN CULLINANE k.cullinane@napier.ac.uk Transport Research Institute (TRi), Edinburgh Napier University, Merchiston Campus, Edinburgh EH10 5DT, Scotland, UK
oai:RePEc:wsi:serxxx:v:57:y:2012:i:02:n:s02175908125001292021-07-25RePEc:wsi:serxxx
article DOES OPENNESS REDUCE WAGE INEQUALITY IN DEVELOPING COUNTRIES? PANEL DATA EVIDENCE FROM BANGLADESH This paper provides panel data evidence on trade liberalization and wage inequality in Bangladesh. Estimates from a dynamic model for five major manufacturing industries spanning the 1975–2002 period suggest that the effect of increased openness to trade is associated with a decrease in wage inequality. The result is in line with the theoretical prediction in that greater openness is expected to reduce wage inequality in developing countries. Bangladesh, openness, wage inequality, panel data, panel unit root, dynamic model, F14, F15, O15, C33 02 2012 57 1250012 The Singapore Economic Review 1 12 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500129 FARZANA MUNSHI fmunshi@bracuniversity.ac.bd Department of Economics and Social Sciences, BRAC University, 66 Mohakhali, Dhaka 1212, Bangladesh, Bangladesh
oai:RePEc:wsi:serxxx:v:50:y:2005:i:spec0:n:s02175908050021412021-07-25RePEc:wsi:serxxx
article LINKING POLICIES FOR BIODIVERSITY CONSERVATION WITH ADVANCES IN BEHAVIORAL ECONOMICS Global biodiversity loss and its consequences for human welfare and sustainable development have become major concerns. Economists have, therefore, given increasing attention to the policy issues involved in the management of genetic resources. To do so, they often apply empirical methods developed in behavioral and experimental economics to estimate economic values placed on genetic resources. This trend away from almost exclusive dependence on axiomatic methods is welcomed. However, major valuation methods used in behavioral economics raise new scientific challenges. Possibly the most important of these include deficiencies in the knowledge of the public (and researchers) about genetic resources, implications for the formation of values of supplying information to focal individuals, and limits to rationality.These issues are explored for stated-preference techniques of valuation (e.g., contingent valuation) as well as revealed preference techniques, especially the travel cost method. They are illustrated by Australian and Asian examples. Taking into account behavioral and psychological models and empirical evidence, particular attention is given to how elicitation of preferences, and supply of information to individuals, influences their preferences about biodiversity. Policy consequences are outlined. Biodiversity, behavioral economics, contingent valuation, experimental economics, travel cost method spec0 2005 50 The Singapore Economic Review 449 462 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002141 CLEM TISDELL c.tisdell@economics.uq.edu.au School of Economics, University of Queensland, Brisbane 4072, Australia
oai:RePEc:wsi:serxxx:v:53:y:2008:i:02:n:s02175908080029632021-07-25RePEc:wsi:serxxx
article PRODUCTION SUBSIDY AS A MACROECONOMIC POLICY IN A STAGNATION ECONOMY This paper analyzes the effects of a changing production subsidy in a model with money-in-the-utility function for households, monopolistic competition amongst an endogenously-determined number of firms, and nominal wage sluggishness that can prevent the equilibrium from attaining full employment. Its conclusion is that in a steady state with less than full employment (that is, under stagnation), a larger production subsidy will promote entry and stimulate effective demand provided that the elasticity of substitution among the differentiated products is sufficiently high. This paper is motivated by recent Japanese experiences. Monopolistic competition, production subsidy, effective demand, stagnation 02 2008 53 The Singapore Economic Review 317 333 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002963 WATARU JOHDO johdo@tezukayama-u.ac.jp Department of Economics, Tezukayama University, 7-1-1, Tezukayama, Nara 631-8501, Japan
oai:RePEc:wsi:serxxx:v:58:y:2013:i:04:n:s02175908135002392021-07-25RePEc:wsi:serxxx
article DETERMINANTS OF LOW FERTILITY IN SINGAPORE: EVIDENCE FROM A HOUSEHOLD SURVEY Below-replacement fertility is a common problem among the rich countries with far-reaching economic and social implications. The problem is more acute in some economically fast-growing Asian countries where the fertility decline has been more rapid and the current fertility rates have reached levels that are unprecedented in recent history. In this paper, data from a unique household survey have been used to understand the determinants of low fertility in one such country: Singapore. The total fertility rate in Singapore has dropped from 4.7 children per woman in 1965 to 1.2 in 2011. This is well below the replacement level of 2.1 and one of the lowest in the world. The authors identify three key determinants of fertility in Singapore: (1) age at marriage; (2) household income; and (3) number of siblings' children. They find that fertility is negatively related to age at marriage and positively related to the number of siblings' children. The relationship between fertility and household income is U-shaped: the relationship is negative for household incomes of up to S$21 000 (in 2010 Singapore dollars) and positive for higher incomes. Fertility, Singapore, J11, J13 04 2013 58 1350023 The Singapore Economic Review 1 26 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500239 AAMIR RAFIQUE HASHMI aamir@nus.edu.sg Department of Economics, National University of Singapore, Singapore WEN JIE MOK Department of Economics (Alumnus), National University of Singapore, Singapore
oai:RePEc:wsi:serxxx:v:57:y:2012:i:04:n:s02175908125003002021-07-25RePEc:wsi:serxxx
article ARE PREFERENTIAL TRADE AGREEMENTS STUMBLING BLOCKS? This paper studies the effect of preferential trade agreements (PTAs) on multilateral trading system using a sequential bargaining game. The study considers two formats of PTAs, i.e., when the PTA tariffs are specified before the formation of PTAs and when PTA members have to negotiate PTA tariffs after the formation of PTAs. The study finds that PTAs with specified tariffs can be building blocks to multilateral liberalization while PTAs without specified tariffs are stumbling blocks. The paper also concludes that PTAs can eliminate bargaining inefficiency called forward manipulation when PTA tariffs are specified before PTA negotiation. Stumbling blocks, preferential trade agreement, WTO, trade negotiation, F13 04 2012 57 1250030 The Singapore Economic Review 1 19 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500300 KORNKARUN CHEEWATRAKOOLPONG Kornkarun.K@Chula.ac.th Department of Economics, Chulalongkorn University, Phrayathai road, Pathumwan, Bangkok 10330, Thailand
oai:RePEc:wsi:serxxx:v:56:y:2011:i:04:n:s021759081100447x2021-07-25RePEc:wsi:serxxx
article EDITORIAL OVERVIEW No abstract received. 04 2011 56 The Singapore Economic Review 459 465 http://www.worldscientific.com/doi/abs/10.1142/S021759081100447X ANTHONY CHIN National University of Singapore, Singapore
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article WHY DO HOUSEHOLD HEADS IN RURAL CHINA NOT WORK MORE IN THE MARKET? This study estimates a modified disequilibrium model to ascertain the relative importance of reasons why household heads in rural China do not work more in the market. Household heads in the Central and Western regions do not so because they have fewer young children, live with their grown-up children or must help their family members with economic crops or livestock production. Household heads in the Eastern region do not work extra because nearly 40% of them are constrained in the labor market. This constraint seems to come from traditional economic structure which demands more temporary workers than permanent ones. Modified disequilibrium model, household head, labor supply, Chinese farm households, work hours constraints, JEL Classification: Q12, JEL Classification: J22 01 2014 59 1450008 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500088 TADASHI SONODA sonoda@soec.nagoya-u.ac.jp Graduate School of Economics, Nagoya University, Furo-cho, Chikusa-ku, Nagoya 464-8601, Japan
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article BOOK REVIEW: "Review of APEC at 20: Recall, Reflect, Remake" edited by K. Kesavapany and Hank Lim No abstract received. 01 2012 57 1280001 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S021759081280001X SEE SENG TAN S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore
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article TIME VARYING ASIAN STOCK MARKET INTEGRATION We employ an asset pricing framework with varying estimation lengths to show that there has been an increasing degree of integration between Asian and international stock markets, but very little with Japan. This finding is consistent with prior studies and highlights the impact of recent regulatory and economic reform undertaken throughout the region. Our results show that instability in the asset variance structure underpins the observed varying degrees of financial market integration. In particular, modeling integration using shorter estimation periods helps explain the time varying nature of financial market integration and the benefits that may accrue to international and domestic investors. Asia-Pacific, financial market integration, international asset pricing, systematic risk, market risk, F15, F2, F36, G10, G15 01 2015 60 1550006 The Singapore Economic Review 1 24 http://www.worldscientific.com/doi/abs/10.1142/S021759081550006X JONATHAN A. BATTEN jabatten@ust.hk Department of Finance, Monash University, Building H, Level 3, Caulfield Campus, Victoria, Australia PETER MORGAN pmorgan@adbi.org Asia Development Bank Institute, Kasumigaseki Building, 8F, 3-2-5 Kasumigaseki, Chiyoda-ku, Tokyo 100-6008, Japan PETER G. SZILAGYI p.szilagyi@jbs.cam.ac.uk Central European University, 1051 Budapest, Nádor utca 9, Hungary; Judge Business School, University of Cambridge, Trumpington Street, Cambridge, CB2 1AG, United Kingdom
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article BOOK REVIEW: "Review of 23 Things They Don't Tell You about Capitalism" by Ha-Joon Chang No abstract received. 04 2012 57 1280013 The Singapore Economic Review 1 6 http://www.worldscientific.com/doi/abs/10.1142/S0217590812800136 Kumi Morioka Duke University, NC, USA
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article BOOK REVIEW: "Review of Why Nations Fail: The Origins of Power, Prosperity and Poverty", edited by Daron Acemoglu and James A. Robinson No abstract received. 04 2013 58 1380009 The Singapore Economic Review 1 5 http://www.worldscientific.com/doi/abs/10.1142/S021759081380009X HAL HILL Australian National University, Australia
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article ASSESSING PRE-CRISIS FUNDAMENTALS IN SELECTED ASIAN STOCK MARKETS In the folklore of emerging markets, there is a popular belief that bubbles are inevitable. In this paper, our objective is to estimate a state-space model for rational bubbles in selected Asian economies with the aid of the Kalman Filter. For each economy, we derive a possible picture of the bubble formation process that is implied by the state-space formulation. The estimation is based on the rational valuation formula for stock prices. Our results provide a possible way of defining the presence of rational bubbles in the stock markets of Taiwan, Singapore, Korea, and Malaysia. Rational bubble, Kalmon Filter, financial market, volatility 02 2005 50 The Singapore Economic Review 175 196 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001962 EE LENG LAU Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore G. K. RANDOLPH TAN Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore SHAHIDUR RAHMAN asrahman@ntu.edu.sg Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore
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article BOOK REVIEW: "Theory of Regular Economics", by Ryo Nagata No abstract received. 02 2005 50 The Singapore Economic Review 289 291 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002025 ZHENLIN YANG School of Economics and Social Sciences, Singapore Management University, Singapore
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article IS APEC SUITABLE FOR CURRENCY UNION? The Asia-Pacific Economic Cooperation (APEC) was established in 1989. APEC member countries are remarkably different from each other in many respects. The traditional optimum currency area (OCA) theory may not be suitable for application to APEC. This paper stresses business cycles and trade intensity, which are included in OCA theory, and considers whether or not the "currency union" is suitable. The paper develops a procedure for applying OCA theory to APEC and examines these criteria while taking into account the endogeneity of these criteria. The result indicates that adopting the dollar for currency union is much more reasonable than adopting the yen. APEC, business cycles, common currency, exchange rate, trade 03 2006 51 The Singapore Economic Review 325 334 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002500 YUTAKA KURIHARA kurihara@vega.aichi-u.ac.jp Department of Economics, Aichi University, 1-1 Machihata Toyohashi, Aichi 4418522, Japan
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article THE DETERMINANTS OF AGGREGATE IMPORT DEMAND IN BRUNEI DARUSSALAM: AN EMPIRICAL ASSESSMENT USING A COINTEGRATION AND ERROR CORRECTION APPROACH This article examines the determinants of aggregate import demand in Brunei Darussalam within a cointegration and error correction framework using the bounds test for cointegration. In addition to the real effective exchange rate and real GDP, in alternative specifications we examine the effect of population growth and world petroleum prices on import demand in Brunei Darussalam. We find that in both the long-run and short-run aggregate imports are inelastic with respect to income and world petroleum prices, but are price-elastic and elastic with respect to population. Bounds test, cointegration, Brunei, import demand 02 2005 50 The Singapore Economic Review 197 210 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001974 PARESH KUMAR NARAYAN P.Narayan@griffith.edu.au Department of Accounting, Finance and Economics, Griffith University, Australia RUSSELL SMYTH Russell.Smyth@BusEco.monash.edu.au Department of Economics, Monash University, 900 Dandenong Road, Caulfield East 3145, Victoria, Australia
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article THE APPLICATION OF AN ENDOGENOUS POVERTY LINE AND ITS RELATIONSHIP WITH THE POVERTY IMPACT OF ECONOMIC SHOCKS: AN EMPIRICAL INVESTIGATION Most of the studies on the poverty impact of economic shocks as well as policy reforms assumed the poverty line as a fixed line; thus, the poverty outcome of shocks may underestimate (overestimate) and mislead in policy guidance. This research aims at empirically investigating the difference of poverty outcome between applying a fixed and an endogenous poverty line. Applying computable general equilibrium microsimulation (CGE-MS), this study has empirically proven that, if a fixed poverty line is applied, the poverty impact of economic shocks which significantly increase (decrease) price will always be underestimated (overestimated). This study empirically found that there is a 0.316 percentage point difference in the poverty outcome between applying the endogenous poverty line and the fixed poverty line when analyzing the impact on poverty in Indonesia of a doubling in the imported soybean price. Supposing the fixed poverty line, the poverty rate will increase by 0.167 percentage points, while supposing the endogenous poverty line, the poverty rate will increase by 0.483 percentage points. Therefore, applying either an endogenous or a fixed poverty line will have a different policy implication. This study strongly suggested that the endogenous poverty line should be applied when analyzing the poverty impact of shocks due to the precision in outcomes. Endogenous poverty line, poverty measurement, CGE, microsimulation, Indonesia, D11, I32, O12 01 2013 58 1350005 The Singapore Economic Review 1 25 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500057 TEGUH DARTANTO teguh@lpem-feui.org Institute for Economic and Social Research (LPEM), Faculty of Economics, University of Indonesia, Jl. Salemba Raya No.4, Jakarta, 10430, Indonesia
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article DETERMINANTS OF STUDENTS' WILLINGNESS TO PAY FOR VIOLENT CRIME REDUCTION We apply the contingent valuation method to estimate how much a specific group of society, which is relatively prone to falling victim to crime, is willing to pay to reduce the likelihood of being the victim of violent crime. Based on responses from 1122 students, we found that younger and female students revealed that they are more inclined to pay so as to avoid violent crime. Students' field of study, cautious behavior and a strong opinion about policies and payment vehicles with potential to reduce the risk of crime are key determinants of the willingness to pay. Contingent valuation method, willingness to pay, intangible costs, crime costs, higher education 04 2013 58 1350027 The Singapore Economic Review 1 34 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500276 AURORA A. C. TEIXEIRA ateixeira@fep.up.pt CEF.UP, Faculdade Economia do Porto, Universidade do Porto, INESC Porto Rua Dr Roberto Frias, 4200-464 Porto, Portugal MAFALDA SOEIRO mafaldam@fe.up.pt Faculdade Engenharia do Porto, Universidade do Porto, Rua Dr Roberto Frias, 4200-400 Porto, Portugal
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article DETERMINANTS OF TERRORISM: A PANEL DATA ANALYSIS OF SELECTED SOUTH ASIAN COUNTRIES The phenomenon of terrorism has riveted world's unwavering attention since 9/11. The underlying study investigates the determinants of terrorism in the South Asian region. Applying negative binomial regression, the study finds that both political structure and economic conditions are responsible for terrorism. On the economic front, relative deprivation represented by income disparity is the major cause of terrorism. On the other hand, deprivation of the people of their political rights and civil liberties, exhibited by political repression, compels them to be involved in terrorist activities. Our findings illustrates that high literacy rate is one of the foremost reason for terrorism in the region. Terrorism, political repression, inequality, education, population, D74, H56 02 2011 56 The Singapore Economic Review 175 187 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004225 MUHAMMAD NASIR nasirawan84@yahoo.com Pakistan Institute of Development Economics (PIDE), Quaid-i-Azam University Campus, Islamabad, P.O. Box 1091, Pakistan AMANAT ALI amanat@qau.edu.pk Department of Economics, Quaid-i-Azam University, Islamabad, P.O. Box 1091, Pakistan FAIZ UR REHMAN faizeconomist@yahoo.com Department of Economics, Quaid-i-Azam University, Islamabad, P.O. Box 1091, Pakistan
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article TESTING OF REAL CONVERGENCE IN GERMANY IN THE PRESENCE OF STRUCTURAL BREAKS In this short article we examine the real convergence hypothesis in Germany with respect to the US by means of fractional integration. Using a parametric procedure due to Robinson (1994), the results show that real convergence is only achieved in this country if we take into account the presence of a structural break at World War II. The same evidence is found in other countries (like Japan, the UK and Canada) when this break is considered. Real convergence, fractional integration, structural breaks 01 2005 50 The Singapore Economic Review 93 101 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001846 L. A. GIL-ALANA alana@unav.es University of Navarre, Faculty of Economics, Edificio Biblioteca Entrada Este, E-31080 Pamplona, Spain
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article BOOK REVIEW: "Asian Industrial Clusters, Global Competitiveness and New Policy Initiatives" edited by Bernard Ganne and Yveline Lecler No abstract received. 03 2011 56 The Singapore Economic Review 459 461 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004298 RUIMIN HE
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article AN ESTIMATION OF EFFICIENT TIME-VARYING TOLLS FOR CROSS HARBOR TUNNELS IN HONG KONG This work estimates the distribution of a time-varying toll over a 24-hour period that minimizes the combined queue length of the three tunnels that traverse Hong Kong's Victoria Harbour, taking into account institutional constraints. Our results reveal that switching from a flat toll to a time-varying toll scheme would eliminate all existing tunnel queues. We argue that optimal tunnel tolling, coupled with the nonstop electronic toll collection mechanism already in place, could be the first step toward the implementation of electronic road pricing in Hong Kong. Optimal tolling would obviate the need to build a fourth harbor crossing in the near future. Congestion, congestion pricing, time-varying toll, R41, R48 04 2011 56 The Singapore Economic Review 467 488 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004432 TIMOTHY D. HAU timhau@hku.hk School of Economics and Finance, University of Hong Kong, Pokfulam Road, Hong Kong BECKY P. Y. LOO bpyloo@hkucc.hku.hk Department of Geography, University of Hong Kong, Pokfulam Road, Hong Kong K. I. WONG kiwong@mail.nctu.edu.tw Department of Transportation Technology & Management, National Chiao Tung University 1001 Ta Hsueh Road, Hsinchu, 30010, Taiwan S. C. WONG hhecwsc@hkucc.hku.hk Department of Civil Engineering, University of Hong Kong, Pokfulam Road, Hong Kong
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article MORAL HAZARD AND ADVERSE SELECTION IN HEALTH INSURANCES, EVIDENCE FROM A TRANSITIONAL ECONOMY This paper uses special features of Vietnam's health insurance system to separately estimate the effects of moral hazard and adverse selection. Traditionally, the estimation of those effects is ad hoc due to the endogeneity of insurance status. Due to a special fact in Vietnam that there exist a great deal of people who are under the compulsory scheme but get no insurances, we are able to estimate the effects of moral hazard and adverse selection using a matching estimator technique. Our results show that with outpatient services, moral hazard and adverse selection are very severe in Vietnam for old people, and not for young people; and that for inpatient service, the effects are insignificant. The results can be used in the construction of the health insurance policy for Vietnam toward universal insurance as stated in the Law of Health Insurance 2008. Moral hazard, adverse selection, health insurance, PSM, transitional economy, I13, I18 02 2014 59 1450011 The Singapore Economic Review 1 21 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500118 MINH THI NGUYEN minhkthn@gmail.com Mathematical Economics Faculty, National Economic University, 207 Giai Phong, Hanoi, Vietnam
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article OUTPUT AND PRICE LINKAGES IN ASIA'S POST-CRISIS MACROECONOMIC INTERDEPENDENCE The paper explores the nature of macroeconomic interdependence in post-crisis Asia. Empirical evidence suggests that, relative to the pre-crisis period, output and price correlations in Asia have increased and the output and price impacts of shocks originating within the region have risen. This greater interdependence, however, did not come at the expense of a weaker economic tie with the rest of the world (as clearly demonstrated in the recent global economic crisis). Asian policymakers must better manage the region's growing macroeconomic linkages through greater cooperation — both to mitigate the impact of negative policy spillovers and to foster an environment in which regional and global links can continue to deepen. Asian economic integration, macroeconomic interdependence, output and price linkages in Asia, F36, F42, F50 01 2010 55 The Singapore Economic Review 59 81 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003614 SHINJI TAKAGI takagi@econ.osaka-u.ac.jp Graduate School of Economics, Osaka University, Toyonaka, Osaka 560, Japan ISSEI KOZURU ikoduru@kosei.ac.jp Kosei Securities, 2-1-10, Kitahama, Chuo-Ku, Osaka 541, Japan
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article LIFE-CYCLE INCOME HYPOTHESIS AND DEMOGRAPHIC STRUCTURE: A SEMI-NONPARAMETRIC ANALYSIS USING A PANEL OF COUNTRIES In this paper, we attempt to determine whether the life-cycle income (LCI) hypothesis can explain movements in the national savings rate using the panel data of countries and the semi-nonparametric approach. While relating movements in the population density function to movements in the national savings rate, we are able to estimate the age response function with a high level of precision, and the estimated age response function is hump-shaped, which is generally consistent with the prediction from the LCI hypothesis. Running time-series regressions separately for individual countries, we also demonstrate that the estimated age response functions are consistent with the LCI hypothesis in a large proportion of countries, despite limited observations in a variety of countries. Finally, our time-series and cross-sectional analysis results imply that the LCI hypothesis is more likely to hold in a country wherein the growth rate of per capita GDP and the growth rate of population are high. Age distribution, Fourier flexible form, life-cycle income hypothesis, semi-nonparametric regression, series estimation, E21, D91, C14 01 2013 58 1350003 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500033 CHEOLBEOM PARK cbpark_kjs@korea.ac.kr Department of Economics, Korea University, Anam-dong, Seongbuk-gu, Seoul, Republic of Korea 136-701, Republic of Korea JINA YU angebus@kisdi.re.kr Broadcasting & Spectrum Policy Research Division, Korea Information Society Development Institute (KISDI), 38 Youngmeori 2 gil (1-1 Juam-dong), Gwacheon-si, Gyeonggi-do, Republic of Korea 427-710, Republic of Korea
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article GROWTH ECONOMETRICS IN THE TROPICS: WHAT INSIGHTS FOR SOUTHEAST ASIAN ECONOMIC DEVELOPMENT? This paper attempts to distil the key conclusions from the very large literature on the empirics of growth and to apply them to the development record of the five major Southeast Asian economies for which we have reasonably long-term data — Indonesia, Malaysia, The Philippines, Singapore and Thailand. These five display a considerable range of development outcomes, ranging from consistently high growth, to episodes of boom and crisis, and to low average growth. After estimating a series of general empirical models from a large sample of countries, we examine how well these fit the observed outcomes in these particular Southeast Asian countries. Our broad finding is that the average model does reasonably well in explaining outcomes in Singapore and Thailand, but that the residuals for Indonesia, Malaysia and the Philippines are quite large and persistent across different specifications. Economic growth, South-East Asia spec0 2005 50 The Singapore Economic Review 313 343 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002062 HAL HILL hal.hill@anu.edu.au Division of Economics, Research School of Pacific and Asian Studies, Australian National University, Canberra ACT 0200, Australia SAM HILL sam.hill@anu.edu.au Division of Economics, Research School of Pacific and Asian Studies, Australian National University, Canberra ACT 0200, Australia
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article THE RELATIONSHIP BETWEEN EMPLOYMENT AND EARNINGS IN SINGAPORE: 1991–2012 Since its formation in 1972 under the leadership of its founding chairman, Professor Lim Chong Yah, the NWC has been a major force in ensuring the stability of the labor market. A key recommendation which the NWC pushed for as a means of saving jobs in the recessions has been the reduction of the cost of labor to employers. The underlying assumption was that the reaction of demand to reduced labor costs would be large enough to justify such an approach. The main aim of this paper is to derive estimates of the elasticity of demand for labor using a suitable time-series econometric approach. The estimates imply that the elasticity of demand for labor in Singapore is less than but close to being unitary in magnitude. Employment, demand for labor, time-series modelling, JEL Classification: C22, JEL Classification: C32, JEL Classification: E24, JEL Classification: E6, JEL Classification: J23 03 2014 59 1450022 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500222 G. K. RANDOLPH TAN randolphtangk@unisim.edu.sg Centre for Applied Research (CFAR), SIM University 461 Clementi Road, Singapore 599491, Singapore
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article EXCHANGE RATE AND STOCK PRICE INTERACTION IN MAJOR ASIAN MARKETS: EVIDENCE FOR INDIVIDUAL COUNTRIES AND PANELS ALLOWING FOR STRUCTURAL BREAKS This article examines the relationship between exchange rates and stock prices in eight Asian countries. We test for cointegration and Granger causality for both individual countries using the Gregory and Hansen cointegration test that accommodates a structural break in the cointegrating vector, and for a panel using the Westerlund panel Lagrange multiplier (LM) cointegration test that allows for multiple structural breaks in the level of the individual cointegrating equations. Our results for individual countries suggest that the only country for which exchange rates and stock prices are cointegrated over the entire period is Korea where there is a weak long-run unidirectional Granger causality running from exchange rates to stock prices. Employing the panel LM cointegration test with multiple structural breaks, we find that exchange rates and stock prices are not cointegrated. We conclude that for the eight Asian countries, exchange rates and stock prices primarily have only a contemporaneous effect on each other that is reflected in the short-run intertemporal comovements between these financial variables. Exchange rates, stock prices, structural break, panel, F31, G15 02 2011 56 The Singapore Economic Review 255 277 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004250 HOOI HOOI LEAN hooilean@usm.my Economics Program, School of Social Sciences, Universiti Sains Malaysia, Malaysia PARESH NARAYAN School of Accounting, Finance and Economics, Deakin University, Australia RUSSELL SMYTH Department of Economics, Monash University, Australia
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article PARALLEL IMPORTS, MARKET SIZE AND INVESTMENT INCENTIVE This paper proposes a vertical control model that features two-part tariff pricing, leader-fringe-follower competition, and investment to characterize the conditions under which parallel imports will (or will not) occur when such activities are legally permitted. In addition, we analyze the effects of parallel imports on the incentive of an authorized distributor to invest in market development. We find that parallel imports cannot arise if the target and the source market either differ too greatly or are too similar in size. Two results are worth emphasizing. First, parallel imports can arise even if the IP owner has the ability to deter parallel imports. Second, the presence of parallel imports and even the threat posed by parallel imports can reduce the domestic distributor's market development investment. Parallel imports, vertical control, Intellectual Property (IP) law 02 2009 54 The Singapore Economic Review 167 181 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003252 ALFONS PALANGKARAYA Centre for Microeconometrics, Melbourne Institute of Applied Economic and Social Research, Australia; Intellectual Property Research Institute of Australia, The University of Melbourne, Melbourne JONGSAY YONG jongsay@unimelb.edu.au Centre for Microeconometrics, Melbourne Institute of Applied Economic and Social Research, Australia; Intellectual Property Research Institute of Australia, The University of Melbourne, Melbourne
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article BUDGET DEFICITS AND INTEREST RATES: THE US EVIDENCE SINCE 1946 Many economists believe that federal government's budget deficits result in higher interest rates. This increase in interest rates can stifle private investment and impede the real rate of economic growth for the economy. This paper examines the potential impact of federal budget deficits on long-term interest rates for corporate bonds. The study is based on post-war annual US data, and employs a standard demand-supply model. The empirical results in our study provide evidence that the increasing budget deficits lead to higher interest rate for corporate bonds. In this regard, our study supports arguments for the crowding out theory. Budget deficit, interest rate 02 2007 52 The Singapore Economic Review 191 200 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002646 SHAKIL QUAYES quayes@asu.edu School of Global Management and Leadership, Arizona State University, PO Box 37100, Phoenix, Arizona, 85069-7100, USA A. M. M. JAMAL Department of Management, Southeastern Louisiana University, Hammond, LA 70402, USA
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article DOES TRADE-OFF BETWEEN CHILD QUANTITY AND CHILD QUALITY EXIST IN MALAYSIA? This paper analyzed whether the child quantity-quality (CQQ) trade-off is applicable in the case of Malaysia. Utilizing the instrumental variable (IV) method, our analysis produces results that are consistent with the hypothesis that the trade-off is unlikely to be applicable to Malaysia as a whole due to the generous public provision of education. However, the results show that the CQQ trade-off exists for the high-income group. Taken together, if both a larger stock of human capital and population are desired, the government should continue to provide education for its people while at the same time maintain policies that stimulate growth. Fertility, child quantity-quality, instrumental variable, Malaysia, J13 04 2015 60 1550021 The Singapore Economic Review 1 19 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500216 NOR AZAM ABDUL-RAZAK Department of Economics and Agribusiness, Universiti Utara Malaysia, Malaysia MOHD ZAINI ABD KARIM zaini500@uum.edu.my Othman Yeop Abdullah Graduate School of Business, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia ROSLAN ABDUL-HAKIM Othman Yeop Abdullah Graduate School of Business, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia
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article TRADE UNIONS AND ECONOMIC REFORM IN AUSTRALIA, 1983–2013 Many of the key reforms of the past three decades that helped to strengthen the Australian economy were implemented during the operation of the Accord that existed between Australian Labor Party governments and the union movement. In order to address structural economic problems, unions agreed to moderate wage outcomes and to facilitate the transition to workplace bargaining in return for social welfare gains for workers, which successive governments have maintained. These reforms helped to improve labor market efficiency and allowed firms to integrate successfully into international markets, without substantially compromising the interests of workers and their families, which thereby allowed economic dislocation and social unrest to be contained. In contrast to the assertions of certain Australian employer groups, research has consistently shown that union involvement in workplace bargaining has a benign impact on business productivity. However, declining membership presents a significant challenge to the capacity of Australian unions to influence economic outcomes at the national and workplace levels in the future. Australia, economic policy, industrial relations, labor market policy, trade unions, wage determination 04 2014 59 1450033 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500337 CHRIS F. WRIGHT chris.f.wright@sydney.edu.au Work and Organisational Studies, School of Business, University of Sydney, NSW Australia 2006, Australia RUSSELL D. LANSBURY russell.lansbury@sydney.edu.au Work and Organisational Studies, School of Business, University of Sydney, NSW Australia 2006, Australia
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article BOOK REVIEW: "Review of Public Finance: An International Perspective" by Joshua E. Greene No abstract received. 01 2013 58 1380001 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590813800015 GIOVANNI KO Nanyang Technological University, Singapore
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article A PRINCIPLE COMPONENT ANALYSIS — NUMERICAL TAXONOMY APPROACH FOR EXPORT PERFORMANCE ASSESSMENT: THE CASE OF IRANIAN CHEMICAL UNITS This paper presents an integrated approach for assessment of export performance based on principal component analysis (PCA) and Numerical Taxonomy (NT). The integrated assessment is influenced by shaping factors such as export value, production value, export growth, R&D expenditure and value added. Iranian chemical industries are selected as a case study according to the format of International Standard for Industrial Classification (ISIC) for a five-year period. The modeling approach of this paper could be used for analyzing other sectors and countries. This study shows how total export efficiency is obtained through the proposed approach whereas previous studies consider conventional productivity approach by a single indicator. Export indicators, PCA, numerical taxonomy, international standard, cluster analysis 04 2009 54 The Singapore Economic Review 689 707 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003446 A. AZADEH ali@azadeh.com aazadeh@ut.ac.ir Department of Industrial Engineering, Center of Excellence for Intelligent Based Mechanical Experiments and Department of Engineering Optimization Research, College of Engineering University of Tehran, Iran, P. O. Box 11365–4563, Iran G. H. ATAEI ataei@nioc.org National Iranian Oil Company (NIOC), Department of Strategic Planning, Tehran, Iran
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article DYNAMICS OF CONSUMER EXPENDITURE AND STOCK MARKET PRICES AND UNCERTAINTY: MALAYSIAN EVIDENCE The present paper analyzes the role of stock market, more specifically real stock prices and stock market uncertainty/volatility, on private consumption behavior for an emerging market, Malaysia, using quarterly data from 1991 to 2009. Employing the autoregressive distributed lag approach to cointegration test, the paper establishes a long-run equilibrium that ties private consumption to its determinants — real income, real stock prices, real lending rate, and stock market volatility. In the long run, the presence of the stock market wealth effect is documented. At the same time, the stock market volatility is also noted to depress private consumption particularly when the volatility is at the degree as observed during the Asian crisis. The authors further note the short-run influences of real stock price changes on consumption growth and the adjustment of private consumption to the long-run level when it is modeled in an error-correction setting. Our simple simulation indicates that the drop in the private consumption due to the decline in stock market wealth post-crisis is substantial, amounting to 2.7% of average post-crisis gross domestic product. Stock market wealth, conditional and realized volatility, private consumption, Malaysia, D91, E21 04 2013 58 1350025 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500252 MANSOR H. IBRAHIM mansorhi@inceif.org International Centre for Education in Islamic Finance (INCEIF), Lorong Universiti A, 59000 Kuala Lumpur, Malaysia SIONG HOOK LAW lawsh@econ.upm.edu.my Department of Economics, Faculty of Economics and Management Sciences, Universiti Putra Malaysia, 43400 Serdang UPM, Selangor, Malaysia
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article AN EMPIRICAL STUDY OF THE FISHER EFFECT AND THE DYNAMIC RELATION BETWEEN NOMINAL INTEREST RATE AND INFLATION IN SINGAPORE The Fisher Effect postulated that real interest rate is constant, and that nominal interest rate and expected inflation move one-for-one together. This paper employs Johansen's method to investigate for the existence of a long-run Fisher effect in the Singapore economy over the period 1976 to 2006, and finds evidence of a positive relationship between nominal interest rate and inflation rate while rejecting the notion of a full Fisher Effect. The dynamic relationship between nominal interest rate and inflation rate is also examined from the error-correction models derived, and the analysis is extended to investigate the impulse response functions of inflation and nominal interest rates where we discover the presence of the Price Puzzle in the Singapore market. Fisher effect, Price Puzzle, Singapore, interest rate, inflation, cointegration, impulse response function 01 2009 54 The Singapore Economic Review 75 88 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003173 KING FUEI LEE king.lee@schroders.com Schroder Investment Management, 65 Chulia Street, #46-00 OCBC Centre, Singapore 049513, Singapore
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article EXPORT SUBSIDIES AND THE FIRST-MOVER (DIS)ADVANTAGE In the presence of home firm's ability to make a cost-reducing investment before or after the government set its subsidy level, this paper analyzes the impact of timing on the optimal policy of the government. We find that under complete information assumption, the firm will overinvest and consequently, the government will over-subsidize, resulting in lower welfare levels than would arise under non-intervention. We extend the model to the case in which the home firm has private information about its own costs, which it may want to signal to the government through its investment choice. We find that under this setup, the low-cost firm overinvests even more than under full information case, making the policy of non-intervention even more attractive. Subsidies, investment, signaling, F12, F13 01 2011 56 The Singapore Economic Review 41 50 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004080 MATLOOB PIRACHA M.E.Piracha@kent.ac.uk School of Economics, University of Kent, Canterbury, Kent CT2 7NP, United Kingdom
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article PRODUCTION FRAGMENTATION AND OUTSOURCING: GENERAL CONCERNS Globalization has its detractors as well as supporters. Concerns have been expressed about the greater ease of fragmenting the production process so that more parts can be outsourced to a variety of countries. Highly developed regions worry about the possibility of greater unemployment or lower unskilled wage rates. Less developed regions are concerned that they may not possess a comparative advantage in the service link activities that promote fragmentation. The paper discusses these issues, with special emphasis on India and China. Globalization, fragmentation, outsourcing, service link activities, production blocks, hinterlands 03 2008 53 The Singapore Economic Review 347 356 http://www.worldscientific.com/doi/abs/10.1142/S0217590808003026 RONALD W. JONES rjones@mail.rochester.edu University of Rochester, Rochester, NY 14627, USA
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article DECRIMINALIZATION POLICY AND MARIJUANA SMOKING PREVALENCE: A LOOK AT THE LITERATURE This paper reviews the literature on the impact of marijuana decriminalization policy on marijuana smoking prevalence. Due to mixed findings in the existing studies, we attempt to find a common basis to explain the different results across papers. The main purpose is to provide a coherent background as to what outcomes may be expected from certain type of data, econometric models, and explanatory variables. If possible, we also try to provide the explanation as to why certain results are found. Decriminalization, Marijuana Smoking Prevalence, I12, I18 04 2009 54 The Singapore Economic Review 621 644 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003483 KANNIKA DAMRONGPLASIT Division of Economics, Nanyang Technological University, Singapore; Department of Health Services University of California, Los Angeles, USA; Rand Corportation, USA CHENG HSIAO chsiao@usc.edu Department of Economics, University of Southern California, USA; Nanyang Technological University, Singapore; City University of Hong Kong, Hong Kong
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article MODELING THE INTERACTIONS OF STOCK PRICE AND EXCHANGE RATE IN MALAYSIA After the East Asian crisis in 1997, the issue of whether stock prices and exchange rates are related or not have received much attention. This is due to realization that during the crisis the countries affected saw turmoil in both their currencies and stock markets. This paper studies the non-linear interactions between stock price and exchange rate in Malaysia using a two regimes multivariate Markov switching vector autoregression (MS-VAR) model with regime shifts in both the mean and the variance. In the study, the Kuala Lumpur Composite Index (KLCI) and the exchange rates of Malaysia ringgit against four other countries namely the Singapore dollar, the Japanese yen, the British pound sterling and the Australian dollar between 1990 and 2005 are used. The empirical results show that all the series are not cointegrated but the MS-VAR model with two regimes manage to detect common regime shifts behavior in all the series. The estimated MS-VAR model reveals that as the stock price index falls the exchange rates depreciate and when the stock price index gains the exchange rates appreciate. In addition, the MS-VAR model fitted the data better than the linear vector autoregressive model (VAR). Stock price, exchange rates, Markov switching vector autoregression model, C32, C51 04 2009 54 The Singapore Economic Review 605 619 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003471 MOHD TAHIR ISMAIL mtahir@cs.usm.my School of Mathematical Sciences, Universiti Sains Malaysia, 18000 Minden, Penang, Malaysia ZAIDI BIN ISA zaidiisa@pkrisc.cc.ukm.my School of Mathematical Sciences, Universiti Kebangsaan Malaysia, Bangi, 43600, Selangor, Malaysia
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article DO MONEY AND INTEREST RATES MATTER FOR STOCK PRICES? AN ECONOMETRIC STUDY OF SINGAPORE AND USA This paper examines the long-term as well as short-term equilibrium relationships between the major stock indices and selected macroeconomic variables (such as money supply and interest rate) of Singapore and the United States by employing the advanced time series analysis techniques that include cointegration, Johansen multivariate cointegrated system, fractional cointegration and Granger causality. The cointegration results based on data covering the period January 1982 to December 2002 suggest that Singapore's stock prices generally display a long-run equilibrium relationship with interest rate and money supply (M1) but a similar relationship does not hold for the United States. To capture the short-run dynamics of the relationship, we replicate the same experiments with different subsets of data representing shorter time periods. It is evident that stock markets in Singapore moved in tandem with interest rate and money supply before the Asian Crisis of 1997, but this pattern was not observed after the crisis. In the United States, stock prices were strongly cointegrated with macroeconomic variables before the 1987 equity crisis but the relationships gradually weakened and totally disappeared with the emergence of Asian Crisis that also indirectly affected the United States. The results of fractional cointegration and the Johansen multivariate system are consistent with the earlier cointegration results that both Singapore and US stock markets did possess equilibrium relationships with M1 and interest rate at the early days. However, the stability of the systems was disturbed by a series of well-known financial turbulence in the past two decades and eventually weakened for Singapore and completely disappeared for the US. This may imply that monetary authority may take action to respond to the asset price turbulence in order to maintain the stability of monetary economy and thus break the existing equilibrium between stock markets and macroeconomic variables like interest rate and M1. Another possible explanation is that the market became more efficient after 1997 Asian crisis. Finally, the results of Granger causality tests uncover some systematic causal relationships, implying that stock market performance might be a good gauge for Central Bank's monetary policy adjustment. Money supply, interest rate, stock index, cointegration analysis, fractional integration, causality 01 2006 51 The Singapore Economic Review 31 51 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002214 WING-KEUNG WONG Department of Economics, National University of Singapore, AS2 06-05, 1 Arts Link, Singapore 117570, Singapore HABIBULLAH KHAN Graduate School of Business, Universitas21Global, Singapore JUN DU Department of Economics, National University of Singapore, Singapore
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article FACTORS SHAPING MALAYSIA'S MANUFACTURING PRODUCTIVITY GROWTH Productivity indicators within the Malaysian manufacturing sector for the period of 1970–2001 were compared. Two variation models were generated from the production functions to measure manufacturing sector productivity growth. The first model is an extensive growth theory model and the second is an intensive growth theory model. The extensive theory model had a gap that cast doubt in the results. A statistical analysis was provided to close this gap. The results show a slowdown in the contribution of Total Factor Productivity (TFP) growth and low growth of labor productivity of the sector. A negative impact of quality of inputs used by the sector was observed in the contribution of TFP, TFP per unit of labor and labor productivity growth in comparison with other productivity indictors of the sector. The study finds that productivity growth of Malaysia's manufacturing sector is input-driven rather than TFP-driven. Malaysia, manufacturing sector, productivity growth, input-driven, TFP 02 2009 54 The Singapore Economic Review 249 262 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003240 ELSADIG MUSA AHMED elsadigmusa@yahoo.com asadiq29@hotmail.com Economics Faculty of Business and Law, Multimedia University, Jalan Ayer Keroh Lama, 75450 Melaka, Malaysia
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article STRUCTURE, EMPLOYMENT AND PRODUCTIVITY GROWTH IN THE INDIAN UNORGANIZED MANUFACTURING SECTOR: AN INDUSTRY LEVEL ANALYSIS The paper analyzes the size, growth and productivity performance of the unorganized manufacturing sector in India during the 1978–1979 to 2000–2001 period. The study shows evidence of an increase in the size of the sector with a slowdown in the reforms period. Evidence indicates that the rate of growth varies widely across the two-digit industries but the variation in growth rate is smaller during the 1990s. Textiles and machinery goods were the fastest growing segments of India's unorganized manufacturing sector in the reforms period. The partial factor productivity approach shows that labor productivity has improved in 2000–2001 over 1978–1979 while capital productivity reported a decline in the same period. The sector, on the other hand, registered a fall in total factor productivity (TFP) during the reforms period. It is found that technological progress has been the main contributor to the growth in TFP in the prereforms period while technical regress contributed to the decline in TFP in the reforms period. A completely different picture is noticed since the mid-1990s when the sector made significant progress in TFP primarily attributed to technological progress which outweighed the decline in technical efficiency. It is also found that capital intensity is an essential factor augmenting labor productivity levels in the sector, which is important for improving the wages paid to the workers in the sector. Unorganized manufacturing, reforms, productivity growth, D24, O47, R11 03 2011 56 The Singapore Economic Review 349 376 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004316 S. N. RAJESH RAJ rajeshraj.natarajan@gmail.com Centre for Multi-Disciplinary Development Research, Dharwad, Karnataka, India
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article AN EMPIRICAL ANALYSIS OF THE EFFECT OF MULTIMARKET CONTACTS ON US AIR CARRIERS' PRICING BEHAVIORS A number of empirical studies have shown that multimarket contacts facilitate collusive behaviors between full-service carriers (FSCs) in the US airline industry. This paper empirically investigates the effects of multimarket contacts on air carriers' pricing behaviors and highlights those of low-cost carriers (LCCs) and FSCs as well as those among LCCs. Simultaneous demand and price (pseudo-supply) equations are estimated to derive these impacts of multimarket contacts in the top 30 air markets in the US multimarket contacts among FSCs do lead to collusive setting of high airfares. However, the effect of multimarket contacts is lower among LCCs, and the degree depends on the number of LCCs in a market. The airfares of LCCs remain low, even though there are multimarket contacts among LCCs. These results suggest that the behaviors of LCCs are not affected by multimarket contacts. Multimarket contact, airline industry, LCC 04 2011 56 The Singapore Economic Review 593 600 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004444 HIDEKI MURAKAMI hidekim@panda.kobe-u.ac.jp Graduate School of Business, Kobe University, Japan RYOTA ASAHI ryota.net1011@hotmail.co.jp Graduate School of Business, Kobe University, Japan
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article INTANGIBLE DETERMINANTS OF MARKET VALUE IN THE NEW ECONOMY: A DYNAMIC PANEL DATA ANALYSIS OF THE INDIAN SOFTWARE INDUSTRY Intangible assets like human capital and organization capital have driven the success of India's software industry. This article analyzes the impact of intangible assets on the market value of Indian software firms using a dynamic panel data model. Measures of tangible and intangible assets are constructed using firm-level panel data. The estimation technique uses system generalized method of moments (GMM) and minimum distance estimation (MDE). This methodology accounts for unobserved firm heterogeneity, endogenous explanatory variables and persistent variables. The results conclusively show that intangible assets have a significant impact on market values of Indian software firms. Dynamic panel data, Indian software industry, intangible capital, new economy, market valuation, C23, G12 03 2009 54 The Singapore Economic Review 379 398 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003392 SUPRIYO DE supriyode@hotmail.com sude7043@mail.usyd.edu.au Faculty of Economics and Business, The University of Sydney, Sydney, NSW 2006, Australia; Ministry of Finance, North Block, New Delhi 110001, India
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article FIRM SPECIFIC VARIATION IN RETURNS AND FUNDAMENTALS IN KOREA STOCK MARKET We explore the link between firm-specific variations in stock returns and firm fundamentals in the context of a simple present value framework and test the effect of market openness and firms' industry belonging on stock price informativeness in Korea. Using detailed accounting data and an extensive control for firm-specific characteristics, we find that alternative proxies of cash flow shocks explain a significant part of the variation in firm-specific returns. The effect, however, is not uniform across market sectors. Although greater foreign shareholding in a firm is important to establish a stronger positive linkage between cash flow shocks and stock returns variation prior to the Asian financial crisis, this condition is not necessary after the Korean market was fully opened up to the foreign investors in the post-crisis period. Firm-specific variation in returns, firm-specific variation in fundamentals, emerging stock markets, market openness, G14, G18, G30 04 2015 60 1550092 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500927 DOOWON LEE Doowon.Lee@newcastle.edu.au Newcastle Business School, University of Newcastle, Australia M KABIR HASSAN mhassan@uno.edu Department of Economics and Finance, University of New Orleans, New Orleans, LA 70148, USA M ARIFUR RAHMAN arifur.rahman@ubd.edu.bn School of Business and Economics, Universiti Brunei Darussalam, Gadong BE1410, Brunei Darussalam
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article AN ANALYSIS OF INCOME INEQUALITY, SOCIAL SECURITY AND COMPETITIVENESS: AN ESSAY ON DR GOH KENG SWEE'S CONTRIBUTIONS TO SINGAPORE'S ECONOMIC STRATEGY Dr Goh Keng Swee has been credited as being the social and economic architect of Singapore. In his 25 years of government service, he served in a wide range of ministerial appointments, including Deputy Prime Minister, Minister of Finance, Minister of Defence and Minister of Education. This paper discusses a specific aspect of his contributions to Singapore's economic strategy, namely that of reducing income inequality without compromising competitiveness. Social security, Gini coefficient, income inequality, competitiveness, union social responsibility, macrofocused unions, H00, I38, J18 01 2012 57 1250002 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500026 CHEW SOON BENG Division of Economics, HSS-04-74, 14 Nanyang Drive, Nanyang Technological University, Singapore-637332, Singapore ROSALIND CHEW asbchew@ntu.edu.sg Division of Economics, HSS-04-74, 14 Nanyang Drive, Nanyang Technological University, Singapore-637332, Singapore
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article SOURCES OF ENERGY INTENSITY CHANGE OF THAILAND'S STEEL INDUSTRY IN THE DECADE OF GLOBAL TURBULENT TIME The study aims at finding the energy intensity and the sources of the changes of the energy intensity of the steel and steel products industry in Thailand using the firm level data collected from the surveys and interviews of steel firms in 2005 and 2012. The study finds that the energy intensity of the industry during the decade of domestic and global economic turbulent time in the 2000s fluctuated. The intensity declined immediately after recovering from the 1997 financial and currency crises but moved in an inverted U-shaped curve when the industry went through the various changes of production structure during 2003 to 2010. The decomposition analysis based on the logarithmic mean Divisia index method finds that the source of the changes of the energy intensity of the industry was dominated by the structural change effect. The fluctuation of the energy intensity was found despite a persistent decline, albeit relatively small, in the energy intensity of individual subsectors. This calls for the need to strengthen the effect of subsector energy intensity changes to help reduce the energy intensity of the industry in the long term. The study results imply four policy measures the government should use to induce steel firms to reduce their energy intensity and thus use the energy in the most efficient way. Energy intensity, Thailand's steel industry, decomposition analysis 03 2014 59 1450027 The Singapore Economic Review 1 34 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500271 PAITOON WIBOONCHUTIKULA Paitoon.W@chula.ac.th Faculty of Economics, Chulalongkorn University, Bangkok, Thailand BUNDIT CHAIVICHAYACHAT Department of Economics, Faculty of Economics, Kasetsart University, Bangkok, Thailand JARUWAN CHONTANAWAT Department of Social Sciences and Humanities, School of Liberal Arts King Mongkut's University of Technology, Thonburi, Bangkok, Thailand
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article SINGAPORE'S HOUSING POLICIES: RESPONDING TO THE CHALLENGES OF ECONOMIC TRANSITIONS Singapore has developed its own unique state-driven housing system, with more than three quarters of its housing stock built by the Housing and Development Board and homeownership financed through Central Provident Fund savings. As a result, it has one of the highest homeownership rates amongst market economies. This paper provides a historical perspective of the main housing problems faced by successive prime ministers and their respective policy responses. Under the leadership of Prime Minister Lee Kuan Yew (1959–1990), the government established an integrated land-housing supply and housing finance framework to channel much needed resources into the housing sector to deal with a chronic housing shortage. Under Prime Minister Goh Chok Tong (1990–2004), asset enhancement schemes to renew aging estates as well as market deregulation measures were implemented. Prime Minister Lee Hsien Loong (2004–present) has been confronted with a different set of challenges — investment demand for housing, rising inequalities and rapidly aging population. These problems have brought about the introduction of carefully crafted macroprudential policies, targeted housing grants to assist low and middle income households, and schemes to help elderly households monetize their housing equity. Singapore, housing policies, housing finance 03 2015 60 1550036 The Singapore Economic Review 1 25 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500368 SOCK-YONG PHANG syphang@smu.edu.sg Singapore Management University, 90 Stamford Road, Singapore 178903, Singapore
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article SUBJECT MATCHING: A CASE STUDY ON TWO-SIDED MATCHING This paper investigates subject matching in the National University of Singapore (NUS). The matching process is conducted in a primary market and a secondary market. In the primary market, students and departments are matched by a centralized matching procedure, based on their submitted preferences. Students who are not satisfied with their allocations in the primary market can choose to join the secondary market. By comparing matching results in these two markets, we show how a centralized matching procedure and a decentralized matching procedure can work together to produce a desirable outcome, especially in a many-to-many matching market. Two-sided matching, centralized matching, decentralized matching, subject selection 02 2005 50 The Singapore Economic Review 155 168 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001949 XIAOLIN XING ecsxxl@nus.edu.sg Department of Economics, National University of Singapore, Singapore 119260, Singapore YUNHUA LIU Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Singapore
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article INCOME INEQUALITY, POVERTY AND LABOR MIGRATION IN THAILAND This paper explores the dynamics of economic growth, poverty, inequality and migration in Thailand, and evaluates the relevance of Lewis model to Thailand's long-term development. Thai economy seems to follow the latter part of the Kuznets curve since mid-1990s, amidst the global trend of rising internal inequality. Also, Lewis model's predictions were not present, both in the overall pattern of internal migration and the labor market conditions in either urban or rural areas. Dualism in Thailand is better characterized by formal/informal dichotomy. However, the Lewis model can be relevant if modified by including the role of foreign workers. Inequality, regional migration, economic growth, government policy, JEL Classification: D63, JEL Classification: R23, JEL Classification: O47, JEL Classification: I38 01 2014 59 1450004 The Singapore Economic Review 1 16 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500040 SOMCHAI JITSUCHON sj.tdri@gmail.com Thailand Development Research Institute, 565 Ramkamhaeng Soi 39 (Thepleela1), Wangthonglang District, Bangkok 10310, Thailand
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article THE STATE-AND-SPEED OF THE ECONOMIES IN ASEAN-5: A GEOMETRY ANALYSIS The many unique findings on economic growth studies by the flying geese analysis (Kwan, 1994), the convergence-catching-up analysis (Lim and McAleer, 2003), and competitive index rankings by the World Economic Forum (WEF) and the International Institute for Management Development (IMD), all provide country rankings and comparisons only on one plane, i.e., to determine which country is doing best, better or worst. But we introduce a new measurement based on geometric planes that enables us to measure the "state and speed of the economy", to determine the actual "economic size" due to policy actions, and to evaluate macroeconomic policies' effectiveness and coherence in producing real economic growth. State of economy, economic size, policy-space 03 2006 51 The Singapore Economic Review 303 324 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002457 KIAN-TENG KWEK ktkwek@um.edu.my Department of Economics, Faculty of Economics and Administration, University of Malaya, Lembah Pantai 50603, Malaysia CHO-WAI CHO Department of Economics, Faculty of Economics and Administration, University of Malaya, Lembah Pantai 50603, Malaysia
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article BOOK REVIEW: "Learning from Experience: Perspectives on Poverty Reduction Strategies from Four Developing Countries" edited by David Peretz No abstract received. 03 2010 55 The Singapore Economic Review 585 588 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003912 SUMAN K SHARMA Nanyang Technological University, Singapore
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article INFLATION, INFLATION UNCERTAINTY AND OUTPUT GROWTH: RECENT EVIDENCE FROM ASEAN-5 COUNTRIES This paper investigates the links between inflation, its uncertainty and economic growth in five ASEAN countries over the period 1980: Q1–2011: Q3. We rely on the Exponential GARCH (EGARCH) model to explore the causal relationship among the three variables. The major findings are: (i) inflation uncertainty increases more in response to positive inflation surprises than to negative surprises in all countries; (ii) inflationary shocks affect positively inflation uncertainty as predicted by the Friedman–Ball hypothesis; (iii) there is no evidence to suggest that inflation uncertainty causes inflation and; (iv) there is evidence that inflation affects growth negatively, both directly and indirectly (via the inflation uncertainty channel). The indirect effect is clearly stronger as it applies in all countries in the sample. Inflation, inflation uncertainty, output growth, ASEAN, C22, E31, E52 04 2013 58 1350030 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500306 SITI HAMIZAH MOHD School of Economics, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor, Malaysia AHMAD ZUBAIDI BAHARUMSHAH zubaidi@putra.upm.edu.my Department of Economics, Faculty of Economics and Management, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor, Malaysia STILIANOS FOUNTAS Department of Economics, University of Macedonia, 156 Egnatia Street, Thessaloniki, 540 06, Greece
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article AMERICAN UNIONS AND THE ECONOMY — THE UNHEARD VOICE OF A SHRINKING SECTOR Prior to the 1970s, unions in America represented nearly a third of the non-agricultural labor force with a significantly higher percentage in major manufacturing industries. Since then, union membership in the private sector has mirrored the steep decline in manufacturing jobs. Reduced numbers means greatly reduced political clout, such that unions today exercise almost no influence on national economic policy, even at a time of deep recession. From the 1980s onward, there has been a marked shift from a Keynesian macroeconomic framework toward a monetarist and liberal market model of economic policy, such that unions are viewed by many as anti-competitive in nature and as a constraint on a free market. This has further weakened their voice on policies relating to globalization. The minimal influence of unions and the lack of other mechanisms for collective employee voice have led to a weakening of policies designed to promote employment, even at a time of high unemployment. For over a decade, there have been no formal, or even regular informal tripartite discussions on employment policy matters. Moreover, even during a Democratic administration, unions have not been given a seat at the policy table. Employment policy, industrial relations, collective bargaining, labor law, union density 04 2014 59 1450029 The Singapore Economic Review 1 20 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500295 JANICE BELLACE bellace@wharton.upenn.edu The Wharton School, University of Pennsylvania, 3730 Walnut Street – 672 JMHH, Philadelphia, PA 19104-6340, USA
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article STATUS, FERTILITY, GROWTH AND THE GREAT TRANSITION We develop an overlapping generation model to examine how the relationship between status concerns, fertility and education affect growth performances. Results are threefold. First, we show that stronger status motives heighten the desire of parents to have fewer but better educated children, which may foster economic development. Second, the government should sometimes postpone the introduction of an economic policy in order to maintain the process of economic development, although such a policy aims to implement the social optimum. Third, status can alter the dynamic path of the economy and help to explain the facts about fertility during the great transition. Social status, fertility, education, economic policy, D31, O41 03 2010 55 The Singapore Economic Review 553 574 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003894 FREDERIC TOURNEMAINE frederic.tournemaine@uc-utcc.org School of Economics, RIPED, University of the Thai Chamber of Commerce, 126/1 Vibhavadee-Rangsit Road, Dindaeng, Bangkok, 10400, Thailand CHRISTOPHER TSOUKIS c.tsoukis@Londonmet.ac.uk Economics, LMBS, London Metropolitan University, 84 Moorgate, London, EC2M 6SQ, UK
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article MODELING INFLATION IN INDIA: THE ROLE OF MONEY This paper studies the role of the real money gap — the deviation of real money balance from its long-run equilibrium level — for predicting inflation in India. Using quarterly data on manufacturing inflation from 1982 to 2007, we find that the real money gap is a significant predictor of inflation in India. Our results show that this variable is a better predictor of future inflation at quarterly horizon than the deviation of broad money growth from its target for the whole sample period. We also document a break in the overall predictability of inflation in the last quarter of 1995. We find that, except for the real money gap, the forecasting power of other predictors under study has declined considerably after 1995. Inflation, Indian monetary policy, real money gap, E31, E37, E52, E58 04 2012 57 1250028 The Singapore Economic Review 1 19 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500282 N. KUNDAN KISHOR kishor@uwm.edu Department of Economics, University of Wisconsin-Milwaukee, Bolton Hall 806, WI-53201, USA
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article THE ROLE OF DEVELOPING COUNTRIES IN GLOBAL ECONOMIC GOVERNANCE The paper reviews critically the arguments concerning greater voice for Developing Countries in global governance. It supports the arguments for greater voice but argues that greater voice brings with it greater responsibilities in terms of the actions and commitments from Developing Countries. The two main illustrations are the multilateral trade negotiations in the WTO and the negotiations concerning climate change in the UN. In both case, it is argued, developing countries must assume greater responsibilities if these negotiations are to be concluded. This can be done in a way which yields net benefits to the Developing Countries themselves. Global economic governance, developing countries, WTO, UNFCCC 02 2012 57 1250008 The Singapore Economic Review 1 20 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500087 PETER LLOYD pjlloyd@unimelb.edu.au Department of Economics, University of Melbourne, Parkville, Victoria 31010, Australia
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article INTRODUCTION AND EDITORIAL OVERVIEW No abstract received. 04 2014 59 1401002 The Singapore Economic Review 1 5 http://www.worldscientific.com/doi/abs/10.1142/S0217590814010024 SOON BENG CHEW Division of Economics, Nanyang Technological University, Singapore
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article BOOK REVIEW: "Towards an Asian Economic Community: Vision of a New Asia", edited by Nagesh Kumar No abstract received. 01 2006 51 The Singapore Economic Review 99 101 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002263 AMINA TYABJI Department of Economics, National University of Singapore, Singapore
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article AN ACTUARIAL APPROACH TO ASSESSING PERSONAL INJURY COMPENSATIONS IN SINGAPORE: THEORY AND PRACTICE In Singapore personal injury litigations, successful claimants usually receive their compensations as a lump sum. The main advantage of a lump sum payment is that the proceedings can be concluded with a 'clean break' between the parties. The lump sum is a result of discounting the future pecuniary values into a single present-day amount, considering the time value of money and the claimant's mortality. Conventionally, lump sum awards are determined by making reference to a spread of amounts in comparable cases. However, a fairer method would be one that involves input from not only lawyers but also other experts including economists and actuaries. This study, which is carried out by an inter-professional working group, provides a set of actuarially computed tables for use in personal injury settlements in Singapore. The calculations involve a consideration of recent advancements in stochastic mortality modeling and an empirical study on the econometrics of real returns on risk-free assets in Singapore. We then present two recent personal injury cases in Singapore, aiming at helping the Singapore legal profession understand and use the economic principles with actuarial tables, and educating economists and actuaries the legal concerns and concepts in personal injury cases. Actuarial evidence, mortality projection, multipliers, Ogden Tables, K13, C53 04 2010 55 The Singapore Economic Review 705 731 http://www.worldscientific.com/doi/abs/10.1142/S0217590810004048 FELIX W. H. CHAN fwhchan@hku.hk Faculty of Law, The University of Hong Kong, Pokfulam Road, Hong Kong WAI-SUM CHAN chanws@cuhk.edu.hk Department of Finance, The Chinese University of Hong Kong, Shatin, N.T., Hong Kong JOHNNY S. H. LI shli@uwaterloo.ca Department of Statistics and Actuarial Science, The University of Waterloo, Ontario, Canada N2L3G1, Canada
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article AN INSTITUTIONAL PERSPECTIVE OF NATIONAL COMPETITIVENESS The literature on the role of institutions in economic growth and development is well-established. In contrast, the relationship between institutional quality and competitiveness, while important, received much less attention until recently, when there has been a growing interest in incorporating variables representing institutional quality into country competitiveness indices. Such attempts take cognizance of the results from cross-country empirical findings. However, any attempt to construct a satisfactory mapping of institutions to competitiveness is fraught with difficulties, including data consistencies, omission of causal factors and the lack of theoretical foundations. Some of these difficulties stem from differences in the overall objectives of the research literature and the development of competitiveness indices. The research literature can explain why, whether and what type of institutions are important, but such findings do not lend themselves to the construction of appropriate policy variables. 04 2010 55 The Singapore Economic Review 671 683 http://www.worldscientific.com/doi/abs/10.1142/S0217590810004000 CASSEY LEE cassey.lee@nottingham.edu.my Nottingham University Business School, University of Nottingham Malaysia, Jalan Broga, 43500 Semenyih, Selangor, Malaysia
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article INFORMATION, INCENTIVES AND PRACTICE PATTERNS: THE CASE OF TB DOTS SERVICES AND PRIVATE PHYSICIANS IN THE PHILIPPINES To explain divergent physician practices, studies focus on either differences in education and training or in financial incentives. The policy challenge is to identify the most cost-effective interventions to encourage adherence to practice guidelines. Utilizing private physician data in major cities in the Philippines, we show the effects of training and financial incentives in physician adoption of the TB DOTS protocol. Training seems to be more important when the new protocol is a significant departure from the old know-how, while financial incentives seem to work better on those who are already clinically competent. These imply that uniform application of information-based and incentive-based interventions may not be cost-effective. Physician practice patterns, physician incentives, practice guidelines, TB DOTS 01 2008 53 The Singapore Economic Review 43 56 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002835 ALELI D. KRAFT adkraft@up.edu.ph School of Economics, University of the Philippines, Diliman, Quezon City, Philippines 1101, Philippines JOSEPH J. CAPUNO School of Economics, University of the Philippines, Diliman, Quezon City, Philippines 1101, Philippines STELLA A. QUIMBO School of Economics, University of the Philippines, Diliman, Quezon City, Philippines 1101, Philippines CARLOS ANTONIO R. TAN School of Economics, University of the Philippines, Diliman, Quezon City, Philippines 1101, Philippines
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article THE IMPACTS OF THE IMF-SUPPORTED STRUCTURAL REFORM PROGRAM ON ASIAN STOCK MARKET EFFICIENCY We investigate the impact of the IMF-supported structural reform program in the 1997 Asian crisis on stock market efficiency using the before–after, with–without and event study approaches by applying a time-varying parameter model to eight Asian stock markets. All the supported countries, including Indonesia and Korea, but not Thailand, experienced significantly improved market efficiency after the implementation of the program, implying a positive effect of the program according to the before–after approach. Among the nonsupported countries, China, Taiwan and Malaysia did not improve efficiency (however, Hong Kong and Singapore did) after the start of the crisis, providing some evidence of a positive effect according to the with–without approach. The Thailand, Indonesia and Korean markets showed positive abnormal returns on the days or days following policy announcements in this IMF-supported program, indicating positive effects of the policy according to the event study approach. These findings suggest that the IMF program was successful during the 1997 Asian financial crisis and that it was helpful in resolving the recent global financial crisis. IMF-supported structural reforms, stock market efficiency, Asian crisis, global financial crisis, G14, G15, F33, C40 04 2012 57 1250029 The Singapore Economic Review 1 21 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500294 TATSUYOSHI MIYAKOSHI miyakoshi@hosei.ac.jp Faculty of Science and Engineering, Hosei University, 3-7-2, Kajino-cho, Koganei, Tokyo 184-8584, Japan YOSHIHIKO TSUKUDA tsukuda@econ.tohoku.ac.jp Graduate School of Economics, Tohoku University, 27-1 Kawauchi, Aoba-ku, Sendai 980-8576, Japan JUNJI SHIMADA shimada@busi.aoyama.ac.jp School of Management, Aoyama Gakuin University, 4-4-25 Shibuya, Shibuya-ku, Tokyo 150-8366, Japan
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article VERTICAL PRODUCT INNOVATION AND PARALLEL IMPORTS In this paper, we develop a model of endogenous R&D in vertical product innovation by an original manufacturer facing Bertrand competition from parallel importer(s). We show that if parallel imports are prohibited among the distributors' countries and there is at least one country other than the manufacturer's homeland in which there is only one distributor, then allowing reimports reduces the manufacturer's incentive to innovate. Otherwise, permitting reimports has no effect on the manufacturer's incentive to invest in R&D. Moreover under the assumption of Bertrand competition, either delegating more than one distributor in each country outside the manufacturer's homeland or allowing parallel imports among the distributors' countries enables the manufacturer to maximize his total profit regardless of whether innovation is successful. Vertical product innovation, parallel imports, reimports 01 2005 50 The Singapore Economic Review 35 46 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001822 CHANGYING LI Changying.Li@nankai.edu.cn Institute of Economics, Nankai University, Tianjin, P. R. China 30071, P. R. China
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article BOOK REVIEW: "Plugging into Production Networks: Industrialization Strategy in Less Developed Southeast Asian Countries" No abstract received. 02 2011 56 The Singapore Economic Review 279 282 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004213 DONGHYUN PARK Economics and Research Department, Asian Development Bank, Philippines
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article GOVERNMENT SPENDING ON PUBLIC GOODS, SPECIALIZATION-BASED EXTERNAL ECONOMIES AND PATTERN OF TRADE This paper examines the link between government spending on a public good and pattern of trade in the presence of specialization-based external economies. The results presented in this paper are based on a simple model of an economy that produces one industrial, one agricultural, one public good and a large number of varieties of professional services. It is shown that, when the agricultural and the public goods are non-traded, the country where government spending is relatively large is a net-exporter of varieties of professional services; if varieties of professional services are equally (or more) capital intensive as compared to the industrial good. When the public good and varieties of professional services are non-traded, the country where government spending is relatively large may export the industrial good in exchange for the agricultural good; if the combined capital intensity of professional services and the industrial good is greater than the capital intensity of the agricultural good and the size of specialization-based external economies is sufficiently small. Government spending on public goods, specialization-based external, economies, pattern of trade 01 2006 51 The Singapore Economic Review 19 30 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002202 SAJID ANWAR Sajid.Anwar@adelaide.edu.au Adelaide Graduate School of Business, University of Adelaide, 233 North Terrace, SA 5005, Australia; International Graduate School of Business, University of South Australia, Adelaide, SA 5001, Australia
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article FREE TRADE AREAS AND INTRA-REGIONAL TRADE: THE CASE OF ASEAN We study the effects of free trade areas on bilateral trade flows. We review and extend the previous empirical literature by embarking on the modelling of unobserved heterogeneity. We apply our preferred model to the case of the Asean Free Trade Area (AFTA). The estimation results suggest that there has been a positive effect of AFTA. This empirical finding is contrary to earlier estimation results, which are typically not so positive about AFTA. It is our impression that these earlier estimates on AFTA are confounded with the effects of unobserved determinants of trade. AFTA, ASEAN, free trade area, gravity model, panel data, C23, F15 03 2009 54 The Singapore Economic Review 319 334 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003367 MAURICE J. G. BUN m.j.g.bun@uva.nl Tinbergen Institute & Amsterdam School of Economics, Universiteit van Amsterdam, Roetersstraat 11, 1018 WB Amsterdam, The Netherlands FRANC J. G. M. KLAASSEN f.klaassen@uva.nl Tinbergen Institute & Amsterdam School of Economics, Universiteit van Amsterdam, Roetersstraat 11, 1018 WB Amsterdam, The Netherlands G. K. RANDOLPH TAN arandolph@ntu.edu.sg Division of Economics, School of Humanities & Social Sciences, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore
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article PREDICTING US 2001 RECESSION, COMPOSITE LEADING ECONOMIC INDICATORS, STRUCTURAL CHANGE AND MONETARY POLICY In an attempt to predict a peak in the US economy using a classical statistical decision methodology and a Bayesian methodology and using the 1996 revised composite leading economic indicators (CLI), it is learned that the Bayesian models have generally outperformed the classical statistical ones and, among the Bayesian models, the two using two and three consecutive CLI growth rates are superior in reliability and in accuracy. These two models, however, failed to correctly predict the 2001 recession.In investigating the reasons behind their failures, we learned that: (1) if the concurrent data for the economic structure of 1983–1999 are used for the prediction, they have also been able to predict the 2001 recession correctly, but their overall reliability is not as strong as before; (2) given the overwhelming weight of the monetary policy tools in the CLI-1996 design and the combination of the economic and political events in the year 2000, the less than expected effectiveness of the monetary policy since 2001 has contributed to this failure; and (3) a possible structural change in the US economy since 2000 has also contributed to this prediction failure. US economy, predicting recessions, monetary policy, structural change, composite leading indicators, Bayesian probability forecasting, classical statistical decision theory, information theory 03 2006 51 The Singapore Economic Review 343 363 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002482 MEHDI MOSTAGHIMI mostaghimim1@southernct.edu Economics and Decision Sciences, School of Business, Southern Connecticut State University, 501 Crescent Street, New Haven, CT 06515, USA
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article BOOK REVIEW: "Innovative East Asia: The Future of Growth" No abstract received. 01 2005 50 The Singapore Economic Review 133 134 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001901 JOHN WONG East Asian Institute, National University of Singapore, Singapore
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article ON-THE-JOB SEARCH, URBAN INFORMAL SECTOR AND DEVELOPMENT POLICIES — A GENERAL EQUILIBRIUM ANALYSIS The purpose of this paper is to examine Field's (1989) proposition in a multisector general equilibrium model with imperfect capital mobility. The effects of different fiscal policies on the equilibrium rate of urban unemployment are also examined. The main findings are (i) more efficient on-the-job search from the rural sector raises equilibrium urban unemployment rate whereas (ii) increased job search efficiency from the urban informal sector lowers this rate. Aditionally, (iii) urban price subsidy policy lowers the equilibrium urban unemployment rate, and (iv) rural subsidy policy raises this rate. On-the-job search, urban informal sector, development policies, D5, H2, J64 02 2010 55 The Singapore Economic Review 401 410 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003766 TITAS KUMAR BANDOPADHYAY titasban@yahoo.co.in Bagnan College, Bagnan, Howrah, West Bengal, India
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article POLICY REFORMS AND AGRICULTURAL EXPORTS IN NIGERIA: AN EMPIRICAL ANALYSIS The role of agriculture in the process of growth and development arises mainly from its linkages with other sectors of an economy. The agricultural sector in developing countries in recent times has recorded secular declines in terms of its contribution to export earning and domestic consumption. This observation is associated with policy inertia among other factors. The Structural Adjustment Programme adopted in Nigeria in the 1980s, is one policy shift aimed at boosting agricultural production. This article aims at empirically verifying the effects of policy reform on agricultural exports in Nigeria by estimating a simple impact assessment model using a slope-dummy method. The estimates among others indicate that agricultural export is significantly influenced by domestic consumption and economic liberalization. The findings suggest that policy reforms on agricultural productivity should go beyond liberalization of the economy. Structural Adjustment Programme, slope-dummy, liberalization, exchange rate regimes and agricultural productivity, D4, F4 04 2009 54 The Singapore Economic Review 589 603 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003501 DOUGLASON GODWIN OMOTOR yomotor@yahoo.com Department of Economics, Delta State University, Abraka, Nigeria CHRISTOPHER O. ORUBU Department of Economics, Delta State University, Abraka, Nigeria EMMANUEL INONI Department of Agricultural Economics, Delta State University, Abraka, Nigeria
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article RIGID LOW COLLEGE PREMIUMS AND THE EXPANSION OF HIGHER EDUCATION IN TAIWAN The rapid expansion of higher education in the late 1980s in Taiwan has resulted in a swift increase in the supply of highly-educated workers in the labor market. This research differs from past studies in that it analyzes the effect of the rapid expansion in higher education in Taiwan with emphasis on the cohort effect, specifically examining the effect of changes both in intra-cohort relative supply and the aggregate relative supply on college returns. Besides, when estimating the aggregate relative supply of college graduates, this study takes into account the substitutability between younger and older educated workers. We present evidence that the expansion policy has significantly depressed college premiums for workers of all ages, but the adverse effect is particularly concentrated among the younger cohorts. Furthermore, we found the elasticity of substitution between college and high school graduates to be 3–4 times higher than in developed countries. We also found the important role played by the demand side, likely linked to technological progress and changes in export structure toward the more technologically intensive. As a consequence, the expansion of higher education and increase in the relative demand for higher-educated workers, along with high elasticity of substitution between college and high school graduates, led to the rigid low college premiums. Education, higher education expansion, stagnant college wage premium, Taiwan, I21, J24, H52 04 2015 60 1550022 The Singapore Economic Review 1 25 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500228 LI-HSUAN HUANG huang@mgt.ncu.edu.tw Department of Economics, National Central University, Chungli 32054, Taiwan HSIN-YI HUANG juliahuang0828@gmail.com Department of Economics, National Central University, Chungli 32054, Taiwan
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article MONETARY POLICY COOPERATION TO SUPPORT ASIAN ECONOMIC INTEGRATION This paper considers the form of monetary policy coordination and regional exchange rate arrangement that would best support economic and financial integration in East Asia. In view of the region's economic diversity, we propose a graduated program of informal policy cooperation from weak forms of cooperation to more intensive modes of cooperation such as the adoption of common monetary policy objectives. An array of informal monetary arrangements rooted to the degree of institutional development can improve the effectiveness of both sovereign and regional institutions, and promote integration in East Asia. Drawing upon the European experience with the Exchange Rate Mechanism (ERM), we conclude that East Asia should first embark on other forms of integration to aid in the development of a high degree of real and nominal convergence amongst the regional countries. Only then would an ERM-type system that employs a regional monetary unit become more sustainable and less susceptible to speculative currency attacks in the region. Regional Economic Integration, Monetary Policy Cooperation, Exchange Rate Arrangements, Sequencing, E58, F31, F33 01 2010 55 The Singapore Economic Review 83 101 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003626 HWEE KWAN CHOW hkchow@smu.edu.sg School of Economics Singapore Management University, 90 Stamford Road, Singapore 178903, Singapore PETER NICHOLAS KRIZ School of Economics Singapore Management University, 90 Stamford Road, Singapore 178903, Singapore ROBERTO S. MARIANO School of Economics Singapore Management University, 90 Stamford Road, Singapore 178903, Singapore AUGUSTINE H. H. TAN School of Economics Singapore Management University, 90 Stamford Road, Singapore 178903, Singapore
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article MANAGING EXCHANGE RATE VOLATILITY: A COMPARATIVE COUNTERFACTUAL ANALYSIS OF SINGAPORE, 1994–2003 This paper looks at how Singapore's exchange rate regime has coped with exchange rate volatility, by comparing the performance of Singapore's actual regime in minimizing the volatility of the nominal effective exchange rate (NEER) and the bilateral rate against the US dollar with some counterfactual regimes and the corresponding performance of eight other East Asian countries. In contrast to previous counterfactual exercises, we apply a more disaggregated methodology for the trade weights, a larger number of trade partners and ARCH/GARCH techniques to capture the time-varying characteristics of volatility. Our findings confirm that Singapore's managed floating exchange rate system has delivered relatively low currency volatility. Although there are gains in volatility reduction for all countries in the sample from the adoption of either a unilateral or a common basket peg, particularly post-Asian crisis, these gains are relatively low for Singapore, largely because of low actual volatility. There are additional gains for non-dollar peggers from stabilizing intra-east Asian exchange rates against the dollar if they were to adopt a basket peg, especially post-crisis, but the gains for Singapore are again relatively modest. Finally, the conclusion from previous counterfactual studies that there is little difference between a unilateral basket peg and a common basket peg in terms of stability reduction is confirmed. East Asia, exchange rates, counterfactuals, F31, F33, F36 04 2009 54 The Singapore Economic Review 543 568 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003525 PETER WILSON peterwilson@smu.edu.sg Singapore Management University, Singapore HENRY SHANG REN NG Singapore Management University, Singapore
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article PRODUCTION NETWORKS AND THE OPEN MACROECONOMY A key feature of globalization in the current era has been the rapid spread of cross-border production sharing in many regions of the world, including Europe, North America and Asia. The effects of these developments in the context of regional trade integration have been examined in the recent literature. This paper looks at their implications for regional monetary integration and exchange-rate policies. Cross-border production networks and the intra-industry trade associated with them affect exchange-rate behavior, balance of payments adjustment, and the transmission of shocks and disturbances. This paper examines the policy implications of regional production networks that (i) are confined to the countries of a given region, and (ii) involve a dominant extra-regional economy. Regionalism, production networks, monetary cooperation, exchange-rate regimes 03 2008 53 The Singapore Economic Review 509 521 http://www.worldscientific.com/doi/abs/10.1142/S0217590808003075 SVEN W. ARNDT sven.arndt@claremontmckenna.edu The Lowe Institute of Political Economy, Claremont McKenna College, 850 Columbia Ave., Claremont, CA 91711, USA
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article THE RISK OF PROPERTY BUBBLES IN HONG KONG AND SINGAPORE: ANOTHER AFTERSHOCK CRISIS OF THE GLOBAL FINANCIAL TSUNAMI? This paper first provides a brief review of the global financial tsunami. It then explains why the quantitative easing in the US and the unique characteristics of the Asian property markets have contributed to the formation of property bubbles in some Asian economies. Thereafter, it discusses the possibility of a bursting of property bubbles in Hong Kong, Singapore or another Asian economy a few years from now, and highlights that the bursting of the property bubble in that economy could trigger severe corrections of property prices in this region through the contagion effect. After pointing out that the implied crisis could be more severe than that during the Asian Financial Crisis, it (i) discusses policies that could mitigate the damages of the potential crisis and (ii) draws important lessons and conclusions that could pre-empt similar disasters in the future. Asset bubble, crisis, bubble squeezing strategy, property market, expectation of asset inflation, changes in economic behaviors, quantitative easing, Hong Kong, Singapore, JEL Classifications: D43, JEL Classifications: E32, JEL Classifications: E44, JEL Classifications: E52 03 2014 59 1450026 The Singapore Economic Review 1 53 http://www.worldscientific.com/doi/abs/10.1142/S021759081450026X PAUL S. L. YIP aslyip@ntu.edu.sg Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, 14 Nanyang Drive, Singapore 637332, Singapore
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article FROM CENTER STAGE TO BIT PLAYER: TRADE UNIONS AND THE BRITISH ECONOMY Over the past 30 years, British unions have been marginalised from economic policymaking. Union membership and collective bargaining coverage have fallen dramatically, and the sometimes negative economic impact of unions at the workplace level has disappeared. While strong unions were once key contributors to macroeconomic problems such as high inflation, the weakening of organised labour has created other economic problems for policymakers in Britain, such as rising inequality. The social and political consequences of deepening inequality may force a reconsideration of the role of both the state and of unions in upholding labour standards. Britain, economic policy, industrial relations, labour market policy, trade unions, wage determination 04 2014 59 1450030 The Singapore Economic Review 1 20 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500301 CHRIS F. WRIGHT chris.f.wright@sydney.edu.au Work and Organisational Studies, School of Business, University of Sydney, Sydney, Australia WILLIAM BROWN william.brown@econ.cam.ac.uk Faculty of Economics, University of Cambridge, Cambridge, United Kingdom
oai:RePEc:wsi:serxxx:v:54:y:2009:i:02:n:s02175908090032642021-07-25RePEc:wsi:serxxx
article RANKING AND SCHOOL AUTONOMY: EFFICIENCY EFFECTS OF NEW INITIATIVES ON THE SINGAPORE EDUCATION SYSTEM From 1979, the Singapore government started to transform the nature of secondary education in Singapore. In 1979, nine schools were chosen as Special Assistance Plan (SAP) schools. After the call towards reforming the school system in the 1980s, the development of Independent schools evolved. In 1994, a new category — the autonomous school — was established. Besides reforming the school structure, in 1992, the "ST Schools 100" (first published by The Straits Times on 19 August 1992) started to rank the top 50 schools in the Special/Express stream and the top 40 schools in the Normal stream, along with separate tables listing the top value-added schools in both streams. Until quite recently, this ranking scheme had been endorsed by the Ministry of Education since 1992 and published on their website annually since 1995. This paper looks at how these new initiatives have affected secondary school outcomes. Comprising a panel data set of 30 of the top 50 schools in Singapore over the 1991–2001 period, the study looks at the technical efficiency of schools as a response to the introduction of new initiatives using two methodologies. The first baseline approach is that of a Corrected Ordinary Least Squares (COLS) multiple-output distance function. The second methodology used is the technical efficiency frontier effects model as described by Battese and Coelli (1995) and Coelli and Perelman (1996) which is a maximum likelihood estimation technique. Singapore secondary schools, efficiency, accountability system 02 2009 54 The Singapore Economic Review 197 215 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003264 ROLAND K. CHEO roland_cheo@nus.edu.sg Department of Economics, National University of Singapore, 10 Kent Ridge Crescent, Singapore 119260, Singapore
oai:RePEc:wsi:serxxx:v:52:y:2007:i:02:n:s021759080700266x2021-07-25RePEc:wsi:serxxx
article IMPACT OF REAL INTEREST RATES ON REAL OUTPUT GROWTH IN INDIA: A LONG-RUN ANALYSIS IN A LIBERALIZED FINANCIAL REGIME The study attempts to evaluate the impact of short-term real interest rate on growth rate in India in a liberalized financial and trade regime (March 1993 to March 2005). Using ARDL approach to cointegration of Pesaran and Shin (1999), the study finds that interest rate does not have a direct impact; rather, it may have an indirect and adverse impact on growth rate through the transmission channel of bank credit, thereby neither supporting the arguments advocated by Keynesians nor the explanations offered by the proponents of Financial Liberalization School. This incredible result may be attributed to the poor quality of credit disbursal of the banking system in India or low credit offtake for productive investment purposes as investment, an important determinant of economic growth, is governed by several other factors. Interest rate, financial liberalization, monetary transmission mechanism, credit and growth rate 02 2007 52 The Singapore Economic Review 215 231 http://www.worldscientific.com/doi/abs/10.1142/S021759080700266X HRUSHIKESH MALLICK hrushi@graffiti.net hrushi@cds.ac.in Centre for Development Studies (CDS), Thiruvananthapuram 695011, Kerala, India SHASHI AGARWAL Development Planning Centre of the Institute of Economic Growth (IEG), Delhi 110007, India
oai:RePEc:wsi:serxxx:v:50:y:2005:i:01:n:s02175908050018952021-07-25RePEc:wsi:serxxx
article THE ROLE OF THE STATE IN THE INCREASINGLY GLOBALIZED ECONOMY: IMPLICATIONS FOR SINGAPORE This paper argues that the role of the state becomes more important in some significant respects as the pace of globalization accelerates, contrary to the popular perception that it should be diminished. This is mainly because, as mobile factors obtain more freedom to choose locations across national borders, the role of the state as the ultimate provider of "complementary assets" in attracting mobile factors to a national economy becomes more important. The paper also argues that the very success of Singapore's complementing strategy in the era of globalization has necessitated the state to move to a two-pronged strategy, in which it needs to attempt seriously to acquire higher-end capabilities that are securely based on its territory, while trying to exploit ever-expanding complementary business areas as it has done previously. Globalization, state, mobility, complementary assets, R&D, Singapore 01 2005 50 The Singapore Economic Review 103 116 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001895 JANG-SUP SHIN ecssjs@nus.edu.sg Department of Economics, National University of Singapore, Singapore
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article PROLIFERATION OF NON-TARIFF MEASURES IN CHINA — THEIR RELEVANCE FOR ASEAN This paper explores various non-tariff measures (NTMs) that co-exist in China and that directly influence imports into the country. Given the intensity and scope of technical measures imposed by China, the directional impacts of technical barriers to trade (TBTs) on bilateral Association of Southeast Asian Nations (ASEAN)-China exports are investigated empirically using an augmented gravity model. The results imply that Chinese TBTs do have some trade depressing effects from the ASEAN perspective. However, sectoral trade effects of TBTs are important as dual effects exist even within some TBT intensive product groups. This informs the policy debate on the effects of NTMs from the ASEAN-China perspective more specifically, and the "South–South" context more generally on two fronts. First, the identification of specific trade restricting measures for the affected sectors will assist in determining policy priorities within the ASEAN-China context. Second, trade facilitation measures that increase the business costs to the ASEAN exporters also warrant attention in addressing the scale of market access issues in China. Non-tariff measures (NTMs), technical barriers to trade (TBTs), gravity model, China, ASEAN, F10, F13, F14 02 2014 59 1450015 The Singapore Economic Review 1 28 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500155 EVELYN S. DEVADASON evelyns@um.edu.my Department of Economics, Faculty of Economics and Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia SANTHA CHENAYAH Department of Economics, Faculty of Economics and Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia
oai:RePEc:wsi:serxxx:v:60:y:2015:i:03:n:s02175908155002892021-07-25RePEc:wsi:serxxx
article GOVERNANCE AND ECONOMIC CHANGE IN SINGAPORE The Singapore economy went through several changes due to changes in its mode of governance from being a trading outpost of the East India Company (EIC) to being part of the colony of the Straits Settlements, and more recently to being a British colony by itself, then to being part of Malaysia and now an independent republic. These modes of governance enabled the economy to grow until Singapore became more important and also more closely linked to the outside world. British rule, British capital and the response of the people who came, enabled Singapore to integrate technological change so that it is now part of a global network. However a declining rate of births and a large foreign population now compel Singapore to make further changes. Colonial Singapore, entrepot trade, economic growth, H11, N15, O53 03 2015 60 1550028 The Singapore Economic Review 1 15 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500289 SOO ANN LEE ecsleesa@nus.edu.sg Department of Economics & LKY School of Public Policy, National University of Singapore, 1 Arts Link #05-12, Singapore
oai:RePEc:wsi:serxxx:v:56:y:2011:i:02:n:s02175908110042492021-07-25RePEc:wsi:serxxx
article DIFFERENTIAL OUTPUT ELASTICITY OF EMPLOYMENT DURING POST-ECONOMIC REFORM PERIOD IN THE INDIAN ECONOMY This paper investigates the sign and size of the differential output elasticity of employment for different industries in the private and public organized sectors of the Indian economy during post-economic reform period. A logarithmic form of demand function for employment, derived from the constant elasticity of substitution production function is estimated. An interaction variable is introduced after having ensured that the employment function has a structural shift by Chow break test. The results based on the time series data from the period 1969–1970 to 2004–2005, show that the positive magnitude of elasticity of employment with respect to output in transport, storage and communications industry is relatively very high, as the differential output elasticity of employment is not only positive but also more than unity followed by wholesale and retail trade and financing, insurance and real estate industries in the private organized sector during the post-economic reform period. This reflects the fact that the labor absorption capacity in the industries of transport, storage and communications, wholesale and retail, financing, insurance and real estate is relatively high. The magnitude of output elasticity of employment in financing, insurance and real estate is relatively high during the post-economic reform period as the differential output elasticity of employment is relatively small as compared to output elasticity of employment during the pre-economic reform period. The labor absorption capacity in private sector during the post-reform period is found to be relatively high as compared to public sector as the differential employment elasticity during the post-reform period in private sector is low. Further the results for the organized sector as a whole illustrate that the output elasticity of employment during the post-reform period is negative on account of negative differential output elasticity of employment showing that the economic growth during the post-reform period is not labor intensive in the Indian economy. Therefore, there is a need to review the sectoral policies to generate additional employment opportunities in the organised sector of the Indian economy. India, employment function, CES production function, differential elasticity, economic reforms, C13, D24, E24, J23, O53 02 2011 56 The Singapore Economic Review 189 202 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004249 M. UPENDER profmupender@rediffmail.com Department of Economics, Osmania University, Hyderabad – 500 007, Andhra Pradesh, India
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article THE IMPACT OF THE 1997 HANDOVER ON THE EFFICIENCY OF THE HONG KONG STOCK MARKET On the first of July 1997, the formerly British colony of Hong Kong was returned to China. This paper compares the profitability of various trading rules on the Hang Seng Index both before and after the handover. Our work extends that of Coutts and Cheung (2000), whose study focuses on pre-1997 Hong Kong, in terms of both the data collection period as well as the number of trading rules studied. The authors find that, among the trading rules examined herein, the Trade Range Breakout rule generates the highest returns. We also conclude that, in general, the handover of Hong Kong to China does not affect the efficiency of the Hong Kong stock market. Efficient market hypothesis, trading rules, structural change 01 2007 52 The Singapore Economic Review 27 38 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002543 TERENCE TAI-LEUNG CHONG chong2064@cuhk.edu.hk Department of Economics, The Chinese University of Hong Kong, Shatin, N.T., Hong Kong, China LILY LOK Department of Economics, The Chinese University of Hong Kong, Shatin, N.T., Hong Kong, China
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article ENTRY AND QUALITY SIGNALING WHEN THE INCUMBENT IS INFORMED OF THE ENTRANT'S QUALITY This paper focuses on competition between an incumbent and an entrant when only the entrant's quality is unknown to consumers. The incumbent knows the entrant's quality. The entrant's quality is assumed to be exogenously determined by nature, or endogenously chosen by the entrant itself. The exogenous model reveals the entrant's high price can signal its high quality, but entry deterrence occurs for the high quality entrant. Interestingly, the incumbent being informed of the entrant's quality generates an additional separating equilibrium in which the incumbent charges a higher price when the entrant's quality is relatively low, and a lower price when the entrant's quality is relatively high. Surprisingly, entry is facilitated. On the contrary to the exogenous model, the endogenous model result shows that entry deterrence still occurs for the high quality entrant with the incumbent being informed of the entrant's quality. However, in both settings, we find that the incumbent could not take advantage of its inside information of the entrant's quality. Quality signaling, entry deterrence, unprejudiced beliefs 05 2014 59 1450040 The Singapore Economic Review 1 16 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500404 FULAN WU wufulan09@gmail.com China Academy of West Region Development, Zhejiang University, No. 866, Yuhangtang Road, Hangzhou, Zhejiang 310058, China
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article THE ROBUSTNESS OF ESTIMATORS FOR DYNAMIC PANEL DATA MODELS TO MISSPECIFICATION Transition from economic theory to a testable form of model invariably involves the use of certain "simplifying assumptions." If, however, these are not valid, misspecified models result. This article considers estimation of the dynamic linear panel data model, which often forms the basis of testable economic hypotheses. The estimators of such a model are frequently similarly based on certain assumptions which appear to be often untenable in practice. Here, the performance of these estimators is analyzed in scenarios where the theoretically required conditions are not met. Specifically, we consider three such instances of serial correlation of the idiosyncratic disturbance terms; correlation of the idiosyncratic disturbance terms and explanatory variables; and, finally, cross-sectional dependence (as a robustness check to these findings, we also consider correlations between observed and unobserved heterogeneity terms). The major findings are that the limited tests readily available tend to have poor power properties and that estimators' performance varies greatly across scenarios. In such a wide array of experiments, it is difficult to pick-out just one "winner." However, a robust estimator across all experiments and parameter settings was a variant of the Wansbeek–Bekker estimator. This is a significant finding, as this estimator is infrequently used in practice. When the experiments are extended to include correlations between observed and unobserved heterogeneity terms, one might also consider, for across-the-board performance, the Blundell and Bond estimator. Dynamic panel data, misspecification, IV/GMM estimation, C13, C15, C23 03 2009 54 The Singapore Economic Review 399 426 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003409 MARK N. HARRIS Department of Econometrics and Business Statistics, Monash University, Clayton, Melbourne, Victoria 3800, Australia WEIPING KOSTENKO Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Australia LÁSZLÓ MÁTYÁS Central European University, Hungary; Erudite, Universite Paris XII, Paris, France ISFAAQ TIMOL Department of Econometrics and Business Statistics, Monash University, Clayton, Melbourne, Victoria 3800, Australia
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article BOOK REVIEW: "What Macroeconomists Should Know about Health Care Policy" by William C Hsiao and Peter S Heller No abstract received. 02 2008 53 The Singapore Economic Review 341 344 http://www.worldscientific.com/doi/abs/10.1142/S0217590808003002 DAVID REISMAN Nanyang Technological University, Singapore
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article WHY PANEL DATA? We explain the proliferation of panel data studies in terms of (i) data availability; (ii) the heightened capacity for modeling the complexity of human behavior than a single cross-section or time series data can possibly allow; and (iii) challenging methodology. Advantages and issues of panel data modeling are also discussed. Panel data, longitudinal data, unobserved heterogeneity, random effects, fixed effects 02 2005 50 The Singapore Economic Review 143 154 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001937 CHENG HSIAO Department of Economics, Nanyang Technological University, Singapore; University of Southern California, Los Angeles, CA 90089-0253, USA
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article INTO THE AGE OF NON-ECONOMICS Most economic concepts such as the market, competition, flexibility, pricing of production factors and consumption theory no longer reflect the reality of the contemporary situation. The current economic model and political system form a synthesis of fiduciary economics and privilege political systems. The exponential rise in material wealth amassed over the industrial age is unsustainable when figuring in the availability of resources. Even more interesting is how it may run counter to human instincts, our gene structure, and how the mindset and behavioral pattern are forged. As the economy and society evolves, combining in-depth knowledge across various disciplines is crucial to furthering our understanding of the world. Market economy cracking, mass communication, scarcities, new economic model, human behaviour, brain research, interdisciplinary analysis, complexity, big data, JEL Classification: A12, JEL Classification: F02, JEL Classification: P16 03 2014 59 1450028 The Singapore Economic Review 1 28 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500283 JOERGEN OERSTROEM MOELLER joergen@oerstroemmoeller.com Institute of Southeast Asian Studies (ISEAS), Singapore; Singapore Management University (SMU), Singapore; Copenhagen Business School (CBS), University of Copenhagen, Denmark
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article INVESTMENT CLIMATE ASSESSMENT IN INDONESIA, MALAYSIA, THE PHILIPPINES AND THAILAND: RESULTS FROM POOLING FIRM-LEVEL DATA Investment Climate surveys (ICs) are a recent instrument used by the World Bank to identify key obstacles to country competitiveness and to guide policy reforms and government interventions in developing countries. In this paper, panel data from four ICs of four South East Asian (SEA) countries namely, Indonesia, Malaysia, The Philippines, and Thailand, are pooled to estimate total factor productivity (TFP) and allocative efficiency aspects of firms in each country, using variants of the Olley and Pakes (1996) productivity decomposition. Several economic performance results are disaggregated to obtain country-specific evaluation of the IC impacts. To establish priorities for policy reforms, the corresponding key IC results are organized in five categories: infrastructures, red tape, corruption and crime, finance and corporate governance, quality, innovation and labor skills, and other control variables. Total factor productivity, investment climate, firms' perceptions, robust econometric methodology, demean Olley and Pakes decomposition, cross-country comparisons, C23, C33, C43, C51, C52 03 2009 54 The Singapore Economic Review 335 366 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003379 ALVARO ESCRIBANO alvaroe@eco.uc3m.es Department of Economics, Universidad Carlos III de Madrid, C/Madrid 126, Getafe 28903, Madrid, Spain J. LUIS GUASCH jguasch@worldbank.org The World Bank and University of California, San Diego, USA MANUEL DE ORTE morte@eco.uc3m.es Laboratorio de Economía de las Telecomunicaciones, Universidad Carlos III de Madrid, Madrid, Spain JORGE PENA jpizquie@eco.uc3m.es Laboratorio de Economía de las Telecomunicaciones, Universidad Carlos III de Madrid, Madrid, Spain
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article MANAGING THE NOODLE BOWL: THE FRAGILITY OF EAST ASIAN REGIONALISM The paper argues that East Asian regionalism is fragile, since (i) each nation's industrial competitiveness depends on the smooth functioning of "Factory Asia" — in particular, on intra-regional trade; (ii) the unilateral tariff-cutting that created "Factory Asia" is not subject to WTO discipline (bindings); (iii) there is no "top-level management" to substitute for WTO discipline, i.e., to ensure that bilateral trade tensions — tensions that are inevitable in East Asia — do not spillover into region-wide problems due to lack of cooperation and communication. This paper argues that the window of opportunity for East Asian "vision" was missed; what East Asia needs now is "management", not vision. East Asia should launch a "New East Asian Regional Management Effort", with a reinforced ASEAN + 3 being the most likely candidate for the job. The first priority should be to bind the region's unilateral tariff cuts in the WTO. Regionalism, noodle bowl, East Asia 03 2008 53 The Singapore Economic Review 449 478 http://www.worldscientific.com/doi/abs/10.1142/S0217590808003063 RICHARD E. BALDWIN Baldwin@hei.unige.ch Graduate Institute of International Studies, 11a, Av de la Paix, 1202 Geneva, Switzerland
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article COMPARATIVE STATICS ON ONLINE COMPETITION AND INTERNET TAXATION This paper analyzes price competition in a differentiated goods market between online and offline firms, and compares equilibrium prices, market demands, and profits of the firms. We also investigate the effects of a commodity tax on offline firms and Internet taxes on online firm regarding government tax revenue. We demonstrate that tax revenue depends not only on the relative size of online access and offline transportation costs, but also on the maturity of e-commerce. Under the Internet Tax Freedom Act, in particular, we show that (i) when the offline commodity tax is large, tax revenue decreases with the maturity of e-commerce market increases, and (ii) when the offline commodity tax is small, tax revenue decreases first and then increases with the maturity of e-commerce market. Electronic commerce, Internet Tax Freedom Act, offline firm, online firm 02 2006 51 The Singapore Economic Review 229 240 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002330 SANG-HO LEE sangho@chonnam.ac.kr Department of Economics, Chonnam National University, 300 Yongbong-dong, Bukgu, Gwangju, 500-757, South Korea
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article BOOK REVIEW: "Housing in Southeast Asian Capital Cities", by Ooi Giok Ling No abstract received. 01 2006 51 The Singapore Economic Review 107 108 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002299 KHAY BOON TAN Division of Economics, Nanyang Technological University, Singapore
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article FOREIGN DIRECT INVESTMENT AND TECHNOLOGY SPILLOVER: EVIDENCE ACROSS INDIAN MANUFACTURING INDUSTRIES The paper attempts to analyze the spillover effect of Foreign Direct Investment (FDI) across Indian manufacturing industries. Foreign presence by way of FDI brings new channels of technology spillover to the domestic industrial firms in the form of enhanced efficiency and diffusion of knowledge in the long-run. By carrying out Pedroni cointegration tests, the analysis tries to provide a long-run relationship between endogenous variables and explanatory variables, pertaining to technology spillovers across Indian manufacturing industries. We find that technology spillovers are relatively higher in industries like food products, textiles, chemicals, drugs and pharmaceuticals and non-metallic mineral products. Foreign Direct Investment, technology spillover, manufacturing, panel cointegration, unit root tests, O41, F43, E23, C22, C23 02 2012 57 1250011 The Singapore Economic Review 1 23 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500117 SMRUTI RANJAN BEHERA smrutibehera2003@gmail.com Department of Economics, Shyamlal College, University of Delhi, Delhi, India PAMI DUA dua@econdse.org Department of Economics, Delhi School of Economics, University of Delhi, Delhi, India BISHWANATH GOLDAR bng@iegindia.org V.K.R.V. Rao Centre for Studies in Globalization, Institute of Economic Growth, University Enclave, Delhi, India
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article OUTSOURCING AND FRAGMENTATION IN SINGAPORE'S MANUFACTURING INDUSTRY This paper studies the impact of outsourcing on productive performance of manufacturing industries in Singapore. The paper develops an outsourcing measure based on the narrow definition of intermediate imports given by Feenstra and Hanson (1996, 1999). Based on the input-output tables, the study uses 5-digit industrial-level classifications to measure the impact of outsourcing on productivity of the manufacturing industries in Singapore from 1995–2004. The outsourcing measure is further decomposed by import of services, import of IT services and import of business services. This decomposition allows us to study the impact of outsourcing of services in addition to the cross-border fragmentation of products and components. The results suggest strong positive impact of cross-border sourcing on the productivity of the manufacturing sector. The decomposition of outsourcing measure indicates that the manufacturing industries are more involved in cross-border sourcing of services, particularly in business services. Offshoring, productivity, services outsourcing 03 2008 53 The Singapore Economic Review 539 557 http://www.worldscientific.com/doi/abs/10.1142/S0217590808003099 SHANDRE M. THANGAVELU ecssmt@nus.edu.sg Department of Economics, National University of Singapore, 1 Arts Link, Block AS2, Level 6, Singapore 117570, Singapore MUN HENG TOH Department of Business Policy, National University of Singapore, Singapore KWAN KEE NG Asia Competitiveness Institute, Lee Kuan Yew School of Public Policy, National University of Singapore, Singapore
oai:RePEc:wsi:serxxx:v:60:y:2015:i:03:n:s02175908155002902021-07-25RePEc:wsi:serxxx
article LESSONS OF SINGAPORE'S DEVELOPMENT FOR OTHER DEVELOPING ECONOMIES While Singapore is grappling with policy options to sustain its success over the next 50 years, the developing world is wondering what made it such a success so far. By looking at some developing countries that are stuck in a roller-coaster ride of economic development I highlight some policy lessons they can learn from Singapore's success story. In a nutshell, as pointed out by Singapore's economic architect, Dr. Goh Keng Swee, non-economic factors matter more than the economic factors for a successful take-off of a developing economy. The paper also highlights some complementary development strategies that are instructive to developing economies. Non-economic factors, political stability, quality of governance, development strategies, O20, O21 03 2015 60 1550029 The Singapore Economic Review 1 13 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500290 TILAK ABEYSINGHE TilakAbey@nus.edu.sg Department of Economics, National University of Singapore, Singapore
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article FOREIGN OWNERSHIP AND EXPORTS IN VIETNAMESE MANUFACTURING This paper analyzes exports of multinational corporations (MNCs) in Vietnamese manufacturing, highlighting the disproportionately large contribution of heavily-foreign MNCs with foreign ownership shares of 90% or more. The exports of heavily-foreign manufacturing MNCs are substantial and concentrated in apparel, footwear, and electric machinery-related industries. Export propensities also tend to be markedly higher in heavily-foreign MNCs than in other MNCs, and these differences generally persist after controlling for the effects industry affiliation, firm size, vintage, and capital intensity. There is a large variation in the relationship between ownership shares and export propensities among industries and years, however. Multinational corporation, export, manufacturing, Vietnam, F23, F14, O53 04 2009 54 The Singapore Economic Review 569 588 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003513 PHAN MINH NGOC phanminhngoc@yahoo.com Sumitomo Mitsui Banking Corporation, Singapore Branch, Singapore ERIC D. RAMSTETTER ramst@icsead.or.jp
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article EVALUATION OF MALAYSIAN CAPITAL CONTROLS IN THE SHORT, MEDIUM, AND LONG RUNS This paper uses monthly data starting from January 1993 until June 2005 to assess the effectiveness of capital controls in restoring the Malaysian economy as compared to the IMF programs in Indonesia, Korea, and Thailand. We analyse various aspects of the economy by employing time-shifted difference-in-difference estimation. To evaluate the effects in the short, medium, and long runs, this study takes into account one to six years of treatment periods. Our estimation results provide strong evidence in favor of capital controls as a more effective crisis solution than the IMF programs in the short and medium runs. Time-shifted difference-in-difference estimation, IMF programs, treatment periods 02 2009 54 The Singapore Economic Review 233 247 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003276 KANNIKA DAMRONGPLASIT kannikad@ucla.edu Department of Health Services, University of California Los Angeles, School of Public Health, Box 951772, Los Angeles, CA 90095-1772, USA; Rand Corporation, USA; Division of Economics, Nanyang Technological University, Singapore
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article BOOK REVIEW: "Trade Policy, New Century: The WTO, FTAs, and Asia, Rising" No abstract received. 04 2009 54 The Singapore Economic Review 709 711 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003562 Pradumna B. Rana Nanyang Technological University, Singapore
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article CAPITAL FLOWS FOR DEVELOPMENT FROM JAPAN AND THE UNITED STATES No abstract received. 04 2009 54 The Singapore Economic Review 489 527 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003549 GUSTAV RANIS STEPHEN KOSACK
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article IS THERE A KUZNETS' PROCESS IN SOUTHEAST ASIA? Relatively little is known about the determinants of inequality in Southeast Asia. This paper fills this void by comprehensively testing Kuznets' hypothesis for Southeast Asia. We estimate both unconditional and conditional Kuznets' curves using panel data for 8 countries. The analysis suggests the existence of a Kuznets' curve with respect to per capita income; the path of inequality is non-linear with respect to economic development. There is no evidence of a Kuznets curve with respect to non-agricultural employment. There is some evidence in terms of urbanization, though this is not robust. There is robust evidence on the role of national governments and education in shaping the path of inequality in the region. Government involvement reduces inequality. Education appears to have a non-linear effect on inequality. Kuznets' hypothesis, development, inequality, Southeast Asia, O11, O15, O53 02 2015 60 1550017 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500174 ABDUL JABBAR ABDULLAH abdjabbar@sarawak.uitm.edu.my Universiti Teknologi Mara, Malaysia HRISTOS DOUCOULIAGOS douc@deakin.edu.au Department of Economics, School of Business, Deakin University, Australia ELIZABETH MANNING elizabem@deakin.edu.au Department of Economics, School of Business, Deakin University, Australia
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article ESTIMATING QUARTERLY GDP DATA FOR THE SOUTH PACIFIC ISLAND NATIONS Time series analyses generally rely on having a relatively high frequency of consistent and reliable data to work with. However for many South Pacific Island Nations (SPINs), data on macroeconomic series, like GDP, are typically available only annually from the 1980s onwards. This paper empirically estimates quarterly GDP data from annual series using the modified Chow and Lin (1971) approach. We link available annual GDP series for select SPINs with GDP-related series that are available quarterly. We deem that our quarterly estimates of GDP are more consistent and reliable compared to estimates obtained through less sophisticated methods of univariate interpolation. Quarterly GDP, disaggregation of time series, South Pacific Island Nations, C82, E00 01 2011 56 The Singapore Economic Review 97 112 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004122 WILLIE LAHARI Department of Economics, University of Otago, P. O. Box 56, Dunedin 9054, New Zealand ALFRED A. HAUG ahaug@business.otago.ac.nz Department of Economics, University of Otago, P. O. Box 56, Dunedin 9054, New Zealand ARLENE GARCES-OZANNE Department of Economics, University of Otago, P. O. Box 56, Dunedin 9054, New Zealand
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article LONG-TERM ADJUSTMENT OF CAPITAL STRUCTURE: EVIDENCE FROM SINGAPORE, HONG KONG AND TAIWAN This paper examines the impact of profitability, stock price performance and growth opportunity on the capital structure of firms in Singapore, Taiwan and Hong Kong. In contrast to Kayhan and Titman (2007), it is found that firms in these three Chinese-dominated economies strongly prefer debt to equity or internal fund financing. They also take advantage of stock price appreciation by issuing more shares. An adjustment model for debt ratios is estimated. The results suggest that the leverage ratios of these firms slowly adjust toward their target levels. Deviations from the target due to the pecking order and market timing effects are found to be significant. Capital structure, market timing, pecking order, financial deficit, G3 04 2012 57 1250027 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500270 TERENCE TAI-LEUNG CHONG Department of Economics and Hong Kong Institute of Asia-Pacific Studies, The Chinese University of Hong Kong, Shatin, NT, Hong Kong SAR, Hong Kong DANIEL TAK-YAN LAW Department of Economics, The Chinese University of Hong Kong, Shatin, NT, Hong Kong SAR, Hong Kong LIN ZOU Department of Economics, Dorothy Y. L. Wong Building, Lingnan University, 8 Castle Peak Road, Tuen Mun, NT, Hong Kong SAR, Hong Kong
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article BOOK REVIEW: "Review of Red Capitalism: The Fragile Financial Foundation of China's Extraordinary Rise" by Carl E. Walter and Fraser J.T. Howie No abstract received. 04 2012 57 1280012 The Singapore Economic Review 1 4 http://www.worldscientific.com/doi/abs/10.1142/S0217590812800124 JASON WONG Duke University, NC, USA
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article INFLOW OF REMITTANCES AND PRIVATE INVESTMENT IN INDIA Examining the impact of remittances on private investment, the study finds that remittances have an adverse impact on private investment and hence is apprehensive about its net positive impact on output growth in India. Therefore, the study suggests that the government policy should be designed toward inducing private sector to allocate more remittances for investments for leveling up the rate of economic growth. Otherwise, a significant proportion of remittances would result in increase in private consumption without desired contributory impact. The study also observes crowding out impact of public sector investment, while openness measure raises private sector investment. Remittances, investment, growth, cointegration, error correction, E22, E43, H62, H63, O11 01 2012 57 1250004 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S021759081250004X HRUSHIKESH MALLICK hrushi_isec@yahoo.co.in hrushi@cds.ac.in Centre for Development Studies, Thiruvananthapuram 695 011, Kerala, India
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article EXCHANGE RATE PASS-THROUGH IN ASEAN: IMPLICATIONS FOR THE PROSPECTS OF MONETARY INTEGRATION IN THE REGION This paper investigates, for the first time, the degree of exchange rate pass-through to domestic prices in all five founding members of ASEAN. For this purpose, a three-variable-recursive VAR model was applied that uses the Choleski decomposition method along the distribution chain of pricing, using data for the period 1968 to 2001.The results show that a strong case for entering a currency union can be made for the cases of Singapore, Malaysia and Thailand, as in these countries there appears to be the case of exchange rate disconnect. A case for common currency can also be made for Indonesia but for entirely different reasons. For this country, an independent monetary policy is a clear source of shock to the economy and therefore a currency union would tend to eliminate them. Finally, a weaker case for a common currency can be made for the Philippines as evidence of some exchange rate pass-through to inflation was found but not to import prices. Exchange Rate Pass-through, Monetary Integration, ASEAN, F31, F33, E42 04 2009 54 The Singapore Economic Review 657 687 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003458 CARLOS CORTINHAS c.cortinhas@exeter.ac.uk Department of Economics, The University of Exeter Business School and The Economic Policies Research Unit (NIPE), Portugal
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article SINGAPORE'S DEMOGRAPHIC TRANSITION, THE LABOR FORCE AND GOVERNMENT POLICIES: THE LAST FIFTY YEARS The trajectory of Singapore's population size and composition can be mapped out with its progression through the various phases of demographic transition from high birth and death rates in the post-war years to very low birth and death rates today, all within the context of rapid economic and social development that has taken place in the past 50 years. Population planning has been integral in Singapore's national development strategy, balancing the economy's needs for more and better qualified workers with social considerations such as the dependency burden and the integration of large numbers of foreigners in a global city-state. This paper considers Singapore's population and manpower planning policies, with an account of the country's passage through the various stages of its demographic transition, and how its working age population composition has evolved. Population and labor force policies are examined with specific consideration of the social, economic and political implications resulting from those policy choices. A final section considers the challenges for the future stemming from these demographic trends. Demography, population, labor, productivity, policy, N35, J13, J21 03 2015 60 1550035 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500356 MUI TENG YAP yap.muiteng@nus.edu.sg Institute of Policy Studies, 1C Cluny Road, House 5, Singapore 259599, Singapore CHRISTOPHER GEE christopher.gee@nus.edu.sg Institute of Policy Studies, 1C Cluny Road, House 5, Singapore 259599, Singapore
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article REFLECTIONS ON THE FOUNDATIONS OF ECONOMIC VALUATION This paper provides a brief review of the measures developed to achieve the goal of economic evaluation of public projects. The limitations of the Kaldor–Hicks criterion are highlighted and these issues lead to the development of the discounted present value (DPV) method and the compounded terminal value (CTV) method. However, the latter methods were not without problems. It is demonstrated that using DPV or CTV to evaluate certain public projects produces exorbitantly small DPVs or exorbitantly large CTVs, which would lead to a manifestly perverse ranking if adopted. A new method of evaluating these public projects, known loosely as the corrected equivalent present value method, is proposed to alleviate the problems of DPV and CTV. 04 2009 54 The Singapore Economic Review 529 542 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003495 E. J. MISHAN London School of Economics (LSE), 22 Gainsborough Gardens, Golders Green, London, NW11 9BL, England
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article A NOTE ON THE CORRELATION RELATIONSHIP AMONG SINGAPORE, HONG KONG AND THE US CAPITAL MARKETS SINCE THE HONG KONG HANDOVER: IMPLICATION FOR INTERNATIONAL PORTFOLIO MANAGEMENT In this note, I document the change in correlation between Hong Kong, Singapore and the US financial market indexes using Geweke Measures after the handover of Hong Kong to China. The results show that these relationships have changed significantly. While the feedback relationship between Hong Kong, Singapore and the US markets increase after the handover of Hong Kong, the increases in feedback relationship between Singapore and the US markets is relatively higher compared to the change between Hong Kong and the US markets. Hong Kong, Singapore, Geweke Measures 03 2006 51 The Singapore Economic Review 335 342 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002470 LEO H. CHAN lchan@desu.edu Finance, Department of Accounting and Finance, School of Management, Delaware State University, 1200 N. DuPont Highway, Dover, DE 19901, USA
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article BOOK REVIEW: "World Investment Prospects to 2010: Boom or Backlash?" No abstract received. 02 2007 52 The Singapore Economic Review 265 267 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002695 DONGHYUN PARK Nanyang Technological University, Singapore
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article BUDGET DEFICITS, EXTERNAL DEBT AND ECONOMIC GROWTH IN NIGERIA The necessity for governments to borrow in order to finance deficit budgets has led to the development of external debt. This study examines how the use of budget deficits as an instrument of stabilization leads to the accumulation of external debt with the attending effects on growth in Nigeria between 1970 and 2003. By synthesizing a relationship between budget deficits and external debt the study shows the implications on economic growth of conducting a fiscal policy within the contexts of debt stabilization and debt sustainability. The results of the econometric analysis confirm the existence of the debt Laffer curve and the nonlinear effects of external debt on growth in Nigeria. The study concludes that if debt-financed budget deficits are operated in order to stabilize the debt ratio at the optimum sustainable level debt overhang problems would be avoided and the benefits of external borrowing would be maximized. Debt overhang, debt service burden, debt sustainability, debt stabilization, external debt, optimal debt stock, economic growth, Nigeria, H61, H63, H68, O47, O55 03 2010 55 The Singapore Economic Review 491 521 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003869 TOKUNBO SIMBOWALE OSINUBI tokunbosinubi@yahoo.co.uk Department of Economics, Faculty of Social Sciences, University of Lagos, Akoka, Yaba, Lagos, Nigeria RISIKAT OLADOYIN S. DAUDA rissydauda@yahoo.com Department of Economics, Faculty of Social Sciences, University of Lagos, Akoka, Yaba, Lagos, Nigeria OLADELE EMMANUEL OLALERU delexyz@yahoo.co.uk Department of Economics, Faculty of Social Sciences, University of Lagos, Akoka, Yaba, Lagos, Nigeria
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article THE EFFECTS OF UNCERTAINTY ON THE VOLUNTARY PRIVATE PROVISION OF IMPURE PUBLIC GOODS This paper examines the effects of uncertainty on an individual's own contribution to the provision of the collective good using an impure public good model. Two types of uncertainty analyzing free-riding behavior are evaluated: (i) uncertainty surrounding the contributions of others to the public characteristic and (ii) uncertainty surrounding the response of others to an individual's own contribution. We extend previous studies by examining both the compensated and uncompensated effects of increases in such risks on the provision of the collective good. We also establish the conditions that are sufficient to determine both compensated and the total, uncompensated effects of an increase in risk on the voluntary provision of the collective good. Impure public good, voluntary provisions, free-riding, uncertainty 01 2009 54 The Singapore Economic Review 61 73 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003161 ILTAE KIM kit2603@chonnam.ac.kr Department of Economics, Chonnam National University, Gwangju 500-757, Republic of Korea
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article BOOK REVIEW No abstract received. 02 2005 50 The Singapore Economic Review 293 300 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002037 ENRICO TANUWIDJAJA Singapore Centre for Applied, and Policy Economics (SCAPE), Department of Economics, National University of Singapore, Singapore
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article THE REAL EXCHANGE RATE DETERMINATION: EMPIRICAL EVIDENCE FROM MALAYSIA This study examines the real exchange rate determination in Malaysia. The result of the autoregressive distributed lag approach shows that an increase in the real interest rate differential, productivity differential, the real oil price or reserve differential will lead to an appreciation of the real exchange rate in the long run. The real oil price and reserve differential are important in the real exchange rate determination. The dynamic ordinary least squares (DOLS) estimator shows about the same conclusion of the autoregressive distributed lag approach. The result of the generalized forecast error variance decomposition shows that the real interest rate differential, productivity differential, the real oil price and reserve differential are generally important to the real exchange rate determination. Real exchange rate, real oil price, reserve differential, cointegration, variance decomposition, F31, F37, F10 02 2014 59 1450016 The Singapore Economic Review 1 19 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500167 WONG HOCK TSEN htwong@ums.edu.my Universiti Malaysia Sabah, Jalan UMS, 88400 Kota Kinabalu, Sabah, Malaysia
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article MALMQUIST INDICES OF PRE- AND POST-DEREGULATION PRODUCTIVITY, EFFICIENCY AND TECHNOLOGICAL CHANGE IN THE SINGAPOREAN BANKING SECTOR By the end of the 1990s, the Singaporean government had recognised the need to open up its banking sector so as to remain competitive in the global economy. The Monetary Authority of Singapore (MAS) thus began deregulation of the banking sector in 1999 to strengthen the competitiveness of local banks relative to their foreign competitors through mergers. This paper employs a nonparametric Malmquist productivity index to provide measure of productivity, technological change and efficiency gains over the period 1995–2005. The findings reveal some total factor productivity growth associated with deregulation and scale efficiency improvement largely from mergers amongst the local banks. Efficiency, productivity, deregulation, Malmquist indices, banking, G21, D24 04 2010 55 The Singapore Economic Review 599 618 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003948 BOON L. LEE bl.lee@qut.edu.au School of Economics and Finance, Queensland University of Technology, Brisbane, Queensland, GPO Box 2434, Brisbane, QLD 4001, Australia ANDREW C. WORTHINGTON Department of Accounting, Finance and Economics, Griffith University, Nathan, Queensland, Australia WAI HO LEONG Asian Economics Research, Barclays Capital, Singapore
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article THE IMPACT OF EXCHANGE RATE ON FDI AND THE INTERDEPENDENCE OF FDI OVER TIME We examine the impact of exchange rates on foreign direct investment (FDI) inflows into the United States in the context of a model that allows for the interdependence of FDI over time. Interdependence is modeled as a two-state Markov process where the two states can be interpreted as either a favorable or an unfavorable environment for FDI in an industry. We use unbalanced industry-level panel data from the US wholesale trade sector and our analysis yields two main results. First, we find evidence that FDI is interdependent over time. Second, under a favorable FDI environment, the exchange rate has a positive and significant effect on the average rate of FDI inflows. Exchange rate, FDI, Markov, unbalanced panel, F31, F21, F23 04 2010 55 The Singapore Economic Review 733 747 http://www.worldscientific.com/doi/abs/10.1142/S0217590810004024 JOSEPH D. ALBA ajoalba@ntu.edu.sg Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Singapore PEIMING WANG Faculty of Business, Auckland, University of Technology, Private Bag 92006, Auckland, 1020, New Zealand DONGHYUN PARK Asian Development Bank, 6 ADB Avenue, Mandaluyong, City Philippines 1550, Philippines
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article EMINENT PAPER SERIES THE PRESENT AND FUTURE OF GAME THEORY A broad nontechnical coverage of many of the developments in game theory since the 1950s is given, together with some comments on important open problems and where some of the developments may take place. The reference section given serves only as a minimal guide to the many thousands of books and articles that have been written on this topic. The purpose here is to present a broadbrush picture of the many areas of study and application that have come into being. The use of deep techniques flourishes best when it stays in touch with application. There is a vital symbiotic relationship between good theory and practice. The breakneck speed of development of game theory calls for an appreciation of both the many realities of conflict, coordination and cooperation and their abstract investigation. Game theory, application and theory, social sciences, law, experimental gaming, conflict, coordination and cooperation, C7, C9 01 2012 57 1250001 The Singapore Economic Review 1 14 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500014 MARTIN SHUBIK martin.shubik@yale.edu Cowled Foundation, Department of Economics and School of Management, Yale University, Box 208281, New Haven, CT 06520-8281, USA
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article GREEN GROWTH: IMPORTANT DETERMINANTS We discuss the important determinants requires to develop green patents, which eventually reinforce green growth. The theoretical framework examined four elements, the enforcement of intellectual property rights (IPRs), research and development (R&D) expenditures, market size and environmental taxations. We empirically test the green patent data to test the interrelationship of green patents representing the green innovations and IPR, R&D expenditures, market size and environmental taxations. Keeping in view the availability of the data we studied 11 developed countries, which are Austria, Australia, Canada, France, Japan, Finland, Germany, Sweden, U.K and U.S. The panel data can better handled the technological change rather than the pure cross section or pure time series data. Therefore, this study used the Pooled Least Square estimation techniques like Fixed Effect Model (FEM) and random effect model (REM) for both balance period of 1995–2010 and unbalanced period from 1995–2010. We only interpreted the balance period results depicting the enforcement of IPRs has negative and significant impact on green patents while the R&D expenditures, market size and environmental taxations has positive and significant impact on the green patents e.g. development of green innovations. We believe that the enforcement of explanatory variables will eventually acquire green growth. Intellectual property rights, foreign direct investment, O34, F19 02 2015 60 1550014 The Singapore Economic Review 1 15 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500149 GHULAM SAMAD ghulamsamad@hotmail.com Colorado State University, USA; Pakistan Institute of Development Economics (PIDE), Islamabad, Pakistan RABIA MANZOOR rabia_ch@live.com Research Associate, Sustainable Development Policy Institute (SDPI), Islamabad, Pakistan
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article FINDING OUT WHO THE CROOKS ARE — TAX EVASION WITH SEQUENTIAL AUDITING This paper investigates multi-item moral hazard with auditing contests.s Although the presented model is widely applicable, we choose tax evasion as an exemplary application. We introduce a tax-evasion model where tax authority and taxpayer invest in detection and concealment. The taxpayers have multiple potential income sources and are heterogeneous with respect to their evasion scruples. The tax authority — unable to commit to an audit strategy — observes a tax declaration and chooses its auditing efforts. We show that the tax authority prefers to audit source by source until it finds evidence for evasion to conduct a full-scale audit thereafter. Furthermore, we provide an explanation for why economic actors engage in both the formal and informal sector at the same time. Moral hazard, auditing rules, contest, tax evasion 02 2006 51 The Singapore Economic Review 195 227 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002305 RALPH-C. BAYER ralph.bayer@adelaide.edu.au School of Economics, University of Adelaide, Economics, North Terrace, Adelaide, SA 5005, Australia
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article BOOK REVIEW: "Strategic Priorities for Agricultural Development in Eastern and Central Africa" No abstract received. 02 2008 53 The Singapore Economic Review 335 336 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002975 SHUBHASREE SESHANNA Nanyang Technological University, Singapore
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article UNEMPLOYMENT AND SPEED OF ADJUSTMENT IN ASEAN-3 ECONOMIES: A COINTEGRATION ANALYSIS This paper investigates the existence of long-run relationship between unemployment and several key macroeconomic variables in Malaysia, Singapore, and the Philippines. The Johansen–Juselius cointegration method confirms the existence of a stationary long-run cointegration relationship between unemployment and its determinants in all three countries. Exports and foreign direct investment are important determinants of unemployment in Malaysia. In the Philippines, government spending and exports are inversely related to unemployment. In Singapore, only exports appeared as a significant factor in determining unemployment. The results show that the speed of adjustment following a shock is more rapid in Singapore compared to the other two ASEAN countries. Unemployment, speed of adjustment, Malaysia, Singapore, the Philippines, E24 03 2011 56 The Singapore Economic Review 327 347 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004353 THIRUNAUKARASU SUBRAMANIAM stkarasu@um.edu.my Department of Southeast Asian Studies, University of Malaya, Malaysia AHMAD ZUBAIDI BAHARUMSHAH Graduate School of Management, University Putra Malaysia, Malaysia
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article CHOICES OF OPTIMAL MONETARY POLICY INSTRUMENTS UNDER THE FLOATING AND THE BASKET-PEG REGIMES This paper determines whether adopting the basket-peg rather than the floating regime is optimal for emerging market countries. Under the basket-peg regime, there is a trade-off between practical usefulness and welfare losses associated with capital movements across countries. We develop a dynamic stochastic general equilibrium model for small open economies to derive a simple basket weight rule. Although this is suboptimal, we find it practical and easy to implement. With calibration using Singaporean and Thai data for 1997Q3–2006Q2 and comparison among cumulative losses associated with the policy instrument rules, we show that a commitment to the basket weight rule is superior to other instrument rules under the floating regime for small, open emerging market countries like Singapore and Thailand. Basket-peg regime, monetary policy instruments, small open economy, exchange rate regime, F33, F41 04 2012 57 1250024 The Singapore Economic Review 1 31 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500245 NAOYUKI YOSHINO yoshino@econ.keio.ac.jp Department of Economics, Keio University, Mita 2-15-45, Minato-ku 108-8345, Tokyo, Japan SAHOKO KAJI Department of Economics, Keio University, Mita 2-15-45, Minato-ku 108-8345, Tokyo, Japan TAMON ASONUMA tasonuma@imf.org International Monetary Fund, 700 19th Street, Northwest Washington D.C. 203431, USA
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article ECONOMIC GROWTH AND EXCHANGE RATE: A NEW ROAD AHEAD FOR INDONESIA This short article advocates the further development of Indonesia through an export-oriented industrialization policy. It opines that it is only through this policy that the perennial depreciation of the Indonesian exchange rate, including through capital flight, can be stopped. The article also advocates a twin-engine approach, with the State be responsible for the efficient supply of public goods, and the private sector, including the active participation of foreign investment, be encouraged, actively, for the supply of private goods, with concentration on export-oriented manufactured goods. The social and educational system will have to give support to this fundamental policy shift. Miracle economies, exchange rate crises, export-orientation, industrialization policy and exchange rate, Arthur Lewis' Model, ADB Model, the twin-engine model, role of public and private sectors, globalized world economy, F20, H41, H44, N65, O14, O23, O53, P1 02 2015 60 1550010 The Singapore Economic Review 1 6 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500101 CHONG YAH LIM ACYLIM@ntu.edu.sg
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article MANAGED FLOAT EXCHANGE RATE SYSTEM: THE SINGAPORE EXPERIENCE This paper examines the key characteristics of Singapore's exchange rate-centered monetary policy; in particular, its managed float regime which incorporates key features of the basket, band and crawl system popularized by Williamson (1998, 1999). We assess how the flexibility accorded by this framework has been advantageous in facilitating adjustment to various shocks to the economy. A characterization of the countercyclical nature of Singapore's exchange rate policy is also offered, with reference to recent work on the monetary policy reaction function and estimates of Singapore's behavioral equilibrium exchange rate. We also review previous econometric analysis which provides evidence that Singapore's managed float system may have helped to mitigate the spillover effects of such increased volatility into the real economy. The track record of Singapore's managed float regime over the past two decades suggests that intermediate regimes are a viable alternative to the so-called "corner solutions", especially when supported by consistent macroeconomic and microeconomic policies as well as strong institutions. Exchange rates, inflation, volatility, monetary policy rules, Singapore 01 2007 52 The Singapore Economic Review 7 25 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002531 HOE EE KHOR Economic Policy Department, Monetary Authority of Singapore, 10 Shenton Way, MAS Building, Singapore 079117, Singapore JASON LEE Economic Policy Department, Monetary Authority of Singapore, 10 Shenton Way, MAS Building, Singapore 079117, Singapore EDWARD ROBINSON Economic Policy Department, Monetary Authority of Singapore, 10 Shenton Way, MAS Building, Singapore 079117, Singapore SAKTIANDI SUPAAT saktiandi@mas.gov.sg Economic Policy Department, Monetary Authority of Singapore, 10 Shenton Way, MAS Building, Singapore 079117, Singapore
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article BEYOND GENDER: THE IMPACT OF AGE, ETHNICITY, NATIONALITY AND ECONOMIC GROWTH ON WOMEN IN THE SINGAPORE ECONOMY This paper examines trends in women's labor force participation, sectoral and occupational distribution, and wage incomes relative to men, including by age and education. Since 1980, gender disparities in virtually all categories have substantially narrowed; those remaining result from women's continued disproportionate responsibility for family care, and additional factors affecting women at the highest levels of the labor force and income distribution. There are some areas of concern for women's economic future in Singapore, including the impacts of ageing, foreign labor and immigration, and wage stagnation experienced by low-income families under Singapore's economic development model. Labor force, employment, women, labor discrimination, J: Labor and demographic economics 02 2015 60 1550020 The Singapore Economic Review 1 16 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500204 LINDA Y. C. LIM lylim@umich.edu Stephen M. Ross School of Business, University of Michigan, 701 Tappan, Ann Arbor, Michigan 48109-1234, United States
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article EVIDENCE ON TWO-WAY RELATIONSHIPS BETWEEN FOREIGN DIRECT INVESTMENT INFLOWS AND COUNTRY-LEVEL INDIVIDUAL GOVERNANCE INDICATORS This paper investigates the interactions between foreign direct investment (FDI) and country-level individual governance indicators for a sample of 173 countries from 1996 to 2007, and also the effect of legal origin, international financial reporting standards (IFRS) and ownership diffusion on them. We find evidence of positively significant two-way relationships between each of the six individual governance indicators and lagged FDI inflows scaled by lagged GDP to confirm that governance is a function of FDI inflows and vice-versa. The overall interpretation of the results is that FDI inflows, IFRS, ownership diffusion and legal framework of a country 'matter' for macro-level governance in a competitive global business environment while FDI inflows are dependent on individual governance indicators and other macro-economic variables to a large extent. Both IFRS and legal origin have no direct link to FDI inflow. These findings have policy implications for individual governments and international donor organizations to undertake tenable actions for the improvement of country-level individual governance indicators to attract more FDI inflow. Foreign direct investment, country-level individual governance indicators, international financial reporting standards, legal origin, ownership diffusion, G30, G34, F37 02 2013 58 1350013 The Singapore Economic Review 1 26 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500136 OMAR AL FAROOQUE ofarooqu@une.edu.au UNE Business School, University of New England, Armidale, NSW 2351, Australia SUBBA REDDY YARRAM UNE Business School, University of New England, Armidale, NSW 2351, Australia
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article HETEROGENEITY ON THE TECHNICAL EFFICIENCY IN JAPANESE AIRPORTS This paper evaluates the production activities of Japanese airports by using a finite mixture model that allows controlling for unobserved heterogeneity. In doing so, a stochastic frontier latent class model, which allows the existence of different technologies, is adopted to estimate production frontiers. This procedure not only enables the identification of different groups of Japanese airports but also permits the analysis of their production efficiency. The main result is that there are two groups of Japanese airports, both following completely different "technologies" to obtain passengers and cargo, suggesting that business strategies need to be adapted to the characteristics of the airports. Some managerial implications are developed. Production efficiency, latent class model, Japan, airports 04 2011 56 The Singapore Economic Review 523 534 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004419 CARLOS PESTANA BARROS cbarros@iseg.utl.pt Instituto de Economia e Gestão, Technical University of Lisbon, Rua Miguel Lupi, 20, 1249-078 Lisbon, Portugal SHUNSUKE MANAGI managi.s@gmail.com Graduate School of Environmental Studies, Tohoku University, 6-6-20 Aramaki-Aza Aoba, Aoba-Ku, Sendai 980-8579, Japan YUICHIRO YOSHIDA yoshida@grips.ac.jp National Graduate Institute for Policy Studies, 7-22-1 Roppongi, Minato-ku, Tokyo, Japan 106-8677, Japan
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article THE WORLD BANK SPENCE COMMISSION REPORT AND THE TRINITY GROWTH THEORY This paper compares Michael Spence's Growth Theory with Professor Lim Chong Yah's Trinity Growth Theory. The similarities and the differences in the two approaches are brought out in explaining the superlative growth rates of economies in the world. The writer maintains that the Trinity Growth Theory also explains why growth levels (income levels) differ, and why growth rates of mature as well as very poor economies display slow growth rates, and not superlative growth rates. The two theories are multi-causal and multidimensional, not uni-causal. The Spence Theory, the Trinity Growth Theory, the EGOIN Theory, the C Factor, the S Curve 01 2010 55 The Singapore Economic Review 49 58 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003602 CHONG YAH LIM Economic Growth Centre, Nanyang Technological University, Singapore
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article A NEW CLIMATE STRATEGY BEYOND 2012: LESSONS FROM MONETARY HISTORY The Kyoto Protocol was the outcome of many years of multilateral negotiation and political compromise with the ultimate aim of reducing the risk of dangerous climate change. Unfortunately, most of the countries that ratified the Kyoto Protocol have not taken effective action to curb greenhouse gas emissions, with many Kyoto countries not looking likely to reach their targets. There is also a lack of enthusiasm from major developing countries to take on the binding targets that form the basis of the Kyoto Protocol Approach. This has raised serious doubts about the viability of the Kyoto policy of committing countries to targets and timetables especially as a model for the current negotiations. As the science becomes more compelling that action is needed to curb greenhouse gas emissions, countries are beginning to look for more sustainable alternatives for the period beyond 2012. This paper outlines the key features that are needed in a new climate change framework beyond Kyoto drawing on lessons from monetary history. Using the analogy to the way modern central banks run monetary policy, it outlines an alternative to the Kyoto Protocol, which is a system of national climate policies coordinated around a common global price for carbon. Climate change, emissions trading, carbon tax, Hybrid, Kyoto, Copenhagen 03 2012 57 1250016 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500166 WARWICK J. MCKIBBIN warwick.mckibbin@anu.edu.au CAMA, Crawford School of Public Policy, Australian National University, Crawford Building 132, The Australian National University, Lennox Crossing, Acton, Australian Capital Territory 0200, Australia
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article THE IMPACT OF COMMODITY TRANSACTION TAX ON FUTURES TRADING IN INDIA: AN EX-ANTE ANALYSIS Trading in commodity derivatives on exchange platforms is an instrument to achieve price discovery and better price-risk management besides helping the macroeconomy with better resource allocation. In the 2008–2009 budget, the Indian government proposed to impose a commodity transaction tax (CTT) amounting to 0.017% of trading value. In this context, we examine the relationship between trading activity, volatility and transaction cost for five most traded commodities in India. Results suggest that there exists a negative relationship between transaction cost and liquidity and a positive relationship between transaction cost and volatility. Further, the results of structural model support the results of VAR analysis. Therefore, if the government imposes CTT, it would lead to higher volatility and lower trading activity affecting market efficiency and liquidity. Commodity transaction tax, futures market, liquidity, volatility, G19, G13, G14 03 2011 56 The Singapore Economic Review 423 440 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004328 PRAVAKAR SAHOO pravakar@iegindia.org Institute of Economic Growth (IEG), Delhi University, New Delhi, India RAJIV KUMAR Indian Council for Research on International Economic Relations (ICRIER), India Habitat Centre, New Delhi, India
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article TESTING FOR LINEAR AND NON-LINEAR GRANGER NON-CAUSALITY HYPOTHESIS BETWEEN STOCK AND BOND: THE CASES OF MALAYSIA AND SINGAPORE The untested assumption of linear relationship between stocks and bonds in previous empirical studies may lead to an invalid conclusion if the actual relationship is non-linear. The emphasis of this paper is on the effect of non-linearities on causal relationships between stocks and bonds in the cases of Malaysia and Singapore. Results from linearity tests indicate the existence of non-linearities in the dynamic relationship between stocks and bonds. Non-linear causality test results based on Taylor expansion suggest that non-linear causality flows from stocks to bonds and vice versa. The test further confirms that bonds with different maturity dates have different relationships with stocks. Stock and bond, linear, non-linear, causality, Taylor series approximation, C12, C22, G10 05 2014 59 1450045 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500453 SHEUE LI ONG ongsheueli@hotmail.com ongsheueli@yahoo.com Faculty of Science and Natural Resources, Universiti Malaysia Sabah, Jalan UMS, 88400 Kota Kinabalu, Sabah, Malaysia CHONG MUN HO Faculty of Science and Natural Resources, Universiti Malaysia Sabah, Jalan UMS, 88400 Kota Kinabalu, Sabah, Malaysia
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article RESPONSE MODES AND COORDINATION IN A TRAFFIC CONTEXT, AN EXPERIMENTAL COMPARISON OF CHINESE AND GERMAN PARTICIPANTS This paper reports results of laboratory experiments about traffic behavior of participants with different cultural backgrounds. We conducted the minority game as an elementary traffic scenario in which human participants of a German and Chinese subject pool had to choose over 100 periods between a road A and a road B. In each period, the road which was chosen by the minority of players won, these participants got a payoff. The payoff in the majority group was 0. An important observation is that the number of road changes of a participant is negatively correlated with her cumulative payoff. The Chinese participants reacted differently to the payoffs of preceding periods than the German participants. Minority game, laboratory experiments, traffic behavior, cross-cultural experiments, comparison of coordination behavior, C88, C91, C92, C15, D83, R40, R41 04 2011 56 The Singapore Economic Review 489 501 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004390 THORSTEN CHMURA Ludwig-Maximilians-Universität München, Seminar für Wirtschaftstheorie, Ludwigstraße 28, 80539 München, Germany
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article BOOK REVIEW: "Understanding and Interpreting Chinese Economic Reform", by Jinglian Wu No abstract received. 01 2006 51 The Singapore Economic Review 97 98 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002251 PAUL S. L. YIP Division of Economics, Nanyang Technological University, Singapore
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article BOOK REVIEW: "Tourism and China's Development: Policies, Regional Economic Growth and Ecotourism" No abstract received. 01 2005 50 The Singapore Economic Review 139 142 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001925 HABIBULLAH KHAN Graduate School of Business, Universitas21Global, Singapore
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article GLOBALIZATION, LIBERALIZATION AND INCOME INEQUALITY: THE CASE OF CHINA This paper studies the mutual effects of globalization, liberalization and income inequality using a case study of China. Comparing the trends of economic growth and income distribution, we found that the economic reform and opening-up policy promoted China's rapid growth while inducing an expansion in income disparity. We also found that the income gap had been a force driving China's high growth in its earlier transition period but began to be an obstacle as the Chinese economy became more globalized and liberalized. To enhance future economic development, China must reduce this inequality. Income distribution, Gini coefficient, China, good inequality and bad inequality, Chinese Household Income Project (CHIP), JEL Classification: C30, JEL Classification: I24, JEL Classification: I28, JEL Classification: J31, JEL Classification: O15, JEL Classification: R23 01 2014 59 1450002 The Singapore Economic Review 1 21 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500027 JINJUN XUE setsu@soec.nagoya-u.ac.jp Graduate School of Economics, Nagoya University Furo-cho, Chikusa-ku, Nagoya 464-8601, Japan CHULIANG LUO luochl@bnu.edu.cn School of Economics and Business Administration, Beijing Normal University, China SHI LI lishi89@263.net School of Economics and Business Administration, Beijing Normal University, China
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article BOOK REVIEW: "Competition Law and Policy in Singapore", edited by Cavinder Bull SC, Lim Chong Kin and Richard Whish No abstract received. 04 2010 55 The Singapore Economic Review 757 761 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003961 SOCK YONG PHANG Singapore Management University, Singapore
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article MODELING MEMORY OF ECONOMIC AND FINANCIAL TIME SERIES Much time series data are recorded on economic and financial variables. Statistical modeling of such data is now very well developed, and has applications in forecasting. We review a variety of statistical models from the viewpoint of "memory", or strength of dependence across time, which is a helpful discriminator between different phenomena of interest. Both linear and nonlinear models are discussed. Time series model, short memory, long memory, stochastic volatility 01 2005 50 The Singapore Economic Review 1 8 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001809 PETER M. ROBINSON London School of Economics, UK
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article CONTRACT MANUFACTURING IN LATE INDUSTRIALIZATION Contract manufacturing is the catalyst shaping the world economy under globalization. Affirming the dominance of the open network in organizing worldwide value chains, it transformed Japan and US into trade partners rather than rivals. It allows firms like Apple, Nokia and Sony to outsource production tasks to People's Republic of China, which serves as the world's workplace, and provides a niche for Singapore and Taiwan in late industrialization. Tapping into the economy of scope from the pooling of capacity and information, contract manufacturers like Foxconn and Flextronics provide durable and significant benefit for their economies of domicile, hence a novel niche in late industrialization. Contract manufacturing, globalization, open network, worldwide value chain, capacity pooling, information pooling, late industrialization, catalysis, L24, L22, L14, F23, D21, O14 04 2012 57 1250023 The Singapore Economic Review 1 15 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500233 AN-CHI TUNG actung@econ.sinica.edu.tw Institute of Economics, Academia Sinica, 128, Sec. 2 Academia Road, Taipei, Taiwan 11529, Taiwan HENRY WAN hyw1@cornell.edu Economics Department, 470 Uris Hall, Cornell University, Ithaca, N.Y. 14853, USA
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article ON THE EXISTENCE OF EQUIVALENT TARIFF VECTORS — WHEN THE STATUS QUO MATTERS It has long been recognized that, in a restricted world of just two countries and two commodities, any feasible non-distorting international transfer can be replaced by a pair of individually distorting but collectively non-distorting equivalent import duties. In recent years it has sometimes been suggested that equivalence persists in broader contexts and there have been two attempts to provide interesting sufficient conditions for equivalence. Our purpose is three-fold. We first note that the sufficient conditions so far provided relate to the equilibrium values of endogenous variables (like prices) rather than to the given values of exogenous variables (like endowments, technologies and preferences) and that conditions of the former kind may be difficult to empirically justify. It is then shown, by means of a robust example with conditions imposed on exogenous variables only, that equivalence cannot be relied upon when there are more than two countries, even when the countries have no extraordinary features. Finally, we emphasize some of the difficulties in implementing equivalent tariffs even when they do exist. Equivalent tariffs, lump-sum transfers, implementability spec0 2005 50 The Singapore Economic Review 345 359 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002074 MURRAY KEMP mkemp@efs.mq.edu.au Department of Economics, Macquarie University, New South Wales 2029, Australia HENRY WAN hyw1@cornell.edu Department of Economics, Cornell University, Ithaca, NY 14853-7601, USA
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article INNOVATION, IMITATION AND ENTREPRENEURSHIP This paper analyzes the gradual shift in the technological paradigm of an economy as it approaches the world technology frontier. The model developed in this paper consists of firms which employ skilled workers as an important input in technological advancement, but the novel feature here is the entrepreneur, who is the brain of technological progress. The entrepreneur has to decide to undertake either imitative or innovative activities, of which decision both affects and is affected by the country's distance to frontier. Specifically, the entrepreneur needs to have a minimum ability threshold level in order to carry out innovation. This endogenous threshold level falls as the economy moves closer to the technological frontier, enabling more entrepreneurs to be engaged in an innovation-based strategy, and consequently, moving the economy from a technological structure that is based on imitation of foreign technologies to one where domestic innovation dominates. The transitional dynamics of the model shows that there exists a steady state distance from the world frontier that countries will eventually converge to. We also find that it is possible for countries under certain conditions, to be trapped in a regime carrying out only imitation of world technologies. Technology diffusion, innovation, entrepreneurship, growth 02 2006 51 The Singapore Economic Review 147 173 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002378 GRACE LI ANN YONG lagyong@nie.edu.sg Centre for Research in Pedagogy and Practice, National Institute of Education, 1 Nanyang Walk, Singapore 639798, Singapore KONG WENG HO kwho@ntu.edu.sg Division of Economics, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore
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article SINGAPORE AND ASEAN IN THE NEW REGIONAL DIVISION OF LABOR This paper examines the implications of international fragmentation of production for trade patterns of Singapore and the other ASEAN economies, with emphasis on their regional and global economic integration. The analysis reveals that the degree of dependence of these countries on this new global division of labor is much larger compared to the other countries of East Asia, Europe and North America. China has emerged as an important trading partner for ASEAN within regional production networks. Network-related trade in parts and components has certainly strengthened economic interdependence among ASEAN countries and between ASEAN, China and the other major economies in East Asia, but this has not lessened the dependence of growth dynamism of these countries on the global economy. The operation of the regional cross-border production networks depends inexorably on trade in final goods with North America and the European Union. Production fragmentation, multinational enterprises, trade patterns, China, ASEAN 03 2008 53 The Singapore Economic Review 479 508 http://www.worldscientific.com/doi/abs/10.1142/S0217590808003105 PREMA-CHANDRA ATHUKORALA Prema-chandra.athukorala@anu.edu.au Division of Economics, Research School of Pacific and Asian Studies, Australian National University, Canberra, ACT 0200, Australia
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article BOOK REVIEW: "Costs and Benefits of Cross-Country Labour Migration in the GMS" by Hossein Jalilian No abstract received. 05 2014 59 1480004 The Singapore Economic Review 1 4 http://www.worldscientific.com/doi/abs/10.1142/S0217590814800046 HUAILU LI Boston University, USA
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article EXPORTING AND PRODUCTIVITY: THEORY, EVIDENCE AND FUTURE RESEARCH Intervention to support export initiatives is commonplace in both industralized and developing countries. Such intervention is underpinned by the view that exporting is good for growth, typified by the success of the South East Asian tiger economies. Yet, while the evidence is largely macroeconomic, most intervention is microeconomic, targeted at specific firms or industries. Recently a new literature has developed that is microeconomic and microeconometric, exploring determinants of entry into and survival in export markets. Key within this literature is the relationship between firm productivity and exports. This paper reviews the theoretical and empirical contributions to this literature and evaluates its contribution to our understanding of the factors driving export decisions and the consequences of export market entry from both. In addition to assessing the importance of new insights being generated, this paper speculates on new directions in which the research agenda will evolve. Exporting, productivity, microeconomic, firm heterogeneity, causality spec0 2005 50 The Singapore Economic Review 303 312 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002050 DAVID GREENAWAY david.greenaway@nottingham.ac.uk School of Economics, University of Nottingham, University Park, Nottingham NG7 2RD, UK RICHARD KNELLER richard.kneller@nottingham.ac.uk School of Economics, University of Nottingham, University Park, Nottingham NG7 2RD, UK
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article Fifty Years of Development in the Singapore Economy: An Introductory Review The papers in this volume provide a retrospective analysis of Singapore's economic development during the past 50 years, from the perspectives of different policy domains. This introductory review highlights common themes among the papers, chiefly the primacy of economic growth in driving social as well as economic policies, the interconnection between different policy arenas, the persistence of a particular development model despite sharp changes in policy direction, and the dominant role of the state. The authors collectively conclude that economic policy was both innovative and effective in the first two to three decades of independence, particularly in simultaneously delivering on both rapid economic growth and improved social welfare. In more recent decades, economic growth and social welfare for a significant minority of residents have begun to diverge. Looking ahead, there appears to be a consensus that slower GDP growth, higher productivity, a relative shift from manufacturing to services and from a global to a regional market orientation, and more vibrant and innovative local private entrepreneurs, are necessary for continued economic development. There is also consensus that public policy must pay greater attention to directly meeting the growing social needs of the population, especially the poor, low-income, elderly and other vulnerable groups. 03 2015 60 1502002 The Singapore Economic Review 1 13 http://www.worldscientific.com/doi/abs/10.1142/S0217590815020026 Linda Y. C. Lim University of Michigan, USA
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article THE RELATIVE CONTRIBUTIONS OF DOMESTIC AND FOREIGN DIRECT INVESTMENTS AND EXPORTS TO MALAYSIA'S ECONOMIC GROWTH The objective of this study is to assess the roles of domestic direct investment, foreign direct investment and exports as catalysts of Malaysia's economic growth using cointegration and Granger causality test techniques. To address the dynamics in the growth relationships, the study also performs time-varying regression and variance decomposition analyses. It covers the quarterly sample period from 1991:Q1 to 2010:Q2. The econometric results suggest that all the three variables have a positive impact on economic growth and thus are catalytic to economic growth. However, the growth effect of domestic direct investment is more stable than that of the other two growth determinants. Contrary to earlier empirical studies, the variance decomposition analysis herein reveals that domestic direct investment is the most important determinant of growth in the long-run (L-R) compared to exports and foreign direct investment. Catalysts of growth, domestic direct investment, exports, FDI, Malaysia, stability, C22, E22, O16, O53 02 2015 60 1550011 The Singapore Economic Review 1 20 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500113 CHOR FOON TANG tcfoon@usm.my Centre for Policy Research and International Studies, Universiti Sains Malaysia, 11800 USM, Penang, Malaysia EU CHYE TAN Department of Economics, Faculty of Economics and Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia
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article AN ECO-ENGINEERING MATHEMATICAL MODEL FOR THE TRAFFIC CONGESTION FEE Traffic congestion is becoming a problem all over the world and physical expansion of road networks is becoming not the best option due to cost and other reasons. This paper considers the option of a congestion pricing model and explains its rationale and parametric estimation. The case of a city is studied to reflect on the potential of data collection mechanisms and public participation and awareness. Simulation, traffic congestion pricing, social marginal cost, eco-engineering model, flow speed elasticity, Intelligent Vehicle Highway Systems, C31 03 2010 55 The Singapore Economic Review 575 583 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003900 MALIK BESHIR MALIK mbmalik@umes.edu Department of Mathematics and Computer Science, University of Maryland Eastern Shore, Princess Anne, MD 21853, USA MUSTAFA BABIKER Babiker@api.org.kw Saudi Aramco, P. O. Box 5000, Dhahran 31311, Saudi Arabia
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article PRICE CONTROL REGULATION OF PRIVATIZED UTILITIES IN THE UNITED KINGDOM: WHAT LESSONS FOR THE DEVELOPING ASIAN NATIONS? Privatization of public utilities in the United Kingdom has been the key vehicle for attaining further improvement in living standards since the mid-1980s. The United Kingdom was the first of the developed nations to privatize public utilities in 1984 when it sold British Telecom (BT). In subsequent years, almost all developed and developing nations followed suit. Simultaneously, the UK's privatization initiatives established independent regulatory agencies to oversee the performance of the newly privatized natural monopolies to protect all the parties (consumers, operators and government) from any adverse consequences of privatization. Most importantly, the regulators oversee and manage the affects of privatization on price increases. This paper investigates the price control regulation of privatized utilities in the UK with a view to gaining further lessons from these experiences for the developing Asian nations where privatization of utilities is currently being seriously considered for adoption. The lessons are investigated from the economic viewpoints. Price control, Ramsey pricing, regulation, RPI-X 01 2005 50 The Singapore Economic Review 69 92 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001858 MOAZZEM HOSSAIN m.hossain@griffith.edu.au Department of International Business and Asian Studies, Griffith Business School, Griffith University, Nathan 4111, Australia
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article ADVANCE TAX PAYMENT AND TAX EVASION: EXPECTED UTILITY ANALYSIS The traditional theoretical analysis of tax evasion fails to explain the empirical finding that declared income decreases with the tax rate. We show that one of the reasons for this result is that many such studies overlook advance tax payments in their analyses. Furthermore, we investigate how advance tax payments influence the extent of tax evasion. We conclude that the influence of advance tax payments on the extent of tax evasion depends on whether an individual's preference is based on expected utility theory or prospect theory. Advance tax payments, expected utility theory, tax evasion, H21, H26 02 2014 59 1450014 The Singapore Economic Review 1 8 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500143 KEISUKE MORITA kmorita@kanagawa-u.ac.jp Faculty of Economics, Kanagawa University, 3-27-1, Rokkakubashi, Kanagawa-ku, Yokohama-shi, Kanagawa, 221-8686, Japan
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article INSULATION OF INDIA FROM THE EAST ASIAN CRISIS: AN ANALYSIS This paper investigates the effects of the East Asian crisis on the Indian economy and exchange rate movements. Despite the contagion effects that profoundly affected the other crisis-hit countries, the Indian economy and the rupee were found less affected. Reforms after the 1990–1991 crisis, control of capital flows, weak economic linkages with crisis-affected countries and stabilization policies that include intervention in the foreign exchange market and tightening of monetary policy are reasons for the insulation of the Indian economy from the crisis. Contagion, currency pressure, liberalization and reforms, policy intervention 03 2007 52 The Singapore Economic Review 419 443 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002737 PAMI DUA dua@econdse.org Department of Economics, Delhi School of Economics, University of Delhi, Delhi 110007, India ARUNIMA SINHA Department of Economics, Columbia University, New York, NY, USA
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article GREEK LABOR MARKET, THE EURO AND THE CURRENT CRISIS This paper is based on two strands of relative literature. The first examines the effect of sticky wages on international trade, unemployment and trade policy. The second strand looks at the effect of the exchange rate on wages. Related to this literature is the discussion in the European Union on establishing a common currency. In this paper, a theoretical and empirical model is developed which is tested using the Greek Labor Market as a case study. Also, a policy section discuss the options available to both the Greek policy makers and the leaders of Greek trade unions. Trade Unions, Greece, Euro 04 2014 59 1450032 The Singapore Economic Review 1 27 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500325 GREGORY T. PAPANIKOS gtp@atiner.gr Department of Economics, University of Stirling, U.K.; Athens Institute for Education & Research (ATINER), Greece. 8 Valaoritou Street, 10671 Kolonaki, Athens, Greece
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article EMINENT PAPER SERIES — WHY DO INVENTORIES RISE WHEN DEMAND FALLS IN HOUSING AND OTHER MARKETS? Inventories and price changes are correlated. The inverse relation is most obvious in housing where inventories build in low-demand markets and shrink in high-demand markets. This is a puzzle. Symmetry of information among buyers and sellers would seem to imply that sellers would change their reservation value by the amount that buyers change their offers. Because there is heterogeneity among buyers in the valuation of a given house, sellers set prices strategically. When demand falls, sellers rationally lower their prices, but not by enough to keep the probability of sale constant. As a result, inventories grow. Housing, inventories, unemployment, vacancies, market, clearing prices, stochastic, demand, D4, R3, M5, L0 02 2012 57 1250007 The Singapore Economic Review 1 34 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500075 EDWARD P. LAZEAR lazear@stanford.edu Graduate School of Business, 518 Memorial Way, Stanford University, Stanford, CA 94305-5015, USA; Hoover Institution, 434 Galvez Mall, Stanford University, Stanford, CA 94305-6010, USA
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article BOOK REVIEW: "Singapore Trade, Investment and Economic Performance" edited by Ramkishen S Rajan and Shandre M Thangavelu No abstract received. 03 2010 55 The Singapore Economic Review 597 598 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003936 SNG HUI YING Nanyang Technological University, Singapore
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article DETERMINANTS OF LEISURE-TIME PHYSICAL ACTIVITY: EVIDENCE FROM MALAYSIA This paper examines how socio-demographic and health-lifestyle factors determine participation and duration of leisure-time physical activity in Malaysia. Based on the Malaysia Non-Communicable Disease Surveillance-1 data, Heckman's sample selection model is employed to estimate the probability to participate and duration on physical activity. Results indicate that gender, age, years of education and family illness history are significant in explaining participation probability in leisure-time physical activity. Gender, income level, smoking-status and years of education are significant in explaining the weekly duration conditional on participation, whereas smoking-status and years of education are significant in determining the unconditional level of leisure-time physical activity. Duration, leisure-time physical activity, Malaysia, participation probability, sample selection model, I10 02 2014 59 1450017 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500179 YONG KANG CHEAH cheahykang@gmail.com School of Economics, Finance and Banking, College of Business, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah Darul Aman, Malaysia ANDREW K. G. TAN atan@usm.my School of Social Sciences, Universiti Sains Malaysia, 11800 Penang, Malaysia
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article AGE PREFERENCES FOR LIFE-SAVING PROGRAMS: USING CHOICE MODELING TO MEASURE THE RELATIVE VALUES OF STATISTICAL LIFE This study employed the survey-based choice modeling (CM) approach to determine people's age preferences for life-saving programs in Metro Manila, Philippines. Two social welfare models — social welfare as a function of the number of lives saved in each of the age groups (Model 1) and social welfare as a function of the number of lives saved irrespective of age and total life-years saved (Model 2) — were specified and ran using binary probit regression. Our results from both models indicate a general preference for saving younger lives. Based on Model 1 estimates, saving a child aged below one year was considered to be equivalent to saving four retirees (60 years old and above), and saving a life in the 1–19 years age group was equivalent to saving five retirees. The working age group's (20–59 years old) life was judged equivalent to three lives in the retired age group. Regression results for Model 2 indicated that both number of lives and total number of life-years saved (and hence age group of lives saved) significantly affected the choices of the respondents. Relative value of statistical life, choice modeling, life-saving programs, I18, Q51, C25, C83 02 2013 58 1350008 The Singapore Economic Review 1 15 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500082 ROSALINA PALANCA-TAN rtan@ateneo.edu Department of Economics, Ateneo de Manila University, 4th Floor, Leong Hall, Loyola Heights, Quezon City, Philippines 1108, Philippines
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article ESTIMATING THE EMPLOYMENT PERFORMANCE INDICATOR: THE CASE OF UNIVERSITI UTARA MALAYSIA GRADUATES This paper proposes an alternate method of estimating the employment performance indicator using the Cox Proportional Hazard model with competing risk framework. Simple aggregation and the logit model have also been used in the estimating for comparison purpose. Using the data of Universiti Utara Malaysia graduates, the study finds that the Bachelor of Accounting degree has the highest employment performance indicator. There are significant differences found in the employment performance ranking as constructed by the proportional hazard model, logit model and simple aggregation. Employment performance indicator, Cox Proportional Hazard model, graduate employment 01 2007 52 The Singapore Economic Review 73 91 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002579 HOCK-EAM LIM lheam@uum.edu.my Faculty of Economics, Universiti Utara Malaysia, 06010, Sintok, Kedah, Malaysia; Department of Economics, Monash University, Clayton, Australia
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article SINGAPORE'S EXCHANGE RATE POLICY: SOME IMPLEMENTATION ISSUES Reflecting the small open nature of its economy, Singapore has adopted an exchange rate-centered monetary policy framework since 1981. The exchange rate regime in Singapore is an intermediate regime that follows the basket-band-crawl system. With this managed float system, the MAS has successfully deterred speculators from attacking the domestic currency for most of the past three decades. At the same time, the flexibility accorded by the managed float system aided Singapore in escaping from the 1997–1998 Asian crisis relatively unscathed. In order to advance our understanding of the hitherto successful operation of Singapore's exchange rate policy, we examine the following three aspects of its implementation: (i) the use of the exchange rate instead of the interest rate as the key monetary policy instrument; (ii) the management of the currency basket in terms of foreign exchange intervention operations; and (iii) regulating the level of domestic liquidity alongside exchange rate policy. This paper also provides some insights on the challenges ahead that potentially face policymakers when implementing Singapore's exchange rate policy. Exchange rate targeting, intervention operations, domestic liquidity 03 2007 52 The Singapore Economic Review 445 458 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002701 HWEE-KWAN CHOW hkchow@smu.edu.sg School of Economics, Singapore Management University, 90 Stamford Road, Singapore 178903, Singapore
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article STRENGTHENING INTELLECTUAL PROPERTY RIGHTS GLOBALLY: IMPACT ON INDIA'S PHARMACEUTICAL EXPORTS This paper examines the impact of stronger protection for intellectual property on the exports of a technologically imitative country such as India. The Indian experience in pharmaceutical exports can further add to the existing literature, which is otherwise largely limited to the experience of OECD countries and the USA. The empirical analysis suggests that even an imitative developing country's exports need not be negatively affected by strengthening patent regime globally, and in fact, in the case of pharmaceuticals, India stands to benefit from market expansion effects. However, this finding in the case of pharmaceutical products cannot be argued to hold for other sectors of the Indian economy, and any generalization on overall impact of stronger patent regime on aggregate exports from the Indian economy must be based on further sectoral studies. Intellectual property rights, pharmaceutical exports 02 2007 52 The Singapore Economic Review 233 250 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002671 JAYA PRAKASH PRADHAN pradhanjayaprakash@gmail.com Institute for Studies in Industrial Development, 4 Institutional Area, P. B. No. 7513, Vasant Kunj, New Delhi-110 070, India
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article INTERACTING BUSINESS CYCLE FLUCTUATIONS: A TWO-COUNTRY MODEL In this paper, we develop a model of business cycle fluctuations between two interacting open economies within the disequilibrium or non-market clearing paradigm. We analyze the main feedback mechanisms (Keynes, Mundell, Rose and Dornbusch) driving the dynamics and the conflict between their stabilizing and destabilizing tendencies and how these depend on certain key speeds of adjustment in the real and foreign exchange sectors. We explore numerically a variety of situations of interacting price cycles in the two countries, where the steady state is locally repelling, but where the overall dynamics are bounded in an economically meaningful domain by assuming downward money wage rigidity. International business cycles, stability, instability, persistence, coupled oscillators 03 2006 51 The Singapore Economic Review 365 394 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002433 CARL CHIARELLA School of Finance and Economics, University of Technology, Sydney, Australia PETER FLASCHEL pflaschel@wiwi.uni-bielefeld.de Department of Economics and Business Administration, Bielefeld University, P. O. Box 100131, 33501 Bielefeld, Germany HING HUNG School of Finance and Economics, University of Technology, Sydney, Australia
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article DETERMINANTS OF INNOVATIVE ACTIVITIES: EVIDENCE FROM EUROPE AND CENTRAL ASIA REGION Recent studies in the innovation literature show that Foreign Direct Investment (FDI) enhances innovations in recipient countries through spill-over effects. In this paper we extend the existing literature by incorporating the corruption index in the estimation procedure. Using a cross-country analysis from the Europe and Central Asia (ECA) region, covering 57 countries over the period of 1995–2010, we find no evidence of FDI spill-over effects on innovations, when corruption is endogenously modelled in the regression. Interestingly, we find that corruption and expenditure on education sector are positively related to the number of patents applications, suggesting anti-corruption programs encourage innovations that promote economic growth. Our study shed light on the national innovations and anti-corruption programs. Foreign direct investment, corruption, innovation, technology transfer, O32, O34, O38, F21, D73 01 2015 60 1550004 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500046 CHI KEUNG MARCO LAU chi.lau@northumbria.ac.uk Newcastle Business School, Northumbria University, Newcastle, UK FU STEVE YANG steve.yang@centennialcollege.hku.hk School of Management, Centennial College, 3 Wah Lam Path, Pokfulam, Hong Kong ZHE ZHANG zhe.zhang@eku.edu Department of Management, Marketing and International Business, School of Business, Eastern Kentucky University, Kentucky, USA VINCENT K. K. LEUNG vincentleung@hkbu.edu.hk Department of Marketing, School of Business, Hong Kong Baptist University, Hong Kong
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article BOOK REVIEW: "Review of An Introduction to Econographicology" by Mario Arturo Ruiz Estrada No abstract received. 04 2012 57 1280014 The Singapore Economic Review 1 4 http://www.worldscientific.com/doi/abs/10.1142/S0217590812800148 HIROAKI HAYAKAWA Faculty of Policy Studies, Chuo University, Tokyo, Japan
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article RECURSIVE PREFERENCE, MOOD FLUCTUATION AND WELFARE COST OF REDUCED GROWTH This paper studies the mood fluctuation of a typical consumer with recursive preference and the welfare cost of reduced growth and business cycle. We estimate the welfare cost using discrete recursive function as well as conduct simulation in order to compare our results with other existing research findings. Our findings are in line with traditional literature whereby the welfare cost of reduced growth is larger than that of business cycle; but our results show that these past measures understate the welfare cost of reduced growth and business cycle. Recursive preference, mood fluctuation, economic growth, welfare cost 02 2009 54 The Singapore Economic Review 263 281 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003331 ZHIYONG DONG dzy@pku.edu.cn School of Economics, Peking University, Beijing, 100871, China QINGYANG GU mqygu@ntu.edu.sg Economics Division, School of Social Sciences and Humanities, Nanyang Technological University, Singapore 639798, Singapore XIAOMING ZHU Toulouse School of Economics, University de Toulouse, France
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article OFFSHORING, OUTSOURCING AND PRODUCTION RELOCATIONS — LABOR MARKET EFFECTS IN THE OECD AND DEVELOPING ASIA This paper evaluates data validity of available empirical sources and the extent of services sector labor market impact of offshoring in the US, EU-15 and Japan. A three-tier data validity hierarchy is identified, while the employment impact of offshoring in the three regions is found to be limited. Correspondingly, developing Asia is unlikely to experience large-scale employment gains as a destination region. Instead, the crucial role of domestic entrepreneurs in the growth of the Indian IT-related services industry is highlighted, as are the twin educational challenges facing developing Asia: the need to improve both primary and higher education simultaneously. Services sectors, offshoring, production relocation, data source validity, automation, highly skilled workers 03 2008 53 The Singapore Economic Review 371 418 http://www.worldscientific.com/doi/abs/10.1142/S021759080800304X JACOB F. KIRKEGAARD jkirkegaard@petersoninstitute.org Peter G. Peterson Institute for International Economics, 1750 Massachusetts Avenue, NW, Washington, D.C. 20036-1903, USA
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article EFFECTS OF CORPORATE AND COUNTRY GOVERNANCE ON R&D INVESTMENT: EVIDENCE FROM EMERGING MARKETS We investigate how corporate governance influences R&D across 13 emerging markets. We find that superior corporate governance increases corporate R&D spending. These results suggest that corporate governance may influence management's discretion to avoid risky innovative projects. We also find that the link between firm-level governance and corporate R&D is stronger in countries with weaker country-level governance. These results suggest substitutability between firm and country governance in generating innovation activities. Corporate governance, emerging market, innovation, G15, G24, G38 01 2015 60 1550003 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500034 IFTEKHAR HASAN ihasan@fordham.edu Fordham University — Gabelli School of Business, 5 Columbus Circle, New York, NY 10019, United States; Bank of Finland, P. O. Box 160, Helsinki, 00101 FI, Finland STEVEN RAYMAR raymar@fordham.edu Fordham University — Gabelli School of Business, 5 Columbus Circle, New York, NY 10019, United States LIANG SONG liangs@mtu.edu Michigan Technological University, 1400 Townsend Dr. Houghton, M149931, United States
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article BOOK REVIEW: "REVIEW OF INCLUSIVE, BALANCED, SUSTAINED GROWTH IN THE ASIA PACIFIC" No abstract received. 02 2012 57 1280006 The Singapore Economic Review 1 5 http://www.worldscientific.com/doi/abs/10.1142/S0217590812800069 HANK LIM Singapore Institute of International Affairs (SIIA), Singapore
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article THE LINKAGE BETWEEN EXPORT AND INCOME: FURTHER EVIDENCE FROM BANGLADESH This article empirically re-examines the export-led growth hypothesis in the context of Bangladesh using the quarterly data from 1973:1 to 2005:4. The standard time series econometric techniques, such as cointegration and Granger causality tests within the error correction modelling (ECM) are used for this purpose. The results from cointegration analysis suggest that there is stable long-run relationship between exports and income and the results from Granger causality test based on the ECM shows unidirectional causal relationship between exports and income. Thus, these results validate the country's export expansion programs to achieve long-run income growth. Cointegration, error correction model, export-income relationship, Granger causality, C22, F10 01 2011 56 The Singapore Economic Review 79 95 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004110 RUHUL A. SALIM Ruhul.Salim@cbs.curtin.edu.au School of Economics & Finance, Curtin Business School (CBS), P. O. Box U1987, Curtin University, Perth, WA 6845, Australia MOHAMMAD A. HOSSAIN Department of Economics, Jahangirnagar University, Savar, Dhaka, Bangladesh
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article GLOBALIZATION AND SOCIAL JUSTICE Globalization enhances efficiency and economic growth and expands the domain of personal contact and communication. Nonetheless, globalization has also evoked discontent because of claimed social injustice. The relation between globalization and social justice therefore merits attention, in order to identify whether justifications for discontent are present and, if there are reasons for discontent, to establish whether globalization should be blamed. Globalization, social justice, trade liberalization, culture, social insurance, immigration, income distribution, international agencies, national government 02 2008 53 The Singapore Economic Review 173 189 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002896 ARYE L. HILLMAN hillman@mail.biu.ac.il Department of Economics, Bar-Ilan University, Ramat Gan 52900, Israel
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article MALAYSIA'S ECONOMIC GROWTH AND DEVELOPMENT: CHALLENGES AND THE WAY FORWARD The paper reviews the economic growth and development experience of Malaysia since her early independence years against the major economic policy initiatives that she has undertaken over the years. It then tries to link those policy initiatives to the various economic growth theories. Subsequently, it dwells upon the various challenges faced by Malaysia to join the ranks of high income nations. Growth, development, JEL Classification: 010, JEL Classification: 011, JEL Classification: 040, JEL Classification: 053 03 2014 59 1450023 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500234 EU CHYE TAN Faculty of Economics & Administration, University of Malaya, Lembah Pantai, 50603 Kuala Lumpur, Malaysia
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article BOOK REVIEW: "Review of Borderless Economics: Chinese Sea Turtles, Indian Fridges, and the New Fruits of Global Capitalism" by Robert Guest No abstract received. 04 2012 57 1280011 The Singapore Economic Review 1 4 http://www.worldscientific.com/doi/abs/10.1142/S0217590812800112 CONRAD CHOU Duke University, NC, USA
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article A 3-BLOC DANCE: EAST ASIAN REGIONALISM AND THE NORTH ATLANTIC TRADE GIANTS No abstract received. Regionalism, multilateralism, Domino theory, Hub and spoke FTAs 01 2010 55 The Singapore Economic Review 27 47 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003596 RICHARD BALDWIN richard.baldwin@graduateinstitute.ch The Graduate Institute, 11a Ave de la Paix, 1202, Geneva, Switzerland THERESA CARPENTER The Graduate Institute, 11a Ave de la Paix, 1202, Geneva, Switzerland
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article FOREIGN ENCLAVES, INFORMAL SECTOR AND URBAN UNEMPLOYMENT: A THEORETICAL ANALYSIS We consider a small open Harris-Todaro (1970) economy with a rural foreign enclave and urban informal sector. We introduce consumption-efficiency relation to explain the simultaneous existence of informal sector and urban unemployment. The main objective of this paper is to analyse the effects of removal of subsidy, given to the foreign enclave, on urban unemployment and on domestic factor income. Our results shed light on the debate: whether subsidies should be removed from the agri-export sector. Foreign enclaves, informal sector, urban unemployment 01 2009 54 The Singapore Economic Review 89 99 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003136 TITAS KUMAR BANDOPADHYAY titasban@yahoo.co.in Bagnan College, P. O. Bagnan, Dist. Howrah, West Bengal, India
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article THE BUDGET DEFICIT AND ECONOMIC PERFORMANCE: A SURVEY The relationship between budget deficits and macroeconomic variables (such as growth, interest rates, trade deficit, exchange rate, among others) represents one of the most widely debated topics among economists and policy makers in both developed and developing countries. However, the purpose of this paper is to review the extensive literature to such a relationship, concentrating on theoretical debates and empirical studies, in order to derive substantive conclusions, which can be beneficial in the macroeconomics area; policy analysis; or in terms of constructing or developing a macroeconomic model for analyzing the impact of budget deficits on macroeconomic variables. The majority of these studies regress a macroeconomic variable on the deficit variable. These studies are cross-country and utilize time series data. In general the key outcomes from the studies presented in this paper indicated that both the method of financing and the components of government expenditures could have different effects. Therefore, it is crucial for the government to distinguish between consumption and investment expenditures especially when the government is in the process of evaluating the impact of fiscal policy on private investment and output growth or in the process of cutting expenditures to reduce the fiscal imbalances in the country. Even though the overall results from the empirical literature with respect to the impact of public investment on private investment and growth are ambiguous, the bulk of the empirical studies find a significantly negative effect of public consumption expenditure on growth, while the effects of public investment expenditure (such as on education, healthcare) are found to be positive although less robust. The key findings from these studies is important in particular for developing countries to be aware of the importance of government investment expenditures in the area of education, healthcare, infrastructure to long-term economic growth and the benefits from which are an important contributor to welfare and well-being. The key outcome from all of the studies presented in this paper while investigating the relationship between the budget deficit and current account deficit showed strong evidence in both developed and developing countries towards supporting the Keynesian proposition (conventional view) which suggests that an increase in the budget deficit would induce domestic absorption and, hence import expansion, causing a current account deficit. The key findings from the empirical studies investigating the relationship between the budget deficit and interest rates indicated strong evidence towards supporting the Keynesian model of a significant and positive relationship between budget deficits and interest rates. The major outcomes from the empirical studies examining the relationship between budget deficits and inflation showed strong evidence that the budget deficit financed through monetization and a rising money supply could lead to inflation. Budget deficit, macro outcomes, survey, theory, empirical evidence 02 2005 50 The Singapore Economic Review 211 243 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001986 ALI SALMAN SALEH saleh.asalman@buseco.monash.edu.my School of Business, Monash University Malaysia, No. 2, Jalan Kolej, Bandar Sunway, 46150 Petaling Jaya, Selangor, Malaysia CHARLES HARVIE charles_harvie@uow.edu.au School of Economics and Information Systems, University of Wollongong, Australia
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article BOOK REVIEW: "APEC in the 21st Century", edited by Riyana Miranti and Dennis Hew No abstract received. 03 2006 51 The Singapore Economic Review 405 408 http://www.worldscientific.com/doi/abs/10.1142/S021759080600241X AMINA TYABJI Department of Economics, National University of Singapore, Singapore
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article BOOK REVIEW: "Production Networks and Industrial Clusters, Integrating Economies in Southeast Asia" edited by Ikuo Kuroiwa and Toh Mun Heng No abstract received. 02 2010 55 The Singapore Economic Review 411 413 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003791 KAMPON ADIREKSOMBAT Nanyang Technological University, Singapore
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article BOOK REVIEW: "Advancing Singapore-China Economic Relations" No abstract received. 02 2015 60 1580003 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S021759081580003X YEW-KWANG NG Division of Economics, Nanyang Technological University, Singapore
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article DOES TRADE IN INTERMEDIATE GOODS INCREASE OR DECREASE WAGE INEQUALITY? This paper develops two models to study the impact of trade in intermediate goods on wage inequality between skilled and unskilled labor in a developed country and a developing country. The first model assumes symmetric production technologies in the intermediate good. It predicts that trade in the intermediate good will increase wage inequality in the developed country, but decrease wage inequality in the developing country. The second model assumes asymmetric technologies in the intermediate good. It predicts that trade in the intermediate good can lead to an increase in wage inequality in both the developed country and the developing country. Wage inequality, outsourcing, developing countries 02 2007 52 The Singapore Economic Review 201 213 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002658 WENLI CHENG wenli.cheng@buseco.monash.edu.au Department of Economics, Monash University, Caulfield East, VIC 3145, Australia DINGSHENG ZHANG China Economics and Management Academy, Central University of Finance and Economics, China
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article REFORM OF THE INTERNATIONAL FINANCIAL ARCHITECTURE: AN ASIAN PERSPECTIVE This is a substantially revised version of the paper presented to the Symposium on Asian Economic Integration organized by Nanyang Technology University in Singapore, 4–5 September 2008. The author is grateful to Teresa Carpenter for providing comments on an earlier version and to Pradumna B. Rana for encouraging him to update the paper with the discussion of recent international financial architecture reforms in response to the global financial crisis of 2007–2009. He also acknowledges competent editorial assistance by Barnard Helman. The findings, interpretations, and conclusions expressed in the paper are entirely those of the author alone and do not necessarily represent the views of the Asian Development Bank, its Institute, its executive directors, or the countries they represent. Asian financial crisis, global financial crisis, international financial architecture, IMF, CMI, F30, F32, F33, F34, F53, F55 01 2010 55 The Singapore Economic Review 207 242 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003675 MASAHIRO KAWAI mkawai@adbi.org Asian Development Bank Institute, Kasumigaseki Building 8F, 3-2-5 Kasumigaseki, Chiyoda-ku, Tokyo 100-6008, Japan
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article ECONOMETRIC ANALYSIS OF PANEL DATA: EDITORIAL INTRODUCTION No abstract received. 03 2009 54 The Singapore Economic Review 313 317 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003355 JAN F. KIVIET j.f.kiviet@uva.nl Tinbergen Institute and Department of Quantitative Economics, University of Amsterdam, The Netherlands
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article IMPORTANT LESSONS FROM STUDYING THE CHINESE ECONOMY In 1979 the United States and China established normal diplomatic relations, allowing me to visit China and study the Chinese economy. After doing so for 30 years since and advising the government of Taiwan in the 1960s and the 1970s and the government of the People's Republic of China in the 1980s and the 1990s, this is an opportune moment for me to summarize the important lessons I have learned. The lessons will be summarized in four parts: on economic science, on formulating economic policy and providing economic advice, on the special characteristics of the Chinese economy and on the experience of China's economic reform.At the beginning, I should comment on the quality of Chinese official data on which almost all quantitative studies referred to in this article were based. Chow (2006) has presented the view that by and large the official data are useful and fairly accurate. The main justification is that every time I tested an economic hypothesis or estimated an economic relation using the official data the result confirmed the well-established economic theory. It would be a miracle if I had the power to make the Chinese official statisticians fabricate data to support my hypotheses. Even if I had had the power, most of the data had already been published for years before I conceived the ideas of the studies reported in this article. China, economic science, research, policy advice, D0, E0, P2 03 2010 55 The Singapore Economic Review 419 434 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003821 GREGORY C. CHOW Princeton University, USA
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article ECONOMIC THEORY AND THE EAST ASIAN REGION This paper attempts to explain why growth rates and why growth levels differ so much among the 17 economies in East Asia. The EGOIN theory, the Triple C Theory and the S Curve Theory are used in the explanation. The three hypotheses in the three cognate theories are also tested for their general validity against the growth experiences of the 17 economies. Four statistical tables and six specially prepared graphs are used to support the author's presentation. EGOIN, S Curve Theory, Triple C Theory, China, Japan, East Asia, Trinity Growth Theory spec0 2005 50 The Singapore Economic Review 495 512 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002177 LIM CHONG YAH ACYLIM@ntu.edu.sg National University of Singapore, Singapore; Nanyang Technological University, School of Humanities & Social Sciences, S3-01B-38, Nanyang Avenue, Singapore 639798, Singapore
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article BOOK REVIEW: "Review of Growth of Economics in the Twentieth Century: Theories and Practices" edited by K. Puttaswamaiah No abstract received. 01 2012 57 1280003 The Singapore Economic Review 1 5 http://www.worldscientific.com/doi/abs/10.1142/S0217590812800033 DAVID REISMAN Nanyang Technological University, Singapore
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article MULTIVARIATE TOBIT SYSTEM ESTIMATION OF EDUCATION EXPENDITURE IN URBAN CHINA Using the 2007 education survey data in urban China, this paper measures the inequality of education expenditures, an indicator of education inequality, and analyzes the effect of household income on the components of education expenditures. Since the components of education expenditure are censored and inter-related, this paper runs a multivariate Tobit system regression of five categories of education expenditures. Our results imply that household income per capita positively affects expenditure on boarding, private tutoring and costs for selecting schools but does not affect expenditure on textbooks. In return, the inequality of education expenditures contribute to income inequality in urban China. Education expenditure, urban China, multivariate tobit, JEL Classifications: C30, JEL Classifications: I24, JEL Classifications: I28, JEL Classifications: J31, JEL Classifications: O15, JEL Classifications: R23 01 2014 59 1450005 The Singapore Economic Review 1 14 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500052 QUHENG DENG dengqh@cass.org.cn Institute of Economics, Chinese Academy of Social Sciences, 2 Yuetan Beixiaojie, Beijing 100836, China JINJUN XUE setsu@soec.nagoya-u.ac.jp Graduate School of Economics, Nagoya University, Furo-cho, Chikusa-ku, Nagoya 464-8601, Japan
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article SAVINGS BEHAVIOR IN INDIA: CO-INTEGRATION AND CAUSALITY EVIDENCE This study investigates the determinants of savings behavior in India and the direction of causality between savings and income per capita as these have important implications for development policy. We estimate long-run savings functions for India using modern co-integration procedures. Our empirical results show that higher income per capita and improved access to banking facilities significantly improves savings in India. On the other hand, foreign savings and public savings have negative impact on private and household savings. We also carry out an analysis of the direction of causality between savings and income. The results suggest that there is a one-way causation from income per capita to the savings rate. Savings, growth, India, causality, co-integration, E21, O16 02 2010 55 The Singapore Economic Review 273 295 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003717 PRADEEP AGRAWAL pradeep@iegindia.org Reserve Bank of India (RBI) Endowment Unit, Institute of Economic Growth, Delhi University Enclave, Delhi 110007, India SAHOO PRAVAKAR Reserve Bank of India (RBI) Endowment Unit, Institute of Economic Growth, Delhi University Enclave, Delhi 110007, India RANJAN KUMAR DASH Reserve Bank of India (RBI) Endowment Unit, Institute of Economic Growth, Delhi University Enclave, Delhi 110007, India
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article EFFICIENCY WAGE THEORY: EVIDENCE FOR SINGAPORE MANUFACTURING SECTOR This paper attempts to test whether there is econometric evidence in support of the efficiency wage theory in Singapore's manufacturing sector. Two of the possible ways to account for efficiency wages are to show that higher wages have resulted in reduced shirking by workers, and to show that higher wages have resulted in an increase in worker productivity. We find evidence in support of efficiency wages for three out of 18 industries within the manufacturing sector in Singapore based on both ordinary least square (OLS) and 2SLS regression results, and for another two industries based only on OLS and yet another two industries based only on 2SLS. Efficiency wage, shirking model, Singapore manufacturing sector, wages and productivity, JEL Classification: A10, JEL Classification: C25, JEL Classification: E24, JEL Classification: J08, JEL Classification: J30 03 2014 59 1450021 The Singapore Economic Review 1 12 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500210 SIN-CHET CHUA scchua1@e.ntu.edu.sg Division of Economics, School of Humanities and Social Sciences, College of Humanities, Arts, & Social Sciences, Nanyang Technological University, 14 Nanyang Drive, Singapore 637332, Singapore YUN-WEN LIM llim6@e.ntu.edu.sg Division of Economics, School of Humanities and Social Sciences, College of Humanities, Arts, & Social Sciences, Nanyang Technological University, 14 Nanyang Drive, Singapore 637332, Singapore TENG-TENG TER ttter1@e.ntu.edu.sg Division of Economics, School of Humanities and Social Sciences, College of Humanities, Arts, & Social Sciences, Nanyang Technological University, 14 Nanyang Drive, Singapore 637332, Singapore SOON-BENG CHEW ASBCHEW@ntu.edu.sg Division of Economics, School of Humanities and Social Sciences, College of Humanities, Arts, & Social Sciences, Nanyang Technological University, 14 Nanyang Drive, Singapore 637332, Singapore
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article COST CONTAINMENT AND ACCESS TO CARE: THE SHANGHAI HEALTH CARE FINANCING MODEL The medical savings account (MSA) model of health care financing is viewed as a health care cost containment strategy. Yet, health care expenditure in Shanghai has increased sharply since the adoption of the MSA system. This paper looks into the health care reforms in Shanghai, especially since the introduction of the MSA scheme.From the Labor Insurance Scheme and Government Insurance Scheme to the Medical Savings Account scheme, ordinary Shanghai residents have not benefited from the most recent health care reforms. They have found medical care much less affordable. Disparity in access to health care access has become more evident than ever. Meanwhile, health care cost has increased sharply. China has benefited from an emphasis on prevention and primary care, but the government's recent policies give a high priority to catastrophic disease. This is not a cost-effective approach. Shanghai's health care system needs to break socioeconomic class boundaries if it is to construct a harmonious society. Shanghai's decision makers and various stakeholders have the resources and wisdom to face the challenge. Cost containment, health care insurance, medical savings accounts, health care access, Shanghai 01 2008 53 The Singapore Economic Review 27 41 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002823 WEIZHEN DONG weizhen@uwaterloo.ca University of Waterloo, 200 University Avenue West, Waterloo, Ontario N2L 3G1, Canada; State Innovative Institute for Public Management and, Public Policy Studies at Fudan University, China
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article PATTERNS OF EXCHANGE RATES AND CURRENT ACCOUNTS: THE EAST ASIAN WALTZ The Global Financial Crisis of 2008 and the Asian Financial Crisis of 1997–1998 have a common trait, that is any shock to the financial system or market system can cause the system or market to flip from one state to another state. Network effect, feedback mechanism, collective behavior, C45, E61, F36 02 2012 57 1250009 The Singapore Economic Review 1 34 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500099 ANDREW SHENG as@andrewsheng.net Faculty of Economics & Administration, University of Malaya, Kuala Lumpur, Malaysia; Graduate School of Economics and Management, Tsinghua University, Beijing, China KIAN TENG KWEK ktkwek@um.edu.my Graduate School of Economics and Management, Tsinghua University, Beijing, China CHO WAI CHO chowai.cho@taylors.edu.my Taylor's University, Selangor, Malaysia
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article INCOME EQUALITY IN A COURSE OF INDONESIAN DEVELOPMENT Indonesia has done remarkably well in the areas of both economic growth and poverty reduction. However, the economic situations differ significantly among Indonesian provinces. Some provinces have already developed well, while the rest have been left behind. The variation in the situations will generate a synthetic long-run time series data of economic development as a whole and enable us to find out when income equality starts to improve in a course of economic development. Agricultural wage rates, surplus labor, poverty line, Gini index, JEL Classification: O15, JEL Classification: O18, JEL Classification: J43 01 2014 59 1450006 The Singapore Economic Review 1 15 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500064 SUSUMU HONDAI shondai@nifty.com Graduate School of International Cooperation Studies, Kobe University, 2-1 Rokkodai, Nada-ku, Kobe 657-8501, Japan
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article ADDING A BASIC PILLAR TO THE CENTRAL PROVIDENT FUND SYSTEM: AN ACTUARIAL ANALYSIS The Central Provident Fund (CPF) system has worked well for majority of Singaporeans who are able to work consistently over their life cycle and have made prudent housing choices. However, the inherent structure of CPF, which is based purely on contributions, is unable to address retirement adequacy for its vulnerable members. Adding a means-tested non-contributory basic pillar to the system will make the system more inclusive. This paper studies the pension cost of a targeted old-age income support system for needy elderly to help meet their basic living expenses. A Lee–Carter stochastic model is used to forecast the elderly population. Pension costs depend on coverage and benefit levels and the cost of living adjustments. The viability of a basic retirement support scheme would also depend on the speed of ageing and the rate of economic growth. Basic retirement expenditure, demographics, needy elderly, pension cost, economic growth 03 2015 60 1550037 The Singapore Economic Review 1 26 http://www.worldscientific.com/doi/abs/10.1142/S021759081550037X NGEE-CHOON CHIA ecscnc@nus.edu.sg Department of Economics, National University of Singapore, Singapore
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article TRADE INTENSITY AND BUSINESS CYCLE SYNCHRONIZATION: THE CASE OF EAST ASIAN COUNTRIES This paper examines whether increasing trade intensities among East Asian countries have led to a synchronization of business cycles. It extends the work of Shin and Wang (2004) in two ways: by improving the specification of their business cycle correlation equation and by extending the sample to cover the post-crisis period. The study finds that intra-industry trade, rather than inter-industry trade, is the major factor in explaining business cycle co-movements in East Asia. This result has important implications for the prospects of introducing a single currency in the region. Economic integration, trade intensity, intra-industry trade, business cycle synchronization, East Asia 02 2008 53 The Singapore Economic Review 279 292 http://www.worldscientific.com/doi/abs/10.1142/S021759080800294X PRADUMNA B. RANA prana@ntu.edu.sg Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore
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article BOOK REVIEW: "Review of Divided Over Thaksin: Thailand's Coup and Problematic Transition" edited by John Funston No abstract received. 02 2012 57 1280008 The Singapore Economic Review 1 4 http://www.worldscientific.com/doi/abs/10.1142/S0217590812800082 PAVIN CHACHAVALPONGPUN ASEAN Studies Centre, Institute of Southeast Asian Studies, Singapore
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article BOOK REVIEW: "Stochastic Optimal Control and the U.S. Financial Debt Crisis" by Stein JL No abstract received. 02 2014 59 1480001 The Singapore Economic Review 1 5 http://www.worldscientific.com/doi/abs/10.1142/S0217590814800010 SERGE REY University of PAU et Pays de l'Adour, France
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article BOOK REVIEW: "Working with Nature against Poverty: Development, Resources and the Environment in Eastern Indonesia" edited by Resosudarmo, BP and D Jotzo No abstract received. 01 2011 56 The Singapore Economic Review 157 158 http://www.worldscientific.com/doi/abs/10.1142/S021759081100416X DAVID REISMAN Nanyang Technological University, Singapore
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article BOOK REVIEW: "Japan's Role in Asia: Mutual Development or Ruthless Competition (4th Ed.)", by Lim Hua Sing No abstract received. 03 2006 51 The Singapore Economic Review 411 413 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002391 DAVID REISMAN Nanyang Technological University, Singapore
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article BOOK REVIEW: "Singapore's Success: Engineering Economic Growth" by Henri Ghesquiere No abstract received. 01 2007 52 The Singapore Economic Review 135 136 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002609 CHONG YAH LIM Economic Growth Centre, School of Humanities and Social Sciences, Nanyang Technological University, Singapore
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article RENEWABLE ENERGY CONSUMPTION, POLITICAL AND INSTITUTIONAL FACTORS: EVIDENCE FROM A GROUP OF EUROPEAN, ASIAN AND LATIN AMERICAN COUNTRIES This paper explores the dynamic relationships between renewable energy consumption and a number of institutional and political factors for a group of countries from Europe, Asia and Latin America spanning the period 1995–2011. The paper employs the methodology of long and short-run panel causality approach as well as the methodology of the panel Error Correction model. The empirical findings provide strong evidence that, after controlling the economic environment, both political and institutional factors exert a strong and statistically significant effect on renewable energy consumption. These findings are expected to have serious implications for policies related to clean energy. Renewable energy consumption, political and institutional factors, panel error correction, panel causality, Q40, K00, C33 01 2015 60 1550008 The Singapore Economic Review 1 19 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500083 NICHOLAS APERGIS napergis@unipi.gr Department of Banking and Financial Management, University of Piraeus, 80, Karaoli & Dimitriou, 18534 Piraeus, Greece SOFIA ELEFTHERIOU sofelef@unipi.gr Department of Business Administration, University of Piraeus, 80, Karaoli & Dimitriou, 18534 Piraeus, Greece
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article ASSESSING CHINA'S RENMINBI PEG TO THE U.S. DOLLAR: THE CASE FOR GREATER RMB EXCHANGE RATE FLEXIBILITY This paper assesses China's Renminbi peg to the U.S. dollar using a structural VAR model. One unique contribution of the paper is that we model China as a large open economy in one structural VAR model with the U.S. by utilizing combinations of short- and long-run identification restrictions and relax the small open economy assumption usually imposed on China. Using monthly data for the period of 1990:4 to 2007:12, we find the following. First, U.S. shocks do not explain much of the output fluctuations in China, indicating that the two economies are subject to asymmetric shocks. Optimum currency area theory suggests that more flexibility of the RMB relative to the dollar may be desirable. Second, U.S. shocks explain little of the fluctuations in China's CPI, suggesting that the benefits of importing inflation from the U.S. by pegging to the dollar are minimal, thus more flexibility in the RMB relative to the dollar is feasible. Third, U.S. shocks do not influence China's international competitiveness (REER) to a noticeable extent, suggesting that moving toward more flexibility relative to the dollar may be in China's interest. China, exchange rate flexibility, U.S, structural VAR, C32, F31, F41, O53 01 2012 57 1250003 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500038 WEI SUN sunw@gvsu.edu Department of Economics, Seidman College of Business, Grand Valley State University, 401 West Fulton Street, Grand Rapids, MI 49504, USA LIAN AN Department of Economics and Geography, Coggin College of Business, University of North Florida, FL, USA
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article INFLATION TARGETING IN INDONESIA: SEARCHING FOR A THRESHOLD It could be argued that for some developing countries, low to moderate inflation is beneficially related to economic growth and that it is only after a certain threshold level that inflation becomes deleterious to growth. This has implications for macroeconomic policy requirements placed on developing countries by international loan bodies. This paper, using data from Indonesia, examines the relationship between growth and inflation. Particularly, a threshold VAR model is used to test for changes in the relationship between inflation and growth. The results so far are exploratory and limited by a small data sample. The results are consistent with a threshold level between 8.5% and 11% producing structural shifts in the relationship between inflation and growth. Inflation targeting, Growth, Threshold VAR, E52, E63, E64 04 2009 54 The Singapore Economic Review 645 655 http://www.worldscientific.com/doi/abs/10.1142/S021759080900346X ANIS CHOWDHURY a.chowdhury@uws.edu.au School of Economics & Finance University of Western Sydney, Australia ROGER HAM r.ham@uws.edu.au School of Economics & Finance University of Western Sydney, Australia
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article MANAGEMENT UNDER CONDITIONS OF COMPLEXITY AND UNCERTAINTY Managers are faced with increased complexity and unexpected risks. This article raises some reasons for the increase in complexity and risks. It also describes the tools and approaches used to anticipate some of these risks and how to mitigate against them. The usefulness of the scenario planning process is also indicated. The type of behavioral biases that makes risk identification difficult is also explained. Complexity, risk management, scenario planning, behavioral biases 02 2014 59 1475001 The Singapore Economic Review 1 5 http://www.worldscientific.com/doi/abs/10.1142/S0217590814750010 CHUAN-LEONG LAM clam2033@gmail.com S3-B2A-41, School of Humanities and Social Sciences, Nanyang Technological University, Singapore
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article INFLUENCE OF DEMOGRAPHIC VARIABLES ON INDIRECT TAX SETTING FOR SELECTED INDIAN STATES This paper attempts to provide conclusive evidence in favor of sensitivity of optimal commodity taxes to demographic variables. This involves estimating optimal commodity taxes for the chosen 16 Indian states, incorporating demographic profiles for each state using NSS data. Such calculations are further done under alternative welfare weights for each household. The results reveal that the introduction of demographic variables in the demand system makes the tax rates more non-uniform across commodities and across states, and significantly alters their response to changes in the social planner's perception of a household's welfare. These effects are more pronounced for certain commodities that are basic and essential in a household's basket. Differences in welfare weights also have a similar effect on tax rates, though to a lesser degree. Optimal commodity taxes, demographic variables, social welfare, non-uniform taxes, India 02 2008 53 The Singapore Economic Review 293 316 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002951 A. K. SETH akseth2020@yahoo.com Department of Commerce, Delhi School of Economics, University of Delhi, Delhi 110007, India ANKUR BHATNAGAR ankur3674@yahoo.co.in Satyawati College (M), Ashok Vihar-III, Delhi 110052, India
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article EDITOR'S COMMENTS ON SPECIAL ISSUE IN HONOR OF PROFESSOR LIM CHONG YAH No abstract received. 03 2014 59 1401001 The Singapore Economic Review 1 2 http://www.worldscientific.com/doi/abs/10.1142/S0217590814010012 Euston Quah The Singapore Economic Review, Singapore
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article THE CASE FOR AN INTERMEDIATE EXCHANGE RATE REGIME The argument that any exchange rate regimes other than firmly fixed and freely floating rates were infeasible — the so-called bipolarity thesis — acquired great popularity in the wake of the Asian crisis of a decade ago, but it has almost vanished today. One reason is surely the unkind empirical evidence, which shows that intermediate regimes — measured as those where both reserve and exchange rate changes lie in an intermediate range — are not in fact tending to disappear (Levy Yeyati and Sturzenegger, 2002). Another reason is the recognition that exchange rate policy should have other objectives besides avoiding crises, and that in the world we live in today it is reasonable to give these other objectives a significant priority. And perhaps a third factor is growing recognition that it is possible to design or operate intermediate regimes in ways that avoid exposing them to the dangers that were focused on by the disciples of bipolarity.This article starts by distinguishing the options that countries face in choosing an exchange rate regime. It examines the advantages and disadvantages of each of them, finally suggesting that for most countries the real choice lies between freely floating rates, floating rates disciplined by a reference rate system, and an ill-defined managed floating with the management undefined. Three issues may influence the choice between those alternatives: transparency; perceived consistency with that pillar of current macroeconomic thinking, inflation targeting; and the theory of what determines exchange rates. In the latter context, it is argued that the current conventional wisdom of the economics profession is wrong, and that a more convincing diagnosis of the process of exchange rate determination lends support to the proposal for a reference rate system. Exchange rates, fixed versus floating, intermediate regime, IMF, behavioral finance 03 2007 52 The Singapore Economic Review 295 307 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002713 JOHN WILLIAMSON jwilliamson@petersoninstitute.org JWilliamson@iie.com Peterson Institute, 1750 Massachusetts Ave, NW, Washington DC 20036, USA
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article USING ECONOMIC ANALYSIS TO PROVIDE LEGAL ADVICE: AN EXAMPLE INVOLVING BUSINESS INCOME TRUSTS Economic analysis of law has been used for policy analysis and to explain legal doctrine. It can also be used by a lawyer in providing a legal opinion. This paper provides an example of how economic analysis can be used in giving a legal opinion. The example is an opinion on the likelihood that investors would be held personally liable for debts arising in the conduct of businesses carried on through a business income trust. Since there is no direct economic analysis of this question in the existing literature, the paper uses the economic analysis of the limited liability of corporations. It uses this analysis because it focuses on the same policy question of whether investors should be made personally liable for debts incurred in the carrying on of a business. The paper reviews the economic analysis of the limited liability of corporations. It then considers how this analysis may extend to business trusts and to business income trusts. 02 2010 55 The Singapore Economic Review 297 320 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003729 MARK GILLEN mgillen@uvic.ca Faculty of Law, University of Victoria, British Columbia, Canada
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article VALUATIONS OF CHANGES IN RISKS: THE REFERENCE STATE AND EVIDENCE OF DIFFERENCES BETWEEN THE MEASURES Given the pervasive evidence that people typically value changes in terms of comparisons to a reference state, and that they commonly value losses and reductions of losses more than gains, current risk assessment and valuation practice is likely to lead to systematic bias and distorted guidance. Willingness to pay estimates of the value of reducing the risk of harm are, for example, likely to understate the value of actions to bring this about. Differences in valuations resulting from different measures are illustrated, and the criteria for the choice between measures of the value of positive and negative changes in risk are demonstrated with results from a new risk study in China. Gain and loss domains, reference state, willingness-to-pay, willingness-to-accept, value disparity, C91, D03, D61, D81 01 2013 58 1350001 The Singapore Economic Review 1 15 http://www.worldscientific.com/doi/abs/10.1142/S021759081350001X JICHUAN ZONG zong@dufe.edu.cn School of Finance, Dongbei University of Finance & Economics, Dalian, P. R. China JACK L. KNETSCH knetsch@sfu.ca Simon Fraser University, Burnaby, British Columbia, Canada
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article BOOK REVIEW: Who Will Pay? Coping with Aging Societies, Climate Change, and Other Long-Term Fiscal Challenges, with a foreword by Jeffrey Sachs No abstract received. 01 2005 50 The Singapore Economic Review 131 132 http://www.worldscientific.com/doi/abs/10.1142/S021759080500186X ÅKE BLOMQVIST Department of Economics, National University of Singapore, Singapore
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article A COMPARATIVE STUDY OF EXCHANGE RATE REGIMES AND MACRO-INSTABILITIES IN THE TWIN ECONOMIES OF SINGAPORE AND HONG KONG Based on a small, open-economy IS-LM prototype model, this paper examines the sources of macroeconomic instabilities in Hong Kong and Singapore operating under two different currency board arrangements. The empirical findings suggest that in general, both external and internal factors contribute to the macroeconomic volatilities observed in the two economies. There is evidence of a tradeoff between exchange rate and interest rate targeting for the stability of money supply in Singapore. Our findings have important implications for Mainland China's monetary authorities in the transition from a hard-peg exchange rate regime like Hong Kong to a basket-link system like the one in Singapore. Currency board, basket-link, Hong Kong, Singapore 01 2007 52 The Singapore Economic Review 93 116 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002580 YUE MA yuema@Ln.edu.hk Economics Department, Lingnan University, Hong Kong, China; Macroeconomic Research Centre, Xiamen University, P R China Y. Y. KUEH Faculty of Commerce, Chu Hai College of Higher Education, Hong Kong, China RAYMOND C. W. NG School of Continuing Education, Hong Kong Baptist University, China
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article BOOK REVIEW: "Review of Cost-Benefit Analysis of Multi-Level Government", by Alessandro Ferrara No abstract received. 04 2013 58 1380011 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590813800118 PARKASH CHANDER Department of Economics, National University of Singapore, Singapore
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article BOOK REVIEW: "Gender and Natural Resource Management Livelihoods, Mobility and Interventions" edited by Bernadette P. Resurreccion and Rebecca Elmhirst No abstract received. 02 2011 56 The Singapore Economic Review 283 286 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004262 SUMAN K SHARMA Nanyang Technological University, Singapore
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article THE EFFICIENT MARKET HYPOTHESIS REVISITED: EVIDENCE FROM THE FIVE SMALL OPEN ASEAN STOCK MARKETS The efficient market hypothesis (EMH), which suggests that returns of a stock market are unpredictable from historical price changes, is satisfied when stock prices are characterized by a random walk (unit root) process. A finding of unit root implies that stock returns cannot be predicted. This paper investigates the stock prices behavior of five ASEAN (Association of Southeast Asian Nations) countries i.e., Indonesia, Malaysia, Philippines, Singapore and Thailand, for the period from 1990:1 to 2009:1 using a two-regime threshold autoregressive (TAR) approach which allows testing nonlinearity and non-stationarity simultaneously. Among the main findings, our results indicate that stock prices of Malaysia and Thailand are a non-linear series and are characterized by a unit root process, consistent with the EMH. Furthermore, we find that stock prices of Indonesia, Philippines and Singapore follow a non-linear series, however, stock price indices are stationary processes that are inconsistent with the EMH. Efficient market hypothesis, threshold autoregressive model, unit root, C22, C52 03 2012 57 1250021 The Singapore Economic Review 1 12 http://www.worldscientific.com/doi/abs/10.1142/S021759081250021X QAISER MUNIR School of Business and Economics, Universiti Malaysia Sabah, Locked Bag 2073, 88999 Kota Kinabalu, Sabah, Malaysia KOK SOOK CHING School of Business and Economics, Universiti Malaysia Sabah, Locked Bag 2073, 88999 Kota Kinabalu, Sabah, Malaysia FUMITAKA FUROUKA School of Business and Economics, Universiti Malaysia Sabah, Locked Bag 2073, 88999 Kota Kinabalu, Sabah, Malaysia KASIM MANSUR School of Business and Economics, Universiti Malaysia Sabah, Locked Bag 2073, 88999 Kota Kinabalu, Sabah, Malaysia
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article BOOK REVIEW: "Review of Fisheries Exploitation in the Indian Ocean — Threats and Opportunities" Edited by Dennis Rumley, Sanjay Chaturvedi and Vijay Sakhuja No abstract received. 03 2012 57 1280009 The Singapore Economic Review 1 2 http://www.worldscientific.com/doi/abs/10.1142/S0217590812800094 CLEM TISDELL School of Economics, The University of Queensland, Australia
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article THE RELATIVE-PROFIT-MAXIMIZATION OBJECTIVE OF PRIVATE FIRMS AND ENDOGENOUS TIMING IN A MIXED OLIGOPOLY This paper investigates whether the relative-profit-maximization objective of private firms affects endogenous timing in a mixed oligopoly in the linear demand case. Assuming firms have constant marginal costs and symmetric private firms are more efficient than the public firm, it is found that such an objective does not affect endogenous timing compared with the absolute-profit-maximization case. When the equilibrium involves the public firm acting as a leader, social welfare increases compared with the level in the absolute-profit-maximization case. When the equilibrium involves the public firm acting as a follower, social welfare remains unchanged. Mixed oligopoly, endogenous timing, Stackelberg, relative profits, L13, D43, H42 02 2011 56 The Singapore Economic Review 203 213 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004201 YUANZHU LU yuanzhulu@cufe.edu.cn China Economics and Management Academy, Central University of Finance and Economics, No.39 South College Road, Beijing, China, 100081, China; Institute for Advanced Study, Shenzhen University, No. 3688 Nanhai Ave, Shenzhen, Guangdong, China, 518060, China
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article Introduction and Editorial Overview No abstract received. 01 2015 60 1502001 The Singapore Economic Review 1 4 http://www.worldscientific.com/doi/abs/10.1142/S0217590815020014 AHMET FARUK AYSAN ahmet.aysan@boun.edu.tr Member of the Board and Monetary Policy Committee, Central Bank of the Republic of Turkey, Ankara, Turkey MEHMET HUSEYIN BILGIN mehmet.bilgin@medeniyet.edu.tr Faculty of Political Sciences, Istanbul Medeniyet University, Istanbul, Turkey
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article BOOK REVIEW: "Southeast Asia in the Global Economy: Securing Competitiveness and Social Protection" edited by Helen ES Nesadurai and J Soedradjad Djiwandono No abstract received. 01 2011 56 The Singapore Economic Review 145 147 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004134 DONGHYUN PARK Economics and Research Department Asian Development Bank, philippines
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article TESTING FOR REGIME SWITCHING IN SINGAPOREAN BUSINESS CYCLES We examine a Markov-Switching model of Singaporean GDP using a combination of formal moment-based tests and informal graphical tests. The tests confirm that the Markov-Switching model fits the data better than a linear, autoregressive alternative. The methods are extended to allow us to identify precisely which features of the data are better captured by the nonlinear model. The methods described here allow model selection to be related to the intended use of the model. Markov-Switching models, specification testing, nonparametric estimation, moment tests 01 2005 50 The Singapore Economic Review 25 34 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001834 ROBERT BREUNIG Robert.Breunig@anu.edu.au School of Economics, Faculty of Economics and Commerce, Australian National University, Canberra ACT 0200, Australia ALISON STEGMAN Research School of Pacific and Asian Studies, Australian National University, Canberra ACT 0200, Australia
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article SPECIFIC FACTORS AND HECKSCHER-OHLIN: AN INTERTEMPORAL BLEND A blend of the Specific Factors and Heckscher-Ohlin models can be fashioned, making use of some of the ideas in the earlier vintage capital literature. At any given time, production in many sectors reflects past decisions to create sector-specific capital in those sectors. In addition, current capital formation can be focused on one or two best sectors depicted by the Hicksian composite unit-value isoquant. Thus, international trade concentrates current investment decisions and yet allows a variety of goods to be produced. Hicksian composite unit-value isoquant, putty-clay 01 2007 52 The Singapore Economic Review 1 6 http://www.worldscientific.com/doi/abs/10.1142/S021759080700252X RONALD W. JONES rjones@mail.rochester.edu Department of Economics, University of Rochester, Rochester, NY 14620, USA
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article CONVENTIONAL ECONOMIC THEORY — A CRITIQUE HIGHLIGHTING FLAWS IN AMERICAN STYLE CAPITALISM For 200 years, we have lived with capitalism in its American style forged easy access to raw materials. Despite entering an era of scarcities, economics is still anchored in growth and distribution theories reflecting the world of plenty. Production theory does not recognize the significance of sharing of knowledge and group behavior introduced by ICT. Consumption theory is still about buying 'more', neglecting the element of uncertainty. Competition has been eradicated and replaced by a limited number of gigantic corporations. Only recently has economics started to go interdisciplinary to incorporate psychology and brain research to explain behavior when confronted with economic choices and the difference between individual and group behavior. Capitalism, competition, burden sharing, social costs, interdisciplinary, A12, A13 01 2011 56 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004067 JOERGEN OERSTROEM MOELLER joergen@oerstroemmoeller.com Institute of South East Asian Studies, 30 Heng Mui Keng Terrace, Pasir Panjang, Singapore 119614, Singapore; Singapore Management University & Copenhagen Business School, Ministry of Foreign Affairs Diplomatic Academy, Singapore
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article COMMON FEATURES IN EAST ASIAN STOCK MARKETS: LONG-TERM AND SHORT-TERM COMOVEMENTS BETWEEN CHINA AND KOREA As increasing attention has been given in recent literature to the potential of the Chinese financial market, we investigate the strength of shared dynamics among East Asian stock markets, by examining both the long-term and short-term comovements. In doing so, the cointegration analysis is used to assess the long-term relationship, whereas the notions of cofeature as well as contemporaneous correlation are employed to discuss the short-term relationship. The basic finding is that evidence for short-term comovement between the Korean and Chinese stock markets appears to be strong, while evidence for long-term relationship is rather weak. Empirical results from subsamples suggest that both the long-term and short-term relationships have strengthened since the acquisition of QFII qualification by Korean financial firms. These observations indicate that the international linkage between the two countries has strengthened along with increasing opportunities for international investment in the Chinese stock market. Cofeature, cointegration, comovement, QDII, QFII, G15, C22, C32 03 2013 58 1350018 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500185 HAHN SHIK LEE hahnlee@sogang.ac.kr Department of Economics, Sogang University, CPO Box 1142, Seoul 172-742, Korea SOO IN KIM piglet0706@naver.com Department of Economics, Sogang University, CPO Box 1142, Seoul 172-742, Korea
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article HOUSEHOLD INCOME DYNAMICS IN A LOWER-INCOME SMALL OPEN ECONOMY: A COMPARISON OF BANKING AND CROWDFUNDING REGIMES This paper examines asset price and household income/consumption dynamics in a small open economy subject to terms of trade shocks, under two financial regimes. The first is a pure banking regime, in which firms borrow from banks for financing costs of labor, investment and intermediate goods for both the relatively riskless natural-resource traded sector and the non-traded sector. The second regime is more financially-inclusive banking/crowdfunding (BCF) regime, in which the households directly receive returns to capital from pooled lending to home-goods firms. Simulation results show that the banking regime better insulates the economy from negative shocks but limits the upside gain from positive shocks which would take place in the banking-crowdfunding regime. Crowd funding, DSGE models, boom-bust episode 01 2018 63 March The Singapore Economic Review 147 166 http://www.worldscientific.com/doi/abs/10.1142/S0217590817440015 PAUL D. McNELIS Gabelli School of Business, Fordham University, New York, USA NAOYUKI YOSHINO nyoshino@adbi.org #x2020;Asian Development Bank Institute, Tokyo, and Keio University, Japan
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article FINANCIAL INCLUSION, RATHER THAN SIZE, IS THE KEY TO TACKLING INCOME INEQUALITY In this paper, we assess empirically whether financial inclusion contributes to reducing income inequality when controlling for other key factors, such as economic development and fiscal policy. We conclude that financial inclusion contributes to reducing income inequality to a significant degree, while the size of the financial sector does not. Although our results are still preliminary and constrained by data limitations, they still bear significant policy implications. More specifically, fostering financial inclusion has one more important by-product, which had hardly been analyzed yet, namely reducing income inequality. More specifically, given the broad definition of financial inclusion used in our analysis, promoting financial inclusion implies facilitating the use of credit to low-income households, as well as granting credit to small and medium-sized enterprises. Income distribution, income inequality, Kuznets curve, financial development, financial deepening, financial inclusion 01 2018 63 March The Singapore Economic Review 167 184 http://www.worldscientific.com/doi/abs/10.1142/S0217590818410047 DAVID MARTÍNEZ TURÉGANO ALICIA GARCÍA HERRERO Hong Kong University of Science and Technology, Clear Water Bay, Hong Kong
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article FINANCIAL STABILITY AND FINANCIAL INCLUSION: THE CASE OF SME LENDING Developing economies are seeking to promote financial inclusion, i.e., greater access to financial services for low-income households and firms. This raises the question of whether greater financial inclusion tends to increase or decrease financial stability. A number of studies have suggested both positive and negative impacts on financial stability, but very few empirical studies have been made. This study focuses on the implications of greater financial inclusion for small and medium-sized enterprises (SMEs) for financial stability. It estimates the effects of measures of the share of bank lending to SMEs on two measures of financial stability — bank nonperforming loans and bank Z scores. We find some evidence that an increased share of lending to SMEs aids financial stability by reducing non-performing loans (NPLs) and the probability of default by financial institutions. Financial inclusion, financial stability, small and medium-sized enterprises (SMEs), SME lending 01 2018 63 March The Singapore Economic Review 111 124 http://www.worldscientific.com/doi/abs/10.1142/S0217590818410035 PETER J. MORGAN pmorgan@adbi.org Asian Development Bank Institute (ADBI), Kasumigaseki Building 8F, 3-2-5, Kasumigaseki, Chiyoda-ku, Tokyo 100-6008, Japan VICTOR PONTINES #x2020;The South Asian Central Banks (SEACEN), Research and Training Centre (80416-M) Level 5, Sasana Kijang Bank Negara Malaysia, 2 Jalan Dato’ Onn 50480 Kuala Lumpur, Malaysia
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article SOURCES OF FINANCE AND EXPORT PERFORMANCE: EVIDENCE FROM THAI MANUFACTURING SMEs This study emphasizes the contribution of sources of finance to the export participation and export intensity of Thai manufacturing small and medium-sized enterprises (SMEs) and manufacturing firms in aggregate. It also elaborates on other key factors contributing to SME manufacturing firm export activity. The empirical results presented confirm that the Export–Import Bank of Thailand (EXIM Bank) and the Department of International Trade Promotion (DITP) both play a significant role in enhancing Thai SME and all manufacturing firm export participation and export intensity. Local and foreign commercial banks, however, are not found to have a significant correlation with their export participation and export intensity. In addition, SMEs and all manufacturing firms receiving funds from friends and family are found to participate less in foreign markets compared to those SMEs and all manufacturing firms in aggregate which do not receive any funds from their friends and family. With respect to the importance of type of ownership for export activity, foreign ownership can help promote the export participation and intensity of Thai manufacturing SMEs and all manufacturing enterprises. Technological innovation activity also helps them to participate in foreign markets. The empirical evidence also points out that financial institutions in Thailand remain reliant on collateral-based lending and financial transparency. A key finding from this paper is that manufacturing SMEs are likely to perform worse in terms of export participation, export intensity, and access to finance compared to large manufacturing enterprises. Sources of finance, export participation, export intensity, small and medium enterprises (SMEs), Thai manufacturing 01 2018 63 March The Singapore Economic Review 83 109 http://www.worldscientific.com/doi/abs/10.1142/S0217590817440027 YOT AMORNKITVIKAI Faculty of Economics, Rangsit University, Pathumthani, Thailand CHARLES HARVIE charvie@uow.edu.au Faculty of Business, University of Wollongong, Wollongong, Australia
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article MORTGAGE LENDING AND FINANCIAL STABILITY IN ASIA We estimated the effect of the share of mortgage lending by individual banks (together with some control variables) on two measures of financial stability — the bank Z-score and the non-performing loan ratio — for a sample of 397 banks in 19 emerging Asian economies for the period 2003–2014 from the Bankscope database. We find evidence that an increased share of mortgage lending is positive for financial stability, specifically by lowering the probability of default by financial institutions and reducing the non-performing loan ratio, at least in non-crisis periods, for levels of mortgage shares up to 23–65%. For higher levels of mortgage lending shares, there is some evidence that the impact on financial stability turns negative. We also find that the share of mortgage lending can be a useful measure of both financial development and financial inclusion.This finding most likely reflects the effect of a higher share of mortgage lending in diversifying the mix of banks’ assets and thereby reducing overall risk. However, if the share of mortgage lending is too high, then the diversification effect diminishes. Therefore, the challenge is to balance the expected improvement in financial stability due to asset diversification against negative impacts that might result from easier lending standards or too rapid increases in mortgage lending that could trigger a bubble in the housing market. This highlights the need for prudent monetary policy and macroprudential policy measures to forestall the development of such bubbles. Mortgage lending, financial stability, financial inclusion 01 2018 63 March The Singapore Economic Review 125 146 http://www.worldscientific.com/doi/abs/10.1142/S0217590817440040 PETER J. MORGAN pmorgan@adbi.org Asia Development Bank Institute, Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku, Tokyo 100-6008, Japan YAN ZHANG Asia Development Bank Institute, Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku, Tokyo 100-6008, Japan
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article FINANCIAL INCLUSION, POVERTY, AND INCOME INEQUALITY This paper extends the existing literature on financial inclusion by analyzing the factors affecting financial inclusion and assessing the impact of financial inclusion on poverty and income inequality in the world and Asia. We construct a new financial inclusion indicators to assess various macroeconomic and country-specific factors affecting the degree of financial inclusion for 176 economies, including 37 of which from developing Asia. We test the impact of financial inclusion, along with other control variables, on poverty and income inequality. We do so for full sample of countries and then for developing Asia sample to access which factors are relevant for full sample and for developing Asia specifically. The estimation results show that per capita income, rule of law, and demographic characteristics significantly affect financial inclusion for both world and Asia samples. However, primary education completion and literacy significantly increases financial inclusion only in the full sample, not for the Asian sample. The findings also indicate that financial inclusion is significantly correlated with lower poverty and income inequality levels for the full sample. For developing Asia, however, there appears to be no link between financial inclusion and income inequality. Financial inclusion, developing Asia, poverty, income inequality 01 2018 63 March The Singapore Economic Review 185 206 http://www.worldscientific.com/doi/abs/10.1142/S0217590818410059 CYN-YOUNG PARK cypark@adb.org Asian Development Bank, 6 ADB Ave, Ortigas Center, Mandaluyong, 1550 Metro Manila, Philippines ROGELIO MERCADO #x2020;Macroeconomics and Monetary Policy Division, The SEACEN Centre, Sesana Kijang, Kuala Lumpur, Malaysia
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article DETERMINANTS AND BARRIERS TO FINANCIAL INCLUSION IN MYANMAR: WHAT DETERMINES ACCESS TO FINANCIAL SERVICES AND WHAT HINDERS IT? This paper examines two aspects of financial inclusion in the context of Myanmar. First, it examines the factors that determine access to formal savings products. Second, it looks at what the barriers to saving are. Using data from a nationally representative survey of 5100 individuals, the paper applies econometric estimation and qualitative data analysis methods to provide answers to these questions. Findings show a low level of saving in Myanmar, and that formal savings increase with income, education, and keeping a budget, among other factors. Policy recommendations include the design of financial literacy programs that are suitable to the Myanmar context, and providing access to financial services. Financial inclusion, household saving, personal finance 01 2018 63 March The Singapore Economic Review 9 26 http://www.worldscientific.com/doi/abs/10.1142/S0217590818410011 KANITTHA TAMBUNLERTCHAI kanittha.t@chula.ac.th Faculty of Economics, Chulalongkorn University, Phayathai Road, Bangkok 10330, Thailand
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article FINANCIAL INCLUSION, FINANCIAL STABILITY AND INCOME INEQUALITY: INTRODUCTION 01 2018 63 March The Singapore Economic Review 1 7 http://www.worldscientific.com/doi/abs/10.1142/S0217590818020022 NAOYUKI YOSHINO nyoshino@adbi.org Asian Development Bank Institute, Tokyo, Japan PETER J. MORGAN pmorgan@adbi.org Asian Development Bank Institute, Tokyo, Japan
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article INSURANCE INCLUSION, TIME PREFERENCE AND STOCK INVESTMENT OF THE CHINESE HOUSEHOLDS Using the China Household Finance Survey data in 2011, the estimation results of structural equation modeling demonstrate that the respondents with higher time preference rate have a significant higher probability of investing in stocks, which implies that the short-term households will prefer stock investment. The social insurance programs and insurance policies held by the family will have a significantly direct positive effect in promoting stock investment and also a significantly direct positive effect on the respondent’s time preference, which could further indirectly increase the family’s stock investment. These results show that the safety-net built by the Chinese government, including the social security and commercial insurance, is very likely to attract more short-term investors into the stock market. These empirical results provide new evidences to explain the extreme volatility of Chinese stock market and also testify the policy effect of building an environment for people to possess property income in China. Stock, insurance, utility, time preference, household finance 01 2018 63 March The Singapore Economic Review 27 44 http://www.worldscientific.com/doi/abs/10.1142/S0217590817440039 YINAN YANG School of Public Administration, South China University of Technology, Guangzhou, China2Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai, China QIAN WANG School of Public Administration, South China University of Technology, Guangzhou, China2Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai, China
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article THE FINANCIAL EXCLUSION IN THE DEVELOPMENT OF DIGITAL FINANCE — A STUDY BASED ON SURVEY DATA IN THE JINGJINJI RURAL AREA Based on survey data, we analyze the level of financial exclusion during the development of digital finance in the rural area of three Chinese provinces of Beijing, Tianjin and Hebei (Jingjinji). We use a censored probit model to examine whether there is financial exclusion and the degree of financial exclusion for the rural residents. The empirical results show that the significant factors influencing the financial exclusion in digital finance include the personal characteristics of the rural residents, the understanding of digital finance, digital financial infrastructure, the development of digital finance, and the social environment. Therefore, we think the precise orientation and distinction for the excluded group in the rural area, according to age, education, income, and other influencing factors could be helpful for making policies to eliminate financial exclusion and increase the inclusiveness of the financial industry. Financial exclusion, digital finance, inclusiveness, censored probit model 01 2018 63 March The Singapore Economic Review 65 82 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500017 BIYUN REN bettyren625@126.com Key Research Institute of Humanities and Social Sciences at Universities of Tianjin, Research Center of Finance and Insurance, Tianjin University of Finance and Economics, Hexi Qu, Tianjin 300222, P. R. China LIUYING LI #x2020;School of Economics, Tianjin University of Finance and Economics, 25 Zhujiang Road, Hexi Qu, Tianjin Shi 300222, P. R. China∥Corresponding author. HONGMEI ZHAO hongmeizhao@nankai.edu.cn #x2021;Institute of Econometrics and Statistics, School of Economics, Nankai University, 94 Weijin Road, Nankai Qu, Tianjin 300071, P. R. China YUNBO ZHOU zyunbonk@163.com #xA7;Institute of Economics, School of Economics, Nankai University, Nankai Qu 300071, P. R. China
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article ONE APPROACH TO RESOLVE THE EXCHANGE RATE PUZZLE: RESULTS USING DATA FROM THE UNITED KINGDOM AND THE UNITED STATES We approach a significant research topic in international economics by restating the test procedures in a novel manner consistent with monetary theorems with controls using monetary variables and applying an appropriate econometric methodology to re-examine three aspects of exchange rate behavior. (i) Does the inflation (price) factor affect Nominal Exchange Rate (NER)? (ii) Do relative interest rates between countries affect a country’s exchange rate? (iii) Do the price and interest rate effects hold if controls for non-parity factors are embedded in tests? The data series for this study are taken over 55 years covering pre-and-post-Bretton Woods era: a second test was done over the post-Bretton Woods period only using 30 years of data. Also, the traditional factors of parity conditions are extended in this research to take into account recently theorized and tested non-parity factors related to cash flows. The resulting evidence affirms clearly that both the parity factors (prices and interest rates) and the non-parity factors affect exchange rates significantly over the long run, also over the 30-year period. In our view, these findings extend our knowledge of how currency behavior is consistent with parity and non-parity theorems. Exchange rate, non-parity factors, prices, interest rates, panel cointegration, dynamic OLS 05 2018 63 December The Singapore Economic Review 1367 1384 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500090 MOHAMED ARIFF Faculty of Business, 14 University Drive, Bond University, Robina QLD 4229, Australia†University Putra, Malaysia. 43300 Serdang, Malaysia ALIREZA ZAREI alizeza.67@gmail.com #x2021;Sunway University, Jalan Universiti, Bandar Sunway, 47500 Petaling Jaya, Selangor, Malaysia
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article WAGE SUBSIDIES AND THE LABOR SUPPLY OF OLDER PEOPLE: EVIDENCE FROM SINGAPORE’S WORKFARE INCOME SUPPLEMENT SCHEME An increasing body of literature considers population aging and labor markets, focusing on the dynamics of older workers’ labor market participation. Singapore introduced the Workfare Income Supplement (WIS) scheme in 2007, targeting low-income, older workers. Previous studies show that labor force participation drops significantly after the age of 45. We examine whether a wage subsidy program can increase the labor supply of these older workers. Using Hong Kong as a control group in a difference-in-difference-in-difference approach, we find that this program increased labor force participation for women aged 60–64 by 3.1–5.5% points, but had no statistically significant impact on the labor supply of men. Labor supply, quasi-natural experiment, wage subsidy, Singapore 05 2018 63 December The Singapore Economic Review 1101 1139 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500964 TIAGO FREIRE tiago@tiagofreire.com International Business School Suzhou, Xi’an Jiaotong-Liverpool University, No. 111 Ren’ai Road, Suzhou, Dushu Lake Higher Education Town, Suzhou Industrial Park, Jiangsu 215123, P. R. China
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article SOURCES OF MACROECONOMIC FLUCTUATIONS IN BRUNEI DARUSSALAM This paper investigates the sources of macroeconomic fluctuations in Brunei Darussalam from 2003Q1 to 2014Q3 using a structural vector autoregression (SVAR) model. Shocks are identified by imposing block exogeneity and long-run restrictions motivated by an open economy model that includes oil prices. The results show that oil price shocks account for only a small proportion of output fluctuations while productivity shocks have the largest share. Real exchange rate movements are largely driven by demand shocks while monetary shocks explain most of the variability in prices. Economic policies should focus on productivity improvement and capital investment to increase output in the long run, and the conduct of fiscal policy should take into account the impact on real exchange rate volatility. Structural VAR, macroeconomic fluctuations, Brunei Darussalam 05 2018 63 December The Singapore Economic Review 1285 1306 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500065 WEE CHIAN KOH wc.koh@anu.edu.au Crawford School of Public Policy, ANU College of Asia and the Pacific, J. G. Crawford Building, Lennox Crossing, The Australian National University, Acton ACT 2601, Australia
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article TECHNOLOGY ADVANTAGE, HETEROGENEOUS TALENT AND TRADE This paper will setup a trade model to explore the impact of the diversity of talent distribution and the technology difference on the pattern of trade (POT) and income inequality of an economy. We find that not only the diversity effect but also the technology effect can matter for the pattern of POT. We demonstrate that, in the free-trade equilibrium, if the technology effect dominates the diversity effect then the country with a more (less) diverse distribution of talent may export the goods produced by a technology with supermodularity (submodularity). In addition, we prove that the relative technology difference will affect income inequality. If the technological advance for the submodular sector S is better than for the supermodular sector C, then income inequality would increase. Technology advantage, diversity, the pattern of trade, income inequality 05 2018 63 December The Singapore Economic Review 1307 1317 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500119 KUO-HSING KUO kuo@staff.pccu.edu.tw Department of International Trade, Chinese Culture University, No. 55, Hwa-Kang Road, Yang-Ming-Shan, Taipei City 11114, Taiwan CHENG-TE LEE Department of International Trade, Chinese Culture University, No. 55, Hwa-Kang Road, Yang-Ming-Shan, Taipei City 11114, Taiwan
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article THE ROLE OF FINANCIAL INSTITUTION MARKETIZATION IN CHINA’S INDUSTRIAL CONTESTABILITY In this paper, we investigate how the marketization of financial institutions affects China’s industrial contestability. Our empirical results show that a higher degree of marketization of financial institutions is significantly associated with both the operation of more firms and the smaller average size of firms. Moreover, the lower and upper quartiles of the conditional distribution of firm size are all significantly negatively associated with the higher marketization degree of financial institutions, whereas increased financial institution competition and market-oriented allocation of credit funds have greater negative effect on the average size of larger firms, relative to smaller firms. In sum, improvements on the degree of marketization of financial institutions lead to an increase in the number of firms and a reduction in the average size of firms in China’s industry. Therefore, the marketization of financial institutions has a significant positive impact on China’s industrial contestability. Financial institution, marketization, industrial contestability 05 2018 63 December The Singapore Economic Review 1245 1261 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500089 XIAOHUI HOU School of Economics and Finance, Xi’an Jiaotong University, Xian Ning West Road No. 28, 710049, Xi’an, Shaanxi Province, P. R. China CHENG LI LLL_xjtu@163.com School of Economics and Finance, Xi’an Jiaotong University, Xian Ning West Road No. 28, 710049, Xi’an, Shaanxi Province, P. R. China QING WANG walden126@126.com #x2020;Xi’an Branch, The People’s Bank of China, P. R. China
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article CORRUPTION AND GROWTH: THE PRODUCTIVITY GROWTH NEXUS This paper modeled the effect of corruption on growth, using Nigerian data for testing. The productivity growth channel of corruption was explored. Cointegration and error correction methods were employed in the analysis. The national system of innovations and corruption exhibited long run relations with productivity growth and were found to be credible fundamentals. The productivity growth vector was considered to be the only plausible in the long run growth analysis. The parsimonious growth equation showed productivity growth and government expenditure as significant and conformed to a priori expectations. The course of policy to sustainable growth was suggestive. Corruption, economic growth, productivity growth, cointegration, capital expenditure 05 2018 63 December The Singapore Economic Review 1227 1244 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500016 OLUREMI OGUN r_ogun@yahoo.com University of Ibadan, Ibadan, Nigeria
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article BUSINESS SERVICE, INTERNATIONAL OUTSOURCING, AND WAGE INEQUALITY This paper adds business services to Feenstra and Hanson’s (1996) model to show that if a country is more prosperous in business services, tending to carry out less international outsourcing activities than it would otherwise. In this model, the more varieties of specialized business services a country endows, the more welfare gains arise in the presence of positive production externalities to the manufacturing sector. Since developed countries are more prosperous in business service sector, this model helps to explain why the impact of opening trade on the dispersion of both wages and unemployment is stronger in developing economies. International outsourcing, wage inequality, business services 05 2018 63 December The Singapore Economic Review 1175 1182 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500132 CHU-PING LO cplo@ntu.edu.tw Department of Agriculture Economics, National Taiwan University, Taipei, Taiwan
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article A POLITICAL ECONOMY ANALYSIS OF THE SOUTHEAST ASIAN HAZE This paper studies the political economy of the Southeast Asian haze and discusses the obstacles that, unless overcome, can prevent a permanent and effective solution to the transboundary pollution problem, which originates in Indonesia. Following a cost-benefit analysis of the problem, the paper takes note of the weaknesses in Indonesia’s governance structure, which make it difficult to enforce national policies aimed at curbing the haze problem. The paper also puts forward a number of suggestions for strengthening the current policy regime for tackling the problem. Transboundary haze, cost-benefit analysis, eco-label, consumer boycotts 05 2018 63 December The Singapore Economic Review 1085 1100 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500339 PARKASH CHANDER parchander@gmail.com Bennett University, Plot Nos 8-11, TechZone II, Greater Noida 201310, Uttar Pradesh, India
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article THE GREAT TRANSITION: IMPLICATIONS FROM ENVIRONMENTAL POLICY FOR THE QUALITY–QUANTITY TRADE-OFF IN CHILDREN-REARING We develop an overlapping-generations model with human capital accumulation and endogenous fertility containing a pollution externality. We study the effects of an environmental policy on individuals’ quality–quantity trade-off on children. In a Malthusian poverty trap, we show that a more stringent policy induces a reduction of fertility. In a state of perpetual development, we find a similar result and show that higher environmental quality, growth and welfare are compatible goals. Moreover, we show that the policy can be used as an instrument for initiating a country’s great transition from a state of poverty to a state of development. Environmental policy, human capital, fertility, great transition 05 2018 63 December The Singapore Economic Review 1155 1174 http://www.worldscientific.com/doi/abs/10.1142/S021759081550112X FREDERIC TOURNEMAINE Faculty of Economics, Chulalongkorn University, Phayathai Road, Pathumwan, Bangkok 10330, Thailand CHRISTOPHER TSOUKIS c.tsoukis@keele.ac.uk Keele Management School, Keele University, Staffordshire, ST5 5BG, UK
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article ANALYZING THE TFP PERFORMANCE OF CHINESE INDUSTRIAL ENTERPRISES After nearly four decades of rapid growth, the China economy is faced with various challenges. The 2008 crisis would have served as the last straw as China experienced falls and volatilities in industrial output, export and foreign direct investment. The new policy focuses on expansion of domestic consumption and rebalancing. Given the unreliability of Chinese products, there is a need to rebuild product acceptability and market confidence. The structure of industrial enterprises, especially the small- and medium-sized enterprises, will play a crucial role in the next phase of development in the China economy. This paper uses the data on Chinese industrial enterprises to estimate the productivity performance of enterprises across regions and industries. The discussion is placed on the impact of the 2008 financial crisis on the China economy and industries enterprises. By using a simple methodology and OLS regression analysis on the estimation of total factor productivity, the empirical results show that SMEs and non-SMEs do perform differently in different industries and across regions, but SMEs suffered more than non-SMEs since the 2008 crisis. China regions, small- and medium-sized enterprises, total factor productivity, industrial enterprises 05 2018 63 December The Singapore Economic Review 1263 1284 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500077 KUI-WAI LI efkwli@friends.cityu.edu.hk Department of Economics and Finance, City University of Hong Kong, 83 Tatchee Avenue, Kowloon Tong, Kowloon, Hong Kong
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article PRICE LINKAGES AMONG EMERGING GOLD FUTURES MARKETS The gold futures in emerging markets have gained more importance in parallel to the increase in the size of gold trading in these markets. This research aims to detect the long-run price linkages and causality effects in these markets. China, Brazil, Russia, India, Korea, Taiwan, Turkey and Indonesia have been selected to represent emerging markets. US and Japan are also included as benchmark markets. The results denote the existence of long-term price dependencies and limited risk diversification benefits in the sample countries. The results further signify that China and Russia are the most isolated countries among the emerging markets sample. Price linkages, gold futures, emerging markets, Johansen test, vector error correction model 05 2018 63 December The Singapore Economic Review 1345 1365 http://www.worldscientific.com/doi/abs/10.1142/S021759081650020X HASAN F. BAKLACI Izmir University of Economics, Sakarya Caddesi, No. 156, Balcova 35330, Izmir, Turkey ÖMÜR SÜER osuer@gsu.edu.tr #x2020;Galatasaray University, Ciragan Caddesi, No. 36, Ortakoy 34349, Istanbul, Turkey TEZER YELKENCİ tezer.yelkenci@ieu.edu.tr Izmir University of Economics, Sakarya Caddesi, No. 156, Balcova 35330, Izmir, Turkey
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article EFFICIENT SUPPLY OF HUMAN CAPITAL: ROLE OF COLLEGE MAJOR This study examines the extent to which changing the composition of college majors among working-age population may affect the supply of human capital or effective labor supply. We use the South Korean setting, in which the population is rapidly aging, but where, despite their high educational attainment, women and young adults are still weakly attached to the labor market. We find that engineering majors have an advantage in various outcomes such as likelihood of being in the labor force, being employed, obtaining long-term position, and earnings, while Humanities and Arts/Athletics majors show the worst outcomes. We then conduct a back-of-the-envelope calculation of the impact of the recently proposed policy change to increase the share of engineering majors by 10% starting in 2017. Our calculation suggests that the policy change may have a positive but small impact on labor market outcomes. Economics of education, college major, returns to schooling, gender gap, human capital, aging 05 2018 63 December The Singapore Economic Review 1319 1343 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500047 SUNGJIN CHO sungcho@shu.ac.kr Department of Economics, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul, 08826, Republic of Korea JIHYE KAM kam.jihye@gmail.com Department of Educational Leadership and Policy Analysis, University of Wisconsin, 1000 Bascom Mall, Madison, WI 53706, USA SOOHYUNG LEE Department of Economics Sogang University, 35 Baekbeom-ro, Mapo-gu, Seoul, 04207, Republic of Korea4IZA, Schaumburg-Lippe-Strasse 5-9, 53113 Bonn, Germany5Maryland Population Research Center, University of Maryland, 2105 Morrill Hall, College Park, MD 20742, USA
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article DOES TRUST PROMOTE ENTREPRENEURSHIP IN A DEVELOPING COUNTRY? Trust was found to promote entrepreneurship in the US. We investigated whether this was true in a developing country, Indonesia. We failed to replicate this; this failure was true whether trust was estimated at the individual or community level or whether ordinary least squares (OLS) or two stage least squares (2SLS) was employed. We reconciled the difference between our results and those for the US by arguing that the weak enforcement of property rights in developing countries and the consequent hold-up problem make it more efficient for entrepreneurs to produce generic goods than relationship-specific goods—producing generic goods does not depend on trust. Trust, entrepreneurship, institution, hold-up problem, Indonesia 05 2018 63 December The Singapore Economic Review 1385 1403 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500144 KITAE SOHN Department of Economics, Konkuk University, 120 Neungdong-ro, Gwangjin-gu, Seoul 05029, South Korea ILLOONG KWON ilkwon@snu.ac.kr Graduate School of Public Administration, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul 08826, South Korea
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article BEVERIDGE VERSUS BISMARCK PENSION SYSTEMS: CONSIDERING FERTILITY RATES AND SKILL DISTRIBUTION By considering the difference in both the fertility rate and the ratio of skilled to unskilled workers for natives and immigrants, this study analyzes the impact of an inflow of immigrants in the Bismarckian system and compares its findings with the Beveridgian system analyzed by Krieger (2004). We show that the inflow of migrants can improve the welfare of both the young and the old generations in the host country under the looser conditions that characterize the Bismarckian system compared with the Beveridgian system. Immigrants, fertility rates, the ratio of skilled to unskilled workers, Bismarckian versus. Beveridgian pension systems 05 2018 63 December The Singapore Economic Review 1141 1153 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500769 YOHEI SEKIGUCHI Department of Policy Management, 1-1-1 Toyoda-cho, Kawagoe-shi, Saitama 350-1110, Japan MASATOSHI JINNO Department of Policy Management, 1-1-1 Toyoda-cho, Kawagoe-shi, Saitama 350-1110, Japan
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article SERVICE REALIZATION AND DETERMINANTS IN AGRICULTURAL COOPERATIVES IN CHINA: EVIDENCE FROM ZHEJIANG, SICHUAN AND HEILONGJIANG PROVINCES In the past decade, China has begun to develop the agricultural cooperatives. The service function is the most important reason for cooperatives’ existence. This paper formulates an analytical framework regarding the realization of services in cooperatives from the perspective of agricultural industrialization. Firstly, the definition, measurement and determinants of service realization are analyzed theoretically. Then, the realization of services, as well as influencing the service realization are examined empirically regarding grain, vegetable, fruit, livestock and chicken in the Zhejiang, Sichuan and Heilongjiang provinces. The paper concludes that product characteristics, resources owned by members, entrepreneurship of managers and incentives to managers have significant and positive impacts on the service realization. Agricultural cooperatives, services, realization, determinants, China 05 2018 63 December The Singapore Economic Review 1205 1225 http://www.worldscientific.com/doi/abs/10.1142/S0217590815501143 YULING GAO gaoyuling0408@163.com Economics School of Anhui University, Hefei, Anhui, China ZUHUI HUANG China Academy for Rural Development, Zhejiang University, Hangzhoug, Zhejiang, China QIAO LIANG China Academy for Rural Development, Zhejiang University, Hangzhoug, Zhejiang, China
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article THE IMPACT OF TERRORISM ON FINANCIAL MARKETS: EVIDENCE FROM ASIA This paper examines the impact of 410 terrorist attacks on the performance of five Asian stock markets. The empirical findings indicate that terrorism has a significant impact on the stock markets. Furthermore, the magnitude of these effects varies with respect to country, attack type, target type and severity of the attacks. In target type, terrorist attacks on business sector and security forces are particularly destructive for the stock markets. Likewise, in attack type, suicide attacks and bomb blasts particularly generate a significant downward movement in the stock markets. Furthermore, the more severe attacks have larger negative impact on market returns. Asian equity markets, terrorism, geopolitical risk, event study, stock market 05 2018 63 December The Singapore Economic Review 1183 1204 http://www.worldscientific.com/doi/abs/10.1142/S0217590815501118 FAHEEM ASLAM Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan AMIR RAFIQUE amir.rafique@comsats.edu.pk Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan ANEEL SALMAN aneel.salman@comsats.edu.pk Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan HYOUNG-GOO KANG hyoungkang@hanyang.ac.kr Department of Finance, Hanyang University Business School, Seoul, South Korea WAHBEEAH MOHTI beeah_awan@yahoo.com Department of Management Sciences, Muhammad Ali Jinnah University, Islamabad, Pakistan
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article RE-MEASUREMENT OF SHORT-TERM INTERNATIONAL CAPITAL FLOWS AND ITS APPLICATION: EVIDENCE FROM CHINA In this paper, we use the improved direct method and improved residual method to re-measure the annual scale and to measure the quarterly scale of the short-term international capital flows based on the Chinese Balance of Payment table. At the same time, we use the residual method to estimate the monthly scale of the Chinese short-term international capital flows as well. Then we explain and test these calculated results. Next we apply the results to the lead–lag analysis of macro-economy. To judge whether the short-term international capital flow is a leading indicator, we apply the Kullback–Leibler information method and cross-correlation analysis method to analyze the lead–lag relationship between the short-term international capital flows and macro-economy by selecting some representative macroeconomic indicators as a reference. Our empirical analysis shows that in China, the short-term international capital flow is a leading indicator to macro-economy and a coincident indicator to Purchasing Managers’ Index. In the end, we give some conclusions and policy proposals. Short-term capital flows, leading indicator, improved residual method, K-L information, cross-correlation analysis 06 2020 65 December The Singapore Economic Review 1645 1665 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500157 JUNYI SHI shigang@bnu.edu.cn School of Statistics, Beijing Normal University (BNU), No. 19, XinJieKouWai St., HaiDian District, Beijing 100875, P. R. China
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article IN PURSUIT OF UNDERSTANDING MARKUPS IN RESTAURANT SERVICES PRICES Measuring markups in restaurant services is a difficult task. Although the sales price is observed, cost of the product served is unobserved. In this study, we employ an intuitive framework and focus specifically on markups on soft drinks. We analyze the determinants of markup on soft drinks in restaurants over 2006–2014. Results suggest that current demand conditions (net minimum wage, output gap), major cost items (food and energy prices, exchange rate) and economic uncertainty (exchange rate volatility) significantly affect markups. This strategy enables the detection of relevant factors which may not be possible to detect in other settings. Restaurant services, markup, minimum wage, output gap, inflation, Turkey 06 2020 65 December The Singapore Economic Review 1423 1437 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500091 MUSTAFA UTKU ÖZMEN utku.ozmen@tcmb.gov.tr Economist, Central Bank of the Republic of Turkey, Research and Monetary Policy Department, İstiklal Caddesi, No
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article ESTIMATING THE CROSS-STRAIT PERFORMANCE OF A LOCAL COFFEE CHAIN THROUGH NETWORK META-FRONTIER DEA This study aims to understand how local enterprises establish brand awareness through tough entrepreneurship as well as focus on international markets so as to inject new ideas and to promote brand value. Examining this issue experimentally on B coffee company with data from Taiwan and China during 2010 to 2012, we use Network Meta-Frontier Data Envelopment Analysis to estimate the cross-strait performances of this firm in order to examine their differences and to propose direction for subsequent improvement. The empirical results are as follows. First, from 2010 to 2012 the channel scale and output in Taiwan is superior to that in China. Second, the performance of China’s channels is on the decline with large fluctuations, whereas Taiwan’s channels are getting better. Third, analyzing the average efficiency value of both sides comprehensively, we find that Taiwan’s channels perform more steadily due to a longer time of establishment and more mature allocation. Network Meta-Frontier Data Envelopment Analysis, business performance, diversification, coffee industry 06 2020 65 December The Singapore Economic Review 1439 1455 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500587 ZEBIN WANG szwzb@163.com School of Business, Soochow University, Suzhou, Jiangsu Province, People’s Republic of China YUNG-HO CHIU echiu@scu.edu.tw #x2020;Department of Economics, Soochow University, No. 56, Section 1, Kuei-Yang, Taipei, 100, Taiwan, ROC JIN-CHI HSIEH gchsieh@tpcu.edu.tw #x2021;Department of Business Administration for Taipei City University of Science and Technology, Taiwan, ROC YING LI #xA7;Business School, Sichuan University, People’s Republic of China YU-CHUAN CHEN ycchen@mail.chihlee.edu.tw #xB6;Department of Finance, Chihlee University of Technology, Taiwan, ROC YI-CHENG JAN snowgirljan@gmail.com #x2225;Barista Coffee Roasting Company, Taiwan, ROC
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article CAUSES OF HAZE AND ITS HEALTH EFFECTS IN SINGAPORE: A REPLICATION STUDY Intermittently, Singapore suffers from severe air pollution in periods of intense forest and peatland fires on neighboring South-Asian islands. A recent American Economic Review article modeled the causal relationships between fire intensity in Indonesia and air pollution (PSI) in Singapore, and between PSI and health clinic visits in Singapore. We find serious flaws in the quantitative assessment of these relationships. Attempts are made to repair these using the same classic methodology and data, but also by alternative methods requiring less speculative assumptions. Although actually more detailed data are required, there are some results produced which seem more credible. Endogeneity robust inference, environmental economics, health economics, instrument invalidity, sensitivity analysis 06 2020 65 December The Singapore Economic Review 1367 1387 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500460 JAN F. KIVIET Amsterdam School of Economics, University of Amsterdam, P. O. Box 15867, 1001 NJ Amsterdam, The Netherlands2Department of Economics, University of Stellenbosch, South Africa
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article THE MACROECONOMIC EFFECTS OF ENHANCED REFORMS IN CHINA Motivated by the idea that substantive reforms in China always happen intermittently and randomly, this paper constructs an RBC model, augmented with a shock that reflects the role of reforms and its randomly occurring character, to investigate the macroeconomic effects of enhancing the reform intensity. An increase in the average intensity of reforms leads to a higher economic growth rate permanently and provides sustainable support for economy when the potential growth rate declines. But it decreases the ergodic steady state of the detrended output, and this could have an adverse effect on economic growth in the short run. China, intensity of reforms, economic growth 06 2020 65 December The Singapore Economic Review 1619 1644 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500358 ZHIHONG JIAN zhihong.jian@hust.edu.cn School of Economics, Huazhong University of Science and Technology, No. 1037 Luoyu Road, Wuhan 430074, Hubei Province, P. R. China YEQING YANG School of Economics, Huazhong University of Science and Technology, No. 1037 Luoyu Road, Wuhan 430074, Hubei Province, P. R. China
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article WAGE INEQUALITY, UNEMPLOYMENT, AND EXPORT-ORIENTED POLICY This paper presents a simple model to address why openness to trade increases the dispersion in wages, unemployment, and capital intensity. However, the dispersion is stronger for developing countries. We argue that the export-oriented policy that most developing countries have widely adopted in recent decades, amplifies the dispersion in these countries. This paper also helps explain the conflicting evidence between two groups of developing countries: East Asian and Latin American. In comparison to the latter, the former has a track record since the 1960s of a miraculous performance in narrowing wage inequality and unemployment by practicing export-oriented policies. Export-Oriented Policy, Wage Inequality, Trade 06 2020 65 December The Singapore Economic Review 1753 1772 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500022 CHU-PING LO cplo@ntu.edu.tw National Taiwan University, Department of Agricultural Economics, Taipei, Taiwan
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article TAX REFORM AND ECONOMIC GROWTH NEXUS IN INDIA: EVIDENCE FROM THE COINTEGRATION AND ROLLING-WINDOW CAUSALITY This paper examines the impact of tax reform on the economic growth of India over the period 1975–2017. In order to measure the impact of tax reform on the economic growth, we have used various econometric tools like Maki and combined cointegration tests and the rolling-window causality test in this study. The study revealed that a stable long-run parameter stability relationship exists the series on tax reform but unable to obtain the short-run relationship. Results also revealed that growth-led taxation effects and tax-led-growth do not exist in India. Hence, India needs more policies which will help to remove inefficiencies created by the existing heterogeneous taxation system, revenue rate and inclusion of petroleum products, electricity, liquor and real estate and policymakers should adopt some policies for direct tax which reduce the imbalance in class. Tax reforms, economic growth, cointegration, rolling-window causality 06 2020 65 December The Singapore Economic Review 1699 1725 http://www.worldscientific.com/doi/abs/10.1142/S021759082050023X NARAYAN SETHI nsethinarayan@gmail.com Department of Humanities and Social Sciences, National Institute of Technology (NIT) Rourkela, 769008 Odisha, India SAILEJA MOHANTY saileja.mohanty@gmail.com Department of Humanities and Social Sciences, National Institute of Technology (NIT) Rourkela, 769008 Odisha, India SANHITA SUCHARITA Sanhita.sucharita@gmail.com #x2020;Department of Management Studies, Central University of Jharkhand, Ranchi, Barmbe Campus, Ranchi 835205, Jharkhand, India NANTHAKUMAR LOGANATHAN #x2021;Azman Hashim International Business School, Universiti Teknologi Malaysia, 81310 Johor Bahru, Johor, Malaysia
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article THE EFFECTS OF COMPETITION ON EFFICIENCY: THE VIETNAMESE BANKING INDUSTRY EXPERIENCE Given considerable changes in the Vietnamese banking environment brought about by significant reforms towards liberalization during the last two decades, this study investigates the evolution of competition and efficiency, compares the competition and efficiency of state-owned banks to joint-stock banks, and then tests the “quiet life” hypothesis in this industry over the period 2000–2014. This study employs the efficiency-adjusted Lerner index (i.e., market power) to capture competition, and the cost efficiency estimated by a Fourier-flexible function stochastic frontier analysis (SFA) to capture bank efficiency. This study firstly finds a slight improvement of competition and cost efficiency in the Vietnamese banking sector over the analysis period. Secondly, there are no significant differences in competition and cost efficiency level between state-owned and joint-stock banks. Thirdly, a positive causality running from competition to cost efficiency is documented, providing evidence of supporting the “quiet life” hypothesis. Finally, positive efficiency effects of the banks’ capital ratio and size are found, while insignificant impacts of the growth of GDP per capita and 2007 global financial crisis were observed. The results are strongly robust to a variety of tests. The findings suggest pro-competition, pro-capitalization and pro-size expansion policies in the Vietnamese banking sector if targeting at improving the cost efficiency of Vietnamese banks. Vietnamese banks, competition, efficiency, quiet life hypothesis 06 2020 65 December The Singapore Economic Review 1507 1536 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500114 THANH PHAM THIEN NGUYEN Business & IT Department/Academic Division, James Cook University, 149 Sims Drive, Singapore 387380, Singapore SON HONG NGHIEM son.nghiem@qut.edu.au Institute of Health and Biomedical Innovation (IHBI), Queensland University of Technology, Kelvin Grove, QLD 4059, Australia
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article HOW URBANIZATION AFFECTS ENERGY-ENVIRONMENT EFFICIENCY: EVIDENCE FROM CHINA Energy consumption and environmental pollution are along with urban sprawling, while the impact of urbanization on energy and environment is quite controversial. The study of urbanization and energy-environmental efficiency provides a new perspective to understand the correlation between urbanization, energy consumption and environment. In this paper, a Directional Distance Function-Data Envelopment Analysis (DDF-DEA) model is employed to investigate provincial energy-environment efficiency in China from 1999 to 2017. Then the mechanism of urbanization substantially affecting the energy-environment efficiency is empirically examined from the perspective of government and market, respectively. The results indicate that China’s energy-environmental efficiency is improving, but regional differences exist and have widened since 2005; the overall impact of urbanization on China’s energy-environment efficiency is negative while the mechanism differs between different regions. Specifically, government-dominated urbanization has promoted energy-environment efficiency in the eastern region, while has a negative impact in the central and western regions; market-led urbanization has a limited positive impact on energy-environment efficiency. These conclusions proved to be robust, and are of great significance for policymakers to take full use of the positive externality of urbanization to promote the energy-environment efficiency and improve the environment. Urbanization, energy-environment efficiency, regional difference, government-dominated, market-led 06 2020 65 December The Singapore Economic Review 1401 1422 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500447 YUFENG CHEN School of Economics, Center for Studies of Modern Business, Zhejiang Gongshang University, Hangzhou 310018, P. R. China†College of Business Administration, Capital University of Economics and Business, Beijing 100070, P. R. China ZHITAO ZHU School of Economics, Center for Studies of Modern Business, Zhejiang Gongshang University, Hangzhou 310018, P. R. China XI YU #x2021;School of Economics, Yunnan University, Kunming 650091, P. R. China
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article HAS MONETARY POLICY CAUSED HOUSING PRICES TO RISE OR FALL IN CHINA? This paper examines whether broader money supply (M2) and interest rate as two monetary policy tools may have differently affected housing prices in China. Empirical results show that there is a co-movement between housing prices and M2 in the short run and it becomes more pronounced after 2006 in the medium run. In addition, generally M2 positively affects housing prices. This supports the asset price channel which indicates that an easing monetary policy offers ample liquidity and results in raising the housing prices. The excess liquidity after 2008 spread to housing market, resulting in too much money chasing relatively few assets and triggering a surge in housing prices. On the other hand, we observe that co-movement between housing prices and interest rate is not very evident in most time. Moreover, we find that interest rate has a positive effect on housing prices which is not consistent with the user cost approach and indicates that a contracting monetary policy is not effective in curbing housing market. Not completely liberalized interest rate system and the high return on housing investments reduce the impact of interest rate on housing prices. These findings indicate that money supply is more effective than interest rate as channel to control the housing prices in China. The results are helpful for the scientific formulation of monetary policy for reasonable regulation of the market. Housing market, money supply, interest rate, continuous wavelet method 06 2020 65 December The Singapore Economic Review 1601 1618 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500145 XIAO-CUI YIN 305425933@qq.com School of Economics, Ocean University of China, Science and Information College, Qingdao Agriculture University, P. R. China CHI-WEI SU School of Economics, Qingdao University, P. R. China RAN TAO taotao0212@163.com Technological Center, Shandong Entry-Exit Inspection and Quarantine Bureau, Qingdao, P. R. China
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article IPO UNDERPRICING AND INFORMATION QUALITY OF PROSPECTUSES Effective information disclosure is the cornerstone of sustainable operation of the capital market. In the IPO market, whether public information in the prospectus can be fully captured by investors largely depends on the quality of valuation-relevant information. Based on Chinese prospectuses, we create five unique indicators to measure the information quality and examine the relationship between information quality and IPO underpricing. We find that high quality of information disclosure results in less underpricing because they relieve serious information asymmetry between issuing companies and investors. We provide a new method to supervise and improve the quality of non-financial information disclosure. Disclosure, information quality, prospectus, IPO 06 2020 65 December The Singapore Economic Review 1559 1577 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500289 KUO ZHOU zhoukuo2010@163.com School of Economics, Jilin University, Changchun, P. R. China BAICHENG ZHOU School of Economics, Jilin University, Changchun, P. R. China†China Center for Public Sector Economy Research, Jilin University, P. R. China HUAXIAO LIU liuhuaxiao@jlu.edu.cn #x2021;College of Computer Science and Technology, Jilin University, Changchun, P. R. China
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article INCOME, SOCIAL SECURITY AND CHINESE FAMILIES’ “TWO-CHILD” DECISIONS: EVIDENCE FROM URBAN RESIDENTS’ FERTILITY INTENTIONS The increase in income, the improvement of social security and the decline in the desire for fertility in urban residents have been extremely important social and economic phenomena in China over the past three decades. However, there have been few studies of China’s situations because of the use of long-term birth control. An analysis based on the framework of lifetime utility maximization for individuals indicated that income and social security have substitution effects on the number of births. This study conducts an empirical analysis with data extracted from the Chinese General Social Survey (CGSS). The results show that an increase in income lowers the willingness for fertility, and the endowment insurance system with subsidies lowers beneficiaries’ fertility intentions. Similarly, an increase in income and the improvement of social security decrease urban residents’ “two-child” fertility intentions significantly. Thus, although the steady growth of the economy and the continuous improvement of the social security system have provided the opportunity to relax China’s population policies, the substitution effect of income and social security on fertility intentions also needs to be considered. Two-child policy, income, social security, fertility intention 06 2020 65 December The Singapore Economic Review 1773 1796 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500101 ZHANGSHENG LIU College of City Construction, Jiangxi Normal University, Nanchang 330022, P. R. China YUANYUAN GONG yygong@huel.edu.cn #x2020;School of Economics, Henan University of Economics and Law, Zhengzhou 450046, P. R. China
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article RETAIL INVESTORS’ BIASED BELIEFS ABOUT STOCKS THAT THEY HOLD: EVIDENCE FROM CHINA’S SPLIT SHARE STRUCTURE REFORM We investigate the compensation plans during China’s split share structure reform, a unique event that affected the entire market and in which investors’ opinions over stock values can be measured. We find that anchoring effects and accruals biased investors’ valuations. Although previous studies have observed investor’s biased belief from their irrational trading behavior, our study provides direct evidence of their biases regarding stock values. In particular, the compensation ratio was lower for stocks with prices closer to the historical high and further from the 52-week high, for stocks with higher accruals and for stocks with higher misvaluations relative to industry peers. In addition, we find a strong herding effect for the compensation ratios of firms that had already completed the reform. These results are robust to control for the effects of risk sharing, differences in bargaining power, the price impact from the increased number of tradable shares and liquidity. Cognitive bias, misevaluation, behavioral finance, emerging markets 06 2020 65 December The Singapore Economic Review 1579 1599 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500078 YAN LUO luoyan@fudan.edu.cn School of Management, Fudan University, No. 670 Guoshun Road, Shanghai 200433, P. R. China XIAOLIN QIAN xiaolinqian@umac.mo Faculty of Business Administration, University of Macau, Av. Padre Tomás Pereira, Taipa, Macau JINJUAN REN jinjuanren@umac.mo Faculty of Business Administration, University of Macau, Av. Padre Tomás Pereira, Taipa, Macau YANJIAN ZHU Academy of Financial Research, College of Economics, Zhejiang University, 38 Zheda Road, Hangzhou, P. R. China
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article IDENTIFICATION AND PREDICTION OF CURRENCY CRISIS: MARKOV SWITCHING-BASED APPROACH This paper investigates ways of identifying and predicting currency crises in world-wide markets, with special focus on 1997 and 2008 currency crises. A novel Markov switching method is proposed for identifying currency crisis based on two states model, the turmoil state and tranquil state, which is the most suitable model considering the balance between model performance and computational demand. Compared with previous Markov switching currency crisis studies, the contribution of this paper comes from several ways. First, the dependent variable is different. While other papers use the exchange rate directly or the estimation of devaluation probability, this study uses the market pressure index calculated from nominal exchange rate and foreign reserves. Secondly, we allow different volatilities in different states, whereas other papers assume the same volatility in two states. Thirdly, our transition probabilities are constant rather than time-varying. The model shows evidence of state switching before crisis in many different currency markets. Lastly, we compare the Markov switching method with the widely used probit model which proposed an early warning system in terms of forecasting performance, and the empirical results show that the novel Markov switching method performs better than the probit model. Markov switching, probit model, currency crisis 06 2020 65 December The Singapore Economic Review 1667 1698 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500029 JIANGZE DU jiangzedu@jxufe.edu.cn School of Finance, Jiangxi University of Finance and Economics, P. R. China RUNFANG YU #x2020;Hong Kong Applied Science and Technology Research Institute, Hong Kong KIN KEUNG LAI #x2021;School of Economics and Management, Xidian University, P. R. China§Department of Industrial and Manufacturing Systems Engineering, The University of Hong Kong, Hong Kong
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article THE DETERMINANTS OF BANK CAPITAL STRUCTURE IN THE WORLD We examine the determinants of bank capital structure using a large sample of banks in the world. We find that banks determine their capital structure in much the same way as non-financial firms, except for growth opportunities. We also provide evidence that country-level factors, such as the legal system, bank-specific factors and economic conditions influence banks’ capital decisions through their impacts on bankruptcy costs, agency costs, information asymmetry and liquidity creation. The results show that, besides the direct effects, there are indirect impacts of country-level factors on the decision of bank capital. Our results have potential policy implications for the on-going regulatory reform. Bank, regulation, capital structure, leverage, risk 06 2020 65 December The Singapore Economic Review 1457 1489 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500010 DUNG VIET TRAN dungtv@buh.edu.vn International School of Business, Banking University Ho Chi Minh City, 700000 Ho Chi Minh City, Vietnam M. KABIR HASSAN Department of Economics and Finance, University of New Orleans, New Orleans, LA 70148, United States ANDREA PALTRINIERI andrea.paltrinieri@uniud.it University of Udine, Via Tomadini 30/A - 33100 Udine, Italy TRUNG DUC NGUYEN trungnd@buh.edu.vn Banking University Ho Chi Minh City, 700000 Ho Chi Minh City, Vietnam
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article CAUSALITY BETWEEN PEER-TO-PEER LENDING AND BANK LENDING IN CHINA: EVIDENCE FROM A PANEL DATA APPROACH This study applied a multivariate panel Granger causality test to examine the causal relationship between peer-to-peer lending (P2PL) and bank lending (BL) in China’s eight major regions for the period from 2014M01 to 2019M12. The empirical results of this paper support evidence for the P2PL leading hypothesis in regions such as Jiangsu and Hubei while the BL leading hypothesis relationship supports the evidence for regions such as Zhejiang and Shanghai. In addition, there is an interactive causal relationship between P2PL and BL in a region such as Shandong. However, the result of a neutrality hypothesis supports three of these eight major regions (Guangdong, Beijing and Sichuan). The findings of this paper provide important policy implications for China’s eight major regions as well as business sectors in the banking industry for understanding and predicting market conditions. P2PL, BL, bootstrap multivariate panel Granger causality, China 06 2020 65 December The Singapore Economic Review 1537 1557 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500332 TSUNG-PAO WU School of Accounting and Finance, Beijing Institute of Technology, Zhuhai No. 6 Jinfeng Road, Tangjiawan, Zhuhai City, Guangdong Province, China 519088, China HUNG-CHE WU wuhungche66@gmail.com Business School, Nanfang College of Sun Yat-Sen University, No. 882 Wenquan Avenue, Conghua District, Guangzhou City, Guangdong Province, China 510970, China SHU-BING LIU sbliu54@yahoo.com.tw Department of Finance, Shih Chien University Kaohsiung Campus, 200 University Road, Neimen, Kaohsiung City, Taiwan 84550, Taiwan HSIN-PEI HSUEH xuexinbei@hbue.edu.cn School of Finance, Hubei University of Economics, No. 8 Yangqiaohu Road, Jiang-xia District, Wuhan City, Hubei Province, China 430205, China CHIEN-MING WANG cmwang8@gmail.com School of Economics and Trade, Hubei University of Economics, No. 8 Yangqiaohu Road, Jiang-xia District Wuhan City, Hubei Province, China 430205, China
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article TRADE POLICY SPACE AND EXPORT PRODUCT DIVERSIFICATION This paper provides a quantitative measure of the concept of trade policy space, at the macroeconomic level, and examines its impact on export product diversification. Trade policy space has been defined as the room of manoeuvre available to a government once its current trade policy is depurated from the impact of structural domestic and international factors. The analysis has been carried out using an unbalanced panel dataset comprising 165 countries (both developed and developing countries) over the period 2002–2015. Results suggest that trade policy space is positively associated with export product diversification, and the higher countries’ development level, the greater is the magnitude of the positive effect of trade policy space on export product diversification. The analysis further shows for recipient-countries of Aid for Trade (AfT) flows that trade policy space is complementary with AfT inflows in inducing export product diversification. In particular, the higher the amounts of AfT inflows that accrue to these countries, the greater is the positive impact of trade policy space on export product diversification in AfT recipient-countries. Trade policy space, aid for trade, export product diversification 06 2020 65 December The Singapore Economic Review 1727 1752 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500575 SÈNA KIMM GNANGNON kgnangnon@yahoo.fr World Trade Organization, Rue de Lausanne 154, CH-1211 Geneva 21, Switzerland
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article COMPETITION, RISK AND PROFITABILITY IN BANKING SYSTEM — EVIDENCE FROM VIETNAM The development in information technology results in a significant increase in bank competition. The question of whether increased competition improves bank profitability and risk reduction is important in many aspects. This paper analyzes the impact of competition on profitability and risk in the context of Vietnam using OLS estimator on data set of 37 Vietnamese commercial banks. The main results present that banks with a higher competition index tend to have higher profitability which is measured by ROE and NIM. In addition, our empirical results also show that banks tend to take on more risk when facing increased competition. Bank competition, profit, risk, Vietnam banking system 06 2020 65 December The Singapore Economic Review 1491 1505 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500137 THI HIEN NGUYEN Vietnam — Japan Institute for Human Resources Development, Foreign Trade University, Vietnam HA GIANG TRAN giangth@ueh.edu.vn University of Economics Ho Chi Minh City, Vietnam
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article THE IMPACTS OF GLOBALIZATION ON THE LABOR SHARE: EVIDENCE FROM ASIA The decline in the share of labor income — an indicator of functional income distribution — has contributed to rising income inequality world-wide. Despite a growing literature, little is known about the effects of globalization on the labor share or inequality in Asia where some of the economies are most globalized. Applying fixed-effect regressions to panel data from 29 Asian economies over the period from 1980 to 2014, we focus on the impacts of globalization on the labor share in Asia where globalization is measured by trade openness and FDI. The modeling results show that trade openness is a significant determinant of the labor share. More specifically, the impact of export is significantly negative and the impact of import is positive. In terms of FDI, the coefficient of the inward FDI is significantly positive and that of the outward FDI is significantly negative in developing countries only. Globalization, labor share, income inequality, FDI, trade openness, Asia supp01 2020 65 December The Singapore Economic Review 57 73 http://www.worldscientific.com/doi/abs/10.1142/S0217590820440038 XIAOSHAN HU coralhu_cn@163.com Institute of World Economy, Fudan University, Shanghai 200433, P. R. China GUANGHUA WAN guanghuawan@yahoo.com Institute of World Economy, Fudan University, Shanghai 200433, P. R. China JING WANG School of Economics, Research Center for Economy of Upper Reaches of the Yangtze River, Center for Southeast Asian Studies, Chongqing Technology and Business University, Nan’an District, Chongqing 400067, P. R. China
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article NEGOTIATING POVERTY LINE-STUDY ON DENSITY EFFECT AROUND THE POVERTY LINE FOR INDIAN STATES Poverty is an interlacement of income distribution below a threshold value and inequality within that boundary. To unthread the fabric of poverty and understand the dimensions of impoverishment below and around the poverty line, a deeper examination of different facets of deprived and starving households is required. This paper attempts to provide an additional tool in monitoring poverty reduction by computing density ratio and decile density trends by applying Kernel density function for the consumer expenditure distribution from the National Sample Survey Organization’s 55th (2000), 61st (2005), 66th (2009) and 68th (2012) quinquennial rounds. The progressive Indian state Kerala has exhibited a higher density ratio with the poverty tail flattening when compared with the backward State Bihar. The ways and means to succeed in reaching the end of the sea of hardship in Bihar are explored keeping in view some of the most impressive achievements of Kerala, a developed Indian state. Poverty, poor, poverty line, poverty measurement, welfare, estimation methodology supp01 2020 65 December The Singapore Economic Review 139 160 http://www.worldscientific.com/doi/abs/10.1142/S0217590819440041 M. BALAJI mbalajiiitd@gmail.com Humanities and Social Sciences Department, Indian Institute of Technology Madras, Chennai, Tamil Nadu 600036, India
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article EMPLOYMENT DISCRIMINATION IN INDIAN MANUFACTURING INDUSTRIES: A LOGIT ANALYSIS Persistent socioeconomic inequalities in a society reduce the chances of employment for its weaker sections. In India, those most affected by inequality and discrimination are women, people of lower castes, rural households and illiterate people. This necessitates an analysis of the levels of discrimination and favoritism working against female, lower caste, rural and illiterate individuals in different manufacturing industries. This study presents an in-depth picture of employment in each industry with regard to the four variables selected — gender, caste, location and education. Fourth (2013–2014) and fifth (2015–2016) annual Employment and Unemployment Surveys have been used for the analysis. Manufacturing employment, labor attributes, Indian manufacturing, logit model, labor discrimination supp01 2020 65 December The Singapore Economic Review 233 259 http://www.worldscientific.com/doi/abs/10.1142/S021759081944003X ARUN KUMAR BAIRWA School of Humanities and Social Sciences, Indian Institute of Technology Indore, Madhya Pradesh, India JADHAV CHAKRADHAR #x2020;Centre for Economic and Social Studies (CESS), Hyderabad, Telangana, India PRITEE SHARMA School of Humanities and Social Sciences, Indian Institute of Technology Indore, Madhya Pradesh, India
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article INTRODUCTION TO THE SPECIAL ISSUE POVERTY-GROWTH-INEQUALITY TRIANGLE IN CHINA AND OTHER COUNTRIES supp01 2020 65 December The Singapore Economic Review 1 6 http://www.worldscientific.com/doi/abs/10.1142/S0217590820030034 GUANGHUA WAN guanghuawan@yahoo.com Institute of World Economy at Fudan University, China HAITAO WU wuhan_haitao@aliyun.com School of Business Management at Zhongnan University of Economics and Law, China YUAN ZHANG zhangyuanfd@fudan.eud.cn China Center for Economic Studies at Fudan University, China
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article URBANIZATION AND MIGRANT WORKERS’ CITIZENSHIP: THE CASE OF VIETNAM Similar to the hukou system in China, the household registration system () in Vietnam which represents the citizenship of its people has become a part of the Vietnamese society in the past 60 years. After the economic reform in 1986, the force of system has begun to wane; however, it still plays an essential role in everyday life of Vietnamese. Utilizing the new Household Registration Study (HRS) survey conducted by the World Bank in 2015, this paper employs Instrumental Variables (IV) to estimate the effect of citizenship (household registration status) on migrant workers in urban Vietnam. The main findings detect a pattern of discrimination against temporary residents in term of labor wages, which is different from the result of OLS estimation in the World Bank report. Household registration system, instrumental variables, migrant workers, labor market, Vietnam supp01 2020 65 December The Singapore Economic Review 211 232 http://www.worldscientific.com/doi/abs/10.1142/S0217590820440051 HUONG VO Institute for Society and Economy - Development and Policies Research Center (DEPOCEN), 12 Trang Thi, Hoan Kiem, Ha Noi, Vietnam2IDAS Program, 12F North Wing, General Building, National Chengchi University, No. 64 Zhinan Road Section 2, Wenshan, Taipei 11605, Taiwan
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article MEASURING INEQUALITY, POVERTY, GROWTH AND WELFARE VIA THE USE OF ASSET INDEXES: THE CASE OF ARMENIA, AZERBAIJAN AND GEORGIA This paper examines the evolution of inequality, poverty and welfare in the South Caucasian Asian states, using an aggregate index based on consumer durables available to the households. Instead of using principal components analysis to aggregate asset indicators into an overall asset index, we propose an ordinal approach to using data on assets, when estimating the wealth of a household (or individual). Using three different approaches (the concept of order of acquisition of durable goods, item response theory and correspondence analysis), we first derive the order of importance of the different assets. Then, we compute indices introduced recently to measure inequality, poverty and achievement, when only ordinal variables are available. Our empirical analysis, based on data collected by the Caucasus Barometer and covering the three states in South Caucasus shows that there exists such an order, that it does not really depend on the statistical approach adopted and that it was very similar in 2009 and 2013. Our results show that among the three countries analyzed, Armenia had the lowest degree of inequality in asset ownership and Georgia the highest. Whatever the approach or index used, ordinal inequality, increased in Armenia and Azerbaijan between 2009 and 2013, but slightly decreased during that period in Georgia. It also appears that poverty decreased in all three countries during this period. There was also important growth, when measuring the latter via the welfare index recently introduced by Apouey et al. (2019), assuming their parameter α→1. Achievement indices, asset indices, correspondence analysis, counting approach, item response theory, multidimensional poverty, order of acquisition of durable goods, ordinal inequality supp01 2020 65 December The Singapore Economic Review 7 33 http://www.worldscientific.com/doi/abs/10.1142/S0217590819440016 JOSEPH DEUTSCH jdeutsch@biu.ac.il Bar-Ilan University, Israel JACQUES SILBER Bar-Ilan University, Israel2LISER, Esch-sur-Alzette, Luxembourg3Centro Camilo Dagum, Tuscan Interuniversity Centre, Advanced Statistics for Equitable and Sustainable Development, Italy YONGSHENG XU yxu3@gsu.edu Department of Economics, Andrew Young School of Policy Studies, Georgia State University, Atlanta, USA GUANGHUA WAN guanghuawan@gmail.com Fudan University, P. R. China
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article SOCIO-ECONOMIC GROUPS, UPWARD AND DOWNWARD MOBILITY: AN AXIOMATIC FRAMEWORK AND INCOME MOBILITY IN CHINA FROM 1989–2011 A society is composed of different socio-economic groups. At a given time, individuals in the society can be classified into different such groups. With the change of time, individuals can move across different groups. Social mobility is viewed as an aggregation of such individual movements across different socio-economic groups. We develop a simple analytic framework to discuss the issue of social mobility, and derive a class of measures for social mobility. A prominent member of this class is the Bartholomew measure that has often been used in applied work. We apply our framework and the theoretical results to the Chinese society by investigating its income mobility for the period between 1989 and 2011. We find an increasing trend in income mobility in 1990s and a drop in the middle and the late of 2000s. By decomposing total mobility into subgroups and into movements, we find that the lowest income group and one/two-step moves make the largest contribution in total mobility. Social status, individual mobility, upward and downward mobility, social mobility, measurement of social mobility, Bartholomew measure, income mobility in China supp01 2020 65 December The Singapore Economic Review 35 56 http://www.worldscientific.com/doi/abs/10.1142/S0217590819440065 LEZHENG LIU lezhengliu@gmail.com China Academy of Public Finance and Public Policy, Central University of Finance and Economics, South College Road 39, Haidian District, Beijing, P. R. China BAOYUN QIAO baoyun.qiao@gmail.com China Academy of Public Finance and Public Policy, Central University of Finance and Economics, South College Road 39, Haidian District, Beijing, P. R. China XIAOYU WU China Academy of Public Finance and Public Policy, Central University of Finance and Economics, South College Road 39, Haidian District, Beijing, P. R. China YONGSHENG XU yxu3@gsu.edu #x2020;Andrew Young School of Policy Studies, Georgia State University, Atlanta, GA, U.S.A.
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article CREAM-SKIMMER OR UNDERDOG? A CASE STUDY OF LABOR TYPE SELECTIVITY IN A RURAL LABOR TRAINING PROGRAM IN CHINA The mismatch between a laborer’s abilities and the goals set forth by a training program is one of the most pressing concerns for a labor training program. This paper looks at the incentives for a laborer to enter a rural labor training program and demonstrates a clear method of analyzing the participation issues using instrumental regressions on the data collected from a case study a “poverty city” in the Zhejiang province, China. This paper shows that a pre-program wage drop may induce workers of a higher caliber to enter the training program and cause a “cream-skimming” effect on its outcome because of the S-shaped labor supply curve for the rural population who live in poverty. The result of the cream-skimming effect enhances the traditional view that a pre-program wage drop may reduce “opportunity cost” to enter a training program. This extension can be handy to revise future designs of rural labor training programs. Rural labor training, labor migration, labor market policy, poverty alleviation, sunshine program supp01 2020 65 December The Singapore Economic Review 185 210 http://www.worldscientific.com/doi/abs/10.1142/S021759082044004X YIU POR (VINCENT) CHEN School of Economy & Trade, Hunan University of Technology and Business, Changsha, 410205, P R China2Labor and Worklife Program, Harvard University, USA
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article POVERTY REDUCTION IN CHINA AND INDIA: A COMPARATIVE STUDY This paper attempts to explain why China performed better than India in reducing poverty. As two of the most populous countries in the world, China and India have both experienced fast economic growth and high inequality in the past four decades. Conversely, China adopted a more export-oriented development strategy, resulting in faster industrialization or urbanization and deeper globalization, than India. Consequently, to conduct the comparative study, we first decompose poverty changes into a growth and an inequality components, assessing the relative importance of growth versus distributional changes on poverty in China and India. Then, Chinese data are used to estimate the impacts of industrialization, urbanization and globalization on poverty reduction in rural China. The major conclusion of this comparative study is that developing countries must prioritize employment generation in secondary and tertiary industries through industrialization and globalization in order to absorb surplus agricultural labor, helping reduce poverty in the rural areas. Poverty reduction, growth and inequality components, globalization, industrialization, China, India supp01 2020 65 December The Singapore Economic Review 95 115 http://www.worldscientific.com/doi/abs/10.1142/S0217590820440026 TONGJIN ZHANG School of Economics, Tianjin University of Commerce, Tianjin, P. R. China YUAN ZHANG China Center for Economic Studies, Fudan University, Shanghai, P. R. China GUANGHUA WAN Institute of World Economy, Fudan University, Shanghai, P. R. China HAITAO WU School of Business Management, Zhongnan University of Economics and Law, Hubei, P. R. China
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article FOUR DECADES OF POVERTY AND CONSUMPTION IN CHINA Since 2010, China’s miraculous growth has come to a halt and has shown steady deceleration. To re-accelerate economic growth, stimulating domestic consumption is a crucial way with fighting poverty as the key step. This paper attempts to explore the impact of poverty on resident consumption in China over the last four decades. Based on provincial data, we first simulate income distribution at the individual level and provide moderate poverty profiles at the provincial level. The empirical analyses are then conducted to gauge the poverty impacts using the estimated poverty index. Results show that (1) moderate poverty has decreased sharply in China, with the best achievement in Beijing, Shanghai and Guangdong; (2) moderate poverty exerts a significantly negative impact on resident consumption; and (3) when poverty increases, resident consumption on household equipment decreases the most, while resident consumption on food, transportation, and telecommunication decreases the least. Poverty, consumption, China supp01 2020 65 December The Singapore Economic Review 117 138 http://www.worldscientific.com/doi/abs/10.1142/S0217590819440053 JINXIAN WANG Business School, Central South University, Changsha, P. R. China‡Department of Economics, Leiden University, Leiden, The Netherlands CHEN WANG #x2020;School of Urban and Regional Science, Shanghai University of Finance and Economics, Shanghai, P. R. China‡Department of Economics, Leiden University, Leiden, The Netherlands YAN ZHANG #xA7;School of Economics, Chongqing Technology and Business University, P. R. China
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article AGRICULTURAL CREDITS AND AGRICULTURAL PRODUCTIVITY: CROSS-COUNTRY EVIDENCE We present cross-country evidence suggesting that agricultural credits have a positive impact on agricultural productivity. In particular, we find that doubling agricultural credits generates around 4–5% increase in agricultural productivity. We use two different agricultural production measures: (i) the agricultural component of GDP and (ii) agricultural labor productivity. Employing a combination of panel-data and instrumental-variable methods, we show that agricultural credits operate mostly on the agricultural component of GDP in developing countries and agricultural labor productivity in developed countries. This suggests that the nature of the relationship between agricultural finance and agricultural output changes along the development path. We conjecture that the development of the agricultural finance system generates entry into the agricultural labor market, which pushes up the agricultural component of GDP and keeps down agricultural labor productivity in developing countries; while, in developed countries, it leads to labor-augmenting increase in agricultural production. We argue that replacement of the informal credit channel with formal and advanced agricultural credit markets along the development path is the main force driving the labor market response. Agricultural credits, productivity, labor markets, financial development supp01 2020 65 December The Singapore Economic Review 161 183 http://www.worldscientific.com/doi/abs/10.1142/S0217590820440014 UNAL SEVEN unal.seven@tcmb.gov.tr Structural Economic Research Department, Central Bank of the Republic of Turkey, Istiklal Caddesi No. 10, Ulus 06050, Ankara, Turkey SEMIH TUMEN #x2020;Department of Economics, TED University, Ziya Gokalp Caddesi No. 48, Kolej 06420, Ankara, Turkey
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article FINTECH, GROWTH AND INEQUALITY: EVIDENCE FROM CHINA’S HOUSEHOLD SURVEY DATA This paper represents an early attempt to investigate the growth and distributional effects of Fintech development, using household survey data from China. China’s rapid expansion of Fintech in the past decade has significantly improved the accessibility and affordability of financial services, particularly for formerly financially excluded population groups. Linking the index of digital financial inclusion with China Family Panel Studies (CFPS) data, we find that Fintech development is positively correlated with household income, and the positive effect is larger for rural households than the urban counterpart, suggesting that Fintech development has helped narrow the urban–rural income gap. Moreover, the poor gain more than the rich from Fintech development in rural China, indicating its benign distributive impacts within rural China. Fintech, growth, inequality, China supp01 2020 65 December The Singapore Economic Review 75 93 http://www.worldscientific.com/doi/abs/10.1142/S0217590819440028 XUN ZHANG School of Statistics, Beijing Normal University, Beijing, P. R. China2Institute of Digital Finance, Peking University, Beijing, P. R. China JIAJIA ZHANG School of Statistics, Beijing Normal University, Beijing, P. R. China3China Finance 40 Forum, Beijing, P. R. China GUANGHUA WAN guanghuawan@yahoo.com Institute of World Economy, Fudan University, Shanghai, P. R. China ZHI LUO Center for Economic Development Research, Wuhan University, P. R. China
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article SINGLE MARKET NON-COMPLIANCE: HOW RELEVANT IS THE INSTITUTIONAL SETTING? This paper investigates the role of the national institutional setting in explaining Single Market non-compliance regarding non-tariff barriers in intra-European Union (EU) trade. Using data on infringements to Single Market law we show that the quality of domestic institutional characteristics is relevant to explain non-compliance among EU countries. While government independence from political pressures and higher levels of representativeness and accountability reduce the propensity of member states to infringe upon Single Market laws, better regulatory quality increases the probability of non-compliance at industry level, suggesting that increases in competition may generate protectionist measures that violate Single Market law. Institutions, single market, non-compliance, non-tariff barriers, count data models 05 2017 62 December The Singapore Economic Review 1115 1135 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500861 NATÁLIA BARBOSA natbar@eeg.uminho.pt NIPE (Economic Policies Research Unit), School of Economics and Management, University of Minho, Braga, Portugal MARIA HELENA GUIMARÃES guimarmh@eeg.uminho.pt School of Economics and Management, University of Minho, Braga, Portugal ANA PAULA FARIA NIPE (Economic Policies Research Unit), School of Economics and Management, University of Minho, Braga, Portugal
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article UNEMPLOYMENT HYSTERESIS IN PIIGS COUNTRIES: A NEW TEST WITH BOTH SHARP AND SMOOTH BREAKS In this empirical study, we apply the Panel stationary test with both sharp and smooth breaks to re-examine the hysteresis hypothesis of unemployment for five high-debt countries, Portugal, Ireland, Italy, Greece and Spain (PIIGS) from 1960 to 2011. We find that our proposed model has greater power than a linear method if the true data-generating process of unemployment is a stationary, non-linear process of unknown form with structural changes. Hysteresis in unemployment is confirmed for all PIIGS countries when traditional unit root tests are employed; however, hysteresis in unemployment is confirmed only for Greece when our proposed Panel stationary test with both sharp and smooth breaks is utilized. Hysteresis in unemployment, PIIGS countries, Stationary test, sharp and smooth breaks, Fourier function 05 2017 62 December The Singapore Economic Review 1165 1177 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500782 JING-PING LI jingboh@126.com Department of Finance and Banking, Shanxi University of Finance & Economics, Shanxi, China OMID RANJBAR o_rangbar@yahoo.com Department of Economics, Allameh Tabataba’i University, Trade Promotion Organization (TPO), Tehran 15134, Iran TSANGYAO CHANG Department of Finance, Feng Chia University Taichung, Taiwan
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article APEC HAS INDEED CREATED INTRA-REGIONAL TRADE: A SYSTEMATIC EMPIRICAL ANALYSIS The Asia–Pacific Economic Cooperation (APEC) forum, whose approach is voluntary and non-binding in open regionalism, has been criticized for its alleged failure to develop a rapid liberalization process and to contribute to a greater level of intra-regional trade in the APEC region. Nonetheless, we find that APEC has been contributing to intra-regional trade creation, particularly in trade in manufactured goods as compared to trade in non-manufactured goods. This finding is robust to the various fixed-effect models and the first-differencing models which are applied to the gravity equation. APEC, open regionalism, augmented gravity models 05 2017 62 December The Singapore Economic Review 1077 1095 http://www.worldscientific.com/doi/abs/10.1142/S0217590815501039 JUNG HUR ecsjhur@sogang.ac.kr Department of Economics, Sogang University, 1 Shinsu-Dong, Mapo-Gu, Seoul 121-742, Korea HYUN-HOON LEE Department of International Trade and Business, Kangwon National University, Hyoja 2-Dong, Chuncheon, Gangwon-do 200-701, Korea
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article DOES OUTSOURCING HOUSEHOLD PRODUCTION HARM FUTURE HUMAN CAPITAL? EVIDENCE FROM MALAYSIA In some Asian countries, households import young women from poorer countries to work as live-in caregivers and maids. These caregivers are typically less educated than the child’s mother, so academic performance may suffer. The effects of ever having a foreign maid, a private tutor or a working mother are examined for Malaysian teenagers. Contrary to expectations, those ever having a foreign maid perform better in school examinations, recent private tutoring has positive impacts but earlier tutoring does not, and there is little effect of maternal employment. These results suggest no adverse effects on human capital from outsourcing household production. Domestic services, household production, human capital, migration, Asia, Malaysia 05 2017 62 December The Singapore Economic Review 959 981 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500745 PECK-LEONG TAN pecktan1@gmail.com Faculty of Business Management, Universiti Teknologi MARA Malaysia, Malaysia JOHN GIBSON #x2020;Department of Economics, University of Waikato, Private Bag 3105, Hamilton, New Zealand
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article BOOK REVIEW: “The Veil of Circumstance: Technology, Values, Dehumanization and the Future of Economics and Politics” 05 2017 62 December The Singapore Economic Review 1257 1259 http://www.worldscientific.com/doi/abs/10.1142/S0217590817800042 K. Ravi Kumar rkumar@utu.edu.sg Nanyang Technological University, 50 Nanyang Avenue, Administration Building, Level 3, Singapore 639798, Singapore
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article BOOK REVIEW: “Inequality, Inclusive Growth, and Fiscal Policy in Asia” 05 2017 62 December The Singapore Economic Review 1251 1252 http://www.worldscientific.com/doi/abs/10.1142/S0217590817800029 ALVIN PANG apang@ateneo.edu Economics Department, Ateneo de Manila University, Philippines
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article BALANCING ACT: ADJUSTMENT OF CHINA'S ECONOMY TO SECURE SUSTAINABLE GROWTH This paper uses income accounting techniques to assess, counterfactually, the implied impact over the last 10 years of a hypothetical government policy to constrain investment growth in order to raise the share of consumption in GDP and to bring about a balance on current account. We find that both target variables are very sensitive to changes in investment and that a policy of careful reform is called for. In the light of this finding, we review Chinese government policy pronouncements and activity with a view to assessing their appropriateness. China, global financial crisis, export-led growth, consumption-led growth, rebalancing, sustainable growth 05 2017 62 December The Singapore Economic Review 1097 1114 http://www.worldscientific.com/doi/abs/10.1142/S0217590815501003 SHI YUTIAN #x2020;School of English for International Business, Jilin Huaqiao University of Foreign Languages, P. R. China JOHN HICKS #x2021;School of Accounting and Finance and Institute of Land Water and Society, Charles Sturt University, Australia§School of Accounting and Finance, Charles Sturt University, Panorama Avenue, Bathurst, Australia, 2795, Australia P. K. BASU #x2021;School of Accounting and Finance and Institute of Land Water and Society, Charles Sturt University, Australia KISHOR SHARMA #x2021;School of Accounting and Finance and Institute of Land Water and Society, Charles Sturt University, Australia YAPA BANDARA #x2021;School of Accounting and Finance and Institute of Land Water and Society, Charles Sturt University, Australia TOM MURPHY #x2021;School of Accounting and Finance and Institute of Land Water and Society, Charles Sturt University, Australia
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article BOOK REVIEW: “The End of Alchemy: Money, Banking and the Future of the Global Economy” 05 2017 62 December The Singapore Economic Review 1261 1263 http://www.worldscientific.com/doi/abs/10.1142/S0217590817800054 JOHN LANE John.lane@hotmail.com NTU School of Humanities and Social Sciences, 14 Nanyang Drive, Singapore 637332, Singapore
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article FOREIGN DIRECT INVESTMENT, TRADE OPENNESS AND GDP IN CHINA, INDIA AND MEXICO This paper examines the short and long-run relationships between Foreign Direct Investment (FDI), Trade Openness and GDP in China, India and Mexico from 1980 to 2011. Based on the properties of individual time series data, the paper estimates the VAR or VECM of the three variables to determine short and long-run causal relationships. The results confirm the existence of long-run causal relationships between the three variables for China and Mexico. The results also point to sharp differences in short-run causal relationships in the three countries and several plausible explanations consistent with the findings are offered. FDI, trade openness, GDP, China, India, Mexico 05 2017 62 December The Singapore Economic Review 1059 1076 http://www.worldscientific.com/doi/abs/10.1142/S0217590815501076 ANIL K. LAL alal@pittstate.edu Department of Economics, Finance & Banking Kelce College of Business, Pittsburg State University, Pittsburg, KS 66762, USA
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article THE MACROECONOMICS OF A DELAYED RECOVERY FROM THE GLOBAL FINANCIAL CRISIS: A COMPARATIVE APPROACH This paper compares Denmark's growth performance to that of the other 18 non-Eurozone OECD economies during 2008–2013. Denmark is the only country with a fixed exchange-rate regime; all the other 18 countries have flexible exchange rates, mostly as part of an inflation-targeting (IT) framework. At the same time, Denmark is the worst growth performer of all. Our analysis indicates that the lack of monetary policy independence is central to understanding the meager Danish performance. Monetary easing during 2008–2009 is an important predictor of economic growth during 2008–2013, and Denmark, having outsourced monetary policy to the ECB, did not pursue monetary easing as aggressively as most other countries. In fact, the Danish Central Bank was forced to raise its policy interest rate in 2008Q4 in order to defend the euro-peg. Overall, the Danish experience serves as a reminder that fixed exchange rates can be quite taxing on economic growth in the aftermath of a huge negative shock. Exchange-rate regimes, monetary policy, financial crisis, economic growth 05 2017 62 December The Singapore Economic Review 1179 1194 http://www.worldscientific.com/doi/abs/10.1142/S0217590815501088 THOMAS BARNEBECK ANDERSEN Department of Business and Economics, University of Southern Denmark, Campusvej 55 Dk-5230 Odense M, Denmark NIKOLAJ MALCHOW-MØLLER nmm@sam.sdu.dk Department of Business and Economics, University of Southern Denmark, Campusvej 55 Dk-5230 Odense M, Denmark
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article BOOK REVIEW: “'Who Moved my Interest Rate?': Leading the Reserve Bank of India Through Five Turbulent Years” 05 2017 62 December The Singapore Economic Review 1253 1255 http://www.worldscientific.com/doi/abs/10.1142/S0217590817800030 NANDINI SUD nandinisud@pu.in.ac Department of Economics, Panjab University, Sector 14, Chandigarh 160014, India
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article EXTENT AND GROWTH EFFECTS OF INFORMALITY IN TURKEY: EVIDENCE FROM A FIRM-LEVEL SURVEY In this paper, we provide a measure for both the prevalence and growth effects of informality in Turkey using firm-level data from the Turkish Economy. The survey is conducted in April–May 2013 covering 1000 representative firms interviewing owners/head managers of the firms. Based on the information given by these owners and managers, the survey makes a complete characterization of several firm characteristics, provides complete information on the extent of informality as well as its effects on various economic outcomes of these firms. The cross-sectional econometric analysis we conduct using the survey data shows that there is an inverted-U relationship between a specific measure of informality and growth expectations of firms. These results shed light on our understanding of the specific channels through which informality affects firms’ growth not only in Turkey but in other emerging markets as well. Informality, growth, survey data 05 2017 62 December The Singapore Economic Review 1017 1037 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500794 KEREM CANTEKIN Department of Economics, University of Utah, 260 S. Central Campus Drive, Orson Spencer Hall, RM 343, Salt Lake City, UT 84112-9150, USA CEYHUN ELGIN ceyhun.elgin@boun.edu.tr Department of Economics, Bogazici University, Natuk Birkan Building, 34342 Bebek, Istanbul, Turkey
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article IMPACT OF EUROZONE SOVEREIGN DEBT CRISIS ON CHINA AND INDIA This paper analyzes the impact of the Eurozone debt crisis on China and India. Using Markov-switching analysis, we discern regimes in economic growth as well as financial markets and study the impact of the global financial crisis and Eurozone crisis on the same. We identify vulnerability and robustness factors governing the degree of exposure and resilience to the crisis for both these economies. In view of strong trade and financial linkages, the Eurozone crisis may have marred prospects of recovery in the aftermath of the recent Great Recession in both China and India. China, however, is found to be more resilient to the crisis possibly due to stronger macroeconomic fundamentals. Eurozone crisis, China, India, Markov-switching 05 2017 62 December The Singapore Economic Review 1137 1164 http://www.worldscientific.com/doi/abs/10.1142/S021759081550099X PAMI DUA dua@econdse.org Department of Economics, Delhi School of Economics, University of Delhi, Delhi 110007, India DIVYA TUTEJA Department of Economics, Delhi School of Economics, University of Delhi, Delhi 110007, India
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article INEQUALITY, FDI AND ECONOMIC DEVELOPMENT: EVIDENCE FROM DEVELOPING COUNTRIES This paper empirically investigates the impact of Foreign Direct Investment (FDI) on inequality using a panel data set of 65 developing counties. While the existing literature mainly examines the impact of FDI on growth, this study explores the importance of domestic conditions of the host countries in determining the distributional effects of FDI. The results show that the impact of FDI is not homogenous on host countries as FDI inflows exert inequality-narrowing effect only in countries that have stronger investment in human capital, better financial sector and a high level of economic development. While FDI accentuates not ameliorates inequality in countries with low level of economic development, findings of the study are robust to the use of different specifications, different estimation methods, inclusion of regional effects and time specific effects. FDI, economic development, inequality, developing countries 05 2017 62 December The Singapore Economic Review 1039 1057 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500678 MUHAMMAD TARIQ MAJEED tariq@qau.edu.pk School of Economics, Quaid-i-Azam University, Islamabad 44000, Pakistan
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article BOOK REVIEW: “Managing the Macroeconomy — Monetary and Exchange Rate Issues in India” 05 2017 62 December The Singapore Economic Review 1245 1249 http://www.worldscientific.com/doi/abs/10.1142/S0217590817800017 PAWAN GOPALAKRISHNAN pawangopalakrishnan@rbi.org.in Strategic Research Unit, Reserve Bank of India, Mumbai, 400001, India
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article UNEMPLOYMENT DYNAMICS IN THE ASIA-PACIFIC REGION: A PRELIMINARY INVESTIGATION This study empirically examined unemployment dynamics in 12 countries in the Asia-Pacific region, namely, China, Hong Kong, Taiwan, South Korea, Japan, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Australia and New Zealand. It used quarterly data on the unemployment rates from the first quarter of 1980 to the first quarter of 2013. This paper employed three different econometric methods, including the recently-developed powerful unit root test with structural break (Lee and Strazicich, 2003, 2004) and the nonlinear unit root test (Enders and Lee, 2012). The findings indicated that the unemployment rates in five countries of the region, namely, China, Taiwan, South Korea, the Philippines and Thailand, had highly dynamic labor markets in which higher-than-normal unemployment rates would revert to the normal level. The other seven Asia-Pacific countries had less dynamic labor markets. The findings of this study have some important policy implications. Unemployment dynamics, Asia-Pacific, nonlinear, unit root, structural break 05 2017 62 December The Singapore Economic Review 983 1016 http://www.worldscientific.com/doi/abs/10.1142/S021759081550085X FUMITAKA FURUOKA fumitaka@um.edu.my Asia-Europe Institute, University of Malaya, 50603 Kuala Lumpur, Malaysia
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article POLICIES AND BUSINESS MODELS FOR THE ELECTRIC MOBILITY REVOLUTION: THE CASE STUDY ON SINGAPORE A detailed total cost of ownership (TCO) model, with well-to-wheel carbon emissions assessment, is developed to analyze the economic competitiveness of battery electric vehicle (BEV) against conventional internal combustion engine (ICE) vehicles in Singapore. The model fully integrates the unique economic, institutional and social features of Singapore related to the ownership and usage of a passenger vehicle into consideration. Assuming current technologies and no change in the regulatory and policy framework, it is found that BEV is already economically competitive in certain niche markets of Singapore, such as small and midsize vehicles for car-sharing and corporate uses. In the near future, with technological progress, BEVs will become competitive in most parts of the Singapore passenger vehicle market, including small vehicles for household and small and midsize vehicles for car-sharing, corporate and taxi uses. However, certain supportive policies are called for, based on policy simulation results, to effectively accelerate the adoption of BEVs. Evidence also shows that supports should be given to the development of charging infrastructure at an early stage of BEV adoption. Battery electric vehicles (BEV), total cost of ownership (TCO), battery cost, supportive policy, ARF, Singapore 05 2017 62 December The Singapore Economic Review 1195 1222 http://www.worldscientific.com/doi/abs/10.1142/S021759081550109X YANFEI LI Economic Research Institute for ASEAN and East Asia (ERIA), Sentral Senayan II, 6th Floor Jalan Asia Afrika No. 8, Gelora Bung Karno, Senayan Jakarta Pusat 10270, Indonesia ROBERT KOCHHAN robert.kochhan@tum-create.edu.sg TUM CREATE Limited, 1 Creat Way, #10-02 CREATE Tower, Singapore 138602, Singapore
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article FINANCIAL EFFICIENCY OF TERTIARY EDUCATION INSTITUTIONS: A SECOND-STAGE DYNAMIC NETWORK DATA ENVELOPMENT ANALYSIS METHOD The overall performance of an organization depends on the operational efficiency of different divisions in a network structure. The organization is really efficient only if each division is operating efficiently. The linkage between divisions is inherently complex and needs to be perused to provide more appropriate solutions for further improvement. Using the advanced dynamic network data envelopment analysis method, this paper investigates divisional efficiency in relation to the overall performance of tertiary education institutions in a network structure. As an illustrative case, the performance of 82 Vietnamese public universities was analyzed for the period 2011–2013. The results indicate that the financial efficiency is 0.826, while the academic efficiency is 0.782. The overall dynamic network efficiency of public universities is 0.804 which strongly correlated with academic efficiency rather than financial efficiency. The second-stage fractional regression analysis is proposed to investigate the effects of contextual factors on the efficiency of the financial division. The findings reveal that enrolment growth, central management and location influence financial efficiency. These findings suggest that more consideration has to be given to government policies by removing enrolment quotas and complicated line management in the context of Vietnamese higher education. Dynamic network, data envelopment analysis, financial efficiencies, fractional regression model, universities 05 2021 66 September The Singapore Economic Review 1421 1442 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500133 CAROLYN-DUNG T. T. TRAN UNE Business School, University of New England Armidale, NSW 2351, Australia RENATO A. VILLANO rvillan2@une.edu.au UNE Business School, University of New England Armidale, NSW 2351, Australia
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article DETERMINANTS OF AGGLOMERATION IN KOREAN MANUFACTURING INDUSTRIES Despite accumulated findings on the effects of agglomeration on productivity of manufacturing industries in Korea, little is known about the determinants of agglomeration. Employing an approach similar to Rosenthal and Strange (2001) [Rosenthal, S and W Strange (2001). The determinants of agglomeration. Journal of Urban Economics, 50(2), 191–229.], but using a different agglomeration index, this study examines whether the three microfoundations of agglomeration economies are important to the geographical concentration of Korean manufacturing industries. While estimation results generally confirm that labor market pooling, input sharing and knowledge spillovers contribute to agglomeration, we found some differences with the previous literature. First, non-manufactured inputs are more influential on agglomeration than manufactured inputs. Secondly, aggregate innovation activities, rather than their share of shipments, are a better measure of knowledge spillovers to explain agglomeration. Thirdly, agglomeration of newly established firms is also influenced by the Marshallian externalities with labor market pooling having a stronger and consistent effect. These results are robust to instrumental variables estimation to control for endogeneity related to knowledge spillovers and labor market pooling. Agglomeration, employment location quotient, input sharing, knowledge spillovers, labor market pooling 05 2021 66 September The Singapore Economic Review 1293 1319 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500169 EUI-CHUL CHUNG echung@konkuk.ac.kr Department of Real Estate Studies, Konkuk University, Seoul 05029, Korea BUN SONG LEE Department of Accounting, Economics and Finance, University of Arkansas-Fort Smith, Fort Smith, AR 72913, USA CHANHO CHO Chanho.Cho@bhsu.edu Black Hills State University, College of Business, Spearfish, SD 57700, USA
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article NINE HISTORICAL VIEWS OF THE PHILLIPS CURVE: EIGHT AUTHENTIC AND ONE INAUTHENTIC There is a widely believed but entirely mythical story to the effect that the discovery of ‘the Phillips curve’ was, in the 1960s and 1970s, an inspiration of inflationist policy. One aspect of the explanation of how that myth came to be widely believed is considered in this paper. It is noted that the expression ‘Phillips curve’ was applied in a number of quite distinct and inconsistent ways, and as a result there was, by about 1980, an enormous confusion as to what that label meant. This confusion, as well as the multiplicity of possible meanings, it is suggested, provides part, although only part, of the explanation of the myth’s acceptance. Phillips curve, expectations, Phillips curve myth 05 2021 66 September The Singapore Economic Review 1125 1140 http://www.worldscientific.com/doi/abs/10.1142/S0217590821500351 JAMES FORDER james.forder@balliol.ox.ac.uk Balliol College, Oxford, UK
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article HOW DOES FOREIGN R&D AFFECT OECD EXPORT COMPETITIVENESS? This study is motivated by the observation that there are two East Asian countries, South Korea and China, emerging as major R&D players in the world during the past two decades. In addition to spillovers originated from the traditional R&D countries, the present study incorporates both direct and indirect spillovers from South Korea and China into the determination of the export performance of the OECD countries. The theoretical justification for the linkages of trade-related spillovers to export competitiveness is outlined in the theoretical model extended from [Keller, W (2004). International technology diffusion. Journal of Economic Literature, 42, 752–782.]. Our empirical investigation is focused on assessing the association of spillovers with both the capacity and technological content of export. To this end, the empirical model linking R&D spillovers to a composite measure of export competitiveness is constructed. Our results indicate the persistence of the two East Asian major R&D players in influencing the export capacity and technological content of the OECD countries. The results in turn suggest that maintaining a close relationship with South Korea and China can mitigate the competitiveness–dampening effect resulting from the R&D activities of large industrialized countries. Trade-related spillovers, export capacity, technological content of export, East Asian R&D 05 2021 66 September The Singapore Economic Review 1221 1247 http://www.worldscientific.com/doi/abs/10.1142/S021759081850011X WUN-JI JIANG wunji@cier.edu.tw Taiwan WTO and RTA Center, Chung-Hua Institution for Economic Research, Taiwan YIR-HUEIH LUH Department of Agricultural Economics, National Taiwan University, Taiwan SZU-CHI HUANG stacy950042@gmail.com Cathay United Bank, Taiwan
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article THE ADVERSE EFFECTS OF ECONOMIC POLICY UNCERTAINTY ON INDEMNIFICATORY HOUSING MARKET IN CHINA This paper empirically examines the impact of the economic policy uncertainty (EPU) index on market indicators of indemnificatory houses in China for the period from January 2012 to December 2018. We use three indicators of the indemnificatory housing market: (i) the price of commodity housing unit, (ii) the number of completion for indemnificatory housing unit and (iii) the amount of investment for indemnificatory housing unit. The findings from the Granger Causality in Distribution test show that the EPU causes the commodity housing price at the left-tail and the right-tail, but not at the centre of the distribution. Besides, the EPU causes the indemnificatory housing completion volume at the right tail, but not at the left and the centre of the distribution. Finally, we observe that the EPU causes the indemnificatory housing investment at the right tail but not at the left and the centre of the distribution. These findings indicate that the indemnificatory housing market in China is mainly affected by the extreme changes in the EPU. Chinese housing market, indemnificatory housing policies, economic policy uncertainty, EPU index, Granger Causality in Distribution 05 2021 66 September The Singapore Economic Review 1337 1353 http://www.worldscientific.com/doi/abs/10.1142/S0217590820460017 JIAN FU fujian2001@zjut.edu.cn Zhejiang University of Technology, Hangzhou, P. R. China XIAOFEN YU yxf@zjut.edu.cn Zhejiang University of Technology, Hangzhou, P. R. China CHUN KWONG KOO ��ESIC Business and Marketing School, Madrid, Spain WAI CHOI LEE wclee@hsu.edu.hk ��The Hang Seng University of Hong Kong, Hong Kong
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article SPECIAL ECONOMIC ZONES AND FDI ATTRACTION TO DISTRICTS IN VIETNAM: A NON-PARAMETRIC APPROACH Special Economic Zones (SEZs) are considered as an important regional industrial policy to attract foreign investment in a developing country such as Vietnam. The development of SEZs in Vietnam including the comprehensive review of infrastructure and business environment in SEZs is presented in this paper for the first time. Moreover, our results reveal the lower estimated density of domestic customers and suppliers connecting with foreign direct invested firms in SEZs in comparison to their domestic counterparts. Most importantly, this paper gives novel non-parametric evidence to indicate the positive causal effects of the zoning policies on the foreign direct investment at district level in the country during the period of 2011–2015. Vietnam, Special Economic Zones (SEZs), foreign direct investment (FDI) 04 2021 66 June The Singapore Economic Review 1027 1053 http://www.worldscientific.com/doi/abs/10.1142/S0217590820490077 HUONG QUYNH NGUYEN Foreign Trade University, HCM City Campus, No. 15 D5 Street, 25th Ward Binh Thanh District, Ho Chi Minh City, Vietnam2World Trade Institute, University of Bern, Hallerstrasse 6, 3012 Bern, Switzerland DAO NGOC TIEN dntien@ftu.edu.vn Foreign Trade University, Main Campus, No. 91 Chua Lang Street Dong Da District, Hanoi City, Vietnam
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article VIETNAM’s INCOMPLETE EXCHANGE RATE PASS-THROUGH We measure exchange rate pass-through (ERPT) for Vietnam and find that Vietnam’s ERPT is low, incomplete, and time varying. Our results also indicate that during appreciation periods ERPT is modest, but that during downturns ERPT effects are much larger. Moreover, our results indicate that the flexible exchange rate regime has successfully anchored the ERPT. Exchange-rate pass-through, incomplete pass-through, time varying pass-through, depreciation inflation, Vietnam 04 2021 66 June The Singapore Economic Review 1087 1104 http://www.worldscientific.com/doi/abs/10.1142/S0217590820490041 PHAM THI THANH XUAN phamxuan@ufm.edu.vn Finance-Banking department, University of Finance - Marketing, Ho Chi Minh City, Vietnam
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article BEYOND CONVENTIONAL TRADE: TRADE OPENNESS IMPLICATIONS OF TRADE IN VALUE ADDED This study compares the impacts of gross trade openness measures with trade openness in value-added measures on economic growth for the years 1995–2014 by employing a dynamic panel data estimation. Our findings suggest that although gross trade shares promote growth, using value-added trade shares magnifies this positive effect. Compared with gross terms, estimates also imply that while exports in value-added terms have much larger growth effect, imports in value-added terms have no significant impact. We then evaluate the impacts of tariffs on growth in terms of gross trade and trade in value added separately. Although our results imply the negative growth effects of gross import tariffs, this negative impact disappears for tariffs in value-added terms. These results reaffirm that trade protectionism has potential to lower global growth through reducing exports because it is clear that export shares regardless of their measurements and disaggregation levels promote growth. Our results indicate that countries should support not only exports of final products but also exports of intermediates. However, given the necessity of imports for exports, our results do not lend any evidence to discourage overall imports. Growth, gross trade shares, trade in value added, trade policy 04 2021 66 June The Singapore Economic Review 973 995 http://www.worldscientific.com/doi/abs/10.1142/S0217590820490053 HALIT YANIKKAYA Department of Economics, Gebze Technical University, Turkey ABDULLAH ALTUN ��Informatics and Information Security Research Center, The Scientific and Technological Research Council of Turkey, Turkey
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article Do Parental Absence and Children’s Gender Affect Early Childhood Investment? Evidence from Rural Thailand This paper studies how parental absence and children’s gender affect early childhood investment using a new dataset from rural Thailand. We found that relative to boys, girls received more time but less material investment. Relative to children with at least one parent present, children with absent parents received significantly less material investment; however, time investment was not significantly different between the two groups. Based on an economic model of early childhood investment, these results suggest that relative to material investment, time investment is more important for girls than for boys, and for households with absent parents than for households with at least one parent present. The estimation of the elasticity of substitution between time and material investments suggests that both types of investments are surprisingly complementary. Parental investment, early childhood investment, left-behind children, parental absence, child’s gender, elasticity of substitution 05 2021 66 September The Singapore Economic Review 1443 1468 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500267 NGỌC TÚ T. Ä INH ngoctu@riped.utcc.ac.th Research Institute for Policy Evaluation and Design (RIPED), University of the Thai Chamber of Commerce, 126/1 Building 21, 7th Floor, Vibhavadi Rangsit Road, Dindaeng, Bangkok 10400, Thailand WEERACHART T. KILENTHONG Research Institute for Policy Evaluation and Design (RIPED), University of the Thai Chamber of Commerce, 126/1 Building 21, 7th Floor, Vibhavadi Rangsit Road, Dindaeng, Bangkok 10400, Thailand
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article DOES RESERVE ACCUMULATION LEAD TO ENDOGENOUS MONEY SUPPLY IN CHINA? This study investigates the causality between reserve accumulation and money supply in China over the period of 2000:01–2016:11. The bootstrap Granger full-sample and sub-sample rolling window causality tests are utilized. The full-sample test supports that reserve accumulations lead to significant endogenous money supply. However, the sub-sample test suggests that the endogenous money supply caused by reserve accumulations mostly existed before 2007 when China implemented a compulsory exchange settlement system. Structural changes also exist as a result of the impacts of excess money supply and reserve accumulations, which suggests specific backgrounds should be taken into account when investigating this issue. The rolling window causality test provides a more accurate result when considering structural changes, which proves reserve accumulations are more likely to cause endogenous money supply in a compulsory exchange settlement system. The significant difference before and after 2007 suggests that the ending of the compulsory exchange settlement system is helpful to improve the monetary policy independence. Reserve accumulation, endogenous money supply, bootstrap rolling window 05 2021 66 September The Singapore Economic Review 1321 1336 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500042 XIN LI shin_li@sjtu.edu.cn Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai, P. R. China JIAO-JIAO FAN Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai, P. R. China CHI-WEI SU cwsu7137@gmail.com School of Economics, Qingdao University, Qingdao, P. R. China ADELINA DUMITRESCU PECULEA adelinadumitrescu02@yahoo.com Department of Economics and Public Policies, National University of Political Studies and Public Administration, Bucharest, Romania
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article DETERMINANTS OF A COUNTRY’S GNP TO GDP POSITION: A REVISIT The aim of this paper is to identify the factors that could contribute to an increase in a country’s GNP relative to its GDP. This represents a sequel to [Tan, EC, CF Tang and RD Palaniandi (2019). What could cause a country’s GNP to be greater than its GDP? Singapore Economic Review, https://doi.org/10.1142/S0217590819500073.] on what could cause a country’s GNP to exceed its GDP. Annual data of a panel of 52 countries from 1992 through 2016 are mobilized for the purpose, with the sample period split into five-year average intervals. The possible determinants of the relative position include the savings-investment gap, international reserves, state of technology, demography, unemployment, export-orientation, income inequality, size of the primary commodities sector, financial repression, tax incidence and the ease of doing business. Based upon the application of the system GMM technique to winsorized data and filtered data from Cook’s Distance Outlier Test, the savings-investment gap could enhance the GNP–GDP percentage of a country. The percentage could be lowered by export orientation, uneven income distribution and the size of the working age population. GNP, GDP, determinants, GMM, panel 05 2021 66 September The Singapore Economic Review 1141 1152 http://www.worldscientific.com/doi/abs/10.1142/S0217590821500296 EU CHYE TAN ��Department of Economics, Faculty of Economics & Administration, University of Malaya, Malaysia TIEN MING YIP yiptienming@um.edu.my ��Department of Applied Statistics, Faculty of Economics & Administration, University of Malaya, Malaysia
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article ON THE EFFECT OF IMPERFECT COLLUSION ON PROFITABILITY AND R&D We consider a theoretical model where firms can reduce their initial unit costs by spending on R&D. We show that the degree of product market collusion (captured by the coefficient of cooperation) might reduce firms’ profits if innovation is made non-cooperatively. The intuition is that non-cooperative R&D introduces a negative externality where firms invest over and above the amount required to minimize costs so as to extract profits from their rival firm. Therefore, when product market competition drops below a certain level, a relatively large amount is spent on R&D with just a small output, making further collusion unprofitable. On the contrary, a Research Joint Venture (RJV) helps to internalize the externality and further product market collusion always increases firms’ profits. As a consequence, total welfare may be lower if R&D is made cooperatively. R&D, Imperfect collusion, research joint ventures 05 2021 66 September The Singapore Economic Review 1249 1259 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500230 MARC ESCRIHUELA-VILLAR Departamento Economía Aplicada. Universitat de les Illes Balears Cra. de Valldemossa km 7.5. 07122 Palma (Islas Baleares), Spain JORGE GUILLÉN jguillen@esan.edu.pe ��Escuela de Administración de Negocios para Graduados (ESAN). Alonso de Molina 1652, Monterrico, Surco. Lima, Perú
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article SINGAPORE’S LIFE PROGRAM: ACTUARIAL FRAMEWORK, LONGEVITY RISK AND IMPACT OF ANNUITY FUND RETURN The Central Provident Fund (CPF) is a defined-contribution savings plan forming the key pillar of the pension system in Singapore. The CPF Lifelong Income For the Elderly (LIFE) program, which provides lifetime income for retirees, is a mandatory pension scheme for all Singapore residents. In this paper we construct an actuarial framework to analyze the LIFE program. We use this framework to study the plan payout outcomes with respect to changes in mortality and annuity fund return assumptions. We also examine the effects of some possible changes in the program on the payouts and bequests. Life annuity, inflation risk, investment returns, longevity risk 05 2021 66 September The Singapore Economic Review 1355 1371 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500199 KOON-SHING KWONG kskwong@smu.edu.sg School of Economics, Singapore Management University, 90 Stamford Rd, Singapore 178903, Singapore YIU-KUEN TSE School of Economics, Singapore Management University, 90 Stamford Rd, Singapore 178903, Singapore WAI-SUM CHAN chanws@cuhk.edu.hk Department of Finance, The Chinese University of Hong Kong, 12 Chak Cheung St, Sha Tin, Hong Kong
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article MANUFACTURING PRODUCTIVITY IN THE INDIAN STATES In this paper, we study the total factor productivity (TFP) of manufacturing industries in 22 Indian states for the periods 2008–2009 and 2011–2012 using industry data from ASI database. We estimate TFP by ordinary least squares using cross-sectional data. For correcting potential endogeneity, we apply two-stage least-squares approach using intermediate inputs as instruments. Our results show that despite a faster growth in the industries in the sample period, there appear wide regional disparities in the TFP in most industries assessed. We note that low-productivity states display a higher variation in TFP across industries than high-productivity states. Our results also confirm the dominance of capital-intensive techniques in Indian manufacturing. In addition, more importantly, there appears to be no sign of change in elasticity of inputs over the sample period. Productivity, manufacturing, two-stage least squares, Indian states 05 2021 66 September The Singapore Economic Review 1261 1292 http://www.worldscientific.com/doi/abs/10.1142/S021759081850008X RUPIKA KHANNA Indian Institute of Management Lucknow, Prabandh Nagar, IIM Road, Lucknow, Uttar Pradesh 226013, India CHANDAN SHARMA Indian Institute of Management Lucknow, Prabandh Nagar, IIM Road, Lucknow, Uttar Pradesh 226013, India
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article RISK–RETURN RELATIONSHIP IN ASIAN, AMERICAN AND EUROPEAN STOCK MARKETS The purpose of this study is to investigate the symmetric and asymmetric relationships between changes in implied volatility indices (VIs) and the market returns for Asian, American and European markets over a period of 10 years spanning from March 2009 to December 2019. In this study, the symmetric and asymmetric return–volatility relationships are examined using three different models, in which return and volatility are taken as dependent and independent variables and vice versa. The Granger casualty test is applied to study the lead–lag relation between return and volatility. The major findings of the study are as follows: firstly, there exists a contemporaneous inverse relationship between implied volatility indices and market returns of various international markets. Secondly, there exists an asymmetric volatility–return relation in the emerging markets (India and Japan). Thirdly, the contemporaneous returns produce a significant asymmetric impact on the changes in volatility index. This supports that the behavioral explanations, such as representativeness and affect heuristic, dominate the return–volatility relation. The empirical investigations provide evidence in favor of the fact that implied VIs play an efficient role in capturing the current perception of the risk. The implications of this kind of study for the investment community and regulatory bodies are rather multifaceted. This asymmetric relationship between return and volatility can be useful for volatility traders in determining the market direction during high- and low-volatility regimes. Hence investment in the future and option contracts based on these indices will help traders hedge against volatility in a single transaction. India volatility index, India VIX, asymmetries, Granger causality test, model-free volatility index 05 2021 66 September The Singapore Economic Review 1397 1420 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500411 RUHEE MITTAL Department of Management Studies, Rukmini Devi Institute of Advanced Studies, 2A & 2B, Phase-1, Madhuban Chowk, Outer Ring Road, Rohini, New Delhi 110085, Delhi, India KARAM PAL NARWAL karampalhsb@gmail.com Haryana School of Business, Guru Jambheshwar University of Science & Technology, NH-10, Rohtak Hissar Sirsa Road, Hisar 125001, Haryana, India VED PAL SHEERA vedpalhsb@gmail.com Haryana School of Business, Guru Jambheshwar University of Science & Technology, NH-10, Rohtak Hissar Sirsa Road, Hisar 125001, Haryana, India
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article NOT ALL GOODS ARE CREATED EQUAL: TARIFF CONCESSIONS IN THE KOREA–CHINA FREE TRADE AGREEMENT In this paper, we use a multinomial logit model and identify the important factors in determining the staging categories of Korean tariff concessions in the Korea–China free trade agreement (FTA). We find that most-favored-nation (MFN) tariff rates and whether a product is agricultural or not are the most influential determinants of tariff concessions in the FTA. The results also show that the effects of the determinants are heterogeneous over industries: the influence of the Chinese import share is more pronounced for agricultural products than for manufactured goods, while that of MFN tariffs is less prominent for agricultural products. The latter result implies that quite a few Korean agricultural products are heavily protected in the FTA, despite their relatively low MFN rates. Tariff concessions, FTA, multinomial logit model, China, Korea 05 2021 66 September The Singapore Economic Review 1205 1219 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500187 HYEJOON IM hi6w@ynu.ac.kr School of Economics and Finance, Yeungnam University, Daehak-ro 280, Kyungsan 38541, South Korea
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article PARENTS’ SOCIAL NETWORK, JOB LOCATION, AND GRADUATE WAGES: EVIDENCE BASED ON THE FIRST JOBS OF GRADUATES FROM A CHINESE COLLEGE This study investigates the effects of parents’ social network (PSN) and job location on graduate wages by using a unique dataset from one Chinese college. First, PSN significantly increases wage premium. Secondly, although graduates who work in their hometowns do not earn higher incomes than those who work outside their hometowns, the former significantly benefit from their PSN. Thirdly, the nepotism channel of PSN may be more important than the information channel, and PSN is more important for female graduates. Our results exhibit robustness to endogeneity. This paper emphasizes the importance of social networks and provides evidence on the intergenerational immobility of socioeconomic status, which raises significant policy implications. Parents’ social network, job locations, graduate wages, China 05 2021 66 September The Singapore Economic Review 1469 1497 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500151 GAOWEN KONG konggaowen@gmail.com School of Economics and Statistics, Guangzhou University, Guangzhou 510006, Guangdong, P. R. China SHASHA LIU sarahliu@jnu.edu.cn School of Management, Jinan University, Guangzhou 510270, P. R. China DONGMIN KONG School of Economics, Huazhong University of Science and Technology, Wuhan 430074, Hubei, P. R. China
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article OPTIMAL EMISSIONS TAXATION AND INTERNALIZATION OF ENVIRONMENTAL DAMAGE WHEN EMISSIONS OCCUR DURING USE OR AT DISPOSAL In a durable-goods oligopoly in which emissions may occur during use or at the disposal of the good, the comparison between the optimal emission tax in a period and marginal environmental damage in that period may not be relevant for environmental policy, as producers’ decisions depend on the expected total emission tax per unit produced in each period and the units of the good produced in one period may cause emissions and environmental damage in future periods. In this paper, through the study of optimal emission taxes, the total expected optimal emission tax per unit produced in a period is compared with the expected overall marginal environmental damage from the last unit produced in that period when the regulator can commit to future emission taxes and also when the regulator cannot commit to such taxes. Optimal emission taxes, durable good, internalization of environmental damage, imperfect competition, commitment ability 05 2021 66 September The Singapore Economic Review 1499 1519 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500218 AMAGOIA SAGASTA Department of Foundations of Economic Analysis II and BRiDGE, University of the Basque Country UPV/EHU, Spain JOSÉ M. USATEGUI josemaria.usategui@ehu.eus Department of Foundations of Economic Analysis II and BRiDGE, University of the Basque Country UPV/EHU, Spain
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article Book Review: "Asia’s Journey to Prosperity: Policy, Market, and Technology over 50 Years" 05 2021 66 September The Singapore Economic Review 1541 1543 http://www.worldscientific.com/doi/abs/10.1142/S0217590821800011 GUANIE LIM National Graduate Institute for Policy Studies (GRIPS), Japan
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article SPECIAL ISSUE: INTERNATIONAL TRADE AND BUSINESS IN THE AGE OF DIGITAL TRANSFORMATIONS 04 2021 66 June The Singapore Economic Review 969 972 http://www.worldscientific.com/doi/abs/10.1142/S0217590821020033 TUAN LUONG De Montfort University, Leicester, United Kingdom DUC KHUONG NGUYEN ��IPAG Business School, Paris, France‡International School, Vietnam National University, Hanoi, Vietnam
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article POPULATION AGING SHOCK AND FISCAL SUSTAINABILITY IN CHINA: MECHANISM ANALYSIS AND EFFECT SIMULATION With the acceleration of population aging in China, the number of pure beneficiaries in the economy is higher than that of pure contributors, which seriously affects fiscal sustainability. This paper probes into the influence path and mechanism of population aging to fiscal sustainability in China, and numerically simulates the extent of such influence using a generational accounting method. Aging reduces the tax base and enlarges fiscal expenditure by reducing the quantity of labor and labor productivity, changing the resident’s consumption level and structure, cutting down the saving rate, and widening the gap between social security revenue and expenditure, all of which challenge the balance of the fiscal system. The empirical results show that the problem of inequality in terms of the fiscal burden across generations is extremely prominent and the per capita tax burden under different birth rate assumptions is obviously different. Under the pressure of aging, in order to maintain the fiscal balance, the future per capita tax burden will be increased by a maximum of 55.9%. Although increasing productivity and reducing interest rates can help reduce that gap, their roles are far less important than the role of fertility. In order to cope with aging, the fiscal system should see an increase in income, a reduction in expenditure, and a redeployment of structure. That is, while at the same time perfecting the tax system and widening the tax base, the expenditure structure should also be optimized. Aging, fiscal system, generational accounting, balance of revenue and expenditure 06 2021 66 December The Singapore Economic Review 1687 1708 http://www.worldscientific.com/doi/abs/10.1142/S0217590818420018 BAIHUI LIU Chinese Academy of Social Sciences, P. R. China ZHIYONG YANG Chinese Academy of Social Sciences, P. R. China
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article MODELING A FLEXIBLE RETIREMENT AGE TO NARROW PENSION GAP: THE CASE OF CHINA With the relatively fixed retirement age, the dramatic increase in life expectancy and the sharp decline in fertility have caused a serious aging problem and an unsustainable pension crisis. It is therefore necessary to design flexible retirement benefits rules that consider life expectancy. By introducing the lifetime utility optimization model, the closed-form solution for the flexible retirement age is obtained. Pension benefits incentive strategies are constructed to encourage contributors to choose a retirement age that is beneficial toward narrowing the pension gap. The empirical studies show that China will face a serious pension gap in the future if the current statutory retirement age is not adjusted. If the retirement age is delayed according to life expectancy, the future pension gap will be greatly reduced. Flexible retirement age, life expectancy, pension gap, incentive strategy, China 06 2021 66 December The Singapore Economic Review 1665 1685 http://www.worldscientific.com/doi/abs/10.1142/S0217590818420079 YALI LIU Center for Science and Technology Metrics, Institute of Scientific and Technical Information of China, No. 15, Fuxing Road, Haidian District, Beijing 100038, P. R. China†School of Economics and Management, Beihang University, No. 37, Xueyuan Road, Haidian District, Beijing 100083, P. R. China MEIYING YANG myang@buaa.edu.cn ��School of Economics and Management, Beihang University, No. 37, Xueyuan Road, Haidian District, Beijing 100083, P. R. China HAITAO ZHENG ��School of Economics and Management, Beihang University, No. 37, Xueyuan Road, Haidian District, Beijing 100083, P. R. China YUNYUN JIANG jiang_yunyun@163.com ��School of Economics, Peking University, No. 5, Summer Palace Road, Haidian District, Beijing 100871, P. R. China DONGFANG GU gdf8516@126.com ��School of Economics and Management, Beihang University, No. 37, Xueyuan Road, Haidian District, Beijing 100083, P. R. China
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article “RAISE CHILDREN TO FIGHT AGAINST AGING†: THE DETERMINANTS OF ELDERLY WELLBEING IN TODAY’S CHINA As the old Chinese saying goes, “raise children to fight against aging†is used to describe the most desirable life arrangement for Chinese elderly people, as it reflects the core idea of filial piety that lies near the heart of the Confucian doctrine regulating society. In a fast-changing economy, are these traditional values still hold for Chinese elderly? Applying the China Health and Retirement Longitudinal Study (CHARLS), we explore the determinants of elderly’s wellbeing in modern China. We have a particular interest in whether living with their children, receiving pecuniary/material transfer or support from children or having more children significantly affects the wellbeing of the elderly. We find that these factors have no significance in affecting the wellbeing of the elderly in China. Furthermore, among the factors significantly determining the wellbeing of Chinese elderly people, pensions and health care are very important, particularly to the elderly in rural areas. Notably, gross domestic product (GDP) level of the province or municipality, where the elderly habitats have a significant impact on elderly’s wellbeing and this echoes with some contemporary research. Wellbeing, happiness, depression, elderly, China, living arrangement, filial piety 06 2021 66 December The Singapore Economic Review 1613 1645 http://www.worldscientific.com/doi/abs/10.1142/S0217590818420031 CONGMIN PENG Department of Business Management, College of Management, National Sun Yat-Sen University, No. 70 Lienhai Road, Kaohsiung City, 80424, Taiwan, ROC PO-WEN SHE Department of Financial Management, College of Management, National Sun Yat-Sen University, No. 70 Lienhai Road, Kaohsiung City, 80424, Taiwan, ROC3The University of Cambridge, The Old School Trinity Ln, Cambridge CB2 1TN
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article DOES POPULATION AGING INCREASE PORK TRADE IN ASIA? This paper estimates the impact of population aging on bilateral pork trade between 32 Asian countries (regions) by using a gravity model that incorporates old-age dependency ratio variables. The Poisson pseudo-maximum-likelihood regression performs better than the ordinary least-squares method in the estimations. An aging labor force stimulates pork exports because it reduces pork production costs by supplying the pork industry with low-wage older laborers. An aging consumer-based economy increases pork imports because older consumers usually have higher incomes. Population aging has both a time characteristic and a country characteristic on pork trade in Asia. Increasing birth rates and reforming the pork industry from the supply side are two feasible policy recommendations for aging Asian countries (regions). Pork trade, Asia, aging, old-age dependency ratio, PPML 06 2021 66 December The Singapore Economic Review 1733 1758 http://www.worldscientific.com/doi/abs/10.1142/S0217590818420055 HONGJUN TAO School of Economics and Management, Fuzhou University, Shangjie, Minhou, Fuzhou 350108, P. R. China LIANG ZHAO ty33zl@163.com ��School of Economics, Fujian Normal University, Fuzhou 350007, P. R. China JEFF LUCKSTEAD jluckste@uark.edu ��Division of Agriculture and Bumps College, University of Arkansas, Fayetteville, AR, USA CHAOPING XIE xiecp@vt.edu �College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, P. R. China
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article INTRODUCTION TO SPECIAL ISSUE ON ECONOMIC ISSUES OF POPULATION AGING IN ASIA 06 2021 66 December The Singapore Economic Review 1545 1547 http://www.worldscientific.com/doi/abs/10.1142/S0217590821020045 JR-TSUNG HUANG jthuang@nccu.edu. Department of Public Finance, National Chengchi University, Taipei 116, Taiwan, ROC
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article THE INFLUENCE OF THE ELDERLY POPULATION ON ECONOMIC GROWTH IN CHINA While most studies have shown that an aging population has a negative impact on economic growth, the potentially positive factor of a young elderly population may be neglected. The purpose of this study is to investigate the following two hypotheses: the young elderly population (aged from 60 to 69) with a strong academic background has a positive impact on the economy in China, and the elderly population has a negative impact on the economy in China. Official provincial-level panel data from 1996 to 2016 for 29 provinces are utilized in fixed-effects models with and without controlling for heteroskedasticity and cross-sectional dependence, as well as in DIFF-GMM and SYS-GMM models in the dynamic panel regression estimation. The primary finding of this study is that young elderly people with a strong educational background can positively affect China’s economic growth and can partly alleviate the negative effect of the overall elderly population. This conclusion is quite robust regardless of which econometric method is adopted. Aging population, China, dynamic panel model, economic growth, young elderly with a strong academic background 06 2021 66 December The Singapore Economic Review 1595 1611 http://www.worldscientific.com/doi/abs/10.1142/S0217590818420080 XIAOLIANG ZHOU xlzfzu@163.com Economics, No. 2, Xueyuan Road, University Town, School of Economics and Management, Fuzhou University, P. R. China TING LI Economics, No. 2, Xueyuan Road, University Town, School of Economics and Management, Fuzhou University, P. R. China
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article ECONOMIC CONSEQUENCES OF POPULATION AGING IN JAPAN: EFFECTS THROUGH CHANGES IN DEMAND STRUCTURE In this paper, I investigate the effects of changes in demand structure caused by population aging on the Japanese economy using a multi-sector new Keynesian model with job creation/destruction analysis. I consider upward revisions in forecast for the speed of Japanese population aging as unexpected shocks to its demand structure. I find that the shocks caused around 0.3% point deflationary pressure on year-to-year inflation, 0.3% to 0.4% point increase in unemployment rates, and 1.8% point decrease in real GDP from the early 1990s to the 2000s in Japan. I also find that the repetition of such upward revisions made those effects look more persistent. Population aging, matching, productivity, deflation 06 2021 66 December The Singapore Economic Review 1709 1731 http://www.worldscientific.com/doi/abs/10.1142/S0217590818420067 MITSURU KATAGIRI mitsuru.katagiri@hosei.ac.jp Hosei University, 2 Chome-17-1 Fujimi, Chiyoda City, Tokyo 102-8160, Japan
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article DO KINSHIP NETWORKS CROWD OUT THE NEW RURAL PENSION PLAN IN CHINA? POLICY IMPLICATIONS FOR AN AGING CHINA Using data from China Family Panel Studies in 2012, this paper investigates the impact of kinship networks on participation in the New Rural Pension Plan (NRPP) in China. The theoretical model and empirical results indicate that kinship networks can provide informal social security, such as psychological security and financial transfers from relatives. Thus, people who are part of stronger kinship networks are less likely to participate in the NRPP than their counterparts. Our research facilitates an understanding of the interaction between social networks and formal institutions and provides policy implications for an aging China. Kinship networks, social security, pension, aging China 06 2021 66 December The Singapore Economic Review 1647 1663 http://www.worldscientific.com/doi/abs/10.1142/S021759081842002X DONGJIE TAO taodongjie@hbue.edu.cn School of Finance and Public Administration, Hubei University of Economics, Wuhan, P. R. China JUNPENG WANG ��School of Public Administration, Zhongnan University of Economics and Law, Wuhan, P. R. China HONGYING CAI chy123@hbue.edu.cn School of Finance and Public Administration, Hubei University of Economics, Wuhan, P. R. China KUI ZHAO zhaokui2015@hust.edu.cn ��School of Management, Huazhong University of Science and Technology Wuhan, P. R. China
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article POPULATION AGING, MIDDLE-INCOME TRAP, AND ECONOMIC GROWTH: AN EMPIRICAL STUDY OF ASIAN ECONOMIES Population aging and the middle-income trap are serious problems felt worldwide, especially in terms of their powerful influence on economic growth. In order to explore the relationships among population aging, middle-income trap, and economic growth, this study uses a panel data of 27 economies in Asia from 1995 to 2016. The primary finding of this study is that lower-middle-income economies are facing the problem of middle-income trap, indicating that the economic growth rates of lower-middle-income economies are slowing down. In addition, population aging has a statistically significant and negative influence on the growth rate of GDP in the high-income economies, but it has a statistically significant and positive influence on the growth rate of GDP in the low-income and lower-middle-income economies. This study suggests that increasing women’s labor participation, technology innovation, and immigration could solve the problems of population aging and the middle-income trap. Population aging, middle-income trap, economic growth, panel smooth regression model 06 2021 66 December The Singapore Economic Review 1577 1594 http://www.worldscientific.com/doi/abs/10.1142/S0217590818420092 JIUN-NAN PAN edouard@saturn.yzu.edu.tw Discipline of Accounting, College of Management, Yuan Ze University, Taoyuan 320, Taiwan, ROC MING-LEI CHANG Department of Accounting, College of Business, Chung Yuan Christian University, Taoyuan 320, Taiwan, ROC
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article THE EFFECTS OF DEMOGRAPHIC CHANGES ON REGIONAL ECONOMIC GROWTH: EVIDENCE FROM JAPAN Since the 1970s, due to the combination of the declining birthrate and rising longevity, the speed of population aging in Japan has been more dramatic than in any other developed country. Consequently, the growth of the working population, which had been faster than the growth of the total population, has gradually become slower in recent years than the latter in Japan. Moreover, similar rapid demographic changes are taking place at various speeds in all prefectures. By introducing demographic variables into empirical models of regional economic growth, which is based on prefecture-level panel data for the period 1980–2010, this paper shows that the recent demographic changes in Japan have had significant effects on its regional economic growth: the contribution of the growth rate difference between the working population and the total population to per capita Gross Regional Domestic Product (GRDP) growth rate, i.e., the demographic bonus, has disappeared. In addition, the growth rate of the aged population (65 years old and over) has had a very significant negative effect on per capita GRDP growth rate, while the growth rate of the young population aged 0–14 has had a significant positive effect. The findings of this study imply that Japan’s population aging and other ongoing demographic changes will continue to depress economic growth in all prefectures. Given the low probability of a significant rise in the birth rate and the rapid increase in the local labor supply, it is important for all prefectures in Japan to raise the quality of their labor-force and improve productivity. Meanwhile, effectively attracting young skilled workers to migrate from other regions/countries should be a key policy issue for both local and central governments in Japan. Aging, working population, demographic change, regional economic growth, per capita GRDP, effects, Japan 06 2021 66 December The Singapore Economic Review 1549 1575 http://www.worldscientific.com/doi/abs/10.1142/S0217590818420109 ERBIAO DAI Asian Growth Research Institute, 11-4 Otemachi, Kokura-kita, Kitakyushu, Fukuoka, Japan TATSUO HATTA hatta@agi.or.jp Asian Growth Research Institute, 11-4 Otemachi, Kokura-kita, Kitakyushu, Fukuoka, Japan
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article FISCAL TRANSPARENCY AND FOREIGN DIRECT INVESTMENT IN CHINA This study aims to explore the influence of fiscal transparency on foreign direct investment (FDI, hereafter) in China under the consideration of the spatial dependence of FDI. The study adopts panel data for 30 provinces from 2010 to 2014 to estimate a one-way fixed-effect spatial Durbin model. The primary finding of this study is that a higher level of fiscal transparency will attract more FDI, while keeping other factors constant and considering the spatial dependence of FDI. Other explanatory variables, such as gross regional product and the density of railways, also have statistically significant influences on FDI. Consequently, this study suggests that the Chinese local governments should improve their fiscal transparency in order to attract more foreign capital and further stimulate their economic development as well as China’s economic growth as a whole. China, foreign direct investment, fiscal transparency, one-way fixed-effect spatial Durbin model 04 2018 63 September The Singapore Economic Review 839 859 http://www.worldscientific.com/doi/abs/10.1142/S0217590817420127 JR-TSUNG HUANG jthuang@nccu.edu.tw National Chengchi University, No. 64, ZhiNan Road Sec. 2, Taipei 116, Taiwan MING-LEI CHANG #x2020;Chung Yuan, Christian University, Taoyuan 32023, Taiwan
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article THE PROGRESSIVE RIFT OF THE EUROZONE: RISKS AND REMEDIES Due to rigid rules, incomplete institutions and concentration on short-run fiscal discipline, economic and institutional diversity and insufficient reforms caused the progressive segmentation of the Eurozone. Insufficient integration process is due to lack of trust among member countries and the need to keep a hard budget constraint of national budgets to avoid uncontrolled inflationary pressure and moral hazard. Although understandable in the short run, this situation is causing serious economic and social costs and damages to the development of vulnerable countries. The paper enquires possible solutions to this dangerous stalemate, that could also provide useful suggestions for other countries. Crisis, Eurozone, institutions, policies, reforms 04 2018 63 September The Singapore Economic Review 943 965 http://www.worldscientific.com/doi/abs/10.1142/S0217590817420097 BRUNO DALLAGO bruno.dallago@unitn.it Department of Economics and Management, University of Trento, Via Inama 5, 38122 Trento, Italy
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article REBALANCING IN CHINA: FISCAL POLICIES FOR SUSTAINABLE GROWTH The 1993/1994 reforms in China created the fiscal space for public investment and rapid growth, based on modern tax instruments (VAT) and administration by offsetting local gainers and losers though the transfer system — and allocation of funds for investment in coastal hubs. Current challenges of congestion, pollution, and growing inequality require the design and financing for new sustainable growth hubs. This will involve an interface between local, national and cross border investments in connectivity under the One Belt One Road Initiative, together with new options for subnational (local) own-taxes, transfers, service delivery and strengthened governance mechanisms to monitor and manage liabilities, including PPPs. China, structural change, fiscal policies and institutions 04 2018 63 September The Singapore Economic Review 861 884 http://www.worldscientific.com/doi/abs/10.1142/S0217590817420085 EHTISHAM AHMAD Grantham Research Institute, London School of Economics, London WC2A 2AE, UK2Pao Yu-Kong Professor, Zhejiang University, P.R. China
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article DECOMPOSITION OF SOCIAL INCOME ADJUSTMENT EFFECT OF CHINA’S PERSONAL INCOME TAX AND SELECTION AMONG DIFFERENT UNIFORM INCOME TAX MODES Based on 10342 Chinese family samples, by means of non-linear models, the effects of wage income tax (WIT), individual business income tax (IBIT) and other income tax (OIT) on the income gap in China are analyzed. It is found that China’s classified income tax is helpful to narrow the income gap. WIT plays a very important role in narrowing the income gap, with IBIT and OIT widening the income gap. Such income taxes, especially WIT, cause differences of the tax burden between taxpayers who have the same income amount. Uniform income tax is an indispensable measure to solve the problems. On the basis of the income tax systems of 13 countries, 16 different kinds of personal or household uniform income tax modes were built up. Namibia’s household uniform income tax mode is practical to China, because the income adjustment effect of such mode is stronger than that of China’s classified income tax, but the average tax rate of it is lower than that of China’s classified income tax. Personal income tax, Gini coefficient, non-linear model 04 2018 63 September The Singapore Economic Review 917 941 http://www.worldscientific.com/doi/abs/10.1142/S0217590817420036 HU HUA huhua2009@126.com School of Economics, Nankai University, Lequn N Rd, Nankai Qu, Tianjin Shi, China
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article GREEN TAX LEGISLATION FOR SUSTAINABLE DEVELOPMENT IN CHINA Environmental pollution has produced adverse impacts on sustainable development in China, and the inappropriate tax legal regime may be one of the important causes. There are only three separate laws concerning three types of taxes, and most of the other taxes are collected by regulations or rules. China has not adopted particular tax laws concerning environmental protection by December 25th, 2016, and has not enforced any special environmental tax law, and polluters are primarily charged for their pollution activities as a way of assuming their legal liabilities, which has significant shortcomings. Under the situations of addressing climate change and constraining and curing environmental pollution for sustainable development, a comprehensive system of green tax laws shall be established and perfected by making and enforcing Environmental Protection Tax Law and improving the existing tax laws involved in environmental protection. Green tax legislation, sustainable development, environmental protection, environmental pollution, system of tax laws 04 2018 63 September The Singapore Economic Review 1059 1083 http://www.worldscientific.com/doi/abs/10.1142/S0217590817420103 ZHONGFA MA Fudan University Law School, Fudan University, Jiangwan Campus, Shanghai 200438, P. R. China JIANFU ZHAO 16110270016@fudan.edu.cn Fudan University Law School, Fudan University, Jiangwan Campus, Shanghai 200438, P. R. China JIAHUI NI 15210270054@fudan.edu.cn Fudan University Law School, Fudan University, Jiangwan Campus, Shanghai 200438, P. R. China
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article INNOVATIONS IN THE SUSTAINABLE MANAGEMENT OF LOCAL GOVERNMENT LIABILITIES IN CHINA Through the first and second year of China’s 13th five-year plan coincided with local governments holding their own “Two Sessions” before attending the “Two Congresses” in Beijing in March. As one of the frequent results, the issue of local government debt naturally became a popular topic. The scale of local government debt in China was/is considerable, and the structure is complex, which poses a threat to sustained economic development. To address this situation, China must regulate local government debt, clean up urban financing vehicle debt, foster and manage the local bond market, and introduce innovation in the management of local government liability. Only through initiatives such as this will China gain control of local government debt and thus support and promote the long-term sustainable growth of the economy. Financial credit, local government debt, local bonds market, new budget law, sustained management 04 2018 63 September The Singapore Economic Review 819 837 http://www.worldscientific.com/doi/abs/10.1142/S0217590817420115 JINCHUAN SHI shijinchuan01@163.com Center for Research of Private Economy, Zhejiang University, 38 Zheda Road, Hangzhou 310027, China ZHIKAI WANG wangzhikai@zju.edu.cn #x2020;School of Economics, Zhejiang University, 38 Zheda Road, Hangzhou 310027, China XIAOJIANG WANG #x2021;Timmy Community Service Centre, No. 460 Miyun Road, Yangpu District, Shanghai 200092, China
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article EDITORIAL NOTE In recent years, the economic slowdown growth has been continuing in China, in tandem with the difficult situations faced by the world emerging economies, it could weaken the confidence of the world economic recovery. China is now facing many structural problems and fiscal reform is one of the fundamental ways to make structural changes that may help with sustainable development. In the introductory paper, the coordinators of this Special Issue of the Singapore Economic Review contextualize the contributions that follow the broader debates on fiscal reform and sustainable development in China, particularly with the summary of reality and vision, options for improvement, international perspectives and consolidation of taxation reform and legislation, running through the collection of papers. They conclude with suggestions for policy decision as well as for further research. 04 2018 63 September The Singapore Economic Review 809 818 http://www.worldscientific.com/doi/abs/10.1142/S0217590818020034 ZHIKAI WANG wangzhikai@zju.edu.cn Zhejiang University, China JINCHUAN SHI shijinchuan01@163.com Zhejiang University, China
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article LOCAL PUBLIC DEBT MANAGEMENT: LESSONS FROM GREECE IN INCLUSIVE ECONOMIC PERSPECTIVE This paper discusses the potential dangers of adversarial debt management in China between central and local authorities. It draws lessons from Germany’s recent mishandling of the Greek debt crisis to illustrate nuances and stresses the wisdom of cooperation and mutual support in restoring balance to local Chinese finance. Inclusive economic theory provides additional insight. Greek crisis, Chinese local debt management, bounded rationality, hegemonic intervention, mutual support 04 2018 63 September The Singapore Economic Review 967 980 http://www.worldscientific.com/doi/abs/10.1142/S0217590817420061 STEVEN ROSEFIELDE Department of Economics, University of North Carolina at Chapel Hill, USA YIYI LIU liuyiyitasha@gmail.com #x2020;Education Policy Initiative at Carolina, University of North Carolina, USA
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article INFORMAL INSTITUTIONS AND LOCAL PUBLIC INVESTMENTS IN RURAL CHINA In this paper, we empirically investigate the impact of informal institutions on local public investment in rural China. We find that lineage groups have a significant effect on local public investment (per capita investment in irrigation, schools, roads, etc.): One clan is good for local public goods investment, while two or more clans in a village have a negative effect. The effect is increasing with the coverage of the largest clan. The evidence on religious groups is mixed. Informal institutions, lineage groups, public investment, rural China 04 2018 63 September The Singapore Economic Review 899 916 http://www.worldscientific.com/doi/abs/10.1142/S0217590817420012 JIANGLI DOU jianglidou@zju.edu.cn Center for Research of Private Economy and School of Economics, Zhejiang University, Zheda Road 38, Hangzhou 310027, P. R. China BING YE Center for Research of Private Economy and School of Economics, Zhejiang University, Zheda Road 38, Hangzhou 310027, P. R. China
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article CHINA’S INDUSTRIAL STRUCTURE UPGRADE IN THE “NEW NORMAL”: EMPIRICAL TEST AND DETERMINANTS This paper measures the index of industrial structure upgrade nationally, regionally and provincially by employing angle cosine method. The results show that China’s industrial structure has upgraded and the East is higher than the Northeast and the Midwest. The paper presents an empirical study to examine the effect of variables including demand-side factors, New Normal as a dummy variable and supply-side factors on industrial structure upgrading. It implies that New Normal is not significant, while consumption, investment, technology improvement and labor supply significantly facilitate the upgrade. It highlights policy suggestions designed to adopt innovation-driven strategy and regional economy development strategy. New normal, industrial structure, index of upgrade, demand-side factors, supply-side factors 04 2018 63 September The Singapore Economic Review 1037 1058 http://www.worldscientific.com/doi/abs/10.1142/S021759081742005X WEN XIAO xiao_w80@hotmail.com College of Economics, Zhejiang University, Hangzhou, P. R. China JIA-DONG PAN pjdxyz@163.com #x2020;Zhejiang Institute of Administration, No. 1000, West Wenyi Road, Hangzhou, P. R. China LI-YUN LIU #x2021;Department of Management, Zhejiang Chinese Medical University, Hangzhou, P. R. China
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article THE RESEARCH ON THE DILEMMA OF THE LOCAL GOVERNMENT FINANCE IN LESS-DEVELOPED AREAS: XINGGUO COUNTY SURVEY This study examines the financial rights and responsibilities of China’s local villages and townships based on a field survey conducted in Xingguo County. This field study focussed on local revenues and expenditures from 2012 to 2014. Upon analyzing data from the survey, we noted numerous difficulties of local financial management due to a lack of well-configured financial authority and power among central and local governments. In addition, revenues and expenditures are unbalanced at the local government level in China. Rural financial management systems need to be improved, and the rural finance function should be strengthened. Local government responsibilities, financial right, survey, underdeveloped areas, China 04 2018 63 September The Singapore Economic Review 885 897 http://www.worldscientific.com/doi/abs/10.1142/S0217590817420048 CHANGBIAO ZHONG zhongchangbiao@nbu.edu.cn School of Economic and Management, China Jiliang University, Hangzhou, P. R. China NANNAN DONG Business School of Ningbo University, Ningbo, P. R. China
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article THE HETEROGENEOUS TAX BURDEN: EVIDENCE FROM FIRM-LEVEL DATA IN CHINA Firms’ behaviors are not only affected by their taxation burden level, but also their differences from each other. In this paper, we use Chinese Industrial Enterprises Database (CIED) to investigate the relationship between firms’ heterogeneity of tax burden and firms’ characteristics, such as size, ownership, exportation and location. We measure a firm’s tax burden in three ways, the value-added tax (VAT) burden, the corporate income tax (CIT) burden, and the total tax burden. By using a Hausman–Taylor estimation, we find: (1) The CIT burden is positively correlated to the size, while other two tax burdens are not; (2) Both the VAT burden and the total tax burden of SOEs are significantly heavier than those of non-SOEs, while the CIT burden shows the exactly opposite effect; (3) Exporters have a remarkably lower tax burden than non-exporters for all three tax burden measures; and (4) The western region and particularly the central region have lighter tax burden than the eastern region for all three tax burden measures. We also provide empirical evidence and policy suggestions for continuing to proceed with the structural tax reduction and the structural fiscal reform in China. Tax burden, size, ownership, exportation, location, structural tax reduction 04 2018 63 September The Singapore Economic Review 1003 1035 http://www.worldscientific.com/doi/abs/10.1142/S0217590817420073 JIANLIANG YE jianliangye@zju.edu.cn Center for Research of Private Economy and College of Economics, Zhejiang University, 38 Zheda Road, Hangzhou, Zhejiang Province 310027, P. R. China XIAOHAN GUO guoxiaoyjy@126.com College of Economics, Zhejiang University, 38 Zheda Road, Hangzhou, Zhejiang Province 310027, P. R. China DEMING LUO Center for Research of Private Economy and College of Economics, Zhejiang University, 38 Zheda Road, Hangzhou, Zhejiang Province 310027, P. R. China XIANGRONG JIN jinxiangrong@sina.com Center for Research of Private Economy and College of Economics, Zhejiang University, 38 Zheda Road, Hangzhou, Zhejiang Province 310027, P. R. China
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article LOCAL ADMINISTRATION AND LOCAL POWER IN SPAIN: RECENT REFORMS AND DEBATES. LESSONS FOR AND FROM CHINA In Spain, as in China, local administration concentrates a number of problems. This is a level of financially weak government. In addition, this fragility is increased, because the municipalities manage numerous services to citizens. Since 2008, the outbreak of the economic crisis caused many difficulties to municipalities, which borrowed. The central government has responded in 2013 with a local reform, which seeks to control the spending of municipalities. Faced with this attempt, municipalities have responded by introducing more economic discipline. Undoubtedly, some of these Spanish lessons may be important for the experience of China, where economic problems of local power are similar. Local administration, centralization, municipality, financial sufficiency, governance 04 2018 63 September The Singapore Economic Review 981 1001 http://www.worldscientific.com/doi/abs/10.1142/S0217590817420024 RUBÉN C. LOIS-GONZÁLEZ Faculty of Geography and History, University of Santiago de Compostela, Praza da Universidade 1, 15782, Santiago de Compostela, Spain CARLOS AYMERICH-CANO aymcan@udc.es Faculty of Law, University of Coruña, Campus de Elviña s/n, 15007-A Coruña, Spain
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article IMMIGRATION, INNOVATION, AND ECONOMIC GROWTH This paper investigates the empirical effects of immigration on economic growth in a panel dataset of 30 Organization for Economic Cooperation and Development (OECD) countries for the period from 1991 to 2015. We find no effect of immigration generally on economic growth. However, a country’s foreign student share has a robust positive association with the country’s economic growth rate. The results, in conjunction with recent evidence of an immigration–innovation connection, suggest that the foreign student share works through new business startups. Economic growth, foreign students, human capital, immigration policy, innovation, business regulations 03 2021 66 June The Singapore Economic Review 685 699 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500164 MEHMET HUSEYIN BILGIN mehmet.bilgin@medeniyet.edu.tr Faculty of Political Sciences, Istanbul Medeniyet University, Istanbul, Turkey GIRAY GOZGOR giray.gozgor@medeniyet.edu.tr Faculty of Political Sciences, Istanbul Medeniyet University, Istanbul, Turkey PETER RANGAZAS Department of Economics, Indiana University — Purdue University Indianapolis, Indianapolis, IN, USA
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article JOB FORMALITY AND EARNINGS DIFFERENCES AMONG MIGRANTS AND NON-MIGRANTS: EVIDENCE FROM FOUR INDONESIAN CITIES Informal employment is a critical source of income for both internal migrants and non-migrants. This study uses the Rural–Urban Migration in Indonesia (RUMiI) project data for 2008 and 2009 to investigate the role of informal employment in earnings among internal migrants and non-migrants in Indonesia while considering the broader nature of informal employment and remuneration. Results show that when using a detailed measure of informality, income consequences of more intensive informal employment are severe, which had not been recognised in the literature. Some of the largest earnings reductions resulting from moving to more informal employment were experienced by non-migrants. Internal migration, informal employment, Indonesia, remuneration, panel data 03 2021 66 June The Singapore Economic Review 653 683 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500204 PAMUDI BANJITHA ABEYNAYAKE SENADHEERAGE pamu.ab@gmail.com Department of Economics, Monash University Malaysia, Jalan Lagoon Selatan, Bandar Sunway, 47500 Subang Jaya, Selangor, Malaysia GARETH DAVID LEEVES Department of Economics, Monash University Malaysia, Jalan Lagoon Selatan, Bandar Sunway, 47500 Subang Jaya, Selangor, Malaysia AUDREY K. L. SIAH Department of Economics, Monash University Malaysia, Jalan Lagoon Selatan, Bandar Sunway, 47500 Subang Jaya, Selangor, Malaysia
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article CULTURE AND SAVINGS: WHY DO ASIANS SAVE MORE? It is a basic consensus that culture affects savings, but the empirical evidence is inadequate. This paper investigates the relationship between culture and savings by using the Hofstede cultural indices, and macro data across 48 countries over the period 1990–2013. The results show that country-fixed effects are highly significant, even if traditional variables are controlled for. We discover that culture can explain much of these individual effects and thus is very important in explaining differences in savings across countries. We use the method of Relative Importance Analysis (RIA) to measure the relative importance of the various cultural dimensions in affecting saving rates. We find that culture-related variables are among the most important saving determinants, along with other variables more commonly used in the economics literature, such as economic growth, social security, and demographics. Culture, saving rates, Hofstede cultural indices, long-term orientation, relative importance analysis 03 2021 66 June The Singapore Economic Review 621 651 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500607 DEZHU YE gzydz@126.com Department of Finance, Research Institute of Finance, Jinan University, Guangzhou, P. R. China SHUANG PAN pasan2016@163.com Department of Finance, Jinan University, Guangzhou, P. R. China YUJUN LIAN Department of Finance, Lingnan College, Sun Yat-sen University, Guangzhou, P. R. China YEW-KWANG NG ykng@fudan.edu.cn School of Economics, Fudan University, P. R. China
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article FDI AND CONVERGENCE ANALYSIS OF PRODUCTIVITY ACROSS CHINESE PREFECTURE-LEVEL CITIES THROUGH BOOTSTRAP TRUNCATION REGRESSION This paper evaluated productivity through metafrontier slacks-based measure, and explored the time and regional heterogeneity of productivity from static and dynamic perspectives. We also conducted convergence analysis on productivity. Our empirical results show that the east has the highest Technological Gap Ratio (TGR), which reveals that the east has the lowest production technology heterogeneity in China. Production heterogeneity has increased since 2004. FDI had negative effects on productivity, especially in the middle, west and northeast regions, which indicates FDI had a “crowding out” effect in China. Productivity displayed a convergence trend from 2004 to 2012. It is important for China’s local firms to enhance indigenous innovation and increase knowledge spillover in order to decrease their production technology gap. Crowding out, FDI, heterogeneity, convergence 03 2021 66 June The Singapore Economic Review 837 853 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500425 XINGLE LONG School of Management, Jiangsu University, Zhenjiang 212013, P. R. China†Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, P. R. China SANGWOOK KIM #x2021;Department of China Studies, Paichai University, Daejeon 302-735, Republic of Korea YUNHAI DAI #xA7;Department of General Education, Namseoul University, Seonghwan 132101, Republic of Korea
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article IS LOCAL GOVERNMENT INTERVENTION EFFECTIVE IN PROMOTING THE TFP OF AN OLD INDUSTRIAL AREA? — A SPATIAL ECONOMETRIC ANALYSIS OF NORTHEAST CHINA Northeast China is an important old industrial base in China that is most profoundly affected by the planned economic system. The social and economic development has the characteristics of powerful government and weak market. This study estimates total factor productivity (TFP) utilizing firm-level data of Northeast China, and analyzes the effect of government intervention on TFP growth by applying a spatial econometric model over the period 1998–2007. The results indicate that TFP is gradually increasing and spatially dependents on surrounding areas. Government intervention behavior has a negative effect on TFP in Northeast China. Specifically, the stronger the government’s intervention capacity is, the less TFP is; the higher the environmental connivance is, the less TFP is. Furthermore, government intervention produces adverse spillover effects on surrounding areas, which are caused by imitation and comparison between local governments. We also examine the relationship between traditional factors, including science and technology level, human capital, FDI and openness. The findings reveal that science and technology level, human capital, FDI and openness play positive roles in stimulating TFP growth. Science and technology produce positive spatial spillover on TFP growth, but other factors do not. Total factor productivity (TFP), government intervention, spillover effect, spatial econometric model 03 2021 66 June The Singapore Economic Review 933 951 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500319 ZHANHUA JIA jiazh306@nenu.edu.cn School of Geographical Science, Northeast, Normal University, Changchun Jilin, China GUOFENG GU School of Geographical Science, Northeast, Normal University, Changchun Jilin, China
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article SOCIAL WELFARE, PHANTOM VOTERS, AND INTERNAL MIGRATION IN TAIWAN — EVIDENCE FROM PANEL SPATIAL ANALYSIS This paper aims to investigate the following two issues related to internal migration in Taiwan: one is the widely discussed issue of the existence of magnetic effects induced by welfare benefits and the other is a rarely discussed issue of the existence of phantom voters. Using panel data for 23 counties and cities from 1995 to 2010 and estimating three fixed-effects spatial Durbin models, the primary findings of this study are that, by keeping other factors constant and considering the spatial dependence of migration, welfare migration is found to exist, particularly for females, and the number of phantom voters in an election year can significantly affect internal migration in Taiwan. Internal migration, phantom voters, spatial Durbin model, welfare migration, Taiwan 03 2021 66 June The Singapore Economic Review 701 720 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500121 JR-TSUNG HUANG jthuang@nccu.edu.tw Department of Public Finance, National Chengchi University, No. 64, ZhiNan Road Sec. 2, Taipei 116, Taiwan, ROC MING-LEI CHANG Department of Accounting, Chung Yuan Christian University, Taoyuan 32023, Taiwan, ROC
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article EFFECTIVENESS OF THE BASEL III FRAMEWORK: PROCYCLICALITY IN THE BANKING SECTOR AND MACROECONOMIC FLUCTUATIONS This study examines the effectiveness of the Basel III capital framework for mitigating procyclical behavior in the banking sector regarding macroeconomic variability and uncertainty. Our sample includes Korean banking industry data from 2001 to 2018. Using fixed- and random-effects panel data and fixed-effects difference-in-differences approaches, we discover that procyclicality in banks’ performance and capital factors is mitigated after the Basel III accord is adopted. The capital adequacy ratio’s volatility increases, whereas the loans-to-assets ratio increases and stabilizes. The Basel III accord therefore effectively serves its intended purpose, as it encourages banks to serve as shock absorbers for the economy and reduces economic uncertainty. Bank procyclicality, Basel III, business cycle, difference-in-differences, economic uncertainty, panel data regression 03 2021 66 June The Singapore Economic Review 855 879 http://www.worldscientific.com/doi/abs/10.1142/S0217590820460066 JINYOUNG YU mydkfkqldk@skku.edu College of Economics, Sungkyunkwan University, 25-2, Sungkyunkwan-ro, Jongno-gu, Seoul 03063, Republic of Korea DOOJIN RYU College of Economics, Sungkyunkwan University, 25-2, Sungkyunkwan-ro, Jongno-gu, Seoul 03063, Republic of Korea
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article ANALYSIS OF THE CO-MOVEMENT BETWEEN LOCAL GOVERNMENT DEBT RISK AND BANK RISK IN CHINA We characterize the debt risk and bank risk of local governments in China with a dynamic factor model that decomposes 31 provincial data of China into country, regional, and idiosyncratic components. The result shows the presence of co-movement between local government debt risk and bank risk. The country, regional, and province factors explain 62%, 16%, and 22% of local government debt risk, respectively, and 28%, 8%, and 64% of commercial bank risk, respectively. Sub-sample analysis reveals that the country factor has become less volatile and its importance typically increases across all provinces after the reform of local government debt financing pattern (e.g., the introduction of Document No. 43). Local government debt risk, bank risk, dynamic factor model 03 2021 66 June The Singapore Economic Review 807 835 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500632 CHANGJUN ZHENG School of Management, Huazhong University of Science and Technology, Wuhan 430074, P. R. China SIWEI HUANG School of Management, Huazhong University of Science and Technology, Wuhan 430074, P. R. China NINGYU QIAN School of Management, Huazhong University of Science and Technology, Wuhan 430074, P. R. China
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article INDIAN INVESTMENT IN CHINESE PROVINCES: SPATIAL DISTRIBUTION, LOCATIONAL DETERMINANTS, CHALLENGES AND IMPLICATIONS The paper empirically examines Indian investment in China and its spatial distribution across 17 Chinese provinces during 2005–2015. Indian investments in China have spread across heterogeneous provinces. The location of ventures has been shaped by several provincial characteristics and locational advantages that include infrastructural facilities, lower wages, markets and openness; economic geography forces that include agglomeration of foreign and private firms and policies and engagements of the local governments. As such multiple determinants of location choice can be observed, which provide insights into the locational determinants of firms from one emerging country in another. Chinese inland provinces trying to attract Indian investment need to focus on developing locational advantages at par with the coastal regions and on economic geography. However, the scale of operation of Indian companies in China remains smaller due to several China-specific challenges. Industrial bodies and investment promotion agencies may aid in building firm-capacity to deal with China-specific challenges, with adequate emphasis on the spatial characteristics of provinces, to overcome business challenges. The increase in Indian investment in China shall be beneficial provided the firms and their activities generate complementarity in the bilateral economic relationship between the two countries and in the product and factor markets. China, India, FDI, locational advantages, agglomeration, province 03 2021 66 June The Singapore Economic Review 767 806 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500666 KHANINDRA CH. DAS kchdas@gmail.com Birla Institute of Management Technology, Plot No. 5, Knowledge Park II, Greater Noida, 201306, Uttar Pradesh, India
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article AN ANALYSIS OF THE TRENDS AND DETERMINANTS OF INTRA-INDUSTRY TRADE BETWEEN CHINA AND ASIA-PACIFIC ECONOMIC COOPERATION MEMBER COUNTRIES This study examines the intra-industry trade relationship that China has with its 20 Asia-Pacific Economic Cooperation partners during the 2000–2014 period. By providing both a developing and developed country focus this research examines both the trends and determinants of these trade relationships from inter-industry trade, vertical inter-industry trade, horizontal inter-industry trade, and inter-industry perspectives. This study found that China’s highest levels of inter-industry trade are with Japan, Korea, and Taiwan and that these relationships have been trending upwards from both horizontal inter-industry trade and vertical inter-industry trade perspectives since 2000. While our empirical assessment using country- and industry-specific variables showed that tariff rates, market size, and factor endowments play an important role within the make-up of inter-industry trade. Finally, from a policy perspective, our study highlights the need for China to not only push forward with its Regional Comprehensive Economic Partnership trade negotiations, but also branch out by gaining additional support from other Asia-Pacific Economic Cooperation partners so as to further enhance its role in the region. Intra-industry trade, horizontal intra-industry trade, vertical intra-industry trade, China, APEC 03 2021 66 June The Singapore Economic Review 743 766 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500486 JACOB WOOD Department of Business, James Cook University Singapore, 149 Sims Road, Singapore YILIN LI gracelyl0322@gmail.com Department of International Trade, College of Economics and Management, Chungnam National University, Daejeon, South Korea JIE WU Department of International Economics and Trade, School of Economics, Zhejiang University of Technology, Pingfeng Campus, P. R. China
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article TIME VARIATION OR ASYMMETRY? THE INFLATION AND INFLATION UNCERTAINTY NEXUS: A CASE OF CHINA This investigation tests the dynamic and quantile causality between inflation and inflation uncertainty of China with constructing a rolling-window based quantile causality test. The result shows unidirectional causality from inflation to inflation uncertainty, which is significantly asymmetric and time-varying. Inflation more likely causes inflation uncertainty in higher quantiles, indicating the linear model based on conditional mean may overestimate this impact in a lower quantile interval. Furthermore, the influence also exhibits a consistent time-varying property that cannot be explained simply by the conditional distribution. The causality shows more significance since 2007 when China cancelled the mandatory settlement system, which led to the increase of monetary policy independence. The time-varying nature indicates institutional changes may lead to regime switching of this causality. Our result supports the Friedman–Ball hypothesis [Friedman, M (1977). Nobel lecture: Inflation and unemployment. Journal of Political Economy, 85(3), 451–472; Ball, L (1992). Why does high inflation raise inflation uncertainty? Journal of Monetary Economic, 29(3), 371–388] to a certain extent and implies that the purpose of controlling inflation uncertainty of China can be achieved by controlling inflation if and only if it is relatively high on the premise of the independence of monetary policy. Inflation, inflation uncertainty, rolling window, quantile causality 03 2021 66 June The Singapore Economic Review 881 903 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500760 XUE GAO College of Economics and Management Shandong, University of Science and Technology 579, Qianwan Gang Rd., Qingdao, P. R. China†College of International Business, Qingdao Huanghai University, 1145 Linghai Road, West Coast New Area, Qingdao, P. R. China YIXIN REN College of Economics and Management Shandong, University of Science and Technology 579, Qianwan Gang Rd., Qingdao, P. R. China XIN LI Antai College of Economics & Management, Shanghai Jiao Tong University 1954, Huashan Rd., Shanghai, P. R. China
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article SOCIO-POLITICAL DETERMINANTS OF INTERDEPENDENT REGIONAL TRADE AGREEMENTS: AN EMPIRICAL APPLICATION Probability of forming regional trade agreements (RTAs) will be greater if two countries are closer in geographical distance. This paper extends the meaning of ‘closer’ by considering not only the geographical distance, but also the socio-political distance as well. This paper empirically analyzes whether a causal relation exists between the socio-political factors−the cultural affinity measured by common language, same religion, and a newly introduced composite index of cultural distance and political ties measured by the existence of a military alliance and the level of democracy–and the likelihood that RTAs will form. For such quantitative analysis, this paper applies the estimation techniques of a qualitative choice model (pooled Probit model with cluster-robust standard errors) to the panel data, which covers bilateral country-pairs among 66 countries between 1998 and 2009. In addition, the interdependence of the formation of RTA is also investigated by considering the third country effects. For a feasibility study, we estimate the probability of forming the proposed RTAs in the East Asian region as an empirical application. We find that the formation of RTAs has been strongly and significantly driven by the reduced cultural distance between members and influenced by the interdependence with third countries. Unlike the existing studies, however, the conventional socio-political determinants (religious similarity, military alliance, and democracy) do not significantly matter for the formation of interdependent RTAs. From the feasibility test for proposed RTAs in East Asia, we argue that building closer cultural linkages between countries in the region are prerequisite to realize the formation of the proposed RTAs such as the China-Japan (CJ), the Japan-Korea (JK), the China-Japan-Korea (CJK), the ASEAN+3 (10 Association of SouthEast Asian Nations, China, Japan, and Korea), and the Regional Comprehensive Economic Partnership (RCEP). Cultural affinity, regional trade agreements, East Asia 03 2021 66 June The Singapore Economic Review 721 742 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500095 INNWON PARK Division of International Studies, Korea University, 145 Anam-ro, Seongbuk-gu, Seoul 02841, Korea SOONCHAN PARK spark@kongju.ac.kr Department of Economics and International Trade, Kongju National University, Kongju, Korea
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article INDUSTRIAL TRANSFER’S EFFECT ON COMPETITIVENESS OF THE MANUFACTURING: A CASE OF ZHEJIANG, CHINA Industrial transfer is an important driving force for competitiveness promotion of the manufacturing at Zhejiang. Based on the theoretical model established, effects of industrial transfer on different dimensions of competitiveness were empirically analyzed from aspects of the direction and the hierarchy. The results showed that it was positively related to the industrial capacity competitiveness and the earning competitiveness, negatively related to the external competitiveness and not related to the internal competitiveness, with effect on the intensive being significantly stronger than that on the extensive. At the same time, there was breakage in transmission path of industry transfer on promotion of competitiveness of the manufacturing. Industrial transfer, manufacturing, industrial competitiveness, transfer path 03 2021 66 June The Singapore Economic Review 953 968 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500277 BINGQIANG LI AndyLBQ@163.com Jiangxi Vocational Education & Industrial Development Institute, Jiangxi Science & Technology Normal University, Jiangxi Nanchang, P. R. China JINZHI LI ljzh703@163.com #x2020;Editorial Office of Journal of Jiangxi Science & Technology Normal University, Jiangxi Science & Technology Normal University, Jiangxi Nanchang, P. R. China NANNAN DONG #x2021;School of Business, Ningbo University, Zhejiang Ningbo, P. R. China LEI HUANG huanglei19870212@163.com Jiangxi Vocational Education & Industrial Development Institute, Jiangxi Science & Technology Normal University, Jiangxi Nanchang, P. R. China
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article FINANCIAL DEVELOPMENT AND HOUSING PRICE CHANGES UNDER THE CONDITION OF FINANCIAL CONTROL: EVIDENCE FROM CHINA The impact of financial development on the real estate industry has increased with the degree of financial control. This research presented in this paper divides China’s area into strong and weak regions based on the degree of financial control, and then it studies the relationship between housing price changes and the level of financial development using panel data from the period 1994 to 2018. We find that the level of national sample financial development plays an important role in promoting the housing prices. In areas with strong financial control, financial resources tend to be allocated to the real estate industry, boosting real estate prices. In areas with weak financial control, the role of financial development in promoting real estate prices is not obvious. The funds accumulated by financial institutions are more marketable and independent. We have confirmed these findings by our analysis of the transformation of certain financial control and financial development variables, the application of Panel-VAR estimation methods, and other robustness tests. Financial development, housing prices, financial control, DIF-GMM method, Panel-VAR estimation 03 2021 66 June The Singapore Economic Review 905 931 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500708 XUE LI School of Finance, Academic of Financial Risk Research, Capital University of Economics and Business, 121 Zhangjialukou, Fengtai District, Beijing, China RUO-XI ZHANG zrxcissy@hotmail.com School of Finance, Academic of Financial Risk Research, Capital University of Economics and Business, 121 Zhangjialukou, Fengtai District, Beijing, China
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article CHINA’S OUTBOUND INVESTMENT IN ASEAN ECONOMIES IN THREE PERIODS: CHANGING PATTERNS AND TRENDS Southeast Asian economic sentiments toward China tend to dither between competitive and cooperative instincts. Initial warmth among the Association of Southeast Asian Nations (ASEAN) members toward the China-led Belt and Road Initiative (BRI) is slowly giving way to project-related concerns as well as fears that “China is buying the world”. This paper examines Chinese outward foreign direct investment (OFDI) in global and ASEAN contexts shortly after the start of the country’s “going out” strategy. The analysis draws on country- and firm-level investment data. It shows that a handful of ASEAN economies have become more important to Chinese investors as their motivations, capabilities and needs evolve. Nonetheless, with the exception of three (Cambodia, Laos and Myanmar), ASEAN economies have not become “reliant” on Chinese investment post-BRI launch, once one considers the increased weight China carries as a foreign investor in the developing world. This is either because these countries generally do not rely on FDI, or because traditional foreign investors from industrialized economies and more advanced ASEAN member states are far more entrenched than Chinese investors in the host economies. Foreign direct investment, Belt and Road Initiative, regional integration, China, Southeast Asia 01 2021 66 March The Singapore Economic Review 105 142 http://www.worldscientific.com/doi/abs/10.1142/S0217590819410066 YEE-SIONG TONG yst26@cam.ac.uk Institute for Manufacturing Education and Consultancy Services (IfM ECS), Department of Engineering, University of Cambridge, Alan Reece Building, 17 Charles Babbage Rd, Cambridge CB3 0FS, UK
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article SINGAPORE ENGAGES THE BELT AND ROAD INITIATIVE: PERCEPTIONS, POLICIES, AND INSTITUTIONS This article argues that Singapore, courtesy of its strong state capacity and long-standing connections with China, has promoted effective polices and coordinated mutually reinforcing institutional mechanisms in engaging with the Belt and Road Initiative (BRI). While some of these institutions predate the BRI, they have been continuously enhanced or modified to meaningfully foster Singapore-China cooperation. In certain cases, new institutions have been created to fulfill specific demands the existing institutions cannot adequately serve. These two types of institutions not only complement each other but also promote cooperation between the bureaucrats, politicians, transnational corporations, government-linked corporations, small- and medium-sized private firms and business associations. The article also illustrates the flexibility of the ‘networked state’ in formulating collaborative ties linking key international and domestic actors, demonstrating how a small state like Singapore can partner China effectively and deepen its strategic importance to the BRI to enhance its own strategic and economic interests. Lastly, the article highlights the two key conditions in BRI-related nations for their successful engagement: the existence of mutual interests between China and a counterpart nation bolstered by conducive perceptions and policies, and the institutionalization of competent mechanisms to materialize and operationalize these interests. Belt and road initiative, state-business relations, transnational state, state capacity, China, Singapore 01 2021 66 March The Singapore Economic Review 219 241 http://www.worldscientific.com/doi/abs/10.1142/S0217590820410015 HONG LIU School of Social Sciences, Nanyang Technological University, Singapore XIN FAN School of Humanities, Nanyang Technological University, Singapore GUANIE LIM Nanyang Centre for Public Administration, Nanyang Technological University, Singapore
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article ENERGY INSECURITY, ECONOMIC GROWTH, AND THE ROLE OF RENEWABLE ENERGY: A CROSS-COUNTRY PANEL ANALYSIS Many countries rely on the international energy market as their main energy supplier, thus leading to issues of insecurity. Energy insecurity can potentially hinder economic growth and cause sustainability problems. This paper builds on cross-country panel data and estimates the relationship between energy insecurity and economic growth. We explore the multi-dimensional feature of energy insecurity through energy dependency, renewable energy share, and price effects. Our results show statistically significant negative impacts on growth due to energy insecurity, but the effects are mostly relevant to developing economies. Moreover, we show that the development renewable energy sector can mitigate the negative effects. Developing economies, energy insecurity, economic growth, renewable energy, sustainability 02 2021 66 March The Singapore Economic Review 323 343 http://www.worldscientific.com/doi/abs/10.1142/S021759081943001X XIANG XU School of Economics, Central University of Finance and Economics, Beijing 102206, P. R. China JIAN YU School of Economics, Central University of Finance and Economics, Beijing 102206, P. R. China DAYONG ZHANG #x2020;Research Institute of Economics and Management, Southwestern University of Finance and Economics, Chengdu 611130, P. R. China QIANG JI #x2021;Center for Energy and Environmental Policy Research, Institutes of Science and Development, Chinese Academy of Sciences, P. R. China§School of Public Policy and Management, University of Chinese Academy of Sciences, Beijing, P. R. China
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article CAPACITY PERMIT TRADING SCHEME, ECONOMIC WELFARE AND ENERGY INSECURITY: CASE STUDY OF COAL INDUSTRY IN CHINA Cutting the overcapacity in coal industry is a current critical issue in China and is a matter for the world. However, inappropriate capacity cut policies may induce huge fluctuations of energy price, creating a threat to energy security and even economic stability. This paper designs a capacity permit trading scheme to minimize the compliance cost of production capacity cut, and proposes the operational details of capacity permit trading scheme using China’s coal industry as an example. We also construct a simple partial equilibrium model to examine the benefits and firm behaviors when adopting the permit trading scheme. The results demonstrate that the permit trading scheme will generate an overall positive social welfare as well as reduce firms’ cheating incentives. The results confirm that the more heterogeneous the firms are in terms of compliance costs, the higher will be the social welfare gains and the trade volume. Our findings show that the proposed permit trading scheme is feasible and beneficial in achieving the capacity cut target in China. Overcapacity, individual transferable quotas, permit trading scheme, China, coal 02 2021 66 March The Singapore Economic Review 369 389 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500589 XUNPENG SHI Australia-China Relations Institute, University of Technology Sydney, Ultimo, NSW 2007, Australia†School of Low Carbon Economics, Hubei University of Economics, Wuhan, Hubei, P. R. China‡Center of Hubei Cooperative Innovation for Emissions Trading System, Hubei University of Economics, Wuhan, Hubei, P. R. China§Energy Studies Institute, National University of Singapore, Singapore 119620, Singapore∥Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, P. R. China YIFAN SHEN #xB6;Institute of Politics and Economics, Nanjing Audit University, Nanjing, Jiangsu, P. R. China KE WANG #x2225;Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, P. R. China**School of Management and Economics, Beijing Institute of Technology, Beijing 100081, P. R. China††Sustainable Development Research Institute for Economy and Society of Beijing, Beijing Institute of Technology, Beijing 100081, P. R. China‡‡Beijing Key Laboratory of Energy Economics and Environmental Management, Beijing Institute of Technology, Beijing 100081, P. R. China§§Department of Geographical Sciences, University of Maryland, College Park, MD 20742, USA YANFANG ZHANG #xB6;¶School of Management, China University of Mining and Technology Xuzhou, Jiangsu 221116, P. R. China
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article ASSESSING THE LINKAGES BETWEEN THE ELECTRICITY CONSUMPTION AND ECONOMIC FACTORS IN A LANDLOCKED ECONOMY: CASE STUDY OF LAO PDR This research paper aims to investigate linkages of electricity consumption representing energy security with estimated factors — GDP, population and foreign direct investment (FDI) during 1998–2018 for Laos People Democratic Republic (Lao PDR) by using ARDLbased Bayesian inference. This study provided empirical evidence on a long-run linear relationship analysis under ARDL-based Bayesian inference, which concludes that they have performed real relationships between electricity consumption, GDP, population and FDI. In addition, in the short-run, it was found that explanatory factors have both negative and positive impacts on Laos’ electricity consumption. The results confirm the hypothesis that although Lao PDR has access to domestic energy resources, only relying on one energy resource will make the energy system insecure. Thus, Lao PDR must develop substantial infrastructures and alternative renewable energies to support the campaign of Lao PDRs electricity security in the long-run. Lao PDR, electricity, landlocked economy, Bayesian model, ARDL 02 2021 66 March The Singapore Economic Review 595 619 http://www.worldscientific.com/doi/abs/10.1142/S0217590820430080 NISIT PANTHAMIT Faculty of Economics, Chiang Mai University, Chiang Mai, Thailand CHUKIAT CHAIBOONSRI chukiat1973@gmail.com Faculty of Economics, Chiang Mai University, Chiang Mai, Thailand
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article THE DECENTRALIZING INTERNATIONAL TRADE ARCHITECTURE: PERSPECTIVES FROM AND ROLE OF ASIA Global economic governance is in flux. The centralized international trade architecture of the post-Bretton Woods era is decentralizing as new regional institutions are being established for various reasons. Decentralization per se is neither good nor bad. It depends on whether there is “healthy” competition and functional complementarity or “unhealthy” competition between global and new regional institutions. This paper has three objectives, to: (i) review the decentralization of the international trade architecture; (ii) identify the benefits and the risks of the decentralization process and its implications for the centrality of the World Trade Organization (WTO), and (iii) recommend policies for the WTO to manage the process. The paper argues that, so far, the benefits of new regional institutions and trade decentralization appear to have outweighed the risks, and as a result global economic governance may have improved. Looking ahead, the paper recommends a number of policy actions that the WTO should take to manage trade decentralization. The paper argues that Asian countries, especially those that are members of the G20, should play a greater role in lobbying and driving the needed reforms of the WTO. They should also seek to expedite the conclusion and ratification of the Regional Comprehensive Economic Partnership (RCEP) and eventually institutionalize the complementarity between RCEP, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Belt and Road Initiative (BRI). Global trade governance, regionalism, RCEP, CPTPP, BRI 01 2021 66 March The Singapore Economic Review 59 84 http://www.worldscientific.com/doi/abs/10.1142/S0217590819410054 PRADUMNA B. RANA Nanyang Technological University, Singapore WAI-MUN CHIA Nanyang Technological University, Singapore XIANBAI JI xji005@e.ntu.edu.sg Nanyang Technological University, Singapore
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article PRIORITIZATION OF RENEWABLE SOLAR ENERGY TO PREVENT ENERGY INSECURITY: AN INTEGRATED ROLE Renewable energy decreases the threat of energy insecurity. Solar energy systems are proving to be an easy and cheaper solution to energy crisis worldwide. Developing countries including Pakistan have augmented efforts to boost the current solar capacity. The identification of desired solar power point plant fabrication requires robust analysis of several factors. Adequate research has not been done on the site selection process for solar projects in Pakistan. This study identifies and proposes multiple point states having solar energy potential. Based on the multiple main and sub-criteria obtained from the literature, a mathematical formulation has been used to install the solar projects at rural areas of Pakistan. An empirical assessment of the off-grid rural solar power projects in Pakistan has also been conducted in this case study. The results reveal that mass, money supply and ratio are important, while the transmission on the matrix, the cost of land and the sun were generated. The study found the district of Barkhan (R2) of Baluchistan to be the most ideal site, followed by Jacobabad (R3) and Mastung (R3). With respect to economic viability, this study found that solar energy systems provide electricity which is much cheaper than conventional energy supplied in the country. This study could be useful reference for South Asian countries including India, Bangladesh, and Afghanistan, which are currently electrifying remote and rural areas through solar energy system. Energy insecurity, environmental criteria, site selection, AHP, fuzzy VIKOR, renewable energy 02 2021 66 March The Singapore Economic Review 391 412 http://www.worldscientific.com/doi/abs/10.1142/S021759082043002X ROBINA IRAM School of Finance and Economics, Jiangsu University, Zhenjiang 212013, P. R. China MUHAMMAD KHALID ANSER mkhalidrao@xauat.edu.cn Xi’an University of Architecture and Technology, P. R. China REHMAT ULLAH AWAN rehmatullah.awan@uos.edu.pk Department of Economics, University of Sargodha, Pakistan AMJAD ALI amjadalichaudhry@gmail.com Knowledge Unit of Business, Economics, Accountancy and Commerce, University of Management and Technology, Sialkot, Pakistan QAISER ABBAS qabbas@gudgk.edu.pk Department of Economics, Ghazi University, D. G. Khan, Pakistan IMRAN SHARIF CHAUDHRY imran@bzu.edu.pk School of Economics, Bahauddin Zakariya University, Multan, 60800 Punjab, Pakistan
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article MODELING ENERGY SECURITY–EXCHANGE RATE LINKAGE: EVIDENCE OF GMM APPROACH This study is an empirical attempt to revisit energy insecurity in Vietnam by focusing on the role of the official exchange rate. To this end, we gathered data of the related variables based on the 4A’s theory for energy security over the period 1985–2017, and conducted estimation using GMM estimator. The major results proved that economic growth has a positive impact on official exchange rate. CO2 emissions have negative coefficient which means negative relationship between this variable and the Vietnam’s official exchange rate, while inflation rate has a negative sign suggesting that by increase in price level of commodities in Vietnam’s economy, the domestic product will be more expensive than that before which accelerates commodities import flows that leads to depreciation of Vietnam’s national currency. In addition, we found out that energy intensity has a negative relationship with official exchange rate in Vietnam. Moreover, the results revealed that a 1% increase in gas import has a negative linkage with the Vietnam’s official exchange rate. According to the results, we recommend that Vietnam needs to diversify its gas imports, strengthen local energy production, increasing energy efficiency to have a stronger national currency against U.S. dollar which ensures energy security in this country. Energy insecurity, exchange rate, GMM estimator, Vietnam 02 2021 66 March The Singapore Economic Review 529 544 http://www.worldscientific.com/doi/abs/10.1142/S0217590819430021 TU CHUC ANH Academy of Finance, Ha Noi, Vietnam EHSAN RASOULINEZHAD #x2020;Faculty of World Studies, University of Tehran, Tehran, Iran THANH NGO CHI #x2021;Hong Duc University, Thanh Hoa, Vietnam HUYEN LE HOANG BA #x2021;Hong Duc University, Thanh Hoa, Vietnam HANH HOANG THANH Academy of Finance, Ha Noi, Vietnam
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article ENERGY SECURITY, RENEWABLE, NON-RENEWABLE ENERGY AND ECONOMIC GROWTH IN ASEAN ECONOMIES: NEW INSIGHTS This study examines the linkages between energy security (ES), renewable and non-renewable energy on economic growth for ASEAN countries within a neo-classical growth framework. The econometric techniques account for cross-sectional dependence and structural breaks by undertaking a dynamic common correlation effect analysis unlike previous studies. The study finds a long-run relationship between ES, renewable, non-renewable energy and economic growth for ASEAN economies between 1980 and 2018. Our results also confirm a feedback relationship between renewable energy and economic growth in the ASEAN. Thus, the ASEAN governments must prioritize renewable energy funding and investments. The results are robust to different estimations and methods. Renewable, non-renewable energy, energy security and growth 02 2021 66 March The Singapore Economic Review 457 488 http://www.worldscientific.com/doi/abs/10.1142/S0217590819430045 RABINDRA NEPAL School of School of Accounting, Economics and Finance, University of Wollongong, Northfields Ave Wollongong, NSW 2522, Australia HAMMED OLUWASEYI MUSIBAU hammed.musibau@utas.edu.au University of Tasmania, Australia
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article ENERGY INSECURITY IN THE ASEAN REGION: THE IMPLICATIONS OF ENERGY POLICY REFORM Energy insecurity has become an alarming issue among ASEAN countries. One proposal to overcome this energy insecurity is to integrate energy markets among ASEAN countries. In order to do this integration, a major energy policy reform, particularly the elimination of energy subsidy policies, is needed. The main goal of this paper, hence, is to analyze the impact of an energy subsidy reduction policy in ASEAN, particularly in terms of economic growth, environmental improvement and welfare distribution. To achieve this goal, this paper uses a multi-country computable general equilibrium (CGE) for Inter-Regional System Analysis for ASEAN (IRSA-ASEAN) to conduct the analysis. This paper finds that countries in which energy subsidies significantly exist, i.e., Indonesia and Malaysia, stand to gain much from eliminating these subsidies. Gross domestic product (GDP) is likely to increase, with the added benefit of reduced CO2 emissions. In terms of welfare distribution, this policy appears to be progressive in nature. Energy security, energy economics, computable general equilibrium model, ASEAN economy 02 2021 66 March The Singapore Economic Review 345 368 http://www.worldscientific.com/doi/abs/10.1142/S0217590820430079 BUDY P. RESOSUDARMO budy.resosudarmo@anu.edu.au Arndt-Corden Department of Economics, Crawford School of Public Policy, Australian National University, Australia DITYA A. NURDIANTO #x2020;Indonesian Ministry of Foreign Affairs, Indonesia YUVENTUS EFFENDI Arndt-Corden Department of Economics, Crawford School of Public Policy, Australian National University, Australia‡Indonesian Ministry of Finance, Indonesia
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article ENERGY INSECURITY, RENEWABLE ENERGY AND ECONOMIC GROWTH Energy security, a multidimensional concept that encompasses the notion of resource availability, accessibility, environmental acceptability and cost affordability, has been widely discussed. However, the same cannot be said about energy insecurity, a concept that may not necessarily mirror energy security, but also comprises the various consequences of energy unavailability. Energy insecurity mostly affects the poorest and can lead to deepened inequalities and poor health at the household level. One solution for tackling energy insecurity could be adoption of renewable energy. Power generated from renewable sources could help in mitigating energy price fluctuations and reduce health issues, as well as encourage stable economic growth. This special issue discusses the interaction between the three concepts through careful case studies and panel analysis and proposes various policy implications for energy policymakers. This introductory paper introduces the articles selected for this special issue. Energy insecurity, economic growth, renewable energy, energy policy 02 2021 66 March The Singapore Economic Review 313 322 http://www.worldscientific.com/doi/abs/10.1142/S0217590821020021 FARHAD TAGHIZADEH-HESARY Social Science Research Institute, Tokai University, Japan YOUNGHO CHANG School of Business, Singapore University of Social Sciences, Singapore NAOYUKI YOSHINO Keio University, Japan PETER J. MORGAN Asian Development Bank Institute, Japan
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article INTRODUCTION — SOUTHEAST ASIA AND THE BELT AND ROAD INITIATIVE: THE POLITICAL ECONOMY OF REGIONALISM, TRADE, AND INFRASTRUCTURE Since its launch in late 2013, the Belt and Road Initiative (BRI) has become a significant factor in shaping China’s economic and diplomatic relations with the world. China’s increasing clout presents opportunities as well as challenges, especially for the developing economies of the Association of Southeast Asian Nations (ASEAN) which constitute major sites for investment and trade alongside the BRI routes. This special issue examines whether and to what extent China’s economic ascendancy has impacted the proposed ASEAN Economic Community and the respective nations in the region. It deals with this question by grounding the analysis along three themes — institutions at a regional level, industry/sector, and particular ASEAN countries’ economic relationship with China. A total of 12 articles are presented to illuminate the state of affairs at the regional level and in specific ASEAN economies. They point to the importance of managing trade and investment flows stemming from China’s increasingly sophisticated national firms. This in turn hinges on forging ‘rules of the game’ at both the multilateral and bilateral levels, which potentially leads to mutually beneficial industrialization and long-term wealth creation. In addition to summarizing key findings of the articles in the special issue, this introductory essay examines some of the key themes confronting ASEAN in its engagement with the BRI such as institutions, global supply chains, and economic strategies. It concludes with a brief discussion on the impact of the COVID-19 pandemic on the BRI in Southeast Asia, and on ways to enhance regional integration. Belt and Road Initiative, foreign direct investment, international trade, ASEAN, China, COVID-19 01 2021 66 March The Singapore Economic Review 1 20 http://www.worldscientific.com/doi/abs/10.1142/S021759082102001X HONG LIU School of Social Sciences, Nanyang Technological University, Singapore KONG YAM TAN School of Social Sciences, Nanyang Technological University, Singapore GUANIE LIM Nanyang Centre for Public Administration, Nanyang Technological University, Singapore
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article HOW DO INVESTORS RESPOND TO TERRITORIAL DISPUTES? EVIDENCE FROM THE SOUTH CHINA SEA AND IMPLICATIONS ON PHILIPPINES ECONOMIC STRATEGY How do territorial disputes affect bilateral foreign direct investment (FDI) between claimant states? Using a difference model, we find that a regime’s position on the South China Sea (SCS) significantly impacts Chinese FDI. We used a novel dataset on firm registrations in the Philippines, finding that the annual number of new firm entrants with Chinese investment significantly increases when maritime border disputes are stabilized. In contrast, we observe that conflictual relations in the maritime borders tend to decrease the number of new firms. We also notice that disputes do not influence FDI from non-claimant states. Foreign Direct Investment, Territorial Disputes, South China Sea, Philippines, Development 01 2021 66 March The Singapore Economic Review 243 267 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500681 ALVIN CAMBA Department of Sociology, The Johns Hopkins University, Baltimore, Maryland, USA JANICA MAGAT janicamagat@tamu.edu Department of Political Science, Texas A&M University, College Station, Texas, USA
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article THE ENERGY–POLLUTION–HEALTH NEXUS: A PANEL DATA ANALYSIS OF LOW- AND MIDDLE-INCOME ASIAN COUNTRIES Increased consumption of nonrenewable energy sources may lead to more air pollution, resulting in negative health impacts in a society. The main purpose of this study is to investigate the relationship between fossil fuel energy consumption and health issues using generalized method of moments estimation technique for data from 18 Asian countries (both low- and middle-income) over the period 1991–2018. The findings demonstrate that fossil fuel energy consumption increases the risk of lung and respiratory diseases. In addition, the results demonstrate the significant effect of CO2 emissions and fossil fuel consumption on undernourishment and death rates. Furthermore, we find that increases in the gross domestic product per capita and healthcare expenditure may help reduce undernourishment and death ratio. The conclusion recommends that diversification of energy in low- and middle-income countries from too much reliance on fossil fuels to more renewable energy sources can improve energy insecurity, at the same time reduce greenhouse gas emissions and minimize the negative impacts on human health. Energy consumption, health issues, energy insecurity, low- and middle-income Asian countries, nexus study 02 2021 66 March The Singapore Economic Review 435 455 http://www.worldscientific.com/doi/abs/10.1142/S0217590820430043 FARHAD TAGHIZADEH-HESARY Social Science Research Institute, Tokai University, Hiratsuka-shi, Kanagawa 259-1292 Japan EHSAN RASOULINEZHAD Faculty of World Studies, University of Tehran, Tehran, Iran NAOYUKI YOSHINO Keio University and National Graduate Institute for Policy Studies (GRIPS), Tokyo, Japan YOUNGHO CHANG School of Business, Singapore University of Social Sciences, Singapore FARZAD TAGHIZADEH-HESARY Department of Radiation Oncology, Shahid Beheshti University of Medical Sciences, Tehran, Iran PETER J. MORGAN Asian Development Bank Institute, Japan
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article THE FLYING GEESE AND CHINA’S BRI IN INDONESIA In recent years, China has been catching-up with other advanced economies and become one of the “leading geese” in the Asian economy. China not only plays a leading role in regional production network but also in various regional economic cooperation. Indonesia, being one of the following geese, needs to adjust its position to benefit from this change in global and regional order. While other more advanced economies have less to offer, Indonesia has gradually moved closer toward China in terms of economic cooperation. Using the flying geese model, this paper argues that China’s BRI might change trade and investment trends in Indonesia. China BRI might complement the role of Japan as a catalyst for economic development in the Asian region in general and in Indonesia in particular. There is no official BRI project agreed by Indonesia so far. However, there are a number completed and ongoing China–Indonesia projects, which arguably might pave the way for future BRI investment. Currently, apart from the Jakarta–Bandung High speed railways, most of the projects are concentrated in resource-exploitation needed by China and the fulfilment of Indonesian development needs, such as power generation, mineral smelters and industrial parks. From the Beijing’s perspective, these projects are perceived as part of BRI. Since these so-called BRI projects have not been completed, it is therefore impossible to assess their impacts on Indonesia’s industrialization at this point. However, we can still argue that BRI might have initiated a new type of investment that might in turn change the industrial trends, structure and performance in Indonesia. If this change leads to improvement in products quality or value added, industrial upgrading, technological transfer and export boost, then one may argue that BRI has brought promised benefits to the host economy (i.e., Indonesia). Otherwise, the benefits would be negligible. China, Indonesia, Belt and Road Initiative (BRI), flying geese, trade, investment 01 2021 66 March The Singapore Economic Review 269 292 http://www.worldscientific.com/doi/abs/10.1142/S0217590819410042 SIWAGE DHARMA NEGARA ISEAS-Yusof Ishak Institute, Singapore LEO SURYADINATA ISEAS-Yusof Ishak Institute, Singapore
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article INVESTIGATING COST-EFFECTIVE POLICY INCENTIVES FOR RENEWABLE ENERGY IN JAPAN: A RECURSIVE CGE APPROACH FOR AN OPTIMAL ENERGY MIX The Great East Japan Earthquake (GEJE) and Fukushima nuclear disaster that occurred in 2011 gave a sharp reminder to Japan’s energy security to reconsider the reduction of nuclear power dependence with a better energy mix. We use a recursive CGE model based on Japan’s renewable energy input–output model to analyze the energy composite of power generation and consumption to investigate cost-effective policy incentives to achieve an optimal energy mix to reduce the nuclear power dependence to less than 5% within 10 years. Moreover, we create scenarios of: (1) nuclear power decommission, (2) renewable energy promotion and (3) virtual power plant (VPP) implementation with public R&D expenditure and power infrastructure investment. The simulation results show that renewable energy could gradually replace nuclear power with capital-use subsidies. Under the direction of nuclear power decommission, the VPP installation could reduce the fiscal cost of wind power by 13%, solar energy by 8% and the social cost by 36%. We provide empirical evidence that the implementation of VPP should be promoted in addition to the renewable policy promotion policy to facilitate power allocation and overcapacity problems better. Recursive CGE model, renewable energy, Japan, optimal energy mix 02 2021 66 March The Singapore Economic Review 507 528 http://www.worldscientific.com/doi/abs/10.1142/S0217590820430067 MICHAEL C. HUANG Ocean Policy Research Institute, The Sasakawa Peace Foundation, 1-15-16 Toranomo, Minato-ku, Tokyo 105-8524, Japan CHUL JU KIM #x2020;Asian Development Bank Institute, Japan
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article CHINA’S BELT AND ROAD INITIATIVE: A VIEW FROM A MAHATHIRIST IMAGINARY Malaysia’s Mahathir Mohamad stands in a delicate position vis-à-vis China’s Belt and Road Initiative (BRI). The BRI’s Silk Road-like scenarios of transcontinental rail links to extend market-facilitated trade and investment have a place within a ‘Mahathirist imaginary’ that opposes inequities in a western-ruled global order and sees hope for the ‘rise of Asia’. In vision he shares the ‘Chinese Dream’ of resurrecting ancient land and maritime trade routes as an ‘imperative of globalization’ despite attempts by others to entangle the BRI in narratives of geopolitics long repugnant to his deep non-aligned convictions. His unprecedented resumption of premiership in May 2018 gave Mahathir a dream-like chance to engage with the BRI but he has been jolted by some Malaysian-China projects contracted in the name of the BRI by the Najib Razak-headed regime (2009–2018). Concerned that those projects could strain Malaysia’s debt burden and undermine its sovereignty, Mahathir must balance his support for BRI with undoing some of its local manifestations without jeopardizing long-term Malaysia-China trade, investment and diplomatic relations. Mahathir Mohamad, Mahathirist imaginary, Malaysia, China, Belt and Road Initiative, Rise of Asia, East Coast Rail Link 01 2021 66 March The Singapore Economic Review 293 312 http://www.worldscientific.com/doi/abs/10.1142/S0217590819410030 BOO TEIK KHOO khoo-bt@grips.ac.jp The National Graduate Institute for Policy Studies, 7-22-1 Roppongi, Minato-ku, Tokyo 106-8677, Japan
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article SINGAPORE–CHINA ECONOMIC COLLABORATION 2.0 Singapore and China started their close economic collaboration in the early 1990s. The collaboration model in the first 25 years focused mainly on the government’s role in foreign investment promotion, urban development, industrial infrastructure development and other related government policies. Platforms of collaboration included the Suzhou Industrial Park, Tianjin Eco-city, Chongqing Connectivity Initiative, the Software Transfer Project, training programs for thousands of Chinese officials and bilateral economic councils. Singapore’s pragmatic leverage on globalization trends and thoughtful application of market forces have been a major factor in the shaping of China’s own highly successful economic growth model.Singapore–China economic collaboration model 2.0 will be different. China is now the second largest economy in the world and is expected to establish its global leadership in the world. Singapore has developed successfully into a leading global business hub complete with trading, manufacturing, financing and professional services as the engines of the business hub. Model 2.0 will be about mutual sharing and partnership. We should see more collaboration outside of China, driven by the private sector and in new technologies. If collaboration model 2.0 is successful, we will see both China and Singapore emerging stronger, in a more sustainable way. Major companies in both countries will be more tightly coupled in projects and joint ventures in China and elsewhere. Made in China 2025, economic reforms, China–Singapore bilateral relations, Suzhou Industrial Park, Belt and Road Initiative 01 2021 66 March The Singapore Economic Review 207 217 http://www.worldscientific.com/doi/abs/10.1142/S0217590819410017 ENG CHEONG TEO engcheong.teo@surbanajurong.com CEO, International (Singapore, Southeast Asia, North Asia), Surbana Jurong Group
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article OIL PRICE FLUCTUATIONS AND STOCK MARKET BEHAVIOR IN A RESOURCE-DOMINANT ECONOMY: CASE OF KAZAKHSTAN During the past 10 years, the oil market has been very unpredictable and volatile, which created uneasy conditions for market participants. The remedy of increasing oil prices is considered as a positive factor for the economy of the Republic of Kazakhstan as an oil-exporting country. Using structural decomposition of vector autoregression (VAR), this study aims to examine how the whole financial system in Kazakhstan is depending on oil prices. The results suggest that the strongest factor affecting the stock index is aggregate demand, and the impact of oil production shocks on the equity market is, on average, insignificant. Such shocks can be discounted while a fall in oil prices affects financial conditions as a whole, damaging the solvency of Kazakhstan, an oil-exporting country. With the positive shock of aggregate demand, the stock market index tends to rise. There is also an effect of oil price volatility on changes in currency value, which also influences the financial situation of the country. Moreover, oil-exporting countries such as Kazakhstan can secure and support their economies with the help of “stable aggregate demand”. The focus on Kazakhstan as one of the oil-producing countries is interesting for at least two reasons. Importantly, oil-exporting countries supply oil to really strong countries concentrating on manufacturing and other industries. Besides, this study provides useful insights for countries with similar economic conditions, including similar stock market development. Stock market index, oil price volatility, Kazakhstan, VAR decomposition 02 2021 66 March The Singapore Economic Review 569 594 http://www.worldscientific.com/doi/abs/10.1142/S0217590820430055 MOLDIR MUKAN Narxoz University, Kazakhstan YESSENGALI OSKENBAYEV Suleyman Demirel University, Kazakhstan NIKI NADERI Azad University Tehran North, Iran YERGALI DOSMAGAMBET Atyrau University of Oil and Gas, Kazakhstan
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article EVOLUTION OF CHINA’S OUTWARD FOREIGN DIRECT INVESTMENT REGIME: IMPLICATIONS FOR SOUTHEAST ASIA UNDER THE BELT AND ROAD INITIATIVE Assessment of the likely impact of Chinese OFDI on the ASEAN members of the Belt and Road Initiative (BRI) requires understanding of the evolution of Chinese policy, regulations and institutions. Utilizing recent developments in institutional theory, this paper examines the interplay between China’s OFDI regulations and enterprise supportive policies. Liberalization of FDI regulations complements policies of technological catch-up and the development of regionally focused multilateral institutions. Evidence of an increasing level of Chinese OFDI since 2003, and of a larger share attracted to the BRI group, particularly the ASEAN countries, is consistent with the theorizing. BRI, OFDI, China, institutions, ASEAN 01 2021 66 March The Singapore Economic Review 143 159 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500309 THERESA YAN chenxiyant@163.com Faculty of Business, Economics and Law, Auckland University of Technology, Private Bag 92006, Auckland, New Zealand PETER ENDERWICK Faculty of Business, Economics and Law, Auckland University of Technology, Private Bag 92006, Auckland, New Zealand
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article ROLE OF FINANCIAL DEVELOPMENT FOR SOLVING THE ENERGY INSECURITY IN ASIA This study aims to investigate the nonlinear effect of financial development on energy security in Asia-16 countries over the period 2000–2016 using the proposed Panel Smooth Transition model for heterogeneity in time trends. Our model shows a single-threshold effect on financial development and energy security relationship, whereas energy accessibility, renewable energy share, and energy intensity are used as indicators of energy security. It implies that the sample can be split into two regimes: low- and high-FDI regime, we choose FDI as the threshold variable because it is a source of innovation that could reduce the demand for energy. The findings indicate that financial development goes hand-in-hand with energy accessibility and renewable energy share, and it also reduces the energy inefficiency in the economy. We also find that the contribution of financial development on renewable energy share becomes more substantial when the FDI is greater than the threshold point (0.9343% of GDP). However, the value of crude oil imports shows a negative impact on energy security in our empirical model. Financial development, sustainable development goals, energy insecurity, panel smooth transition model for heterogeneity in time trends 02 2021 66 March The Singapore Economic Review 413 434 http://www.worldscientific.com/doi/abs/10.1142/S0217590820430018 PICHAYAKONE RAKPHO Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand WORAPHON YAMAKA Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand WACHIRAWIT PUTTACHAI Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand PARAVEE MANEEJUK Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand
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article ROOTING IN NANYANG: HOW EFFICIENT ARE CHINESE MANUFACTURING FIRMS IN MALAYSIA? While China’s Belt and Road Initiative (BRI) is widely considered as an attempt to reshape the global geo-political landscape through its massive investment/engagement in capital-intensive infrastructure, an often-neglected topic is the performance of Chinese-funded firms in manufacturing sector. Therefore, this paper sought to examine the efficiency levels of Chinese manufacturing firms in Malaysia. By using firm-level data supplied by Malaysia’s Department of Statistics, this study employs Data Envelopment Analysis to examine the efficiency levels of Chinese manufacturing firms in comparison with local and other foreign firms in 2010 and 2015. The results show that Chinese manufacturing firms show higher efficiency levels than local and foreign firms in 2010 and 2015, implying that these firms have the potential to transfer technology and share managerial skills to local firms. However, the efficiency levels of Chinese firms deteriorated from 2010 to 2015, suggesting that firms’ relocations decision may have been driven by distortions created by incentives and other supports provided by the Chinese government rather than by firms’ efforts to sustain or raise efficiency levels. The findings suggest that Chinese firms have to be careful in making strategic decision to relocate operations abroad to ensure that government initiatives are in sync with firm-level performance. Chinese outward foreign direct investment, manufacturing, data envelopment analysis, Malaysia 01 2021 66 March The Singapore Economic Review 185 206 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500516 MIAO ZHANG miaozhang@xmu.edu.cn The Center for Southeast Asian Studies & Institute of Malaysia Studies, Xiamen University, Xiamen University, Xiamen 361005, Fujian Province, P. R. China MD ASLAM MIA School of Management, Universiti Sains Malaysia (USM), 11800 Pulau Pinang, Malaysia
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article BELT AND ROAD INITIATIVE: A FRAMEWORK TO ADDRESS CHALLENGES AND UNLOCK POTENTIAL FOR HIGH-QUALITY AND INCLUSIVE GROWTH Developing economies, especially emerging market economies (EMEs), face complex challenges in investing for growth, including building infrastructure. Many developing economies are trying to sustain the growth catch-up process, and manage disruptions related to transition to the “new economy”, as well as headwinds from protectionist tendencies in trade and technology. Investing for the long term — including in infrastructure — has therefore become a critical issue. In this context, the Belt and Road Initiative (BRI) has captured the imagination of the world. An ambitious initiative involving more than 70 countries collaborating through investments in infrastructure, it seeks to improve connectivity for cross-border trade and investment, and generate economic benefits for the countries involved. It seeks to address large infrastructure gaps and build capacities for growth. And it helps countries unable to get affordable financing for plugging savings-investment shortfalls. However, the BRI has drawn criticisms over China’s underlying geopolitical motives, and BRI partner countries have been warned of the risk of becoming heavily indebted or getting locked into business platforms created by China. This paper aims to contribute to the policy debate over the BRI from an ASEAN perspective. It analyzes the reasons for the persistent infrastructure investment gaps in EMEs from an ASEAN perspective; assesses whether BRI is more of a development opportunity or a debt trap; outlines a framework to address the risks and concerns in order to unlock the potential benefits; and uses case studies both outside of and within the ASEAN region to distil key themes needing policy attention. Emerging market economies (EMEs), developing economies, trade, investment, growth, development, infrastructure, Belt and Road Initiative (BRI), connectivity, savings-investment, debt 01 2021 66 March The Singapore Economic Review 21 58 http://www.worldscientific.com/doi/abs/10.1142/S0217590819410029 HOE EE KHOR Khor.Hoeee@amro-asia.org ASEAN+3 Macroeconomic Research Office (AMRO), 10 Shenton Way, #15-08 MAS Building, Singapore 079117 CHAIPAT POONPATPIBUL Chaipat.Poonpatpibul@amro-asia.org ASEAN+3 Macroeconomic Research Office (AMRO), 10 Shenton Way, #15-08 MAS Building, Singapore 079117 SUAN YONG FOO ASEAN+3 Macroeconomic Research Office (AMRO), 10 Shenton Way, #15-08 MAS Building, Singapore 079117
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article THE ROLE OF ENERGY SECURITY IN ECONOMIC GROWTH IN ASIA: QUANTITATIVE ANALYSIS AND POLICY OPTIONS Rapid economic growth in Asia recently has been driving global energy demand and prices. However, little progress has been made concerning the region’s energy security. To assess Asia’s progress in energy security and its impact on real income per capita growth, the 4-As energy security framework — energy availability, applicability, affordability and acceptability dimensions — is integrated into the cross-country generalized method of moments (GMM) model and empirically estimated using data from 20 Asian countries (1995–2015). Results indicate that energy security measured by expanding renewable energy use, increase in electricity access and electric power consumption per capita growth are positively associated with real income per capita growth, while a larger share of imported energy and higher energy intensity hinder growth. Meanwhile, climate security is included in the energy security framework; the results suggest that an increase in CO2 emissions has a negative impact on economic growth. Possible policy implications for improving energy security in Asia are discussed in the conclusion. Energy security, 4-As, energy policy, Asia, economic growth 02 2021 66 March The Singapore Economic Review 545 567 http://www.worldscientific.com/doi/abs/10.1142/S0217590820430031 VICTORIIA ALEKHINA alekhinavic@gmail.com Graduate School of Economics, Keio University and Energy Data and Modelling Center (EDMC), The Institute of Energy Economics, Japan (IEEJ), Tokyo, Japan
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article DOES THE BELT AND ROAD INITIATIVE RESHAPE CHINA’S OUTWARD FOREIGN DIRECT INVESTMENT IN ASEAN? SHIFTING MOTIVES OF STATE-OWNED AND PRIVATE-OWNED ENTERPRISES In recent years, China has been increasingly witnessed as a major global outward investor, especially since the launch of the Belt and Road Initiative (BRI) in 2013. The question of whether and if yes how the BRI reshapes firm outward investment motives remains under-researched. Using a project-level database of China’s Outward Direct Investment from the Ministry of Commerce from 2010 to 2015, this paper investigates the changing investment motives of state-owned and private-owned enterprises (SOEs and POEs) before and after the implementation of the BRI in two periods, namely 2010–2013 and 2014–2015. Our conditional logit models show that (1) market-seeking is one of the key motives for both POEs and SOEs; (2) POEs pursued natural resources in ASEAN based on geographical and relational proximity in the pre-BRI period while SOEs are directed to exploit natural resources in ASEAN besides remoter destinations after the launch of the BRI; (3) POEs are risk-taking in both periods, which runs counter to conventional expectations. This can be explained by the long-term investment tradition of POEs in ASEAN in which POEs are attracted predominantly by socio-economic factors and often less sensitive to variegated host institutions among ASEAN countries and (4) the BRI promotes Chinese OFDI in ASEAN through increased senior leader visits and enhanced diplomatic relations. The Belt and Road Initiative, ASEAN, outward foreign direct investment (OFDI), firm ownership, motive change 01 2021 66 March The Singapore Economic Review 161 183 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500772 SHI JIN School of Economics, Zhejiang University of Technology, China HU XIAOHUI #x2020;School of Public Administration, Zhejiang University of Finance and Economics, China LI YUNXIONG #x2021;Department of Geography and Environment, London School of Economics and Political Science, United Kingdom FENG TAO #x2020;School of Public Administration, Zhejiang University of Finance and Economics, China
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article ASEAN ELECTRICITY MARKET INTEGRATION: HOW CAN BELT AND ROAD INITIATIVE BRING NEW LIFE TO IT? This paper assesses how China’s Belt and Road Initiative (BRI) can bring investment and technology into ASEAN and its impact on ASEAN’s electricity market. With the theoretical framework of scenario analysis, this paper provides three scenarios for ASEAN electricity market integration: the Lao PDR–Thailand–Malaysia–Singapore (LTMS) arrangement, a power exchange between heterogeneous grids in the Greater Mekong Sub-region (GMS) region, and a fully competitive electricity market with a fully-developed ASEAN Power Grid (APG). Based on these scenarios, the paper examines the extent to which the BRI can assist electricity market integration in the ASEAN region. It is found that BRI can best fit with and facilitate the first scenario. Given the uncertain outlook for the electricity market integration in the GMS region, how China’s BRI can play a role in facilitating the GMS electricity market integration is not clear under the second scenario. Further, BRI may be less helpful in the third scenario in which the region’s master plan of APG would be realized. In any sense, how BRI can fit with and facilitate ASEAN’s electricity market integration would more depend on the host countries rather than the Chinese side. ASEAN, Belt and Road Initiative, electricity market integration 01 2021 66 March The Singapore Economic Review 85 103 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500413 LIXIA YAO Energy Studies Institute, National University of Singapore, Singapore, 119620 PHILIP ANDREWS-SPEED Energy Studies Institute, National University of Singapore, Singapore, 119620 XUNPENG SHI Australia-China Relations Institute, University of Technology Sydney, PO Box 123, Australia3Center of Hubei Cooperative Innovation for Emissions Trading System, Hubei University of Economics, Wuhan 430205, Hubei Province, P. R. China
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article ENERGY SECURITY AND ENVIRONMENTAL EFFICIENCY: EVIDENCE FROM OECD COUNTRIES Assessment of energy and environmental issues has received a special focus due to global warming and climate vulnerabilities. Energy, environment and economic development simultaneously yielded a combined effect, which is favorable from the economic point of view while unfavorable for environmental aspects. It is necessary to measure the energy, economic and environmental performance with appropriate methods. Therefore, this study measures the energy security and environmental efficiency. Data used in this study were collected from the official website of International Energy Agency (IEA), British Petroleum (BP) and World Bank. We employ a non-radial DEA technology for assessing energy and environmental efficiency for OECD countries. Results reveal that the values of energy intensity range from 0.93 to 0.30, while GHG emission per capita values range from 24.61 to 5.28. As far as energy efficiency is concerned, Iceland and Greece have the highest value (0.99) of energy efficiency, whereas Ireland has the lowest value (0.34) of energy efficiency. Further analysis shows that Austria, Australia, Portugal and Spain have values between 0.70 and 0.80 for energy intensity, whereas UK, Sweden, Germany and the USA have values of energy intensity, between 0.40 and 0.50. The study proposes some valuable policy implications for policy and decision-makers to make the environment more sustainable. Assessment, DEA, environment, economy, energy, OECD 02 2021 66 March The Singapore Economic Review 489 506 http://www.worldscientific.com/doi/abs/10.1142/S0217590819430033 HUAPING SUN School of Finance and Economics, Jiangsu University, Zhenjiang 212013, P. R. China MUHAMMAD IKRAM #x2020;College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing 211106, P. R. China MUHAMMAD MOHSIN School of Finance and Economics, Jiangsu University, Zhenjiang 212013, P. R. China QAISER ABBAS #x2021;Department of Economics, Ghazi University Dera Ghazi Khan, Pakistan
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article STOCK MARKET PREDICTION IN BRICS COUNTRIES USING LINEAR REGRESSION AND ARTIFICIAL NEURAL NETWORK HYBRID MODELS The BRICS (Brazil, Russia, India, China and South Africa) acronym was created by the International Monetary Foundation (IMF)–Group of Seven (G7) to represent the bloc of developing economies which crucially impact on the global economy by their potential economic growth. Most of the foreign direct investment are considering the stock markets of BRICS as the most attractive destination for foreign portfolio investment. This study aims to identify the relationship between macroeconomic variables and the stock market index values of BRICS and generate accurate predictions for index values by performing linear regression and artificial neural network hybrid models. Monthly data from January 2003 to December 2019 are used for the empirical study. The results indicate that a strong correlation exists between the stock market and macroeconomic variables in BRICS over time. The hybrid model is observed very accurate for index value prediction where the mean absolute percentage error (MAPE) value is 0.714% for the whole data set covering all BRICS countries data during the study period. Additionally, MAPE values for each of the BRICS countries are, respectively, obtained as 0.083%, 2.316%, 0.116%, 0.962% and 0.092%. Thus, the main findings of this study show that while neural network-integrated models have high performances for volatile stock market prediction, macroeconomic stabilization should be the priority of monetary policy to prevent the high volatility of stock markets. Stock market, BRICS, financial market, ANN, hybrid models 02 2022 67 March The Singapore Economic Review 635 653 http://www.worldscientific.com/doi/abs/10.1142/S0217590821500521 GÖRKEM ATAMAN Department of Business Administration, Yasar University, Ä°zmir, Turkey SERPIL KAHRAMAN ��Department of Economics, Yasar University, Ä°zmir, Turkey
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article SOCIAL INSURANCE CONTRIBUTIONS AND FIRM INVESTMENT: A QUASI-EXPERIMENTAL EVIDENCE FROM CHINA This paper studies the impact of firm social insurance contribution on investment by exploiting a contribution collection administration reform in China. Using a difference-in-differences strategy, we find that Chinese firms increase social insurance contribution after the reform that the premiums collection duty is transferred from local social insurance administrations to tax bureaus for better enforcement. As a consequence, the enforced increase in contribution decreases firm investment significantly. On average, a one percentage point increase in social insurance contribution decreases firm investment by 1.5 percentage points. The effects are more pronounced among firms with higher manufacturing costs or tighter financial constraints. Social insurance contribution evasion, firm investment, social insurance reform 02 2022 67 March The Singapore Economic Review 895 916 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500072 JING ZHAO JingZ6668@163.com Economics and Management School, Wuhan University, Wuhan, P. R. China JIYUAN WANG ��School of Insurance, Central University of Finance and Economics, Beijing, P. R. China
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article AAOIFI ACCOUNTING STANDARDS AND A THEORY OF INTEREST-FREE BANKING Based on the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) issued six new Financial Accounting Standards (FAS) in 2017, we derive the cost of financing formulas for various Islamic financing contracts. Later, we present a simple theoretical framework for interest-free Islamic banking based on the Basic Limited-Participation Model seminal approach developed by Lucas (Lucas, RE Jr. (1990). Liquidity and interest rates. Journal of Economic Theory, 50(2), 237–264.) and Fuerst’s (Fuerst, TS (1992). Liquidity, loanable funds, and real activity. Journal of Monetary Economics, 29(1), 3–24.), and later followed by Walsh (Walsh, C (1998). Money in the short run: Informational and portfolio rigidities. In Monetary Theory and Policy, pp. 211–223. Cambridge, Mass.: MIT Press.). We compare the competing theoretical models for conventional banks and for interest-free Islamic banks and formulate testable hypothesis. To complement our models, we provide empirical evidence by using a unique sample of 15 banks from Bangladesh that provide both conventional banking and Islamic banking services. Results suggest that Islamic bank profit rates and conventional bank interest rates are correlated in an economic environment where conventional and Islamic banks dwell under same regulatory framework. Interest rates, financial institutions, banks, depository institutions 01 2022 67 March The Singapore Economic Review 45 85 http://www.worldscientific.com/doi/abs/10.1142/S0217590819420074 ASSYAD AL-WREIKET Department of Accounting, Frostburg State University, USA ALI ASHRAF Department of Marketing and Finance, Frostburg State University, USA OLA AL-SHEYAB Department of Management, Frostburg State University, USA M. KABIR HASSAN Department of Finance, University of New Orleans, USA IVAN JULIO Boston University, USA
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article THE DETERMINANTS OF FOREIGN DIRECT INVESTMENT IN R&D: DIFFERENT INDUCEMENT EFFECTS OF PRIVATE AND PUBLIC R&D IN DEVELOPED AND DEVELOPING HOST COUNTRIES In this paper, we identify the different determinants of the location of research and development (R&D) on foreign direct investment (FDI) in both developed and developing countries. In the case of host developed countries, we find that private R&D investment is positively associated with attracting R&D on FDI. In contrast, in the case of host developing countries, we find that private R&D investment is not significantly associated with attracting R&D FDI, but public R&D induces it. These findings imply that the objective of R&D FDI in developed economies is to advance multinational corporations’ (MNCs) technology further by targeting the local technology market. In contrast, the R&D FDI of MNCs in developing countries is attracted toward localities where the R&D infrastructure is better developed due to public R&D investment. MNCs in developing countries do not direct considerable attention to the R&D activities of the local private sector because their goal is to modify their own technology or products for the local product or export markets in the host countries. Therefore, although one obvious policy implication is the importance of conducting local R&D to attract foreign R&D, the more important factors are to stimulate private R&D further in the case of developed countries and to initiate public R&D first in the case of developing countries. R&D, FDI, determinant, developing countries, developed countries, public R&D 03 2022 67 June The Singapore Economic Review 923 951 http://www.worldscientific.com/doi/abs/10.1142/S0217590820450034 JUN-KI PARK Research Fellow, Samsung Economic Research Institute, Seoul, South Korea DONG JOON LEE djlee429@hanmail.net Research Fellow, Samsung Economic Research Institute, Seoul, South Korea KEUN LEE Professor, Department of Economics, Seoul National University, Seoul, South Korea
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article A HYBRID REVIEW OF ISLAMIC PRICING LITERATURE During the last decade, studies on Islamic pricing (IP) have received considerable attention from researchers and academicians. Given the growing popularity of IP, this study critically examines IP literature using a hybrid review — bibliometric analysis with content analysis. In addition to that the Islamic view of pricing based on the principles of Quran and Sunnah is also examined. The bibliometric results show that IP literature demonstrates a low productivity, low citations ratio, and high research collaboration. The content analysis identifies that the pricing methods, mechanisms, considerations and other industries except Islamic finance industry, are still under-researched. This study is of critical importance because it simultaneously shows the evolution of IP and explores new dimensions of it. Islamic pricing, Islamic marketing mix, bibliometric analysis, content analysis, Islam 01 2022 67 March The Singapore Economic Review 477 509 http://www.worldscientific.com/doi/abs/10.1142/S0217590821420029 MD. ABDULLAH AL MAMUN mamunr@iut-dhaka.edu Department of Business and Technology Management, Islamic University of Technology, Gazipur 1704, Bangladesh M. KABIR HASSAN mhassan@uno.edu ��Department of Economics and Finance, University of New Orleans, New Orleans, LA 70148, USA MD. ABUL KALAM AZAD Department of Business and Technology Management, Islamic University of Technology, Gazipur 1704, Bangladesh MAMUNUR RASHID mamunur.rashid@ubd.edu.bn ��Universiti Brunei Darussalam, Brunei Darussalam, Brunei
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article COMPARATIVE TFP GROWTH BETWEEN GCC CONVENTIONAL AND ISLAMIC BANKS BEFORE AND AFTER THE 2008 FINANCIAL CRISIS This paper measures and compares the performance of GCC conventional and Islamic banks in terms of total factor productivity growth (TFPG) before and after the 2008 financial crisis. The sources of TFPG are technical change, size economies, and observed asset growth. Technical change and size economies are measured by estimating a translog cost function and factor share equations. Results show that Islamic banks outperformed conventional banks overall and across different sizes. To the extent that product and process innovation improves TFPG, Islamic banks have weathered the 2008 financial crisis by being more innovative than conventional banks. Conventional versus Islamic banking, GCC, total factor productivity growth, 2008 financial crisis 01 2022 67 March The Singapore Economic Review 289 308 http://www.worldscientific.com/doi/abs/10.1142/S0217590820420047 AZZEDDINE AZZAM Department of Agricultural Economics, University of Nebraska-Lincoln, 103E Filley Hall, Lincoln, Nebraska, USA BELAID RETTAB ��Dubai Chamber, Dubai, UAE
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article OUTWARD FOREIGN DIRECT INVESTMENT OF CHINA’S BANKING SECTOR: DETERMINANTS AND MOTIVATIONS The outward foreign direct investment (OFDI) is vital for the sustainable development of China’s banking sector. This paper examines the location determinants of OFDI by China’s banks during 2003–2015 with a set of negative binomial panel regression models. We show that the OFDI for China’s banking sector generally exhibits market-seeking, resource-seeking and efficiency-seeking motivations. The efficiency-seeking motivation is mostly through the incentive to avert credit risk. The OFDI also tends to flow to economically stable countries. Our results indicate that the Chinese banks’ investment decisions are mainly in line with fundamental theories and are robust for different samples and periods. China, banking sector, outward FDI, location determinants 02 2022 67 March The Singapore Economic Review 685 707 http://www.worldscientific.com/doi/abs/10.1142/S0217590821500594 YUHUA ZHAO zhaoyuhua@bisu.edu.cn School of Economics, Beijing International Studies University, Beijing 100024, P. R. China NILUFER OZDEMIR n.ozdemir@unf.edu ��Department of Economics and Geography, Coggin College of Business, University of North Florida, Jacksonville, Florida 32224, USA REN ZHANG r_z79@txstate.edu ��Department of Finance and Economics, McCoy College of Business, Texas State University, San Marcos, Texas 78666, USA LIAN AN ��Department of Economics and Geography, Coggin College of Business, University of North Florida, Jacksonville, Florida 32224, USA
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article BUILDING TRUST IN WAQF MANAGEMENT — IMPLICATIONS OF GOOD GOVERNANCE AND TRANSPARENT REPORTING This study seeks to highlight the implications of governance and reporting practices in ensuring accountability and building donors trust in Waqf Institutions (WIs). Data gathered through the survey are analyzed using PLS-SEM technique. The conceptual model was developed based on the critical review of the past literature. Among the three proxies of board attributes, only board ability has a significant positive impact on accountability. Voluntary information disclosure has a significant positive impact on accountability. Accountability has a significant impact on building trust in waqf management. Results provided by the study advocate for the adoption of formal reporting and improved governance mechanisms to enhance donors’ trust in WIs. Waqf, trust, governance, reporting, accountability, Shari’ah 01 2022 67 March The Singapore Economic Review 459 475 http://www.worldscientific.com/doi/abs/10.1142/S0217590820420059 RASHEDUL HASAN Faculty of Business, Communication and Law, INTI International University, Malaysia ABU UMAR FARUQ AHMAD aufahmad@gmail.com Islamic Economics Institute, King Abdulaziz University, Kingdom of Saudi Arabia SITI ALAWIAH BT. SIRAJ s.alawiah@iium.edu.my Department of Accounting, International Islamic University, Malaysia
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article AN INTEGRATED MODEL OF KNOWLEDGE TRANSFER FROM GLOBAL FLAGSHIPS TO LOCAL FIRMS IN GLOBAL PRODUCTION NETWORKS It is known that global flagships’ capacity and willingness to transfer knowledge in global production networks will affect the knowledge acquisition of local firms. However, the mechanism is not clear enough, or rather scattered, and thus lacks an integrated model for comprehensive conceptualization. Adopting a sample of 105 Chinese firms, we construct an integrated two-stage model to interpret the mechanism of knowledge transfer from global flagships to local firms and find that global flagships’ capacity and willingness to transfer positively impact the knowledge acquired by local firms through the mediation of the knowledge contributed by the global flagships. Organizational distance and local firms’ absorptive capacity affect the knowledge acquired by local firms as well. The influences of the latter two also depend on the different types of ties between global flagships and local firms. Global production networks, global flagships, local firms, knowledge transfer, inter/intra-firm ties 03 2022 67 June The Singapore Economic Review 1047 1069 http://www.worldscientific.com/doi/abs/10.1142/S021759082045006X JIAN DU dujian@zju.edu.cn School of Management, Zhejiang University, P. R. China JIE LU jiel@zju.edu.cn School of Management, Zhejiang University, P. R. China DONG WU School of Management, Zhejiang University, P. R. China XIAORAN CHANG changxiaoran1@126.com ��College of Economics & Management, China Jiliang University, P. R. China
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article ISLAMIC BLENDED FINANCE FOR CIRCULAR ECONOMY IMPACTFUL SMEs TO ACHIEVE SDGs In this research, we present a framework for blended Islamic finance for impactful small and medium enterprises (SMEs) to achieve sustainable development goals (SDGs). The blend results from discussing the pertinent perspectives that underlie the motives of philanthropy, private sector activities and public sector facilitation. The consensus of these three stakeholders on the impact criteria is an essential precondition for the blend to happen. Therefore, we first developed the consensus-based impact criteria for SMEs, namely, 4Zeros & SS (zero-waste, zero-emissions, zero-interest, zero-foreclosures and service to society). After that, we adopted a financial engineering approach to design products by blending the three motives. Financial contracts could be incentive compatible and effective if these three motivations are recognized and brought together. The purpose of our research is to offer such incentive-compatible structures that can mobilize funding for impactful SMEs, save cost as well as generate revenue for self-sustainability. In the contract design, the private sector provides finance, the philanthropist pays the costs of funds, the public sector facilitates, and the impactful SME gets subsidized financing. Since the blended nature of the contract provides a social subsidy to fund the cost element of the financing, the proposed structure creates a win–win result for the blending parties. While financial institutions expand into the SMEs sector for profitability, blended Islamic finance will attract additional resources toward enhancing development impact. Through the philanthropic component, SMEs, on the other hand, will access the source of social subsidy that will relieve the burden of the exorbitant commercial rates. The funding structure will reduce risk perception and spur growth.Consequently, this collaborative and innovative contract design will contribute to achieving multidimensional human development, as enshrined in the Maqasid al-Shariah, and the SDGs. Impactful businesses must integrate environmental, social and governance best practices as well as national development goals. Hence, the proposal offers several benefits and prospects of extended use for other consensus-based purposes such as low-cost housing, solar panelling, health, education, etc. Islamic social finance, blended Islamic finance, sustainable human development, Zakah, Waqf, Sadaqa, sustainable development goals, circular economy 01 2022 67 March The Singapore Economic Review 219 244 http://www.worldscientific.com/doi/abs/10.1142/S0217590820420060 TARIQULLAH KHAN Hamad Bin Khalifa University, Education City, Ar-Rayyan, Qatar FATOU BADJIE fatimahbadjie@gmail.com University of The Gambia, The Gambia
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article IMPACT OF ISLAMIC FINANCE ON ECONOMIC GROWTH: AN EMPIRICAL ANALYSIS OF MUSLIM COUNTRIES Islamic finance is one of the most rapidly growing sectors of the global financial system. This paper empirically outlines the pure effect of Islamic finance including Islamic banking and Islamic bonds on economic growth in major Muslim countries. Current study has taken up Islamic banks’ assets and Islamic banks’ financing, total value of sukuk issued and real GDP as measuring proxies. For the analysis, PMG of ARDL framework has been utilized. The outcomes of the study revealed that in the long run, Islamic banks’ assets, Islamic banks’ financing and Islamic bonds are significantly correlated with real GDP in Muslim countries. Islamic banking, sukuk, GDP, PMG/ARDL 01 2022 67 March The Singapore Economic Review 245 265 http://www.worldscientific.com/doi/abs/10.1142/S0217590819420062 SYEDA AROOJ NAZ arooj.naz@live.com Department of Management Sciences, COMSATS University Islamabad, Wah Campus, Pakistan SAQIB GULZAR Department of Management Sciences, COMSATS University Islamabad, Wah Campus, Pakistan
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article DOES ISLAMIC FINANCE FOLLOW FINANCIAL HIERARCHY? EVIDENCE FROM THE MALAYSIAN FIRMS Focusing on the sukuk market in Malaysia from 2000–2017, this study estimates the degree of each sample issuer information asymmetry and investigates how it influences sukuk issuance and how it differs by sukuk type. First, we find that a cost-plus-sales-based Murabahah sukuk is available for all sukuk issuers, even though the degree of information asymmetry is high. Second, a lease-based Ijarah sukuk can be chosen by high information asymmetric firms only when the firm has qualified collateral assets. Third, only a low information asymmetric firm can choose a profit-and-loss sharing-based Musyarakah sukuk. Therefore, we conclude that sukuk issuance also follows a financial hierarchy in accordance with the agency costs of each financial methodology required when a specific sukuk is chosen. Sukuk issuance, information asymmetry, Murabahah sukuk, Ijarah sukuk, Musyarakah sukuk 01 2022 67 March The Singapore Economic Review 511 540 http://www.worldscientific.com/doi/abs/10.1142/S0217590821420030 MAMORU NAGANO mnagano@econ.seikei.ac.jp Faculty of Economics, Seikei University, 3-3-1 Kichijoji Kitamachi Musashino City, Tokyo 180-8633, Japan
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article DETERMINANTS OF CREDIT RISK: A COMPARATIVE ANALYSIS BETWEEN ISLAMIC AND CONVENTIONAL BANKS IN BANGLADESH The paper investigates the determinants of credit risk of Islamic and conventional banks in Bangladesh. In so doing, it collects data from 30 private commercial banks comprising of seven Islamic banks and 23 conventional banks for the period 2001–2018. Collected data are analyzed using GMM estimation technique. This method is perceived to be robust because it reduces the endogeneity problem that exists in the panel data set. Analysis of data shows that among the macro-economic variables, GDP growth decreases credit risk, whereas real interest rate and inflation increase credit risk. Bank-specific variables prove that both clusters of banks suffer from adverse selection and moral hazard problems. Results also indicate that competition has a risk-enhancing effect on banks, which supports the competition-fragility nexus. Further analysis shows that board size and board independence affect the credit risk of both clusters of banks. Findings of this study suggest some policy implications from macro, bank and governance perspectives. Specifically, banks should adopt ‘speed limit’ policy to reduce the poor quality loan. Also, competition in the banking industry should be regulated. Finally, central bank should maintain uniform capital adequacy ratio for both clusters of banks. Although this study is limited to private commercial banks in Bangladesh, the results can be generalized for other emerging economies. Credit risk, commercial banks, adverse selection, moral hazard, corporate governance 01 2022 67 March The Singapore Economic Review 349 379 http://www.worldscientific.com/doi/abs/10.1142/S0217590820420011 MD. NURUL KABIR nurul.kabir@northsouth.edu Department of Accounting and Finance, North South University, 15, Block B, Bashundhara, Dhaka, Bangladesh MOHAMMAD DULAL MIAH Department of Economics and Finance, University of Nizwa, Birkat Al Mawz, P. O. Box 33, PC 616 Nizwa, Oman RUBAIYA NADIA HUDA rubaiya.huda@northsouth.edu Department of Accounting and Finance, North South University, 15, Block B, Bashundhara, Dhaka, Bangladesh
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article A CONTEMPORARY REVIEW OF ISLAMIC FINANCE AND ACCOUNTING LITERATURE This paper reviews empirical studies with a particular interest in Islamic finance literature and highlights future research directions. The earlier literature on Islamic finance was built on the Islamic economic foundation of social justice and fairness, which was formed theoretically from the primary sources of Sharia coupled with some analytical frameworks. Subsequent studies emphasized the empirical investigations without including far-reaching analytical and theoretical postulations in the area. Although empirical studies on Islamic banking are plenty, there is a new body of emerging empirical literature on Islamic finance focusing on corporate finance and Takaful, whereas Islamic accounting studies are mostly qualitative. The literature provides a mixed picture of Islamic financial markets and instruments, showing that the Islamic ones perform better most of the time but also perform worse at times than their conventional counterparts. This paper discusses issues that are relevant to Islamic finance and identifies avenues for future research and policy implications. Islamic Capital Markets, Islamic Corporate Finance, Islamic Accounting, Insurance 01 2022 67 March The Singapore Economic Review 7 44 http://www.worldscientific.com/doi/abs/10.1142/S0217590819420013 M. KABIR HASSAN mhassan@uno.edu Department of Economics and Finance, University of New Orleans, New Orleans, LA 70148, United States SIRAJO ALIYU ��Department of Banking and Finance, RM 20 Annex New Building — School of Business Studies, Federal Polytechnic, Bauchi, Nigeria MUMTAZ HUSSAIN mhussain@imf.org ��Policy Development and Review Department International Monetary Fund (IMF), 700 19th St. NW, Washington, DC 20431, United States
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article DOES STUDENT MOBILITY AFFECT TRADE FLOWS? NEW EVIDENCE FROM CHINESE PROVINCES This paper investigates the impact and relationship of international students’ inflow with export and import trade based on the panel data of 28 provinces in China from 2000 to 2016. However, due to the remarkable differences in economic and social development across various regions, the characteristics and patterns of international students’ inflow in different Chinese provinces are significantly large. Our study finds that international students’ inflow will promote the development of the host country’s export and import trade. The results show that international students’ inflow is positive and statistically significant in the Fixed Effect (FE) and the Generalized Method of Moments (GMM) estimation. This paper empirically investigates the impact of international student inflow on China’s export and import trade. However, the impact of export and import trade of different modes have certain regional differences. Our study proposes that the Chinese government should attach greater importance to the role of international students’ inflow to promote import–export trade. In addition, policymaker needs to design effective strategies and policies to promote export trade from less developed regions, and improve the stability of the sustained growth of export and import trade. Foreign students’ inflow, China, regional trade, empirical analysis 03 2022 67 June The Singapore Economic Review 1089 1116 http://www.worldscientific.com/doi/abs/10.1142/S0217590820450010 YASIR KHAN School of Economics & Management, Anhui Polytechnic University Wuhu 241000, P. R. China2School of Economics & Management Southeast University Nanjing 211198, P. R. China QIU BIN School of Economics & Management, Anhui Polytechnic University Wuhu 241000, P. R. China2School of Economics & Management Southeast University Nanjing 211198, P. R. China
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article DOES FOREIGN AID HELP OR HINDER THE INSTITUTIONAL QUALITY OF THE RECIPIENT COUNTRY? NEW EVIDENCE FROM THE OIC COUNTRIES This study examines the impact of foreign aid on the institutional quality (IQ) of the OIC countries. Using the data of OIC countries for the three-year average period from 1991 to 2016, the system GMM finds that aid in general deteriorates the IQ for the aid recipient countries. However, quantile regression suggests that the negative impact of foreign aid on institutional quality (IQ) is relatively greater in the countries where the existing quality of institution is poor. The findings of the study suggest that improving the existing capacity is essential for reaping the optimum benefit of foreign aid on institutional development. Foreign aid, institutional quality, OIC countries, system GMM, quantile regression 01 2022 67 March The Singapore Economic Review 189 218 http://www.worldscientific.com/doi/abs/10.1142/S0217590819420037 MOHAMMAD ASHRAFUL FERDOUS CHOWDHURY INCEIF, Kuala Lumpur, Malaysia and Department of Business Administration, Shahjalal University of Science & Technology, Sylhet, Bangladesh MOHAMED ARIFF ��INCEIF, Kuala Lumpur, Malaysia MANSUR MASIH ��Finance/Islamic Finance, UniKL Business School, Kampung Baru, 50300 Kuala Lumpur, Malaysia IZLIN ISMAIL �Department of Finance & Banking, University of Malaya, Malaysia
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article THE INVESTMENT ACCOUNT HOLDERS DISCLOSURE LEVEL IN THE ANNUAL REPORTS OF ISLAMIC BANKS: CONSTRUCTION OF IAHS DISCLOSURE INDEX This paper aims to measure the IAHs disclosure level in the annual reports of Islamic banks. To do this, we develop a specific IAHs disclosure index based on Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards. We use manual content analysis of 49 full-fledged Islamic banks’ annual reports over the period 2011–2015 across 10 countries. The findings of this study show that the overall level of IAHs disclosure is 28%. Indeed, the sampled Islamic banks provide fewer disclosures related to IAHs. This study contributes to enrich the knowledge of Islamic accounting literature by exploring directly the IAHs disclosure level in the annual reports of Islamic banks via self-constructed IAHs disclosure index based on AAOIFI accounting standards. It can help regulators in different countries to understand and strengthen the IAHs disclosure practices in Islamic banks by imposing AAOIFI disclosure requirements in terms of IAHs reporting. Investment account holders, Islamic banks, IAHs disclosure index, AAOIFI accounting standards, manual content analysis 01 2022 67 March The Singapore Economic Review 87 111 http://www.worldscientific.com/doi/abs/10.1142/S0217590820420035 RAOUDHA SAIDANI Institute of Advanced Business Studies (IHEC Carthage), University of Carthage, Tunisia NEILA BOULILA TAKTAK neila_boulila@yahoo.fr Institute of Advanced Business Studies (IHEC Carthage), University of Carthage, Tunisia KHALED HUSSAINEY khaled.hussainey@port.ac.uk ��Faculty of Business and Law, University of Portsmouth, UK
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article LOCAL BARGAINING IN POLICY PILOTS IN CHINA — THE CASE OF RURAL LAND MARKETIZATION IN DEQING, ZHEJIANG In China, policy pilots are not about implementation; it is meant to establish new institutions, adopting new practices or finding new solutions that may not be officially endorsed or publicly recognized yet. Pilots are also not “experiments†in which interventions are clearly designed and executed under strict control. It is to some extent a form of muddling through with both central and local contributions. In this paper, we examine the local government’s role in a land pilot scheme in Deqing County in Zhejiang Province since 2015 to examine the relationship between the central and local governments. China, policy pilots, rural land reform, implicit bargaining, leveraging, central–local relations 02 2022 67 March The Singapore Economic Review 779 798 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500034 GAN LI Institute of China ICT Development & Strategy, Nanjing University of Posts and Telecommunications, P. R. China BINGQIN LI Social Policy Research Centre, University of New South Wales, Australia
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article COMPETITION-STABILITY RELATIONSHIP IN DUAL BANKING SYSTEMS: EVIDENCE FROM EFFICIENCY-ADJUSTED MARKET POWER This research attempts to explore the impact of banking competition on financial stability employing a more precise measure of market power. It was found that Islamic banks are less stable and are enjoying lower market power. The analysis shows that higher market competition makes the banking sector vulnerable to defaults, supporting the “competition-fragility view†. This research finds no difference in the relationship for Islamic banks indicates that Islamic banks might be involved in traditional banking activities as conventional banks. The results are consistent and robust to different estimation approaches and subsamples. This research carries regulatory and policy implications. Bank competition, efficiency-adjusted market power, stability, dual banking, Lerner index 01 2022 67 March The Singapore Economic Review 309 332 http://www.worldscientific.com/doi/abs/10.1142/S0217590820420096 MUDEER AHMED KHATTAK Faculty of Business Administration, Iqra University Islamabad, Pakistan OMAR ALAEDDIN omar.alaeddin@unikl.edu.my Universiti Kuala Lumpur, Business School, Universiti Kuala Lumpur, Malaysia MOUTAZ ABOJEIB moutaz.aj@gmail.com Islamic Shariah Research Acadamy (ISRA), Malaysia
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article NOT PATENTS BUT TRADEMARKS-BASED PATH OF TECHNOLOGICAL DEVELOPMENT OF LATECOMERS: EVIDENCE FROM THE KOREAN DATA In contrast to the vast literature on verifying the importance of formal R&D activities measured as patent registrations, this paper explores the possibility of not patent but trademark-driven path of latecomer firms’ technological development. The study is motivated by the evidence from the Korean data showing the existence of two groups of sectors where firms in the one group tended to file more trademarks than patents. We find that in the first group of sectors, like food, apparel, and pharmaceuticals, trademarks have been the most applied form of the IPRs with a much larger number of their registrations than patents from the initial stage of development until recently, whereas in the second group of sectors, like electronics and automobiles, the main IPR form has been patents. Regressions on the determinants about this bifurcation find that the trademark groups are those sectors involving more tacit knowledge and/or domestic market orientation associated with slow progress in technological capabilities. The results are important because it implies the existence of alternative path of economic development by the latecomer firms in different sectors, beside the patent-driven path which is already verified in Kim et al. (2012). Appropriate intellectual property protection and economic growth in countries at different levels of development. Research Policy, 41(2), 358–375, http://dx.doi.org/10.1016/j.respol.2011.09.003. Trademarks, patents, Korea, tacit knowledge, sectoral systems of innovations 03 2022 67 June The Singapore Economic Review 1071 1088 http://www.worldscientific.com/doi/abs/10.1142/S0217590820450022 RAEYOON KANG bethe1@snu.ac.kr Institute of Economic Research, Seoul National University, Seoul, Republic of Korea TAEHYUN JUNG tjung@hanyang.ac.kr Graduate School of Technology and Innovation Management, Hanyang University, Seoul, Republic of Korea KEUN LEE Economics Department, Seoul National University, Seoul, Republic of Korea
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article AN ANALYSIS OF THE MANAGEMENT OF FISCAL DEFICIT OF PAKISTAN: AN ECONOMETRIC STUDY OF AUTO-REGRESSIVE DISTRIBUTIVE LAGS (ARDL) APPROACH Fiscal policy is an essential ingredient of economic performance. The fiscal policy is considered as a short-run measure; however, this has long-lasting outcomes for any economy. The current study has examined the connection among different constituents of fiscal policy, i.e., federal government revenues and federal government expenditures; federal government revenues and different components of federal government expenditures; federal government expenditures and different components of federal government revenues and fiscal deficit and influential budgetary variables in the context of the economy of Pakistan. The study has empirically investigated the relationship among the budgetary variables for Pakistan from 1979 to 2017. For data analysis, time-series econometric techniques such as auto-regressive distributive lag (ARDL) approach and Granger causality test have been employed. The results of ARDL bounds test approach suggest the existence of long-run equilibrium relationship among the variables. The result of CUSUM and CUSUMSQ shows the stability of functional relationship tested in this study, which means that model is a useful instrument for policymaking. So, a rise or fall in budgetary variables causes changes in fiscal deficit in long run. The results of study endorse the proof of spent-and-tax hypothesis in the economy of Pakistan. The study suggests the need for extensive fiscal policy reforms in Pakistan. Federal government revenues, federal government expenditure, indirect taxes, current expenditure, fiscal deficit 02 2022 67 March The Singapore Economic Review 655 684 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500352 KHURRAM EJAZ CHANDIA School of Public Affairs, University of Science and Technology of China, Hefei, P. R. China†Department of Management Sciences, COMSATS University Islamabad, Sahiwal Campus, Punjab, Pakistan MUHAMMAD BADAR IQBAL badr@cuisahiwal.edu.pk ��Department of Management Sciences, COMSATS University Islamabad, Sahiwal Campus, Punjab, Pakistan SAIRA AZIZ ��School of Management, University of Science and Technology of China, Hefei, P. R. China†Department of Management Sciences, COMSATS University Islamabad, Sahiwal Campus, Punjab, Pakistan IFRA GUL ifragul60@gmail.com �Independent Researcher. BINESH SARWAR binesh@mail.ustc.edu.cn School of Public Affairs, University of Science and Technology of China, Hefei, P. R. China
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article INDIVIDUAL’S BEHAVIOR AND ACCESS TO FINANCE: EVIDENCE FROM PALESTINE Governments and global institutions are working to enhance economic development as a key for sustainability by including disadvantaged people (including the poor, women, youth, and illiterate) in the financial system. This paper uses the World Bank Global Findex Database (2014) for 1000 Palestinians to examine the influence of individual behavior on financial inclusion in Palestine. This study used empirical methods to determine whether individual socioeconomic characteristics influence financial inclusion in Palestine. The results indicated that females were less likely to be included in financial transactions, especially transactions involving borrowing and formal accounts. Further, we learned that borrowing behavior in Palestine leans toward informal sources. Formal institutions have made remarkable efforts to develop an inclusive financial infrastructure in Palestine. However, the country’s unstable political climate continues to impede economic stability and individuals’ motivation to use formal financial resources such as credit. More efforts to specifically encourage youth, the poor, and women to use formal banking could enhance their access to financial services. Adopting Islamic financial services, and online banking would also improve financial inclusion for all of Palestine’s citizens and drive sustainable development. Further, theoretical and empirical studies of Palestine’s economic development are recommended. Financial inclusion, Palestine, individual behavior, access to finance, Islamic services 01 2022 67 March The Singapore Economic Review 113 133 http://www.worldscientific.com/doi/abs/10.1142/S0217590819420025 FADI HASSAN SHIHADEH Fadih20@gmail.com Palestine Technical University, Kadoorie, West Bank, Palestine
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article INNOVATION AND CORRUPTION: DISSECTING CAUSAL LINKAGE USING PATENT APPLICATION INFORMATION FROM INDIA Using World Bank Enterprise Survey data on bribery and patent applications, we try to study the causal linkage between firm level innovation and corruption in India. Specifically, we try to understand if corruption impacts innovation at the firm level. Since we find that innovation and corruption are jointly determined, we propose instrumental variables regression approach to identify this causal effect. We instrument bribery by exogenously determined external audit parameter and then use a recursive bivariate probit model combined with industry-fixed effects to reach our results. Our findings suggest that bribery has an adverse impact on innovation. The results of our study are much in contrast to the existing literature, which largely supports a positive relationship between innovation and corruption. bribery, corruption, innovation, instrument variable, patent application 03 2022 67 June The Singapore Economic Review 1147 1173 http://www.worldscientific.com/doi/abs/10.1142/S0217590820450046 PRASHANT PODDAR Indian Institute of Management Lucknow, IIM Road, Prabandh Nagar, Lucknow 226013, Uttar Pradesh, India SANJAY KUMAR SINGH sanjay@iiml.ac.in Indian Institute of Management Lucknow, IIM Road, Prabandh Nagar, Lucknow 226013, Uttar Pradesh, India
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article EXPLORING INNOVATION FACTORS AFFECTING ECONOMIC PERFORMANCE IN EMERGING ASIAN COUNTRIES: A MACHINE LEARNING APPROACH In this study, we aimed to identify the main innovation factors that affect the economic performance of emerging countries. We analyzed data on 21 innovation-related variables in six emerging Asian countries (China, Indonesia, Malaysia, the Philippines, Thailand and Vietnam) from 1990 to 2008. Using principal component analysis (PCA), we identified six factors that explained up to 90.6% of the variation of all of the variables. Taking the least absolute shrinkage and selection operator clustering approach to variable selection, along with the other classification and estimation methods, we explored the effects of the six identified factors on economic growth. Research and development expenditure and contract enforcement (cost) had negative effects on economic growth, whereas gross enrolment ratio (tertiary), primary-school pupil–teacher ratio (inverse), paved roads and number of registered carrier departures worldwide had positive effects on economic growth. Panel data model, innovation factors, economic growth, machine learning, principal component analysis, cluster-LASSO 03 2022 67 June The Singapore Economic Review 1029 1045 http://www.worldscientific.com/doi/abs/10.1142/S0217590820450058 YUWEN LIU Institute of Technology Management, National Tsing Hua University, No. 101 Section 2, Guangfu Rd, Hsinchu 30013, Taiwan, ROC CHIN-CHIA LIANG ��Department of Finance, Da-Yeh University, No. 168 University Road, Dacun, Changhua 51592, Taiwan, ROC
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article ENERGY, ECONOMIC GROWTH, INEQUALITY, AND POVERTY IN IRAN This paper examines the relationships among energy consumption, economic growth, inequality, and poverty in Iran. We estimate these relationships at both the aggregate and sectoral level using instrumental variables to address endogeneity and simultaneous equation models to enhance efficiency. Results show that decreasing inequality will be beneficial for economic growth, poverty alleviation and energy access. Inequality can negatively affect GDP directly, as well as indirectly through its negative effect on energy consumption. Similarly, inequality can increase poverty both directly as well as indirectly through its negative effect on energy consumption. We also find that increasing energy consumption has multiple benefits: it increases GDP, tends to decrease inequality and decreases poverty. Energy consumption decreases poverty both directly as well as indirectly via its effect on decreasing inequality. Our results therefore suggest that policies to improve energy access are important, and will have the benefits of increasing GDP, decreasing inequality and decreasing poverty. Energy consumption, poverty and inequality, economic growth, simultaneous equation system 02 2022 67 March The Singapore Economic Review 733 754 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500198 MAJID AGHAEI University of Mazandaran, Pasdaran Street, 47415, P.O. Box C.-Y. CYNTHIA LIN LAWELL clinlawell@cornell.edu Cornell University, 407 Warren Hall, Ithaca, NY, 14853-4203, USA
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article INTRODUCTION TO SPECIAL ISSUE ON FRONTIERS OF INNOVATION STUDIES AND ISSUES IN EMERGING ECONOMIES: A SCHUMPETERIAN PERSPECTIVE 03 2022 67 June The Singapore Economic Review 917 922 http://www.worldscientific.com/doi/abs/10.1142/S0217590822030023 Keun Lee kenneth@snu.ac.kr Department of Economics, Seoul National University, Gwanak-ro 1, Seoul 08826, South Korea Xiaobo Wu xbwu@zju.edu.cn School of Management, Zhejiang University, Hangzhou, Zhejiang 310058, P. R. China Chan-Yuan Wong wcy@mx.nthu.edu.tw Institute of Technology Management, National Tsing Hua University, Hsinchu City 30013, Taiwan, R. O. China
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article DOES IMPORTED PRODUCER SERVICE AFFECT MANUFACTURING EXPORT? EVIDENCE FROM CHINA Based on a panel data of 44 countries and 18 industries spanning 14 years, this paper provides a novel insight into the driving force behind the expanding volume of China’s export. We match the global input–output database with micro-level data from Chinese manufacturing firms and find a positive effect of imported producer service inputs on domestic manufacturing exports. Foreign producer service inputs assist domestic firms in entering foreign markets and maintaining foreign relations, thus contributing to their exporting performance. The results confirm the specialization effect and information cost reduction effect led by imported service inputs. Producer service, linkage, manufacturing exports 03 2022 67 June The Singapore Economic Review 1117 1146 http://www.worldscientific.com/doi/abs/10.1142/S0217590822450011 ZHEN YU yuzhenwhu@126.com Institute for the U.S. and Canadian Economies, Wuhan University, Wuhan, P. R. China YAO XIAO ��Economics and Management School, Wuhan University, Wuhan, P. R. China XIN GU ��School of Economics and Management, Southeast University, Nanjing, P. R. China XUBIN XIE xiexubinwhu@163.com Institute for the U.S. and Canadian Economies, Wuhan University, Wuhan, P. R. China
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article WHAT COULD CAUSE A COUNTRY’S GNP TO BE GREATER THAN ITS GDP? This paper seeks to establish whether there exist factors that could render a country’s Gross National Product (GNP) greater than its Gross Domestic Product (GDP). It is not known whether a similar study has ever been previously undertaken as the literature search fails to discover any. Data of countries worldwide, to the extent of their availability, are drawn generally for years that fall within the 2000–2016 period for this study. The factors postulated as positive and negative determinants include the savings-investment gap, international reserves, technological sophistication, demography, unemployment, export orientation, income inequality, size of the primary commodities sector, financial repression, tax incidence and labor market regulations. Of these factors, the logit and probit regressions pursued reveal that only income inequality, size of the primary commodities sector and export orientation are the significant determinants. They work to dampen the probability of a country to register a GNP higher than GDP. A supplementary panel regression analysis also suggests these as factors that could reduce a country’s GNP to GDP ratio. In light of such findings, countries should address the problem of disparity in income distribution and promote indigenous ownerships in their primary commodities and export-oriented sectors if they are striving for an excess of GNP over GDP. GNP, GDP, determinants, logit, probit 02 2022 67 March The Singapore Economic Review 557 566 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500073 EU CHYE TAN ��Department of Economics, Faculty of Economics and Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia CHOR FOON TANG tcfoon@usm.my ��Centre for Policy Research and International Studies, Universiti Sains Malaysia, 11800 USM, Penang, Malaysia RUPAH DEVI PALANIANDI rupah.p@kdu.edu.my �School of Business, KDU University College, 40150 Shah Alam, Selangor, Malaysia
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article SHOCKS AND FRICTIONS IN THAI ECONOMY: THROUGH THE LENS OF BUSINESS CYCLE ACCOUNTING This paper applies business cycle accounting methodology to analyze the sources of aggregate fluctuations in Thai economy, especially during the recent severe recessions in 1997–1998 and 2008–2009. This exploration helps researchers uncover possible shocks and frictions that drive business cycle in a small and open economy within a minimal model set-up. Under this methodology, a fluctuation in aggregate output can be accounted for by exogenous time-varying wedges, namely efficiency wedge, investment wedge, labor wedge, government wedge, etc. This study found that the efficiency wedge is essential in accounting for aggregate output, consumption and investment fluctuation, while the bond wedge, which only present in an open economy setting, is a prime factor in accounting for movement in current accounts. I conducted counterfactual experiments to see what accounts for the output drop during recent recessions. I find that the efficiency wedge played a key role in recent recessions in Thailand, while the investment wedge was accounted for slow economic recovery after the recessions. Business cycle accounting, Thailand, Asian crisis, Global financial crisis 02 2022 67 March The Singapore Economic Review 587 601 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500356 VIMUT VANITCHAREARNTHUM vimut@cbs.chula.ac.th Department of Banking and Finance, Chulalongkorn Business School, Chulalongkorn University, Bangkok 10240, Thailand
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article DO RECONSTRUCTION INVESTMENTS IMPROVE TECHNOLOGICAL PROGRESS IN AN EARTHQUAKE-STRICKEN AREA? EVIDENCE FROM THE WENCHUAN EARTHQUAKE This study identified the impact of a seismic shock on technological progress in earthquake-stricken areas (ESAs) using a synthetic control method. Technological progress was measured using the total factor productivity (TFP) and the TFP growth rate. The ESAs after the Wenchuan Earthquake in China were used as an empirical case study; the Solow residual model was used to assess the TFP and the TFP growth rate in 16 districts. Counter-factual dynamics for the ESAs were constructed to exclude the effect of the macro-economy. The research findings indicate that technological progress in the ESAs after the Wenchuan Earthquake improved as a result of reconstruction investments. However, there were differences in the speed of technological progress between ESAs. These differences may be attributed to the differences in the industrial characteristics between ESAs. The study concludes that the technological progress of the secondary industry, such as the manufacturing industry and building industry, is more resilient. This refers to the capacity to resist economic losses after the seismic shock, compared to the tertiary industry, such as the service industry and tourist industry. However, there was a larger long-term advancement in the technological progress in the tertiary industry compared to the secondary industry after the earthquake. With this understanding, ESA governments can implement appropriate strategies to meet both short-term needs and sustainable economic growth. Technological progress, total factor productivity (TFP), earthquake, earthquake-stricken area (ESA), reconstruction, Wenchuan earthquake, resilience 02 2022 67 March The Singapore Economic Review 799 820 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500759 MILAN DENG School of Construction Management and Real Estate, Chongqing University Chongqing, P. R. China LIN WANG School of Construction Management and Real Estate, Chongqing University Chongqing, P. R. China HUI XU ��School of Economics and Management, Chongqing University of Posts and Telecommunications, Chongqing, P. R. China LONG YIN School of Construction Management and Real Estate, Chongqing University Chongqing, P. R. China LIFANG HUANG School of Construction Management and Real Estate, Chongqing University Chongqing, P. R. China
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article DOMAINS AND MOTIVES OF MUSHARAKAH SPUR IN THE ISLAMIC BANKING INDUSTRY OF PAKISTAN Participatory financing schemes, including Musharakah and Mudarabah, are theoretically claimed to be the ideal modes of Islamic financing, but their practice is restrained by several factors. That is why Islamic banks have a consistent tendency to avoid participatory financing on the assets side throughout the world. However, recently this trend has started changing in Pakistan and Indonesia where the share of participatory finance has raised significantly in the financing portfolio of Islamic banks. The present paper explores this recent spur of participatory finance in Pakistan in terms of its domains of applications and the responsible factors. The findings lead to a novel posteriori framework which shows that the shift toward participatory financing is primarily characterized by increase in working capital financing and commodity operations financing through Musharakah mode Islamic banks. Moreover, five factors contribute to the spur of participatory financing including: (i) introducing varieties in Musharakah, (ii) enhanced applicability, (iii) high volume projects, (iv) government interventions, and (v) regulator’s role. The framework can significantly advance understanding with respect to the implementation theory of participation financing within Islamic banking and related Shariah compliance and regulation. Diminishing Musharakah, Islamic banking, Musharakah, qualitative content analysis, Pakistan, participatory financing, running Musharakah 01 2022 67 March The Singapore Economic Review 381 409 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500620 MUHAMMAD NOUMAN mnouman@aup.edu.pk Institute of Business and Management Sciences (IBMS), The University of Agriculture Peshawar, Pakistan KARIM ULLAH karim.Ullah@imsciences.edu.pk ��Institute of Management Sciences Peshawar, Pakistan SHAFIULLAH JAN ��Institute of Management Sciences Peshawar, Pakistan
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article CARRYOVER EFFECT OF ELITE HIGH SCHOOL TO JOB MARKET FOR UNIVERSITY GRADUATES: EMPIRICAL EVIDENCE FROM A UNIVERSITY ADMINISTRATION DATA This paper estimates carryover effects of attending elite high schools on job markets after students’ university graduation. Most of the previous literature focused on returns of elite or private school attendance on academic achievements in university education. Instead, this study investigates whether the education effect of elite high school is carried forward to the job market after university studies. Our study utilizes unique university-employment-matched data obtained from one Korean university administration. In addition to students’ academic performance, such as grade point average (GPA), we also include participation in extracurricular activities to better control for the self-selection effect portable from elite high school as well as the quality of university education. The empirical results show that the education at elite high schools does not only positively affect the academic performance at university, but interestingly, it is found to be carried forward to the job market even after university graduation. Elite high school, carryover effect, job market of university graduates, university administration data 02 2022 67 March The Singapore Economic Review 877 893 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500054 DONGHUN CHO hooncho@hallym.ac.kr Department of Economics, Hallym University, 39 Hallymdeahak-gil, Chuncheon-si 200-702, Gangwon-do, Korea JOONMO CHO Department of Economics, Sungkyunkwan University, 25-2 Sungkyunkwan-ro, Jongno-gu, Seoul 110-745, Korea
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article INTRODUCTION TO SPECIAL ISSUE ON ISLAMIC ECONOMICS AND FINANCE 01 2022 67 March The Singapore Economic Review 1 6 http://www.worldscientific.com/doi/abs/10.1142/S0217590822030011 M. Kabir Hassan mhassan@uno.edu University of New Orleans, New Orleans, USA
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article THE IMPACT OF THE ANTI-CORRUPTION CAMPAIGN ON INCOME DISTRIBUTION: EVIDENCE FROM CHINA This paper provides the first systematic micro-level evidences on the effectiveness of anti-corruption campaign in disciplining public officials and its impact on income distribution. Based on China Household Income Project (CHIP) survey data 2007 and 2013, we found that party and government officials had significant hidden income and the public–private earnings gap was as high as 8% before the campaign. However, the hidden income become not significant and the earnings gap declined to −18% in this post-campaign period. The regions inspected by central anti-corruption inspection groups experience larger public earnings penalties compared to the other regions. Overall, our findings suggest that the privilege of public officials declined sharply during this anti-corruption campaign. Anti-corruption campaign, earning gap, privilege, public officials, China 02 2022 67 March The Singapore Economic Review 755 777 http://www.worldscientific.com/doi/abs/10.1142/S0217590821500272 YING GE yingge@zju.edu.cn School of Economics, Zhejiang University, China JINJUN XUE Center of Hubei Cooperative Innovation for Emissions Trading System, China3Faculty of Management and Economics, Kunming University of Science and Technology, China4School of Economics and Management, Xidian University, China5Graduate School of Economics, Nagoya University, Japan
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article SPILLOVER EFFECT OF THE FEDERAL RESERVE’S FORWARD GUIDANCE ON CHINA’S FINANCIAL MARKETS: FROM MECHANISM ANALYSIS TO EMPIRICAL TEST This study analyzed the channels responsible for the spillover effect of the US Federal Reserve’s (Fed’s) forward guidance on China’s financial markets with an event study and EGARCH model with data collected over the past decade. The Fed’s forward guidance affects China’s foreign exchange, bond, stock and money markets. In the three trading days before and after the event, China’s foreign exchange market had an instantaneous reaction, the bond and stock market had lagged reactions, and the money market reaction lasted for the full event window. The Fed’s forward guidance on China’s financial market differs based on the Fed’s monetary policy, guidance type and whether the guidance content is adjusted or not. Forward guidance, spillover effect, unconventional monetary policy, mechanism analysis 02 2022 67 March The Singapore Economic Review 603 634 http://www.worldscientific.com/doi/abs/10.1142/S0217590821500612 XIN DENG Hunan University of Technology and Business, 569 Yuelu, Changsha, Hunan 410205, P. R. China†Science and Technology on Information Systems Engineering Laboratory, National University of Defense Technology, Changsha, Hunan 410073, P. R. China LIN GE Hunan University of Technology and Business, 569 Yuelu, Changsha, Hunan 410205, P. R. China XUAN WU ��Hunan Branch of China Construction Bank, Yin’Gang Building, No. 2, Baisha Road, Changsha, Hunan 410011, P. R. China
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article CORPORATE CASH HOLDING PATTERNS FROM A PERFORMANCE PERSPECTIVE Because of the difficulty of corporate cash flow forecasting and cash demand forecasting, the corporate cash holding decisions have always been a focus in theory and practice. This paper constructs corporate cash holding patterns by combining the two basic characteristics of cash holding level and volatility, and uses the dynamic panel model to test the impact of different cash holding patterns on corporate performance. The research findings reveal that there are significant differences in the impact of different cash holding patterns on corporate performance, with the stable and normal-level cash holding pattern having the greatest positive impact, while volatile and low-level cash holding pattern proved to be greatest negative impacts. Corporate cash holding pattern, cash holding level, cash holding volatility, corporate performance 02 2022 67 March The Singapore Economic Review 821 848 http://www.worldscientific.com/doi/abs/10.1142/S0217590821500405 QIWANG ZHANG Business School, Liaoning University, P. R. China JI WANG Business School, Liaoning University, P. R. China JIANNAN GENG Business School, Liaoning University, P. R. China
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article EVOLUTIONARY NETWORK OF BUSINESS MODEL STUDIES AND APPLICATIONS IN EMERGING ECONOMIES Business models are crucial for explaining firm performance. In practice, managers apply business models to increase firm’s advantage. Particularly, innovative business models solve many economic and social problems in emerging economies. To show the knowledge development in the field, we explored the knowledge network and identified the role of business models in emerging economies.To examine the primary topics in business model studies, we reviewed the academic literature and applied main path analysis (MPA) to explain the development in this field since 2000. The valid sample of this study comprised 665 papers, and citation information was used in the MPA. We further investigated the role of business models in emerging economies through keyword analysis and case analysis.The results for the main path indicate that the development of business model studies proceeded in three stages. In general, the literature in business model studies has transitioned from discussing internal and external value to framing business model structures. Specifically, in the latest stage, sustainability in a business model was conceptualized, and studies focused on how a business model can function as a structured model for explaining how various businesses operate. Moreover, studies on emerging economies have noted the importance of sustainable business models and model adaptations for firms in developing countries. Business model, evolutionary network, main path analysis, emerging economies, business model innovation 03 2022 67 June The Singapore Economic Review 1005 1028 http://www.worldscientific.com/doi/abs/10.1142/S0217590820550012 MEI HSIU-CHING HO mei.ho@mail.ntust.edu.tw National Taiwan University of Science and Technology, Taiwan, ROC
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article INVITED POLICY ECONOMICS PAPER — ECONOMICS IN ASIA 1995–2020 Over the last 25 years, Asia’s economic rise has been extraordinary. Its share of global gross domestic product (GDP) has risen from 5.8% to 22.9%.1 The first phase of high economic growth — up to 1995 — saw Asia enter the global supply chain primarily with labor-intensive/low-cost manufacturing. Domestic consumption was a fairly low share of GDP; Asia was manufacturing mainly for consumption in the US and Europe. As such, it was primarily a rule-taker. In the second phase — from 1995 to 2020 — it gradually turned into an economic force joining the US and Europe in shaping the global economy, exercising significant influence upon the value chain, the cycles of the global economy, transport and logistics, the global capital markets and consumption patterns (consumer preferences and tastes). While not yet among the leading rule-makers, it had become difficult for policymakers (public and private) to make decisions without Asia’s consent. To form an opinion of today’s emerging third phase — post 2020 — the intriguing question is whether the Asian countries have adopted what may be termed Anglo-American economic thinking (basically, the primacy of the market). Or whether behind the curtain, the Asian economy works in its own way diverging from the American and British economic schools. Since demographics and sheer economic scale mean that Asia will dominate the global economy in the years to come, the nature of the Asian economy will be of crucial importance for the future global economy. The conclusion of this paper is that “Asia†in many respects differs — and fundamentally so — from market economy principles. How this prospect should be interpreted is also evolving, as circumstances change. Certainly, the repercussions of COVID-19 have not been the same in the US, Europe, East Asia and South Asia — and this may suggest that socio-political structures have a stronger impact on economic outcomes than economic theory teaches, thus calling into question the global validity of market economy principles. Asia, economics versus culture and politics, ownership corporations, social welfare 02 2022 67 March The Singapore Economic Review 541 555 http://www.worldscientific.com/doi/abs/10.1142/S0217590821500600 JOERGEN OERSTROEM MOELLER University of Copenhagen, Denmark
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article LOW-FREQUENCY VOLATILITY AND MACROECONOMIC DYNAMICS: CONVENTIONAL VERSUS ISLAMIC STOCK MARKETS This study investigates the relationship between macroeconomic risk and low-frequency volatility of conventional and Islamic stock markets from around the world. Using a panel of 36 countries, representing developed, emerging and Islamic countries for the period from 2000 to 2016, the study finds that low-frequency market volatility is lower for Islamic countries and, markets with more number of listed companies, higher market capitalization relative to GDP and larger variability in industrial production. The study also finds that low-frequency component of volatility is greater when the macroeconomic factors of GDP, unemployment, short-term interest rates, inflation, money supply and foreign exchange rates are more volatile. The empirical results are robust to various alternative specifications and split sample analyses. The findings imply that religiosity has an influence on the correction of market volatility and investors may consider the Islamic stocks to diversify their risks. Low-frequency volatility, macroeconomic risk, conventional stock markets, Islamic stock markets 01 2022 67 March The Singapore Economic Review 411 438 http://www.worldscientific.com/doi/abs/10.1142/S0217590819420049 HONG-BAE KIM rfctogether@gmail.com Department of Business Administration, Dongseo University, Pusan, South Korea A.S.M. SOHEL AZAD ��Department of Finance, Faculty of Business and Law, Deakin University, 221 Burwood Highway, Burwood, Vic-3125, Australia
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article FINANCIAL INCLUSION, INSTITUTIONAL QUALITY AND FINANCIAL DEVELOPMENT: EMPIRICAL EVIDENCE FROM OIC COUNTRIES This unique study examines the moderation effect of institutional quality (IQ) on the relationship between financial inclusion (FI) and financial development (FD) of 45 Organization of Islamic Cooperation (OIC) countries. For empirical analysis, panel data are used for the period 2000–2016. We use the Arellano–Bond generalized method of moments (GMM) and two-stage least-squares (2SLS) method in our estimations to draw multidimensional results. The empirical results confirm the significant positive relationship between FI, IQ and FD. Interestingly, we find that IQ moderates FI and has a significant positive impact on FD. Our findings are robust to alternative econometric specifications of FI, IQ and FD. Therefore, policymakers must sensibly understand the pivotal role of FI and IQ in establishing sustainable future development of OIC countries. Financial inclusion, institutional quality, financial development, GMM, 2SLS, OIC 01 2022 67 March The Singapore Economic Review 161 188 http://www.worldscientific.com/doi/abs/10.1142/S0217590820420084 MINHAJ ALI Minhajali556@gmail.com School of Economics, Zhongnan University of Economics and Law, P. R. China MUHAMMAD IMRAN NAZIR School of Finance, Zhongnan University of Economics and Law, P. R. China SHUJAHAT HAIDER HASHMI School of Economics, Huazhong University of Science and Technology, P. R. China WAJEEH ULLAH School of Economics, Zhongnan University of Economics and Law, P. R. China
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article DOES FINANCIAL INCLUSION DRIVE THE ISLAMIC BANKING EFFICIENCY? A POST-FINANCIAL CRISIS ANALYSIS Considering the reverberations of financial crisis of 2007–09 that the banking industry terribly witnessed, this paper aims to estimate both the non-bias-corrected and bias-corrected efficiency by employing the data envelopment analysis and Simar–Wilson double bootstrapping regression techniques over the period of 2011–2017 and see how the financial inclusion impacts on Islamic banks. This study finds that most of the countries, except some Asian and Middle-Eastern countries, have inconsistent efficiency trends in Islamic banking sector. It also shows that financial inclusion is significantly allied with Islamic banking efficiency. Eventually, the results propose that Islamic banks are still bearing the consequence of that economic recession and, therefore, bank should focus more on financial inclusion since those banks having sound and inclusive financial environment are seen enjoying higher level of financial efficiency. Financial inclusion, bias-corrected efficiency, data envelopment analysis, Islamic banks, Asia, global financial crisis 01 2022 67 March The Singapore Economic Review 135 160 http://www.worldscientific.com/doi/abs/10.1142/S0217590819420050 HASANUL BANNA Ungku Aziz Centre for Development Studies, Faculty of Economics and Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia†Department of Finance and Banking, Faculty of Business and Accountancy, University of Malaya, 50603 Kuala Lumpur, Malaysia MD RABIUL ALAM Ungku Aziz Centre for Development Studies, Faculty of Economics and Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia‡Department of Language and Literacy Education, Faculty of Education, University of Malaya, 50603 Kuala Lumpur, Malaysia§Department of English, Asian University of Bangladesh, Dhaka, Bangladesh RUBI AHMAD rubi@um.edu.my ��Department of Finance and Banking, Faculty of Business and Accountancy, University of Malaya, 50603 Kuala Lumpur, Malaysia NORHANIM MAT SARI norhanim@putrabs.edu.my �Putra Business School, University Putra Malaysia (UPM), 43400 Serdang, Selangor, Malaysia
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article Effects of Free Trade Zone Policy on China’s Income Disparity The income gap between the rich and the poor is growing in China. The Free Trade Zone policy has been adopted in China over the past decade. We analyze whether the Free Trade Zone policy contributes to China’s income disparity based on a panel of provincial level data covering the period from 2009 to 2017. The empirical results show that the implementation of the Free Trade Zone policy has significantly reduced China’s income disparity between provinces, but different regions have different effects. The impact of this policy on the distribution of income has significantly narrowed the income gap in the eastern region. Meanwhile, the policy effect is long lasting, with the influence of the policy increasing over time. In particular, the establishment of Free Trade Zones in provinces with relatively low income, low trade dependence and low innovation capability is more conducive to narrowing the income gap. Furthermore, the establishment of Free Trade Zones in provinces with a relatively high unemployment rate has obviously decreased the income gap; however, in provinces with a low unemployment rate, the income gap has increased. Our empirical results are robust with different model specifications. Free trade zone, income disparity, natural experiment, difference-in-differences (DID) 02 2022 67 March The Singapore Economic Review 709 732 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500320 HUIFANG CHENG chf@zjut.edu.cn School of Economics, Zhejiang University of Technology, Hangzhou, P. R. China YI ZHANG School of Economics, Zhejiang University of Technology, Hangzhou, P. R. China HONGYI LI hongyili@cuhk.edu.hk ��Business School, Chinese University of Hong Kong, Hong Kong SAR
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article IMPACT OF NON-INTERMEDIATION ACTIVITIES OF BANKS ON ECONOMIC GROWTH AND VOLATILITY: AN EVIDENCE FROM OIC This paper investigates the impact of non-intermediation activities of banks on economic growth and volatility of OIC. For the purpose, we utilize LSDVC estimation approach using the sample of Organization of Islamic Countries (OIC) member countries for the period of 2001–2013. We find non-intermediation income to be insignificant for both economic growth and volatility of OIC member countries in general though it reduces volatility of Gulf Cooperation Council (GCC) economies. Intermediation activities are found to be insignificantly related with the growth of OIC member countries, but on the other hand, they are found to reduce volatility in OIC member countries. Our results are robust across different specifications and estimators. Non-interest/financing income (non-intermediation income), economic growth, economic volatility, OIC member countries 01 2022 67 March The Singapore Economic Review 333 348 http://www.worldscientific.com/doi/abs/10.1142/S0217590820420023 MOHSIN ALI School of Accounting and Finance, Faculty of Business and Law, Taylor’s University, Malaysia MANSOR H. IBRAHIM mansorhi@inceif.org International Centre for Education in Islamic, Finance (INCEIF), Lorong Universiti A, Malaysia MOHAMED ESKANDAR SHAH eskandar@inceif.org International Centre for Education in Islamic, Finance (INCEIF), Lorong Universiti A, Malaysia
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article CONSUMER PREFERENCES AND REGULATIONS IN CREDIT CARD MARKETS: EVIDENCE FROM TURKEY In this paper, we analyze the demand side of the credit card market. Using unique survey data and a discrete choice model, we uncover consumer preferences for all price and nonprice features of credit cards. Our results provide evidence for an alternative explanation for the credit card pricing puzzles. We show that consumers view credit cards as highly differentiated products with both bank-level and card-level nonprice features. When selecting their credit cards, they predominantly prioritize these nonprice features over prices. Although private banks charge higher prices for their credit card services than other banks, the majority of consumers choose them as issuers due to their bank-level and card-level nonprice features. Consumers who prioritize prices tend to choose the credit cards of participation or public banks. Widespread branch/automated teller machine networks as bank-level features and installments, bonuses/rewards/miles and the prestige of the card as card-level features are particularly effective in consumers’ decisions to choose private banks as issuers. Such strong preferences for nonprice features seem to furnish private banks with market power. Hence, we argue that underlying issuers’ market power is also this differentiated nature of credit cards, for which regulatory measures are not self-evident. Credit card pricing puzzles, discrete choice models, product differentiation, bundling, salience, market failures 02 2022 67 March The Singapore Economic Review 849 875 http://www.worldscientific.com/doi/abs/10.1142/S0217590821500764 G. GULSUN AKIN gulsun.akin@boun.edu.tr Department of Economics, Bogazici University, Bebek, Istanbul, Turkey AHMET FARUK AYSAN aaysan@hbku.edu.qa Department of Economics, Hamad Bin Khalifa University, Qatar EZGI ÖZER ezgiozer@gmail.com Department of Economics, Bogazici University, Bebek, Istanbul, Turkey LEVENT YILDIRAN Department of Economics, Bogazici University, Bebek, Istanbul, Turkey
oai:RePEc:wsi:serxxx:v:67:y:2022:i:01:n:s02175908194200862022-11-09RePEc:wsi:serxxx
article SHARI’AH ORIENTED PRECIOUS METAL BACKED CRYPTOCURRENCY: FROM SHARI’AH ADVISORS’ AND FINANCIAL EXPERTS’ PERCEPTIONS The suitability of assets-backed money has been the subject of considerable debate, although hampered in part by lack of theoretical and empirical evidence. Therefore, the motivation of this research is to investigate the perceptions of Shari’ah scholars and financial experts on the concepts and salient features of Shari’ah-compliant precious metal backed crypto-currency (PMC). To achieve this, this study adopted a qualitative method using semi-structured interview based on saturation technique. The results from Shari’ah advisors and financial experts indicated that the informants have differences of views on the assets-backed money, but they agreed that it ensures stability of money and adding the cryptocurrency technology is found to be desirable and recommendable. It is also found that PMC would be subjected to financial regulation challenges and using blockchain technology will increase the transparency. The informants agreed that PMC is closer to MaqÄ sid al-Shari’ah and there is some form of justice and equality compared to the current interest-based financial system. Therefore, the informants recommended the implementation of PMC. Shari’ah oriented, precious metal, cryptocurrency, perceptions 01 2022 67 March The Singapore Economic Review 439 458 http://www.worldscientific.com/doi/abs/10.1142/S0217590819420086 MOUSA AJOUZ College of Administrative Sciences and Informatics, Palestine Polytechnic University, Hebron, Palestine ADAM ABDULLAH aabdullah@alqasimia.ac.ae ��College of Economics and Management, Al-Qasimia University, Sharjah, UAE SALINA KASSIM ksalina@iium.edu.my ��Institute of Islamic Banking and Finance, IIUM, Malaysia
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article GLOBAL VALUE CHAINS (GVCS) AND ECONOMIC GROWTH: A NONLINEAR ANALYSIS This study examines the relationship between economic growth and participation in global value chains (GVCs) and demonstrates that the U-shaped nonlinear pattern of GVCs could be more effective than the simple linear pattern of GVCs in terms of economic growth in high- and middle-income economies. The U-shaped nonlinear pattern expresses that an economy decreases foreign dominated GVCs (increases domestic value chains) for building local value chains and then raises the GVCs participation to benefit at a better position in GVCs. This paper investigates a panel of 63 advanced and emerging economies and obtained significant evidence by using systemic quantitative analysis. This research suggests that emerging markets should decrease foreign-dominated GVCs (increase high value-added domestic value chain) and then raise the participation of the GVC for economic growth. Global value chains, economic growth, nonlinear analysis, quantitative analysis, emerging economies 03 2022 67 June The Singapore Economic Review 985 1004 http://www.worldscientific.com/doi/abs/10.1142/S0217590821450028 ZHUQING MAO mmg7ng7ng@hotmail.com DST/NRF South African Research Chair in Industrial Development, College of Business and Economics, University of Johannesburg, 31 Henley Road, Auckland Park, Johannesburg 2092, South Africa
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article INDIA–CHINA: CHANGING BILATERAL TRADE AND ITS EFFECT ON ECONOMIC GROWTH This paper highlights the policy aspects of India and China, in the context of consensus building on bilateral trade, which is the cornerstone of diplomatic and political ties between the two countries. India and China have witnessed uninterrupted economic development with a significant rise in bilateral trade because of protrade policies in the last few decades. In this backdrop, this paper examines the dynamic spillovers of India–China’s bilateral trade on the economic growth of the two countries. For the purpose, Autoregressive distributed lag (ARDL) model in multivariate framework is utilized with gross capital formation (GCF) and foreign direct investment (FDI) as two additional explanatory variables. The results highlight that the India–China bilateral trade share has significant long-run impact on the growth of GDP per capita (GDPP) of the two countries, while the impact is more pronounced for China. The growth rates of the two countries are found significantly cointegrated with the variables in question. The results provide important insights in foreign trade patterns, with policy implication for trade and economic co-operations between the two countries. Bound test, bilateral trade, economic growth, foreign trade spillovers 02 2022 67 March The Singapore Economic Review 567 586 http://www.worldscientific.com/doi/abs/10.1142/S021759081950005X RAKESH KUMAR saini_rakeshindia@yahoo.co.in Department of Management Studies, Deen Dayal Upadhyaya College, University of Delhi, New Delhi, India
oai:RePEc:wsi:serxxx:v:65:y:2020:i:05:n:s02175908195007352022-12-21RePEc:wsi:serxxx
article COMPLEMENTARITY BETWEEN TANGIBLE AND INTANGIBLE CAPITAL: EVIDENCE FROM JAPANESE FIRM-LEVEL DATA Using Japanese firm-level panel data spanning from 2000 to 2013, we estimate industry-level production functions that explicitly take into account the complementarity and substitutability between tangible and intangible capital. The estimation results show that tangible and intangible capitals are complementary in most industries although the degree of complementarity substantially varies across industries. We further find that the relation between tangible and intangible capital in the production function accounts for the relation between firm-level tangible capital and intangible capital investments. Namely, firms’ tangible investments are more strongly positively associated with intangible investments as the degree of the complementarity between the tangible and intangible assets becomes larger. These findings show the necessity to take into account the relation between the dynamics of tangible and intangible capital in terms of their complementarity for precisely understanding the mechanisms governing a firm’s growth. Intangible capital, production function, complementarity and substitutability, investment 05 2020 65 September The Singapore Economic Review 1293 1321 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500735 KAORU HOSONO kaoru.hosono@gakushuin.ac.jp Faculty of Economics, Gakushuin University, 1-5-1 Mejiro, Toshima-ku, Tokyo 171-8588, Japan DAISUKE MIYAKAWA #x2020;Hitotsubashi University Business School (HUB), National Center of Sciences, 2-1-2 Hitotsubashi, Chiyoda-ku, Tokyo 101-8439, Japan MIHO TAKIZAWA miho.takizawa@gakushuin.ac.jp Faculty of Economics, Gakushuin University, 1-5-1 Mejiro, Toshima-ku, Tokyo 171-8588, Japan KENTA YAMANOUCHI k.yamanouchi@keio.jp #x2021;Department of Economics, Keio University, 2-15-45, Mita, Minato-ku, Tokyo, 108-8345, Japan
oai:RePEc:wsi:serxxx:v:54:y:2009:i:01:n:s02175908090031242022-12-21RePEc:wsi:serxxx
article WILLINGNESS TO PAY FOR REDUCING CROWDING EFFECT DAMAGES IN MARINE PARKS IN MALAYSIA Marine Parks are established to protect an area of the sea zoned as a sanctuary for the protection of its marine eco-systems, especially coral reef and its associated fauna and flora, like sea grass bed, mangrove and the sea shore. In Malaysia, there are 6 marine parks to-date. The establishment of marine parks also attracts more tourists to the areas. For example, the number of visitors to Payar Marine Park increased tremendously from 3, 668 visitors in 1990 to 133, 775 visitors in 2002. However, too many tourists are thought by scientists to have damaged the coral reefs. This paper will estimate how much visitors are willing to pay to reduce damages to three marine parks in Malaysia; Payar, Redang and Tioman Marine Park. Willingness to pay estimates were obtained from the visitors using a double-bounded dichotomous choice version of the Contingent Valuation method. Contingent valuation method, double-bounded dichotomous choice model, marine parks, Malaysia, crowding 01 2009 54 The Singapore Economic Review 21 39 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003124 SITI AZNOR AHMAD siti736@uum.edu.my Department of Economics, Glasgow University, Glasgow G12, UK NICK HANLEY n.d.hanley@stir.ac.uk Department of Economics, University of Stirling, Stirling FK9 4LA, UK
oai:RePEc:wsi:serxxx:v:62:y:2017:i:05:n:s02175908155011312022-12-21RePEc:wsi:serxxx
article FDI CONSEQUENCES OF DOWNWARD WAGE–COST RIGIDITIES This paper estimates an adjusted gravity model by directly measuring downward wage rigidities based on our modified regime-switching specification in order to investigate the effect of labor market flexibility on the flows of foreign direct investment (FDI) between Korea and 18 counterpart countries. To measure wage–cost rigidities, we employ firm-specific sales data for 410, 012 firms in 19 countries obtained from Compustat as a relevant driver of wage costs extracted from earnings data by International Labor Organization (ILO). Our results suggest that greater wage rigidities in a counterpart country are associated with less net-outflows of FDI in Korea. Foreign direct investment, wage rigidities, labor market flexibility, regime-switching 05 2017 62 December The Singapore Economic Review 1223 1244 http://www.worldscientific.com/doi/abs/10.1142/S0217590815501131 JEONGSEOK SONG jssong@cau.ac.kr School of Economics, Chung-Ang University, 84, Heukseok-ro, Dongjak-gu, Seoul Korea DAECHEON YANG School of Business Administration, Chung-Ang University, 84, Heukseok-ro, Dongjak-gu, Seoul Korea SOONWON KWON soonwon@sookmyung.ac.kr Division of Business Administration, Sookmyung University, Cheongpa-ro 47-gil 100, Yongsan-gu, Seoul Korea
oai:RePEc:wsi:serxxx:v:63:y:2018:i:01:n:s02175908184100232022-12-21RePEc:wsi:serxxx
article EDUCATION PREMIUM IN THE ONLINE PEER-TO-PEER LENDING MARKETPLACE: EVIDENCE FROM THE BIG DATA IN CHINA We study the education premiums in the online peer-to-peer (P2P) lending marketplace in which individuals bid on unsecured microloans applied by individual borrowers. Using more than 100, 000 consummated and failed listings from the largest online P2P lending marketplace in China — Paipaidai.com, we examine whether higher education level lead to lower interest rates and lower risk of default. We find that controlling for other characteristics of borrowers, borrowing rates of borrowers with bachelor’s degrees is 0.141 percent higher than that of borrowers with associate’s degrees, and that female borrowers’ education premiums were higher than their male counterparts. With regard to loan performance, borrowers with bachelor’s degrees are 13% less likely to default than the borrowers with associate’s degrees. Therefore, the education premiums in the P2P lending marketplace are rational. Education premium, peer-to-peer lending, P2P lending, rationality, microloan 01 2018 63 March The Singapore Economic Review 45 64 http://www.worldscientific.com/doi/abs/10.1142/S0217590818410023 JUANJUAN CHEN chenjiejie@hnu.edu.cn School of Economics and Trade, Hunan University (HNU), 109 Shijiachong Road, Yuelu District, Changsha City, Hunan Province, 410006, P. R. China YABIN ZHANG yabinzhang@hun.edu.cn School of Economics and Trade, Hunan University (HNU), 109 Shijiachong Road, Yuelu District, Changsha City, Hunan Province, 410006, P. R. China ZHUJIA YIN School of Economics and Management, Changsha University of Science and Technology (CSUST), 960, 2nd Section, Wanjiali South RD, Changsha City Hunan Province, 410114, P. R. China
oai:RePEc:wsi:serxxx:v:65:y:2020:i:06:n:s02175908205004592022-12-21RePEc:wsi:serxxx
article THE ENVIRONMENTAL VALUE OF SOUTH KOREA’S MOUNTAINS: A CONTINGENT VALUATION STUDY To address the lack of awareness on environmental values, this study estimates the environmental value of mountain ranges (Jeongmaek) connected to the Baekdudaegan mountain system in South Korea. Seven Jeongmaek are studied during 2011–2016 using a questionnaire survey and the contingent valuation method. Based on willingness to pay (WTP) for biodiversity, this study finds that the lowest estimated WTP was KRW 5813 for Geumbuk and Hannam-Geumbuk Jeongmaek, and the highest value was KRW 120, 471 for Hanbuk Jeongmaek. These differences in WTP appear to be significantly determined by education level and number of visits of respondents. Environmental goods, environmental value, public goods, CVM, willingness to pay 06 2020 65 December The Singapore Economic Review 1389 1400 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500459 DONG-PIL KIM Department of Landscape Architecture, Pusan National University, South Korea KEE-RAE KANG #x2020;Institute of Comprehensive Bio Industrial, Pusan National University, South Korea HAE-JOO LEE Department of Landscape Architecture, Pusan National University, South Korea‡Korea National Arboretum, South Korea HEE-CHAE KIM #x2021;Korea National Arboretum, South Korea WOO-SUNG LEE #xA7;Department of Landscape Architecture, Daegu University, South Korea BO-KWANG CHUNG #xB6;Baekdudaegan National Arboretum, South Korea SU-BOK CHAE #x2225;Busan Development Institute, South Korea CHA-KWON KIM *Department of Landscape Architecture, Graduate School, Kyungpook National University, South Korea
oai:RePEc:wsi:serxxx:v:54:y:2009:i:02:n:s021759080900332x2022-12-21RePEc:wsi:serxxx
article AN EMPIRICAL ANALYSIS OF STOCK MARKET INTEGRATION: COMPARISON STUDY OF SINGAPORE AND MALAYSIA Using a GARCH (1, 1) model, this paper compares the extent to which financial sector liberalization in Singapore and Malaysia each has led to integration of its domestic equity market with external markets. The results show that the level of integration of the domestic markets with the external markets is higher when MSCI regional and global data are used, as compared to when individual country data are used to proxy regional and global markets. Inferences are made about the preferred pace of liberalization in Singapore, as well as, the impact of the Asian financial crisis and capital control measures imposed in Malaysia on financial integration, in the respective countries under study. Financial market liberalization, stock market integration, GARCH model, systematic risks, specific risks 02 2009 54 The Singapore Economic Review 217 232 http://www.worldscientific.com/doi/abs/10.1142/S021759080900332X ZHENG YI School of Finance, Southwestern University of Finance and Economics, Chengdu, China 611130, China SWEE-LIANG TAN sltan@smu.edu.sg School of Economics, Singapore Management University, 90 Stamford Road, Singapore 178903, Singapore
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article THE EFFECTS OF SUBSIDIES FOR CHILDBEARING ON MIGRATION AND FERTILITY: EVIDENCE FROM KOREA This study examines the effects of a fertility subsidy that was instituted in specific regions in Korea in 2004. The value of the subsidy ranged from $4000 to $9000 (2004 US$) depending on the area of residence. Using a difference-in-differences estimation strategy, we measure the effects of the policy on childbearing and migration in and out of the subsidized areas. Our estimates for migration suggest that the policy significantly increased the net inflow of females into the subsidized areas. This effect is driven roughly equally by a decrease in the outflow from and an increase into the subsidized areas. Our estimated effects on fertility are in line with previous results from the literature; we find that a $1000 increase in fertility subsidies leads to a 0.108% increase in the chance of bearing a child for all age groups (21 to 45). Our results show that the policy increased total births in 2005 by 11, 000 and that the vast majority of this increase was from the 21 to 33 cohort. Fertility, migration, subsidy, difference–in–differences 04 2016 61 September 1550040 The Singapore Economic Review 1 16 http://www.worldscientific.com/doi/abs/10.1142/S021759081550040X SUNG HYO HONG sunghyohong@hotmail.com Division of Economics and Trade, Kongju National University, 56 Gongjudaehak-ro Gongju, Chungnam 314-701, Republic of Korea RYAN SULLIVAN Naval Postgraduate School, 287 Halligan Hall Monterey, California 93943, USA
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article COST-EFFECTIVENESS ANALYSIS OF ELECTRIC VEHICLES IN SINGAPORE As a compact city-state with a modern electricity grid and relatively clean energy sources, Singapore seems ideal for the deployment of the battery electric vehicle (BEV). A fleet of 89 BEVs were deployed in a test-bed that was concluded in 2013. The paper conducts a cost-effectiveness analysis and financial analysis of the Renault Fluence ZE and its comparable gasoline model to assess the economics of BEVs. It concludes that BEV adoption in Singapore is both undesirable (due to higher social costs) and unlikely (due to higher private costs) in the immediate and near future. Where 94% of the population live in high-rise apartments, there will be a heavy reliance on costlier communal charging stations, thereby mitigating the operating savings that BEVs could have offered if home chargers were used. Lifetime costs are not as sensitive to changes in oil prices as expected. For the BEV to be socially viable, the breakeven carbon price amounts to S$9, 700 per tonne of CO2, which suggests that BEVs are not a cost-effective means of reducing carbon emissions in Singapore, or battery prices would need to be halved. Nevertheless, the study demonstrates that exempting the BEV batteries from taxation could support BEV adoption if that were to be a government objective. Electric vehicle, cost-effectiveness analysis, Singapore 02 2018 63 March The Singapore Economic Review 313 338 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400148 KAH-HUNG YUEN oliveryuen87@gmail.com Energy Studies Institute, National University of Singapore, 29 Heng Mui Keng Terrace, Block A #10-01, Singapore 119620, Singapore
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article BURDEN OF FAMILY CARE-GIVERS AND THE RATIONING IN THE LONG-TERM CARE INSURANCE BENEFITS OF JAPAN Long-Term Care Insurance (LTCI), introduced in Japan in 2000, is rapidly turning into a system of rationed benefits due to financial difficulty. Based on our survey of 2, 530 family care-givers and the Zarit Care-Giver Burden Index, we have examined how LTCI is affecting their subjective burden. We have found that, as Kishida and Tanigaki (2004) had shown, (i) insufficient provision of short-term stays, day services and home-helper services, as well as (ii) disruptive or antisocial behaviors of the elderly, increase the care-giver's burden. We then argue that (iii) these results establish the positive contribution of LTCI in the well-being of family care-givers, (iv) short-term stay is the most efficient service, followed by home-helper service, and day service is the least efficient, and we show that (v) J-ZBIC-8 works well enough for many practical purposes. Long-Term Care Insurance, Burden Index of Care-Givers, rationing 01 2008 53 The Singapore Economic Review 121 144 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002872 WATARU SUZUKI kqsmr859@ybb.ne.jp Tokyo Gakugei University, 4-1-1 Nukuikitamachi, Koganeisi Tokyo, Japan 184-8501, Japan SEIRITSU OGURA ogura@ages.i.hosei.ac.jp Hosei Institute on Aging, Boissonade Tower 16F, 2-17-1 Fujimi, Chiyodaku Tokyo, Japan 102-8160, Japan NOBUYUKI IZUMIDA izumida@ipss.go.jp National Institute of Population and Social Security Research, Hibiya-Kokusai-Building 6F, 2-2-3 Uchisaiwaicho, Chiyodaku Tokyo, Japan 100-0011, Japan
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article TO PEG OR NOT TO PEG? This paper presents a simple framework for analyzing the macroeconomic effects of internal and external shocks under polar exchange rate regimes. It highlights the significance of fluctuations in competitiveness and real income for exchange rate policy, revealing that positive (negative) real shocks increase (decrease) national income and strengthen (weaken) the balance of payments and exchange rate. It also shows that, ceteris paribus, pegged exchange rates facilitate real income growth for emerging economies while lowering its variability when exports and productivity are improving and monetary shocks predominate. Alternatively, a floating exchange rate system may be most appropriate for less open advanced economies with relatively stable monetary sectors that frequently experience negative real shocks. Competitiveness, national income, exchange rate choice 01 2007 52 The Singapore Economic Review 39 52 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002555 ANTHONY J. MAKIN t.makin@griffith.edu.au Griffith Business School, Griffith University, Gold Coast, PMB50, Qld 9726, Australia
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article INDUSTRIAL POLICY IN A GLOBALIZED AGE — LESSONS FROM EAST ASIAN EXPERIENCE Not only the wealth, but also the independence and security of a country appear to be materially connected with the prosperity of manufactures. Every nation, with a view to these great objects, ought to endeavor to possess within itself all the essentials of national supply.Alexander Hamilton, Report on Manufactures, December 5, 1791. Industrial policy, WTO, coordination failure, information asymmetry, East Asia 03 2006 51 The Singapore Economic Review 267 281 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002421 HENRY WAN hyw1@cornell.edu Department of Economics, Cornell University, Ithaca, NY 14853-7601, USA AN-CHI TUNG Institute of Economics, Academia Sinica, Taiwan, ROC
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article WILLINGNESS TO PAY FOR AIR QUALITY IMPROVEMENTS FROM USING ELECTRIC JEEPNEYS IN METRO MANILA This study used the contingent valuation method (CVM) to measure the benefits of improved air quality in Metro Manila through the adoption of cleaner public transportation. A single-bound dichotomous choice contingent valuation approach using the referendum format was used to estimate the willingness to pay (WTP) from a survey of 1, 000 households. The study arrived at WTP estimates for the proposed program ranging from USD3.85 to USD5.77 per month. Income elasticity of WTP was estimated at 0.49. The study also investigated the impact of using secret ballots for eliciting WTP responses to minimize "yea-saying" behavior and reduce social desirability bias. Willingness to pay, air quality, jeepney, secret ballot, Q51, Q53 04 2015 60 1550073 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500733 JAMIL PAOLO S. FRANCISCO jpaolofrancisco@gmail.com Asian Institute of Management, 123 Paseo de Roxas, Makati City 1229, Philippines
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article SOCIAL CAPITAL FORMATION AND INTRA FAMILIAL CORRELATION: A SOCIAL PANEL PERSPECTIVE Social capital is widely regarded to constitute an important indicator for the economic performance of a society. This paper analyzes the impact of various socio-demographic characteristics on social capital. Proxy variables for social capital are obtained from a comprehensive principal components analysis exercise using survey data from the British Household Panel Survey (BHPS). The BHPS provides information on social and economic change at the individual and household levels in Britain and the UK with an annual survey of ca. 10, 000 individuals from ca. 5, 000 households. Based on the 13th wave of this database, we investigate the impact of exogenous qualities, individually acquired characteristics, and of the social environment using a spatial auto-regression framework. The results show that the formation of social capital can be modeled to a very high degree of statistical accuracy. The structural effect from the households contributes substantially to the social capital level of each household member. Thus, the social capital formation can be based equally on individual measures (such as education) and social contagion processes. Social capital, spatial econometrics, social economics, panel data approach, C51, C23, Z13, J12 03 2009 54 The Singapore Economic Review 473 488 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003434 CHRISTOPH HAUSER christoph.hauser@uibk.ac.at Department of Economic Theory, Economic Policy and Economic History, University of Innsbruck, Universitaetsstrasse 15, 6020 Innsbruck, Austria MICHAEL PFAFFERMAYR michael.pfaffermayr@uibk.ac.at Department of Economic Theory, Economic Policy and Economic History, University of Innsbruck, Universitaetsstrasse 15, 6020 Innsbruck, Austria GOTTFRIED TAPPEINER gottfried.tappeiner@uibk.ac.at Department of Economic Theory, Economic Policy and Economic History, University of Innsbruck, Universitaetsstrasse 15, 6020 Innsbruck, Austria JANETTE WALDE janette.walde@uibk.ac.at Department of Statistics, University of Innsbruck, Universitaetsstrasse 15, 6020 Innsbruck, Austria
oai:RePEc:wsi:serxxx:v:64:y:2019:i:01:n:s02175908174300192022-12-21RePEc:wsi:serxxx
article HOME APPLIANCES AND GENDER GAP OF TIME SPENT ON UNPAID HOUSEWORK: EVIDENCE USING HOUSEHOLD DATA FROM VIETNAM We examined the gender gap between wives and husbands with regard to time spent on unpaid housework and the interaction terms between home appliance ownership and gender among 36, 480 Vietnamese households. We found the gender gap was persistent regardless of number of co-residing children, age cohorts, household size and income, working status of the couples, and whether a wife had a higher wage rate (education) than her husband. The gender gap of time increased with the appearance of home appliances such as gas cookers. A lower probability of husbands doing housework and changes in gender values could be important explanations. Home appliances, gender gap, housework, time use, housework division 01 2019 64 March The Singapore Economic Review 97 114 http://www.worldscientific.com/doi/abs/10.1142/S0217590817430019 TIEN MANH VU Asian Growth Research Institute, Kitakyushu, Fukuoka, Japan2Osaka School of International Public Policy, Osaka University, 1-31 Machikaneyama, Toyonaka, Osaka, Japan
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article ABSENCE OF EDUCATION–HEALTH GRADIENT IN A DEVELOPING COUNTRY AND ITS IMPLICATIONS FOR CHRONIC DISEASES We present evidence against the well-established education–health gradient by relating education to measured hypertension status in 5, 873 men and 6, 152 women aged 40+ in Indonesia. Once a basic set of covariates was controlled for, the two variables were not statistically significantly related. We argue that this lack was due to neglect of chronic diseases. It appears that the assumption of full information in theories on the education–health gradient is too strong to be applied to the developing world. Therefore, more information needs to be provided to the public regarding the seriousness of chronic diseases and preventive and curative methods. Education, health, gradient, hypertension, Indonesia 05 2021 66 September The Singapore Economic Review 1521 1540 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500236 KITAE SOHN ksohn@konkuk.ac.kr Department of Economics, Konkuk University, 120 Neungdong-ro, Gwangjin-gu, Seoul 05029, South Korea
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article STATE OWNERSHIP, CORPORATE TOURNAMENT AND EXECUTIVE COMPENSATION: EVIDENCE FROM PUBLIC LISTED FIRMS IN CHINA This article tests several predictions of tournament theory on executive compensation in the context of a transition economy. Using an unbalanced panel of 34, 701 executives in 1, 386 public listed firms in China during 1999 and 2006, the paper finds that (1) pay increases as executives move up the corporate hierarchy into higher ranks; (2) pay gap is the largest between the first- and second-tier executives; (3) pay dispersion increases with the number of tournament participants and the risk of the business environment; (4) state ownership of shares reduces pay, pay gap and the sensitivities of the contestant pool and business risk to pay dispersion; (5) board composition and independence, CEO duality and the independence of the supervisory committee all affect pay and pay dispersion. Overall, this paper shows that listed firms in China, as they become more and more market-oriented, have adopted a pay structure that is largely consistent with the predictions of tournament theory, and that it is important to consider both state ownership and corporate governance in analyzing executive compensation structure. Executive compensation, tournament theory, state ownership, corporate governance, China, J31, G30, P31 03 2011 56 The Singapore Economic Review 307 326 http://www.worldscientific.com/doi/abs/10.1142/S021759081100433X DONGWEI SU tdsu@jnu.edu.cn Department of Finance, College of Economics, Jinan University, Guangzhou, Guangdong 510632, China
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article SAGE DOCTRINE, SOCIAL CAPITAL, AND LABOR — MANAGEMENT RELATIONS IN 21ST CENTURY TAIWAN Within just four decades Taiwan was able to transform itself from a poor and backward economy into a high income, newly-industrialized economy. Taiwan's outstanding economic performance during this period prompted the World Bank and other international organizations to refer to this transformation as the "Taiwan miracle, " and other developing countries have been encouraged to learn from Taiwan's experience. Harmonious and stable labor–management relations was — one of the major factors contributed to this successful development because they facilitated the inflow of a large amount of direct foreign investment (DFI) and therefore provided the island with the capital and appropriate advanced technologies that were urgently needed, and generated a large number of employment opportunities. In this paper, we use the concept of social capital to explain the causes of the harmonious labor–management relations in the past, and discuss the possible future of Taiwan's labor–management relations. Social capital, sage doctrine, labor–management relations, Taiwan, trade unions 04 2014 59 1450034 The Singapore Economic Review 1 12 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500349 JOSEPH S. LEE jslee@mgt.ncu.edu.tw Institute of Human Resource Management, National Central University, Taiwan
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article THE ECONOMIC COST OF REVOLUTION: THE IRANIAN CASE. A SYNTHETIC CONTROL ANALYSIS In 1978, a revolution in Iran succeeded in toppling Shah Mohammad Reza Pahlavi. After the Shah was forced to leave the country, Ayatollah Ruhollah Khomeini, one of the leaders of the revolution, returned from his exile in France to become the Supreme Leader of Iran. In this paper, we investigate the economic cost of the revolution using the synthetic control method. According to our estimates, we conclude that after the emergence of the revolution, the annual real gross domestic product (GDP) per capita in Iran declined by about 20.15% on average relative to its synthetic counterpart without the revolution in the period 1978–1980. If Iran had not faced such a revolution, the accumulated per capita GDP would have been $6, 479 higher, which amounts to an average annual loss of about $2, 159 over that period. Comparative case study, synthetic control method, Islamic revolution, Iran 01 2022 67 March The Singapore Economic Review 267 287 http://www.worldscientific.com/doi/abs/10.1142/S0217590820420072 SERHAT HASANCEBI shasancebi002@ikasle.ehu.eus Departamento de Fundamentos del Análisis Económico II, University of the Basque Country, UPV/EHU, Lehendakari Aguirre 83, 48015 Bilbao, Spain
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article LABOR DONATION OR MONEY DONATION? PRO-SOCIALITY ON PREVENTION OF NATURAL DISASTERS IN A CASE OF CYCLONE AILA, BANGLADESH The coastal zone in Bangladesh is the most powerfully lethal due to cyclones and storm hazard where 29% of the total population reside. Thus, collective disaster mitigation measures are urgent, and it is important to understand people’s pro-social attitude toward such countermeasures. However, few studies on this issue have been conducted in the context of developing countries, such as Bangladesh, and we therefore address this issue. We made a questionnaire survey of 1, 000 respondents and elicited (i) a willingness to donate their labor (WDL) and (ii) a willingness to pay (WTP) to collective countermeasures for avoiding the damages from cyclones and associated disasters. With this data, we examine WDL and WTP in relation to respondents’ occupation, education and income. The novelty lies in offering respondents an option of choosing WDL and/or WTP in the questionnaire. The study finds that the poor and less educated people are likely to choose WDL and willing to donate more labor, while rich and educated people are likely to choose WTP and willing to donate more money. However, we also find that voluntary labor donation from poor and less educated people is significant in that donation from poor and less educated people exceeds that from rich and educated people on per-household basis. Poor and less educated people may be more pro-social and WDL is an important source of contribution to be utilized in natural disaster mitigation of developing countries. This finding can be considered a useful guidance for future policies in more general cases, since it is consistent with observed labor donations for the recovery in the 2011 earthquake off the Pacific coast of Tohoku, Japan. Pro-sociality, natural disaster, preventive measures, willingness to pay, willingness to donate labor 01 2016 61 March 1640007 The Singapore Economic Review 1 26 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400075 SHIBLY SHAHRIER School of Economics and Management, Kochi University of Technology, 2-22 Eikokuji-cho, Kochi-shi, Kochi 780-0844, Japan KOJI KOTANI kotani.koji@kochi-tech.ac.jp School of Economics and Management, Kochi University of Technology, 2-22 Eikokuji-cho, Kochi-shi, Kochi 780-0844, Japan
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article HIGH-FREQUENCY INTERNET SURVEY OF A PROBABILITY SAMPLE OF OLDER SINGAPOREANS: THE SINGAPORE LIFE PANEL® Facing a rapidly ageing population, Singapore is presented with urgent policy challenges. Yet there is very little data on the economic, health and family circumstances of older Singaporeans. In response, the Centre for Research on the Economics of Ageing (CREA) at Singapore Management University has been collecting monthly data on a panel of Singaporeans aged between 50 and 70 years. We detail the methodology by which the Singapore Life Panel® (SLP) was constructed using a population-representative sampling frame from the Singapore Department of Statistics. Contact was made with 25, 000 households through postal, phone and in-person canvassing. More than 15, 200 respondents from over 11, 500 households enrolled in the panel. Comparisons between SLP and official statistics show close matching on age, sex, marital status, ethnicity, education, labor force status, income and expenditure. This suggests that the panel is a representative of Singapore’s elderly population. Monthly surveys continue to be administered over the internet, supplemented by phone and in-person outreach to ensure the panel remains representative and hence reliable for informing policy makers. Response rates are remarkably stable at over 8, 000 per month. The SLP contains rich data on demographics, health status, socio-economic indicators, contact with government programs and subjective perceptions and is likely to be a key resource for economic research into ageing in Singapore. Internet survey, probability-based internet panel, survey methodology, sampling techniques, population-representative samples, ageing 06 2021 66 December The Singapore Economic Review 1759 1778 http://www.worldscientific.com/doi/abs/10.1142/S0217590818420043 RHEMA VAITHIANATHAN Centre for Social Data Analytics, Auckland University of Technology, New Zealand†Centre for Research on the Economics of Ageing (CREA), Singapore Management University, 90 Stamford Rd, Singapore 178903 BRYCE HOOL ��Centre for Research on the Economics of Ageing (CREA), Singapore Management University, 90 Stamford Rd, Singapore 178903‡School of Economics, Singapore Management University, Singapore MICHAEL D. HURD mhurd@rand.org �RAND Centre for the Study of Aging, USA SUSANN ROHWEDDER susannr@rand.org ��School of Economics, Singapore Management University, Singapore
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article DETERMINANTS OF FIRM-LEVEL INNOVATION PERFORMANCE: NEW EVIDENCES FROM ASEAN MANUFACTURING FIRMS Based on the stakeholder theory, we posit that firms’ innovation, as a strategic choice, is determined by not only firms’ resources but also their pressures from different stakeholders and relationship with the government. Using a dataset of 3, 444 firms in seven ASEAN countries, we find that firms’ innovative outputs are positively influenced by export orientation and fierce competition but restrained by the presence of foreign investment. In addition, while strengthening the relationship with government facilitates, the chance to create some types of innovation, could magnify or dampen the effects of those pressures on firms’ innovation. Our findings have useful implications for the firms’ managers to accumulate and spend resources to build up a strong capacity for innovation. For the governments in ASEAN region, they should focus on improving the institutional quality and providing incentives for foreign investments that only bring advanced technologies and spillover effects. Innovation, manufacturing, ASEAN, small and medium firms, institutional quality 03 2022 67 June The Singapore Economic Review 953 983 http://www.worldscientific.com/doi/abs/10.1142/S0217590821450016 LAN KHANH CHU Banking Research Institute, Vietnam Banking Academy, No. 12, Chua Boc Street, Dong Da District, Hanoi City, Vietnam DUNG PHUONG HOANG Faculty of International Business, Vietnam Banking Academy, No. 12, Chua Boc Street, Dong Da District, Hanoi City, Vietnam
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article DOES FINANCIAL DEVELOPMENT MATTER IN POVERTY REDUCTION? EMPIRICAL EVIDENCE FROM SOUTH ASIAN ECONOMIES This study looked at the possibility that South Asian countries’ financial prosperity may lessen poverty. The data presented in this research show that between 1990 and 2019, economic development directly led to a decline in poverty in South Asian nations. Remittances reduce poverty, but financial growth has a huge influence. The model result suggests that financial development strongly affects poverty reduction, regardless of the econometric methodology. The results demonstrated that whereas remittances increase poverty levels for men and women, economic development significantly reduces them. Poverty was decreased considerably by variables such as economic development, foreign direct investment and commercial openness. As a result of these expenditures, the South Asian population was shown to be more vulnerable to poverty. The South Asian population was more susceptible to poverty due to these outlays. The results also refute earlier research suggesting that rising poverty may result from financial instability. Financial development, poverty reductions, remittances, South Asia, econometric approaches 04 2023 68 June The Singapore Economic Review 1207 1230 http://www.worldscientific.com/doi/abs/10.1142/S0217590822440088 WENQIN MA shiyuxin0214@sina.com School of Management, University of Science and Technology of China, Hefei, P. R. China
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article TARGETED POVERTY ALLEVIATION AND STOCK PRICE CRASH RISK: EVIDENCE FROM CHINA Using manually collected samples on voluntary targeted poverty alleviation of 3418 Chinese firms for the period 2016–2019, we explore the impact of targeted poverty alleviation actions of listed companies on the stock price crash risk. Results show that listed companies participating in targeted poverty alleviation exhibited a lower risk of stock price crash risk; this conclusion is still valid after a series of robustness and endogeneity tests. This paper further explored its internal transmission routes. We found that the response of a public company to the targeted poverty alleviation policy will increase its positive coverages and plays the role of information intermediary and public supervision of media. Thus, the company’s behavior of hiding bad news is curtailed, and its future stock price crash risk is significantly reduced. For the government, China’s targeted poverty alleviation strategy is worthy of reference, while getting rid of poverty, the stock price crash risk of participating companies has also been effectively suppressed. Targeted poverty alleviation, stock price crash risk, China’s stock market, corporate social responsibility 04 2023 68 June The Singapore Economic Review 1271 1301 G32 G38 http://www.worldscientific.com/doi/abs/10.1142/S0217590821440033 SHOUDONG CHEN Center for Quantitative Economics, Jilin University, Changchun 130012, P. R. China†School of Business, Jilin University, Changchun 130012, P. R. China YUESHAN LI ��School of Business, Jilin University, Changchun 130012, P. R. China
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article KNOWLEDGE CHANGES FATE: CAN FINANCIAL LITERACY ADVANCE POVERTY REDUCTION IN RURAL HOUSEHOLDS? Poverty reduction and inclusive growth in poor rural areas attracted the increasing attention of governments and scholars around the world. We investigate financial literacy by conceptualizing its impacts on rural households’ poverty reduction, considering current and long-term economic income dynamics. Using a database from 2015 to 2017 China Household Finance Survey, we find that financial literacy has current and long-term effects on promoting rural households’ status by eliminating and effectively improving poverty (dynamic effects). Second, this study reveals that financial literacy and education have a significant complementary effect on rural households’ poverty reduction. The study distinguishes financial literacy from knowledge obtained through general education. Third, financial education is shown to significantly improve rural households’ financial literacy on and enhance poverty reduction. The policy implications of our findings include that the governments and financial institutions are also required to rigorously measure, understand and improve financial literacy. Reform of financial regulatory systems must include a national strategy for education projects and improvement in the quality and supervision of financial products and services. Financial literacy, rural household poverty reduction, inclusive growth, financial education, heterogeneity analysis 04 2023 68 June The Singapore Economic Review 1147 1182 D12 D14 G10 O13 http://www.worldscientific.com/doi/abs/10.1142/S0217590821440057 SHULIN XU School of Economics, Jinan University, Guangzhou 510632, P. R. China ZHEN YANG ��School of Business Administration, Dongbei University of Finance and Economics, Dalian 116025, P. R. China ZEFENG TONG ��School of Public Finance and Taxation, Zhongnan University of Economics and Law, Wuhan 430073, P. R. China YUNFENG LI �School of Finance, Jiangxi Normal University, Nanchang 330022, P. R. China
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article ROLE OF FINANCIAL TECHNOLOGY ON POVERTY ALLEVIATION IN ASIAN COUNTRIES: MEDIATING ROLE OF INSTITUTIONAL QUALITY Although the rapid development of financial technology has been realized throughout the Asian countries, research studies seldom focus on the growing impact of financial technology on poverty alleviation. The research paper explores financial technology’s effect on poverty alleviation in the Asian countries. The dataset was collected from Asian countries between 2010 and 2021. A web search technology and frequent word analytics tool are employed to conceptualize variables, and after that, each selected region’s financial technology index is constructed. Given the variation in poverty across selected regions, a novel approach of vector quantile regression is used to quantify the effect of financial technology on poverty allocation. The suggested method’s parametric estimators are employed as “location†measurements of poverty. The findings of this research reveal that despite an uneven index of financial technology development across Asian economies, financial technology significantly impacts poverty alleviation in every selected Asian economy. Furthermore, financial technology strongly impacts poverty alleviation in developing economies than emerging economies of Asian countries. Considering the above findings, practitioners, governments and policy-makers need to foster advanced financial technology mechanisms, specifically in developing economies of the selected Asian economies. Fintech, poverty alleviation, institutional quality, quantile regression, support vector regression 04 2023 68 June The Singapore Economic Review 1251 1270 http://www.worldscientific.com/doi/abs/10.1142/S021759082244009X XI-YAN LIU Liuxiyan95@163.com Department of Economics, The University of Warwick, Coventry CV4 7AL, UK LEI CHANG School of Economics, Peking University, Beijing 100871, P. R. China
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article TRILEMMA ASSOCIATION OF EDUCATION, INCOME AND POVERTY ALLEVIATION: MANAGERIAL IMPLICATIONS FOR INCLUSIVE ECONOMIC GROWTH This study focused on the trilemma association of education, income and poverty alleviation: managerial implications for inclusive economic growth in developing countries in Asia to establish the proportion of the poor in the population and further identify its determinants. This research utilized secondary data from 1990 to 2016 by using econometric estimation. The results show that education decreases poverty when evaluated through the poverty gap and poverty headcount ratio and employment and increasing rate of economic development in the form of GDP to reducing poverty. GDP the Gini coefficient show the same signs while the magnitudes of the coefficients. Consequently, improvement in an independent variable will decrease poverty while the results have various levels of contributions through static and dynamic panel data methods, that education can reduce poverty. Results indicate that the level of poverty stood at 62.2%. The level of education, poverty headcount ratio, poverty gap and secondary school enrolment were significant in determining a household’s poverty status. However, land ownership and household head’s occupation were not statistically significant in explaining the probability of a household’s poverty status. From the results, this study recommends that all stakeholders work towards reducing poverty in the study to enhance education and family planning. Poverty alleviation, education, economic growth, econometric estimation, South East Asia 04 2023 68 June The Singapore Economic Review 1469 1492 http://www.worldscientific.com/doi/abs/10.1142/S0217590822440052 ZHEN LIU zhenliu_cn@yahoo.com School of Business, Nanjing Normal University, No. 1, Wenyuan Road, Nanjing 210023, P. R. China MOHAMMAD MARUF HASAN School of International Studies, Sichuan University, Chengdu, Sichuan, 610065, P. R. China3School of Economics, Sichuan University, Chengdu, Sichuan, 610065, P. R. China LI XUAN lix199@nenu.edu.cn School of Economics and Management, Northeast Normal University, 5268 Renmin Street, Changchun 130024, P. R. China HAYOT BERK SAYDALIEV hayot.saydaliev@gmail.com Institute of Forecasting and Macroeconomic Research, Tashkent, Uzbekistan, Mathematical Methods in Economics, Tashkent State University of Economics, Tashkent 100003, Uzbekistan JING LAN College of Public Administration, Nanjing Agricultural University, No. 1, Weigang, Nanjing 210095, P. R. China WASIM IQBAL Wasimiqbal01@yahoo.com Department of Management, Science, College of Management Shenzhen University, P. R. China
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article IMPACTS OF FINANCIAL INCLUSION ON POVERTY AND INCOME INEQUALITY IN DEVELOPING ASIA This study investigates the impacts of financial inclusion on poverty and income inequality in 27 developing countries in Asia during 2004–2019 based on a composite financial inclusion index (FII) constructed using principal component analysis (PCA). The generalized method of moments (GMM) was employed for the estimation. The results show that financial inclusion can influence the reduction in both poverty and income inequality. The empirical findings also reveal the contribution of such control variables as economic growth in decreasing income disparity and trade openness in helping improve the standard of living of poor households despite its tendency to co-vary with income inequality. The present empirical evidence supporting the role of financial inclusion in reducing poverty and income inequality in developing countries has led to a policy implication that financial sector development should focus on the availability, usage, and depth of credit to cover all poor households or low-income groups to help improve their access to financial services, enable them to increase their income, and reduce the income gap between poor and rich households. Financial inclusion, poverty, income inequality, developing countries, Asia 04 2023 68 June The Singapore Economic Review 1375 1391 D31 D53 I32 O16 N15 http://www.worldscientific.com/doi/abs/10.1142/S0217590822440027 WARATTAYA CHINNAKUM warattaya_chin@hotmail.co.th Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand
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article DO REMITTANCES MITIGATE POVERTY? AN EMPIRICAL EVIDENCE FROM 15 SELECTED ASIAN ECONOMIES This paper examines the impact of remittances on poverty alleviation in 15 selected Asian economies. Remittances have been identified as a potential source of income for households in developing countries and a means of reducing poverty. Using panel data from 2000 to 2020, we estimate the effect of remittances on poverty levels in these economies, controlling for other relevant factors such as GDP per capita, inflation rate and population growth. Our results suggest that remittances have a significant and negative impact on poverty levels in these economies, indicating that remittances play a crucial role in poverty reduction. The findings also reveal that the effect of remittances on poverty reduction varies across economies, with some economies experiencing a stronger poverty-reducing effect than others. The findings highlight the potential benefits of policies aimed at facilitating the flow of remittances and ensuring their effective use in reducing poverty in developing countries. Poverty, remittances, economic growth, panel data: Asian countries 04 2023 68 June The Singapore Economic Review 1447 1468 http://www.worldscientific.com/doi/abs/10.1142/S0217590823440034 XIANG CUI School of Marxism, Dalian Maritime University, Dalian 116026, Liaoning, P. R. China MUHAMMAD UMAIR umair.economics.phd@gmail.com ��Department of Economics, University of Lakki Marwat, Pakistan GANIJON IBRAGIMOVE GAYRATOVICH g.ibragimov@tsue.uz ��Faculty of Corporate Governance, Tashkent State University of Economics, Uzbekistan AZER DILANCHIEV adilanchiev@ibsu.edu.ge �Department of Finance and Economics, International Black Sear University, Georgia
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article DOES ENERGY EFFICIENCY MATTER FOR POVERTY ALLEVIATION AND ECONOMIC GROWTH? A FRESH EMPIRICAL INSIGHT FROM AN ASIAN PERSPECTIVE Globally, everybody deals with poverty as a shared societal issue. It is still unclear how to investigate its causes and create new paradigms for policy, but it offers many promising directions for academic study. The use of technological innovation in this environment for social change to address poverty reduction is also an important issue. Consequently, this study investigates how effective poverty reduction may be accomplished in Asia through technological innovation and financial development. The super-efficiency data envelopment analysis model and system generalized method of moments were utilized in the present study together with data from 2010 to 2020 for an empirical estimate. The data show that different areas have effectively reduced poverty over time. However, Asia’s overall effectiveness in reducing poverty is rather unevenly distributed geographically. The significance of poverty reduction in Asia is positively impacted by technical advancement and financial prosperity. The effects of globalization on the efficacy of poverty reduction are negligible. This study presents some policy insights for decision makers based on the empirical findings. Poverty alleviation, DEA and GMM model, Asian perspective, financial development 04 2023 68 June The Singapore Economic Review 1427 1446 http://www.worldscientific.com/doi/abs/10.1142/S0217590823440022 XIAOHAN JIANG 3220200253@bit.edu.cn School of Mechanical Engineering, Beijing Institute of Technology, Beijing 100081, P. R. China JIANWEN ZHOU jwzhou23@163.com ��School of Nanjing Forestry University, Nanjing 210018, P. R. China MINGYANG WANG wmysrailgun@163.com ��Zhongguancun Sub-Branch, PSBC, Beijing 100080, P. R. China CHUNLONG DONG 18708758@students.lincoln.ac.uk �School of Engineering, University of Lincoln, Lincoln LN67TS, UK AMIR ISHAQUE amir.ishaque@mail.au.edu.pk �Department of Business Studies, Air University Islamabad, Pakistan
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article DOES THE POLICY OF FINANCIAL SUBSIDIES FOR AGRICULTURAL INSURANCE CONTRIBUTE TO ENSURING FOOD SECURITY FOR POVERTY ALLEVIATION? EVIDENCE FROM CHINA China’s current agricultural policy includes a wide range of agricultural subsidies, but the overall effect and levels of protection are low. China’s continued use of agricultural subsidies to ensure national food security is important in the context of global poverty alleviation. We examine the effect of agricultural insurance financial subsidy policies on food security using a difference-in-difference model with data from 285 Chinese cities from 1978 to 2019. These agricultural insurance subsidies have a significant positive effect on food security, with the most noticeable improvements in the northeast region. Reform and redesign of the subsidy system for greater flexibility and coverage are needed to safeguard China’s food security. Food security, agricultural subsidies, policy effect, poverty alleviation, heterogeneity 04 2023 68 June The Singapore Economic Review 1303 1322 http://www.worldscientific.com/doi/abs/10.1142/S0217590821440045 QUNXI KONG School of Industrial Development, Nanjing University of Finance & Economics, Nanjing 210003, P. R. China RONGRONG LI School of Industrial Development, Nanjing University of Finance & Economics, Nanjing 210003, P. R. China DAN PENG ��School of Business, Nanjing University, Nanjing 210093, P. R. China ZOEY WONG ��School of Business, Nanjing University, Nanjing 210093, P. R. China
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article POVERTY ALLEVIATION POLICIES FOR ACHIEVING INCLUSIVE GROWTH: EDITORIAL INTRODUCTION 04 2023 68 June The Singapore Economic Review 1059 1062 http://www.worldscientific.com/doi/abs/10.1142/S0217590823030017 Farhad Taghizadeh-Hesary School of Global Studies, Tokai University, Japan2Tokai Research Institute for Environment and Sustainability, TRIES, Japan
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article HOW DO NATURAL DISASTERS AFFECT ENERGY POVERTY? EVIDENCE FROM A GLOBAL PERSPECTIVE To investigate the impact of natural disasters on energy poverty, this study employs a panel dataset of 113 countries covering the period 2000–2014. We also conduct an asymmetric analysis on the natural disaster–energy poverty nexus. In addition, we analyze the impact mechanism between natural disasters and energy poverty. The main findings indicate that natural disasters deteriorate the energy poverty status, and this impact is asymmetric. Furthermore, technological innovation can reduce the positive impact of natural disasters on energy poverty. Also, renewable energy infrastructure is an important pathway through which natural disasters affect energy poverty. Natural disasters, energy poverty, asymmetry, mediating effect, global analysis 04 2023 68 June The Singapore Economic Review 1115 1146 C23 C31 I3 Q54 http://www.worldscientific.com/doi/abs/10.1142/S0217590822440039 YUE DOU School of International Trade and Economics, University of International Business and Economics, Beijing 100029, P. R. China2UIBE Belt & Road Energy Trade and Development Center, University of International Business and Economics, Beijing 100029, P. R. China KANGYIN DONG School of International Trade and Economics, University of International Business and Economics, Beijing 100029, P. R. China2UIBE Belt & Road Energy Trade and Development Center, University of International Business and Economics, Beijing 100029, P. R. China QINGZHE JIANG School of International Trade and Economics, University of International Business and Economics, Beijing 100029, P. R. China2UIBE Belt & Road Energy Trade and Development Center, University of International Business and Economics, Beijing 100029, P. R. China MUHAMMAD SHAHBAZ Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, P. R. China4School of Management and Economics, Beijing Institute of Technology, Beijing 100081, P. R. China5Department of Land Economy, University of Cambridge, Cambridge CB2 1TN, UK
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article LEVERAGING ON ENERGY SECURITY TO ALLEVIATE POVERTY IN ASIAN ECONOMIES This study examines the role of energy security in poverty reduction in the 12 poorest Asian economies from 2000 to 2019. We postulated an energy security index using principal component analysis. We adopted the system generalized method of a moment technique to manage endogeneity and dynamism in the model. For robustness, we applied a panel-corrected standard error (PCSE). We found a negative relationship between energy security and poverty reduction, suggesting that energy security helps reduce poverty. We conclude that energy security promotes sustainable poverty alleviation and recommends feed-in tariffs, net metering, tax credits, and energy resource diversification away from fossil fuels. Poverty reduction, energy poverty, energy security, Asian economies, inclusive growth 04 2023 68 June The Singapore Economic Review 1063 1090 Q42 Q49 http://www.worldscientific.com/doi/abs/10.1142/S0217590822440015 FARHAD TAGHIZADEH-HESARY Social Science Research Institute, Tokai University, Japan ABDULRASHEED ZAKARI School of Management and Economics, Beijing Institute of Technology, Beijing, P. R. China3Alma Mater Europaea ECM, Maribor, Slovenia NAOYUKI YOSHINO yoshino@econ.keio.ac.jp Keio University, Japan IRFAN KHAN Khan.Irfan4032@yahoo.com School of Management and Economic, Beijing Institute of Technology, Beijing, P. R. China
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article EVALUATING THE ROLE OF EDUCATION AND HUMAN CAPITAL IN POVERTY REDUCTION AND INCLUSIVE GROWTH IN SOUTH ASIA Economic growth necessitates the development of human capital and education. It plays a critical and necessary role in the formulation of income distribution policies and alleviating poverty. This study investigates the relationship through ordinary least square (OLS), fully-modified OLS and dynamic OLS models using panel data from the South Asian Association for Regional Cooperation (SAARC) countries from 1990 to 2018. According to the findings, imbalance plays an important role in influencing poverty and concludes that the government should embrace procedures that help improve pay distribution to reduce poverty at the strategy level. Furthermore, the findings state that a bi-directional Granger causality exists between schooling and poverty. In terms of strategy, SAARC countries should continue to increase the proportion of sustainable energy used for financial development, thereby decreasing the use of fossil energy for environmental improvements. Additionally, this study shows that the association of pay disparity hoses the positive effect of financial development on poverty, and it supports the contention that the degree of imbalance reduces the impact of comprehensiveness. Pay disparity is now a critical determinant of poverty. Poverty reduction, economic growth, econometric estimation, SAARC, panel data analysis 04 2023 68 June The Singapore Economic Review 1323 1344 http://www.worldscientific.com/doi/abs/10.1142/S0217590821440069 SICHENG LI Guosen Securities, Shenzhen 518001, P. R. China2Tianjin University, Tianjin 300072, P. R. China CEMEI LI Higher Vocational Department, Yunnan University of Business Management, AnNing District KunMing 650000, P. R. China MOHAMMAD MARUF HASAN marufpc@yahoo.com School of International Governance Innovation, Guangdong University of Foreign Studies, Guangzhou 510006, Guangdong, P. R. China SYED MOUDUD-UL-HUQ moudud_cu7@mbstu.ac.bd Department of Accounting, Mawlana Bhashani Science and Technology University, Tangail 1902, Bangladesh ROBINA IRAM Robinamohsin22@yahoo.com School of Finance and Economics, Jiangsu University, Zhenjiang, P. R. China
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article ECONOMIC DEVELOPMENT AND RURAL ENERGY POVERTY: EVIDENCE FROM CHINA Sustainable development places a premium on recognizing people at risk of energy poverty, defined as the incapability to get a sufficient level of residential energy services. Therefore, this study analyses the relationship between economic development and rural energy poverty in Chinese regions. Using statistics from the China Families Panel Studies, it is observed that the Great Chinese Drought increased the risk of living in poverty. We conclude that there is wide variation in China’s regions regarding economic liberalization and the country’s energy deprivation. In provinces with different degrees of poverty, there is an inverse U-shaped association between economic growth and the country’s energy poverty. The country’s energy poverty reduced or even eliminated by advancing economic development to a specific degree. Many socioeconomic indicators at the home level are connected with energy poverty in various ways depending on the dimension, implying that individualized criteria are required to classify vulnerable families in each size and country-level considerations. Energy poverty, China Families Panel Studies, economic development, China’s region 04 2023 68 June The Singapore Economic Review 1231 1250 http://www.worldscientific.com/doi/abs/10.1142/S0217590823440010 YI WANG wy.vip@pku.edu.cn School of Software and Microelectronics, Peking University, Beijing 100091, P. R. China JIANHE WANG 2101060725@cupl.edu.cn Business School, China University of Political Science and Law, Beijing 100088, P. R. China LEI WANG wangleiaixuexi@163.com School of Economics and Management, Beijing Forestry University, Beijing 100083, P. R. China LI ZHANG zhangli2020@pku.org.cn National School of Development, Peking University, Beijing 100871, P. R. China ZIMAN XIANG Central Conservatory of Music, Beijing 100031, P. R. China
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article THE NEXUS OF FINANCIAL DEEPENING AND POVERTY: THE CASE OF BLACK SEA REGION ECONOMIES This paper analyzes the effect of financial deepening on poverty in the emerging Black Sea market economies with new generation causality analysis techniques utilizing panel data from 1996 to 2020. The econometric method of panel data is applied to the six emerging economies. It can be seen that the causal relationship between domestic loans to the private sector (DPS) and per capita household consumption expenditure (HCE) is significant in Georgia, Turkey and Ukraine. In addition, a bidirectional causality relationship is observed in Georgia. Romania, Georgia, Turkey and Ukraine are countries where the causality between HCE and DPS is significant. It is concluded that DPS increases per capita HCE and thus effectively reduces poverty. Poverty alleviation, financial deepening, monetization rate, emerging economies, black sea region, causality analysis 04 2023 68 June The Singapore Economic Review 1183 1205 http://www.worldscientific.com/doi/abs/10.1142/S0217590822440064 CHENGHUI LU luchenghui2022@126.com School of Philosophy and Sociology, Jilin University, Changchun 130012, P. R. China AZER DILANCHIEV ��Faculty of Business and Technology, International Black Sea University, Tbilisi, Georgia
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article HOW HAS THE CORONAVIRUS OUTBREAK AFFECTED ECONOMIC POVERTY IN DIFFERENT ASIAN REGIONS? It is widely believed that the global economy is experiencing unprecedented challenges by the Covid-19. The main purpose of this research is to explore how the Covid-19 outbreak affected poverty in different Asian regions classified by the United Nations geoscheme, namely South Asia, Southeastern Asia, Central Asia, East Asia and Western Asia. To estimate the coefficients of variables, the panel data framework based on quarterly data over 2010Q1–2020Q2 is employed. Results revealed that the Covid-19 pandemic is a serious challenge for poverty in these regions. The impacts of the pandemic on poverty are smaller for larger or developed economies in Asia than smaller or less-developed economies. Regulating and making a timeline for managing post-coronavirus period is a major policy implication. Another policy implication is that due to the similar findings for Asian countries, they can exchange experiences in controlling the pandemic impacts. COVID19, Poverty, Asian regions, Augmented Mean Group (AMG) estimation 04 2023 68 June The Singapore Economic Review 1091 1113 http://www.worldscientific.com/doi/abs/10.1142/S021759082144001X LINHAI ZHAO longmen168@126.com School of Economics and Finance, Huaqiao University, Quanzhou 362021, P.R. China EHSAN RASOULINEZHAD ��Faculty of World Studies, University of Tehran, Tehran, Iran
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article CAN INFRASTRUCTURE DEVELOPMENT ALLEVIATE MULTIDIMENSIONAL POVERTY? — EVIDENCE FROM CHINA We investigate the impact of the construction of large-scale high-speed railways (HSRs) on regional multidimensional poverty in China. We find that the opening of HSRs can reduce this poverty indicator. This association is robust to a series of checks. Regarding the mechanisms, the opening of HSRs can improve regional accessibility, enhance local tourism, increase labor mobility and promote human capital accumulation, which alleviates multidimensional poverty. Further research indicates the regional heterogeneity of the effect. This research supplements poverty alleviation theory from the perspective of public infrastructure and offers insight into how multidimensional poverty arises and how it can be alleviated. High-speed railways, infrastructure development, multidimensional poverty, poverty alleviation, developing country 04 2023 68 June The Singapore Economic Review 1393 1426 G30 D01 E20 E21 E60 http://www.worldscientific.com/doi/abs/10.1142/S0217590821440021 YONGBO GE yongboge@163.com School of Insurance, Shandong University of Finance and Economics, Jinan, P. R. China YUEXIAO ZHU ��School of Finance, Shandong University of Finance and Economics, Jinan, P. R. China WENQIANG ZHANG 2729544822@qq.com ��School of Finance, Shandong University of Finance and Economics, Jinan, P. R. China XIAORAN KONG dianavi9797@163.com ��School of Finance, Shandong University of Finance and Economics, Jinan, P. R. China
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article A FUZZY ANALYSIS OF SPIRITUAL POVERTY ALLEVIATION IN DEEP POVERTY-STRICKEN AREAS OF GANSU This paper aims to find the importance and contribution of spiritual poverty alleviation using people’s subjective evaluation data of deeply impoverished areas. The research is conducted according to the method of five-level scale evaluation and the fuzzy comprehensive evaluation, combined with on-site questionnaires with the masses, and interviews with village cadres. The main findings reveal that the spiritual measures are more important than the material measures, and some of the second-level indicators have relatively low recognition of poverty alleviation contribution, which is an important basis for our targeted policies. Gansu, deep poverty, spiritual poverty alleviation, fuzzy comprehensive evaluation method 04 2023 68 June The Singapore Economic Review 1493 1505 http://www.worldscientific.com/doi/abs/10.1142/S0217590822440040 WEIWEI GUO weiwei_guo962@outlook.com Economics and Management College, Longdong University, Qingyang, Gansu, P. R. China YONGXIANG MA Economics and Management College, Longdong University, Qingyang, Gansu, P. R. China
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article ROLE OF SUSTAINABLE INFRASTRUCTURE DEVELOPMENT TO POVERTY ALLEVIATION IN ASIA: DOES INCLUSIVE GROWTH MATTER IN A COLLECTIVE ECONOMIC ENVIRONMENT The impact of Asia’s infrastructure development and inclusive income growth on poverty alleviation from 2000 to 2020 is well-documented in this research by applying the generalized method of moments (GMM). With the use of economic and social indices, it has been established that infrastructure improvement significantly impacts reducing poverty levels. The findings demonstrate the important impact of energy poverty alleviation on income-inclusive growth. It is easier to survive poverty in rural areas with access to water infrastructure and health insurance. Infrastructure and poverty seem to have a bidirectional causal relationship in the long term. To put it another way, boosting infrastructure investment might be a key to promoting poverty reduction. At the same time, greater performance in the public sector may result in a more effective allocation of resources toward building large infrastructure. Thus, it is postulated that with increasing knowledge, infrastructural development in most developing nations, including South Asian countries, is insufficient; fresh and sustained infrastructure investments are crucial for poverty reduction. This research sheds light on the critical role that energy out-of-poverty plays in inclusive development and infrastructure development for all people, regardless of their income level. Energy poverty, infrastructure development, inclusive income growth, Asia 04 2023 68 June The Singapore Economic Review 1345 1373 http://www.worldscientific.com/doi/abs/10.1142/S0217590822440076 BENCHANG CHEN chenbenchang@hotmail.com School of International Economics and Politics, Liaoning University, Shenyang 110136, P. R. China GUILIN KUANG Lonelyn0415@sina.com ��Research Institute, Changsha Yutaishu Management Consulting Co., Ltd., Changsha 410205, P. R. China
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article GREEN GROWTH IN TAIWAN — AN APPLICATION OF THE OECD GREEN GROWTH MONITORING INDICATORS Green growth is a global priority strategy for responding to climate change. This paper applies the OECD (2011a) green growth monitoring indicators framework to analyze 20 indicators of progress toward green growth specific to Taiwan. Principal Component Analysis and Analytic Hierarchy Process are used as weighting methods to calculate an aggregating composite index and perform sensitivity testing. The results show that for the past decade (2002–2011), Taiwan has been moving toward green growth but has been negatively impacted by its natural capital stock. This indicates that improving natural capital stock is a key for sustaining green growth in Taiwan. Green growth, composite indicator, PCA; AHP, sensitivity analysis 02 2018 63 March The Singapore Economic Review 249 274 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400100 CHIEN-MING LEE Associate Professor of National Taipei University, Institute of Natural Resources Management, No. 151 Daxue Rd., Sanxia District, New Taipei City, Taiwan HSUAN-HSUAN CHOU shirleychou2441@gmail.com Associate Researcher at the National Taipei University, Institute of Natural Resources Management, No. 151 Daxue Rd., Sanxia District, New Taipei City, Taiwan
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article CHINA’S TARGET RESPONSIBILITY SYSTEM AND CONVERGENCE OF CO2 EMISSIONS China has established and assigned target responsibilities for local officials in energy conservation and created an evaluation indicator, which is a key institutional arrangement that provides local officials with political incentives to promote carbon abatement policies. In this paper, we elaborate on the relationship between China’s target responsibility system and CO2 emissions using interprovincial panel data, grouping provinces into Eastern, Central and Western regions to compare China’s CO2 emissions convergence between the periods of the 10th Five-year Plan and the 11th Five-year Plan. The analysis indicates that the target responsibility system does not noticeably change local officials’ political incentives to engage in carbon abatement because the effect of the target responsibility system for energy conservation seems to be overshadowed by and subject to gross domestic product (GDP) growth targets. Against the backdrop of growing international pressure on climate change issues, this paper argues that China must include in the target responsibility system an indicator of absolute CO2 emissions reduction as a policy objective. Target responsibility system, energy conservation, convergence of CO2 emissions 02 2018 63 March The Singapore Economic Review 431 445 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400197 YOUNGPING SUN sunyp@hbue.edu.cn Center for Hubei Cooperation Innovation of Emissions Trading System, Hubei University of Economics, China
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article FINANCIAL DEVELOPMENT AND CARBON EMISSIONS IN CHINESE PROVINCES: A SPATIAL PANEL DATA ANALYSIS Using the panel data of 30 provinces in China between 1997 and 2011, we employed the extended STIRPAT model and spatial panel econometrics methods to investigate the relationship between financial development and carbon emissions and test the influence of financial development as well as other factors on provincial carbon emissions per capita among Chinese provinces. The estimation results show that: (i) spatial spillover effects play a role in provincial carbon emissions in China; and (ii) the sum of technical effect and structure effect of financial development surpass its’ sum of direct effect and wealth effect in China, which suggests that financial development reduces carbon emissions per capita. China should pay more attention to the integration of green finance policy and environmental regulation, and establish appropriate mechanisms to strengthen inter-provincial interaction and coordinated development. Financial development, carbon emissions, STIRPAT model, spatial panel model 02 2018 63 March The Singapore Economic Review 447 464 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400203 LING XIONG Institute for International Studies, Wuhan University, China†Collaborative Innovation Center for Territorial, Sovereignty and Maritime Rights (CICTSMR), Wuhan University, China SHAOZHOU QI Institute for International Studies, Wuhan University, China‡Economics and Management School, Wuhan University, China
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article DETERMINANTS OF ENERGY AND CO2 EMISSION INTENSITIES: A STUDY OF MANUFACTURING FIRMS IN INDIA This paper investigates determinants of energy and emission intensities of manufacturing firms in India, from 2000 to 2014. Given that Indian manufacturing sector is one of the world’s most polluting sectors in terms of CO2 emissions; we arrive at firm level determinants of energy and carbon dioxide emission intensities from consumption of three primary sources of energy, namely (1) Coal, (2) Natural Gas and (3) Petroleum. The results of the regression analysis suggest that there are inter-firm differences in energy and emission intensity. The results indicate that smaller and larger firms are both energy and emission intensive compared to medium sized firms. Similarly, firms spending more in research and development activities are found to be energy and emission efficient, compare to others. Hence, in the global competitive business environment, Government of India should carefully formulate policies suitable for the medium sized firms to make them energy and emission efficient. Indian manufacturing, coal, natural gas, petroleum, IPCC reference approach 02 2018 63 March The Singapore Economic Review 389 407 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400173 SANTOSH K. SAHU Department of Humanities and Social Sciences, Indian Institute of Technology Madras, Chennai, Tamil Nadu, 600036, India DEEPANJALI MEHTA aqfdeepanjali@mse.ac.in #x2020;Madras School of Economics, Gandhi Mandapam Road, Kottur, Chennai, Tamil Nadu, 600025, India
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article THE EMISSIONS REDUCTION EFFECT AND ECONOMIC IMPACT OF AN ENERGY TAX VS. A CARBON TAX IN CHINA: A DYNAMIC CGE MODEL ANALYSIS Carbon tax and energy tax are among the hot discussions in China. This study conducts simulation studies on them with a CGE model and analyzes their economic impacts, especially on the energy-intensive sectors. The Chinese economy is affected at an acceptable level by the two taxes in different scenarios. The import and export of energy-intensive industries are changed, leading to improved domestic competitiveness. Compared with implementing a single tax, a combined carbon-energy tax reduces more emissions with relatively smaller economic costs. For China, the sooner such taxes are launched, the smaller the economic costs and the more significant emission reductions. Energy tax, carbon tax, climate change, CGE model, energy intensive industry 02 2018 63 March The Singapore Economic Review 339 387 http://www.worldscientific.com/doi/abs/10.1142/S021759081740015X LELE ZOU Institute of Policy and Management, Chinese Academy of Sciences, China JINJUN XUE Graduate School of Economics, Nagoya University, Japan3Hubei University of Economics, China ALAN FOX alan.fox@usitc.gov United States International Trade Commission (USITC), USA BO MENG mengbo@ide.go.jp Institute of Developing Economics, Japan External Trade Organization (IDE-JETRO), Japan
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article INTRODUCTION AND EDITORIAL OVERVIEW 02 2018 63 March The Singapore Economic Review 207 211 http://www.worldscientific.com/doi/abs/10.1142/S0217590817020027 JINJUN XUE setsu@soec.nagoya-u.ac.jp Nagoya University, Japan BO MENG menghulu@gmail.com Institute of Developing Economies, JETRO, Japan ZHONGXIU ZHAO zhxzhao@uibe.edu.cn International University of Business and Economics, China
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article REGIONAL DEVELOPMENT AND GREENHOUSE GAS EMISSIONS: THE CASE OF THE AMAZON REGION This paper verifies the existence of possible tradeoffs between policies directed at reducing the emissions of greenhouse gases and those policies directed at fostering the development of the Brazilian Amazon Region, considering its economic relations with the rest of the country and international markets. To achieve this goal, this paper uses an interregional input–output model, estimated for the Brazilian economy for the year 2004. The results of our analysis show that the sectors with the greatest importance in terms of emissions are cattle and soybean production, which are also the most prominent for the region’s economic development. Although 63% of Brazil’s anthropogenic emissions of CO2eq were concentrated in the Amazon Region, under a consumer perspective the region’s responsibility corresponded to only 24% of emissions in the country, being surpassed by the consumer-based emissions of rest of Brazil (49%), as well as that belonging to foreign countries by means of exports (27%). This poses a dilemma that needs to be faced not only by Brazil but also by developed nations, as the burden of reducing emissions of greenhouse gases in the Brazilian Amazon region cannot be put only on the poor population of the region. Amazon region, greenhouse gases, input-output, regional development 02 2018 63 March The Singapore Economic Review 483 512 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400227 DENISE IMORI denise.imori@usp.br Department of Economics (FEA), University of São Paulo, Brazil JOAQUIM JOSÈ MARTINS GUILHOTO Department of Economics (FEA), University of São Paulo, Brazil†Regional Economics Applications Laboratory (REAL), University of Illinois, 67 Mumford Hall, 1301, W.Gregory Dr. Urbana, IL 61801 USA‡CNPq Scholar, Brazil CAIO WAISMAN cwaisman@usp.br Department of Economics (FEA), University of São Paulo, Brazil
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article EVALUATION INDEX SYSTEM OF GREEN INDUSTRY BASED ON MAXIMUM INFORMATION CONTENT Green industry evaluation is a necessary part in the development of low-carbon economy and achieve sustainable development in the economic, social and ecological environment. Establishing a system of reasonable indicators is the key to green industry evaluation. From the connotation of green industry, this paper chooses green industry evaluation indicators with the extensive inclusion of green production, green consumption and green environment. Based on the principle of the maximum information content and the principle of eliminating redundant information, it establishes the evaluation indicators system of green industry. The proposed index system exhibits universal features of selection methods. Furthermore, the indexes of green industry formulated by authorities, such as EMCA, and designed for cities, such as Beijing and Shanghai in China, are described in terms of mass-elected indexes; these indexes can also provide important reference for green industry development in other similar cities, particularly coastal cities. Green industry evaluation, index screening, maximum information content, index system 02 2018 63 March The Singapore Economic Review 229 248 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400094 BIN MENG mengbinfly@163.com Faculty of Management and Economics, Dalian University of Technology, Dalian 116024, P. R. China GUOTAI CHI Faculty of Management and Economics, Dalian University of Technology, Dalian 116024, P. R. China
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article CARBON BOND PRICING AND MODEL SELECTION This paper discusses how to value a carbon bond and how to choose models for it like CGNPC wind additional carbon benefits of medium-term notes, the first Carbon-bond in China. First, the fractional process with jumps is used to model CERs spot price in BlueNext market and to price a numerical carbon bond. Then, through sensitive analysis for model parameters, the fractional process without jumps is suggested to model CERs spot price finally, but the fractional process with jumps may be more suitable for EA in China. Furthermore, there also discusses how to choose discount rate for those derivatives which are paid off by one currency but its underlying is quoted by another. Carbon bonds, fractional Brownian motion, fractional process with jumps, sensitivity analysis 02 2018 63 March The Singapore Economic Review 465 481 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400215 JIANFEN FENG School of Banking and Finance, University of International Business and Economics, Beijing, P. R. China XIAOWEI HUANG xwhuang@.uibe.edu.cn School of Banking and Finance, University of International Business and Economics, Beijing, P. R. China JUYUE HOU houjy@163.com School of Banking and Finance, University of International Business and Economics, Beijing, P. R. China CHUNXIA WANG wangchunxiajiuye@163.com School of Banking and Finance, University of International Business and Economics, Beijing, P. R. China YAN ZENG yantsenghmg@aliyun.com Institute of International Economy, University of International Business and Economics, Beijing, P. R. China
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article INPUT–OUTPUT-BASED GENUINE VALUE ADDED AND GENUINE PRODUCTIVITY IN CHINA’S INDUSTRIAL SECTORS (1995–2010) This paper recalculates value added, capital formation, capital stock and related multifactor productivity in China’s industrial sectors by further developing the genuine savings method of the World Bank. The sector-level natural capital loss was calculated using China’s official input–output table and their extensions for tracing final consumers. The capital output elasticity in the productivity estimation was adjusted based on these tables. The results show that although the loss of natural capital in China’s industrial sectors in terms of value added has slowed, the impacts on their productivity during the past decades is still quite clear. Genuine savings method, total factor productivity, input–output method, China 02 2018 63 March The Singapore Economic Review 213 228 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400082 YUNING GAO School of Public Policy and Management, Tsinghua University, Beijing, 100084, China YUNFENG ZHENG zhengyunfeng@mail.tsinghua.edu.cn School of Public Policy and Management, Tsinghua University, Beijing, 100084, China ANGANG HU anganghu@tsinghua.edu.cn School of Public Policy and Management, Tsinghua University, Beijing, 100084, China
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article PRODUCTION SHARING, DEMAND SPILLOVERS AND CO2 EMISSIONS: THE CASE OF CHINESE REGIONS IN GLOBAL VALUE CHAINS Recent trade literature highlights production sharing among economies [Johnson, R and G Noguera (2012). Accounting for intermediates: Production sharing and trade in value added. Journal of International Economics, 86(2), 224–236), and some studies report that 20–25% of CO2 emissions can be attributed to international trade [Peters, G, J Minx, C Weber and O Edenhofer (2011). Growth in emission transfers via international trade from 1990 to 2008. Proceedings the National Academy of Sciences USA, 108(21), 8903–8908.]. However, the mechanism explaining how and to what extent production sharing affects CO2 emissions remains unclear. This study, as an extension of [Meng, B, J Xue, K Feng, D Guan and X Fu (2013a). China’s interregional spillover of carbon emissions and domestic supply chains. Energy Policy, 61, 1305–1321.], adopts the perspective of demand spillovers to provide new insights regarding the position of Chinese domestic-regions’ production in Global Value Chains (GVCs) and their associated CO2 emissions. To this end, we employed a new type of World Input-Output Database (WIOD) in which China’s domestic interregional input–output table for 2007 is endogenously embedded. The pattern of China’s regional demand spillovers across both domestic regions and countries is revealed by employing this new database. These results were then connected to endowments theory, which helps to make sense of the empirical results. It is found that China’s regions are located relatively upstream in GVCs, and had CO2 emissions in net exports, which were entirely predicted by the environmental extended Heckscher–Ohlin–Vanek (HOV) model. Our study points to micro policy instruments to combat climate change: for example, tax reform for energy inputs that helps to change the production pattern, which then has an impact on trade patterns and so forth. Production sharing, CO2 emissions, demand spillovers, global value chains 02 2018 63 March The Singapore Economic Review 275 293 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400112 JIANSUO PEI jspei@amss.ac.cn University of International Business and Economics, Beijing 100029, China BO MENG #x2020;Institute of Developing Economies, IDE-JETRO, Tokyo, Japan FEI WANG wangfei64@hotmail.com University of International Business and Economics, Beijing 100029, China JINJUN XUE setsu@soec.nagoya-u.ac.jp #x2021;Nagoya University, Nagoya, Japan ZHONGXIU ZHAO zhxzha@uibe.edu.cn University of International Business and Economics, Beijing 100029, China
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article A COMPARISON OF PRODUCER, CONSUMER AND SHARED RESPONSIBILITY BASED ON A NEW INTER-COUNTRY INPUT–OUTPUT TABLE CAPTURING TRADE HETEROGENEITY In this paper, we employed a new inter-country input-output table where China’s productions are differentiated into domestic use, processing exports and non-processing exports (WIOD-DPN table), to compare the CO2 emissions responsibilities of 13 major regions under producer, consumer and shared accounting systems. The results show that the CO2 emissions responsibility of advanced countries would become less when the accounting system is changed from a consumer system to a shared system, while that of emerging countries are on the contrary. The degree of these changes depends on the value-added received by the production countries from the global value chain. Inter-country input-output table, shared responsibility, processing trade, China 02 2018 63 March The Singapore Economic Review 295 311 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400124 XUEMEI JIANG School of Economics, Capital University of Economics and Business, Beijing, China QUANRUN CHEN cqrmaths@163.com #x2020;School of Statistics, University of International Business and Economics, Beijing, China CUIHONG YANG chyang@iss.ac.cn #x2021;Center for Forecasting Sciences, AMSS, Chinese Academy of Sciences, Beijing, China
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article ECONOMIC IMPACT OF SUBSIDY POLICIES TO ELECTRIC VEHICLE SOCIETY IN TOYOHASHI CITY IN JAPAN — A CGE-MODELING APPROACH In this paper, we explore the economic impact of promotion and realization of an electric vehicle society (EVS). More concretely, this paper emphasizes a computable general equilibrium (CGE) modeling approach to evaluate the following issues: economic impacts of subsidies for promotion of an EVS, the possibility of price reductions, industrial structure change toward an EVS, and modal shift occurring toward an EVS. Our simulation results demonstrate that after applying 5–25% up subsidies to five industries, such as electric vehicle (EV) manufacturing, EV transport, solar power, cogeneration and other transport, the total industrial output and city GDP increase. A large growth rate is found in industries where subsidies are introduced alone with non-ferrous metal industry. However, it is interesting that decreasing proportions are found in oil and coal product, mining, heat supply and gasoline vehicle (GV) transport industries. Moreover, all the commodity prices decrease since subsidies are given to some industries. Hence Toyohashi City’s economy shows a direction where the demand for conventional vehicles and energy use are decreased, conversely, the demand for EVs and renewable energy are increased illustrating a different life style from the current one. However, it does not mean that the total CO2 emission is decreased. EV society makes some industrial outputs larger. Due to the fact that some industrial outputs are increased, CO2 emissions of EV manufacturing and nonferrous metal are increased more than decreased industries. Thus, introducing 5–25% subsidies to EV manufacturing, EV transport, solar power, cogeneration and other transport can really represent a realistic alternative society to EVS if the total CO2 emission can be reduced. Therefore, we have to think what can make the total CO2 emission reduced. CGE model, electric vehicle, economic impact of subsidies, CO2 emissions, Toyohashi City, Japan 02 2018 63 March The Singapore Economic Review 409 429 http://www.worldscientific.com/doi/abs/10.1142/S0217590817400185 YUZURU MIYATA Graduate School of Architecture and Civil Engineering, Toyohashi University of Technology, Toyohashi, Japan HIROYUKI SHIBUSAWA hiro-shibu@tut.jp Graduate School of Architecture and Civil Engineering, Toyohashi University of Technology, Toyohashi, Japan TOMOAKI FUJII f.tomo.a@gmail.com Graduate School of Architecture and Civil Engineering, Toyohashi University of Technology, Toyohashi, Japan
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article BOOK REVIEW — Win: How Public Entrepreneurship Can Transform the Developing World 01 2023 68 March The Singapore Economic Review 317 318 http://www.worldscientific.com/doi/abs/10.1142/S0217590822800029 TOMOKI FUJII tfujii@smu.edu.sg School of Economics, Singapore Management University, Singapore
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article MEASURING THE TECHNICAL EFFICIENCY OF CEMENT INDUSTRY IN PAKISTAN Using stochastic frontier analysis, the paper measures the technical efficiency of cement industry of Pakistan. For this purpose, technical efficiency is calculated for 16 cement industries using panel data for the period 2000–2016. Two models are estimated to measure the technical efficiency of cement industry, i.e., the industrial model and the macro-model. In the former model, only industry related variables are used, while in the latter model macroeconomic variables are also used as input variables besides industrial variables. The results indicate that all industrial variables, i.e., capital, labor, raw material, repair and maintenance, energy inputs and advertisement have positive effect on production of cement industry measured by net sales. In macro-model, gross domestic product (GDP) growth and exchange rate have significant positive effect on production. It is found that one percent increase in economic growth will increase cement production by 0.061%. Similarly, one percent devaluation in exchange rate will bring 0.855% increase in cement production. The results show that there is 48.4% efficiency in cement industry of Pakistan, which indicates that cement industry in Pakistan is inefficient by 51.6%. It implies that there is a need to improve the efficiency of cement industry. Further, macroeconomic variables should be incorporated while examining the efficiency of cement industry in Pakistan. Cement industry, SFA; technical efficiency, Pakistan 01 2023 68 March The Singapore Economic Review 141 155 C23 L61 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500085 MUHAMMAD ZAKARIA School of Economics & Finance, Xi’an Jiaotong University, Xi’an, Shaanxi, P. R. China XIUYUN YANG yangxiuyun@mail.xjtu.edu.cn School of Economics & Finance, Xi’an Jiaotong University, Xi’an, Shaanxi, P. R. China SALIHA MUMSHAD salihamumshad@gmail.com ��Department of Management Sciences, COMSATS University Islamabad, Islamabad Campus, Pakistan
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article QUANTITATIVE EASING POLICY, EXCHANGE RATES AND BUSINESS ACTIVITY BY INDUSTRY IN JAPAN FROM 2001 TO 2006 This study empirically investigates the dynamic effects of Japan’s quantitative easing (QE) policy on industry-specific business activity using a time-varying parameter model and monthly data spanning 2001–2006. This model yields more reliable and precise results than earlier fixed effects models using quarterly data. The first major finding is that the effect of QE on yen–dollar exchange rates varied during the sampled period and is most evident in the final phases, whereas its effect on stock prices persisted almost continuously. Second, QE’s effect on Japan’s real economy — i.e., on industrial production — varies by industry and over time. Most notably, QE raised production via yen–dollar depreciation in the machinery sector (e.g., general and transport machinery) and the sector including chemicals, non-ferrous metals and iron and steel during its latter phases. This study is the first to investigate how unconventional monetary policy influences Japan’s real economy by analyzing the real exchange rate during the second half of QE implementation in Japan. Quantitative easing (QE) policy, Time-varying parameter vector autoregressive (TVP-VAR) model, exchange rates, stock prices, export 01 2023 68 March The Singapore Economic Review 1 28 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500139 HIROYUKI IJIRI ��Department of Economics, Faculty of Economics, Okayama Shoka University, 2-10-1 Tsushimakyoumachi, Kita-ku, Okayama-shi, Okayama 700-8601, Japan‡Graduate School of Economics, Kobe University, 2-1 Rokkodai-cho, Nada-ku, Kobe-shi, Hyogo 657-8501, Japan YOICHI MATSUBAYASHI ��Graduate School of Economics, Kobe University, 2-1 Rokkodai-cho, Nada-ku, Kobe-shi, Hyogo 657-8501, Japan
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article MACROECONOMIC DETERMINANTS OF FIRM PERFORMANCE: EVIDENCE FROM TURKEY The relationship between macroeconomic factors and firm performance is important, especially for growth and development in developing countries. In this paper, a firm-level dataset is used for estimating the role of macroeconomic factors on firm performance in the period 2006–2017 for the Turkish manufacturing sector by using GMM model. Four macroeconomic factors are considered for estimating their roles on firm performance; openness, financial depth, real exchange rate, and economic growth rate. The obtained findings show that the macroeconomic conditions have a significant effect on firm performance in the manufacturing sector in Turkey. Turkish manufacturing sector, macroeconomic conditions, firm performance 01 2023 68 March The Singapore Economic Review 177 196 D21 D22 G30 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500188 ÖMER TUÄžSAL DORUK o.doruk@auc.edu.tr American University of Cyprus, Nicosia, Mersin 10, Turkey
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article CAPITAL FLOW WAVES AND ECONOMIC GROWTH: EVIDENCE FROM ADVANCED AND DEVELOPING ECONOMIES There have been growing concerns that volatile international capital flows could harm macroeconomic conditions in a country, although capital mobility generally promotes efficient resource allocation. To understand the roles of gross capital inflows and outflows, this study examines the effects of extreme capital flow waves on economic growth in 164 developing and advanced economies. The main results show clear differences between them. Growth in advanced countries is insensitive to extreme capital flow waves, but for developing countries, sudden stops and retrenchments (sudden decreases in capital inflows and outflows) hurt growth, while surges (sudden increases in capital inflows) are positively associated with growth. The analysis indicates that developing economies are vulnerable to sharp decreases in both capital inflows and capital outflows. Our findings have policy implications for financial regulators, particularly in developing countries, indicating that they should pay more attention to macroprudential policies related to capital flow management aimed at stabilizing capital flow movements. Extreme capital flow waves, gross capital flow episodes, economic growth 01 2023 68 March The Singapore Economic Review 65 98 F20 F30 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500322 SU WAH HLAING Ministry of Planning and Finance, Office No (26), Naypyitaw, Myanmar MAKOTO KAKINAKA kakinaka@hiroshima-u.ac.jp Graduate School for International Development and Cooperation, Hiroshima University, 1-5-1 Kagamiyama, Higashi-Hiroshima, Hiroshima 739-8529, Japan
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article THE EFFECTIVENESS OF CENTRAL BANK INTERVENTION: EVIDENCE FROM TAIWAN’S FOREIGN EXCHANGE MARKET This paper explores the effectiveness in which the Central Bank of the Republic of China (Taiwan) artificially devalues the New Taiwan Dollar relative to the US Dollar via the major foreign exchange brokered firm in Taiwan. The empirical results support that Taiwan’s central bank targets to step into the major market to influence the exchange rate at some specific intervals. However, the effectiveness of intervention in the major brokered company is short run and might reverse overnight. Moreover, intervention increases the returns and spreads of the two markets for a few minutes. Finally, the effectiveness of moral suasion is insignificant, depending on the timing of interventions and the response of market participants to those interventions. Central bank, foreign exchange, intervention 01 2023 68 March The Singapore Economic Review 99 118 F31 G10 G14 G28 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500279 DAR-HSIN CHEN dhchen@mail.ntpu.edu.tw Department of Business Administration, National Taipei University, ROC YING-HSIN LEE Department of Business Administration, National Taipei University, ROC
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article HOW DO RURAL HOUSEHOLDS PREFER TO ADAPT LIVELIHOODS TO ECONOMIC EFFECTS OF CLIMATE AND POLICY CHANGES? A better understanding of how society anticipates and adapts to future changes is critical to inform impact assessment and to develop timely and well-targeted policies to support adaptation. However, the forward-looking adaptation process remains poorly understood. In this paper we introduce choice experiment as a useful approach to investigate how households prefer to adapt livelihoods ex ante to the economic impact of climate and policy changes. This allows us to frame adaptation decisions within the random utility theory and explicitly quantify the likelihoods of particular adaptation choices given varied attributes of contextual changes and households. We collected data from 162 rural households in three Chinese mountain villages. Overall, households chose primarily to increase efforts in agriculture activities or stick to current livelihood portfolios. The results of a Mixed Logit model indicated that households’ choice of agriculture was certain while their adoption of non-agriculture livelihoods to safeguard the households from future changes. Moreover, several possibilities were evaluated for policy interventions to build adaptive capacity of households and facilitate adaptation. Such measures could, for instance, focus on supporting agricultural inputs, providing access to credit as well as practical skills training. Adaptive capacity, Yunnan, climate change, rural development, choice experiment 01 2023 68 March The Singapore Economic Review 265 284 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500061 YUAN ZHENG 32-36 Floors, BRICS Tower 333 Lujiazui Ring Road, Pudong Area, Shanghai 200120, P. R. China†Department of Food and Resource Economis, University of Copenhagen, Rolighedsvej 25, 1958 Frederisksberg C, Denmark JETTE BREDAHL JACOBSEN jbj@ifro.ku.dk ��Department of Food and Resource Economis, University of Copenhagen, Rolighedsvej 25, 1958 Frederisksberg C, Denmark BO JELLESMARK THORSEN bjt@ifro.ku.dk ��Department of Food and Resource Economis, University of Copenhagen, Rolighedsvej 25, 1958 Frederisksberg C, Denmark ZHEN LIU ��Department of Food and Resource Economis, University of Copenhagen, Rolighedsvej 25, 1958 Frederisksberg C, Denmark‡School of Business, Nanjing Normal University, No.1 Wenyuan Road, Nanjing 210046, P. R. China
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article WAGE DISCRIMINATION IN INDIA’S FORMAL AND INFORMAL LABOR MARKETS The study examines the extent of gender- and caste-based discrimination among the formally and informally employed in India using the National Sample Survey Office (NSSO) Employment-Unemployment Survey (EUS) data for the four major rounds from 1999–00 to 2011–12. Oaxaca-Blinder decomposition results corrected for self-selection show wage discrimination to be significantly higher in informal employment compared to the formally employed. Similarly, caste-based discrimination is found to be lower compared to gender-based discrimination. The quantile decomposition results show discrimination to vary across the quantiles. Our results highlight the need for better regulation of the informal labor market in India. Gender, caste, discrimination, decomposition, quantile, informal, regulation 01 2023 68 March The Singapore Economic Review 243 263 J31 J38 J71 J78 http://www.worldscientific.com/doi/abs/10.1142/S021759081950019X BHASKAR JYOTI NEOG bneog8@gmail.com Department of HSS, IIT Kharagpur, India BIMAL KISHORE SAHOO bimalkishore.sahoo@gmail.com Department of HSS, IIT Kharagpur, India
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article A NEW LOOK AT THE REMITTANCES-FDI- ENERGY-ENVIRONMENT NEXUS IN THE CASE OF SELECTED ASIAN NATIONS This study investigates the association between remittances, FDI, energy use, and CO2 emissions for a sample of the top six Asian nations receiving remittances, namely, China, India, the Philippines, Pakistan, Bangladesh, and Sri Lanka, during the 1982–2014 period. The results of employing an autoregressive distributed lag (ARDL)-bound technique signify that there is a stable long-run association among the stated variables. The empirical findings indicate that CO2 increases significantly with a rise in energy use in all sample nations in both the long and short-runs. Conversely, the association between CO2 emissions and remittances is found to be significantly positive for Sri Lanka, Pakistan, the Philippines, and Bangladesh in the long-run, positive for Pakistan, the Philippines, and Sri Lanka only in the short-term, and non-significant for India and China in both the long and short-runs. Furthermore, the empirical results illustrate that the inflow of FDI significantly increases CO2 emissions in the cases of China, Sri Lanka, and India in both the long and short-runs. While FDI inflow has no significant effect on CO2 emissions for the Philippines and Pakistan, it has a significant negative effect for Bangladesh in both the long and short-runs. Thus, the connection between remittances, FDI, and CO2 emissions varies significantly across the countries considered in our study. CO2, remittances, energy use, FDI, ARDL-bound test 01 2023 68 March The Singapore Economic Review 157 175 F24 P18 Q59 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500176 ZIA UR RAHMAN zrahman915@yahoo.com Research School for Southeast Asian Studies, Xiamen University, Fujian 361005, P. R. China HONGBO CAI ��Business School, Beijing Normal University, Beijing 100875, P. R. China MANZOOR AHMAD manzoorahmad94@163.com ��School of Economics, Department of Industrial Economics, Nanjing University, 210008, P. R. China
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article SEARCHING FOR THE OPTIMAL LEVEL: INFLATION AND PRICE VARIABILITY IN TURKEY This paper explores the relationship between inflation and relative price variability (RPV) in Turkey for the period 2004–2017 to shed further light on the issue with relatively recent data. For this purpose, we use monthly price data for 12 main item groups and 414 specific items thereof. Analyses show that RPV for the period of interest exhibits large fluctuations, being particularly salient in the categories of communications and food. Regarding the underlying functional form, semi-parametric estimation results indicate a U-shaped relationship between inflation and RPV, where the latter reaches its minimum at an inflation level close to 8%. Relative price variability, inflation, semi-parametric regression 01 2023 68 March The Singapore Economic Review 197 215 C32 O47 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500231 HATICE KARAHAN hkarahan@medipol.edu.tr Istanbul Medipol University, Istanbul, Turkey M. EGE YAZGAN ��Istanbul Bilgi University, Istanbul, Turkey
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article CHANGES OF ECONOMIC STRUCTURE, INTEREST GROUPS AND AGRICULTURAL-TRADE PROTECTION: THE CASE OF CHINA This paper seeks to explore the motivations behind agricultural trade-related support policies through extending the two-sector specific factor production model to three sectors to make the model more relevant for a one-party state such as China. This model suggests that the switch from taxing to subsidizing the agricultural sector depends not only on changes in the economy’s structure but, more critically, on the underlying political support from heterogeneous interest groups in the course of economic development. The equilibrium agricultural protection level is determined by equating the marginal political returns from supporting farmers with the marginal political costs from opposing groups (including manufacturers). Agricultural protection levels, three-sector specific factor model, political support model, labor migration, China 01 2023 68 March The Singapore Economic Review 119 140 Q17 Q18 D72 O38 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500310 WENSHOU YAN School of Business Administration, Zhongnan, University of Economics and Law, P. R. China KAIXING HUANG ��School of Economics, 94 Weijin Road, Nankai University, Tianjin, P. R. China
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article THE EFFECT OF REVENUE SHARES ON LOCAL GOVERNMENT SPENDING: EVIDENCE FROM PHILIPPINE PROVINCES Intergovernmental fiscal transfer (IFT) is one of the several sources of funds of sub-national governments. There are two general types of IFT — conditional and unconditional. In many developing economies including the Philippines, the usual existing IFT is a form of unconditional fiscal transfer called revenue shares. In the Philippines, this revenue-sharing scheme is called the internal revenue allotment (IRA). Empirical literature says that unconditional IFTs are the type of fiscal transfers with the least effect on local government spending. The literature posits that the reason for this is that local governments use these transfers to substitute for own-sourced revenues such as local taxes. This explanation was formalized through a framework presented in this paper. Using panel data from Philippine provinces for the years 2001 to 2015, this paper attempted to determine the effect of revenue shares, in the form of IRA, on local government expenditures. Using different econometric methodologies, this paper arrived at several conclusions. First, IRA has a strong positive effect on total local government spending with a marginal effect slightly greater than one — much higher than what comparable studies found using data from other countries. Secondly, the effect of IRA on local government expenditures is even stronger for provinces with relatively greater ability to generate its own funds. Next, IRA and other externally sourced revenues have much stronger marginal effects on local government spending than do own-sourced revenues. Finally, IRA has widely varying effects on different components of local government expenditures. Revenue shares, intergovernmental fiscal transfers, sub-national government spending, local government finance, The Philippines 01 2023 68 March The Singapore Economic Review 29 63 H71 H72 H75 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500206 TRISTAN CANARE tristan.canare@gmail.com Department of Economics, School of Social Sciences, Ateneo de Manila University, Quezon City, The Philippines
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article OWNERSHIP STRUCTURE, ACQUISITIONS AND EXECUTIVE COMPENSATION: EVIDENCE FROM PUBLICLY LISTED CHINESE COMPANIES Using panel data from China’s publicly listed companies (PLCs), this paper investigates the relationship between acquisitions and executive compensation. Empirical analysis based on panel regression reveals that acquisitions lead to a significant increase in executive compensation. Further evaluation, using disaggregated data, shows that acquisitions have a significant and positive impact of executive compensation of state-owned PLCs, but its effect on executive compensation paid by private-owned PLCs is statistically insignificant. The state-owned PLCs give less weight to financial performance compared with private-owned PLCs. State ownership and shareholding concentration increase the executive compensation, which gives rise to a principal–principal type problem. Moreover, using the generalized propensity score (GPS) methodology, which allows one to control for the presence of the selection bias, we find that the compensation-increasing effect of acquisitions for the top executive managers is higher than the effect for the top board directors. Finally, once the selection bias is taken into account, we find that acquisitions have almost no effect on the compensation of lower level executive managers and board directors, which suggests the presence of a principal–agent type problem in the two-tiered governance structure of the Chinese PLCs. Acquisition decisions, executive compensation, generalized propensity score, principal–agent problem, China 01 2023 68 March The Singapore Economic Review 285 315 C14 G34 J33 M12 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500113 LILI KANG lxk699@126.com Shanghai Lixin University of Accounting and Finance, Shanghai, P. R. China SAJID ANWAR Shanghai Lixin University of Accounting and Finance, Shanghai, P. R. China2University of the Sunshine Coast, Sippy Downs, Australia FEI PENG pengfei@lixin.edu.cn Shanghai Lixin University of Accounting and Finance, Shanghai, P. R. China
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article LOCATION CHOICE AND TAX RESPONSIVENESS OF FOREIGN MULTINATIONALS: EVIDENCE FROM ASEAN COUNTRIES This study uses a firm-level dataset to examine the impacts of taxation on multinationals’ decisions to set up new foreign subsidiaries in developing ASEAN countries. It finds that while taxes play a critical role in multinational enterprises’ location choice decision, there is an important heterogeneity in the tax responsiveness. First, the tax sensitivity for high-tech firms is significantly lower than that for low-tech firms. Second, having a prior presence in the respective host country is associated with substantially lower tax responsiveness. Finally, in accordance with international-tax-avoidance considerations, the tax responsiveness is significantly diminished for affiliates with a connection to tax-haven countries. Tax incentive, FDI, multinational firms, developing countries 01 2023 68 March The Singapore Economic Review 217 242 H25 H87 F21 F23 C25 http://www.worldscientific.com/doi/abs/10.1142/S021759082250062X ATHIPHAT MUTHITACHAROEN athiphat.m@chula.ac.th Faculty of Economics, Chulalongkorn University, 254 Phyathai Road, Patumwan, Bangkok 10400, Thailand
oai:RePEc:wsi:serxxx:v:64:y:2019:i:05:n:s02175908175000602020-07-21RePEc:wsi:serxxx
article CONSPICUOUS CONSUMPTION OF ONLINE SOCIAL NETWORKING DEVICES AND SUBJECTIVE WELL-BEING OF BANGKOKIANS Empirical evidence of the conspicuous consumption theory is limited and ambiguous. It has been shown, however, that the consumption of life experiences makes people happier than the consumption of material goods. Yet, these studies typically conduct dichotomous comparisons and do not distinguish between conspicuous and inconspicuous consumption. Conspicuous and inconspicuous online social networking devices (OSND) are experiential goods and as such fall between life experiences and material goods. The objective of this paper, thus, is to examine the relationship between conspicuous consumption of OSND and subjective well-being, which is proxied by happiness and mental health. Cross-sectional data (n=500) were collected in 2015 using probability sampling. The ordered logistic regression results reveal that conspicuous consumption of OSND is negatively related with happiness and mental health in all regressions as hypothesized, while the coefficient on inconspicuous consumption of OSND is positive. Also, the number of virtual friends is negatively associated with happiness. Among the control variables, it is noteworthy that respondents with high blood pressure, used to capture physical health, have lower happiness and mental health, while respondents with higher education and high own monthly income exhibit higher happiness and mental health. Respondents, whose personality can best be characterized as “agreeable”, have lower happiness and mental health which is in line with the old saying that “nice guys finish last”. Conspicuous consumption, online social networking devices, happiness, mental health, social comparison 05 2019 64 December The Singapore Economic Review 1371 1395 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500060 CHANTAL HERBERHOLZ Faculty of Economics, Chulalongkorn University, 254 Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand NATTAYA PRAPAIPANICH nattayapr@g.swu.ac.th School of Economics and Public Policy, Srinakharinwirot University, Bangkok, Thailand
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article LONG RANGE DEPENDENCE AND STRUCTURAL BREAKS IN THE GOLD MARKETS The price of gold and its determining factors have been studied extensively in the literature. However, there is a lack of research on structural break in the long memory of the gold markets. This paper examines the long memory properties of gold prices. In particular, it attempts to test the stability of the long range dependence of gold returns and volatility. The results suggest that long memory exists in gold returns and volatility, and that the volatility of daily gold futures returns can be characterized by a hyperbolic decaying long memory process. Three episodes of structural breaks are found. Long memory, modified R/S statistic, FIGARCH, spot gold, gold futures 02 2020 65 March The Singapore Economic Review 257 273 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500096 TERENCE TAI LEUNG CHONG Department of Economics and Lau Chor Tak Institute of Global Economics and Finance, The Chinese University of Hong Kong, The People’s Republic of China2Department of International Economics and Trade, Nanjing University, P. R. China CHENXI LU luchenxi@chinamoney.com.cn Department of Economics, The Chinese University of Hong Kong, Shatin, NT, Hong Kong, SAR, The People’s Republic of China WING HONG CHAN wchan@wlu.ca Lazaridis School of Business and Economics, Wilfrid Laurier University, Canada
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article FISCAL POLICY, INSTITUTIONS AND GROWTH: NEW INSIGHTS The paper attempts to analyze the impact of fiscal policy on economic growth while considering level of development and controlling for state of institutions. We extend the Solow growth model by incorporating fiscal policy and institutions through using total factor productivity. Our empirical analysis includes a panel of 56 countries. The empirics demonstrate that impact of fiscal policy on growth is statistically insignificant in the full sample. However, splitting the sample into developed and developing economies, positive association with economic growth in developed economies and negative association in developing economies observed. Our findings thus inform that fiscal policy contributes positively to growth only in developed economies. The reason for this seems to be an enabling institutional environment in developed economies. This kind of enabling institutional environment allows fiscal policy to play positive role in developed economies and absence of such environment contributes to the negative impact of fiscal policy in developing economies. Fiscal policy, Institutions, Economic growth, Stages of development 05 2019 64 December The Singapore Economic Review 1251 1278 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500296 SAIMA NAWAZ Department of Management Sciences, COMSATS Institute of Information Technology, Park Road, Tarlai Kalan, Islamabad 4550, Pakistan M. IDREES KHAWAJA idreespide1@gmail.com Pakistan Institute of Development Economics (PIDE), Quaid-i-Azam University Campus, Islamabad, Pakistan
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article FINANCING FOR INNOVATION OF CHINESE LISTED FIRMS Using a panel data of listed companies, this paper studies how internal financing and external financing affect the innovative investment of Chinese industrial enterprises. It finds that internal fund is the primary source of financing for the innovative investment undertaken by Chinese nonfinancial firms and the role of external financing varies in the ownership structure of the firm. We find that for the centrally controlled State-Owned Enterprises (SOEs), bank loans is an important secondary source of financing for innovation, while for both local SOEs and listed non-SOEs bank loans are not important. External smoothing mechanisms also vary across types of ownership structure. We find that central SOEs mainly use bank loans to buffer against negative shocks to internal funds, while both local SOEs and listed non-SOEs use equity financing from the stock market for the same purpose. Our study shows that it is the accumulation of internal fund, rather than the development of formal financial sector, that contributes to the rapid growth of total innovative investment of Chinese firms. Innovation financing, internal fund, debt financing, equity financing, government subsidy 04 2020 65 June The Singapore Economic Review 1007 1032 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500072 JU XIAOSHENG School of Humanity and Social Science, National University of Defense Technology, School of Government Sun Yat-Sen University, Furong Road 207, Changsha, P. R. China CHEN JIAO cjasd@163.com #x2020;Business School, Hunan University, Hunan Sheng 410006, P. R. China TAN QI tanqi84@163.com School of Humanity and Social Science, National University of Defense Technology, School of Government Sun Yat-Sen University, Furong Road 207, Changsha, P. R. China
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article FUNDING LIQUIDITY RISK, SYNDICATION BEHAVIOR AND THE RISK CULTURE OF THE AUSTRALIAN VENTURE CAPITAL INDUSTRY Venture capital (VC) is usually invested in high risk technology companies at their early stages of development. In response to the industry risk environment, the VC fund managers have developed a set of risk management practices appropriate for the industry which include investment syndication. Furthermore, the VC funds are supplied by individual and institutional investors with different risk profiles and investment focus, usually in finite amounts and for a limited period of time. The funding agreement between the VC firms and the fund investors combined with the limited amount and time can lead to additional funding liquidity risks as the VC funds are invested in the portfolio companies. In this paper, we develop a simple two period model from a VC firm’s perspective with funding liquidity constraints to demonstrate how funding liquidity risk can influence syndication decisions. We subsequently analyze the implication of the model, derive a set of predictions and validate them with VC investment data from Australia. The analysis shows that syndication has both instrumental function in risk management and behavioral implications on risk culture essential for addressing the emerging frontiers of sustainability risks. Venture capital, syndication decision, funding liquidity, risk culture and ESG risk 05 2019 64 December The Singapore Economic Review 1279 1297 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500405 ASIF IQBAL SIDDIQUI Curtin University Sustainability Policy Institute, Building 209 (Lvl 1), Kent St, Bentley WA 6102 Perth, Australia DORA MARINOVA d.marinova@curtin.edu.au Curtin University Sustainability Policy Institute, Building 209 (Lvl 1), Kent St, Bentley WA 6102 Perth, Australia
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article DO CIRCUIT BREAKERS IMPEDE TRADING BEHAVIOR? A STUDY IN CHINESE FINANCIAL MARKET As the most influential regulation in 2016, China launched circuit breakers in the financial markets. However, the circuit breaker mechanism was implemented for only four days and then suspended. Many criticisms then stated that circuit breakers impeded trading behavior in Chinese financial markets. This study explores this short-life circuit breaker mechanism in China, and examines whether circuit breakers impede trading behavior in Chinese financial markets as many criticisms stated. We use an intraday dataset and investigate the circuit breakers. Contrary to those criticisms, we find that circuit breakers are not easily reachable and have no “magnet effect” between two thresholds of breakers. We also find that without protection of circuit breakers, potential large market fluctuations will have negative impacts on individual stocks’ liquidity and value. As the major contribution, our study indicates that Chinese financial markets still need a circuit breaker mechanism to protect investors’ benefits and maintain the market liquidity and stability. Circuit breakers, magnet effect, Chinese financial market, high-frequency data 05 2019 64 December The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500565 KUN LI kunli@bnu.edu.cn Business School, Beijing Normal University, Houzhulou Building, 19 Xinjiekouwai Street, Beijing 100875, P. R. China
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article AN INVESTIGATION INTO THE DYNAMIC RELATIONSHIP BETWEEN CPI AND PPI: EVIDENCE FROM THE UK, FRANCE AND GERMANY This paper examines the dynamic relationship between the consumer price index (CPI) and the producer price index (PPI) in the UK, France and Germany from 1997 to 2013. We employ the momentum-threshold autoregressive (MTAR) cointegration model for empirical analysis. The results show that the CPI and the PPI are cointegrated with bi-directional long-run Granger causality between CPI and PPI, signifying the existence of both demand-pull and the cost-push nature of inflation. The estimates of threshold vector error correction models (TVECMs) indicate asymmetric adjustments to equilibrium, where upward adjustments are statistically significant but downward adjustments are sluggish and insignificant. Moreover, we generate the unconditional half-life estimates as a measure of persistence, which reveal robust evidence of complex non-linearities in the adjustment process. Our overall results provide valuable information for policymakers to formulate inflation-control policies and optimal policy horizons under a non-linear framework. Threshold cointegration, MTAR adjustment, Granger causality, mean bias, unconditional half-life 05 2019 64 December The Singapore Economic Review 1081 1100 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500261 KAI-YIN WOO Department of Economics and Finance, Hong Kong Shue Yan University, 10 Wai Tsui Crescent, Braemar Hill, North Point, Hong Kong SAR SHU-KAM LEE sklee@hksyu.edu Department of Economics and Finance, Hong Kong Shue Yan University, 10 Wai Tsui Crescent, Braemar Hill, North Point, Hong Kong SAR CHO-YIU JOE NG joecyng-c@my.cityu.edu.hk #x2020;Department of Economics and Finance, City University of Hong Kong, Tat Chee Avenue, Kowloon, Hong Kong SAR
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article CAN BRICS’S CURRENCY BE A HEDGE OR A SAFE HAVEN FOR ENERGY PORTFOLIO? AN EVIDENCE FROM VINE COPULA APPROACH In this paper, we examine the role of Brazil, Russia, India, China and South Africa’s (BRICS) currency in energy market by using vine copula method. The value-at-risk (VaR) and expected shortfall of two portfolios are calculated. One is a benchmark portfolio which is consisted of only energy prices, the other is a portfolio which adding the BRICS’s exchange rate into the benchmark portfolio. The data period is from 24 August 2010 to 29 November 2019. Our results show the BRICS’s currency can reduce the risk in energy investment. BRICS, crude oil, natural gas, dependence structure, risk 04 2020 65 June The Singapore Economic Review 805 836 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500174 YIJIN HE heheyijin@yahoo.co.jp Graduate School of Economics, Kobe University, 2-1, Rokkodai, Nada-Ku, Kobe 657-8501, Japan TADAHIRO NAKAJIMA Graduate School of Economics, Kobe University, 2-1, Rokkodai, Nada-Ku, Kobe 657-8501, Japan†The Kansai Electric Power Company, Incorporated, 6-16, Nakanoshima 3-chome, Kita-Ku Osaka 530-8270, Japan SHIGEYUKI HAMORI Graduate School of Economics, Kobe University, 2-1, Rokkodai, Nada-Ku, Kobe 657-8501, Japan
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article BOOK REVIEW — India’s Recent Foreign Direct Investment: An Assessment 05 2019 64 December The Singapore Economic Review 1 2 http://www.worldscientific.com/doi/abs/10.1142/S0217590819800018 Bhanoji Rao
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article DOES INNOVATION ENHANCE PRODUCTIVITY IN CASE OF SELECTED INDIAN MANUFACTURING FIRMS? This study examines the effects of innovation on productivity of Indian Manufacturing firms. Despite the voluminous literature on this area, the demanding line, i.e., various types of innovation effects on productivity growth, received little attention particularly in the Indian context; hence, our study fills the gap by employing firm-level data from Hyderabad and Bengaluru cities of India from 2011 to 2013. The estimated results confirm the significant impact of innovation on productivity upsurge in Indian manufacturing firms. Further, we investigate the spatial aspects of innovation considering the two cities separately. However, such city-based analysis does not produce any different findings. Innovation, total factor productivity, Leveinsohn–Petrin approach, panel data model, Indian manufacturing 05 2019 64 December The Singapore Economic Review 1225 1250 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500340 SEENAIAH KALE seenaiah@isid.org.in Institute for Studies in Industrial Development, 4, Institutional Area, Vasant Kunj, New Delhi 110 070, India BADRI NARAYAN RATH Department of Liberal Arts, Indian Institute of Technology Hyderabad, India
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article THE STATUS QUO IN DISCRETE CHOICE EXPERIMENTS: IS IT RELEVANT? An issue in environmental economics is how respondents make choices in discrete choice experiments (DCEs), and whether different strategies impact on the reliability of willingness-to-pay (WTP) results. Do individuals make choices with reference to their status quo (SQ) position, or can they make simulated market choices amongst only hypothetical scenarios? This study uses a split sample to test whether the inclusion or exclusion of the SQ on a choice card in DCEs affects the WTP estimates, based on visitors’ preferences for tourist facilities at Kenyir Lake, Malaysia. The results indicated little difference between both the samples in terms of goodness-of-fit, size and significance of the attribute coefficients, and WTP estimates for the Conditional Logit (CL) and Mixed Logit (MXL) models. Status quo, discrete choice experiments, willingness-to-pay, conditional logit model, mixed logit model 02 2020 65 March The Singapore Economic Review 507 532 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500036 WAN NORHIDAYAH W MOHAMAD Department of Economics, Faculty of Economics and Management, Universiti Putra Malaysia, 43400, Serdang, Selangor, Malaysia KEN WILLIS ken.willis@newcastle.ac.uk School of Architecture, Planning and Landscape, Newcastle University, Newcastle upon Tyne, NE1 7RU, United Kingdom NEIL POWE n.a.powe@newcastle.ac.uk School of Architecture, Planning and Landscape, Newcastle University, Newcastle upon Tyne, NE1 7RU, United Kingdom
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article CORRUPTION AND INNOVATION: LINEAR AND NONLINEAR INVESTIGATIONS OF OECD COUNTRIES Employing annual data over the period 1996–2013 for 29 OECD countries, this paper explores the impact of corruption on domestic innovative activity, measured by the number of patent and trademark applications, via a linear panel fixed effect model and a nonlinear panel smooth transition regression with all lagged explanatory variables as instrumental variables and under the consideration of potential endogeneity biases. The results indicate several important findings. First, there exists a strong threshold effect between the control of corruption and levels of innovative activity across nations. Second, we note that corruption only has a substantial positive impact on innovation when it is over the threshold level, but not when a country has a seriously corrupt government with low bureaucratic quality, no matter for patent or trademark applications. Hence, heterogeneous beliefs about low transition speed show that OECD countries may not take actions instantly and identically to pursue better bureaucratic quality. Finally, we discover that an improvement over corruption presents greater impacts on patent applications than on trademark applications. Taken together, we confirm that corruption plays a fundamental role in determining innovation activities in OECD countries, offering meaningful policy implications for those policymakers and industries in accordance with our findings. Innovation, patent, trademark, corruption, OECD countries 01 2020 65 March The Singapore Economic Review 103 129 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500273 JUN WEN wjun1978@163.com School of Economics and Finance, Xi’an Jiaotong University, Shaanxi, P. R. China MINGBO ZHENG mingbo1992@126.com #x2020;Shih Chien University, Kaohsiung, Taiwan GEN-FU FENG fgf@mail.xjtu.edu.cn School of Economics and Finance, Xi’an Jiaotong University, Shaanxi, P. R. China SUNWU WINFRED CHEN winfred@gz.usc.edu.cn #x2020;Shih Chien University, Kaohsiung, Taiwan CHUN-PING CHANG #x2020;Shih Chien University, Kaohsiung, Taiwan
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article EVALUATION OF COMPLEMENTARITY EFFECT OF INNOVATION POLICIES: VENTURE CERTIFICATION AND INNO-BIZ CERTIFICATION IN KOREA In this paper, we analyze effects of overlapping policy support. Specifically, we examine two Korean policies related to innovative SMEs, Venture certification and Inno-Biz certification, which have similar goals, targets and benefits. Methodologically, we use the difference in difference method with the propensity score matching method to reduce the selection bias that can occur in policy impact assessment studies. Our results show that in this case of overlapping homogeneous policies, Venture certification and Inno-Biz certification, the complementarity effect is negative. That is, simultaneously supporting these two policies produces no synergy. This result implies that rather than offering multiple supports through double certification of a single firm, offering Inno-Bizcertification to non-supported firms could better increase performance. In other words, policy makers have to consider overlapping policy support before implementing any new policies, and they should not support homogeneous policies for a single group of firms. Government support, certification policy, complementarity effect, selection bias, propensity score matching 02 2020 65 March The Singapore Economic Review 385 402 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500430 SEUNGHWAN OH ohsh@stepi.re.kr Science and Technology Policy Institute (STEPI), 370, Sicheong-daero, Sejong-si, 30147, Republic of Korea DONGNYOK SHIM #x2020;Technology Management, Economics and Policy Program (TEMEP), Institute of Engineering Research, Seoul National University, 1, Gwanak-ro, Gwanak-gu, Seoul, 08826, Republic of Korea DAEHO LEE daeho.lee@skku.edu #x2021;Department of Interaction Science, Sungkyunkwan University, 25-2, Sungkyunkwan-ro, Jongno-gu, Seoul, 03063, Republic of Korea
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article AN EARLY WARNING OF AN IMPENDING CURRENCY CRISIS IN CHINA Are there early warnings of an impending financial crisis in China? Our analysis using the Kaminsky–Lizondo–Reinhart (KLR) signal approach reveals that the probability of China having a currency crisis in the 24 months to October 2017 could be increased assuming no remedial action by the authorities to avert an impending crisis. Notwithstanding the above, our analysis shows that nine out of 15 economic indicators are effective in predicting a currency crisis. Loss function of policymakers and evaluation of usefulness are then employed to verify their validity. The results show that bank deposits and M2/international reserves are the most powerful indicators. KLR approach, currency crisis, loss function, usefulness evaluation, China 05 2019 64 December The Singapore Economic Review 1101 1125 http://www.worldscientific.com/doi/abs/10.1142/S021759081850025X RUOXI ZHANG School of Finance, Academic of Financial Risk Research, Capital University of Economics and Business, 121 Zhangjialukou, Beijing 100070, P. R. China XUE LI snowlovehome@163.com School of Finance, Academic of Financial Risk Research, Capital University of Economics and Business, 121 Zhangjialukou, Beijing 100070, P. R. China SATISH CHAND s.chand@adfa.edu.au #x2020;School of Business, University of New South Wales, Canberra, ACT, Australia
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article FRAGMENTATION, SKILL FORMATION AND INTERNATIONAL CAPITAL MOBILITY During the last few decades an important feature of the on-going process of globalization is production fragmentation. Owing to the growing importance of international fragmentation of production processes the composition of international trade has indeed altered in recent years. Here we want to focus on production fragmentation which actually implies that the requirement for the intermediate goods can be met by producing it domestically or it can be imported from abroad. In this paper we want to examine the probable causes for a developing economy to switchover from a regime of no fragmentation to fragmentation. Here the impact of such a regime change has also been examined on wage inequality as well as on the incidence of skill formation within the economy. Moreover, we have examined here the impact of perfect international capital mobility on the economy in the context of regime change between fragmentation and no fragmentation. Production fragmentation, skilled-unskilled wage gap, skill formation, liberalization, international capital mobility 02 2020 65 March The Singapore Economic Review 335 350 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500023 SUDESHNA MITRA Department of Economics, St. Paul’s C. M. College, 33/1, Raja Rammohan Roy Sarani, Kolkata-09, India KAUSIK GUPTA kausik2k1@rediffmail.com Department of Economics, University of Calcutta, 56A B. T. Road, Kolkata-700050, India
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article BEQUEST AND MORAL HAZARD IN FAMILY Observed bequest patterns of widely diverse societies are polarized into unigeniture (giving all to one child) and equigeniture (dividing bequests equally). Over time, inheritance custom evolves from unigeniture to equigeniture. To explain these two observations, this paper proposes a model of bequest behavior that a parent cares welfare of his children while he wants them to expend costly and unverifiable efforts for family. All the stable equilibrium inheritance customs comprise unigeniture and equigeniture only, being consistent with the observed polarization. Moreover, a rise in the productivity of efforts for family can cause the evolution to equigeniture from unigeniture. Unigeniture, equigeniture, bequest motive 02 2020 65 March The Singapore Economic Review 533 550 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500127 INSOOK LEE islee@phbs.pku.edu.cn Peking University HSBC Business School, University Town, Nanshan District, Shenzhen 518055, P. R. China
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article ASYMMETRIC EFFECTS OF EXCHANGE RATE VOLATILITY ON BILATERAL TRADE BETWEEN TAIWAN AND INDONESIA This paper investigates the effect of exchange rate volatility on bilateral trade between Taiwan and Indonesia via 19 export and import industries. Considering the existence of an asymmetric effect of exchange rate volatility on trade, we employ an asymmetric ARDL model and arrive at the following main results. First, the long-run asymmetric effect of exchange rate volatility shows far higher impacts on Taiwan’s exports to Indonesia than on Taiwan’s imports from Indonesia. Second, the short-run asymmetric effect of exchange rate volatility causes unstable changes on the trade amounts for most of Taiwan’s export and import industries with Indonesia. Exchange rate volatility, asymmetrical ARDL, trade, Taiwan, Indonesia 04 2020 65 June The Singapore Economic Review 857 888 http://www.worldscientific.com/doi/abs/10.1142/S021759082050006X MEI-SE CHIEN cms@nkust.edu.tw Department of Finance and Information, National Kaohsiung University of Science and Technology, 415 Chien Kung Road, Kaohsiung 807, Taiwan NUR SETYOWATI #x2020;Department of International Business, National Kaohsiung University of Science and Technology, Taiwan‡Accounting Department, Politeknik Negeri Semarang, Indonesia CHIH-YANG CHENG chihyang@g-mail.nsysu.edu.tw #xA7;Department of Finance, National Sun Yat-Sen University, Taiwan
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article STUDY ON CHINA’S ECONOMIC DEVELOPMENT FROM THE PERSPECTIVE OF STRONG SUSTAINABILITY Theoretical researchers and policy makers have been using both traditional production factors and relatively new production factors to explain the different growth rates in different countries and regions. However, as pollution becomes more serious, the ecological environment gradually becomes an important part of the national (regional) development strategy. Few scholars have laid their hands on energy and environmental factors in the study of China’s economic growth. On the contrary, they have frequently considered physical and human capital accumulation as the main sources of China’s economic growth. Thus, strong sustainability should attract more attention from researchers. This article attempts to shed light on the sources of China’s economy from the perspective of strong sustainability. Employing a Cobb–Douglas production function, this paper introduces environment pollution, as a key natural capital, and energy consumption into the economic accounting framework. We also introduce government intervention, financial structure, industrial structure and degree of openness into the framework of total factor productivity to examine the effectiveness of the Chinese government’s direct and indirect participation in the markets. Then, we use the long-term growth accounting equation of China to decompose its economic growth and to analyze the decomposition results dynamically. In addition, this paper analyzes the short-term change of China’s economic growth by using a VAR model. The results revealed three facts. First, we find an inverted U-shaped relationship between the degree of openness and the industrial structure and their marginal growth effects, a U-shaped relationship between the financial structure and its marginal growth effect and a negative relationship between the government intervention and gross domestic product growth. Secondly, China’s economic development approach was still extensive and unsustainable, and it should follow a model that relies more on total factor productivity and relies less on ecological factors. China’s economic growth mainly depended on physical capital and energy consumption, and environment pollution was also a necessary byproduct of economic growth, however, the contribution of human capital and total factor productivity were small. Last but not the least, in the short term, the total factor productivity was an important source of China’s economic growth. Total factor productivity, economic growth, ecological loss, strong sustainability 01 2020 65 March The Singapore Economic Review 161 192 http://www.worldscientific.com/doi/abs/10.1142/S021759081746002X WANPING YANG wanpingyang@mail.xjtu.edu.cn School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710061, P. R. China JINKAI ZHAO School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710061, P. R. China
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article THE IMPACTS OF BIASED RESOURCE ALLOCATION ON THE EFFECTIVENESS OF OFFICIAL DEVELOPMENT ASSISTANCE Many developing countries are receiving official development assistance (ODA). Whether ODA is beneficial or harmful to the receiving country is controversial in the literature. This paper analyzes this issue from a new angle by adopting the framework of competitiveness which allows us to link resource allocation with economic growth. Under this framework, we point out that the mechanism of resource allocation influences the effectiveness of ODA on economic growth. By applying data envelopment analysis (DEA) to competitiveness, we capture the effects of inefficient and biased allocation of resources on ODA. The data confirm the co-existence of positive and negative impacts of ODA. Finally, we conclude that current ODA is not efficient in helping most of the receiving countries. Official development assistance, data envelopment analysis, endowment effect, misallocation effect, biased effect 01 2020 65 March The Singapore Economic Review 239 256 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500285 SUNG-KO LI Department of Economics, Hong Kong Baptist University, The Wing Lung Bank Building for Business Studies, 34 Renfrew Road, Kowloon Tong, Kowloon, Hong Kong, P. R. China CHUN-KEI TSANG Department of Economics, Hong Kong Baptist University, Hong Kong, P. R. China3Business, Economic and Public Policy Research Centre, Hong Kong Shue Yan University, Hong Kong, P. R. China
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article A FRAMEWORK FOR ANALYZING THE IMPACT OF FISCAL DECENTRALIZATION ON MACROECONOMIC PERFORMANCE, GOVERNANCE AND ECONOMIC GROWTH This study analyzes the direct impact of fiscal decentralization on economic growth and broadens the scope of assessment by examining the indirect impact of fiscal decentralization on economic growth via its impact on macroeconomic performance and quality of governance institutions. The study uses a panel data set of 53 developed and developing countries over the period of 1996–2014. The empirical findings show that the indirect impact, rather than the direct impact of fiscal decentralization on growth, that is, the effect of decentralization on economic growth through its effect on macroeconomic performance and quality of governance institutions significantly matters for growth. Further, the results show that fiscal decentralization is growth enhancing when supported by stable macroeconomic performance in terms of stability in prices, budget deficit and exchange rate. The effect of fiscal decentralization on per capita gross domestic product (GDP) growth rate is positive when it is complemented by sound institutional structure in terms of rule of law, low corruption in government institutions, high-bureaucratic quality and democratic accountability. All these conclusions hold for developed as well as for developing countries. Fiscal decentralization, growth, macroeconomic performance, governance, public policy 01 2020 65 March The Singapore Economic Review 3 39 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500194 UMAIMA ARIF Economics Department, Quaid-i-Azam University Islamabad, Islamabad, Pakistan EATZAZ AHMAD eatzaz@qau.edu.pk Economics Department, Quaid-i-Azam University Islamabad, Islamabad, Pakistan
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article THE ROLE OF EDUCATED LEADERS IN ECONOMIC GROWTH AND DEVELOPMENT: EVIDENCE FROM CENTRAL AFRICAN REPUBLIC AND SINGAPORE This paper postulates that highly educated leaders matter in economic growth and development and that this is one of the fundamental causes of the differences in income between countries. To verify this assertion, we examine Central African Republic and Singapore within the neoclassical growth model that incorporates educational attainments of leaders as the functionally relevant explanatory variable. We found the mean years of schooling of educated leaders to be statistically and significantly different in both countries, but more importantly, educational attainments of leaders have a positive and statistically significant effect on economic growth in Singapore, but negative in Central African Republic. Educated leaders, economic growth, development, Central African Republic, Singapore, policy choices 01 2020 65 March The Singapore Economic Review 81 102 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500364 OLUWOLE OWOYE Department of Social Sciences/Economics, Western Connecticut State University, Danbury, CT 06810, USA OLUGBENGA A. ONAFOWORA onafowor@susqu.edu Department of Economics, Susquehanna University, Selinsgrove, PA 17870, USA
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article THE ENVIRONMENTAL KUZNETS CURVE FOR CARBON DIOXIDE EMISSIONS AND TRADE ON BELT AND ROAD INITIATIVE COUNTRIES: A SPATIAL PANEL DATA APPROACH This paper empirically examines the nexus between CO2 emissions and international trade for the 65 Belt and Road Initiative (BRI) economies over the period of 1985–2017. We first consider the cross-sectional dependence and slope homogeneity test in the panel, and we observed from the results that there is substantial heterogeneity and cross-sectional dependence. We employed the results of the common correlated effects mean group (CCEMG) estimator and determined that for all 65 BRI economies, foreign direct investment inflow, gross domestic product (GDP) squared and urbanization had a positive and significant impact on carbon emissions (CO2). Moreover, this study found that foreign direct investment inflow led to an increase in carbon emissions in BRI countries across South Asia, Southeast Asia, East Asia and Europe. Finally, on the basis of the panel causality test, we found evidence of various causality associations among the selected variables across the regions. These findings are significant for the related policymakers in BRI countries, as they can assist in developing appropriate carbon emission, trade and energy policies with the goal of reducing carbon emissions. CO2 emissions and international trade, FDI, EKC, environmental impact, Belt and Road Initiative 04 2020 65 June The Singapore Economic Review 1099 1126 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500255 YASIR KHAN School of Economics & Management, Southeast University, 211198 Nanjing, P. R. China QIU BIN qiubin@seu.edu.cn School of Economics & Management, Southeast University, 211198 Nanjing, P. R. China
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article DOES GOLD INVESTMENT OFFER PROTECTION AGAINST STOCK MARKET LOSSES? EVIDENCE FROM FIVE COUNTRIES This study aims to analyze the characteristics of gold as a diversifier, a hedge or a safe haven against the stock market collapse in five countries. We propose the standard and quantile techniques in the volatility models, with the time-varying conditional variance of the regression residuals based on the TGARCH specifications. Gold exhibits considerable evidence of the strong hedge in India and the US and diversified role in China. With regards to its role as a safe haven, gold retains its status as a key investment particularly in a country where gold has a preeminent cultural role, i.e., India, as well as in the US and the UK. On the contrary, gold only plays a minor role in emerging markets like in Malaysia. Therefore, investors in India and the US can use gold to protect against losses in the stock market at all times, whereas in the UK, gold is only viewed as a profitable asset to own during the stock market collapse. Contrariwise, Chinese investors should hold a well-diversified portfolio to earn sustainable returns and offer protection against the stock market collapse. We conclude that the recent worldwide financial crises have increased the investment demand for gold over the last 17 years at least. Gold, diversifier, hedge, safe haven, financial turmoil 02 2020 65 March The Singapore Economic Review 275 301 http://www.worldscientific.com/doi/abs/10.1142/S021759081950036X MOHD FAHMI GHAZALI fahmi@ums.edu.my Labuan Faculty of International Finance, Universiti Malaysia Sabah, 87000 Federal Territory of Labuan, Malaysia HOOI HOOI LEAN #x2020;Economics Program, School of Social Sciences, Universiti Sains Malaysia, 11800 Penang, Malaysia ZAKARIA BAHARI bzak@usm.my #x2021;Centre for Islamic Development Management (ISDEV), Universiti Sains Malaysia, Malaysia
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article THE INFLUENCE OF RELIGION AND SOCIAL INEQUALITY ON FINANCIAL INCLUSION We examined the influence of religious and social inequality factors on financial inclusion based on the fact that Muslim countries mostly have the lower level of financial inclusion around the globe. To do that, first, we calculated the financial inclusion indices (FIIs) of 152 countries including 48 OIC countries. Then, we examined the effect of religious and social inequality factors on financial inclusion using ordinary least square (OLS). Subsequently, we examined the Moran’s-I test in the OLS models and estimated spatial autocorrelation (SAR) models and spatial error model (SEM) in order to include the spatial correlation effect on the estimate models. Through these estimations, we found that the religious factors, such as whether OIC or non-OIC, religious diversity and Muslim population, have obvious effects on determination of financial inclusion. In addition, we also verified social inequality factors, such as gender inequality, education level and social opportunity level, work as determinants of financial inclusion. Moreover, we found the evidence that financial inclusion itself and unknown factors of neighbor countries have effects on financial inclusion by identifying the spatial effects of analysis models. Financial inclusion index, religious factors, social inequality factors, spatial autoregressive model, spatial error model 01 2020 65 March The Singapore Economic Review 193 216 http://www.worldscientific.com/doi/abs/10.1142/S0217590817460031 DAI-WON KIM dw2613@gmail.com Incheon Metropolitan City Development Corporation, 42, Inju-daero 914 beon-gil, Nandong-gu, Incheon, 21591, South Korea JUNG-SUK YU jsyu@dankook.ac.kr #x2020;School of Urban Planning & Real Estate Studies, College of Social Science, Dankook University, 152, Jukjeon-ro, Suji-gu, Yongin-si, Gyeonggi-do, 16890, South Korea M. KABIR HASSAN #x2021;Department of Economics and Finance, College of Business Administration, University of New Orleans, LA 70148, USA
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article BANK DIVERSIFICATION, COMPETITION AND LIQUIDITY CREATION: EVIDENCE FROM MALAYSIAN BANKS This paper examines the effect of bank competition on bank liquidity creation and explores whether the effect varies by the diversification level of banks, using a sample of Malaysian banks from 2001 to 2017. Our preliminary analysis shows that the aggregate, on- and off-balance sheet liquidity creation of banks decreases when their market power drops, suggesting an adverse effect of bank competition on bank liquidity creation. However, the adverse effect diminishes or disappears for highly diversified banks, and this result holds for both asset and income diversification. The results identify diversification as a “buffer” through which banks could insure their liquidity creation business against competition by generating new income sources for the banks and enhancing their tolerance to intermediation margin compression. Bank liquidity creation, competition, market power, asset diversification, income diversification 04 2020 65 June The Singapore Economic Review 1127 1156 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500103 MOAU YONG TOH tmy@cczu.edu.cn Department of Finance, Business School, Changzhou University, 21 Gehu Middle Road, Wujin, Changzhou, Jiangsu, P. R. China CHRISTOPHER GAN Christopher.Gan@lincoln.ac.nz #x2020;Department of Financial and Business Systems, Faculty of Agribusiness and Commerce, Lincoln University, Lincoln 7647, Christchurch, New Zealand ZHAOHUA LI #x2020;Department of Financial and Business Systems, Faculty of Agribusiness and Commerce, Lincoln University, Lincoln 7647, Christchurch, New Zealand
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article DEMOCRACY AND GROWTH: A DYNAMIC PANEL DATA STUDY In this paper, we investigate the idea whether democracy has a direct effect on economic growth. We use a system GMM framework that allows us to model the dynamic aspects of the growth process and control for the endogenous nature of many explanatory variables. In contrast to the growth effects of institutions, regime stability, openness, geography and macro-economic policy variables, we find that measures of democracy matter little, if at all, for the economic growth process. Democracy, growth, institutions, openness, dynamic panel 01 2020 65 March The Singapore Economic Review 41 80 http://www.worldscientific.com/doi/abs/10.1142/S0217590817470075 JEFFRY A. JACOB j-jacob@bethel.edu Department of Business and Economics, Bethel University, 3900 Bethel Dr., St. Paul, MN 55112, USA THOMAS OSANG Department of Economics, Southern Methodist University, 3300 Dyer St., Dallas, TX 75275, USA
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article DETERMINANTS OF FERTILITY IN THE LONG RUN This study investigates the determinants of fertility using a panel data set for 43 countries from 1900 to 2010 at five-year intervals. The regression results show that fertility increases with infant mortality and national disasters and decreases with total years of educational attainment and political development. Fertility rates fall initially and then rise with an increase in income. Average years of schooling of females has a significantly negative effect on fertility rates, whereas that of males are statistically insignificant. A woman’s educational attainment at the primary and secondary levels has a pronounced negative effect on fertility rates. On the contrary, an increase in a woman’s tertiary educational attainment, with the level of a man’s remaining constant, tends to raise fertility rates, particularly in advanced countries, indicating that highly educated women can have a better environment for childrearing in a society with greater gender equality. Educational attainment, female education, fertility, natural disaster, gender inequality 04 2020 65 June The Singapore Economic Review 781 804 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500528 JONG-WHA LEE Economics Department, Korea University, 145 Anam-ro, Seongbuk-gu, Seoul 02841, Korea2Centre for Applied Macroeconomic Analysis, Australian National University, Australia
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article FINANCIAL STABILITY AND THE ROLE OF ECONOMIC AND FINANCIAL INTEGRATION IN SOUTH ASIA: EVIDENCE FROM TIME-SERIES DATA Using the aggregate financial stability index (AFSI) which measures the gradual progression and changes in financial market stability, this paper empirically evaluates the impact of financial and economic integration on financial stability in South Asian countries using time-series data for the period 1980–2012. Auto-regressive distributed lag (ARDL) Bounds testing approach to cointegration is applied to ensure long-run relationship between variables. Bound F-test results confirm the long-run relationship between selected variables. The estimated results show that economic and financial integration has exerted a significant negative effect on financial stability in long run. Financial stability, economic integration, financial integration, AFSI, South Asia 02 2020 65 March The Singapore Economic Review 303 333 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500011 SAMIA NASREEN Government College Women University Faisalabad, Faisalabad, Punjab, Pakistan SOFIA ANWAR sofia_eco@gcuf.edu.pk Government College University Faisalabad, Kotwali Rd, Faisalabad 38000, Pakistan
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article ASIA’S EMERGENCE IN GLOBAL BEVERAGE MARKETS: THE RISE OF WINE* Asia’s alcohol consumption and its retail expenditure on each of beer, distilled spirits and grape wine have more than doubled so far this century. In the process, the mix of beverages in Asia’s consumption of alcohol has been converging on that of the west as wine’s share rises. Since Asia’s beverage production has not kept up with its expansion in demand, imports net of exports are increasingly filling the gap — especially for wine. This paper analyzes trends in consumption and imports for the region and for key Asian countries, and provides projections to 2025 using a new model of global beverage markets. Changes in beverage tastes, premiumization of alcohol consumption, impacts of tax and trade policies, beverage market projections 04 2020 65 June The Singapore Economic Review 755 779 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500162 Kym Anderson Wine Economics Research Centre, School of Economics, University of Adelaide, Adelaide SA 5005 Australia2Arndt-Corden Department of Economics, Australian National University, Canberra, ACT, 2601
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article TAX STRUCTURE AND ECONOMIC GROWTH: DO DIFFERENCES IN INCOME LEVEL AND GOVERNMENT EFFECTIVENESS MATTER? We examine the effects of both overall tax rate and changes in tax structure on growth by using data for more than 100 high, middle, and low income countries by employing the GMM estimation methods. In general, our results do not support the argument that overall tax rates or changes in tax structure have a significant effect on growth. However, we find that a shift from income to consumption and property taxes leads to a positive and significant effect on growth rate while a shift from consumption and property taxes to income taxes has a positive effect for low-income countries. Taxation, growth, tax structure, government effectiveness, dynamic panel data 01 2020 65 March The Singapore Economic Review 217 237 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500170 HALIT YANIKKAYA Department of Economics, Gebze Technical University, 41400, Gebze/Kocaeli, Turkey TANER TURAN tturan@gtu.edu.tr Department of Economics, Gebze Technical University, 41400, Gebze/Kocaeli, Turkey
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article THE EX-DIVIDEND-DAY BEHAVIOR OF STOCK PRICES AND VOLUME: THE CASE OF PHARMACEUTICAL DIVIDEND ARISTOCRATS This paper presents the wide analysis of the profitability factors of dividend capture strategy on public pharmaceutical companies within a five-year period after the global financial crisis 2008. We investigate the abnormal return and trading volumes with event study, and the effect of price changes around the ex-dividend date under the influence of various factors. Our findings suggest that there are no abnormal trading volumes on both the −1 day of the event window and the day of the event on a subsample of companies that do not declare a dividend before the register close date. We confirm the negative stock yield on the ex-dividend day in most markets. We further confirm the tax hypothesis explaining the behavior of the share price and note the specific behavior of stock prices in the ex-dividend date for companies that do not disclose information on future payments (Japan and South Korea) and on emerging markets. The positive average cumulative abnormal return is statistically significant only for companies with a share of R&D/Total revenue <3%. For companies with a value of more than 3%, the return is negative. An anomaly in the pharmaceutical stock market behavior in the ex-dividend date for 2016 is documented in our paper. A statistically significant price increase is registered both without taking into account the general market behavior, and taking into account market and individual expected return for each share of the sample. The cumulative abnormal returns are greater for pharma companies with a total enterprise value more than $1 billion, except for 2016. Ex-dividend day, ex-dividend day phenomenon, abnormal turnover, abnormal return, trading behavior, pharmaceutical shares 04 2020 65 June The Singapore Economic Review 889 915 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500243 TEPLOVA TAMARA tteplova@hse.ru Faculty of Economic Sciences, Head of Research and Training Laboratory of Financial, Markets Analysis National Research, University Higher School of Economics (NRU HSE), Shabolovka str., 26, bld. 4, room 4320, Moscow, Russia QAISER MUNIR Institute of Business Administration, KU Circular Road, Karachi Pakistan KAPICHNIKOVA MARIA kapichnikovamaria@gmail.com National Research University Higher, School of Economics (NRU HSE), Laboratory of Financial Markets Analysis
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article THE WAGE EFFECTS OF OVER-EDUCATION AMONG YOUNG STEM GRADUATES Using data from the 2010 Graduates Occupational Mobility Survey, this paper examines the wage effects of over-education (OE) among graduates in science, technology, engineering, and mathematics (STEM) disciplines at the early stage of their careers. In the pooled OLS analysis, the negative correlation between OE and wages remains even if we were to estimate an augmented specification where OE is disaggregated according to perceived skill mismatch. However, the pooled OLS estimates are changed dramatically when we control for unobserved individual heterogeneity (i.e., ability) using the panel FE estimation procedure; namely, reduced coefficients in the wage equation compared to pooled OLS estimation. Over-education, educational mismatch, skill mismatch, STEM, wages 05 2019 64 December The Singapore Economic Review 1351 1370 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500059 KIHONG PARK Department of Economics, Korea Army Academy at Yeong-cheon (KAAY), South Korea DOOSEOK JANG jangds@kaist.ac.kr School of Humanities & Social Sciences, Korea Advanced Institute of Science Technology (KAIST), South Korea
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article DIRECT EFFECT OF INWARD FDI AND TARGET FIRM PERFORMANCE: EVIDENCE WITH CHINESE FIRM-LEVEL DATA This paper uses Chinese firm-level data from 2001 to 2007 and applies a propensity score matching method combined with a difference-in-differences approach to examine the direct causal link between inward foreign direct investment (FDI) and various aspects of Chinese firms’ performance. We divide China into four economic regions and subdivide the origin of foreign investment into HMT investment (within the Greater China Area) and other foreign investment (outside the Greater China Area). The results indicate that the progress of the IFDI market in China is not evenly balanced within the four economic regions, while the different origins of foreign investment produce different effects. Inward foreign direct investment, Chinese firms, direct effect, four economic regions 04 2020 65 June The Singapore Economic Review 969 1005 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500346 SE CHEN School of Economics, Hunan Agricultural University, Changsha 410128, P. R. China2Department of Economics, University of Essex, Colchester CO4 3SQ, UK MINGXIAN LI limingxian6856@hunau.edu.cn School of Economics, Hunan Agricultural University, Changsha 410128, P. R. China
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article CAUSALITY-IN-VARIANCE BETWEEN THE STOCK MARKET AND MACROECONOMIC VARIABLES IN SINGAPORE The present study investigates the causality-in-variance between macroeconomic variables and the stock market in Singapore from November 1990 to March 2013. This study utilizes the [Sanso, A, V Arago and JL Carrion (2004). Testing for change in the unconditional variance of financial time series. Revista de Economia Financiera, 4, 32–53.] test to detect the structural break in variance; a generalized autoregressive conditional heteroskedasticity (GARCH) process to model volatility; and the cross correlation function (CCF) causality method. The results demonstrate that the most important macroeconomic causes of stock market volatility in Singapore is exchange rate volatility. The findings provide preliminary insights on risk elements for policy makers monitoring the stability of financial markets by providing insights about volatility spillovers and risk transmission between the stock market and macroeconomic variables in Singapore. Causality-in-variance, spillovers, stock market volatility, structural break in variance, macroeconomic volatility 05 2019 64 December The Singapore Economic Review 1299 1317 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500363 LIDA NIKMANESH School of Economics, Faculty of Economics and Management, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor ABU HASSAN SHAARI MOHD NOR ahassan@ukm.edu.my School of Economics, Faculty of Economics and Management, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor
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article VOLUNTARY VERIFIABLE INFORMATION DISCLOSURE AND LOAN FUNDING PERFORMANCE: EVIDENCE FROM PAIPAIDAI IN CHINA We investigate what mechanism helps to motivate the willingness of Chinese people to lend money to strangers online in the peer-to-peer (P2P) lending market. We argue that the voluntary verifiable information disclosure created by Chinese P2P practitioners helps to mitigate the asymmetric information problem and facilitates lending transactions between lenders and borrowers. We exploit a unique individual level data set obtained from Paipaidai, a leading Chinese P2P company, and evaluate the extent that the voluntary verifiable information disclosure helps to ease adverse selection problems. We find that information disclosure does increase the probability that a loan listing will be successfully funded by around 10% on average. We also find that the voluntary verifiable information disclosure helps to decrease the equilibrium interest rate by around 0.2% on average. Information asymmetry, voluntary information disclosure, verifiable information, online peer-to-peer lending 02 2020 65 March The Singapore Economic Review 419 441 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500066 YING LI yili@must.edu.mo Department of Accounting and Finance, Macau University of Science and Technology, Macau JACKY SO #x2020;Department of Finance and Business Economics, University of Macau, Macau JIA YUAN jiayuan@umac.mo #x2020;Department of Finance and Business Economics, University of Macau, Macau
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article DOES FISCAL DEFICIT CROWD OUT PRIVATE CORPORATE SECTOR INVESTMENT IN INDIA? This paper examines the impact of fiscal deficit and its financing pattern on private corporate sector investment in India, for the period from 1970–1971 to 2012–2013. Using Autoregressive Distributed Lag (ARDL) Models, the study finds that fiscal deficit crowds out private investment both in the long run and in the short run. The results also show that internal (domestic) financing of fiscal deficit has significant negative impact on private investment but external (foreign) financing of fiscal deficit has insignificant effect. In the short run, availability of bank credit plays a more important role in investment decision making than the rate of interest in India. The study suggests that government should maintain the fiscal deficit within a sustainable level by reducing its unnecessary non-developmental expenditure, subsidies etc. The government should restructure its financing pattern of fiscal deficit since internal financing has a significant negative impact on private investment. Fiscal deficit, private investment, crowding out, autoregressive distributed lag models, bound testing approach 05 2019 64 December The Singapore Economic Review 1201 1224 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500302 RANJAN KUMAR MOHANTY ranjanmohanty85@gmail.com National Institute of Public Finance and Policy, New Delhi, 110067 India
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article BOOK REVIEW: Be Financially Free 05 2019 64 December The Singapore Economic Review 1 2 http://www.worldscientific.com/doi/abs/10.1142/S021759081980002X JOERGEN OERSTROEM MOELLER
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article INFLUENCE OF MACROECONOMIC STABILITY ON FINANCIAL DEVELOPMENT IN DEVELOPING ECONOMIES: EVIDENCE FROM WEST AFRICAN REGION This paper examines the effects of macroeconomic stability on financial development in the West African region. Macroeconomic stability is measured based on five Maastricht Criteria’s variables namely inflation rate, real exchange rate, government debt, fiscal deficit and real interest rate. The study employs dynamic models on the panel data. We find that macroeconomic stability has significant effects on financial development in the region. Specifically, inflation rate, real exchange rate and fiscal deficit have negative effects, while the effects of government debt and real interest rate are positive. The implication of this study is that macroeconomic stability variables are determinants of financial development. Hence, developing economies should strive to achieve macroeconomic stability in order to drive financial development, with a view to achieving sustainable economic development. Macroeconomic stability, financial development, economic growth, developing economies 04 2020 65 June The Singapore Economic Review 837 856 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500553 KIZITO UYI EHIGIAMUSOE School of Accounting and Finance, Taylor’s University, 47500, Selangor, Malaysia HOOI HOOI LEAN Economics Program, School of Social Sciences, Universiti Sains Malaysia 11800 Penang, Malaysia JIN HOOI CHAN Business School, University of Greenwich, Old Royal Naval College, London SE10 9LS, United Kingdom
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article AGGLOMERATION ECONOMIES AND PERFORMANCE IN KNOWLEDGE-INTENSIVE BUSINESS SERVICES Most studies on the relationship between agglomeration economies and economic performance have focussed on regions in general or manufacturing. Very few papers have considered the impacts of agglomeration economies on the economic performance of knowledge-intensive business services (KIBS) firms. We propose a theoretical framework based on the characteristics of KIBS to study the precise channels through which KIBS firms benefit from specialization externalities and diversity externalities. The empirical evidence based on the software and IT services industry in China, a very dynamic branch of KIBS, shows that firms benefit from service diversity externalities but not specialization externalities, consistent with the idea of “nursery cities”. Agglomeration externalities, knowledge-intensive business services, firm performance 02 2020 65 March The Singapore Economic Review 457 469 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500048 CUI ZHANG zzzhangcui@126.com School of Economics, Jinan University, Guangzhou 510632, P. R. China
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article EDITORIAL: SPECIAL ISSUE ON ECONOMIC GROWTH 01 2020 65 March The Singapore Economic Review 1 2 http://www.worldscientific.com/doi/abs/10.1142/S0217590820030010 JAMES ANG James.Ang@ntu.edu.sg Department of Economics, School of Social Sciences, Nanyang Technological University, 48 Nanyang Avenue, Singapore 639818, Singapore
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article THE EFFECTS OF U.S. UNCONVENTIONAL MONETARY POLICY ON ASIAN STOCK MARKETS To assess the spillover effects of quantitative easing (QE) on return and volatility from the U.S. market to the selected Asian markets, this study applies dynamic correlation coefficient-generalized autoregressive conditional heteroscedasticity model to capture the time-varying nature of return and volatility spillovers during non-QE and QE periods of the sample countries. Furthermore, we incorporate the estimated time-varying correlation coefficients and country-specific factors to probe the determinants of the spillover. We find that the U.S. QE policies have significantly affected the correlations between the U.S. and some Asian countries, to which it performs significantly progressive decline in the correlations during the latest QE. Greater stock market liquidity remarkably increases their financial spillovers. Spillover, quantitative easing (QE), dynamic correlation coefficient-generalized autoregressive conditional heteroscedasticity model (DCC-GARCH), country factors, East Asia 04 2020 65 June The Singapore Economic Review 917 945 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500205 CHIEN-CHIANG LEE cclee6101@gmail.com Research Center of the Central China for Economic and Social Development, Nanchang University, China School of Economics and Management, Nanchang University, China MEI-PING CHEN Department of Accounting Information, National Taichung University of Science and Technology, Taichung, Taiwan CHUN-CHIE HUANG Department of International Business Studies, National Chi-Nan University, Nantou, Taiwan
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article NONPARAMETRIC ESTIMATION FOR SECOND-ORDER JUMP-DIFFUSION MODEL IN HIGH FREQUENCY DATA We provide the nonparametric estimators of the infinitesimal coefficients of the second-order continuous-time models with discontinuous sample paths of jump-diffusion models. Under the mild conditions, we obtain the weak consistency and the asymptotic normality of the estimators. A Monte Carlo experiment demonstrates the better small-sample performance of these estimators. In addition, the estimators are illustrated empirically through stock index of Shanghai Stock Exchange in high frequency data. High frequency, second-order jump-diffusion, Nadaraya–Watson estimator, weak consistency, asymptotic normality 04 2020 65 June The Singapore Economic Review 1033 1063 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500102 YUPING SONG songyuping2011@gmail.com School of Finance and Business, Shanghai Normal University, Shanghai, 200234, P. R. China
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article EXPORT AND INVENTORY: EVIDENCE FROM CHINESE FIRMS This paper investigates the effect of export on firm inventory using Chinese firm data. We find that exporting increases firms’ inventory stocks. Also, exporting to more distant destinations is associated with less frequent and more concentrated export transactions. Firm inventory, export, export frequency 02 2020 65 March The Singapore Economic Review 403 417 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500619 XIAOTAO ZHAO School of Economics and Management, Southeast University, P. R. China XIAOPING CHEN #x2020;School of Social Sciences, Nanyang Technological University, Singapore
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article REAL EXCHANGE RATE RETURNS AND REAL STOCK PRICE RETURNS IN THE STOCK MARKET OF MALAYSIA This study examines the relationships between real exchange rate returns and real stock price returns in the stock market of Malaysia. The Kwiatkowski, Phillips, Schmidt and Shin (KPSS) and Dickey and Fuller (DF) unit root test statistics show that all the variables examined are found to be stationary in the first differences. The constant conditional correlation (CCC)-multivariate generalized autoregressive conditional heteroskedasticity (MGARCH) model shows that real exchange rate return of Malaysian ringgit against the United States dollar (RM/USD) and real stock price return of Kuala Lumpur Composite Index (KLCI) are found to be negative and significantly correlated. However, there is insignificant correlation between real exchange rate return of Malaysian ringgit against Japanese Yen (RM/¥) and real stock price return of KLCI. Moreover, the CCC-MGARCH models show that real exchange rate returns and real stock price returns of some stocks are found to be significantly correlated. The KPSS unit root test statistics show that the time invariant conditional variances of real exchange rate returns and real stock price returns are mostly found to be stationary in the levels. There is no evidence of Granger causality between the time invariant conditional variances of real exchange rate returns and real stock price return of KLCI but some evidence of Granger causality between the time invariant conditional variances of real exchange rate returns and real stock price returns. There is a link between the exchange rate market and the stock market in Malaysia but not every real stock price return is significantly linked with real exchange rate return. Real exchange rate return, real stock price return, constant conditional correlation (CCC)-multivariate generalized autoregressive conditional heteroskedasticity (MGARCH) model, Granger causality 05 2019 64 December The Singapore Economic Review 1319 1349 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500387 HOCK TSEN WONG htwong@ums.edu.my Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Jalan UMS, 88400 Kota Kinabalu, Sabah, Malaysia
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article GEOGRAPHIC DISTANCE, INCOME AND CHARITABLE GIVING: EVIDENCE FROM CHINA Using data from a nationwide donation program and a follow-up survey, this paper examines how geographic distance between donors and recipients and the capability to give measured by donors’ income affect the amount of charitable giving (conditioned on having given). We find that an increase in geographic distance significantly reduces donation amounts for 15% of the donors. The sensitivity of donation to distance decreases with total monthly disposable income for 62% of the donors. We further find that donation amounts increase with donors’ income for 4% of the donors when evaluating at the mean or median distance. Charitable giving, geographic distance, income, China 05 2019 64 December The Singapore Economic Review 1145 1169 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500212 QIAN WENG qian.weng@ruc.edu.cn School of Labor and Human Resources, Renmin University of China, No. 59, Zhongguancun Street, Haidian District, Beijing 100872, P. R. China HAORAN HE Business School, Beijing Normal University, Xinjiekouwai St. 19, Haidian District, 100875 Beijing, P. R. China
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article IS THERE MORE OR LESS COMPATIBILITY BETWEEN SYSTEMS WHEN CONSUMERS ARE KEENER ON A RIVAL SYSTEM’S SOFTWARE? A greater level of keenness on a rival system’s software intuitively motivates system manufacturers to raise their degrees of compatibility in order to capture more profit from selling software to rival system users. After constructing a game-theoretic model to investigate system manufacturers’ partial compatibility decisions, this paper surprisingly finds that when consumers are keener on a rival system’s software, hardware price competition is relaxed and system manufacturers reduce the degrees of compatibility. This paper also presents the following three results. First, partial compatibility occurs when the expenditure on system goods is relatively low. Second, the optimal degree of compatibility increases in the expenditure on system goods and decreases in hardware production cost. Third, system manufactures suffer losses on selling hardware when keenness on a rival system’s software is relatively low. According to Lee (2013), this result provides a theoretical interpretation of the phenomenon that platform providers often sell hardware platforms close or below cost in the US video game industry [Lee, R (2013). Vertical integration and exclusively platform and two-sided markets. American Economic Review, 103, 2960–3000]. Partial compatibility, degree of compatibility, system goods, hardware, software 04 2020 65 June The Singapore Economic Review 1065 1072 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500084 CHUNG-HUI CHOU chchou@isu.edu.tw Department of Finance, I-Shou University, Kaohsiung City, Taiwan 84001, Republic of China
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article THE CAPITAL FLIGHT FROM INDIA: A CASE OF MISSING WOODS FOR TREES? The surge of capital inflow into emerging markets since the 1990s has attracted much research, but capital flight from these economies has received scant attention in research and policy debates, despite its severe implications. The present study attempts to address the issue of capital flight and gap in the literature. Our estimates show a steep increase in the magnitude of capital flight from India since 2003, and empirical results suggest that the significant determinants of capital flight are GDP and exchange rate. We find that higher interest rates discourage capital flight; while keeping interest rates high may partially restrict capital flight, it is infeasible, and may impede future economic growth. Our findings suggest the need for interventions and changes in the current policy framework to improve investment opportunities for residents and arrest capital flight. Capital flight, unrecorded capital flows, residual method, ARDL, emerging markets, India, financial liberalization 02 2020 65 March The Singapore Economic Review 365 383 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500429 ASHIS KUMAR PRADHAN ashiskumarpradhan@iitkgp.ac.in Department of Humanities and Social Sciences, Indian Institute of Technology Kharagpur, Kharagpur – 721302. India GOURISHANKAR S. HIREMATH Department of Humanities and Social Sciences, Indian Institute of Technology Kharagpur, Kharagpur – 721302. India
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article R&D, FINANCIAL CONSTRAINTS AND PRODUCTIVITY: EVIDENCE FROM THE CHINESE INDUSTRIAL ENTERPRISES Using a unique dataset from National Bureau of Statistics of China, we estimate the total factor productivity (TFP) of enterprise and explore the relationship among research and development expenditures (R&D), financial constraints and TFP. We find that: First, R&D has a significantly lagged effect on the improvement of TFP. Second, the R&D fails to improve the contemporaneous productivity and negatively impacts on contemporaneous TFP. Third, financial constraints significantly reduce the improvement effect of R&D on TFP, and this kind of marginal effect has significant difference between state-owned enterprises (SOEs) and private enterprises (Non-SOEs). This study offers important policy implications by showing that: First, firms can obtain long-term benefits from continuous R&D expenditures. Second, the government should release appropriate policies to ease financial constraints, especially for the Non-SOEs. Research and development (R&D), total factor productivity (TFP), financial constraint, China 04 2020 65 June The Singapore Economic Review 947 967 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500126 MINGLI XU shmily@hust.edu.cn School of Public Administration, South China Normal University, Guangzhou 510006, China WEI YANG School of Business, East China University of Science and Technology, Shanghai 200237, China LIRANG PANG panglirang@hust.edu.cn School of Economics, Huazhong University of Science and Technology, Wuhan 430074, China DONGMIN KONG kongdm@hust.edu.cn School of Economics, Huazhong University of Science and Technology, Wuhan 430074, China
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article ASSESSING THE DOUBLE-EDGED SWORD OF USING IMITATION AS A STEPPING STONE TO INNOVATION: A CASE OF MALAYSIA’S K-ECONOMY PUZZLE Policy prescription for middle-income economies struggling to achieve innovation-driven growth has often been rapid promotion of skills-driven industrial transformation. However, Malaysia, an upper middle-income economy aspiring to achieve innovation-led growth, presents a near decade of K-Economy Growth Puzzle in the 2000s, when its aggressive skills-driven transformation initiatives had somehow resulted in decline to a lower output growth path despite successful expansion in skilled labor and innovation production. We present a continuous time growth model with industrial transformation based on an existing model advocating rapid skills transformation. By solving the model as a two-point boundary value problem, coupled with country-specific calibration strategies, vastly different results are obtained for this middle-income economy with fixed, imitation-heavy production structure. There may be a double-edged sword to using imitation as stepping stone to innovation, which then requires a much different industrial transformation approach. By examining transformation with different labor market configurations in a stylized manner using numerical experiments, we find that a delicate reordering of labor incentives would have been enough to help Malaysia navigating through the output growth–skills transformation trade-off. Growth puzzle, imitation, industrial transformation, human capital 01 2020 65 March The Singapore Economic Review 131 159 http://www.worldscientific.com/doi/abs/10.1142/S0217590817460018 KING YOONG LIM k.y.lim3@lancaster.ac.uk Department of Economics, Lancaster University Management School, Bailrigg, Lancaster LA1 4YX, UK
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article REAL WAGE STAGNANCY: EVIDENCE FROM TAIWAN This study examines how and why the gap between economic growth and real wage growth in Taiwan is widening, a phenomenon that contrasts sharply with South Korea, which has a similar industrial structure to that of Taiwan. We empirically demonstrate that, despite the continued growth of labor productivity, the benefits from economic growth allocated to workers have been falling, and that this process has accelerated following the 2008–2009 financial crisis. The labor market institutional effect contributed partially to the problem. Workers’ purchasing power, measured by the real consumption wage rate, has been declining for a relatively long period, implying significant deterioration of terms-of-trade, and cutting real wage growth by as much as 2.23% per year. The terms-of-trade effect is particularly prominent in the manufacturing sector, which is highly export-oriented. Moreover, we found cash wages to be very sensitive to the rise in the rate of unemployment, and to the changes in output performance of the industry in which the workers are employed. The latter factor significantly reduced the cash wages paid to workers in the manufacturing sector, which highlighted the waning of workers’ bargaining power regarding wages, as well as the negative impact of globalization on the labor market. We therefore conclude that the deterioration of terms-of-trade, increases in the aggregate unemployment rate, the adverse globalization effect and the institutional effect might be the main driving forces for real wage stagnancy in Taiwan. Real wage stagnancy, labor productivity, nonwage labor cost, Taiwan, South Korea 02 2020 65 March The Singapore Economic Review 485 506 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500417 LI-HSUAN HUANG Department of Economics, National Central University, 300 Chungda Road, Chungli 320, Taiwan HSIN-YI HUANG juliahuang0828@gmail.com Department of Economics, National Central University, 300 Chungda Road, Chungli 320, Taiwan
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article THE IMPACT OF DEMOGRAPHIC CHANGE ON ECONOMIC GROWTH This paper evaluates the impact of demographic change on the economic growth of OECD and non-OECD countries. An annual panel dataset of 71 countries, consisting of 27 advanced economies and 44 emerging economies over the period of 1981–2014, is used. Two types of regression models (panel regression model and panel continuous threshold model) including several demographic variables are used to investigate the effects of demographic structure. The results of this study show the significant difference of the impact of demographic transition on the economic growth of OECD and non-OECD economies. Demographic change, economic growth, nonlinearity, threshold 02 2020 65 March The Singapore Economic Review 471 484 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500401 DIEU THANH LE jane.dieulethanh@gmail.com Economic Division, Embassy of the Republic of Korea, Hanoi, Vietnam HAIL PARK Department of International Business and Trade, Kyung Hee University, Seoul, Republic of Korea
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article CONTRACTING-OUT OF HOUSEHOLD WASTE COLLECTION SERVICES IN JAPAN We first report three empirical findings from our survey on the contracting-out of municipal waste collection services in Japan: (1) the rate of contracting-out and the contract price are inversely related, (2) this inverse relationship tapers out as the contracting rate becomes sufficiently high, and the contract price even tends to go up as the contracting rate approaches 100% and (3) there is a significant disparity in the contracting rates between the eastern and western parts of Japan. In order to account for these observations, we then set up a simple analytical model and examine its implications. Also, we discuss the issues that a potential hold-up situation could give rise to when the services are completely contracted out to private firms. Waste collection, contracting-out, contract price, hold-up 02 2020 65 March The Singapore Economic Review 443 455 http://www.worldscientific.com/doi/abs/10.1142/S0217590817410041 NORIMICHI MATSUEDA School of Economics, Kwansei Gakuin University, 1-1-155 Uegahara Nishinomiya, Hyogo 662-8501, Japan JUN’ICHI MIKI j_miki@koeki-u.ac.jp #x2020;Faculty of Humanities and Social Sciences, Tohoku University of Community Service and Science, 3-5-1 Iimoriyama, Sakata, Yamagata 998-8580, Japan
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article THE REGIONAL ASYMMETRIC RESPONSES TO CENTRAL BANK’S MONETARY POLICY IN PAKISTAN Literature on differential impacts of monetary policy across regions discusses several factors which may be responsible for asymmetrical effects of monetary policy. As far as Pakistan is concerned, limited evidence is available for both mechanism and impact of monetary policy. In this study, we examine asymmetries in responses of real output of provinces to central bank’s monetary policy in Pakistan. We also attempt to explore the potential sources of these asymmetries. The Structural Vector Autoregression (SVAR) model is employed to examine each province’s response to unanticipated monetary policy shocks. The generalized impulse response functions from SVAR reveal that monetary policy has varied effects across the provinces. In two regions — Punjab and Sindh — monetary policy shocks cause variations in provincial outputs in similar ways. These responses are also comparable to the response of national output to changes in monetary policy but with considerable differences in magnitudes. While other provinces Khyber Pakhtunkhawa (KPK) and Balochistan show less sensitivity to unanticipated change in monetary policy. The less sensitive regions exhibit dissimilar responses both in timings and magnitudes. These dissimilarities in regional responses draw attention to devise an effective national monetary policy that might consider the cross-provincial differences in responses to central monetary policy in Pakistan. Monetary policy, asymmetries in effects, provincial outputs, Pakistan 02 2020 65 March The Singapore Economic Review 351 364 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500035 NASEEM FARAZ Department of Economics, Clark University, Worchester 01610, MA, USA†Pakistan Institute of Development Economics (PIDE), Quaid-i-Azman University Campus, Islamabad, Pakistan ZAINAB IFTIKHAR #x2020;Pakistan Institute of Development Economics (PIDE), Quaid-i-Azman University Campus, Islamabad, Pakistan‡Université Catholique de Louvain, 1, Place de l’Université, B-1348 Louvain-la-Neuve, Belgium
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article IMPACT OF GOVERNMENT SPENDING ON INFLATION IN ASIAN EMERGING ECONOMIES: EVIDENCE FROM INDIA, CHINA, AND INDONESIA This paper investigates the long-run and short-run impacts of government spending on inflation in three Asian emerging economies of India, China and Indonesia by applying the cointegration and Vector Error Correction Model to time series data from 1970 to 2010. The results confirm a cointegrating causal link between government spending and inflation in the long run in these countries, regardless of their institutional governance differences. In the short run, government spending (as a percentage of GDP) appears to have a negative impact on inflation in China, while a positive impact in Indonesia and India. The implication is that governments of emerging economies should be prudent with their decisions on government spending. Inflation, government spending, Asian emerging economies, cointegration, vector error correction model 05 2019 64 December The Singapore Economic Review 1171 1200 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500338 TAI DANG NGUYEN tai.nguyen@anu.edu.au Crawford School of Public Policy, J.G. Crawford Building, #132 Lennox Crossing, Australian National University, Canberra, ACT, 0200, Australia
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article INDUSTRIAL POLICY: CHINESE DEBATE TO TAIWANESE FOUNDRIES This study explores Chinese realities of industrial policy. These facts attract global interest. They also caused China’s Debate of the Century between prominent Chinese economists, Justin Lin and Weiying Zhang. After commenting on this exchange with evidential assessments, three questions are explored for technology-followers: (A) Can industrial policy against market failure also minimize government failure? (B) Can catching-up create win–win outcome by complementarity, rather than substitution? (C) Can leapfrogging trigger global innovation by co-evolution? TSMC from Taiwan suggests affirmative answers for all these three. Although its game-theory basis appears challenging for replication, exceptions may prove rules for further studies. Industrial policy, China, India, special economic zones, semiconductor foundries, TSMC 05 2019 64 December The Singapore Economic Review 1057 1080 http://www.worldscientific.com/doi/abs/10.1142/S021759081950022X AN-CHI TUNG actung@econ.sinica.edu.tw Institute of Economics, Academia Sinica, Taipei, Taiwan HENRY WAN Department of Economics, Cornell University, New York, USA
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article CITY SIZE, LABOR PRODUCTIVITY AND WAGES IN KOREA This study attempts to derive policy implications for spatially-balanced growth through empirical analysis on determinants of regional wage gaps in Korea. Combes et al. [(2008) Spatial wage disparities: Sorting Matters. Journal of Urban Economics, 63, 723–742] suggest that regional wage gaps result from the regional differences in workers’ human capital, nonhuman endowments, and agglomeration economies. The current study applies a similar two-stage estimation model to the 2006 cross-sectional data for 4009 workers from the Korean Labor Panel Survey (KLPS) performed by the Korea Labor Institute. Localization economies are positive external effects from the geographic concentration of firms in the same industry. We find evidence of localization economies in our research. The second stage estimation results for the determinants of regional wage gaps show that the average wage is higher in areas that concentrate in a small number of industries rather than in areas that are diversified with many industries. This result is in direct contrast to the findings from Combes et al. [(2008) Spatial wage disparities: Sorting Matters. Journal of Urban Economics, 63, 723–742] who analyze the French labor market data. This difference can be explained by the possibility that in Korea the improved quality of life (e.g., better education services) and/or the increase in job mobility in large diversified metropolitan areas induce workers to accept relatively lower wages in those areas. In order to resolve the bias in the estimation of the agglomeration effects caused by the heterogeneity of workers, we also performed panel regressions of the 2nd 2000 and the 7th 2005 KLPS panel data of 7431 observations. The panel regression results also support our original findings from regressions of the 8th 2006 KLPS data. Local labor markets, spatial wage disparities, localization economies, urbanization economies 04 2020 65 June The Singapore Economic Review 1073 1098 http://www.worldscientific.com/doi/abs/10.1142/S0217590817500138 BUN SONG LEE bunslee@hotmail.com Department of Accounting, Economics and Finance, University of Arkansas-Fort Smith, Fort Smith, AR 72913, USA SUNG HYO HONG Department of Economics, Kongju National University, Chungnam 32588, Republic of Korea MARK E. WOHAR Department of Economics, University of Nebraska at Omaha, Omaha, NE 68182, USA4School of Business and Economics, Loughborough University, Leicestershire, LE11 3TU, UK
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article EVOLUTIONARY TREND OF FOREIGN INVESTMENT IN CHINA: A COMBINED DECOMPOSITION AND TRANSITIONAL DYNAMICS APPROACH This paper examines the pattern and evolution trend of foreign investment in China through combining decomposition analysis and framework of transitional dynamics. It is recognized that inter-regional disparity contributes the most to China’s disparity in foreign investment. Stochastic kernel analyses are then performed for the country and the economic zones regarding the foreign investment trend. It is concluded that convergence of foreign investment to the country’s mean cannot be attained and continues to locate at the lower end. This analysis offers illuminating insights on the evolution of foreign investment in China across time. China, foreign investment, decomposition, transitional dynamics 04 2019 64 September The Singapore Economic Review 1037 1055 http://www.worldscientific.com/doi/abs/10.1142/S0217590817450126 TSUN SE CHEONG jamescheong@hsmc.edu.hk Hang Seng Management College, Shatin, Hong Kong ANDY W. W. CHENG Hang Seng Management College, Shatin, Hong Kong VICTOR J. LI victorli@cuhk.edu.hk #x2020;The Chinese University of Hong Kong, Hong Kong
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article HOW FUNDING STRUCTURE AFFECTS EFFICIENCY OF R&D INVESTMENT BY LARGE- AND MEDIUM-SIZED INDUSTRIAL FIRMS IN CHINA? EVIDENCE FROM PROVINCE-LEVEL PANEL DATA This study explores the efficiencies of firm’s R&D investment depending on the degree of reliance on government funding relative to firms’ private funding. Stochastic frontier analysis is applied on a sample of 30 provinces with data on R&D inputs and innovation outputs by all large- and medium-sized industrial firms in these provinces from 2000 to 2013. It is found that R&D investment financed by firms’ private funding is more efficient than that by government funding in generating new products, whereas R&D investment financed by government funding is more efficient than that by firms’ private funding in producing new patents. R&D investment, innovation output, funding structure, stochastic frontier analysis, China 04 2019 64 September The Singapore Economic Review 921 938 http://www.worldscientific.com/doi/abs/10.1142/S0217590817450084 YIXIAO ZHOU School of Economics and Finance, Curtin University, Kent St, Bentley WA6102, Western Australia, Australia RUNYANG ZHANG School of Economics and Finance, Curtin University, Kent St, Bentley WA6102, Western Australia, Australia LIGANG SONG ligang.song@anu.edu.au #x2020;Crawford School of Public Policy, The Australian National University, JG Crawford Building, 132, Lennox Crossing, Acton ACT 0200, Australia
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article THE SELF-REPORTED PATENT QUALITY OF CHINESE FIRMS: MOTIVATION SOURCE AND TECHNOLOGY ACCUMULATION EFFECTS ANALYSIS Enhanced innovation capacity has become imperative to China’s growth and development. Patent quantity and quality indicators are benchmark measures of innovative capacity. This paper utilizes data from the 2013 Chinese Patent Survey to explore self-evaluated firm-level patent quality in China. Focus is placed on the effects of technological accumulation and also patent motivation on four multi-dimensional self-evaluation indices: technical quality, writing quality, right stability and market value. The results: (i) verify the proposal that in high patent intensity industries “strategic patent behavior will reduce patent quality”; (ii) suggest that reducing administrative-driven patent behaviors could improve patent quality and (iii) find patent structure but not quantity to be positively correlated with patent quality. This serves to enrich understanding of China’s patent system and the one-dimensional “inventive step” analysis deriving from analyses of European Patent Survey data. Patent quality, self-evaluated, patent survey, patent motivation, technological accumulation 04 2019 64 September The Singapore Economic Review 939 960 http://www.worldscientific.com/doi/abs/10.1142/S0217590817450114 HAO MAO Shanghai International College of Intellectual Property, Tongji University, Shanghai, P. R. China2Development and Research Center, State Intellectual Property Office, Beijing, P. R. China LAUREN A. JOHNSTON lauren.johnston@unimelb.edu.au Faculty of Business and Economics, Melbourne Institute of Applied Economic and Social Research, University of Melbourne, Melbourne, Australia ZHIFENG YIN School of Economics, Central University of Finance and Economics, Beijing, P. R. China
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article ECONOMIC GROWTH IN CHINA AND ITS POTENTIAL IMPACT ON AUSTRALIA–CHINA BILATERAL TRADE: A PROJECTION FOR 2025 BASED ON THE CGE ANALYSIS This paper uses the Global Trade Analysis Project (GTAP) Static Model to predict the potential impact of economic growth in China on bilateral trade between China and Australia in 2025, under three different scenarios representing the business as usual, the successful reform and the stagnation cases, respectively. The results show that exports from Australia to China will continue to increase in both absolute and relative terms, irrespective of which economic growth path China takes, partly due to the strong complementary relationship of production between the two countries. The results also indicate that education service exports will become a new engine of bilateral trade in addition to agricultural and mineral products. Furthermore, comparing the results obtained from the three scenarios shows how successful reform will bring more benefits to both China and Australia in trade, which provides useful insights for policy making to facilitate bilateral economic relationship. GTAP Static Model, China economic growth, China–Australia bilateral trade 04 2019 64 September The Singapore Economic Review 839 862 http://www.worldscientific.com/doi/abs/10.1142/S0217590817450059 YU SHENG Center for Chinese Agricultural Policy, School of Advanced Agricultural Science, The Peking University, Beijing 100080, China PETER DRYSDALE peter.drysdale@anu.edu.au Crawford School of Public Policy, The Australian National University, Canberra, ACT 0200, Australia CHUNLAI CHEN Chunlai.chen@anu.edu.au Crawford School of Public Policy, The Australian National University, Canberra, ACT 0200, Australia
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article DOES EXPORT DIVERSIFICATION MATTER FOR CHINA’S REGIONAL GROWTH? China has enjoyed high economic growth for more than three decades since the initiative of economic reform in early 1980s. This growth has been driven mainly by labor-intensive export-oriented manufacturing activities. Yet, there are remarkably few empirical studies of the link between export diversification and economic growth. In this paper, the effect of export diversification on economic growth in Chinese provinces in the period 2000–2006 is examined. The findings support cross-country evidence that regions with diversified export baskets enjoy higher economic growth. However, it is found that the growth benefits are linked to diversification of export products, rather than geographical diversification of exports. Further, it is also found that the growth effect and export diversification may have a nonlinear relationship. As such, governments promoting export diversification should distinguish the diversification of export products from that of export destinations. Their policies should also change as regional economies develop. Export diversification, economic growth, Chinese regions 04 2019 64 September The Singapore Economic Review 863 882 http://www.worldscientific.com/doi/abs/10.1142/S0217590817450023 DAHAI FU fudahai@126.com School of International Trade and Economics, Central University of Finance and Economics, Beijing, P. R. China YANRUI WU yanrui.wu@uwa.edu.au UWA Business School, The University of Western Australia, Perth, Australia YING ZHANG Institute of Economics, Chinese Academy of Social Science, Beijing, P. R. China
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article INTERREGIONAL IMPACT OF FOREIGN DIRECT INVESTMENT ON CHINA’S INLAND URBANIZATION Foreign direct investment (FDI) in China is heavily concentrated in coastal region, which has attracted large amount of rural migrant workers from inland region. This type of population migration associated with FDI may have an impact on China’s inland urbanization. There is however little research on this topic. This paper aims to investigate the interregional impact of FDI on China’s inland urbanization. The study finds that on average FDI has negative interregional impact on inland urbanization. However, FDI in coastal and inland regions engaged in different trade modes (processing versus ordinary trade) has different interregional impact on China’s inland urbanization. Foreign direct investment, urbanization, dynamic panel system GMM, labor migration, China 04 2019 64 September The Singapore Economic Review 997 1017 http://www.worldscientific.com/doi/abs/10.1142/S0217590817450035 CHUNLAI CHEN chunlai.chen@anu.edu.au Crawford School of Public Policy, The Australian National University, Canberra, Australia YAN WU School of Economics, Beijing Technology and Business University, Beijing, P. R. China
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article URBANIZATION AND RURAL–URBAN CONSUMPTION DISPARITY: EVIDENCE FROM CHINA The objective of this paper is to investigate the impacts of urbanization on influencing the rural–urban consumption disparity in China, a research gap which has not been bridged so far. Adopting a provincial dataset from 1997 to 2014, a generalized method of moments (GMM) estimator is employed to reveal the impact of urbanization on the ratio of per capita consumption expenditure of the urban households to the rural households, along with other socioeconomic variables. Empirical results show salient relationship between increasing urbanization ratio and declining rural–urban inequality. Significant impact of education costs on increasing the rural–urban inequality is also observed. Other factors that increase the disparity include foreign investment and gross regional product (GRP) indices. Industrial structure, costs of housing and health care are insignificant factors. The results of this study help in understanding China’s new urbanization development strategy in a better way. Urbanization, rural–urban disparity, consumption, regional inequality, China 04 2019 64 September The Singapore Economic Review 983 996 http://www.worldscientific.com/doi/abs/10.1142/S0217590817450102 JING LI victorli@cuhk.edu.hk Department of Geography and Resource Management, The Chinese University of Hong Kong, Shatin, N. T., Hong Kong TSUN SE CHEONG #x2020;School of Business, Hang Seng Management College, Hang Shin Link, Siu Lek Yuen, Shatin, N.T., Hong Kong JIANFA SHEN jianfa@cuhk.edu.hk Department of Geography and Resource Management, The Chinese University of Hong Kong, Shatin, N. T., Hong Kong DAHAI FU fudahai@cufe.edu.cn #x2021;School of International Trade and Economics, Central University of Finance and Economics, 39 South College Road, Haidian District, Beijing, P. R. China
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article UNDERSTANDING CHINA’S URBAN CONSUMPTION PATTERNS: NEW ESTIMATES AND IMPLICATIONS Potential demand for consumer goods and services is enormous in China. Turning such potential into real effective demand will play a crucial role in sustaining China’s future economic growth. Based on most recent consumption data of major categories of goods and services by consumers of different income groups, this study empirically evaluates the potential of the market for goods and services in China using the panel data of 18 provinces over the period 2002–2012. The results indicate that (1) compared to developed countries, Chinese urban residents have much potential for consuming goods including medical care, transportation and communication, education and entertainment; (2) the profile of the expenditure elasticity for necessities such as food change is hump-shaped. Residents in middle-income groups are more income-elastic than the low- and high-income groups; (3) expenditure elasticity of medical care decreases as income level rises, while the trends of transportation and communication, education and entertainment share a similar profile across income groups. Urban households, expenditure elasticity, income levels, consumption patterns, China 04 2019 64 September The Singapore Economic Review 961 981 http://www.worldscientific.com/doi/abs/10.1142/S0217590817450096 XIN GU School of Economics and Management, Southeast University, Nanjing, Jiangsu Province, China ZHANG-YUE ZHOU zhangyue.zhou@jcu.edu.au #x2020;College of Business, Law and Governance, James Cook University, Queensland, Australia YAN-RUI WU yanrui.wu@uwa.edu.au #x2021;Economics, Business School, University of Western, Australia, Perth, Western Australia
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article INTRODUCTION AND EDITORIAL OVERVIEW — IN SEARCH OF NEW SOURCES OF GROWTH: WHAT CHINA SHOULD DO NEXT? 04 2019 64 September The Singapore Economic Review 813 814 http://www.worldscientific.com/doi/abs/10.1142/S0217590819020028 SIZHONG SUN sizhong.sun@jcu.edu.au James Cook University, Australia YANRUI WU yanrui.wu@uwa.edu.au University of Western Australia, Australia GUIYING LAURA WU guiying.wu@ntu.edu.sg Nanyang Technological University, Singapore
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article THE DETERMINANTS OF OUTWARD FOREIGN DIRECT INVESTMENT STRATEGIES OF CHINESE ENERGY FIRMS This paper investigates the location strategies of Chinese energy firms over the period 2003–2013. The results confirm that market-seeking and resource-seeking are two significant motivations behind Chinese energy firms’ outward foreign direct investment (OFDI). As expected, a higher level of the host country’s energy resource reserves attracts more energy resource related projects and the host country’s renewable energy output influences Chinese firms’ renewable energy investment. However, for OFDI in energy resources, the political stability of the host country is not a significant factor while when investing in renewable energy, it is a significant consideration. Interestingly, for OFDI in energy resources, trade integration measured by the share of exports sold in the host country in China’s total exports, is not statistically significant while for OFDI in renewable energy, trade integration affects the investment decision. Energy projects, investment motivations, location strategies, outward foreign direct investment 04 2019 64 September The Singapore Economic Review 1019 1036 http://www.worldscientific.com/doi/abs/10.1142/S0217590817450072 SHITENG XU stxu@sfs.ecnu.edu.cn School of Economics, Faculty of Economics and Management, East China Normal University, 500 Dongchuan Road, Shanghai 200241, China JEFF GOW #x2020;School of Commerce, University of Southern Queensland, Toowoomba, Queensland, Australia‡Department of Agricultural Economics, Stellenbosch University, Stellenbosch, South Africa YOUZHI CHEN cyzzhyt@126.com #xA7;Administration Institute of Minhang District (Shanghai), 258 Shuying Road, Shanghai 201100, China YAHUA ZHANG #x2020;School of Commerce, University of Southern Queensland, Toowoomba, Queensland, Australia ZHIBIN HUANG xiaohoangau@gmail.com #x2020;School of Commerce, University of Southern Queensland, Toowoomba, Queensland, Australia
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article PRODUCTIVITY DYNAMICS OF CHINESE MANUFACTURING FIRMS China has experienced high-speed catch-up growth with an average annual rate of over 8% in per capita GDP in the past four decades. Using growth accounting, Zhu (Understanding China’s growth: Past, present, and future. Journal of Economics Perspectives, 26(4), 103–124) finds that the growth of total factor productivity (TFP) accounts for 77% of China’s per capita GDP growth during 1978–2007, and argues that China’s TFP growth is mainly driven by resource reallocation due to market liberalization and institutional reforms. This paper aims to estimate China’s aggregate productivity growth by applying three leading methods of estimating firm-level production function on Chinese manufacturing firms during 1998–2007, and quantify the contribution of resource reallocation to productivity growth. In addition, we also empirically compare the three estimation methods in this large data set. China’s economic growth, TFP growth, production function, resource reallocation 04 2019 64 September The Singapore Economic Review 899 919 http://www.worldscientific.com/doi/abs/10.1142/S0217590817450047 QU FENG School of Social Sciences, Nanyang Technological University, 14 Nanyang Drive, Singapore 637332, Singapore ZHIFENG WANG WANG0869@e.ntu.edu.sg #x2020;Center of Economics, Finance and Management Sciences, Hunan University, 403 Administration Building, North Campus, Yuelu District, Changsha, Hunan 41006, China GUIYING LAURA WU guiying.wu@ntu.edu.sg School of Social Sciences, Nanyang Technological University, 14 Nanyang Drive, Singapore 637332, Singapore
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article CHINA’S DEBT CHALLENGE: STYLIZED FACTS, DRIVERS AND POLICY IMPLICATIONS This paper begins by showing that even after conditioning for factors that might justifiably lead to a country having relatively high leverage, China remains a debt outlier. In this sense, China can be regarded as over-leveraged and its debt levels may present potential risks to growth and financial stability. The corporate sector is central to China’s debt story, accounting for two-thirds of the total. Moreover, the corporate sector has been mostly responsible for China’s leverage cycles, including the leveraging up since 2008 and an earlier deleveraging phase starting in 2003. Two major but under-appreciated drivers of Chinese corporate leverage cycles are then identified. The most important is the share of internally funded corporate capital expenditure, which is a combined consequence of evolving corporate earnings and capital expenditure. The second is the rising importance of real estate and construction firms as holders of corporate debt. China’s corporate leverage landscape is also shown to be more complex than a story of zombie state-owned enterprises in industrial segments with excess capacity being ever-greened with loans from state banks. A balanced mix of policy responses will be needed to manage a warranted and orderly deleveraging cycle in the years ahead. China, debt, leverage, corporate earnings, capital expenditure 04 2019 64 September The Singapore Economic Review 815 837 http://www.worldscientific.com/doi/abs/10.1142/S0217590817450011 GUONAN MA Faculty of Business Administration University of Macau, E22, Avenida da Universidade, Taipa, Macau, China JAMES LAURENCESON james.laurenceson@uts.edu.au Australia-China Relations Institute (ACRI), University of Technology Sydney (UTS), Level 18, Tower Building, 15 Broadway, Ultimo NSW 2007, Australia
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article INTERNATIONAL MIGRATION, HUMAN CAPITAL COMPOSITION AND MIDDLE-INCOME TRAPS One of the most interesting and debateable topics in China’s economic growth is whether China’s economy would be hindered by a middle-income trap. This paper addresses this topic by analyzing the link between international skilled migration and the middle-income trap. Our study has extended the model proposed by [De la Croix, D. and Docquier F. (2012). Do Brain Drain and Poverty Result from Coordination Failures? Journal of Economic Growth, 17(1) 1–26.] and accounted for the importance of heterogeneity of human capital emphasized by [Jones, F. (2008). The Knowledge Trap: Human Capital and Development Reconsidered. NBER Working Paper No. 14138, Northwestern University.] Results have demonstrated that in the presence of externalities in the formation of human capital, there possibly exist four steady-state development paths in the dynamic system due to coordination failures. These four paths include: (i) the unskilled labor equilibrium which is characterized by low-income and significant loss of skilled labor, (ii) the generalist equilibrium with lower-middle income and significant loss of specialists, (iii) the specialist equilibrium with the characteristics of upper-middle income and significant loss of generalists; and (iv) the skilled equilibrium with high income and insignificant loss of skilled workers. Amongst them, the generalist equilibrium and specialist equilibrium represent two types of middle-income trap. Brain drain, middle-income trap, human capital, multiple equilibria 04 2019 64 September The Singapore Economic Review 883 897 http://www.worldscientific.com/doi/abs/10.1142/S0217590817450060 ZHAOBIN FAN International Business School, Jinan University, 601 Huangpu W Ave, Guangzhou Shi, Guangdong Sheng, P. R. China HUI LI h.li.4@bham.ac.uk School of Mathematics, University of Birmingham, Ring Rd W, Birmingham B15 2TS, UK
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article INDETERMINACY IN A ONE-SECTOR MODEL REVISITED: DEMAND VERSUS SUPPLY-SIDE INDETERMINACY This paper explains how indeterminacy in a one-sector model may arise due to externalities in the disutility of labor supply, which is termed asdemand-sideindeterminacy. This contrastssupply-sideindeterminacy that is driven by externalities in the production function as exemplified by Benhabib and Farmer (Journal of Economic Theory, 1994). For the one-sector models considered, I find that indeterminacy arises more easily from the demand than from the supply side. In addition, demand and supply-side indeterminacy generate different cyclical patterns of wages, a feature that is useful for identifying episodes of self-fulfilling prophecies within the two types of indeterminacy. Indeterminacy, one-sector, self-fulfilling prophecies, business cycle 02 2009 54 The Singapore Economic Review 183 196 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003306 NICHOLAS C. S. SIM nicholas.sim@bc.edu Department of Economics, Boston College, 140 Commonwealth Avenue, Chestnut Hill, MA 02467, USA
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article RISK MEASUREMENT OF INVESTMENTS IN THE SATELLITE RING OF A CORE-SATELLITE PORTFOLIO: TRADITIONAL VERSUS ALTERNATIVE APPROACHES This paper provides a risk framework for fiduciaries by considering using a core-satellite approach to investing. While the article mainly covers the additional risk measurement techniques, which are needed when investing in hedge funds, its recommendations are also relevant for other investments that have default, devaluation, and/or liquidity risks associated with them. Also, while the article's focus is on quantitative techniques, we note that a fiduciary must also understand the economic basis for each investment's returns. Sharpe ratio, Hedge funds, Risk measurement, Asymmetric risk 01 2004 49 The Singapore Economic Review 105 130 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000822 HILARY TILL till@premiacap.com Premia Risk Consultancy, Inc., Chicago, USA
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article MONETARY COOPERATION IN EAST ASIA: A WAY FORWARD This paper provides a theoretical justification for regional credit facilities such as currency swap arrangements in East Asia to ward off currency attacks and deter would be speculators. It also presents a case for monetary integration in East Asia. However, in view of the diverse economic, social and political background among the East Asian economies, a practical approach is to start off with a few small monetary unions rather than a large monetary union in the region. Lessons are drawn from a highly successful, but little known, monetary union between Brunei and Singapore. 02 2001 46 The Singapore Economic Review 211 246 http://www.worldscientific.com/doi/abs/10.1142/S0217590801000346 KEE JIN NGIAM Department of Finance and Accounting, NUS Business School, National University of Singapore, Singapore HAZEL YUEN Department of Finance and Accounting, NUS Business School, National University of Singapore, Singapore
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article BOOK REVIEW: Can East Asia Compete? Innovation for Global Markets No abstract received. 01 2004 49 The Singapore Economic Review 131 133 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000834 JOHN LODEWIJKS University of New South Wales, Sydney, Australia
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article STOCHASTIC FRONTIER ANALYSIS OF SINGAPORE MANUFACTURING INDUSTRIES Previous papers on Singapore manufacturing productivity have focused almost exclusively on total factor productivity (TFP) growth rates and ignored the problem of measuring the extent of learning-by-doing. In this paper, we examine an alternative measure: the rate of technical efficiency change. Using data from 1974–1998, a translog production frontier is estimated. Following a conceptual framework popularised by Bauer (1990), productivity growth is decomposed into components arising from technical progress, technical efficiency change, a scale economies effect and an allocative inefficiency effect. Stochastic production frontier, Technical progress, Technical efficiency, Scale economies 01 2004 49 The Singapore Economic Review 85 103 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000810 SOO-WEI KOH Nanyang Technological University, Singapore SHAHIDUR RAHMAN Nanyang Technological University, Singapore G. K. RANDOLPH TAN arandolph@ntu.edu.sg Nanyang Technological University, Singapore
oai:RePEc:wsi:serxxx:v:47:y:2002:i:01:n:s02175908020004202021-08-15RePEc:wsi:serxxx
article SINGAPORE'S EXCHANGE RATE POLICY: EMPIRICAL FOUNDATIONS, PAST PERFORMANCE AND OUTLOOK Singapore's exchange rate policy in practice is a policy mix somewhat more complicated than the simple "strong Singapore dollar policy". This paper discusses the theoretical and empirical foundations of this policy mix. It then proceeds to evaluate the past performance of Singapore's exchange rate policy. By highlighting a drastic decline in foreign inflation towards a negligible level nowadays, the paper recommends a far more moderate appreciation of Singapore dollar than those in the past. Exchange rate policy, Singapore, Export competitiveness, Exchange rate pass-through 01 2002 47 The Singapore Economic Review 173 182 http://www.worldscientific.com/doi/abs/10.1142/S0217590802000420 PAUL S. L. YIP Department of Applied Economics, Nanyang Technological University, Singapore
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article A NEW FINDING FOR CORPORATE BOARD SIZE EFFECTS: EVIDENCE FROM JAPAN This paper reexamines the relation between firm performance and board size using the data of Japanese companies. We find a significantly positive relation between firm performance and board size when the board size is small, but a significantly negative relation when the board size is large. Our finding is different from major empirical research such as the work by Yermack, Eisenberget al.and Coleset al.[Yermack, D (1996). Higher market valuation of companies with a small board of directors.Journal of Financial Economics, 40, 185–211; Eisenberg, T, S Sundgren and MT Wells (1998). Larger board size and decreasing firm value in small firms.Journal of Financial Economics, 48, 35–54; Coles, JL, ND Daniel and L Naveen (2008). Boards: Does one size fit all?Journal of Financial Economics, 87, 329–356].The empirical results regarding the relation between firm performance and board size might depend strongly on the characteristics of firms used in a given analysis. Board of directors, corporate governance, Japanese companies, firm performance, G30 04 2013 58 1350031 The Singapore Economic Review 1 12 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500318 JUN XIE syakun1979@whu.edu.cn Department of Finance, School of Economics and Management, Wuhan University, Hubei 430072, China YUKIO FUKUMOTO fukumoto@osaka-ue.ac.jp Department of Economics, Osaka University of Economics, 2-2-8 Osumi, Higashiyodogawa-ku, Osaka 533-8533, Japan
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article ASSESSING THE ECONOMIC DAMAGE FROM INDONESIAN FIRES AND THE HAZE: A CONCEPTUAL NOTE A haze from forest fires in Indonesia affected not only that country, but also most of Malaysia, Singapore and Southern Thailand, for three months in 1997. Studies estimating the cost of the haze to the affected economies have since appeared. This note shows that "typical" empirical estimates of costs (benefits) related to the haze often contain elements of transfers between groups in an economy and can be misleading when the intention is to measure the net losses or gains to the economy as a whole. Transfers, Consumer surplus, Producer surplus, Welfare gain 02 2002 47 The Singapore Economic Review 229 241 http://www.worldscientific.com/doi/abs/10.1142/S0217590802000572 SURESH NARAYANAN nsuresh@usm.my School of Social Sciences, Universiti Sains Malaysia 11800 Minden, Penang, Malaysia
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article EXPANSIONARY FISCAL CONTRACTION: GOVERNMENT SPENDING FINANCED BY LUMP-SUM TAXES Barry and Devereux (2003) have identified two conditions for permanent fiscal contractions to be expansionary. The first condition is that households do not face an effective infinite horizon. The second is that the wealth effect of reduced tax liabilities on labor supply must be small if labor supply is endogenous. However, Barry and Devereux have not allowed for the possibility that government spending may affect the intertemporal allocation of private consumption. By allowing for the possibility, this paper identifies a third condition for permanent fiscal contractions to be expansionary, namely that public and private consumption must not be too highly substitutable. Fiscal policy, expansionary fiscal contraction, substitutability between public and private consumption 02 2004 49 The Singapore Economic Review 225 232 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000895 KIM-HENG TAN akhtan@ntu.edu.sg School of Humanities and Social Sciences, Nanyang Technological University, S3-B2A-05 Nanyang Avenue, Singapore 639798, Republic of Singapore
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article GLOBALIZATION, SOCIAL WELFARE, PUBLIC POLICY AND LABOR INEQUALITIES Income inequality has increased sharply in higher income and in many lower income countries. Theories attributing this to bifurcation of labor markets in higher income countries are examined. Some theorists attribute this bifurcation primarily to technical change with influence from globalization. Others take an opposite viewpoint. A contrasting view presented here is that globalization is strongly linked with technological change. More significantly even if globalization increases economic efficiency and growth in globalizing countries, it can raise income inequality and reduce social welfare in such countries. International fiscal competitiveness may, it is argued, contribute to income inequality and make all nations worse off. Trends in public social expenditure and in taxation receipts in higher income countries, including Singapore, are examined to determine the extent of empirical support for the theory. Fiscal competition, globalization, income inequality, labor markets, public economics 02 2004 49 The Singapore Economic Review 233 253 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000901 CLEM TISDELL c.tisdell@economics.uq.edu.au School of Economics, The University of Queensland, Brisbane, 4072, Australia SERGE SVIZZERO University of La Reunion, France
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article HECKSCHER–OHLIN THEORY: HAS IT A FUTURE? It is noted that Heckscher-Ohlin general-equilibrium theory is based on three little discussed assumptions (representative agents, costless reallocation of productive factors, and the existence of autarkic equilibria) and it is argued that the theory is highly sensitive to the relaxation of any one of the assumptions. Heckscher-Ohlin theory, Representative agents 02 2002 47 The Singapore Economic Review 193 198 http://www.worldscientific.com/doi/abs/10.1142/S021759080200050X MURRAY C. KEMP murrayk@agsm.edu.au Australian Graduate School of Management, University of New South Wales, Australia
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article The Effect of Government on Economic Growth in Fiji This paper investigates the empirical relationship between the size of government and the process of economic growth in Fiji. The results reported here present a mixed picture, in that the model estimated specifies two different effects of the government sector on economic growth. Using annual time series data for the period 1964–1999, it is found that government expenditure exerts a strong beneficial impact on economic growth. However, marginal factor productivity in the government sector is found to be lower than that of the private sector. The reasons for this low productivity are two-fold: the result of the lack of market incentives and signals in the public sector and the involvement of Fiji's government in some activities which may be rationalised in terms of the socio-political objectives of the Fijian government. While recognising that there may be factors which may hinder the process of efficiency in the private sector, it can be argued that by shifting factors of production from the low productivity (government) sector to the high productivity (private) sector, the rate of growth of GNP will increase. Economic growth, Government, Consumption expenditure, Fiji 01 2003 48 The Singapore Economic Review 27 38 http://www.worldscientific.com/doi/abs/10.1142/S0217590803000608 D. P. Doessel Queensland Centre for Mental Health Research, Department of Psychiatry, The University of Queensland, Australia Abbas Valadkhani School of Economics and Finance, Queensland University of Technology, Australia
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article PRECAUTIONARY SAVINGS AND CPF CONTRIBUTIONS IN THE PRESENCE OF A BORROWING CONSTRAINT The neutrality result that total private savings (voluntary and compulsory) are invariant to a change in the employee's CPF contribution rate has been derived by Hoon (1991) and Liew (2000), both of whom assumed perfect capital markets. It was shown by Lim (1994) to hold in a model with borrowing constraints as long as the latter are nonbinding. In this article, we integrate the phenomena of income uncertainty (from Liew) and borrowing constraints (from Lim) in a stochastic, intertemporal optimisation model. We demonstrate the existence of precautionary savings and, contrary to received thinking, the nonneutrality result of total savings to the employee's CPF contribution rate even for workers with positive voluntary savings. The broader implications of this result are also discussed. Central Provident Fund, Precautionary savings, Borrowing constraints 01 2002 47 The Singapore Economic Review 129 152 http://www.worldscientific.com/doi/abs/10.1142/S0217590802000432 CHERN WOON LAM National University of Singapore, Singapore BASANT K. KAPUR National University of Singapore, Singapore
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article MACROPRUDENTIAL POLICIES AS BUFFER AGAINST VOLATILE CROSS-BORDER CAPITAL FLOWS This paper investigates the effectiveness of macroprudential policies introduced by Turkey in late 2010. The unprecedented quantitative easing policies of advanced countries after the global financial crisis have presented serious financial stability concerns for most emerging countries including Turkey. To cope with these challenges, Turkey has devised new policy tools such as asymmetric interest rate corridor and reserve option mechanism. From the perspective of capital flows, the interest rate corridor works mainly through stabilizing supply of foreign funds, and the reserve option mechanism through decreasing the sensitivity of equilibrium exchange rate to shifts in the demand for foreign funds. Using a large panel of 46 countries and employing [Bruno and Shin (2013a). Capital flows, cross-border banking and Global liquidity.Working paper, Princeton university; Bruno and Shin (2013b). Assessing macroprudential policies: Case of Korea.Working paper, Princeton university] methodology, we investigate whether the new policy framework in Turkey has been successful in cushioning the economy from volatile cross-border capital flows from a comparative perspective. The results show that, after controlling for a set of domestic and external variables and relative to a group of advanced and emerging countries, cross-border capital flows to Turkey have been less sensitive to global factors after the implementation of macroprudential policies. Capital flows, Macroprudential policies, E58, F32, F34 01 2015 60 1550001 The Singapore Economic Review 1 26 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500010 AHMET FARUK AYSAN ahmet.aysan@tcmb.gov.tr Central Bank of the Republic of Turkey, Ankara, Turkey SALIH FENDOĞLU salih.fendoglu@tcmb.gov.tr Central Bank of the Republic of Turkey, Ankara, Turkey MUSTAFA KILINÇ mustafa.kilinc@tcmb.gov.tr Central Bank of the Republic of Turkey, Ankara, Turkey
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article GOVERNMENT FISCAL BEHAVIOR AND ECONOMIC GROWTH OF SINGAPORE IN THE TWENTIETH CENTURY This paper reviews the trends in the government fiscal structure and explores the possible relationships between government fiscal expenditure and economic growth in Singapore over the 20th century. It is a reasonable conjecture that the government fiscal behavior and in particularvis-à-viseconomic growth had undergone a significant shift as Singapore switched from British colonial rule to self-government. The paper first traces out the characteristics of the colonial government fiscal behavior and compares them with those during the period of self-government in terms of sources and uses of revenue and fiscal balance. This is then followed by econometric exercises to ascertain whether the government fiscal expenditure responds to income movements broadly in the spirit of Wagner's law in 1900–1939 and 1966–2000. Generally, attention is focused upon inter-temporal similarities and differences. Budget growth, Wagner's law, E62, E69, H60 01 2011 56 The Singapore Economic Review 19 40 http://www.worldscientific.com/doi/abs/10.1142/S0217590811004079 ICHIRO SUGIMOTO ichiro@soka.ac.jp Faculty of Economics, Soka University, Tokyo, Japan EU CHYE TAN tanec@um.edu.my Faculty of Economics and Administration, University of Malaya, Kuala Lumpur, Malaysia
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article WILL MERITOCRACY UNDERMINE THE KNOWLEDGE-BASED ECONOMY? No abstract received. 02 2001 46 The Singapore Economic Review 275 278 http://www.worldscientific.com/doi/abs/10.1142/S0217590801000310 ERN SER TAN Department of Sociology, National University of Singapore, Singapore
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article PRICING BEHAVIOR OF A CONVENTIONAL RETAILER'S ONLINE-BRANCH This paper presents a simple model to interpret the business rationale for a conventional retailer with market power to develop its online business in the presence of an e-commerce rival. The model shows that the online branch of a conventional retailer tends to sell products at a higher price level than its dot.com rival. The participation of the conventional retailer in the online market may increase the average online prices. The conventional retailer will compete aggressively in price only when the cost-saving benefit of online sale is sufficiently large. E-commerce, Online retail prices 02 2003 48 The Singapore Economic Review 173 179 http://www.worldscientific.com/doi/abs/10.1142/S0217590803000700 DING LU ecslud@nus.edu.sg Department of Economics, National University of Singapore, AS2 Level 6, 1 Arts Link, Singapore 117570, Singapore
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article CO2EMISSIONS AND REGIONAL INCOME DISPARITY: EVIDENCE FROM CHINA In this paper, we propose the hypothesis: Given the environmental Kuznets curve (EKC) hypothesis, regional income inequality has a negative, indirect impact on the average level ofCO2emissions through decreasing marginal emission propensities (MEP) of GDP. We have employed a vector error correction model and three inequality measures in our empirical analysis. The empirical results support the hypothesis in China. The main findings of this paper suggest that a trade-off exists between reducingCO2emissions and narrowing regional income disparity and that the MEP contributes to this negative effect. CO2emissions, regional income disparity, environmental Kuznets curve, JEL Classification: Q54, JEL Classification: O44, JEL Classification: O15 01 2014 59 1450007 The Singapore Economic Review 1 20 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500076 LIN GUO icecreamlinlin@gmail.com Graduate School of Economics, Nagoya University, Furo-Cho, Chikusa-Ku, Nagoya 464-8601, Japan
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article UNCERTAINTY IN THE ECONOMICS OF MEDICAL DECISIONS A physician chooses not only the supply of medical treatment, contingent on the result of a diagnostic test, but also the quality of his service. Two sources of uncertainty are introduced. One source arises as, based on the patient's "apparent" symptoms, onlya prioriestimates of the likelihood of alternative medical conditions can be inferred. They can be improved upon by a diagnostic test, but inherent in such tests is the possibility of a "false positive". This second source of uncertainty is shown to be critical in the possible over- or undersupply of medical treatment. Remedial pricing structures are suggested. Bayesian analysis, analysis of health care markets 01 2008 53 The Singapore Economic Review 81 101 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002859 JOHN LANE j.lane@lse.ac.uk jslane@ntu.edu.sg London School of Economics, United Kingdom; Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore SANDRO TSANG sandro_tsang@hotmail.com Department of Economics, University of Granada, 18011 Granada, Spain
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article TECHNOLOGY TRANSFER, FINANCE CHANNELS, AND SME PERFORMANCE: NEW EVIDENCE FROM DEVELOPING COUNTRIES This paper attempts to explore the determinants for small and medium enterprise (SME) performance. In particular, we investigate how training, technology adoption, finance channels and exporting behavior affect SMEs' performance by examining the determinants of theprofit per worker. Using a rich and up to date firm-level dataset, we find evidence that SMEs can improve performance by importing more foreign materials inputs and by utilizing foreign technologies from technologically advanced economies. This effect of technology spillover is particularly important for smaller enterprises in developing countries because in-house innovation is expensive. We further find that both informal finance sources and formal finance channels do not enhance the performance of smaller enterprises in financing daily operations and interestingly, informal channels hamper a firm's performance. There is no evidence for the effect of on-the-job training on firm performance. The exporting behavior of firms measured by the percentage of exports has no significant impact on firm performance. Technology transfer, finance channels, SME performance, L25 03 2012 57 1250020 The Singapore Economic Review 1 20 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500208 MEHMET HUSEYIN BILGIN mhbilgin@medeniyet.edu.tr Faculty of Political Sciences, Istanbul Medeniyet University, D-100 Karayolu 34732, Goztepe-Kadikoy, Istanbul, Turkey CHI KEUNG MARCO LAU marco.lau@zirve.edu.tr Faculty of Economics & Administrative Sciences, Zirve University, Gaziantep, Turkey ENDER DEMIR demir.ender@unive.it Advanced School of Economics, Ca' Foscari University of Venice, Venice, Italy
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article DIRECT MACROECONOMIC LINKS BETWEEN SELECTED EAST ASIAN ECONOMIES AND THE US? AN EMPIRICAL ANALYSIS This paper attempts to establish whether there exists any direct macroeconomic linkages between some East Asian (EA) countries on the one hand and the US on the other hand, based upon quarterly real gross domestic product (GDP) series spanning from the early 1990s. Cointegration, Granger causal relations and contemporaneous correlations of output shocks are explored. Contrary toa prioriexpectations, the empirical evidence suggests no direct linkages of these economies to the US, with the exception of the Malaysian economy. In the case of Malaysia, only a Granger causal relation from the US is found. All this would allude to the ability of these EA economies save one to grow independently of the US, barring a global economic crisis such as the recent one triggered off by sub-prime loans. Growth, cointegration, causality, F41, F43 03 2012 57 1250019 The Singapore Economic Review 1 9 http://www.worldscientific.com/doi/abs/10.1142/S0217590812500191 EU CHYE TAN tanec@um.edu.my Faculty of Economics & Administration, University of Malaya, Kuala Lumpur, Malaysia
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article ACCOUNTING FOR INTANGIBLES: THE GREAT DIVIDE BETWEEN OBSCURITY IN INNOVATION ACTIVITIES AND THE BALANCE SHEET This paper analyses descriptive data from a discretionary accounting setting and several generic properties of innovation activities to explain why intangible assets are grossly under-recognized in company balance sheets. Existing literature and publicly available data indicates the increasing significance of intangible investment in the growth and development of firms and the stock of knowledge. However, a systematic framework to reliably quantify the stock of intangible assets remains elusive. This paper contributes to the debate surrounding recognition of intangible assets by demonstrating how economic attributes of intangible assets arise from generic features of innovation activities, and identifying the nature of the mis-match between accounting principles and the economic attributes of intangible assets which serves to reduce the relevance of accounting information. It is argued that accounting has become inwardly focused on the internal consistency of accounting relative to an outdated set of principles. Before an accounting asset can be recognized financial reporting systems typically require a 'cost' verifiable from a past transaction which the firm can directly link to expected future revenues. This narrow accounting approach is inconsistent with the properties of intangible investments in the knowledge-based economy. 01 2001 46 The Singapore Economic Review 83 117 http://www.worldscientific.com/doi/abs/10.1142/S0217590801000243 ANNE WYATT wyatt@unimelb.edu.au. Faculty of Economics and Commerce, Department of Accounting, The University of Melbourne, Melbourne, Australia 3010, Australia
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article Was Japan's Level of Investment in the 1990's Excessive? In this paper a method for calculating the socially optimal level of aggregate investment is developed. That method is then applied to Japan. It is found that in the 1990's the level of investment in Japan was excessive, in the sense that it exceeded the socially optimal level. The degree of over-investment in Japan in the 1990's has averaged about 5.5 per cent of GDP per year according to the calculations in this paper. Investment, Japan, Demographic change, Recession 01 2003 48 The Singapore Economic Review 13 26 http://www.worldscientific.com/doi/abs/10.1142/S0217590803000633 Ross S. Guest Griffith University, Australia Ian M. McDonald University of Melbourne, Australia
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article Orthodox Economics and Economists: Strengths and Weaknesses Economics is a very powerful discipline that focuses on some important aspects of our life, in particular, constrained maximization equilibrium in resource allocation. However, orthodox economics based on simplified models and many economists much captured by such models have too narrow a focus, ignoring many important factors including the importance of competition for relative standing, environmental disruption, and behaviour patterns inconsistent with the narrow concept of rationality. Economics has also become excessively formalistic, sacrificing relevance for technical sophistication. Extensions of economics to overcome these weaknesses have been and are being made. The incorporation of these advances will make economics more useful. But more time and resources may be needed to train economists properly. Economics, Economists, Scope, Relevance, Formalism 01 2003 48 The Singapore Economic Review 81 94 http://www.worldscientific.com/doi/abs/10.1142/S021759080300061X Yew-Kwang Ng Monash University, Australia
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article TESTING ALTERNATIVE MODELS OF LABOUR SUPPLY: EVIDENCE FROM TAXI DRIVERS IN SINGAPORE In this paper, we use data from a survey of taxi drivers in Singapore to test two competing labour supply hypotheses: the standard intertemporal model and the income targeting model, where workers set an earnings target over some short time horizon. The former predicts positive wage elasticities of labour supply, while an extreme form of the latter implies an elasticity of -1. The estimated wage elasticities are persistently negative, even after correcting for measurement error using instrumental variables. However, these findings are consistent with those in Camereret al.(1997)'s study of New York City's cab drivers. Labour supply, Income targeting, Life-cycle model, Wage elasticity 01 2002 47 The Singapore Economic Review 17 47 http://www.worldscientific.com/doi/abs/10.1142/S0217590802000389 YUAN K. CHOU ychou@unimelb.edu.au Department of Economics, University of Melbourne, VIC 3010, Australia
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article THE WELFARE EFFECTS OF THE AUSTRALIAN GOODS AND SERVICES TAX This paper analyses the effect of the Australian goods and services tax. First, we compute the social marginal cost per dollar revenue raised for nine broad commodity groups to determine whether a uniform flat rate is efficient. Second, we evaluate the welfare effects of the tax on the consumption of different income groups. The results indicate that a uniform tax may not be efficient and that the goods and services tax has adversely affected the distribution of purchasing power and thus, there is little scope for using the indirect tax system as a means to redistribute consumption towards the poor. Consumer demand, Goods and services tax, Social welfare 01 2002 47 The Singapore Economic Review 49 63 http://www.worldscientific.com/doi/abs/10.1142/S0217590802000407 JOHN ASAFU-ADJAYE j.asafu-adjaye@economics.uq.edu.au School of Economics, The University of Queensland, Australia RENUKA MAHADEVAN School of Economics, The University of Queensland, Australia
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article A RE-STATEMENT OF SINGAPORE'S EXCHANGE RATE AND MONETARY POLICIES This policy note, which focuses on Singapore's monetary and exchange rate policies, has a number of objectives. First, it highlights the fact that the Monetary Authority of Singapore (MAS) is equipped with a powerful tool to target the exchange rate level it desires (within limits). Second, it reviews Singapore's exchange rate policy since 1980 and explains that the de facto policy is far more complicated and flexible than the simplistic but oft-noted description of the MAS pursuing a "strong Singapore dollar" policy. Specifically, the paper argues that Singapore's exchange rate regime is an ideal example of the monitoring band system favoured by John Williamson. Third, the paper contrasts the Singapore currency regime with the relatively more inflexible currency board arrangement (CBA) operated in Hong Kong. The relative advantages of Singapore's flexible monitoring band arrangement over Hong Kong's rigidly fixed CBA are highlighted. Exchange rate system, Monitoring band, Monetary policy, Singapore 02 2003 48 The Singapore Economic Review 201 212 http://www.worldscientific.com/doi/abs/10.1142/S0217590803000694 PAUL S. L. YIP aslyip@ntu.edu.sg Economics Department, School of Humanities and Social Sciences, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore
oai:RePEc:wsi:serxxx:v:55:y:2010:i:02:n:s02175908100037052021-08-15RePEc:wsi:serxxx
article THE GLOBAL CREDIT CRISIS AND CHINA'S EXCHANGE RATE The case for stabilizing China's exchange rate against the dollar is strong. Before 2005 when the yuan/dollar rate was credibly fixed, it helped anchor China's domestic price level. But gradual RMB appreciation from July 2005 to July 2008 created a "one-way-bet" that disordered China's financial markets in two respects: (i) no private capital outflows to finance China's huge trade surplus leading to an undue build up of official exchange reserves and erosion of monetary control, and (ii) a breakdown of the forward exchange market in 2007–2008 so that exporters could no longer get trade credit — probably worsening the severe slump in Chinese exports. But after July 2008, the credit crunch induced an unexpected unwinding of the dollar carry trade leading to a sharp appreciation in the dollar's effective exchange rate. The People's Bank of China (PBC) then stopped RMB appreciation against the dollar. China's forward exchange market was restored and monetary control regained. Now the PBC can better support the fiscal stimulus by promoting a parallel expansion of bank credit.But, since March 2009, the fall in the dollar (with the RMB tied to it) again threatens to undermine the yuan/dollar rate and China's monetary stability. China's exchange rate, capital flows, trade credit, forward exchange market, carry trade, bank credit, fiscal stimulus, E62, F31, F32, F42 02 2010 55 The Singapore Economic Review 253 272 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003705 RONALD MCKINNON mckinnon@stanford.edu Economics Department, Stanford University, Stanford, California 94305-6072, USA BRIAN LEE brianbj.lee@gmail.com Economics Department, Stanford University, Stanford, California 94305-6072, USA YI DAVID WANG dyiwang@stanford.edu Economics Department, Stanford University, Stanford, California 94305-6072, USA
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article THE FISHER EFFECT: A SURVEY The Fisher hypothesis has been a much debated topic. Over the years the hypothesis debated and the techniques used have changed. While the majority of early studies on the Fisher effect concentrated primarily on confirming the long and distributed lag in expectations formation, subsequent work saw the integration of the Fisher hypothesis with the theories of rational expectations and efficient markets. With the incorporation of these theories in the Fisher hypothesis, the methodological advances involved examining the time series properties of the variables in question. This survey reviews previous work from this perspective. In addition, the studies pertaining to developing economies and possible explanations for the failure of the Fisher effect are also reviewed. Fisher effect, Inflation, Interest rates 02 2003 48 The Singapore Economic Review 135 150 http://www.worldscientific.com/doi/abs/10.1142/S0217590803000682 ARUSHA COORAY arusha.cooray@utas.edu.au University of Tasmania, Australia
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article INTERNATIONAL EVIDENCE ON REAL INTEREST RATE PERSISTENCE This paper investigates the persistency in theex-postreal interest rates in the presence of endogenous structural breaks for Australia, Austria, Belgium, Canada, Denmark, France, Germany, Ireland, Italy, the Netherlands, New Zealand, Norway, Switzerland, the UK and the USA using seasonally adjusted quarterly data. The procedure used in this study extends the previous research in the respect of investigating degree of persistency of theex-postreal interest rates series by allowing for possible process shifts at endogenously determined more than two structural breaks dates following the principles suggested by Lumsdaine and Papell (1997). The results from the study show that real interest rates are very persistent when such breaks are not taken into account. However, the findings also indicate low persistency in real interest rates for all countries when such breaks are allowed in the data-generating process. We find that endogenously determined structural breaks substantially reduce the degree of persistency of the real interest rate series, which has important theoretical implications as well. Real interest rate, structural breaks, persistence, grid-bootstrap, half-life, C22, E4 04 2015 60 1550087 The Singapore Economic Review 1 14 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500873 ZEYNEL ABIDIN OZDEMIR zabidin@gazi.edu.tr Gazi University, Department of Economics, Besevler 06500, Ankara, Turkey CAGDAS EKINCI cagdas.ekinci@hacettepe.edu.tr Middle East Technical University, Department of Computer Engineering, Cankaya 06800, Ankara, Turkey KORHAN GOKMENOGLU korhan.gokmenoglu@emu.edu.tr Eastern Mediterranean University, Department of Banking and Finance, Famagusta, Northern Cyprus, Cyprus
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article IDENTIFYING AND DATING THE EPISODES OF SPECULATIVE PRESSURES AGAINST THE SINGAPORE DOLLAR The key objective of this study is to bring into light several shortcomings of early literatures in identifying episodes of currency crises. A careful examination of the basic statistical distribution of exchange market pressure index, based on a weighting scheme proposed by Eichengreen–Rose–Wyplosz (1995, 1996), reveals that the conventional method of defining currency crisis is statistically flawed. This study applies an alternative statistical method known as Extreme Value Analysis (EVA), originally developed by Hill (1975), and, more recently, extended by Huismanet al.(2001) to the case of Singapore from 1985 to 2003. Currency crisis, exchange market pressure, extreme value theory, Singapore 02 2006 51 The Singapore Economic Review 113 133 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002366 VICTOR PONTINES victor.pontines@adelaide.edu.au School of Economics, University of Adelaide, SA 5005, Australia REZA SIREGAR reza.siregar@adelaide.edu.au School of Economics, University of Adelaide, SA 5005, Australia
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article JAPANESE SUBSIDIARIES IN AUSTRALIA: WORK PRACTICES AND SUBCONTRACTING RELATIONS AS LEARNING MECHANISM This paper tests whether Japanese subsidiaries in Australia were learning organisations. Two strands of MNE theory are presented: dynamic capability and organisational learning models. Japanese MNEs transferred both work and subcontracting practices to their Australian subsidiaries. Statistical tests showed that there were no significant deepening in work practices or subcontracting relationships between 1993 and 1997. Our tests also revealed no long-term learning, measured by changes in work practices and subcontracting relationships for firms who had operated in Australia for more than 10 and less than 10 years. The paper advances explanations of the absence of short-term and long-term learning. 01 2001 46 The Singapore Economic Review 119 139 http://www.worldscientific.com/doi/abs/10.1142/S0217590801000255 STEPHEN NICHOLAS s.nicholas@unimelb.edu.au. Australian Centre for International of Melbourne, Parkville, Victoria 3101, Australia WILLIAM PURCELL University of New South Wales and Nagoya University, Australia
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article THE IMPACT OF THE FINANCIAL CRISIS ON THE PRODUCTIVITY OF THAILAND'S FINANCIAL INSTITUTIONS Using a new dataset of Thai financial institutions, this paper analyzes the dynamics of productivity over the past decade (1989–1998), including the impact of the financial crisis of recent history. We find productivity increased substantially in the wake of Thailand's financial liberalization (1992–1996); this was followed by a precipitous fall during the crisis (1996–1997). To test the robustness several specifications are undertaken: four models (differing with respect to whether or not risk and deposits are included as inputs), and two frontiers (one where banks and finance companies are treated separately, the other where the data are pooled) are analyzed. Financial institution, Productivity change, Financial crisis, Liberalization 02 2001 46 The Singapore Economic Review 153 177 http://www.worldscientific.com/doi/abs/10.1142/S0217590801000309 ILA M. SEMENICK ALAM ila.alam@tulane.edu Department of Economics, Tulane University, 206 Tilton Hall, New Orleans, LA 70118, USA JONATHAN E. LEIGHTNER jleightn@aug.edu College of Business Administration, Augusta State University, Augusta, GA 30904, USA
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article ECONOMIC POLICIES IN THE LIGHT OF HAPPINESS STUDIES WITH REFERENCE TO SINGAPORE Recent happiness studies show that income explains only 2% of the variance in happiness. Quality-of-life indicators also correlate less with income but more with advances in knowledge at the world level. Individuals and nations still engage in the rat race for higher incomes due to the competition for relative standing, the ignoring of the environmental disruption effects, our accumulation instinct, the influence of advertising and peer pressure, and the inadequate recognition of the habituation effect. In addition, economists over-estimate the costs of public spending, emphasising the excess burden of taxation, ignoring the negative excess burden in the public spending side and ignoring the grosser inefficiency of private consumption. These considerations suggest that more public spending in the right areas like education, research, and environmental protection may be much more welfare-improving despite some unavoidable inefficiencies. The restriction of private cars in Singapore may be desirable despite being excessive in accordance to the narrower economic analysis. It may also be appropriate to emphasise non-income factors important for welfare, including freedom and democracy. Economic policy, Happiness, Public spending, Welfare 02 2002 47 The Singapore Economic Review 199 212 http://www.worldscientific.com/doi/abs/10.1142/S0217590802000523 YEW-KWANG NG ecsny@nus.edu.sg kwang.ng@buseco.monash.edu.au Monash University, Australia; Visiting Goh Keng Swee Professor, Department of Economics, National University of Singapore, Singapore
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article FORECASTING DAILY FOREIGN EXCHANGE RATE IN INDIA WITH ARTIFICIAL NEURAL NETWORK This study compares the efficiency of a non-linear model called artificial neural network with linear autoregressive and random walk models in the one-step-ahead prediction of daily Indian rupee/US dollar exchange rate. We find that neural network and linear autoregressive models outperform random walk model in in-sample and out-of-sample forecasts. The in-sample forecasting of neural network is found to be better than that of linear autoregressive model. As far as out-of-sample forecasting is concerned, the results are mixed and we do not find a "winner" model between neural network and linear autoregressive model. However, neural network is able to improve upon the linear autoregressive model in terms of sign predictions. In addition to this, we also find that the number of input nodes has greater impact on neural network's performance than the number of hidden nodes. Feedforward neural network, Training, Error backpropagation, In-sample prediction, Out-of-sample prediction 02 2003 48 The Singapore Economic Review 181 199 http://www.worldscientific.com/doi/abs/10.1142/S0217590803000712 CHAKRADHARA PANDA chdpanda@yahoo.com. Department of Economics, University of Hyderabad, India V. NARASIMHAN Department of Economics, University of Hyderabad, India
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article DOES MONEY TELL US ANYTHING ABOUT INFLATION IN NIGERIA? This paper seeks to establish whether or not monetary aggregatesM1andM2have useful information for forecasting inflation, other than that provided by inflation itself. The study is approached in two ways. First, it conducts forecasting experiments, using mean absolute percentage errors (MAPEs). It then evaluates whether each monetary variable improves the forecasts of a simple autoregressive (AR) (1) model of inflation or not. The study reveals that the MAPEs for all the variables are less than that of the benchmark AR (1) model. This implies that all the variables examined serve as important information variables for price movements.Also, from the inflation equation, the paper reveals that monetary aggregate(M2), Treasury bill rate, deposit rate and exchange rates are significant in the equation, therefore concluding that these variables provide useful information in predicting inflation in Nigeria. Inflation, monetary aggregates, forecasting, error correction model 01 2007 52 The Singapore Economic Review 117 134 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002592 MICHAEL ADEBAYO ADEBIYI mikebiyi@yahoo.com Department of Economics, University of Lagos, Akoka-Yaba, Nigeria
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article CAPITAL GAINS: BLUE MACHINES AND RED MACHINES Capital gains play an essential role in the intertemporal allocation of resources, but they can also fuel self-fulfilling bubbles. The simple case of 2 "identical" capitals is analyzed in an overlapping generations model. The only trajectory in which expectations are realized at every date is the one in which blue machines and red machines have the same price. If ever their prices differ, then there is a "bubble" which must burst in finite time. Bubbles, capital gains, heterogeneous capital, irreversible investment, overlapping generations (OG), Tobin'sq spec0 2005 50 The Singapore Economic Review 437 447 http://www.worldscientific.com/doi/abs/10.1142/S021759080500213X LUÍS AGUIAR-CONRARIA lfaguiar@eeg.uminho.pt Departmento de Economia, Escola de Economia e Gestao, Universidade do Minho, Campus de Gualtar, 4710-57 Braga, Portugal KARL SHELL ks22@cornell.edu Department of Economics, Cornell University, 402 Uris Hall, Ithaca, NY 14853-7601, USA
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article NOTES AND CORRESPONDENCES: DIFFERENTIATING MERIT FROM CAPABILITY No abstract received. 02 2001 46 The Singapore Economic Review 279 281 http://www.worldscientific.com/doi/abs/10.1142/S0217590801000322 STEPHEN J. APPOLD Department of Sociology, National University of Singapore, Singapore
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article EXAMINING THE UNDERLYING PARITY CONDITIONS SUFFICIENT FOR REAL INTEREST PARITY FOR ASIAN COUNTRIES This paper examines the underlying parity conditions upon which real interest parity (RIP) is predicted for some Asian countries relative to the U.S. and Japan over a period (1978–2009) containing significant changes using the multivariate cointegration procedure of Johansenet al.(2000) that allows for up to two pre-determined breaks. Each parity condition is examined to determine which is responsible for the rejection of RIP. The results suggest that the Fisher hypothesis is the least likely to violate RIP, whereas uncovered interest parity (UIP) appears to be most commonly violated. Stability tests suggest that the RIP relationship has been stable in most cases and that the impact of the Asian crisis and the Plaza Accord appears to be transitory, and that the RIP relationships have strengthened in the aftermath of the 1997–1998 Asian crisis. RIP, cointegration tests, structural breaks, F15, F33, F36, F41 01 2013 58 1350002 The Singapore Economic Review 1 26 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500021 SALAH A. NUSAIR salnusair@yahoo.com nusair.s@gust.edu.kw Department of Economics and Finance, Gulf University for Science and Technology, P.O. Box 7207 Hawally, 32093, Kuwait
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article FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH IN MALAYSIA: THE ROLE OF DOMESTIC FINANCIAL SECTOR This study aims to incorporate the role of domestic financial system in transferring the technological diffusion embodied in FDI inflows on the Malaysian economy from 1970–2001. Applyingbound test, orunrestricted error correction model(UECM) proposed by Pesaranet al.(2001), the presence of FDI inflows creates a positive technological diffusion in both short- and long-run if the evolution of domestic financial system has achieved a certain minimum level. This implies that the improvement of technology level in Malaysia in the long run is due to the spillover efficiency effects from FDI. Hence, the study suggests that FDI tends to be more likely to enhance economic growth more efficiently when a recipient country has a well-developed and well-functioning financial sector. Financial development, foreign direct investment, economic growth, bound test, technological diffusion 02 2005 50 The Singapore Economic Review 245 268 http://www.worldscientific.com/doi/abs/10.1142/S0217590805001998 CHEE-KEONG CHOONG choongck@mail.utar.edu.my Department of Economics, Faculty of Accountancy and Management, Universiti Tunku Abdul Rahman, Lot PT 21144, Jalan Sungai Long, Bandar Sungai Long, Cheras, 43000 Kajang, Selangor D.E., Malaysia ZULKORNAIN YUSOP Department of Economics, Faculty of Economics and Management, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor D.E., Malaysia SIEW-CHOO SOO Department of Econometrics and Business Statistics, School of Business, Monash University Malaysia, No.2 Jalan Kolej, Bandar Sunway, 46150 Petaling Jaya, Selangor D.E., Malaysia
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article AN EVALUATION OF HEDGE FUNDS: RISK, RETURN AND PITFALLS Hedge funds are collective investment vehicles fast becoming popular with high net worth individuals as well as institutional investors. These are funds that are often established with a special legal status that allows their investment managers a free hand to use derivatives, short sell and exploit leverage to raise returns and cushion risk. Given that they have substantial latitude to invest, it is instructive to examine the performance of hedge funds as compared to other forms of managed funds. This paper provides an overview of hedge funds and discusses their empirical risk and return profiles. It also poses some concerns regarding the empirical measurements. Given the complexity of hedge fund investments, meaningful analytical methods are required to provide greater risk transparency and performance reporting. Hedge fund performance is also beset by a number of practical issues generating "practical risks". These risks are not fully addressed by the usual risk-adjusted performance measures in the literature. A penalty function to discount these extraneous risk dimensions is proposed. The paper concludes that further empirical work is required to provide informative statistics about the risk and return of hedge funds. Hedge funds, Risk management, Performance measurement, Nonnormal distribution, Hurst Ratio, Risk penalty function 01 2002 47 The Singapore Economic Review 153 171 http://www.worldscientific.com/doi/abs/10.1142/S0217590802000493 FRANCIS KOH franciskoh@smu.edu.sg School of Business, Singapore Management University, Singapore DAVID K. C. LEE dlee@ferrell.com.sg Ferrell Asset Management, Singapore KOK FAI PHOON pkf@pacific.net.sg Ferrell Asset Management, Singapore
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article ECONOMICS, ECONOMISTS, AND BEHAVIOURAL ECONOMICS: SOME ISSUES OF CHOICE Economic behaviour observed in experiments and in people's everyday dealings is often at variance with predictions and explanations based on standard theory. The findings of systematic patterns of such economic behaviour provide significant opportunities to extend the usefulness of economics. However, like the hesitation of participants in economic experiments to give up their coffee mugs, economists appear reluctant to take advantage of these opportunities. Endowment effect, Behavioural economics, Policy 01 2004 49 The Singapore Economic Review 19 35 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000779 JACK L. KNETSCH Simon Fraser University, Canada
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article TRADE GAINS: THE END OF THE ROAD? In 1972, the potential gainfulness of free trade was established under fairly general assumptions — essentially those of Arrow and Debreu. Since then, the assumptions have been considerably weakened, notably by accommodating overlapping mortal generations and an infinite horizon. However, there remain several indispensable but implausible assumptions. Two of those assumptions are examined, in a preliminary way, in the present paper: (a) in finite trade models of Arrow–Debreu type, each individual is sufficiently ill-informed or irrational to believe that he/she has no market power; (b) in models of overlapping generations and infinite horizons, there are no intergenerational bequests or giftsinter vivos. Few clear generalizations are found. However, an attempt is made to describe circumstances under which assumptions (a) and (b) can be abandoned. Gains from trade, overlapping generations, hidden Arrow–Debreu assumptions spec0 2005 50 The Singapore Economic Review 361 368 http://www.worldscientific.com/doi/abs/10.1142/S0217590805002086 MURRAY C. KEMP mkemp@efs.mq.edu.au Department of Economics, Macquarie University, New South Wales 2029, Australia
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article EXCHANGE RATE PASS-THROUGH FOR SELECTED ASIAN ECONOMIES This paper investigates the degree of exchange rate pass-through for the selected Asian countries namely Malaysia, Thailand, Taiwan, and Singapore. Unlike past studies, this paper focuses on small open economies and includes exports of primary commodities in the investigation. We utilize cointegration techniques based on Engle and Granger (1987) and Johansen and Juselius (1990), and error correction modeling, to provide a more robust and rigorous investigation of the long run and short run pass-through of exchange rates. It is found that, in general, the degree of pass-through is high, although there is a small extent of pricing to market found for all countries. For Malaysia, the degree of pricing to market found suggests that there is intense competition in the export industries. In the case of Thailand, there is almost complete pass-through and this conforms to oura prioriexpectations. In the case of Singapore and Taiwan, we detect a higher degree of pass-through compared to past studies. For a country, the high degree of pass-through will support the adoption of more flexible exchange rate oriented monetary policies, and for firms it will reveal the limits of their price setting behavior amidst international competition. Exchange rate pass-through, Cointegration, Pricing to market, Error correction model, Asian economies 02 2001 46 The Singapore Economic Review 247 273 http://www.worldscientific.com/doi/abs/10.1142/S0217590801000358 MUN-HENG TOH fbatohmh@nus.edu.sg Department of Business Policy, National University of Singapore, 10 Kent Ridge Crescent, Singapore 119260, Singapore HWEI-JING HO Department of Business Policy, National University of Singapore, 10 Kent Ridge Crescent, Singapore 119260, Singapore
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article SOME EMPIRICAL EVIDENCE OF EXCHANGE MARKET PRESSURE IN SINGAPORE This paper examines an intervention index in the foreign exchange market, applying the quarterly data of the Singapore economy during the 1990's. The intervention index measures intervention activity as the proportion of exchange market pressure relieved by exchange market intervention. Singapore is selected because (1) it is a small open economy and consistent with this empirical study, and (2) it has been affected by speculative attacks. The specific interest is the effectiveness of intervention conducted by the Singapore authority to mitigate exchange market pressure. It is concluded that the overall intervention activity is surprisingly successful over the sample period. Intervention, Exchange market pressure, Singapore 01 2004 49 The Singapore Economic Review 55 69 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000792 HIROYA AKIBA akiba@waseda.jp School of Political Science & Economics, Waseda University, Tokyo, Japan YUKIHIRO IIDA Graduate School of Economics, Waseda University, Tokyo, Japan
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article Macroeconomic Management: Is Keynesianism Dead? No abstract received. 01 2003 48 The Singapore Economic Review 1 12 http://www.worldscientific.com/doi/abs/10.1142/S0217590803000657 Chong Yah Lim Nanyang Business School, Nanyang Technological University, Singapore
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article BOOK REVIEW: "Handbook of Development Policy and Management", edited by Colin Kirkpatrick, Ron Clarke and Charles Polidano No abstract received. 01 2002 47 The Singapore Economic Review 183 187 http://www.worldscientific.com/doi/abs/10.1142/S0217590802000481 PUNDARIK MUKHOPADHAYA
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article CHINA — CAN RAPID ECONOMIC GROWTH CONTINUE? Between 1978 and 2000, Chinese GDP expanded more than seven-fold; present official projections suggest a further four-fold expansion to 2020. Is this feasible and, if so, what would be the consequences for the rest of the world? China has a huge catch-up potential and a vast resource of cheap labor. Policies are improving. The fiscal, employment and regional disparity problems, while serious, seem manageable. Hence, further rapid growth is possible. For the world economy this is bound to be beneficial thanks to resource reallocation, the growth of a large market and likely terms of trade gains. Developing countries, particularly in Asia, will, however feel a strong competitive challenge. China, economic growth, foreign trade 02 2004 49 The Singapore Economic Review 255 272 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000913 ANDREA BOLTHO andrea.boltho@magd.ox.ac.uk Magdalen College, University of Oxford, Oxford OX1 4AU, UK
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article OPENING THE FINANCIAL SECTOR TO FOREIGN COMPETITION: ASSESSING THE DYNAMIC MACROECONOMIC CONSEQUENCES USING A TWO-SECTOR GROWTH MODEL This paper uses an economic growth model with a financial sector to examine the conditions under which financial liberalization is desirable from the perspective of a policymaker who cares about the well-being of domestic households. Financial liberalization raises the rate of financial innovation and the efficiency of financial intermediation, but typically causes large foreign firms from leading-edge countries to displace smaller and less efficient domestic firms. Profits are repatriated abroad instead of accruing to domestic households as dividends. This trade-off is further complicated when we allow financial firms to hire talented foreigners once liberalization has taken place. Simulations of the model indicate that the case for financial liberalization is stronger when agents are more impatient, spillover effects of current financial innovation on future innovation are larger, financial innovations are more susceptible to congestion in their use, and when knowledge diffuses more quickly from foreign to domestic workers. Economic growth, finance, financial liberalization 02 2004 49 The Singapore Economic Review 195 224 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000883 YUAN K. CHOU ychou@unimelb.edu.au Department of Economics, University of Melbourne, VIC 3010, Australia MARTIN S. CHIN Department of Economics, University of Melbourne, VIC 3010, Australia
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article HOW INTRA-INDUSTRY TRADE CHANGED OUR PERCEPTION OF THE WORLD ECONOMY No abstract received. Intra-industry trade, product differentiation, multinationals 01 2004 49 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000767 PETER J. LLOYD pjlloyd@unimelb.edu.au Department of Economics, Faculty of Economics and Commerce, The University of Melbourne, Parkville, Victoria 3010, Australia
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article MEASURING PRODUCTIVE CAPACITY REALIZATION OF BANGLADESH FOOD MANUFACTURING: A RANDOM COEFFICIENT FRONTIER APPROACH The aim of this paper is to empirically estimate the firm level productive capacity realization (PCR) by using the stochastic coefficient frontier production function. Empirical estimations have been done using firm level data from Bangladesh food manufacturing covering the inter-temporal periods 1988, 1992 and 1996. The results suggest that there are considerable levels of unrealized production capacity in the food processing sector and very little improvement occurred in realization of productive capacity after the implementation of economic reforms. So, there is enough room for increasing output by realizing substantial unrealized capacity. Capacity realization, Production function 02 2001 46 The Singapore Economic Review 195 209 http://www.worldscientific.com/doi/abs/10.1142/S0217590801000292 RUHUL AMIN SALIM ras@squ.edu.om. Department of Economics & Finance, College of Commerce and Economics, Sultan Qaboos University, Al Khod 123, Muscat Sultanate of Oman, Oman
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article ON SINGAPORE DOLLAR–U.S. DOLLAR AND PURCHASING POWER PARITY This study re-examines the validity of the relationship between the Singapore dollar–U.S. dollar exchange rate and relative prices using the latest econometric methodologies that account for non-linearity. Among others, this study finds Exponential Smooth Transition Autoregressive (ESTAR)-type non-linear mean-reverting adjustment process of the nominal Singapore dollar–U.S. dollar rate towards the consumer price index ratio. Unlike previous findings of a linear cointegration relationship between the nominal Singapore dollar–U.S. dollar exchange rate and consumer price index ratio, this study shows that the relationship is in fact non-linear in nature. The major economic implications of our findings are: (1) policy makers need to take non-linearity into consideration in their policy decisions; (2) the Monetary Authority of Singapore (MAS) is able to maintain the macroeconomic equilibrium despite the authority's strong dollar policy; and (3) one should keep track of Singapore's monetary policy and other innovations in aggregate demand in order to closely monitor the movement of the Singapore exchange rate. Exchange rates, Non-linearity, Purchasing power parity, Exponential smooth transition autoregressive (ESTAR) model, Singapore 01 2004 49 The Singapore Economic Review 71 84 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000809 VENUS KHIM-SEN LIEW Department of Economics, Faculty of Economics and Management, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor, Malaysia AHMAD ZUBAIDI BAHARUMSHAH Department of Economics, Faculty of Economics and Management, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor, Malaysia KIAN-PING LIM kianping@ums.edu.my
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article Book Review: How Far Has China Gone in Marketization? No abstract received. 01 2003 48 The Singapore Economic Review 95 97 http://www.worldscientific.com/doi/abs/10.1142/S0217590803000645 Xiaowen Tian East Asian Institute, National University of Singapore, Singapore
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article BOOK REVIEW: Economic Globalization and Asia — Essays on Finance, Trade and Taxation No abstract received. 02 2004 49 The Singapore Economic Review 291 293 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000937 PETER WILSON Department of Economics, National University of Singapore, Singapore
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article HEALTH CARD AND HEALTH CARE FACILITIES DEMAND AMONG THE INDONESIAN ELDERLY This paper evaluates the benefits of the health card subsidy, issued by the Indonesian government after the financial crisis in 1997, on elderly health care demand. The health card subsidy provides free access to health services, and was accepted at any available health center orpuskesmas. Using the Indonesia Socioeconomic survey data (Susenas) for 2003, results show that health cards issued to the poor consistently increase the demand for health care facilities among the old population. Unfortunately, it is also found that the health card benefited wealthier individuals in their access to health centers orpuskesmas. Health subsidy, health care demand, elderly poverty, Indonesia 01 2008 53 The Singapore Economic Review 103 119 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002860 MALIKI maliki@hawaii.edu National Planning and Development Agency (Bappenas), Jl. Taman Surapati 2, Jakarta 10310, Indonesia
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article SOME MARKET EFFECTS OF E-COMMERCE An important characteristic of E-commerce is that it is a form of technological change. The effects of E-commerce induced reductions in business production costs and on seller to buyer transaction costs are assessed. Comparative static models for different market structures are used to assess the effects of E-commerce on prices, quantities, aggregate efficiency gains, and the distribution of benefits and costs. Ultimately consumers are the principal beneficiaries via lower prices. Competitive forces and profit incentives induce firms to adopt cost reducing E-commerce technology. 01 2001 46 The Singapore Economic Review 49 62 http://www.worldscientific.com/doi/abs/10.1142/S0217590801000231 JOHN FREEBAIRN Department of Economics, The University of Melbourne, Victoria 3010, Australia
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article MONEY, INFLATION AND CAPITAL ACCUMULATION This paper shows that increasing the rate of monetary growth increases the capital-labor ratio in the long run when the initial inflation rate is low but decreases the capital-labor ratio when the inflation rate is high. This paper provides a theoretical justification for the empirical result by Bullard and Keating (1996) that inflation has positive real effects for low-inflation countries in the long run but negative effects for higher-inflation countries. Money, Inflation, Seigniorage, Capital accumulation 02 2001 46 The Singapore Economic Review 179 193 http://www.worldscientific.com/doi/abs/10.1142/S021759080100036X KIM HENG TAN akhtan@ntu.edu.sg Nanyang Business School, Nanyang Technological University, Singapore 639798, Singapore
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article AN ANALYSIS OF STRATEGIC BEHAVIOR INeBAY AUCTIONS A relatively new type of panel data analysis is becoming more and more topical in the applied econometrics literature as auction mechanisms are being explored in more depth. The typical data utilized in such studies involves repeated measures of auction outcomes, where the variable of interest involves order statistics from the sample of bids from many bids on completed auctions for a particular commodity. This article presents structural estimates of bidding behavior in eBay computer monitor auctions. We exploit characteristics of such repeated measures to analyze the efficiency of private value auctions for a relatively homogeneous good, computer monitors sold on eBay. We discuss how outcomes of the auction mechanism can be analyzed and their equilibrium outcomes assessed and evaluate the consumer surplus that is generated from such auctions. Particular attention is given to the collection of the eBay data from data recovery protocols that monitor in real time and in relative detail, characteristics of a particular auction with heterogeneity controls for different types of monitors and for different reputation effects of the auctioneer. Among other findings, our results point to a rejection of the use of Jump Bidding (Avery, 1998) or "Snipe or War" bidding (Roth and Ockenfels, 2002). We also find that longer auctions only have a small effect on price and experienced auctioneers respond to this incentive. Internet auctions, English auctions, structural econometrics, simulated nonlinear least squares, C1, C7, D44, L1 03 2009 54 The Singapore Economic Review 441 472 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003422 RAUL GONZALEZ raugonza@ccr.dsi.uanl.mx Facultad de Economías, Universidad Autónoma de Nuevo León, Monterrey, N.L. México. A.P. 288, Mexico KEVIN HASKER hasker@bilkent.edu.tr Department of Economics, Bilkent University, 06800 Bilkent, Ankara, Turkey ROBIN C. SICKLES rsickles@rice.edu Department of Economics, Rice University, Houston, Texas 77005-1892, TX, USA
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article EMPIRICAL PSYCHOLOGY BETWEEN WHOLESALE PRICE AND CONSUMER PRICE INDICES: THE CASE OF PAKISTAN In a small open economy, the retail sector adds value with a lag to existing production and uses existing domestic production as an input. Therefore, demand side dynamics depend on the wholesale prices of the domestic goods, the prices of the imported goods, the nominal exchange rate, the level of indirect taxes, the marginal cost of retail production and interest rates. Hence, this mechanism provides a theoretical basis for causality from wholesale prices to consumer prices. Being motivated by this causal transmission mechanism, this paper tries to examine the causal relationship between wholesale prices and consumer prices in a small developing economy like Pakistan. Empirical methodology uses recently developed tests for the existence of a long-run relationship between wholesale prices and consumer prices. Typically, in applied analysis, testing for the existence of cointegration and causality can only be carried out once the time series properties of the data have been established. For example, tests for cointegration require the variables to be integrated to the same order, typicallyI(1), prior to estimation. By eliminating the need for unit root pre-testing, the tests applied here considerably simplify the inference procedure. They also reduce the potential for distortions in the inference due to the unknown properties of the testing sequence. Our findings include robust evidence that, for Pakistan, there is a bidirectional causality between wholesale prices and consumer prices. Feedback impact shows that influences from the wholesale price index (WPI) to the consumers' price index (CPI) is stronger or dominating as compared to feedback from CPI to WPI supporting the Cushing-McGarvey (1990) hypothesis. Wholesale prices, consumer prices, causality, cointegration, Pakistan, C20, I10 03 2010 55 The Singapore Economic Review 537 551 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003882 MUHAMMAD SHAHBAZ COMSATS Institute of Information Technology, Lahore, Pakistan ABU N. M. WAHID awahid@tnstate.edu Department of Economics and Finance, Tennessee State University, USA ADNAN HAIDER Research Department, State Bank of Pakistan, Karachi, Pakistan
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article BOOK REVIEW: ASEAN Beyond the Regional Crisis: Challenges and Initiatives No abstract received. 02 2001 46 The Singapore Economic Review 283 288 http://www.worldscientific.com/doi/abs/10.1142/S0217590801000371 TEOFILO C. DAQUILA Southeast Asian Studies Programme, National University of Singapore, Singapore
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article TEACHING NOTE— CUSTOMS UNIONS VS. NON-PREFERENTIAL QUOTAS This paper intends to show that increasing a non-preferential import quota is always superior to joining a customs union, assuming that the customs union is small. However, increasing a non-preferential input quota is not necessarily superior to joining a customs union if the customs union is large and capable of influencing the terms of trade. Customs union, Non-preferential quotas 02 2002 47 The Singapore Economic Review 269 273 http://www.worldscientific.com/doi/abs/10.1142/S0217590802000547 YEONG-HER YEH University of Hawaii, USA
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article THE SCARCITY OF ENVIRONMENTAL CAPITAL AND ECONOMIC GROWTH: A COMPARATIVE STUDY OF AUSTRALIA AND THE UNITED STATES The paper employs a methodology that enables the elicitation of the price and quantity of environmental capital (KN) at an aggregate macroeconomic level. The stock ofKNconsidered here is confined to the air-shed of an economy that gets utilized in the process of economic growth. A time series study of the prices and quantities ofKNenables an appreciation of the changing value of nature in economic growth. Despite improvements in the rate of utilization ofKN, there is insufficient evidence of decreasing scarcity ofKNin the case of both Australia and the United States. Environmental capital, scarcity, income approach to national accounts, interest rate, depreciation rate 02 2007 52 The Singapore Economic Review 251 263 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002683 DODO J. THAMPAPILLAI spptj@nus.edu.sg Lee Kuan Yew School of Public Policy, National University of Singapore, Singapore 119260, Singapore
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article JUMP, NON-NORMAL ERROR DISTRIBUTION AND STOCK PRICE VOLATILITY — A NONPARAMETRIC SPECIFICATION TEST This paper examines a wide variety of popular volatility models for stock index return, including Random Walk model, Autoregressive model, Generalized Autoregressive Conditional Heteroscedasticity (GARCH) model, and extensive GARCH model, GARCH-jump model with Normal, and Studentt-distribution assumption as well as nonparametric specification test of these models. We fit these models to Dhaka stock return index from 20 November 1999 to 9 October 2004. There has been empirical evidence of volatility clustering, alike to findings in previous studies. Each market contains different GARCH models, which fit well. From the estimation, we find that the volatility of the return and the jump probability were significantly higher after 27 November 2001. The model introducing GARCH jump effect with normal and Studentt-distribution assumption can better fit the volatility characteristics. We find that RW-GARCH-t, RW-AGARCH-t RW-IGARCH-t and RW-GARCH-M-t can pass the nonparametric specification test at 5% significance level. It is suggested that these four models can capture the main characteristics of Dhaka stock return index. GARCH-jump, nonparametric specification test, t-distribution 01 2009 54 The Singapore Economic Review 101 121 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003203 MOHAMMAD MASUDUR RAHMAN rahman@ias.unu.edu United Nations University-Institute of Advanced Studies (UNU-IAS), 6F, International Organization Centre, Pacifico-Yokohama, Minatomirai, Nishi-ku, Yokohama 220-8502, Japan LAILA ARJUMAN ARA lailamolly2003@yahoo.com WTO Research Centre, Aoyama Gakuin University, Tokyo, Japan ZHENLONG ZHENG zlzheng@xmu.edu.cn Department of Finance, Xiamen University, Fujian, China
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article BOOK REVIEW: Tiger Technology: The Creation of a Semiconductor Industry in East Asia No abstract received. 01 2001 46 The Singapore Economic Review 149 151 http://www.worldscientific.com/doi/abs/10.1142/S0217590801000280 Jang-Sup Shin Department of Economics, National University of Singapore, Singapore
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article TESTING DIFFERENT CLASSES OF ENDOGENOUS GROWTH MODELS: INDUSTRY EVIDENCE FOR THE NEW ZEALAND ECONOMY The endogenous growth literature can be broadly separated into two classes of growth models: Rival human capital models and non-rival "idea" models. Both classes differ in their positive and normative implications for growth. Following Klenow's (1998) approach, this paper uses industry panel data to investigate which class of growth models might be the most appropriate for the New Zealand economy: Exogenous growth, or one of the two classes of endogenous growth models. In contrast to Klenow's findings for the United States, in the New Zealand case rival human capital models seem more applicable, though none of the models correctly predicts all of the empirical relationships. Growth, Human capital, Ideas, Industry data, New Zealand 01 2002 47 The Singapore Economic Review 89 110 http://www.worldscientific.com/doi/abs/10.1142/S0217590802000390 HANS-JÜRGEN ENGELBRECHT H.Engelbrecht@massey.ac.nz Department of Applied and International Economics, College of Business, Massey University, Palmerston North, New Zealand NATHAN MCLELLAN New Zealand Treasury, Wellington, New Zealand
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article DUAL AND COMMON AGENCY ISSUES IN INTERNATIONAL JOINT VENTURES: EVIDENCE FROM CHINA With the help of a theoretical model, we analyze the relation between rent sharing in an international equity joint venture (EJV) and local public goods provision. In our setting, the local government faces a commitment problem to provide public servicesex postto the set-up of the firm. We show that, to overcome such a dual agency problem, the multinational enterprise leaves more rents to the local partner than in the first-best to provide stronger incentives for local public investment. We test the trade-off between local public goods and ownership shares across Chinese provinces to find support for our mechanism. Rent sharing, local public goods, foreign investment, China, F21, F23, L14, L22, H41 03 2013 58 1350020 The Singapore Economic Review 1 25 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500203 YI ZHANG zhangyi.econ@mail.xjtu.edu.cn Jinhe Center for Economic Research, Xi'an Jiaotong University, No. 28 Xianning West Road, Xi'an, Shaanxi, 710049, China HEIN ROELFSEMA Utrecht University School of Economics, Utrecht University, Kriekenpitplein 21–22, 3584 EC Utrecht, The Netherlands
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article ARE STOCK SPLITS CREDIBLE SIGNALS? EVIDENCE FROM THE SINGAPORE MARKET This paper studies the effects of stock splits on returns using daily data from the Singapore Stock Exchange over the period 1983-2000. Specifically, it examines whether stock split announcements provide credible signals due to asymmetry of information. We find that the market, on average, responds positively and significantly to announcements of stock splits. We then partition the sample into sub-samples: one with dividends (earnings) increasing firms and another with dividends (earnings) decreasing firms the 12 month period after the stock split. Both groups respond positively to stock split announcements on the event period, which initially casts doubt on the signaling hypothesis. Additional tests show that the difference between the cumulative average returns of the two sub-samples is significantly positive during the post-event and/or full-test period. An implication of this finding is that the market can differentiateex antebetween the two sub-samples, which lends support to the hypothesis that stock split announcements generally provide credible signals of future prospects. Stock splits, signaling effects, dividend policy 02 2004 49 The Singapore Economic Review 163 177 http://www.worldscientific.com/doi/abs/10.1142/S021759080400086X M. ARIFF mohamed.ariff@buseco.monash.edu.au Monash University, Department of Accounting and Finance, P.O. Box 197, Caulfield East, Vic 3163, Australia WALAYET A. KHAN wk3@evansville.edu University of Evansville, School of Business, 1800 Lincoln Avenue, Evansville, IN 47722, USA H. KENT BAKER kbaker@american.edu American University, Kogod School of Business, Department of Finance and Real Estate, 4400 Massachusetts Avenue, NW Washington, D.C. 20016-8044, USA
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article BOOK REVIEW: "Inspiring Economics: Human Motivation in Political Economy" by Brunos S. Frey No abstract received. 02 2002 47 The Singapore Economic Review 275 279 http://www.worldscientific.com/doi/abs/10.1142/S0217590802000559 BASANT K. KAPUR Department of Economics, National University of Singapore, Singapore
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article CROSS-BORDER TOURISM FROM BRUNEI DARUSSALAM TO EASTERN MALAYSIA: AN EMPIRICAL ANALYSIS We analysed the factors influencing the level of cross-border tourism from Brunei Darussalam to Eastern Malaysia based on a random survey of 675 Bruneian residents returning from land and sea trips to Eastern Malaysia and using simple statistical and multiple regression analysis. The results revealed that the age of the respondents, personal income, perceived quality of Eastern Malaysia as a better place to rest and relax, perceived quality of goods and services in Eastern Malaysia, use of alcohol by respondents and having family members and friends living in Eastern Malaysia were significant factors affecting the number of visits to Eastern Malaysia. This analysis was based on visits over the 12-month period prior to the survey, a period of relative price stability. Regression analysis of personal expenditures on goods and services of respondents during their most recently completed trip indicated that personal income, travelling with friends, number of days spent on the trip, perception of Eastern Malaysia as a better place to rest and relax and use of public transport were the significant factors affecting expenditures. We estimated that Bruneian residents spent about B$426 million a year on goods and services while visiting Eastern Malaysia, and this amount accounted for roughly 5.7% of Brunei's gross domestic product (GDP) in the year 2000. Brunei, Cross-border tourism, Economics of tourism, Southeast Asia, Tourism demand 01 2002 47 The Singapore Economic Review 65 87 http://www.worldscientific.com/doi/abs/10.1142/S0217590802000419 KWABENA A. ANAMAN Department of Economics, Universiti Brunei Darussalam, Bandar Seri Begawan BE1410, Brunei Darussalam ROSE AMINAH ISMAIL Department of Economics, Universiti Brunei Darussalam, Bandar Seri Begawan BE1410, Brunei Darussalam
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article How Did the Bank of Thailand Respond to Capital Inflows before a Crisis? Sterilization and Base Money in the 1990's This paper explores how the Bank of Thailand (BOT) responded to capital inflows through sterilization and how it changed base money before the Asian crisis. There has been no general consensus on this subject and many previous studies have not considered the definition of sterilization. In this paper, sterilization is defined as the sale of domestic assets by a central bank in order to offset an increase in base money due to the purchase of foreign assets. When the BOT does not sell domestic assets but instead changes the value of accounts that are not counted in base money on the liabilities side of the balance sheet, it can keep base money fixed without sterilization. The results of this analysis are that the BOT kept base money constant after 1994 by means of sterilization and the manipulation of liabilities not counted in base money, while prior to 1994, there was incomplete sterilization and base money was not fixed. Capital inflow, Dollar peg system, Bank of Thailand, Sterilization, Base money 01 2003 48 The Singapore Economic Review 39 60 http://www.worldscientific.com/doi/abs/10.1142/S0217590803000621 Masahiro Inoguchi ged0401@srv.cc.hit-u.ac.jp Graduate School of Economics, Hitotsubashi University, Japan
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article HOUSEHOLD HETEROGENEITY AND OPTIMAL INTER-TEMPORAL PRICING FOR A DURABLE-GOOD MONOPOLY In this paper, I extend the analysis in Koh (2006) to examine the optimality of inter-temporal price discrimination for a durable-good monopoly in a model where infinitely-lived households consume both durable goods and a stream of non-durable goods subject todifferentinter-temporal budget constraints. I also consider the multi-dimensional setting where households differ in both inter-temporal budget constraints and the utilities they derive from the consumption of the durable good. Durable good, monopoly, inter-temporal price discrimination 03 2006 51 The Singapore Economic Review 395 403 http://www.worldscientific.com/doi/abs/10.1142/S0217590806002494 WINSTON T.H. KOH winstonkoh@smu.edu.sg School of Economics and Social Sciences, Singapore Management University, 90 Stamford Road, Singapore 178903, Singapore
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article POVERTY, POLICY REFORMS FOR RESOURCE-USE AND ECONOMIC EFFICIENCY: NEGLECTED ISSUES It is widely believed that in developing countries, open-access to natural resources, inadequate private property rights, and lack of development of market systems add to the incidence of poverty. Increased economic efficiency is seen as a powerful force for reducing the extent of poverty in developing countries in thelong run. While this may be so, it ignores the depth and incidence of poverty that can be generated during adjustments to policy reforms. This possibility constrains policy choices as shown theoretically on natural resource policies and agricultural adjustment policies with Asian examples. Social, behavioral, and institutional features are also considered as they may result in the poverty lock-in of some groups. It is essential to consider dynamic processes and not to rely solely on comparative statics when assessing economic policies to reduce poverty and increase economic efficiency. It is also important to take into account the institutional constraints on policy choices. Adjustment to policy change, agricultural policy, Asia, economic efficiencies, institutionalism, market reforms, natural resource policies, poverty 02 2009 54 The Singapore Economic Review 155 166 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003318 CLEM TISDELL c.tisdell@economics.uq.edu.au School of Economics, University of Queensland, Brisbane 4072, Australia
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article KNOWLEDGE-BASED OR KNOWER-BASED? This paper analyses the concept of a knowledge-based society. It suggests that certain important features of a knowledge-based society are better understood by appealing to the notion of aknower-basedsociety, and discusses some implications following from this. One point highlighted is that the existence of a knowledge-based society would exert pressure on the need to define the ethical challenges of such a society. It is proposed that some of the most pressing issues in the knowledge-based era, such as those revolving around the production and dissemination of knowledge, actually go hand-in-hand with questions of value. 01 2001 46 The Singapore Economic Review 1 16 http://www.worldscientific.com/doi/abs/10.1142/S0217590801000206 MABEL WAI LIN EICKEMEYER Department of Philosophy, National University of Singapore, 3 Arts Link, Singapore 117570, Singapore
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article PARALLEL IMPORTS, INNOVATIONS AND NATIONAL WELFARE: THE ROLE OF THE SIZES OF INCOME CLASSES AND NATIONAL MARKETS FOR HEALTH CARE This paper shows that regardless of any intra-country income differences, parallel imports result in a lower level of health-care innovation but, contrary to popular as well as conventional theoretical wisdom, alower pricein the Third World compared to market-based discrimination. Despite such a lower price, however, parallel imports unambiguously make all buyers in the Third World worse off when intra-country income disparity exists. On the other hand, even discarding the MNC's profit, there will be cases in which the richer country prefers price discrimination as well. That is, in those cases, no countries will have any incentive under the welfare criterion to undo price discrimination, contrary to Richardson (2002). Parallel imports, price discrimination, health-care innovation, market size, income distribution 01 2008 53 The Singapore Economic Review 57 79 http://www.worldscientific.com/doi/abs/10.1142/S0217590808002847 RAJAT ACHARYYA racharya@cal2.vsnl.net.in Department of Economics, Jadavpur University, Kolkata 700032, India MARÍA D.C. GARCÍA-ALONSO mcg@kent.ac.uk Department of Economics, University of Kent, Kent CT12 7NP, United Kingdom
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article THE PRODUCTIVE EFFICIENCY OF SINGAPORE BANKS: AN APPLICATION AND EXTENSION OF THE BARRET AL.(1999) APPROACH While a voluminous literature exists on the measurement of financial institution efficiency, little work has been directed at investigating the properties of data envelopment analysis (DEA) scores by examining the relationships between these scores and traditional measures of bank performance. Following the seminal work of Barr, Killgo, Siems and Zimmel (1999), this paper employs data on Singapore financial institutions for the period 1993 to 1999 to develop efficiency scores for Singapore banks. It then examines the manner in which derived DEA efficiency scores interact with traditional measures of profitability, size, risk and soundness. Bank performance measures, data envelopment analysis, financial services, productive efficiency 02 2004 49 The Singapore Economic Review 273 290 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000925 WAI HO LEONG Economics Division, Ministry of Trade and Industry, 100 High Street, Singapore 179434, Republic of Singapore BRIAN DOLLERY bdollery@metz.une.edu.au International Graduate School of the Social Sciences, Yokohama National University, Japan; School of Economics, University of New England, Armidale NSW 2351, Australia
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article BOOK REVIEW: "Vietnam: From an Uncertain Tiger to a Dormant Dragon" No abstract received. 02 2003 48 The Singapore Economic Review 213 216 http://www.worldscientific.com/doi/abs/10.1142/S0217590803000736 CAROLINE BRASSARD Public Policy Programme, National University of Singapore, Singapore
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article BOOK REVIEW: Barriers to Riches No abstract received. 01 2001 46 The Singapore Economic Review 145 148 http://www.worldscientific.com/doi/abs/10.1142/S0217590801000279 Hian Teck Hoon Singapore Management University, Singapore
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article CENTRAL BANK INTERVENTION AND EXCHANGE RATE BEHAVIOR: EMPIRICAL EVIDENCE FOR INDIA This paper examines the causal relationship between central bank intervention and exchange rate returns in India. Using monthly data from December 1997 to December 2011, the empirical results derived from the CCF approach of Cheung and Ng [Journal of Econometrics72(1996) 33–48] suggest that there is causality-in-variance from exchange rate returns to central bank intervention, but notvice versa. These findings are robust in the sense that they hold in cases where the returns were measured from either the spot rate or the forward rate. Therefore, we conclude that the Indian central bank has intervened in the foreign exchange market to respond to exchange rate volatility, although the volatility has not been influenced by central bank intervention in the form of net purchases of foreign currency in the market. Causality-in-variance, central bank, exchange rate, India, intervention, E58, F31 02 2015 60 1550016 The Singapore Economic Review 1 11 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500162 TAKESHI INOUE tinoue@nanzan-u.ac.jp Faculty of Policy Studies, Nanzan University, 27 Seirei-Cho, Seto, Aichi 489-0863, Japan
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article LOCATIONAL CHOICE FOR EXPORT PROCESSING ZONES IN DEVELOPING COUNTRIES Little attention has been given to the issue of the locational choice for EPZs, from a theoretical point of view, except by Miyagiwa (1993). In this paper, using a three-sector general equilibrium model with unemployment, we will examine theoretically the issue of where to locate EPZs. This model gives policy makers in developing countries four policy options. An interesting result is as follows: it reveals that attracting foreign firms which are more labor-intensive (capital-intensive) than the rural domestic firms into the rural-based EPZ is the best (worst) policy for developing countries. Export processing zones, foreign capital inflow, development strategy 02 2004 49 The Singapore Economic Review 179 193 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000871 KAZUHIRO TETSU tetu@hss.shizuoka.ac.jp Department of Economics, Shizuoka University, 836 Ohya, Shizuoka-shi, 422-8529, Japan
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article DE FACTOANDDE JUREREGIONAL ECONOMIC INTEGRATION IN EAST ASIA: HOW DO THEY INTERACT A salient feature of the East Asian region is the persistent discrepancy between the progress inde factoandde jureeconomic integration. East Asia has long been said to be the champion of loose regional economic integration, with deepening intra-regional trade and investment linkages in the absence of any formal cooperative scheme. However, an oft-heard claim is that East Asia has been shifting recently towards an institution-based form of regional economic cooperation, primarily as a result of the 1997–98 financial crisis. Next to post-crisis financial cooperative schemes under the ASEAN+3, the surge of Regional Trade Agreements (RTAs) involving East Asian countries is thought by some to further substantiate this claim. The objective of the paper is twofold; first, to assess the validity of the aforementioned claim; and second, to examine the links betweende factoandde jureeconomic integration in East Asia compared to other regions of the world. In the process, the sequencing between trade and monetary cooperation is also addressed. The paper starts by providing a candid assessment of the current state of play of economic cooperation in East Asia (de jureintegration), both from the trade and the financial/monetary perspective, and highlights the limitations of the formal regional integration movement in East Asia to date. As a next step, it explores the changing nature of intra-regional trade and investment linkages, contrasts it to the situation in other parts of the world such as Europe and examines to what extent this new form of interdependence may be instrumental in making formal regional economic schemes more attractive. A major conclusion is thatde factotrade integration may not automatically lead to deeper regional trade cooperationde jureand that its impact is likely to be stronger on monetary cooperation projects. Regional economic integration, FTAs, RTAs, fragmentation, financial cooperation, international monetary arrangements, foreign exchange policy, East Asia, F13, F15, F31, F33, F36, F59, O19, O24 01 2010 55 The Singapore Economic Review 7 25 http://www.worldscientific.com/doi/abs/10.1142/S0217590810003584 FRANÇOISE NICOLAS nicolas@ifri.org French Institute of International Relations, 27 rue de la Procession, 75740 Paris Cedex 15, France
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article ECONOMIC GROWTH IN INDIA: "DOES FOREIGN DIRECT INVESTMENT INFLOW MATTER?" The main objective of this paper is to examine the role of Foreign Direct Investment (FDI) in promoting the growth of the economy via export promotion by using the annual data from 1979–80 to 2000–01. This study uses the Johansen co-integration test and the results demonstrate that there is a long run relationship between Gross Domestic Product (GDP), FDI and Export (EX). The same relationship is also established when the Index of Industrial Production (IIP) replaces GDP. However, the positive elasticity coefficients between FDI, GDP and FDI, IIP are less than the positive elasticity coefficient between EX, GDP and EX, IIP. It implies that EX plays a comparatively better role in the growth of the Indian economy than FDI. Thus, on the eve of India's plan for further opening up of the economy, it is advisable to open up the export-oriented sectors so that a higher growth of the economy can be achieved through the growth of these sectors. Foreign direct investment, Economic growth, Export, Co-integration 02 2003 48 The Singapore Economic Review 151 171 http://www.worldscientific.com/doi/abs/10.1142/S0217590803000748 DUKHABANDHU SAHOO Economics Unit, Institute for Social and Economic Change, Nagarbhavi, Bangalore-72, India MAATHAI K. MATHIYAZHAGAN Economics Unit, Institute for Social and Economic Change Nagarbhavi, Bangalore-72, India
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article ANALYSIS OF LOW-CARBON PRODUCTION CHAINS TOWARDS CHINA'SCO2EMISSION REDUCTION TARGETS FOR 2020 Achieving China's carbon reduction targets for 2020 necessitates the consideration of integrated production chains (PCs) given that competition between sectors has been transformed into competition between PCs. This paper establishes an extended input–output (IO) model that calculates the cost multiplier transmission effect of emission reduction in low-carbon production chains (LCPCs). Empirical results show that in relation to PCs, the electricity power industry and urban residents are the key policy points in adjusting China's industrial structure. This paper suggests that policymakers consider the cost multiplier transmission effect imposed by upstream sectors to downstream industries. Carbon reduction target, production chains (PCs), price-multiplier model, extended input–output model, low carbon production chains, Q43, Q41, Q48, O13, O53, P22, E31 03 2013 58 1350021 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500215 YAN XIA Center for Energy and Environmental Policy Research, Institute of Policy and Management, Chinese Academy of Sciences, No. 55 Zhongguancun Dong Lu, Beijing 100190, P. R. China YING FAN yfan@casipm.ac.cn Center for Energy and Environmental Policy Research, Institute of Policy and Management, Chinese Academy of Sciences, No. 55 Zhongguancun Dong Lu, Beijing 100190, P. R. China JIE WU Center for Energy and Environmental Policy Research, Institute of Policy and Management, Chinese Academy of Sciences, No. 55 Zhongguancun Dong Lu, Beijing 100190, P. R. China
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article ARE TAX CUTS EFFECTIVE EVEN IN ANTICIPATION OF A FUTURE TAX INCREASE? EVIDENCE FROM JAPAN'S UNIQUE EPISODES IN THE 1990S This paper empirically investigates the effects of the 1995 and 1996 tax cuts in Japan. Both tax cuts were introduced to compensate consumers for an impending consumption tax rate increase from 3% to 5% in 1997. We use micro-level data of theFamily Income and Expenditure Surveyto evaluate effects of these tax cuts on household consumption, focusing on the differences between the two episodes. Our estimates indicate that theRicardian equivalencelargely holds. Only the 1995 tax cut distinctly stimulated consumption on its impact, while the 1996 tax cut had almost no effect on the consumption, presumably because it was implemented much closer to the coming tax increase. Tax cuts, Ricardian equivalence, excess sensitivity 02 2007 52 The Singapore Economic Review 167 177 http://www.worldscientific.com/doi/abs/10.1142/S0217590807002622 MASAHIRO HORI Economic and Social Research Institute, Cabinet Office, Government of Japan, Japan SATOSHI SHIMIZUTANI sshimizu@ier.hit-u.ac.jp Institute of Economic Research, Hitotsubashi University, 2-1 Naka, Kunitachi-shi, Tokyo, 186-8630, Japan
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article BOOK REVIEW: UNCTAD, World Investment Report 2000: Cross-Border Mergers and Acquisitions and Development No abstract received. 01 2001 46 The Singapore Economic Review 141 143 http://www.worldscientific.com/doi/abs/10.1142/S0217590801000267 Amina Tyabji Department of Economics, National University of Singapore, Singapore
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article ON THE CONCEPTUAL UNDERPINNING OF A COST-BENEFIT ANALYSIS No abstract received. 01 2002 47 The Singapore Economic Review 1 16 http://www.worldscientific.com/doi/abs/10.1142/S0217590802000468 E. J. MISHAN
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article CHARACTERIZING THE MONETARY TRANSMISSION MECHANISM IN A SMALL OPEN ECONOMY: THE CASE OF MALAYSIA This paper evaluates the monetary policy response of Malaysia's central bank and the nature of monetary transmission mechanism in the 1990s when the exchange rate was on a managed float and the capital account was open. Structural vector autogression analysis is employed to evaluate how the central bank sets short term interest rates taking into consideration the constraints faced in adjusting the policy instrument to shocks to the economy. The impulse response functions and the variance decomposition indicate that the central bank preferred to use foreign exchange intervention rather than interest rate to stabilize the ringgit exchange rate. The results suggest that a sustained high level of interest rates would have caused a prolonged and deep contraction in output during the East Asian financial crisis. Monetary policy, Monetary transmission, East Asia financial crisis 02 2003 48 The Singapore Economic Review 113 134 http://www.worldscientific.com/doi/abs/10.1142/S0217590803000670 WEE BENG GAN CIMB Investment Bank, Kuala Lumpur, Malaysia LEE YING SOON alysoon@ntu.edu.sg. Nanyang Business School, Nanyang Technological University, Singapore 639798, Singapore
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article THE MONETARY APPROACH TO THE BALANCE OF PAYMENTS: AN APPLICATION TO BARBADOS This paper examines the monetary approach to the balance of payments in Barbados, a small open economy with a fixed exchange rate system. We use an error correction mechanism (ECM) approach which shows that the monetary approach applies to Barbados. Such an ECM approach has not been previously employed in other related studies. Our analysis has implications for monetary policy since it confirms that excessive credit expansion leads to balance of payments deficits in fixed exchange rate systems, and the monetary authorities need to hold high levels of reserves in small open economy systems to protect the exchange rate. Money, Balance of payments, Foreign reserves, Cointegration, Error correction modelling 02 2002 47 The Singapore Economic Review 213 228 http://www.worldscientific.com/doi/abs/10.1142/S0217590802000511 MICHAEL HOWARD mhoward@sunbeach.net University of the West Indies, Cave Hill Campus, Barbados, P. O. Box 64, St. Michael, Barbados NLANDU MAMINGI University of the West Indies, Cave Hill Campus, Barbados
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article CORRUPTION AND THE OUTSIDER: MULTINATIONAL ENTERPRISES IN THE TRANSITIONAL ECONOMY OF VIETNAM Transitional Vietnam exhibits key characteristics that economists argue are conducive to corrupt practices and, by knock-on effects, to slower economic growth. The process of liberalisation has shifted the status quo in Vietnam, permitting entry by a wider pool of bribe-takers and bribe-givers. Standard economic definitions of corruption focus on the abuse of public office for private gain, whereby corrupt practices are modelled as distortions in the distribution of government provided goods and services. This paper modifies existing models, specifying corruption as a distortion to the definition, allocation and/or enforcement of property rights. The model incorporates an explicit role for the incentive set that shapes behaviour by government officials, private individuals and firms. Abuse of public office is modelled as a distortion to property rights, including the re-assignment of private rights as the result of lobbying or rent-seeking activities. Local norms may sanction corruption against certain groups. The MNE is one case in point; others include different ethnic, religious and socio-economic groups. As outsiders in an environment historically hostile to "outsiders", MNEs represent "easy" corruption targets. 01 2001 46 The Singapore Economic Review 63 82 http://www.worldscientific.com/doi/abs/10.1142/S021759080100022X ELIZABETH MAITLAND e.maitland@unimelb.edu.au. Australian Centre for International Business, Faculty of Economics & Commerce, University of Melbourne, Victoria 3010, Australia
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article THE DOLLAR STANDARD AND ITS CRISIS-PRONE PERIPHERY: NEW RULES FOR THE GAME No abstract received. 02 2003 48 The Singapore Economic Review 99 112 http://www.worldscientific.com/doi/abs/10.1142/S0217590803000669 RONALD I. MCKINNON Stanford University, USA
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article BOOK REVIEW: "Development and Structural Change in Asia-Pacific: Globalising Miracle or End of A Model?" No abstract received. 02 2003 48 The Singapore Economic Review 217 218 http://www.worldscientific.com/doi/abs/10.1142/S021759080300075X JANG-SUP SHIN Department of Economics, National University of Singapore, Singapore
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article CAPITAL ACCOUNT LIBERALIZATION AND ECONOMIC PERFORMANCE IN MALAYSIA This study examines the impact of capital account liberalization on economic growth in Malaysia from 1970 to 2004. It uses two measures of capital account openness, namelyde jure(an index of liberalization) andde facto(the volume of capital flows). The empirical results based on the modified growth model demonstrate that thede juremeasure of capital account liberalization shows an adverse effect on growth in Malaysia. However, thede factomeasure shows a robust positive effect on economic growth. The results also highlight that the effect of capital account liberalization on growth is contingent on a country's level of financial development and the quality of its institutions. Capital account openness, economic growth, institutions, financial development, bounds test, F43, O40 03 2013 58 1350022 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500227 SIONG HOOK LAW lawsh@upm.edu.my Department of Economics, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor, Malaysia W. N. W. AZMAN-SAINI Department of Economics, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor, Malaysia
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article IS MERITOCRACY OUTMODED IN A KNOWLEDGE-BASED ECONOMY? Singapore prides itself on its system of meritocracy that is meant to channel the most capable individuals to the most critical positions. Performance in school, buttressed by a system of university scholarships, identifies potential stars early on. Scholars are often carefully groomed in the early years of their working careers and screened further. Only the best reach positions of real responsibility. Such a system worked well in the past and some researchers have held the meritocratic stratification system at least partially responsible for Singapore's economic growth (and that of some other Asian countries). The meritocratic system, however, is not well-suited to the exigencies of knowledge-based economies; these require a broad base of committed workers each with a high level of skill. As tasks and needs rapidly shift, so may job performance. Building on information gathered from Singaporean workplaces and on theories of internal labor markets, this paper will identify how a meritocratic stratification system limits overall job performance by producing only a small number of committed workers. This paper will illustrate how a stratification system capable of motivating a larger number of workers would work and discuss adaptation issues. 01 2001 46 The Singapore Economic Review 17 48 http://www.worldscientific.com/doi/abs/10.1142/S0217590801000218 STEPHEN J. APPOLD Department of Sociology, National University of Singapore, Singapore
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article MARKETS AND INDUSTRY— VENTURE CAPITAL AND ECONOMIC GROWTH: AN INDUSTRY OVERVIEW AND SINGAPORE'S EXPERIENCE This paper provides an overview of the venture capital industry and its development in Asia and Singapore. Venture capital plays an important role in innovation and economic growth. Indeed, the resurgence of the United States as a technology leader is intimately linked to the success of Silicon Valley. As Singapore enters the next phase of economic development, the creation of internal engines of growth is an urgent task. The Singapore government has done much to provide an environment for entrepreneurship to thrive. Its success at replicating the Silicon Valley culture will be important for Singapore's future economic success. Venture capital, Private equity, Economic growth, Silicon Valley, Singapore 02 2002 47 The Singapore Economic Review 243 267 http://www.worldscientific.com/doi/abs/10.1142/S0217590802000535 FRANCIS C. C. KOH franciskoh@smu.edu.sg School of Business, Singapore Management University, Singapore WINSTON T. H. KOH winstonkoh@smu.edu.sg School of Economics and Social Sciences, Singapore Management University, Singapore
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article Sustainability of External Imbalances: The Case of Malaysia The understanding of the sustainable external imbalances over the 1961-2001 for Malaysia is presented in this paper. The empirical results clearly show that inflows and outflows share a common stochastic trend prior to the 1997 Asian crisis while in the post-crisis period the current account surpluses are on an unsustainable path. Our findings highlight the important role of imports (mainly intermediate inputs) in exports. For an economy that depends on export promotion for its growth process, imports are important in restoring external imbalances to its sustainable steady state path. As illustrated by the recent crisis, the large depreciation of the ringgit contributed to a decline in imports and for an economy that is highly dependent on imported capital, this means an economic slowdown. Current account deficits, Sustainability, Intertemporal budget constraint, Malaysia 01 2003 48 The Singapore Economic Review 61 80 http://www.worldscientific.com/doi/abs/10.1142/S0217590803000591 Evan Lau Department of Economics, Faculty of Economics and Management, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor, Malaysia Ahmad Zubaidi Baharumshah zubaidi@putra.upm.edu.my Department of Economics, Faculty of Economics and Management, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor, Malaysia
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article ARE OECD MACROECONOMIC VARIABLES TREND STATIONARY? EVIDENCE FROM PANEL STATIONARITY TESTS ALLOWING FOR A STRUCTURAL BREAK AND CROSS-SECTIONAL DEPENDENCE This article applies the panel stationarity test with a break proposed by Hadri and Rao (2008) to examine whether 14 macroeconomic variables of OECD countries can be best represented as random walk or stationary fluctuations around a deterministic trend. In contrast to previous studies, based essentially on visual inspection of the break type or just applying the most general break model, we use a model selection procedure based onBIC. We do this for each time series so that heterogeneous break models are allowed for in the panel. Our results suggest, overwhelmingly, that if we account for a structural break, cross-sectional dependence and choose the break models to be congruent with the data, then the null of stationarity cannot be rejected for all the 14 macroeconomic variables examined in this article. This is in sharp contrast with the results obtained by Hurlin (2004), using the same data but a different methodology. Panel stationarity test, structural breaks, bootstrap, C12, C23, C52 03 2009 54 The Singapore Economic Review 427 440 http://www.worldscientific.com/doi/abs/10.1142/S0217590809003410 KADDOUR HADRI k.hadri@qub.ac.uk Queen's University Belfast, 25 University Square, Belfast BT7 1NN, UK YAO RAO y.rao@liv.ac.uk The University of Liverpool, UK
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article BOOK REVIEW: "Singapore in the New Millennium: Challenges Facing the City-State", edited by Derek da Cunha No abstract received. 01 2002 47 The Singapore Economic Review 189 192 http://www.worldscientific.com/doi/abs/10.1142/S021759080200047X AMINA TYABJI Department of Economics, National University of Singapore, Singapore
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article ASIAN CRISES: THEORY, EVIDENCE, WARNING SIGNALS No abstract received. 02 2004 49 The Singapore Economic Review 135 161 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000858 JEROME L. STEIN Brown University, USA GUAY C. LIM University of Melbourne, Australia
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article HOW TO MAKE A PROFITABLE TRADING STRATEGY MORE PROFITABLE? Chong and Lam and Chonget al.show that SETAR(200) and MA(50) outperform other rules in both the U.S. and the Chinese stock market. This paper investigates the synergy of combining SETAR(200) and MA(50) rules in ten U.S. and Chinese stock market indexes. It is found that the SETAR rule performs better in the U.S. market, while the MA rule performs better in the Chinese market. In addition, we find evidence that a new strategy combining the two rules together is able to create synergy. An immediate implication of our result is that investors are able to improve the performance of their portfolios by combining existing profitable trading rules. SETAR model, bootstrap, GARCH-M model, combined strategy, market efficiency, C22, G10, G12 03 2013 58 1350019 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590813500197 TERENCE TAI-LEUNG CHONG chong2064@cuhk.edu.hk Hong Kong Institute of Asia-Pacific Studies, The Chinese University of Hong Kong, Shatin, N. T., Hong Kong; Department of International Economics and Trade, Nanjing University, Jiangsu, 210044, China TAU-HING LAM Department of Economics, The Chinese University of Hong Kong, Shatin, N. T., Hong Kong
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article PROFESSIONAL BETTORS, ODDS-ARBITRAGE COMPETITION, AND BETTING MARKET EQUILIBRIUM A slew of empirical evidence on horse racetrack betting markets points to betting biases and market inefficiency. More recent empirical work has documented the absence of betting biases in racetrack betting markets characterized by a high volume of betting. This paper offers a competition-based model of betting behavior that is consistent with the pattern of betting biases reported in the literature. We postulate the existence of professional bettors who, being better informed and/or having different objectives than the general betting population, engage in odds arbitrage when doing so is profitable. We evaluate the case of a single odds-arbitraging bettor first in order to establish the fundamental properties of odds arbitrage. We then examine the effects of entry of professional bettors who play a Nash game in odds arbitrage; the results show that professionals' participation causes the final track odds to converge to the level implied by the horses' true win probabilities when there is a high volume of betting. Professional bettors, Odds arbitrage, Betting market equilibrium 01 2002 47 The Singapore Economic Review 111 127 http://www.worldscientific.com/doi/abs/10.1142/S021759080200033X BRIAN R. ADAMS Advanced Digital Information Corporation, Redmond, WA, USA FRANK W. RUSCO U.S. General Accounting Office, Washington, D.C., USA W. DAVID WALLS Department of Economics, University of Calgary, Canada
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article CREDIT RATING AND BANK BEHAVIOUR IN INDIA: POSSIBLE IMPLICATIONS OF THE NEW BASEL ACCORD The paper examines the impact of credit rating on capital adequacy ratios of Indian state-owned banks using quarterly data for the period 1997:1 to 2002:4. To this end, a multinomial logit model with multi credit rating indicators as dependent variable is estimated. The variables that can impinge upon capital adequacy ratio have been used as explanatory variables. Two separate models — one for long-term credit rating and another for short-term credit rating — have been estimated. The paper concludes that, both for short-term as well as for long-term ratings, capital adequacy ratios are an important factor impinging on credit rating of Indian state-owned banks. Capital adequacy, Credit rating, Multinomial logit model 01 2004 49 The Singapore Economic Review 37 54 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000780 D. M. NACHANE Indira Gandhi Institute of Development Research, Gen. A. K. Vaidya Marg, Goregaon (E), Mumbai 400 065, India SAIBAL GHOSH Department of Economic Analysis and Policy, Reserve Bank of India, Fort, Mumbai 400 001, India
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article BOOK REVIEW: "World Finance and Economic Stability: Selected Essays of James Tobin" No abstract received. 02 2004 49 The Singapore Economic Review 295 298 http://www.worldscientific.com/doi/abs/10.1142/S0217590804000949 SWEE LIANG TAN School of Economics and Social Sciences, Singapore Management University, Singapore
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article THE IMPACT OF THE BELT AND ROAD INITIATIVE ON FIRMS’ EMPLOYMENT STRUCTURE AND WAGE — EVIDENCE FROM CHINA’S PUBLIC LISTED FIRMS In this paper, we use the Belt and Road Initiative (B&R) as a semi-natural experiment and apply a difference-in-difference analysis together with the propensity score matching approach to estimate the impact of the B&R on China’s A-Share listed firms with outbound FDI to the B&R countries during 2011–2017. We find that China’s firms investing in B&R countries, compared to those investing elsewhere in the world, tend to reduce their total employment, increase the share of skilled labor, and increase wages. Various tests show that the key results of B&R impacts remain robust. We also find that the adjustment after investing in B&R countries is mainly found in non-SOEs, the firms in key provinces that enjoy pilot B&R policies. Both vertical and horizontal FDI firms are found to significantly adjust their employment, skill structure, and wage payment, with the former as more responsive. Belt and road initiative, difference-in-difference, employment, wage 04 2021 66 June The Singapore Economic Review 1055 1072 http://www.worldscientific.com/doi/abs/10.1142/S0217590820490028 BO CHEN School of Economics, Huazhong University of Science and Technology, 1037 Luoyu Rd., Wuhan, Hubei 430074, P. R. China YUE CHEN 893484567@qq.com School of Economics, Huazhong University of Science and Technology, 1037 Luoyu Rd., Wuhan, Hubei 430074, P. R. China
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article THE IMMIGRATION EFFECTS OF TRADE PROTECTIONISM: EVIDENCE FROM OECD COUNTRIES In the context of the current Presidential administration’s policy to reduce imports to the US and its restrictive attitudes toward immigration, it is relevant to investigate how imports and immigration are related. Existing studies have typically analyzed the effects of immigration on imports. But we wondered if the reverse causality could be worthy of examination. Thus, this study explores the impacts of trade policy on immigration. The first part discusses whether trade policies impact immigration, and the second part delves deeper into the heterogeneous effects of trade policies on high-skilled and low-skilled immigration. A large country’s restrictive import policies increase labor demand stemming from the increased demand for import substitution. Thus, workers in the exporting countries see a strong incentive to move to importing countries. Such restrictions also affect the propensity to immigrate of high- and low-skilled workers differently. Net capital inflows increase because trade restrictions appear to decrease capital outflows to exporting countries in part by losing investors’ confidence. This increases the demand for high-skilled workers as capital complements them. Therefore, high-skilled workers are more migratory than those of low-skilled. Using a panel of 20 OECD countries for the period of 1980–2010 and an instrumental variable method, the results show that restricted trade policies increase immigration and that such policies have a stronger impact on the high-skilled immigration than those of low-skilled. A clearer understanding of the channels through which trade will be a determinant of skilled migration may assist policymakers to craft an appropriate policy environment that enhances import substitution of skill-intensive goods that would serve to discourage skilled emigration. Tariff, immigration, foreign direct investment, skilled and unskilled labor 04 2021 66 June The Singapore Economic Review 997 1026 http://www.worldscientific.com/doi/abs/10.1142/S0217590820490016 DAMBAR UPRETY upretyd@uncw.edu Department of Economics & Finance, University of North Carolina Wilmington, 601 S College Rd., Wilmington, NC 28403-5945, USA
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article DOES GOVERNMENT SPENDING ON EDUCATION AFFECT PROVINCIAL INCOME INEQUALITY IN VIETNAM? This study is conducted to examine the effect on income inequality of government spending on education across 63 provinces in Vietnam. The generalized method of moments (GMM) regression technique is used to address potential endogeneity in the model caused by income inequality and inequality in government spending on education. Income inequality is proxied by both the Gini coefficient and the Theil index. Inequality in government spending on education in Vietnam is estimated using a novel entropic approach, which decomposes the inequality into two components: “within-province†inequality and “between-province†inequality. Data for the period from 2010 to 2016 are used. Our empirical findings are summarized as follows. First, “within-province†inequality accounts for a substantial portion of inequality in government spending on education. This means that although the Vietnamese national government has done well in terms of allocating spending on education across 63 provinces, inequality in education spending appears across districts within provinces. Second, both total inequality of government spending on education and its two components are positively associated with income inequality across provinces. As such, reducing differences in government spending on education across provinces and across districts within provinces is an effective mechanism for reducing income inequality across provinces and across districts within provinces in Vietnam. Education, entropic approach, government spending, inequality, Vietnam 04 2021 66 June The Singapore Economic Review 1105 1123 http://www.worldscientific.com/doi/abs/10.1142/S0217590820490065 CHI MINH HO Business and Economics Research Group, Ho Chi Minh City Open University, 97 Vo Van Tan Street, Ward 6, District 3, Ho Chi Minh City, Vietnam QUAN THAI-THUONG LE Business and Economics Research Group, Ho Chi Minh City Open University, 97 Vo Van Tan Street, Ward 6, District 3, Ho Chi Minh City, Vietnam ANH THE VO Business and Economics Research Group, Ho Chi Minh City Open University, 97 Vo Van Tan Street, Ward 6, District 3, Ho Chi Minh City, Vietnam DUC HONG VO Business and Economics Research Group, Ho Chi Minh City Open University, 97 Vo Van Tan Street, Ward 6, District 3, Ho Chi Minh City, Vietnam DAO THI-THIEU HA ��Faculty of International Economics, Banking University Ho Chi Minh City, 56 Hoang Dieu 2 Street, Thu Duc District, Ho Chi Minh City, Vietnam
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article THE IMPACT OF ICT ON SERVICE TRADE While trade in goods has been investigated extensively over decades, studies on trade in services are relatively new. In this paper, we investigate the impacts of information and communication technology (ICT) on trade in services. We measured ICT by four dimensions, including the subscriptions to broadband, fixed telephones, mobile phones and Internet. Our sample covered more than 200 countries from 2005 to 2015. We employed the modified gravity model and found that all four dimensions had significant impacts on the expansion trade in services, but mobile subscriptions are the most consistent dimensions. Finally, the effects of ICT in exporting and importing countries are similar. Information and communication technology, service trade 04 2021 66 June The Singapore Economic Review 1073 1086 http://www.worldscientific.com/doi/abs/10.1142/S021759082049003X TUAN ANH LUONG De Montfort University, The Gateway, Leicester LE1 9BH, United Kingdom THU HANG NGUYEN Foreign Trade University, 91 Chua Lang Street, Dong Da District, Hanoi, Vietnam
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article INDIGENOUS INNOVATION, FOREIGN TECHNOLOGY TRANSFER AND THE EXPORT PERFORMANCE OF CHINA’S MANUFACTURING INDUSTRIES Although a well-established link is observable in the existing literature on innovation–export interplay, there is a lack of research investigating the distinct impact of a variety of channels for domestic innovation and foreign technology spillovers on export performance in a unified framework. This paper uses a two-digit 1998–2013 panel dataset to empirically investigate the impact of domestic innovation efforts, innovation capability, foreign knowledge spillovers and technology transfer on export performance of large-and-medium-sized industrial enterprises (LMEs) in China. We find that: First, domestic innovation efforts significantly promote industrial export performance, while there is lack of highly-skilled human capital in China which restricts the favorable impact of innovation on exports; Second, technology imported from foreign countries have increased export competitiveness in China. Furthermore, innovative activities of foreign enterprises have led to export boom and this spillover channel experience has a stronger effect on export than one emanating from imported technology; Third, on the whole, foreign knowledge spillover channels have been more effective drivers of export performance than domestic innovation efforts. Fourth, calculations based on contribution to trade balance indicator witness a recent increase in the domestic content of industrial exports in China. Indigenous innovation, foreign technology transfer, export performance, manufacturing industries, productivity 05 2020 65 September The Singapore Economic Review 1349 1366 http://www.worldscientific.com/doi/abs/10.1142/S0217590819400034 YING MA yingma@whu.edu.cn Centre for Economic Development Research (CEDR), Economics and Management School of Wuhan University, Luojia Hill Wuhan, Hubei 430072, P. R. China ABDUL RAUF #x2020;Economics and Management School of Wuhan University, Luojia Hill, Wuhan, Hubei 430072, P. R. China
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article IS RESOURCE MISALLOCATION LEADING TO PRODUCTIVITY GAPS IN MALAYSIA’S MANUFACTURING SECTOR? The reallocation of resources from low- to high-productivity firms can generate large aggregate productivity gains. The paper uses data from the Malaysian manufacturing censuses of 2005 and 2010 to measure the country’s hypothetical productivity gains if all misallocation within industries are removed. Comparing the results across the two census waves, we conclude that efficiency gaps (that is, the degree of misallocation) in Malaysia have narrowed by one-fifth. The efficiency gaps, however, appear to be over 40%, indicating a substantial room for improvement. This is important, particularly if total factor productivity growth is expected to support future economic growth. The analysis in this paper accounts only for resource misallocation within sectors. There may be other, possibly large, resource misallocation across sectors. Closing those gaps could boost total factor productivity and gross domestic product growth even further. Total factor productivity, resource misallocation, distortions, efficiency, growth, manufacturing, Malaysia 05 2020 65 September The Singapore Economic Review 1213 1235 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500711 LAY LIAN CHUAH The World Bank Group, Development Research Group, Sasana Kijang, 50480 Kuala Lumpur, Malaysia NORMAN V. LOAYZA nloayza@worldbank.org The World Bank Group, Development Research Group, Sasana Kijang, 50480 Kuala Lumpur, Malaysia HA NGUYEN hanguyen@worldbank.org The World Bank Group, Development Research Group, Sasana Kijang, 50480 Kuala Lumpur, Malaysia
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article HETEROGENEOUS EFFECTS OF CREDIT ACCESS ON FORMAL AND INFORMAL FIRM GROWTH: EMPIRICAL EVIDENCE FROM VIETNAM This paper examines the causal effect of credit access on firm growth (measured by employment growth), using a unique micro-, small-, and medium-sized firm-level data collected every two years in Vietnam from 2005 to 2013. The results obtained from fixed-effects (FE) and FE with instrumental variable estimators show that firms with credit access experience a higher growth than firms without credit access. We also find that access to credit is positively associated with both formal and informal firm growth, but the results for formal firms seem to be driven by some high growth firms (and rapidly shrinking firms). The effect of credit access on firm growth is also heterogeneous by firm size and firm age in both types of firms. Credit access, firm growth, employment growth, Vietnam 05 2020 65 September The Singapore Economic Review 1185 1211 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500723 TRINH QUANG LONG Faculty of Finance and Banking, Ton Duc Thang University, Ho Chi Minh City, Vietnam PETER JOHN MORGAN #x2020;Asian Development Bank Institute, Tokyo, Japan MINH BINH TRAN #x2021;University of Economics and Business, Vietnam National University, Hanoi, Vietnam
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article SPECIAL ISSUE ON PRODUCTIVITY: INTRODUCTION 05 2020 65 September The Singapore Economic Review 1157 1159 http://www.worldscientific.com/doi/abs/10.1142/S0217590820030022 FILIPPO DI MAURO filippodimauro1@me.com National University of Singapore, Singapore
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article INTELLECTUAL CAPITAL AND PERFORMANCE IN THE SEMICONDUCTOR INDUSTRY This paper researches a method of rating competitiveness involving the estimation of the performance of semiconductor firms through Malmquist productivity index (MPI) and metafrontier Malmquist productivity index (MMPI). Regressions are used to find the relationship between intellectual capital and performance. Overall, technological innovations contribute to the improvement in the integrated circuit (IC) design sub-industry while increases in efficient production allow the IC foundry sub-industry and the IC packaging and testing sub-industry to maintain position. The regression results show human capital was critical to technological innovation while relational capital was important to efficient production. Data envelopment analysis (DEA), intellectual capital, Malmquist productivity index, metafrontier, semiconductor industry 05 2020 65 September The Singapore Economic Review 1323 1348 http://www.worldscientific.com/doi/abs/10.1142/S0217590819400022 KUO-CHENG KUO kuochengkuo20@gmail.com Program of Global Business, Chinese Culture University, Taipei, Taiwan WEN-MIN LU wenmin.lu@gmail.com Department of Financial Management, National Defense University, Taipei, Taiwan GRACE TZU-YI CHANG Department of International Business Administration, Chinese Culture University, 55, Hwa-Kang Rd., Yang-Ming-Shan, Taipei, Taiwan
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article GOVERNMENT COMMERCIALIZATION GRANTS AND BUSINESS PERFORMANCE Australian government offered a number of commercialization grants to businesses from 2009 to 2014. The grants were to support companies and innovators during the commercialization phase of their products and ideas. Focussing on the small firms that are supported by the program, we find that the grant recipient firms tend to invest in capital and research and development (R&D) in larger amounts than a similar comparison group. These firms also experience a faster growth in turnover and a higher probability of exporting, patenting and registering for trademarks. Overall, the program seems to have had a positive impact on firm productivity and innovation activity. Entrepreneurship, innovation, marketing, public policy 05 2020 65 September The Singapore Economic Review 1271 1291 http://www.worldscientific.com/doi/abs/10.1142/S0217590819400010 SASAN BAKHTIARI Australian Department of Industry Innovation and Science and Crawford School of Public Policy, Australian National University, Australia ANGELINA BRUNO Angelina.Bruno@industry.gov.au #x2020;Australian Department of Industry, Innovation and Science, Australia
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article PROMOTING HIGHER PRODUCTIVITY IN CHINA — DOES INNOVATION EXPENDITURE REALLY MATTER? The slowing down of the global economy adds additional challenges to China’ economic policies as the country orchestrates its transition to lower resource dependency and higher technology intensity of output. Are policies aimed at technologically advanced sectors the right answer? Drawing from a newly created dataset of firms’ balance sheets over the period 1998–2013, matched with patents data until 2009, we uncover that expenditure in innovation had limited effect on boosting productivity, without generating a clear gain in overall productivity for the high-tech sector. As a matter of fact, there is a much higher dispersion in productivity outcomes in firms belonging to the low-technology sectors, which derives from a bunch of champions in those sectors scoring higher productivity dynamics than in the High-technology sectors. The paper finds those barriers to entry and in general, market power of incumbents in the high-tech generate less than optimal resource reallocation, which hampers the overall productivity. Policies should presumably aim at removing such obstacles rather than solely promote innovation expenditure. Productivity, innovation, patents, China 05 2020 65 September The Singapore Economic Review 1161 1183 http://www.worldscientific.com/doi/abs/10.1142/S0217590820400019 FILIPPO DI MAURO bizfdm@nus.edu.sg National University of Singapore, Singapore MINH DUY HOANG National University of Singapore, Singapore JO VAN BIESEBROECK jo.vanbiesebroeck@kuleuven.be University of Leuven, Belgium
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article DO CONGLOMERATES OPERATE MORE EFFICIENTLY THAN SINGLE-SEGMENT FIRMS? We investigate the impact of organizational form on operational efficiency using a large sample covering manufacturing and non-manufacturing sectors in the United States over 30 years. We quantify operational efficiency using various measures, and find robust evidence that segments of diversified firms are operationally more efficient than their single-segment industry peers. The difference is more noticeable in industries where financing needs are high due to greater growth potential and where access to external markets is constrained due to higher information asymmetry. Conglomerates, efficiency 05 2020 65 September The Singapore Economic Review 1237 1270 http://www.worldscientific.com/doi/abs/10.1142/S0217590819400046 NILABHRA BHATTACHARYA Southern Methodist University, United States JOHAN SULAEMAN Department of Finance, NUS Business School, National University of Singapore. 15 Kent Ridge Drive, Singapore 119245 JEFF JIEWEI YU University of Arizona, United States
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article FINANCIAL STABILITY AND MONETARY POLICY REACTION FUNCTION FOR SOUTH ASIAN COUNTRIES: AN ECONOMETRIC APPROACH This study empirically investigates a monetary policy reaction function for South Asian economies by incorporating financial stability as an additional policy objective in the central bank’s loss function. Empirical results are estimated by applying auto-regressive distributed lag (ARDL) approach to cointegration and vector autoregressive (VAR) approach using time-series data of five South Asian countries, namely, Pakistan, India, Bangladesh, Nepal and Sri Lanka. Estimated results indicate that monetary policy significantly reacts to the level of financial stability in all countries. The result further suggests that central banks would tighten monetary policy if output gap widens and exchange rate depreciate. In addition, central banks of Pakistan and India do not respond significantly to inflation gap. Financial stability, AFSI, monetary policy, Taylor rule, South Asia 03 2023 68 June The Singapore Economic Review 1001 1030 E44 E58 G12 G13 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500395 SAMIA NASREEN Department of Economics, Government College Women University Faisalabad, Faisalabad, Punjab, Pakistan SOFIA ANWAR sofia_eco@gcuf.edu.pk Department of Economics, Government College University Faisalabad, Faisalabad, Punjab, Pakistan
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article RESIDUAL GOVERNMENT OWNERSHIP AND FIRM VALUE IN A TRANSITIONAL ECONOMY There is a high level of residual government ownership after privatization processes of state-owned firms in many transitional economies. Accordingly, the role of residual government ownership in firms in these economies draws strong attention from researchers resulting in a huge volume of papers in the literature. This naturally motivates us to examine whether state ownership affects the firm value in Vietnam, a successful transitional economy. More specifically, this paper aims to provide further insights into the impact of residual government ownership on the value of privatized firms listed on the Ho Chi Minh City stock exchange covering the period from 2009 to 2014. Using panel data techniques of fixed effects estimator, our empirical results indicate that residual government ownership has a negative effect on value of Vietnamese firms. This finding provides important implications for different stakeholders in transitional countries. Firm value, government ownership, Tobin’s Q, Vietnam stock market 03 2023 68 June The Singapore Economic Review 671 684 G10 G18 G30 G38 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500334 XUAN VINH VO Institute of Business Research, University of Economics Ho Chi Minh City, Vietnam, 59C Nguyen Dinh Chieu Street, District 3, Ho Chi Minh City, Vietnam2CFVG Ho Chi Minh City, University of Economics Ho Chi Minh City, Ho Chi Minh City, Vietnam, 91 Ba Thang Hai Street, District 10, Ho Chi Minh City, Vietnam
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article DETERMINANTS OF BANK LIQUIDITY CREATION: A COMPARISON BETWEEN ISLAMIC BANKS AND CONVENTIONAL BANKS IN A DUAL BANKING SYSTEM Using a panel dataset of 45 banks operating in Malaysia’s dual banking system over the period 2001–2017, this paper investigates whether and how the liquidity creation of Islamic banks is determined differently from that of the conventional commercial banks. The preliminary analysis shows that bank capital, size, risk and market power are significant determinants of bank liquidity creation in the dual banking system, whereas macroeconomic factors exert little influence. When banks are differentiated by bank types, the paper finds that bank capital, size and risk are related to more liquidity creation of Islamic banks vis-à -vis conventional banks, particularly in terms of on-balance sheet liquidity creation. Bank market power affects the liquidity creation by Islamic banks negatively, as opposed to the positive effect observed for conventional banks. This paper also finds that the liquidity creation pattern of Islamic banks is pro-cyclical, given that their on-balance sheet liquidity creation is more responsive to changes of economic growth and monetary policy rate. The overall results suggest that the institutional features of Islamic banking and the country’s regulatory support for the industry cause Islamic banks to respond heterogeneously from their conventional counterparts. The results offer numerous key policy implications for countries adopting dual banking systems. Liquidity creation, dual banking system, Islamic bank, conventional bank 03 2023 68 June The Singapore Economic Review 963 999 G21 G28 http://www.worldscientific.com/doi/abs/10.1142/S0217590821500053 MOAU YONG TOH moauyong.toh@xmu.edu.my School of Economics and Management Xiamen University Malaysia, Jalan Sunsuria Bandar Sunsuria, Sepang, Selangor, Malaysia DEKUI JIA ��Department of Finance, School of Economics Changzhou University, 21 Gehu Middle Road Wujin Changzhou, Jiangsu, P. R. China
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article FRICTIONS AND MISMATCHES IN THE LABOR MARKET We develop an infinite-horizon dynamic search model to understand education–job mismatches in the labor markets where job seekers face three different types of labor markets based on their minimum educational requirements. Using a new dataset, we find that our model matches the US data well when we introduce heterogeneity through wage distributions. We use counterfactual experiments to show that even when the general unemployment level is kept constant, if the conditions within different job market types change, overeducation levels may increase or decrease dramatically. We find that regardless of the general unemployment level, frictions in the job market is the main reason for overeducation. However when unemployment is high, highly educated job seekers may settle for jobs below their education level at a higher level leading to a high degree of overeducation in the labor market and crowding out job seekers who have lower level of education. Dynamic search, mismatch, overeducation, Monte Carlo Simulation 03 2023 68 June The Singapore Economic Review 685 701 C63 J01 J31 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500504 BURHAN BINER biner@umn.edu Department of Economics, DePaul University, 1 East Jackson Boulevard, Suite 6200, Chicago, IL 60604, USA TURKMEN GOKSEL tgoksel@ankara.edu.tr Department of Economics, Faculty of Political Sciences, Ankara University, Cemal Gursel Ave, Cebeci, Ankara 06590, Turkey
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article COMMITMENT DEVICES IN MARRIAGE FOR SAVINGS: EVIDENCE FROM JAPAN We empirically test the hypothesis that, for married individuals with time-inconsistent preferences, leaving the management of family budgets to their spouse functions as a commitment device for savings. We conduct a cross-sectional analysis based on the micro-data of married Japanese couples obtained from waves 2009 and 2010 of Osaka University’s Preference Parameters Study. Our results show that when wives have time-inconsistent preferences, their household savings are more likely to go as planned if they leave household budgets to their husbands in comparison to when they make these decisions themselves. However, time-inconsistent individuals do not actively use leaving the management of family budgets to their spouse as a commitment device for savings. Considering these, we conclude that individuals do not recognize the benefits of leaving the management of family budgets to their spouse, but it can work as a commitment device. Time-inconsistency, self-control, under-savings, commitment devices 03 2023 68 June The Singapore Economic Review 1031 1058 D13 D15 J12 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500383 WATARU KUREISHI The National Institute of Population and Social Security Research, Hibiya Kokusai Building, 6th Floor, 2-2-3 Uchisaiwaicho, Chiyodaku, Tokyo 100-0011, Japan MIDORI WAKABAYASHI midwak@tohoku.ac.jp Graduate School of Economics and Management, Tohoku University, 27-1 Kawauchi Aobaku, Sendai, Miyagi 980-8576, Japan
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article ELECTRICITY MARKET LIBERALIZATION AND EFFICIENCY: EVIDENCE FROM SINGAPORE Since 1995 Singapore has launched a series of reforms to liberalize its electricity market. More participants are introduced both in the power generation side as well as wholesale and retail markets to facilitate competition and promote efficiency. This paper aims to examine the efficiency of Singapore’s electricity market by detecting exceptionally high electricity prices as outliers. In particular, we first propose a dynamic regression model that accounts for market demand and supply, production cost, as well as time effects. Based on the regression, an upper bound is then constructed for the identification of outliers. Using a unique data set from 2003 to 2019, we find fewer outliers over time, indicating that Singapore’s electricity market becomes more efficient in recent years. We obtain consistent results by incorporating alternative model specifications such as hybrid model and Least Absolute Shrinkage and Selection Operator (LASSO). The results are also robust to different subsamples and data frequencies. In addition, a more comprehensive set of criterions for model selection is also proposed in this paper. Market liberalization, electricity market, efficiency, USEP, outliers, LASSO 03 2023 68 June The Singapore Economic Review 651 669 Q41 Q47 C22 C53 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500667 QU FENG Economics Division, School of Social Sciences, Nanyang Technological University, 48 Nanyang Avenue, Singapore 639818 SHIHAO ZHOU shihao002@e.ntu.edu.sg Economics Division, School of Social Sciences, Nanyang Technological University, 48 Nanyang Avenue, Singapore 639818
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article MULTIDIMENSIONAL PERSPECTIVE OF FINANCIAL RISK ANALYSIS: EVIDENCE FROM CHINA China faces a critical economic structural transformation with increasing financial instability and uncertainty, necessitating a greater need for accurate measurement of systemic financial risk. In the paper, this work analyses the systemic financial risk in China between 2011 and 2020 based on financial development, fragility and risk indicators and the world economy to construct a comprehensive index of systemic financial risk (CISFR). The results show an upward trend in China’s financial risk in the past 10 years and a mid-to-high level fluctuation in the past five years, mainly driven by risks in the banking system, securities market and real estate market. In 2021–2022, China’s financial system is still in a high-risk stage, and high systemic risks are still an important economic issue. The study’s comprehensive index method can be extended to emerging economies. It reflects the main driving factors of financial risk by assigning weights to basic indicators from a multidimensional perspective, thus providing a reference for policymakers to prevent and control financial risk. Financial risk analysis, comprehensive index, quantitative measurement, innovative financial development, applications 03 2023 68 June The Singapore Economic Review 841 866 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500680 YUNXIA TAN tanyunxia@hfbank.com.cn Evergrowing Bank Co., Ltd., 250014 Jinan, P. R. China HAFEEZ ULLAH �Antai College of Economics and Management, Shanghai Jiaotong University, 200000 Shanghai, P. R. China XIAOYUE CHENG Chengxy855@126.com ��College of Management, Ocean University of China, 266100 Qingdao, P. R. China FAN ZHANG 18538300927@qq.com �College of Accounting, Henan University of Economics and Law, 45000, Zhengzhou, P. R. China ZHUQUAN WANG ��College of Management, Ocean University of China, 266100 Qingdao, P. R. China‡China Business Working Capital Management Research Center, 266100 Qingdao, P. R. China
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article INTERDEPENDENCE BETWEEN STOCKS AND EXCHANGE RATE IN EAST ASIA — A WAVELET-BASED APPROACH This paper investigates whether the portfolio-balance approach or the flow-oriented theory better explains the connection between stocks and exchange rate in various time-horizons in the four East Asian countries — Indonesia, Thailand, South Korea and Japan. For the analysis, we use different approaches of the wavelet methodology — wavelet correlation, wavelet coherence and wavelet cross-correlation. Wavelet correlations suggest that negative correlation is dominant across the wavelet scales in the emerging East Asian markets, which indicates that the portfolio-balance approach, that is, capital mobility stands behind this nexus. For the Japanese case, we find positive wavelet correlation across the scales, which suggests that the flow-oriented model or current account explains the interlink. Results of wavelet coherence are in line with the wavelet correlation results, and these results provide an additional evidence that investors’ panic during World financial crisis was the main culprit behind the massive financial fund reallocation in the all emerging Asian markets. Stock and exchange rate markets, wavelet-based methodologies, East Asian countries 03 2023 68 June The Singapore Economic Review 917 939 C15 C32 F31 G15 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500450 DEJAN ŽIVKOV Novi Sad School of Business, University of Novi Sad, Vladimira Perića Valtera 4, 21000 Novi Sad, Serbia MARKO PEĆANAC marko.pecanac@predsednik.rs ��Andrićev venac 1, 11000 Belgrade, Serbia DAJANA ERCEGOVAC dajana_vindzanovic@yahoo.com Novi Sad School of Business, University of Novi Sad, Vladimira Perića Valtera 4, 21000 Novi Sad, Serbia
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article NON-PERFORMING LOANS, MACROECONOMIC AND BANK-SPECIFIC VARIABLES IN SOUTHEAST ASIA DURING COVID-19 PANDEMIC This study examines the relationship between bank-specific variables, macroeconomic variables and non-performing loans (NPLs) in the seven countries of Southeast Asia (Cambodia, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam) during the pre-COVID-19and COVID-19 pandemic. This study adopts panel data regression and distributed lagged regression to examine the impact of bank-specific variables and macroeconomic variables as NPL determinants. The results show that bank-specific variables significantly correlate to NPL, but limited evidence indicates the influence of macroeconomic variables during pre-COVID. Nonetheless, macroeconomic variables are significant to NPL with the emergence of the pandemic, while the bank-specific variables are found to be insignificant. It shows that macroeconomic variables have a greater impact during the turbulent period as they affect most businesses, especially during the pandemic. Furthermore, macroeconomic variables are observed to have a stronger influence on developed countries, but the impact of bank-specific variables is stronger in emerging countries. The results of this study assist policymakers, regulators, banks and governments in identifying the determinants of high NPL as the indicator of a financial crisis. Greater emphasis shall be given to the changes in macroeconomic variables. Non-performing loan, macroeconomic, bank-specific, banking, COVID-19 03 2023 68 June The Singapore Economic Review 941 961 E50 E60 G21 H60 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500679 OOI KOK LOANG City Graduate School, City University Malaysia, 46100, Petaling Jaya, Malaysia ZAMRI AHMAD School of Management, Universiti Sains Malaysia, Gelugor 11800, Malaysia R. V. NAVEENAN Symbiosis Institute of Business Management Bengaluru, Bengaluru 560100, Karnataka, India
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article ASYMMETRIC RESPONSE OF DISAGGREGATED IMPORT DEMAND TO EXCHANGE RATE MOVEMENTS: A SMALL OPEN ECONOMY PERSPECTIVE Net importing countries are very susceptible to changes in the value of their currency. Pakistan, being a small open economy, faces a constant pressure in its current account and BOP, which leads to unavoidable stress on its exchange rate. Exchange rate movements affect the cost of imports directly which have been studied extensively in empirical literature. However, these studies ignore the possibility of asymmetric effects of exchange rate and its impact on import demand in Pakistan. An appreciation in exchange rate may have a different impact on demand for imports than depreciations depending upon the level of rigidity in consumer preferences as well as the availability of substitutes for consumer goods, capital goods and raw materials. We use quarterly data of Pakistan’s consumer goods, capital goods and raw material imports from 2005:Q1 to 2018:Q4 and employ a relatively recent econometric methodology, namely, Nonlinear Autoregressive Distributed Lag (NARDL) technique. The results confirm the existence of asymmetric impact of exchange rate in the long-run. The appreciation of currency has more pronounced impact in increasing imports relative to the depreciation of it in decreasing imports. There are further differences of this effect within imports across consumer goods, capital goods and raw materials. We present policy implications of this asymmetric effect of exchange rate on disaggregated consumer imports. Import demand function, exchange rate, asymmetry 03 2023 68 June The Singapore Economic Review 823 840 F14 F19 F41 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500484 KHURRUM S. MUGHAL khurrum.mughal@gmail.com ��Research Department, State Bank of Pakistan, Karachi, Pakistan SADDAM ILYAS saddam.ilyas@sbp.org.pk ��Research Department, State Bank of Pakistan, Karachi, Pakistan YASIR TARIQ MOHMAND ��Department of Management Sciences, COMSATS University, Islamabad, Pakistan FAHEEM ASLAM faheem.aslam@comsats.edu.pk ��Department of Management Sciences, COMSATS University, Islamabad, Pakistan MUKHTAR UL HASAN mukhtar.hassan@sbp.org.pk ��Research Department, State Bank of Pakistan, Karachi, Pakistan
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article THE ROLE OF MARKETIZATION ON THE LINKAGE BETWEEN MISALLOCATION AND PRODUCTIVITY DISPERSION: EVIDENCE FROM CHINA This paper enriches the misallocation literature by identifying the role of marketization based on China’s manufacturing database. We find that when the effect of misallocation on TFP dispersion is larger than that of market competition, the TFP dispersion of private enterprises tends to increase, misallocation decreases and market competition increases. However, as the dispersion of state-owned enterprises in China decreases, misallocation and market competition both increase. Misallocation, productivity dispersion, market competition, total factor productivity (TFP) 03 2023 68 June The Singapore Economic Review 761 795 D24 D52 L11 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500292 YUAN AN 739025210@qq.com School of Economics and Trade, Guangdong University of Foreign Studies, Guangzhou, P. R. China KEBIN DENG ecdengkb@scut.edu.cn School of Economics and Commerce, South China University of Technology, Guangzhou, P. R. China ZHONG DING School of Accounting, Guangdong University of Foreign Studies, Guangzhou, P. R. China FOX GAO f.gao@business.uq.edu.au School of Business, The University of Queensland, Australia
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article REGIONAL SKILL DIFFERENTIALS: A STUDY OF THE INDONESIAN LABOR MARKET This study investigates the patterns and trends in the returns to skill in the Indonesian labor market over the period 2007 to 2013, a period of rising earnings and income inequality. The study takes into account the labor demand and supply across regional development regions and over time. It presents evidence on the returns to skill related to structural changes in the economy through the growth of modern services and the resource boom. It confirms that skill premiums varied across regional development areas. The composition of industries across regions, female labor participation, the proportion of casual workers, the supply of tertiary-educated workers and factors unique to each region are all determinants of the regional skill premiums. The results support the policy focus on developing human capital in Indonesia to meet the rising demand for skilled workers and show the role of the manufacturing sector and minimum wages policy in reducing the skill premium. Skill premium, supply of labor, demand of labor, regional development area, Indonesia, human capital 03 2023 68 June The Singapore Economic Review 703 728 I24 J01 J24 J31 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500371 TRI MULYANINGSIH Department of Economics, Universitas Sebelas Maret, Surakarta, Indonesia RIYANA MIRANTI riyana.miranti@canberra.edu.au Institute for Governance and Policy Analysis (IGPA), Faculty of Business, Government and Law, University of Canberra, ACT 2601, Australia ANNE DALY anne.daly@canberra.edu.au Faculty of Business, Government and Law, University of Canberra, ACT 2601, Australia CHRIS MANNING chris.manning@anu.edu.au ANU College of Asia and the Pacific Arndt-Corden Department of Economics, Crawford School of Public Policy, Australian National University, ACT Acton 2601, Australia
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article CONFLICTS, CALAMITIES AND NUTRITIONAL POVERTY TRAPS IN A PEASANT ECONOMY: EVIDENCE FROM RURAL CHINA 1929–1933 This paper uses data compiled by John Lossing Buck from his rural China survey conducted between 1929 and 1933 to analyze the impact of weather calamities and conflict on agricultural productivity, farm wages and nutrition intake. Our results support the conditions required for a Nutritional Poverty Trap (NPT) to be present, while anecdotal evidence points to the potential presence of a nutritional poverty trap for large segments of China’s agricultural economy. We find a lagged effect of climate shock on nutrition, but find no evidence that the many conflicts of the day affected nutrition. This is more likely due to the avoidance of conflict zones by surveyors, but may also support the notion that the effects from conflicts were local and short-lived due to the resilience of farmers. Nutrition, nutritional poverty trap, food policy, poverty, agricultural productivity, disaster 03 2023 68 June The Singapore Economic Review 729 759 Q54 Q12 I32 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500280 LI ZHOU College of Economics and Management, Nanjing Agricultural University, Nanjing, Jiangsu 210095, P. R. China JIE SUN sun51jie@126.com College of Economics and Management, Nanjing Agricultural University, Nanjing, Jiangsu 210095, P. R. China CALUM GREIG TURVEY ��Department of Applied Economics and Management, Cornell University, Ithaca, NY 14853, USA
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article THE EMERGENCE OF NEW TECHNOLOGY-BASED SECTORS: A PROXIMITY APPROACH BASED ON CHINESE PATENT DATA This paper analyzes the emergence of new technology-based sectors in China based on Chinese patent data. We apply the research framework based on product-space methodology to Chinese patent data and find that China displays similar characteristics to other developed countries. The technology structure based on local accumulated capabilities at the province level plays the biggest role in the emergence of new technology-based sectors. Furthermore, we find that the accumulated technological capabilities in adjacent provinces have positive spillover effects to this emergence and the accumulated technological capabilities in non-adjacent provinces have uncertain effects to this emergence; the spread of capabilities is constrained by geographical distance. Product space, new technology-based sectors, technology diversification, spillover effects 03 2023 68 June The Singapore Economic Review 797 821 L16 O14 R11 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500449 HUA ZHANG School of Economics and Trade at Guangdong University of Finance, P. R. China CHRISTOPHER DECKER ��Department of Economics at University of Nebraska at Omaha, P. R. China JINLAN NI ��Department of Economics at University of Nebraska at Omaha, P. R. China‡Institute of Urban Development at Nanjing Audit University, USA
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article IMPACT OF FINANCIAL CRISES ON THE DYNAMICS OF CAPITAL STRUCTURE: EVIDENCE FROM KOREAN LISTED COMPANIES This study examines the impact of the 1997 Asian financial crisis and the 2008 Global economic crisis on the capital structures of Korean non-financial listed companies. Using a panel data covering 1, 159 Korean listed non-financial firms from 10 industrial sectors over a 31-year period (1985–2015), this study investigates the patterns of firms’ capital structures before and after the crises and identifies their speeds of adjustment toward the optimal leverage. This study finds different effects of the two crises on both capital structures and adjustment speeds. The average debt ratio fell significantly after the 1997 Asian financial crisis. The distance between the optimal and the observed debt ratios shrank after the Asian crisis, while the speed of adjustment increased two-fold. Unlike the Asian financial crisis, the global economic crisis of 2008 had a positive effect on companies’ debt ratios and the speeds of adjustments toward the optimal leverage. Our empirical analysis shows that, on average, the Korean non-financial listed companies decreased their debt ratios over the entire period of observation, with the leverage being the highest before the Asian financial crisis and lowest after the global economic crisis. Our results also show that the debt ratios of Korean chaebols were higher than that of non-chaebols. Moreover, we find that the high level of leverage of Korean firms was associated with tangible assets, income variability, size and age of the firm, non-debt tax shield and uniqueness. Capital structure, optimal leverage, speed of adjustment, Korean listed companies, panel data, financial crises, dynamic model, chaebols 03 2023 68 June The Singapore Economic Review 867 898 C33 D21 C51 E22 G32 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500498 TSOY LYUBOV Department of Economics, Room GN702, Sogang University, 35 Baekbeom-ro (Sinsu-dong #1), Mapo-gu, Seoul 04107, Korea ALMAS HESHMATI Department of Economics, Room GN702, Sogang University, 35 Baekbeom-ro (Sinsu-dong #1), Mapo-gu, Seoul 04107, Korea
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article HOW DOES INVESTOR SENTIMENT INFLUENCE IPO INITIAL RETURN AND LONG-TERM PERFORMANCE? AN AGENT-BASED COMPUTATIONAL FINANCE APPROACH This study builds an agent-based computational finance platform that can reproduce the basic characteristics of China’s initial public offering (IPO) market and explain its anomalies. The results of our computational experiments show that along with the increasing proportion of sentiment strategy investors (i.e., those with an information advantage) entering the market, the IPO underpricing rate also rises correspondingly. Sentiment investors usually suffer losses because of their irrational investment decisions, while sentiment strategy investors profit by preying on sentiment investors. Investor sentiment, initial public offering, underpricing, agent-based computational finance 03 2023 68 June The Singapore Economic Review 899 915 D21 G11 G30 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500437 XIONG XIONG College of Management and Economics, Tianjin University, Tianjin 300072, P. R. China JINYI ZHANG College of Management and Economics, Tianjin University, Tianjin 300072, P. R. China ZHENWEI LV College of Management and Economics, Tianjin University, Tianjin 300072, P. R. China GAOFENG ZOU College of Management and Economics, Tianjin University, Tianjin 300072, P. R. China
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article WHETHER CONSUMER SATISFACTION BENEFITS THE INVESTMENT PORTFOLIO: EMPIRICAL EVIDENCE FROM HONG KONG This paper aims to investigate the role of a consumer satisfaction index (CSI) for financial investments in the Hong Kong market. Using yearly data for Hong Kong consumer satisfaction index (HKCSI) to compile a CSI at company level, the effect of consumer satisfaction on company market value is identified. A hypothesized investment portfolio based only on CSI at company level is created, and its return compares with a widely used index measuring stock market performance in Hong Kong. A formal statistical test on the outperformance of portfolios that load on consumer satisfaction is conducted. Using the Capital Asset Pricing Model (CAPM), the beta risk of the entire time period is evaluated, and shows that the portfolio risk based on company level CSI is not significantly different than the market risk. This paper concludes therefore that consumer satisfaction can be incorporated into financial models and applied for formulating investment portfolios with better performance than the market rate in Hong Kong. Company performance, consumer satisfaction, investment portfolio, Hong Kong, linear regression, portfolio optimization, Capital Asset Pricing Model 02 2023 68 The Singapore Economic Review 485 506 C12 C61 E22 E44 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500152 JIN LI School of Economics and Management, Xidian University, Xi’an 710071, P. R. China GEOFFREY TSO msgtso@cityu.edu.hk College of Business, City University of Hong Kong, Tat Chee Avenue, Kowloon, Hong Kong SAR DON WU donwu@ift.edu.mo Institute for Tourism Studies, Colina de Mong-Ha, Macao SAR
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article IS AN AGING POPULATION GOOD OR BAD FOR THE ENVIRONMENT? PANEL EVIDENCE FROM 25 OECD COUNTRIES Although CO2 emissions are purely global externalities and unlikely to be addressed by individual countries, empirical attention has typically been on the national level as national efforts have come in to plug the gap. The contribution of this study is therefore to investigate the effect of population aging on CO2 emissions, controlling for income and fossil fuel energy consumption, using panel data of 25 OECD countries during 1980–2015. After applying the panel cointegration approach such as fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS), we discover that population aging appears to reduce CO2 emissions, ceteris paribus. We also confirm the existence of the environmental Kuznets curve (EKC) relationship with an inverted-U curve, where CO2 emissions increase with income level until it reaches the estimated turning point and then starts to turn down. Other evidence shows that fossil fuel energy consumption increases CO2 emissions, other things equal. We believe that these findings present sustainable policy directions that may help solve the problem of population aging our world is dealing with today. CO2, EKC, environment, OECD, panel cointegration, population aging 02 2023 68 The Singapore Economic Review 397 412 C23 J11 Q56 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500692 YOORI KIM Semifive, Seoul, South Korea JUNGHO BAEK ��College of Business and Security Management, University of Alaska Fairbanks, 505 South Chandalar Drive, Fairbanks, AK 99775, USA
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article FORECASTING SINGAPORE’s ECONOMY USING STATISTICAL LEARNING AND FACTOR MODELS We evaluate the performance of the penalized vector autoregression (VAR), diffusion index (DI), and regression tree-based ensemble learning models to forecast Singapore’s macroeconomy using high-dimensional data. Our dataset consists of 220 monthly time series that capture the economy of Singapore and 20 monthly times series that capture the global economic environment. We find that the penalized VAR model and the ensemble learning model give an outstanding performance in both short and long horizons. On the other hand, the performance of the DI model depends crucially on the methods to select the number of factors. In particular, a conventional selection method may overestimate the true number of factors and thus deteriorate the forecasting performance of the DI model. Additionally, the VAR and DI models may utilize different information in forecasting. Vector autoregression, diffusion index, statistical learning, forecasting, Singapore economy 02 2023 68 The Singapore Economic Review 319 353 C32 C38 C53 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500655 BENEDICT FOO Division of Economics, School of Social Sciences, Nanyang Technological University, Singapore DENG YAO KOH Division of Economics, School of Social Sciences, Nanyang Technological University, Singapore JUAN PANG TAN Division of Economics, School of Social Sciences, Nanyang Technological University, Singapore WENJIE WANG Division of Economics, School of Social Sciences, Nanyang Technological University, Singapore
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article EMISSIONS TAX AND EXECUTIVE COMPENSATION: A PUBLIC–PRIVATE JOINT MECHANISM TO PROMOTE ENVIRONMENTAL AND ENERGY MANAGEMENT It is widely accepted that a market-based instrument such as a tax on greenhouse gas emissions is effective in motivating firms to improve energy efficiency, environmental management and invest in environmentally-related research and development (R&D). However, modern corporations tend to separate ownership and management, and decision-making executives who are myopic may not share the firm owners’ concern about their firm’s exposure to long-run costs and risks associated with climate change. Hence, executive wage contracts should include rewards for environmental performance, particularly in energy efficiency and developing R&D to reduce emissions. This paper examines the effect of implementing executive compensation that is partially indexed to abatement in a monopolist firm, in which decision-making is delegated to a manager under an emissions tax policy. In equilibrium, it is shown that the new wage compensation leads to more abatement, greater production of output, and higher wages for the manager compared with a conventional wage scheme where wages are solely indexed to profits. Hence, the government imposes a lower emissions tax on the firm. More importantly, this public–private joint mechanism results in net social welfare improvement in equilibrium. However, whether the monopolist’s profit is higher in the new wage scheme depends non-monotonically on the abatement efficiency technology and the extent of wage indexation to profitability. Emissions tax, managerial incentive contracts, abatement, energy efficiency 02 2023 68 The Singapore Economic Review 355 375 D20 L20 L22 Q55 Q58 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500710 SOO KEONG YONG School of Business and Economics, Universiti Brunei Darussalam, Bandar Seri Begawan, Brunei YOUNGHO CHANG yhchang@suss.edu.sg School of Business, Singapore University of Social Sciences, Singapore
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article EXPLAINING GAPS IN INFRASTRUCTURE INVESTMENT BY MUNICIPAL GOVERNMENTS IN AUSTRALIA Shortfalls in infrastructure expenditure represent a ubiquitous problem in all Australian local government systems as well as in many other countries. In this paper, we use an evolutionary model to describe how local government investment decisions are made. We demonstrate that fear of reputational damage among elected councilors could cause herding behavior resulting in convergent and overly cautious investment behavior by councils. Under these conditions, divergent viewpoints amongst council members are discouraged and local government may become moribund in its decision-making. We show how this may result in “gaps†in infrastructure investment. Local government, infrastructure, herding behavior 02 2023 68 The Singapore Economic Review 457 466 D72 H70 D80 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500024 PHIL SIMMONS School of Business, University of New England, Armidale, Australia BRIAN DOLLERY School of Business, University of New England, Armidale, Australia†Faculty of Economics, Yokohama National University, Yokohama, Japan
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article SOCIAL INSURANCE UNDER FRAUD AND REDISTRIBUTIVE TAXATION This paper examines the equity and efficiency effects of social insurance in the presence of insurance fraud and linear income taxes and shows the following findings. (i) Under the commonly accepted assumption of decreasing absolute risk aversion (DARA), the social insurance benefit may increase insurance fraud, whereas raising the marginal tax rate (lumpsum transfer) of the linear income tax also causes insurance fraud to increase (decrease). (ii) Equity and efficiency effects of social insurance are conflicting rather than complementary with each other. Social insurance, income taxes, insurance fraud 02 2023 68 The Singapore Economic Review 467 483 H21 H26 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500115 TSAUR-CHIN MICHAEL WU wutc@fcu.edu.tw Department of Public Finance, Feng Chia University, No. 100, Wehhua Rd, Xitun District, Taichung City, 407, ROC CHIH-TA YEN yct@nutc.edu.tw ��Department of Public Finance and Taxation, National Taichung University of Science and Technology, No. 129, Section 3, Sanmin Rd, North District, Taichung City, 404, ROC CHE-CHIANG HUANG v12001@cute.edu.tw ��Department of Public Finance, China University of Technology, No. 56, Section 3, Xinglong Rd, Wonshan District, Taipei City, 116, ROC JIN-LI HU �Institute of Business and Management, National Chiao Tung University, No. 1001, Daxue Rd, East Dirstrict, Hsinchu City, 30010, ROC
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article SKEWED CREDIT AND GROWTH DYNAMICS While a large empirical literature finds that financial development is beneficial for economic growth, recent evidence suggests otherwise. We contribute to this debate by examining the link between credit growth skewness and long-run growth. Earlier literature found that economies that are characterized by negative skewness in private sector credit growth experience faster output growth. We revisit this relationship using a large panel dataset that encompasses both advanced and developing economies and the aftermath of the global financial crisis. While our results reconfirm an association between credit skewness and economic growth, the relationship is more nuanced than previously thought. The beneficial growth effects of negative skewness are evident only prior to 2000. Our findings help explain why credit cycles positively affected economic growth in emerging markets in the past and why advanced economies’ growth has been sluggish since the 2008–2009 global financial crisis. Credit dynamics, skewness, economic growth 02 2023 68 The Singapore Economic Review 563 608 F36 G10 O16 O41 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500783 GEMMA ESTRADA Asian Development Bank, Mandaluyong City, Metro Manila, Philippines AITOR ERCE erceaitor@gmail.com ��Navarra Public University, Pamplona, Spain DONGHYUN PARK dpark@adb.org Asian Development Bank, Mandaluyong City, Metro Manila, Philippines
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article DOES CULTURE EXPLAIN THE HIGH PRIVATE SAVING BEHAVIOR IN EAST ASIAN COUNTRIES? FURTHER EVIDENCE Attempts within the prior studies to determine whether the disparities in national saving rates can be explained by cultural attributes have been largely unsuccessful, essentially as a result of the formidable problems of measurement of culture, data availability and endogeneity. We first extend the prior research using the six measurable cultural dimensions of Hofstede et al. [(2010). Culture and Organizations: Software of the Mind, Intercultural Cooperation and Its Importance for Survival, 3rd Edition. New York: McGraw Hill], along with the largest panel database currently available, containing 84 countries over the period 1981–2012, on culture-related variables and saving rates, to test our hypothesis that cultural factors can influence private saving behavior in an international context. We then focus our study on three main cultural variables in East Asian countries — Confucianism, Long-term Orientation (LTO) and Uncertainty Avoidance (UA) — and find that they all have significant impacts on private saving rates around the world. Our findings also potentially solve the puzzle of why China, Japan and other East Asian countries save so much and so persistently since we find that the high LTO measures within these regions determine their high levels of private savings, whilst their low UA measures explain the persistence of their high saving rates, even during a period of financial crisis. Long-term orientation, uncertainty avoidance, private saving, Confucianism 02 2023 68 The Singapore Economic Review 413 456 E21 Z10 http://www.worldscientific.com/doi/abs/10.1142/S021759082250076X NIANZHI GUO guonianzhi@nbs.edu.cn Newhuadu Business School, Minjiang University, University Town, Fuzhou, Fujian Province 350108, P. R. China ANTHONY H. TU School of Management and Economics, University of Electronic Science and Technology of China, 2006 Xiyuan Ave., West Hi-Tech Zone, Chengdu 611731, P. R. China
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article PERSONAL CHARACTERISTICS AND INTENTION FOR ENTREPRENEURSHIP This study analyzes the relationship between entrepreneurship intention and personal characteristics and skills by using the surveys we conducted in Turkey on 1465 senior university students. We use a modified version of the Entrepreneurial Orientation (EO) scale and the Political Skills Inventory to measure some personal characteristics and skills. We also use the nine sub-dimensions of these two scales. Probit model and wavelet coherence analysis results show that proactivity, entrepreneurship, and networking sub-dimensions of the scales are related to entrepreneurship intention. We also find that gender, the number of siblings, the grade point average (GPA) of the students, their family’s education level, the parent’ ownership of an enterprise, and the number of non-governmental organizations (NGO) that they are a member of are also related to entrepreneurship intention. Results may be useful to understand and enhance entrepreneurship potential. Entrepreneurship, self-employment entry, occupational choice 02 2023 68 The Singapore Economic Review 539 561 C90 D63 http://www.worldscientific.com/doi/abs/10.1142/S0217590821500338 MURAT YALCINTAS myalcintas@ticaret.edu.tr Istanbul Commerce University, Beyoglu, Istanbul, Turkey OYKÜ IYIGÜN Istanbul Commerce University, Beyoglu, Istanbul, Turkey GOKHAN KARABULUT gbulut@istanbul.edu.tr Istanbul University Department of Economics, Beyazit, Istanbul, Turkey
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article THE EFFECTS OF UNCONVENTIONAL MONETARY POLICY IN JAPAN: NEW EVIDENCE FROM TIME-VARYING PARAMETER VAR ANALYSIS This paper investigates the macroeconomic effects of unconventional monetary policies by estimating a time-varying parameter structural vector auto-regression (TVP-VAR) using Japanese monthly data beginning with the implementation of quantitative easing in 2001. The results of the empirical study can be summarized in four points. First, the impulse responses of output to a positive monetary policy shock rose during the period of quantitative easing (March 2001–July 2006) but declined after the comprehensive monetary easing began (October 2010–July 2015). Second, the impulse responses of inflation to a positive monetary policy shock became stably positive after the introduction of inflation targeting in January 2013. Third, the impulse responses of stock prices to positive monetary policy shocks rose each time an unconventional monetary policy was adopted. Finally, the recovery of the credit transmission channel might be attributed to the level of non-performing loans remaining low. The third result implies that increased stock prices from a monetary policy shock are primarily affected by foreign capital because foreign capital responds more strongly than domestic capital to unconventional monetary policy. Monetary policy, transmission mechanism, time-varying parameter structural vector auto-regression model, quantitative easing, inflation targeting, quantitative qualitative easing 02 2023 68 The Singapore Economic Review 609 628 C11 E44 E52 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500012 KANSHO PIOTR OTSUBO 16eed001@meijigakuin.ac.jp Graduate School of Economics, Meiji Gakuin University, 1-2-37 Shirokanedai, Minato-ku, Tokyo 108-8636, Japan
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article ENVIRONMENTAL MACROECONOMICS: A NEGLECTED THEME IN ENVIRONMENTAL ECONOMICS — LEAVE ALONE ECONOMICS Economists usually regard environmental issues as drivers of allocative distortions within markets. Hence, they claim that corrections of such distortions, for example, by recourse to the internalization of externalities, are firmly rooted within the market framework. Therefore, the traditional view is that environmental issues fall fairly and squarely within the domain of microeconomics. This paper argues that such a view is flawed. The primary reason is that externalities are never fully internalized. Within any market, there always exist residual externalities, which do accumulate over time. Therefore, the same way as the aggregate of market transactions lead to the definition of national product in macroeconomics, the aggregate of residual externalities lend credence to the recognition of nature as capital that depreciates. In accordance with this recognition, this paper illustrates the reformulation of long run stabilization frameworks in macroeconomics. The analysis of these reformulated frameworks illustrates different configurations for policy variables as illustrated with reference to South Korea. Environmental capital, economic growth, Swan–Solow model, endogenous growth models 02 2023 68 The Singapore Economic Review 377 396 Q5 E01 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500327 DODO J. THAMPAPILLAI Lee Kuan Yew School of Public Policy, 469C Bukit Timah Road, National University of Singapore, Singapore 259772, Singapore YVONNE CHEN Lee Kuan Yew School of Public Policy, 469C Bukit Timah Road, National University of Singapore, Singapore 259772, Singapore
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article FOREIGN DIRECT INVESTMENT AND INNOVATION: EVIDENCE FROM CHINESE FIRMS’ PATENT FILINGS One main motivation of attracting inward foreign direct investment (FDI) for emerging economies is to obtain knowledge spillovers from developed countries and promote domestic innovation. The effects of FDI on innovation include both the direct effects from FDI on targeted domestic firms and indirect effects from foreign ownership on other foreign and domestic firms’ innovation. Applying a design with a two-stage randomization procedure that allows for both direct and indirect effects of FDI on innovation and allows these two effects to vary with the share of foreign firms in a well-specified cluster, we empirically investigate the effects of inward FDI on Chinese firms’ innovation using patent filings as a proxy for innovation. Our findings indicate that the potential innovation of firm varies with the share of foreign firms in the cluster. The approach used in this paper can help researchers and policymakers to better understand the benefits of inward FDI promotion programs, agglomeration and regional policy. Inward FDI, innovation, direct and indirect effects, spillover effects, technology transfer 02 2023 68 The Singapore Economic Review 507 538 F21 F23 O19 O33 L25 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500217 TING CHEN chenting124@163.com School of Finance, Guangdong University of Finance & Economics, 21 Luntou Road, Guangzhou, P. R. China XIANMENG CHEN cxminxmu@163.com School of Economics, Xiamen University, 422 Siming South Road, Xiamen, Fujian, P. R. China WENJIE LUO luowenjie888@qq.com Institute of Industrial Economics, Jinan University, 601 Huangpu Avenue West, Guangzhou, P. R. China XUNYONG XIANG Institute of Industrial Economics, Jinan University, 601 Huangpu Avenue West, Guangzhou, P. R. China
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article NON-LINEAR EFFECTS OF TERRORISM ON ECONOMIC GROWTH IN PAKISTAN: ACCOUNTING FOR CAPITAL PER WORKER AND STRUCTURAL BREAKS In this study, we examine the asymmetric effects of terrorism and economic growth in Pakistan over the period 1970–2016, while considering the role of capital per worker and structural breaks. We use the non-linear ARDL approach to establish the long-run association and to estimate the short-run and long-run effects accordingly. The results indicate the presence of asymmetries in both long and short run. Moreover, 1% decrease in terrorism results in an increase of per capita income by 0.02% in the long run and 0.001% in the short run. Assuming symmetry, the long run capital share is 0.47. In asymmetric relation, a 1% increase in capital share increases output by 0.55%, whereas a 1% decrease in capital stock decreases output by 0.26%. The break effects show that the years 1993 and 2004 have negative effects on growth. The vector error correction model-based causality results indicate a unidirectional causality from terrorism to per capita income. Overall, the results highlight that terrorism is growth retarding. Terrorism, economic growth, structural breaks, non-linear ARDL, causality, Pakistan 02 2023 68 The Singapore Economic Review 629 650 C22 F43 H12 N15 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500140 RONALD RAVINESH KUMAR Informetrics Research Group, Ton Duc Thang University, Ho Chi Minh City, Vietnam2Faculty of Social Sciences and Humanities, Ton Duc Thang University, Ho Chi Minh City, Vietnam SYED JAWAD HUSSAIN SHAHZAD Department of Management of Science and Technology Development, Ton Duc Thang University, Ho Chi Minh City, Vietnam4Faculty of Finance and Banking, Ton Duc Thang University, Ho Chi Minh City, Vietnam PETER JOSEF STAUVERMANN pstauvermann@t-online.de Department of Global Business and Economics, Changwon National University, Republic of Korea (South Korea) NIKEEL KUMAR S11085861@student.usp.ac.fj School of Accounting and Finance, The University of the South Pacific, Fiji
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article OIL PRICE FLUCTUATIONS AND ENERGY COMMODITY PRICES: AN ANALYSIS OF ASYMMETRIC EFFECTS Previous studies mostly ignore possible nonlinear behaviors that may be caused by asymmetry, persistence, or structural breaks. This study aims to fill this gap by applying the Nonlinear Autoregressive Distributed Lag technique of Shin et al. [(2014). Modelling asymmetric cointegration and dynamic multipliers in a nonlinear ARDL framework. In Festschrift in Honor of Peter Schmidt: Econometric Methods and Applications, pp. 281–314. New York: Springer] to examine the dynamic effect of oil prices on other energy prices based on nonlinear empirical frameworks. We identify how oil prices and four other energy commodity prices behave using daily data from January 07, 1991 to February 25, 2020. The long-run relationships suggest both oil price increases and decreases are significantly and positively related to the prices of all other energy commodities. There seems to be asymmetry in the linkages between oil prices and all the prices of diesel fuel, gasoline, heating oil and natural gas in the long run. Except for natural gas, the effects of oil price increases are significantly larger than those of oil price decreases. However, in the short run, the results are somewhat different. An asymmetric impact of oil price changes is found for gasoline and the effects of oil price decreases are larger than those of oil price increases. In our model, the real effective exchange rate of the US dollar is explicitly incorporated to capture the linkages between US dollar fluctuations and energy price movements. We find that the relative weakness of the US dollar strengthens the prices of energy commodities in the global market. Asymmetric crude oil price changes, energy commodity prices, real effective exchange rate of the US dollar, daily data, nonlinear ARDL model 06 2022 67 December The Singapore Economic Review 1811 1833 Q43 http://www.worldscientific.com/doi/abs/10.1142/S021759082050037X THAI-HA LE Fulbright School of Public Policy and Management, Fulbright University Vietnam, 105 Ton Dat Tien, Tan Phu Ward, District 7, Ho Chi Minh City, Vietnam YOUNGHO CHANG yhchang@suss.edu.sg Singapore University of Social Sciences, Singapore 461 Clementi Road, Singapore 599491, Singapore DONGHYUN PARK dpark@adb.org Asian Development Bank, Philippines 6 ADB Avenue, Ortigas Center, Mandaluyong, 1550 Metro Manila, Philippines
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article ECONOMIC POLICY UNCERTAINTY AND THE REAL ECONOMY OF SINGAPORE This paper investigates (for the first time) the impact of the economic policy uncertainties of Singapore and its major trading partners on Singapore’s industrial production and exports. The study uses monthly data from January 2003 to August 2019, correlation analysis, spillover index analysis and a structural vector autoregression model to perform the investigation. Using the newly invented Singaporean economic policy uncertainty index, the research finds that it is a good predictor of industrial production. It is found that, in general, uncertainty depresses Singapore’s industrial production and exports. The paper suggests that policymakers promote new entrepreneurship and build a skilled labor force to minimize the impact of uncertainty on the economy of Singapore. Economic policy uncertainty, industrial production, export, structural VAR 04 2022 67 June The Singapore Economic Review 1307 1331 D81 E23 F41 http://www.worldscientific.com/doi/abs/10.1142/S0217590820460042 KHANDOKAR ISTIAK kistiak@southalabama.edu University of South Alabama, Mobile, Alabama 36688, USA
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article THE COMPETITION ECONOMICS OF ONLINE PLATFORMS This paper provides an overview of the competitive issues surrounding online platforms. The general theme is that while much has been made of the structural features of online platforms, there is little hard evidence that these are durable monopolies. Nonetheless, there are concerns about the behavior of large online digital platforms arising from their vertical integration, self-preferencing, killer acquisitions, and agglomeration. Developments in and relevance to ASEAN countries are discussed. Network effects, two-sided markets, online platforms, self-preferencing, foreclosure, killer acquisitions, Big Tech 05 2022 67 September The Singapore Economic Review 1699 1724 D21 D22 D42 D43 K21 L12 L13 L26 L41 L42 L86 L96 O31 http://www.worldscientific.com/doi/abs/10.1142/S0217590821420017 CENTO VELJANOVSKI Case Associates, Pavilion Kensington High Street, London, UK2Institute of Economic Affairs, 2 Lord North Street, London, UK3University of Buckingham, Hunter Street, Buckingham, UK
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article ARE FAIR, REASONABLE AND NONDISCRIMINATORY (FRAND) COMMITMENTS APPLICABLE OUTSIDE THE STANDARD ESSENTIAL PATENTS (SEPS) DOMAIN? — AN ECONOMIC PERSPECTIVE To date, the Competition and Consumer Commission of Singapore (CCCS) has dealt with two cases that involved fair, reasonable and nondiscriminatory (FRAND) commitments in order to resolve the competition concerns identified. While the application of FRAND commitments outside the standard essential patents (SEPs) domain remains limited globally, we show that the circumstances that give rise to the economic justification for the use of FRAND commitments in SEP cases are not unique. Instead, such circumstances are also present in some non-SEP cases such as those involving vertical effects in mergers and acquisitions, or abuse of dominance conduct such as refusal to supply. Therefore, FRAND commitments remain a viable behavioral remedy in addressing competition concerns. Intellectual property, standard setting organizations, fair, reasonable, nondiscriminatory, FRAND 05 2022 67 September The Singapore Economic Review 1725 1757 L15 L24 http://www.worldscientific.com/doi/abs/10.1142/S0217590822430019 JIA LE NG Competition and Consumer Commission of Singapore (CCCS), Singapore MARCEL TAN marcel_tan@cccs.gov.sg Competition and Consumer Commission of Singapore (CCCS), Singapore WENG LOONG KONG kong_weng_loong@cccs.gov.sg Competition and Consumer Commission of Singapore (CCCS), Singapore
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article THE ROLE OF IMPLICIT DETERMINANTS IN A HIGHLY LIBERALIZED EMERGING MARKET: EVIDENCE FROM MALAYSIA While Malaysia has fulfilled expectation of a highly liberalized market since 2009, however, her stock market is still far from fully integrated with the world market. Existing literature by far has not provided any insight on market integration of such highly liberalized yet not perfectly integrated stock market. This paper explores whether such non-perfect market integration is due to some implicit factor at firm level. Based on Errunza, V and E Losq (1989). Capital flow controls, international asset pricing, and investors’ welfare: A multi-country framework. The Journal of Finance, 44(4), 1025–1037 asset pricing framework, we employed a multivariate GARCH-M model to estimate the monthly market integration level of Malaysia stock market with the world over a period from January 2009 to September 2016. Subsequently, we examine whether the three firm-level implicit factors, i.e., ownership concentrations, foreign ownership and firm price delay affect the Malaysia stock market’s world integration. These firm-level factors are aggregated from firm-level data while price delay was also aggregated from estimates of weekly data at firm level. In short, we found that price delay and ownership concentrations have significant negative effects on the market level integration, with the latter having a nonlinear U−shape effect where ownership concentration will have a positive effect passing the threshold of 52.2%. Last but not least, foreign ownership has a significant positive effect. Integration, risk pricing, ownership concentration, foreign ownership, price delay 04 2022 67 June The Singapore Economic Review 1287 1305 G12 G14 G15 G18 G32 F30 http://www.worldscientific.com/doi/abs/10.1142/S0217590820460054 YIN YIN KOAY yinyinkoay@gmail.com School of Management, Universiti Sains Malaysia, 11800 USM, Penang, Malaysia CHEE-WOOI HOOY School of Management, Universiti Sains Malaysia, 11800 USM, Penang, Malaysia
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article TRADE INTEGRATION AND INTERNATIONAL FINANCIAL INTEGRATION: EVIDENCE FROM ASIA This paper investigates the relationship between international trade integration and international financial integration in Asia using a dataset covering the period from 2001 to 2015. Using a simultaneous equations system, this paper sheds further light into international trade integration and international financial integration processes of Asian countries. We account for the bidirectional causality between these two variables by employing a system of simultaneous equations. Utilizing the two-stage least squares estimator, we find a positive and significant bidirectional relationship between international trade integration and international financial integration. This result has strong policy implication relating to the liberalization process in these Asian countries. Asia, financial integration, trade integration 04 2022 67 June The Singapore Economic Review 1275 1286 F10 F15 F30 F40 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500248 XUAN VINH VO University of Economics, Ho Chi Minh City, Vietnam2Ho Chi Minh City, 59C Nguyen Dinh Chieu Street, District 3, Ho Chi Minh City, Vietnam3CFVG Ho Chi Minh City, 91 Ba Thang Hai Street, District 10, Ho Chi Minh City, Vietnam
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article WHAT IS AN “EFFECTIVE†ASEAN COMPETITION LAW? A METHODOLOGICAL NOTE ASEAN is currently reviewing its competition laws with “the difficult task of operationalizing the term effectiveness.†But the review seems more concerned with achieving international best practice rather than promoting effective economic outcomes that are based on local economic and institutional conditions and Asian business practices. There has been minimal input from ASEAN economists in the development and administration of ASEAN competition laws. Instead, ASEAN competition laws are mainly shaped and administered by lawyers who are more concerned with international comparisons of administrable laws, system administration and procedures and not so much with either local economic conditions or the ability of local competition regulators to achieve good economic outcomes. There is an extensive business school literature that shows that Asian business operates differently from those in the West. But these differences are not recognized in the design and operation of ASEAN competition laws.This paper first, reviews how economics can contribute to both the design and implementation of effective ASEAN competition laws that take into account differences in business practices, economic conditions and institutional capacities. Second, because competition laws are mainly designed and run by lawyers, the paper also examines how lawyers perceive and research the transfer of legal rules from one country to another. This provides a guide to economists interested in research on the law and economics of competition law within ASEAN. The authors hope that it will stimulate both economists (and lawyers interested in economics) to undertake practical empirical research that will enhance the effectiveness of ASEAN competition laws and their possible convergence. Competition law and economics, Asian business, ASEAN, inter-country comparisons, regional integration 05 2022 67 September The Singapore Economic Review 1565 1606 A11 B41 D4 F15 H32 H77 K21 L40 N45 http://www.worldscientific.com/doi/abs/10.1142/S0217590821430013 ROBERT IAN MCEWIN Faculty of Law, Australian National University, Canberra, Australia†Faculty of Law, Chulalongkorn University, Bangkok, Thailand PEERAPAT CHOKESUWATTANASKUL Faculty of Law, Australian National University, Canberra, Australia
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article DO OIL PRICE FLUCTUATIONS AFFECT THE INFLATION RATE IN INDONESIA ASYMMETRICALLY? Changes in the oil price directly affect production costs, and subsequently, the general price level of products. With Indonesia observing an inflation targeting policy, this study applies the nonlinear autoregressive distributed lag (NARDL) technique to investigate the effect of oil price fluctuations in Indonesia. The relationship is important for the central bank to gauge the effectiveness of the inflation targeting policy in immunizing the country from oil price fluctuations. Our findings have revealed that there was an asymmetric behavior between oil price and the inflation rate (producer price index), thus questioning the effectiveness of the inflation targeting policy. More specifically, in the long run, an increase in the oil price will tend to lead to an increase in the rate of inflation with a greater deviation, while an oil price reduction will lead to a decrease in the inflation rate with a lower deviation. This suggests that the benefits of an oil price reduction are not passed down to the consumer. Inflation targeting, oil price, asymmetric cointegration, Indonesia 04 2022 67 June The Singapore Economic Review 1333 1353 D4 H5 Q4 http://www.worldscientific.com/doi/abs/10.1142/S0217590820460030 LIM THYE GOH Department of Economics, Faculty of Economics & Administration, University of Malaya, Jalan Universiti, 50603 Kuala Lumpur, Malaysia2Wilayah Persekutuan Kuala Lumpur, Malaysia SIONG HOOK LAW lawsh@upm.edu.my Department of Economics, Faculty of Economics and Management, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor, Malaysia IRWAN TRINUGROHO Faculty of Economics and Business, Universitas Sebelas Maret, Jebres, Surakarta, Jawa Tengah 57126, Indonesia
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article HOMETOWN-SPECIFIC BARGAINING POWER IN AN EXPERIMENTAL MARKET IN CHINA We conducted a market experiment in China to examine potential effects of subjects’ hometowns on their behaviors as well as potential differences between team and individual trades. We observed that group size affected bargaining power and subsequently payoffs in different directions according to where the subjects were from. In particular, teamwork strengthened the bargaining power of the subjects from coastal areas but weakened that of the subjects from inland areas when commodity exchanges were conducted between subjects from different areas. This finding suggests that it is important to take one’s hometown into account when comparing economic behavior or decision-making between teams and individuals, especially in the countries or regions where hometown diversity plays a central role in explaining differences in business management and local market performance. Hometown, market experiment, team trade, individual trade, China 04 2022 67 June The Singapore Economic Review 1225 1252 C91 C92 D51 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500030 XIANGDONG QIN xdqin@sjtu.edu.cn Antai College of Economics and Management, Shanghai Jiao Tong University, 1954 Huashan Rd, Shanghai, 200030, P. R. China JUNYI SHEN ��Research Institute for Economics and Business Administration, Kobe University, 2-1 Rokkodai, Nada, Kobe 657-8501, Japan KEN-ICHI SHIMOMURA ken-ichi@rieb.kobe-u.ac.jp ��Research Institute for Economics and Business Administration, Kobe University, 2-1 Rokkodai, Nada, Kobe 657-8501, Japan TAKEHIKO YAMATO yamato.t.aa@m.titech.ac.jp ��Department of Industrial Engineering and Economics, School of Engineering, Tokyo Institute of Technology, 2-12-1 Ookayama, Meguro-ku, Tokyo 152-8552, Japan
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article DIRECT RECIPROCITY AND SERIAL RECIPROCITY: AN EXPERIMENTAL ANALYSIS In this paper, we experimentally examine the relative strength of direct reciprocity and serial reciprocity. In three between–subject treatments, we solicit individual’s direct reciprocal giving and serial reciprocal giving in incentivized experiments where subjects make single or joint giving decisions. We find that, for both single and joint decisions, direct reciprocal giving and serial reciprocal giving are equivalent in magnitude. Meanwhile, an additional option of giving causes subjects to adjust their allocations between themselves and others, but this increase in total giving is not proportional to the increase in the number of recipients. This study provides new evidence of the complex relationship between direct reciprocity and serial reciprocity. Direct reciprocity, serial reciprocity, indirect reciprocity, the trust game, the donation game 04 2022 67 June The Singapore Economic Review 1497 1516 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500376 JINGPING LI jingping.li@sdu.edu.cn The Center for Economic Research, Shandong University, 27 Shanda South Road, Jinan 250100, P. R. China
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article INVITED PAPER — A CONJECTURE ON THE ORIGINS AND EVOLUTION OF MARKETS The author shares his theory on market creation and evolution from his perspective as an academic and a practitioner who has been involved in financial innovation for five decades. Rather than being spontaneously created, markets appear to follow a clear set of steps (the “seven-stage†process) from inception to maturity. It is critical that the benefits from transacting are greater than the costs of establishing the market — otherwise the evolution does not occur. Historical examples of the process outlined by the author can be found in commodity, equity, fixed income and environmental markets. The author provides observations and lessons that his evolutionary framework shares with financial inventive activity in new and existing products in our rapidly evolving digital world. Recent digital innovations such as the blockchain have evolved in a framework that did not require a legislative or regulatory framework (or what the author calls a “permissionless†environment). A properly designed regulatory environment can be permissionless regarding inventive activity (withness the Commodity Futures Trading Commission in the United States). A permissionless environment has historical precedent in other “analog†innovations such as wheat trading in the 19th century or financial futures in the mid-1970s. Following the seven-stage process, those innovations arose from structural changes or latent economic demands. Their standards and infrastructure were only much later understood and adopted by the regulators. Given that, the author suggests that since changes now occur at hyper speed, the implications for the future shape of derivatives markets are likely to be profound. Financial innovation, market evolution, blockchain, derivatives 06 2022 67 December The Singapore Economic Review 1781 1785 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500746 RICHARD L. SANDOR rsandor@envifi.com Aaron Director Lecturer in Law and Economics, University of Chicago Law School, Chicago, Illinois, USA
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article STORE PROMOTION, MANUFACTURER COMPETITION AND WELFARE This study evaluates the partial exclusion effects of store promotion. We find that a manufacturer with a better brand name has a higher willingness-to-pay for promotion services offered by retail stores or online platforms. The promotion results in higher sales-weighted average prices (wholesale and retail) and a larger inter-brand price gap. The stores or platforms extract more profits from manufacturers and consumers through the promotion services. The effects on consumer surplus and social welfare depend on whether the promotion alters consumer preferences. If it does, more consumers would be choosing their less-preferred brands because of the larger inter-brand price gap, which would be socially inefficient. If it does not, the promotion may help to correct the price distortion, but the social welfare effect is positive only when the promotion effect is small enough. In both cases, the promotion services reduce the total consumer surplus by softening inter-brand competition. Promotion service, manufacturer competition, shelf space, welfare 04 2022 67 June The Singapore Economic Review 1479 1496 L1 L4 M2 M3 http://www.worldscientific.com/doi/abs/10.1142/S0217590821500442 HAO WANG hwang@nsd.pku.edu.cn China Center for Economic Research, National School of Development, Peking University, P. R. China XUNDONG YIN xundongyin@foxmail.com China Academy of Public Finance and Public Policy, Central University of Finance and Economics, Beijing 100081, P. R. China ALICE Y. OUYANG China Academy of Public Finance and Public Policy, Central University of Finance and Economics, Beijing 100081, P. R. China
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article SHOULD ASEAN ANTITRUST LAWS EMULATE EUROPEAN COMPETITION POLICY? Recent years have seen the Association of Southeast Asian Nations (ASEAN) members embark upon various initiatives that seek to harmonize their competition regimes. These ongoing efforts to modernize and harmonize ASEAN competition laws take place amid a longstanding effort by both the European Union (EU) and the United States (US) to export their respective competition laws throughout the world. This raises a critical question: Should the ASEAN countries attempt to mimic the competition regimes of other developed nations, notably those that are in force in the EU and the US? And, if so, which one of these regimes should they draw more inspiration from? This paper seeks to dispel the myth that the European model of competition enforcement would necessarily provide a superior blueprint. To the contrary, it shows that the evolutionary, common-law-like regime that has emerged in the US has many strengths that are often overlooked by contemporary competition policy scholarship, and which might provide a particularly good fit for the economic and political realities of the ASEAN member states. The paper proceeds as follows. Section 2 analyzes the high-level differences between the American and European approaches to competition policy. Section 3 shows that the US and Europe also differ substantially in terms of the conduct that may constitute an infringement of competition law — the EU system being significantly more restrictive. Section 4 turns to the thorny problem of digital platforms, in particular, and argues that while the European model might more readily facilitate intervention against digital platforms, the resulting cases may be detrimental to consumers and the economy more broadly. Section 5 posits that reducing economic concentration — sometimes cited as a byproduct of European-style competition enforcement — should not be a self-standing goal of antitrust policy. Finally, Section 6 argues that many of the economic and political characteristics of the ASEAN economy cut in favor of using the US model of competition enforcement as a blueprint for further development and harmonization of ASEAN competition law. Antitrust law, European law, ASEAN markets, digital competition, error-costs, comparative law 05 2022 67 September The Singapore Economic Review 1637 1697 http://www.worldscientific.com/doi/abs/10.1142/S0217590821430025 DIRK AUER International Center for Law & Economics (ICLE), USA2ULiege, Belgium3UCLouvain, Belgium GEOFFREY A. MANNE ICLE, USA5Northwestern University Center on Law Business, and Economics, USA SAM BOWMAN 1104 NW 15th Ave, Ste 300, Portland, Oregon 97209, USA
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article MADE IN SINGAPORE In this paper, we characterize the position of Singapore in global value chains and identify Singapore’s key upstream and downstream trade partners. We trace how the position of Singapore in global value chains has changed in the past two decades: whether it has moved upstream or downstream, how involved it is in global value chains, how its trend compares with the other major Asian exporters (China, Japan, Korea, Taiwan and Hong Kong), and which key sectors of Singapore play a major role in these global trade networks. Global value chain, gross export decomposition, upstream/downstream trade partners, GVC participation, GVC position 06 2022 67 December The Singapore Economic Review 1835 1904 F14 F15 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500150 PAO-LI CHANG School of Economics, Singapore Management University, 90 Stamford Road, Singapore 178903, Singapore PHUONG T. B. NGUYEN tbpnguyen@smu.edu.sg Lee Kong Chian School of Business, Singapore Management University, 50 Stamford Road, Singapore 178899, Singapore
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article WHAT HAPPENS TO THE LABOR SUPPLY AND SCHOOLING OF THE CHILDREN LEFT BEHIND BY TEMPORARY MIGRANTS? Using Vietnamese panel data, we investigate how a father’s temporary migration is associated with the labor supply and human capital investment of his child left behind. Our analysis shows that a longer absence of a father is associated with more housework and less education of his son if the boy is at an age for primary or lower secondary schooling. Temporary parental migration, human capital investment, child labor, Vietnam Living Standards Survey 04 2022 67 June The Singapore Economic Review 1457 1478 O15 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500182 ALISON BOOTH Australian National University, ACT 2600, Australia YUJI TAMURA ��La Trobe University, VIC 3086, Australia
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article WHICH FACTORS MATTER TO DEPOSIT INSURANCE COVERAGE LIMIT? EVIDENCE FROM EMERGING MARKETS This paper analyzes the effects of the household savings rate, interest rate spread and bank capital to total assets on the relationship between banks’ risk-taking and explicit deposit insurance coverage while controlling for certain macroeconomic factors, bank-level factors and political factors with data from 50 emerging markets. It is found that the U-shaped relationship between banks’ risk-taking and coverage is more apparent in countries with higher household savings rates, lower interest rate spreads or lower bank capital to total assets. The risk-minimizing coverage settings are analyzed and compared with the actual limits for emerging market economies in 2013. For emerging market countries, the effects of the household savings rate, deposit and loan spreads and banks’ capital to assets ratio should be fully considered when setting reasonable deposit insurance coverage, and their interaction with coverage should be emphasized. Risk-taking, deposit insurance coverage, household savings rate, interest rate spread, bank capital to total assets, emerging markets 04 2022 67 June The Singapore Economic Review 1421 1446 G28 G21 E44 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500266 YIMING CHANG Key Laboratory of High Confidence Software Technologies (MOE), School of Electronics Engineering and Computer Science, Peking University, No. 5, Yiheyuan Road, Haidian District, Beijing, P. R. China†Research Center for Computational Social Science, Peking University, No. 5, Yiheyuan Road, Haidian District, Beijing, P. R. China‡PKU-Haier “Smart Home†Qingdao Joint Innovation Lab, Institute of Computational Social Science Peking University (Qingdao), No. 879, Lijiangxi Road, West Coast New Area, Qingdao, Shandong, P. R. China XIANGYUAN YU yxylisa@126.com �School of Management, Swansea University, Singleton Park, Swansea SA2 8PP, Wales, UK SHANGMEI ZHAO �School of Economics and Management, Beihang University, No. 37, Xueyuan Road, Haidian District, Beijing, P. R. China HAIJUN YANG navy@buaa.edu.cn �School of Economics and Management, Beihang University, No. 37, Xueyuan Road, Haidian District, Beijing, P. R. China
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article PREVENTIVE ACTIVITY AND NATIONAL HEALTH INSURANCE AMONG TAIWAN’S ELDERLY PEOPLE In this paper, we evaluate the preventive behaviors for middle age people in Taiwan through survey wave comparisons for the period 1993–2007. We first investigate the determinants of preventive behavior and how their effects change over time by using the seemingly unrelated bivariate probit model. Evidence shows that income and education levels do have a significantly positive relation with preventive behavior models, while reported poor health, inpatient and outpatient services, and regions are essential determinants of preventive behaviors. Then, we investigate the impact of Taiwan’s National Health Insurance (NHI) on preventive behaviors based on the difference-in-difference (DID) analysis. The results show a lack of evidence for the moral hazard effect on preventive care and regular exercise panels over the period 1993–2007. Health care, elderly, national health insurance, preventive behavior 06 2022 67 December The Singapore Economic Review 2067 2098 D11 I18 J14 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500228 CHUN-WEI LIN cwlin1@pu.edu.tw Department of International Business, Providence University, Taichung, Taiwan, ROC CHI-CHUAN LEE leechichuan@swufe.edu.cn Institute of Development Studies, Southwestern University of Finance and Economics, Chengdu, P. R. China CHIEN-CHIANG LEE Research Center of the Central China for Economic and Social Development, Nanchang University, Nanchang, P. R. China4School of Economics and Management, Nanchang University, Nanchang, P. R. China
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article COLLUSION IN PRIVATE PROCUREMENT: HOW DOES MANDATORY BUILDING REPAIR INCREASE RENOVATION PRICES? This paper studies a regulatory change that significantly increases the prices of residential building renovation. In Hong Kong, where most people live in high-density condominiums, owners’ corporation arranges tender process to choose contractors on behalf of all homeowners when common areas of a building need maintenance and repair. Since 2012, the government has mandated selected buildings to finish such renovations within a year. Using propensity score matching method, we find that homeowners who received statutory notices to repair their building paid 40% more in bid price compared with those who did it voluntarily. After the mandatory scheme was introduced, all homeowners on average paid 40% more, and those who received the notices paid even higher prices. Moreover, these increases in prices are more pronounced in districts where condominiums are more expensive and residents are more educated. Finally, the major contractors’ bids became more correlated after the introduction of the mandatory scheme, suggesting that the scheme may have helped promote bid-rigging and corruption among contractors and owners’ corporations. Housing regulations, bid-rigging, private procurement 05 2022 67 September The Singapore Economic Review 1759 1779 K21 L12 R21 http://www.worldscientific.com/doi/abs/10.1142/S0217590822430020 TIN CHEUK LEUNG Wake Forest Economics Department, Wake Forest University, Winston-Salem, NC 27109, USA KWOK PING TSANG byront@vt.edu Department of Economics, Virginia Tech, Blacksburg, VA 24061, USA KEVIN K. TSUI Department of Economics, Clemson University, Clemson, SC 29634, USA4Zhongnan University of Economics and Law, Wuhan, Hubei 430073, P. R. China
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article WHY PARTICIPATE IN THE “ONE BELT AND ONE ROAD†INITIATIVE? AN INCOME CONVERGENCE APPROACH This paper seeks to investigate the motivations of countries that participate in the One Belt and One Road (B&R) Initiative, a China-led economic development program with the intention of enhancing regional economic cooperation. We examine the income convergence hypothesis for B&R countries with both linear and nonlinear unit root tests to detect the presence of economic integration over the periods 1960–2016 and 1979–2016. For the B&R countries that are found to show income convergence to China in our income convergence testing, we argue that they tend to have a strong existing economic relationship with China. By contrast, the countries that have relatively weak economic relationships with China tend to show no convergence to China, and they take advantage of the B&R as an opportunity to catch up. Moreover, we find evidence that more countries converge to China’s real per capita income for the years after 1978 when China started its transition to a market economy and initiated the open-door policy to embrace globalization. The results suggest that China contributes to a higher degree of income convergence in regional integration. One Belt and One Road, China, economic integration, income convergence 04 2022 67 June The Singapore Economic Review 1209 1223 C1 C5 R0 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500297 GUO HENG HU guohenghu@163.com School of Business, Henan Normal University, P. R. China CHI-KEUNG MARCO LAU c.lau@hud.ac.uk ��Department of Accountancy, Finance and Economics, Huddersfield Business School, University of Huddersfield, Queensgate, HD1 3DH, UK ZHOU LU ��School of Economics, Tianjin University of Commerce, P. R. China XIN SHENG x.sheng@hud.ac.uk ��Department of Accountancy, Finance and Economics, Huddersfield Business School, University of Huddersfield, Queensgate, HD1 3DH, UK
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article GROWTH MAXIMIZING FISCAL RULE TARGETS IN INDIA The objective of this paper is to obtain the growth optimizing public debt to GDP ratio (d*), based on estimated output elasticity (α) of public sector capital under the golden rule of budgetary deficit. After conducting unit root tests and cointegration analysis, value of α which is estimated under OLS, CLS and FMOLS, hovers around 0.281–0.29. Hence, the computed value of d* stands around 65–67% of GDP; modestly lower than the current value (73% in 2016). Since large revenue deficit has been persisting, effective value of d* would be even lower. Fiscal tightening, especially reducing revenue deficit and offloading the persistently loss making PSUs would be important for macroeconomic stability and accelerating economic growth. Public debt, fiscal deficit, macroeconomic stability, economic growth 06 2022 67 December The Singapore Economic Review 2129 2147 E62 H60 H62 H63 http://www.worldscientific.com/doi/abs/10.1142/S021759081950067X KRISHANU PRADHAN krishanup@gmail.com Madras Institute of Development Studies (MIDS), 79, 2nd Main Road, Gandhi Nagar, Adyar Chennai - 600020, India
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article HOUSEHOLD ECONOMIC PRUDENCE IN THAILAND The countercyclical pattern of saving in Thailand in the 1990s and 2000s raised questions about household saving behaviors in the country. Using constructed pseudo-panel data sets from the Thai Household Socioeconomic Surveys (SESs) from 1992 to 2011, this paper estimates the intensity of the precautionary saving motive, measured by the coefficient of relative prudence of households in Thailand. By using a dynamic pseudo-panel approach to address concerns with regard to individual heterogeneity causing bias in estimation, the estimated relative prudence of Thai households is around 2, which shows a low precautionary saving motive among these households compared to other countries. Estimates based on disaggregation by demographic characteristics show that as a result of the government-assistance policy, older cohorts and those who live in the rural areas show lower prudence. Precautionary saving, prudence, dynamic pseudo-panel, Thailand 06 2022 67 December The Singapore Economic Review 1905 1923 C23 D14 D12 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500114 SASIWIMON WARUNSIRI PAWEENAWAT sasiwimon@econ.tu.ac.th Faculty of Economics, Thammasat University, 2 Prachan Road, Phranakorn, Bangkok 10200, Thailand
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article TWO APPROACHES TO MODELING UNCERTAINTY: HOW DID UNCERTAINTY AFFECT THE ECONOMY DURING AND AFTER THE GREAT RECESSION? Recent research in macroeconomics has sought to develop a tractable form of heterogeneity in attempting to model sluggish responses in the price level. In addition, economists have struggled to explain why the demand for safe assets has increased as evidenced by the decline in real interest rates and even nominal interest rates in the last three decades [King, M (2017). Uncertainty and large swings in activity. In National Bureau of Economic Research Martin Feldstein Lecture, Cambridge, MA: NBER Summer Institute; King, M and D Low (2014). Measuring the ‘World’ Interest Rate. National Bureau of Economic Research Working Paper 19887, Cambridge, MA]. We build a simple two-period lived overlapping generations model that displays both heterogeneity of expectations and robustness. Our goal is to derive the economic impacts associated with greater uncertainty; more specifically, to answer the question can these two versions of uncertainty account for an increase in the demand for money and the low return on safe assets? Since analysis of even such a simple model requires a lot of technical work, we put most of this technical work into a rather lengthy technical Appendix for the benefit of readers who wish to follow such details. The main text in the paper will just focus on the basic economics. Computational cost, inflation dynamics, inflation uncertainty, robustness 04 2022 67 June The Singapore Economic Review 1389 1420 C62 E31 E41 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500315 WILLIAM A. BROCK Department of Economics, University of Wisconsin, Madison, WI, USA†Department of Economics, University of Missouri, Columbia, MO, USA JOSEPH H. HASLAG ��Department of Economics, University of Missouri, Columbia, MO, USA
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article THE ROLE OF THE INFORMATION TECHNOLOGY IN THE INDUSTRIAL STRUCTURE OPTIMIZATION AND UPGRADING IN CHINA By developing an industrial structure change model, this paper investigates the role of the information technology in explaining the process of industrial structure optimization and upgrading in China from 2001 to 2019. Then, we put forward and discuss the substitution effect and the pervasiveness effect of information technology, and deduce the theoretical propositions from the model. We use the Malmquist index method to estimate the rate of information technology progress, and then choose the genetic algorithm to calibrate the parameters of the model. The research conclusions innovatively explain how the information technology can promote the industrial structure optimization and upgrading in China based on the substitution effect and the pervasiveness effect of information technology in detail. The results point out that when the contribution of information technology to total factor productivity of the tertiary industry is higher than that of the secondary industry, the pervasiveness effect of information technology can promote the upgrading of the industrial structure. Under the comprehensive effect of the pervasiveness effect and substitution effect of information technology, the industrial structure tends to be more optimized. The further heterogeneity analysis shows that the driving effect of information technology on the optimization and upgrading of industrial structure in regions with “servitization†characteristics is more significant. It highlights policy suggestions designed to adopt innovation-driven and technology development strategy, regional industrial structure transformation and economy development strategy. Information technology, industrial structural change, substitution effect, pervasiveness effect 06 2022 67 December The Singapore Economic Review 2023 2048 C15 E17 L16 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500333 WEICHENG XU School of Economics, Ocean University of China, No. 238 Songling Road, Qingdao, Shandong, P. R. China†Institute of Marine Development, Ocean University of China, Qingdao, Shandong, P. R. China XIAO WANG wwangxiao0211@163.com School of Economics, Ocean University of China, No. 238 Songling Road, Qingdao, Shandong, P. R. China ZHENDONG ZHANG zzd1225@163.com School of Economics, Ocean University of China, No. 238 Songling Road, Qingdao, Shandong, P. R. China
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article INSTITUTIONAL QUALITY AND FOOD SECURITY The world produces countless tonnes of food to feed everyone, yet the numbers of people who suffer from hunger remain high, especially in developing countries. This issue may highlight the importance of institutions as a foundation for the issue of food security. Hence, this study investigates the role of institutions on food supply in a panel of 56 developing countries. The dynamic generalized methods of moments results indicate that institutional factor plays a vital role in improving the availability of food and access to nutritious food for all people, thereby ameliorating the food supply problem. Therefore, the overall result suggests that policy-makers should improve the level of institutional quality so that it can form the fundamental ground toward alleviating hunger and improving the food supply. Institutional quality, food security, GMM, developing countries 06 2022 67 December The Singapore Economic Review 2099 2127 O11 O13 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500046 YOGEESWARI SUBRAMANIAM yogees.wari@yahoo.com.my School of Management, Universiti Sains Malaysia, 11800 Minden, Penang, Malaysia TAJUL ARIFFIN MASRON School of Management, Universiti Sains Malaysia, 11800 Minden, Penang, Malaysia THIRUNAUKARASU SUBRAMANIAM stkarasu@um.edu.my ��Faculty of Arts and Social Sciences, University of Malaya, 50603 Kuala Lumpur, Malaysia
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article THE TIME-VARYING CAUSAL RELATIONSHIP BETWEEN INTERNATIONAL CAPITAL FLOWS AND THE REAL EFFECTIVE EXCHANGE RATE: NEW EVIDENCE FOR CHINA We test the bilateral causal relationship between four types of international capital flows and the real effective exchange rate (REER) in China over the period 1998:Q1 to 2016:Q2 and examine whether the link is time varying. Parameter stability tests suggest that the relationship between capital flows and the RMB REER is time varying both in the short and the long run. Bootstrap rolling-window causality tests suggest bidirectional Granger causal relationships between the current account, portfolio investments and FDI, and the REER in several sub-periods, and a Granger-causal relationship from foreign exchange reserves to the REER in some sub-periods. International capital flows, real effective exchange rate, rolling windows, structural change 04 2022 67 June The Singapore Economic Review 1253 1274 F21 F31 F32 O24 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500097 YANPING ZHAO School of Economics, Ocean University of China, Shandong, China XIAOYAN LI lixiaoyan13235@163.com School of Economics, Ocean University of China, Shandong, China JAKOB DE HAAN ��De Nederlandsche Bank, Amsterdam, The Netherlands‡University of Groningen, Groningen, The Netherlands§CESifo, Munich, Germany
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article MULTINATIONAL TAX AVOIDANCE AND ANTI-AVOIDANCE ENFORCEMENT: FIRM-LEVEL EVIDENCE FROM DEVELOPING ASEAN COUNTRIES We use firm-level data from ASEAN5 to examine the significance of tax-motivated profit shifting by multinational enterprises and to analyze how anti-avoidance measures mitigate the profit shifting. We show that (1) tax-motivated profit shifting is statistically and economically significant, especially for manufacturing firms, (2) auditing and transfer-pricing scrutiny is more effective in reducing profit shifting than documentation requirement alone and (3) tax-motivated profit shifting is prominent for large firms, while anti-tax avoidance measures result in the absence of profit shifting detected from small manufacturing firms. The findings have important implications for developing countries with weak governance but dependent on MNEs. Profit shifting, tax avoidance, auditing, transfer pricing, multinational enterprise 06 2022 67 December The Singapore Economic Review 2049 2065 F23 H25 H26 K34 M42 http://www.worldscientific.com/doi/abs/10.1142/S021759082050040X ATHIPHAT MUTHITACHAROEN Faculty of Economics, Chulalongkorn University, Thailand KRISLERT SAMPHANTHARAK School of Global Policy and Strategy, University of California San Diego, California, USA3Puey Ungphakorn Institute for Economic Research (PIER), Bank of Thailand, Thailand
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article EXPORTS AND IMPORTS, IS THERE SIMULTANEITY? A STRUCTURAL MODEL FOR SUPERTRADING ECONOMIES The determining of exports and imports independently, which is a common assumption in the literature, may be over restrictive for extremely open economies. As an alternative, this study proposes and estimates structural models for the simultaneous determination of trade flows in three extremely open economies (Ireland, Belgium and Singapore). It confirms the existence of an interrelation between exports and imports and, as a result, the existence of a bias in the estimates of trade elasticities when the interrelation is not taken into account. Trade elasticities, imports, exports, simultaneous equation models 04 2022 67 June The Singapore Economic Review 1545 1559 F12 F14 http://www.worldscientific.com/doi/abs/10.1142/S0217590819500577 RAÚL SÃ NCHEZ-LARRIÓN Universidad Rey Juan Carlos, Paseo Artilleros s/n 28032 Madrid, Spain MARÃ A ARRAZOLA Universidad Rey Juan Carlos, Paseo Artilleros s/n 28032 Madrid, Spain JOSÉ DE HEVIA Universidad Rey Juan Carlos, Paseo Artilleros s/n 28032 Madrid, Spain
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article BOOK REVIEW — In AI We Trust: Power, Illusion and Control of Predictive Algorithms 06 2022 67 December The Singapore Economic Review 2149 2151 http://www.worldscientific.com/doi/abs/10.1142/S0217590822800017 DAVID LEE davidleekc@suss.edu.sg School of Business, Singapore University of Social Sciences, 463 Clementi Road, Singapore 599494, Singapore
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article COMPARING ECONOMETRIC ANALYSES WITH MACHINE LEARNING APPROACHES: A STUDY ON SINGAPORE PRIVATE PROPERTY MARKET We aim to compare econometric analyses with machine learning approaches in the context of Singapore private property market using transaction data covering the period of 1995–2018. A hedonic model is employed to quantify the premiums of important attributes and amenities, with a focus on the premium of distance to nearest Mass Rapid Transit (MRT) stations. In the meantime, an investigation using machine learning algorithms under three categories — LASSO, random forest and artificial neural networks is conducted in the same context with deeper insights on importance of determinants of property prices. The results suggest that the MRT distance premium is significant and moving 100m closer from the mean distance point to the nearest MRT station would increase the overall transacted price by about 15, 000 Singapore dollars (SGD). Machine learning approaches generally achieve higher prediction accuracy and heterogeneous property age premium is suggested by LASSO. Using random forest algorithm, we find that property prices are mostly affected by key macroeconomic factors, such as the time of sale, as well as the size and floor level of property. Finally, an appraisal on different approaches is provided for researchers to utilize additional data sources and data-driven approaches to exploit potential causal effects in economic studies. Singapore property price, hedonic model, machine learning algorithms, random forest, artificial neural networks 06 2022 67 December The Singapore Economic Review 1787 1810 C23 C45 R31 R41 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500538 TINGBIN BIAN Economics Division, School of Social Sciences, Nanyang Technological University, SHHK-04-48, 48 Nanyang Avenue, Singapore 639818, Singapore JIN CHEN Economics Division, School of Social Sciences, Nanyang Technological University, SHHK-04-48, 48 Nanyang Avenue, Singapore 639818, Singapore QU FENG Economics Division, School of Social Sciences, Nanyang Technological University, SHHK-04-48, 48 Nanyang Avenue, Singapore 639818, Singapore JINGYI LI Economics Division, School of Social Sciences, Nanyang Technological University, SHHK-04-48, 48 Nanyang Avenue, Singapore 639818, Singapore
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article ANALYZING THE IMPACT OF BREXIT ON GLOBAL UNCERTAINTY USING FUNCTIONAL LINEAR REGRESSION WITH POINT OF IMPACT: THE ROLE OF CURRENCY AND EQUITY MARKETS This paper studies the relationship between monthly economic uncertainty of 20 advanced and emerging markets, and two daily covariates, i.e., exchange rate and stock index, with particular emphasis on the relationship between the variables in response to the Brexit vote. We use a functional data approach supplemented with a point of impact structure to conduct a mixed-frequency analysis. We find that incorporating the point of impact, in this case the Brexit shock, is marginally important relative to models that ignore it. We also find that the exchange rate played a more important role than the equity market in transmitting the Brexit shock to cause heightened uncertainty in the 20 countries considered. Our results have important policy implications. Functional data analysis, point of impact, Brexit, uncertainty, currency and stock markets 04 2022 67 June The Singapore Economic Review 1377 1388 C22 G10 http://www.worldscientific.com/doi/abs/10.1142/S0217590820460029 SIPHUMLILE MANGISA siphumlile.mangisa@mandela.ac.za Department of Statistics, Nelson Mandela University, Port Elizabeth, South Africa SONALI DAS ��Department of Business Management, University of Pretoria, Pretoria, South Africa RANGAN GUPTA rangan.gupta@up.ac.za ��Department of Economics, University of Pretoria, Pretoria, South Africa
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article BOOK REVIEW — Albert Winsemius and Singapore: Here It is Going to Happen 06 2022 67 December The Singapore Economic Review 2153 2158 http://www.worldscientific.com/doi/abs/10.1142/S0217590822800030 KEEN MENG CHOY keenchoy@gmail.com Faculty of Economics, Soka University, Tokyo, Japan
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article SINGAPORE’S HIGH WAGE POLICY REVISITED The author, now aged 90, reflects on the then highly iconoclastic National Wages Council (NWC) recommendation of a 20% yearly gross wage increase guideline for three years, 1979–1981. He emphasizes the important differences between the negotiable and the non-negotiable recommended wage increases. He also emphasizes the important difference between a pure percentage wage increase and a quantum plus percentage wage increase formula particularly in the integral economic restructuring program. The compulsory payments consisting of the important Central Provident Fund (CPF) increases and the new Restructuring Skills Development Fund (SDF) Levy. The increase in the compulsory CPF led to the formation of the Sovereign Wealth Fund — the Government Investment Corporation (GIC). The restructuring led to the creation of the SDF. The SDF was used to promote labor productivity through the then equally iconoclastic substitution of capital for labor programs. The end result of the restructuring policy was to minimize demand-pull inflationary pressures, increase the gross wages of low-wage and medium-wage workers and increase real Gross Domestic Product (GDP) growth rates, accompanied by an important fall in the Gini Coefficient of income inequality. The anti-cyclical preparedness of the high-wage economic restructuring program is also emphasized and the idea of discussing the high-wage policy in isolation is debunked. Tripartism, Economic restructuring, skills development fund levy, government-investment corporation, skills development fund, skills upgrading, anti-cyclical preparedness, ownership of public housing 04 2022 67 June The Singapore Economic Review 1175 1183 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500394 CHONG YAH LIM acylim@ntu.edu.sg Emeritus Professor, Nanyang Technological University, 639798 Singapore
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article INTERNET FINANCE, NET INTEREST MARGIN AND NONINTEREST ACTIVITIES IN CHINA’S BANKING SECTOR Using data from 133 Chinese commercial banks from 2003 to 2015, we examine the links among Internet finance, net interest margin and noninterest activities. Four main findings emerge. First, the net interest margin exerts significantly negative impacts on the noninterest activities through incentive distortion, cross-subsidization and resource restriction effects. The incentive distortion effect plays a stronger role, while the cross-subsidization and resource restriction effects play weaker roles. Second, Internet finance significantly promotes the development of noninterest activities, meaning that the technology spillover effect of Internet finance is stronger than the customer loss effect in China. Third, Internet finance strengthens the negative effects of the net interest margin on fee and commission activities but weakens the negative effects of the net interest margin on other noninterest activities. Finally, we find that the effects of the net interest margin on noninterest activities are stronger in state-owned banks than in non-state-owned banks, while the effects of Internet finance on noninterest activities are weaker in state-owned banks. Internet finance, net interest margin, noninterest activities, commercial banks 06 2022 67 December The Singapore Economic Review 1987 2022 G21 G28 G32 http://www.worldscientific.com/doi/abs/10.1142/S021759082050054X PIN GUO School of Economics and Finance, Xi’an Jiaotong University, No. 74, Yanta West Road Xi’an, Shaanxi, P. R. China MAOYONG CHENG School of Economics and Finance, Xi’an Jiaotong University, No. 74, Yanta West Road Xi’an, Shaanxi, P. R. China ZHIXIAN GAO charles_zhi@163.com ��Bridge Trust Co., Ltd., No. 10, Business Outer Ring Road, Zhengzhou, Henan, P. R. China
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article THE SIZE OF AN AIR SHED: A MACROECONOMIC STOCK ESTIMATE This paper presents a simple method for estimating the size of environmental capital (KN) assets that are otherwise mistaken as infinite. An illustration is provided for Australia’s air shed. The method draws on the perpetual inventory method (PIM) used in macroeconomics for measuring the size of manufactured capital (KM) stock. While the application of the PIM for measuring KM is based on net accumulation over time, with KN it involves net depreciation over time. The depreciation, however, can be negated by the resilience capabilities of KN assets based on their biophysical characteristics. Owing to sparse data, two proxy methods for estimating the resilience coefficient are developed. These proxies rely on emission targets and standards that have been discussed in Australia’s policy context. Environmental capital stock, perpetual inventory method, national income accounts, depreciation, resilience 04 2022 67 June The Singapore Economic Review 1447 1455 Q5 E01 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500200 DODO J. THAMPAPILLAI Lee Kuan Yew School of Public Policy, National University of Singapore, 469C Bukit Timah Road, Singapore 259772, Singapore2Department of Environmental Science, Macquarie University, North Ryde, NSW 2109, Australia
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article INSTITUTIONS MATTER DIFFERENTLY DEPENDING ON THE OWNERSHIP TYPES OF FIRMS: INTERACTING EFFECTS ON FIRM PRODUCTIVITY IN CHINA Ownership and institutions are regarded as key determinants of firm performance. Using data of Chinese firms from 1998 to 2009, this study tests the separate and interacting effects of ownership and institutions. The divergent performance of firms can be explained from the heterogeneous ownership context, as confirmed by the literature, and through variations in the way that firms of different ownership types use and exploit institutions. Privately owned firms tend to exploit considerably larger benefits from the same institutions in comparison with foreign-owned enterprises (FEs) or state-owned enterprises (SOEs). FEs or SOEs also obtain some benefits; however, these benefits are significantly smaller than those obtained by private enterprises (PEs). Results can be attributed to the differences in the aims and incentives of firms with diverse ownership types. While the initial productivity of PEs may be lower than that of FEs at the low levels of institutional development, PEs are shown to eventually catch up with FEs because institutions develop further over time to be better exploited by PEs than FEs. Hence, any policy design should consider this coevolving nature of institutions and firm ownership; whereas private firms cannot prosper without sound institutions, institutional development may be useless unless there are private firms that can benefit from this institutional development. Firm productivity, institutions, ownership, Chinese economy, coevolution, private firms, foreign-owned firms 04 2022 67 June The Singapore Economic Review 1185 1208 L1 L2 M2 http://www.worldscientific.com/doi/abs/10.1142/S0217590818500224 HYUNTAI LEE xiantaikor@gmail.com Center for Area Studies, Korea Institute for International Economic Policy, 370, Sicheong-daero, Sejong-si, 30147, Korea KEUN LEE Department of Economics, Seoul National University, 1, Gwanak-ro, Gwanak-gu, Seoul, 08826, Korea
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article HOUSING MARKET VOLATILITY, SHADOW BANKS AND MACROPRUDENTIAL REGULATION: A DYNAMIC STOCHASTIC GENERAL EQUILIBRIUM MODEL ANALYSIS Given the risks of shadow banks and their risk contagion with the housing market, this study investigates the necessity, policy transmission mechanism and impact of incorporating shadow banks into a macroprudential regulation framework. It constructs a dynamic stochastic general equilibrium (DSGE) model incorporating housing market volatility and heterogeneous financial intermediation, where housing market volatility transmits to the financial intermediation sector through the collateral channel. Meanwhile, regulatory asymmetry expands the shadow banking scale and leverage indicators driven by the housing market, increasing the shadow banking risk. Moreover, considering shadow banking credit size, the macroprudential regulation framework can mitigate the volatility of economic variables and maintain macro-financial and economic stability under the conditions of tightening monetary policy and strengthening regulation. However, policy effects are limited in curbing shadow banking risks from housing market fluctuations. Thus, it is necessary to crop the source of shadow banking risks from the transmission mechanism, formulate more targeted and specialized regulatory policies to complement housing market control measures, maximize cross-market effects among different policies, and incorporate shadow banking into the regulatory system. Housing market volatility, shadow banks, macroprudential regulation, countercyclical capital regulation, dynamic stochastic general equilibrium 06 2022 67 December The Singapore Economic Review 1925 1949 E32 E44 G23 R21 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500527 JINSONG WANG 1596317308@qq.com School of Economics, Hangzhou Normal University, No. 2318, Yuhangtang Road, Hangzhou City, Zhejiang Province, P. R. China LUOQIU TANG ��Shanghai University of Finance and Economics, School of Finance, No. 777, Guoding Road, Shanghai, P.R. China
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article WHAT INFLUENCES ADOPTION OF COMPETITION LAW? THE CASE OF ASEAN ECONOMIES We investigate the factors that influence adoption of competition law using a panel of countries from 1970 to 2015. We find that in addition to development level, trading arrangements and peer pressure have also influenced adoption. The spread of competition laws adopted from Western precedents left a question regarding the extent they have been tailored to the diverse circumstances of the Association of Southeast Asian Nations countries. We document the nature, structure, conduct and scope of competition laws by comparing and contrasting the experience of the Philippines and Thailand. Our descriptive analysis reveals that the force and influence of the law are not entirely dependent on early adoption. Competition law, competition policy, ASEAN, antitrust, Philippines, Thailand 05 2022 67 September The Singapore Economic Review 1607 1636 F63 K21 L40 L44 L51 O10 O53 O57 http://www.worldscientific.com/doi/abs/10.1142/S0217590821430049 MAJAH-LEAH V. RAVAGO Ateneo de Manila University, Philippines JAMES A. ROUMASSET jimr@hawaii.edu University of Hawaii, USA ARSENIO M. BALISACAN ambalisacan@phcc.gov.ph Philippine Competition Commission, Philippines
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article ECONOMIC IMPACTS OF POLICY ADOPTED BY CHINA FOR ITS AGING POPULATION With China’s rapidly aging population, this paper constructs a policy model using overlapping generation (OLG) model and the computable general equilibrium (CGE) modeling to analyze the second-child policy and delaying retirement policy. Our research findings suggest that considering the short-term effects, delaying the retirement age imposes a greater impact on the economy than the second-child policy. Its economic impact increases initially, but then decreases to a stable level showing a diminishing influence. In the long term, the second-child policy has greater ability to boost the economy than the delaying retirement age policy and its economic impact gets stronger. From an industrial output perspective, the two policies exert greater influence on agriculture, light industry, finance and service sector than on construction and heavy industries. From an industrial import and export perspective, the two policies have great influence on finance, electric power, and fossil energy more than they do on the agricultural sector. From a monetary perspective, the impacts are greater on household income followed by the government income and corporate income, respectively. The policies also make a bigger difference to fixed capital than to changes in deposits and loans. Second child, aging population, policy, economic impacts 04 2022 67 June The Singapore Economic Review 1517 1543 E61 J14 J16 J18 J26 O11 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500186 SHUANGQI LI lsqwuhan@163.com School of Finance, Chongqing Technology and Business University, Chongqing, P. R. China TANGYANG JIANG Internet School, Anhui University, Hefei, P. R. China ZHE SONG 1922889494@qq.com School of Economics and Business Administration, Chongqing University, Chongqing, P. R. China ZHENGLONG HAN 1145058662@qq.com Institute of Innovation and Development Strategy, Anhui University, Hefei, P. R. China
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article A FREQUENCY-DOMAIN ANALYSIS OF MEDIUM-SCALE DSGE MODELS This paper employs the local Bayesian likelihood methodology to estimate a medium-scale dynamic stochastic general equilibrium (DSGE) model on different frequencies and uses frequency-domain tools to evaluate the time-varying parameter model and the fixed-parameter model. These techniques yield fresh insights into theoretical and empirical implications conveyed by alternative models beyond what conventional time-domain approaches can offer. We show that parameter estimates are sensitive to frequencies, and goodness-of-fit varies substantially with the frequency bands. Overall, the estimated time-varying parameter model captures the properties of the U.S. data better in the business cycle frequency band, and beyond this band, the fixed-parameter model performs better. Additionally, our study also reveals the importance of structural shocks in improving the fit between models and data. Finally, we utilize the spectral representation of generalized forecast error variance decomposition to investigate the frequency dynamics of volatility connectedness. We find shocks to economic activity have an impact on variables at different frequencies with different strengths, and markets become more connected during crisis periods. Furthermore, this study provides insights into a question policymakers are much concerned with: which shocks are major sources of economic volatilities and which sectors serve as major recipients of shocks? DSGE model, frequency analysis, Bayesian local likelihood estimation, frequency-varying parameter, coherence function, model fit, connectedness 06 2022 67 December The Singapore Economic Review 1951 1986 C11 C52 E27 E52 http://www.worldscientific.com/doi/abs/10.1142/S0217590822500229 JINSHUN WU Department of Economics, School of Economics and Management, East China Jiaotong University, Nanchang, Jiangxi 330013, P. R. China TAPS MAITI ��Department of Statistics and Probability, Michigan State University, East Lansing, Michigan, United States
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article HIGH CORPORATE SOCIAL RESPONSIBILITY BUT LOW CORPORATE MATERNITY RESPONSIBILITY: KOREAN EVIDENCE This study analyzes the association between corporate social responsibility (CSR) activities and maternity protection using Korean firm-level data. The result shows that companies with good CSR evaluation is negatively related to reinstatement rate after parental leave. It was also revealed that industries with low relevance to female workers or consumer issues and firms with good corporate governance indicators is negatively related to maternity protection. Firms are attracted to external social issues, rather than internal labor standards, such as parental leave. This study examined various causes that lead to these results. Parental leave, Female labor force, Corporate social responsibility, Corporate maternity responsibility, Human resources management 04 2022 67 June The Singapore Economic Review 1355 1375 M14 J13 J21 http://www.worldscientific.com/doi/abs/10.1142/S0217590820500472 HANNA JUNG hnjung5493@mokpo.ac.kr School of Economics, Mokpo National University, A8-3317, 1666 Yeongsan-ro, Cheonggye-myeon, Muan-gun, Jeollanam-do, 58554, South Korea JOONMO CHO ��School of Economics, Sungkyunkwan University, 32413, Dasan Hall, 25-2, Sungkyunkwan-ro Jongno-gu, Seoul 03063, South Korea
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article THE RELATIONSHIP BETWEEN CO2 EMISSIONS AND FINANCIAL DEVELOPMENT This paper examines the relationships among CO2 emissions, energy use, GDP, and financial development for 25 OECD countries over the 1971–2007 period. From the results of the panel FMOLS and the cross-sectional dependence regression, we do not find any support for the existence of the EKC for OECD countries. Moreover, the results present that the coefficient of financial development to CO2 emissions is negative and statistically significant for eight countries (Austria, Denmark, Germany, Ireland, the Netherlands, Norway, Portugal, and the U.S.). The findings of this study thus show that financial development can help EU countries to adjust their CO2 emissions. CO2 emissions, financial development, cross-section dependence regression, fully modified OLS 05 2015 60 December 1550117 The Singapore Economic Review 1 21 http://www.worldscientific.com/doi/abs/10.1142/S0217590815501179 JOE-MING LEE Department of Applied Economics, Fo Guang University Add. No. 160, Linwei Rd., Jiaosi Shiang Yilan County 26247, Taiwan, R.O.C. KU-HSIEH CHEN khchen@mail.fgu.edu.tw Department of Applied Economics, Fo Guang University Add. No. 160, Linwei Rd., Jiaosi Shiang Yilan County 26247, Taiwan, R.O.C. CHIN-HO CHO gold00926@gmail.com Research Division V, Taiwan Institute of Economic Research 7F., No. 16–8, Dehuei St., Jhongshan District Taipei City, 10461, Taiwan, R.O.C
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article BOOK REVIEW: "Japan and Asia: Economic Development and Nation Building" 05 2016 61 December 1680009 The Singapore Economic Review 1 4 http://www.worldscientific.com/doi/abs/10.1142/S0217590816800096 EUSTON QUAH ecsquahe@ntu.edu.sg Nanyang Technological University, Singapore ZHENG FANG fangzheng@unisim.edu.sg SIM University, Singapore
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article POLICY BRIEF: IMBALANCES WILL CONTINUE TO RULE OVER THE GLOBAL ECONOMY Global debt will keep growth subdued over the next decade. Falling work force will move labor intensive manufacturing out of China and into South Asia. Investment, not consumption, will be the main driver of growth, which primarily will take place in Asia and probably also Africa. New institutional frameworks such as AIIB emerge, but they will operate inside the existing global order. Falling albeit still tangible Chinese saving combined with fading interest for US treasury bonds will pose an awkward dilemma for US monetary policy. Under such circumstances current savings–investment balances will continue to rule the global economy. Global imbalances, China savings surplus, global investment pattern, demography, productivity, consumption 05 2016 61 December 1671002 The Singapore Economic Review 1 9 http://www.worldscientific.com/doi/abs/10.1142/S0217590816710028 JOERGEN OERSTROEM MOELLER ISEAS Yusof Ishak Institute, 30 Heng Mui Keng Terrace, Singapore 119614, Singapore†Singapore Management University, 81 Victoria Street, Singapore 188065, Singapore‡Copenhagen Business School, Copenhagen University, Howitzvej 60, 2000 Frederiksberg, Denmark
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article CAPITAL FLOW SURGES AS BUBBLES: BEHAVIORAL FINANCE AND MCKINNON’S OVER-BORROWING SYNDROME EXTENDED This paper explores how behavioral finance and complexity economics, along with imperfect information, faulty mental models and perverse incentive structures can cast light on the factors that generate the international capital flow surges and sudden stops that McKinnon described as the over-borrowing syndrome. While there has been a great deal of empirical research on this topic in recent years, there has been much less theoretical analysis of why these flows too often behave in such a volatile manner. Developing a better understanding of the forces driving capital flows should help us identify situations where capital flow surges are particularly likely to end in costly sudden stops and help policy makers decide how best to respond to such flows. Capital flow surges, sudden stops, over-borrowing syndrome, behavioral finance, complexity economics, mental models, bubbles 02 2016 61 June 1640023 The Singapore Economic Review 1 27 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400233 LEVAN EFREMIDZE Claremont Institute for Economic Policy Studies, Claremont Graduate University, Claremont, CA 91711, USA†Graziadio School of Business and Management, Pepperdine University, Malibu, CA 90263, USA JOHN RUTLEDGE Claremont Institute for Economic Policy Studies, Claremont Graduate University, Claremont, CA 91711, USA THOMAS D. WILLETT Claremont Institute for Economic Policy Studies, Claremont Graduate University, Claremont, CA 91711, USA§Claremont McKenna College, Claremont, CA 91711, USA
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article REGIONAL DEVELOPMENT DYNAMICS IN INDONESIA BEFORE AND AFTER THE ‘BIG BANG’ DECENTRALIZATION Decentralization is in vogue. However, the relationship between decentralization and local-level development dynamics remains unclear. Does decentralization lead to a ‘reform dividend’ of more rapid development in better-governed regions, with attendant national benefits? What is the impact on spatial inequality? In particular, do poorer regions lag further behind as equalizing fiscal policies at the national level weaken? We address these issues with reference to Indonesia, the world’s largest archipelagic nation, which implemented a ‘big bang’ decentralization program in 2001. Our main conclusion, perhaps counterintuitive, is that decentralization had a minimal impact on regional development dynamics, although its political impacts have been far-reaching. Indonesia, regional development, decentralization, spatial inequality 02 2016 61 June 1640027 The Singapore Economic Review 1 26 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400270 HAL HILL hal.hill@anu.edu.au Australian National University, Canberra ACT0200, Australia YOGI VIDYATTAMA yogi.vidyattama@canberra.edu.au The National Centre for Social and Economic Modeling (NATSEM), Institute for Governance and Policy Analysis (IJPA), University of Canberra, Building 24, University Drive South, Bruce, ACT, 2617, Australia
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article FACTORS AFFECTING TAX EVASION: DO INTEREST RATE AND REGIONAL EFFECTS MATTER? This paper empirically investigates the relationship among the tax evasion and local disposal income, unemployment rate and demographic variables by using 20 municipalities in Taiwan with the official interior, latest, and wider range of panel data over the period from 1998 to 2011. The main findings support the positive impact of disposal income on tax evasion, while unemployment rate has a negative impact. Among the interest rate effect models, if policy-makers want to hinder the extension of tax evasion, they should reduce the interest rate. Furthermore, government not only applies fiscal policy but also applies monetary policy for improving tax evasion. In our regional effect model, we have found evidence on a positive impact of the demographic structure variables on tax evasion except social expenditure of local government. We have also found clear evidence on the positive impact in South and East areas on tax evasion in the regional effect model. Moreover, both interest rate and regional factors have an influence on tax evasion. Tax evasion, regional effect, interest rate, panel data, Taiwan 04 2016 61 September 1550026 The Singapore Economic Review 1 23 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500265 YI-CHUNG HSU Department of Public Finance and Taxation, National Taichung University of Science & Technology, Taichung, Taiwan CHIEN-CHIANG LEE Department of Finance, National Sun Yat-sen University, Kaohsiung, Taiwan
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article DETERMINANTS OF INTERNATIONAL PRODUCTION FRAGMENTATION: MALAYSIA’S EXPERIENCE IN THE INFORMATION, COMMUNICATIONS AND TELECOMMUNICATIONS (ICT) INDUSTRY Although Malaysia has been an integral part of the international production fragmentation network since 1970, empirical investigations on the factors that determine the expansion of these networks are sparse. The paper examines the aforementioned empirical gap in the case of the Malaysian information, communications and telecommunications (ICT) sector using trade patterns in parts and components (PNC). Panel-data estimation from 1990 to 2008 suggests that mobile factors such as relative labor costs and productivity, foreign capital, agglomeration effect, infrastructure development and industrial policies are important in facilitating the international production fragmentation development. Income and domestic prices effect however, are conditional to trade flows. International production fragmentation, international production sharing, global production network, international trade, parts and components, final goods, ICT, Malaysia 05 2015 60 December 1550042 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500423 ANDREW JIA-YI KAM cchizz@yahoo.com Institute of Malaysian and International Studies, The National University of Malaysia, 43600 UKM Bangi, Selangor D.E, Malaysia
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article BOOK REVIEW: "Review of Energy Security in Japan: Challenges after Fukushima" by Dr. Vlado Vivoda 04 2016 61 September 1680001 The Singapore Economic Review 1 6 http://www.worldscientific.com/doi/abs/10.1142/S0217590816800011 RIDWAN D RUSLI ridwan.rusli@exergyadvisory.com Lecturer in Public Economics, Nanyang Technology University, Chief Executive Officer, Exergy Advisory, Singapore
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article PUBLIC INVESTMENT FINANCED BY CONSUMPTION TAX IN AN AGING SOCIETY Earlier papers have examined endogenous growth models including public investment financed by an income tax. However, public capital with such financing has not been reported. Aging societies are developing rapidly in economically developed countries. Consumption taxes to finance government expenditures are attractive to alleviate intergenerational inequality. In this paper, we demonstrate that, for public investment financing, a consumption tax is better than an income tax for income growth. If a future generation’s utility is not discounted greatly in social welfare, a consumption tax is superior. A government-set income growth rate target makes income tax financing desirable by providing more social welfare. Public investment, consumption tax, aging society, economic growth 05 2015 60 December 1550043 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500435 MINORU WATANABE minoru-w@kyotogakuen.ac.jp Faculty of Economics and Business Administration, Kyoto Gakuen University, 1–1 Nanjo–Otani, Sogabe, Kameoka, Kyoto 621–8555, Japan YUSUKE MIYAKE teatime567@gmail.com #x2020;Faculty of Economics, Kanto Gakuen University, 200 Huziaku–Cho Ota, Gunma, Japan MASAYA YASUOKA #x2021;School of Economics, Kwansei Gakuin University, 1-155 Uegahara Ichiban-Cho, Nishinomiya, Hyogo 662-8501, Japan
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article INTRODUCTION TO SPECIAL ISSUE IN MEMORY AND HONOR OF PROF. RONALD MCKINNON 02 2016 61 June 1602003 The Singapore Economic Review 1 6 http://www.worldscientific.com/doi/abs/10.1142/S0217590816020033 TAN KONG YAM spptky@nus.edu.sg National University of Singapore, Singapore
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article BOOK REVIEW: "Strengthening Social Protection in East Asia" 05 2016 61 December 1680007 The Singapore Economic Review 1 5 http://www.worldscientific.com/doi/abs/10.1142/S0217590816800072 LINDA LOW bizllls@nus.edu.sg School of Business, UniSIM, Singapore
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article IS CHINA’S URBANIZATION CONVERGENT? In this study, we apply a stationarity test with a flexible Fourier function proposed by Enders and Lee [Oxford Bulletin of Economics and Statistics, 74 (2012) 574–599] to test the convergence of China’s urbanization. We find that our approximation has greater power to detect U-shaped and smooth breaks than the linear method if the urbanization is, in fact, a stationary non-linear process. It shows that the stationarity of the urbanization level varies across different regions where urbanization levels are convergent mainly in the middle- and low-income regions in China, while the high-income regions’ urbanization is divergent. This, in turn, shows that most of the regions, especially high-income regions, have their own economic evolution rules due to the degree of openness in the economy and urbanization process. Urbanization, flexible fourier test, structural change 05 2016 61 December 1550058 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500587 TIE-YING LIU liutieyimg@bjtu.edu.cn School of Economics and Management, Beijing Jiaotong University, Beijing, China CHI-WEI SU Department of Finance, Ocean University of China, Qingdao, 238 Songling Road, Qingdao, Shandong, China XU-ZHAO JIANG jiangxuzhao@ouc.edu.cn School of Economics, Ocean University of China, China
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article IMPACT OF A DISASTER ON LAND PRICE: EVIDENCE FROM FUKUSHIMA NUCLEAR POWER PLANT ACCIDENT The Great East Japan Earthquake, which occurred on March 11, 2011, triggered the Fukushima nuclear power plant accident. This study estimates the economic damage caused by the radioactive contamination from the plant using a hedonic approach. Our estimation results show that an increase of 1μSv∕h decreases the land price by 3.39% on average in Fukushima and Miyagi prefectures. Specifically, damage due to the radiation effect is estimated to cost approximately 64.1 billion yen in Fukushima. In addition, our result shows that commercial and business areas are more sensitive than residential areas to the radiation quantity. Disaster, hedonic model, nuclear power plant accident, land use type 01 2016 61 March 1640003 The Singapore Economic Review 1 15 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400038 KENTA TANAKA Faculty of Economics, Musashi University, 1-26-1, Toyotama-kami, Nerima-ku, Tokyo 176-8534, Japan SHUNSUKE MANAGI #x2020;Department of Urban and Environmental Engineering, Kyushu University, Fukuoka, Japan‡QUT Business School, Queensland University of Technology, 2 George st., Brisbane QLD 4000, Australia
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article LONG-RUN EFFECT OF A DISASTER: CASE STUDY ON THE KOBE EARTHQUAKE In 1995, the Kobe earthquake occurred in the second largest economic region of Japan, and its economic damages were accounted around 10 trillion yen. This paper presents an empirical investigation of long-run economic effects of the event based on a time-series data. The results indicate that the event had created statistically significant deviations from the pre-earthquake growth path of Kobe. In addition, the comparison with the projected pre-event growth path revealed that the long-run effects have resulted in a steady decline of per capita GRP, while the short-run impacts led to some positive impacts from recovery and reconstruction during the first several years. Disasters, long-run effects, time-series analysis, regional economy 01 2016 61 March 1640009 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400099 YASUHIDE OKUYAMA okuyama@kitakyu-u.ac.jp Graduate School of Social System Studies, University of Kitakyushu, 4-2-1 Kitagata, Kokuraminami-ku, Kitakyushu 802-8577, Japan
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article BOOK REVIEW: "Review of INTRACO: Blazing a Trail Overseas for Singapore?" by Faizal bin Yahya 04 2016 61 September 1680002 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590816800023 FRANCIS E. HUTCHINSON fhutchinson@iseas.edu.sg Institute of Southeast Asian Studies, Singapore
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article THE EFFECT OF ISLAMIC SECONDARY SCHOOL ATTENDANCE ON ACADEMIC ACHIEVEMENT Using unique survey data on rural secondary school children, this paper evaluates the relative quality of Islamic secondary schools (i.e., madrasahs) in Bangladesh. Students attending registered madrasahs fare worse in maths and English than students attending non-madrasah schools. However, failure to account for non-random sorting overestimates the negative influence of madrasahs on student’s achievement. Evidence on the magnitude of this bias is presented. Once selection effect is taken into account, the madrasah’s disadvantage in English is small while that in maths becomes insignificant. Given the overall low level of achievement, this suggests that madrasah students perform just as poorly as those from non-madrasah schools in rural Bangladesh. Instrumental variable, madrasahs, school quality, Bangladesh 04 2016 61 September 1550052 The Singapore Economic Review 1 24 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500526 M. NIAZ ASADULLAH Faculty of Economics and Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia2Department of Economics, University of Reading, Reading, UK3Centre on Skills, Knowledge and Organisational Performance (SKOPE), University of Oxford, Oxford, OX2 6PY, UK4IZA, University of Bonn, 53113 Bonn, Germany
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article UNDERSTANDING THE HOUSEHOLD CONSUMPTION BEHAVIOR IN URBAN CHINA Using the panel urban households’ aggregate data at the province level in China, this paper attempts to identify the source of the rejection of permanent income hypothesis (PIH) in urban households’ consumption. We introduce liquidity constraints, myopia and loss aversion into testable hypotheses and document that: First, the PIH fails in urban China and the consumption is consistent with the liquidity constraints. Second, in regions with the high and moderate economic levels, the consumption behaviors show liquidity constraints in the early period of market-oriented economic reforms (i.e., 1980s). However, with time, the consumption pattern changed to myopia. Third, in region with low economic level, the reverse is observed: a period of myopia gave way to a period of liquidity constraints. Our results suggest that neither myopia nor liquidity constraints are an adequate characterization of consumption in different regions of urban China, and offer clear policy implications for governments who are concerned with boosting the household income and expanding domestic demand. Aggregate consumption, urban China households, liquidity constraints, myopia, loss aversion 05 2015 60 December 1550062 The Singapore Economic Review 1 21 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500629 JIN XU jinxu@hust.edu.cn Department of Economics, Huazhong University of Science and Technology, Wuhan 430074, Hubei Province, China DONGMIN KONG Department of Finance, Huazhong University of Science and Technology, Wuhan 430074, Hubei Province, China
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article WILLINGNESS TO PAY FOR RECREATIONAL ATTRIBUTES OF PUBLIC PARKS: A CHOICE EXPERIMENT APPROACH The choice to visit a park depends on individual preferences and understanding these preferences will be useful to parks’ management decisions on facilities and infrastructure needs and maintenance. Choice experiment (CE) method is used to inform parks’ management in Kuala Lumpur City, Malaysia on the social values of attributes available at the park. The latent class (LC) model is used to explore the effect of taste heterogeneity on the attributes. The results in the LC models indicate that the most preferred attribute at parks in Kuala Lumpur is recreational facilities. The willingness to pay (WTP) for these facilities range from RM3.25 to RM39.96. This shows that individuals can afford to pay up to RM40.00 per visit for such improvement in the attributes. Parks, attributes, choice experiment method, willingness to pay 05 2015 60 December 1550048 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500484 BAKTI HASAN-BASRI School of Economics, Finance and Banking College of Business, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia MOHD ZAINI ABD KARIM zaini500@uum.edu.my Othman Yeop Abdullah Graduate School of Business, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia NORMIZAN BAKAR normizan@uum.edu.my School of Economics, Finance and Banking College of Business, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia
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article HALF-LIFE DEVIATIONS FROM PURCHASING POWER PARITY: EVIDENCE FROM PACIFIC RIM COUNTRIES The study examines the half-life deviations from purchasing power parity (PPP) using both linear and nonlinear models for the sector specific real exchange rates of the Pacific Rim countries. By using a linear benchmark model, the estimated half-life deviations from PPP of about/or less than 3 years seemingly solve the PPP puzzle. After re-examining them using nonlinear forms, the PPP puzzle for most sectoral real exchange rates in the study still remains. More specifically, we find that deviations from PPP by TAR are persistent and take much more time for mean reversions especially for non-tradable sectors using logistic STAR / exponential STAR (LSTAR/ESTAR). The major reasons might be that conventional studies have failed to control the possible nonlinearity of real exchange rates, and have disregarded the possible bias of any single numèraire country. Finally, we also show the speed of mean reversion for real exchange rates by sectoral prices (tradable and non-tradable). Aggregation bias, half-life, nonlinearity, real exchange rate 04 2016 61 September 1650003 The Singapore Economic Review 1 20 http://www.worldscientific.com/doi/abs/10.1142/S021759081650003X MING-JEN CHANG mjchang@mail.ndhu.edu.tw Department of Economics, National Dong Hwa University, Hualien 97401, Taiwan
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article HOW THE 1978 FOREIGN DOMESTIC WORKERS LAW INCREASED THE LABOR SUPPLY OF SINGAPOREAN WOMEN In 1978, Singapore became the first country to introduce legislation allowing foreign domestic workers to work in the country under special visas. Although Singapore is often cited in the literature as a success story, no studies have quantified the impact of this legislation. In this paper, we use data derived from the Singapore Yearbook of Manpower Statistics between 1974 and 1985 to determine the influence of the 1978 legislation on the labor supply of Singaporean women. We find that the labor supply of women affected by this policy increased by between 3.1% and 6.2%. Gender, labor supply, quasi-natural experiment, Singapore 05 2016 61 December 1550075 The Singapore Economic Review 1 19 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500757 TIAGO FREIRE tiago@tiagofreixe.com International Business School Suzhou, Xi’an Jiaotong-Liverpool University, No. 111 Ren’ai Road, Dushu Lake Higher Education Town, Suzhou Industrial Park, Jiangsu 215123, P. R. China
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article HOW TAXES AND REAL WAGE INFLEXIBILITY INTERACT TO MAKE TRADE DEFICITS ADDICTIVE: THE TERTIARY AND QUATERNARY BURDENS OF A TRANSFER Previous papers on the transfer problem pay scant attention to the problems caused by the distortionary taxation that extracts the gift from the donor nation or the cut in distortionary taxation that bestows the gift to the recipient nation. When combined with inflexibility in the real wage these changes in taxation and the transfer itself impose a considerable burden to the donor matched by a considerable blessing to the recipient. We explore these effects, and conclude that “The Great Rebalancing” between the US and China needed to cure the US trade deficit, i.e., to eliminate the transfer that China is making to the US may bestow a big burden on the US matched by a big blessing for China. Trade deficit, transfer, wage inflexibility, taxes 02 2016 61 June 1640026 The Singapore Economic Review 1 15 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400269 EDWARD TOWER Duke University, United States2Chulalongkorn University, Thailand3Nanyang Technological University, Singapore YIFAN VICTOR YE yifan.ye@duke.edu Duke University, United States
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article IS IMBALANCES AND CURRENT ACCOUNT SURPLUSES IN JAPAN: IN MEMORY OF PROFESSOR RONALD I. MCKINNON In this paper, I find (1) that Japan showed massive and persistent current account surpluses from at least 1981 until at least 2011, (2) that Professor Ronald McKinnon was correct, at least in the case of Japan, and that these large and persistent current account surpluses were due primarily to Japan’s large and persistent IS imbalances (the excess of saving over investment), (3) that the specific causes of the IS imbalances have changed dramatically over time, and (4) that future trends in Japan’s IS imbalances (current account surpluses) are difficult to project but that they will probably not change dramatically in either direction in the foreseeable future. IS imbalances, IS balances, saving-investment balances, global imbalances, current account surpluses, current account balances, trade balances, saving, household saving, corporate saving, government saving, investment, population aging, Ronald McKinnon, Japan 02 2016 61 June 1640020 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400208 CHARLES YUJI HORIOKA Asian Growth Research Institute, 11-4, Ohtemachi, Kokurakita-ku, Kitakyashu, Fukuoka 803-0814, Japan2National Bureau of Economic Research and Institute of Social and Economic Research, 1050 Massachusetts Ave, Cambridge, MA 02138, United States
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article ERRATUM: "ANOTHER LOOK AT PRICE INSTABILITY AND CONSUMER WELL-BEING: NONDURABLE AND DURABLE (HOUSING) MARKETS" 04 2016 61 September 1692001 The Singapore Economic Review 1 2 http://www.worldscientific.com/doi/abs/10.1142/S0217590816920016 BASANT K. KAPUR ecskapur@nus.edu.sg Department of Economics, National University of Singapore, Singapore 117570, Singapore
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article POLICY BRIEF PAPER: REFORMING THE NATIONAL FOOD SECURITY PROGRAM 04 2016 61 September 1671001 The Singapore Economic Review 1 6 http://www.worldscientific.com/doi/abs/10.1142/S0217590816710016 PARKASH CHANDER pchander@jgu.edu.in Jindal School of Government and Public Policy, India
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article THE EFFECTS OF FINANCIAL DEVELOPMENT ON INVESTMENT IN TURKEY Analyzing financial development and investment in Turkey between 1960 and 2008, this paper illustrates how financial development affects investment decisions in a dynamic model of the firm under financial frictions. A composite index is constructed of three alternative financial development measures. The bounds testing approach was used to test for the existence of long-run levels relationships and long-run levels relationships were estimated using the autoregressive distributed lag method. Both short- and long-run causality tests were performed. Results indicate that financial development, budget balance, and total credit to the private sector positively and significantly affect investment. Investment, financial development, financial frictions, bounds testing approach, ARDL 04 2016 61 September 1650002 The Singapore Economic Review 1 21 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500028 MEHMET BALCILAR Department of Economics, Eastern Mediterranean University, Gazimagusa, Mersin 10, Turkey2Department of Economics, University of Pretoria, Pretoria 0002, South Africa SERHAN ÇIFTÇIOĞLU serhan.ciftcioglu@emu.edu.tr Department of Business, Eastern Mediterranean University, Gazimagusa, Mersin 10, Turkey HASAN GÜNGÖR hasan.gungor@emu.edu.tr Department of Economics, Eastern Mediterranean University, Gazimagusa, Mersin 10, Turkey
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article THE RELATION BETWEEN BOND FUND INVESTOR FLOWS AND VOLATILITY This study applies the panel smooth transition regression (PSTR) model to investigate the non-linear dynamic relationship between bond fund flows and investment volatility in Taiwan. Our empirical results are as follows. (1) A bond fund's net flow and volatility present a non-linear relationship, (2) Investors' behavior is different under the volatility threshold value and the control variables of asset of funds, management fees and the Sharpe indicator, (3) The different risk attributes of bond funds produce completely different investor behavior. In sum, the threshold of volatility is an important index to look at when investing in bond funds. Bond fund, PSTR model, volatility, fund's net flow 05 2016 61 December 1550102 The Singapore Economic Review 1 13 http://www.worldscientific.com/doi/abs/10.1142/S0217590815501027 JOE-MING LEE jmlee@mail.fgu.edu.tw Department of Applied Economics, Fo Guang University, Add. No. 160, Linwei Rd., Jiaosi Shiang, Yilan County 26247, Taiwan, ROC KU-HSIEH CHEN khchen@mail.fgu.edu.tw Department of Applied Economics, Fo Guang University, Add. No. 160, Linwei Rd., Jiaosi Shiang, Yilan County 26247, Taiwan, ROC JYING-NAN WANG Department of Applied Economics, Fo Guang University, Add. No. 160, Linwei Rd., Jiaosi Shiang, Yilan County 26247, Taiwan, ROC
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article ADVANCE TAX PAYMENTS AND TAX EVASION: A NOTE In the withholding tax system, the tax authority requires taxpayers to pay taxes in advance before filing their tax returns. This note investigates how advance tax payments affect the extent of tax evasion in the economy. We show that the extent of tax evasion decreases with increasing prepaid taxes, if individuals behave according to prospect theory. Advance tax payments, prospect theory, tax evasion 05 2015 60 December 1450050 The Singapore Economic Review 1 10 http://www.worldscientific.com/doi/abs/10.1142/S0217590814500507 KEISUKE MORITA morita-k@kyotogakuen.ac.jp Faculty of Economics, Kyoto Gakuen University, Nanjo-Otani 1-1, Sogabe, Kameoka, Kyoto 621-8555, Japan
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article POVERTY AND NATURAL DISASTERS — A QUALITATIVE SURVEY OF THE EMPIRICAL LITERATURE The last few years have seen an explosion of economic research on the consequences of natural disasters. This new interest is attributable first and foremost to a growing awareness of the potentially catastrophic nature of these events, but also a result of the increasing awareness that natural disasters are social and economic events: their impact is shaped as much by the structure and characteristics of the countries they hit as by their physical characteristics. Here, we survey the literature that examines the direct and indirect impact of natural disaster events specifically on the poor and their impact on the distribution of income within affected communities and societies. We also discuss some of the lacunae in this literature and outline a future agenda of investigation. Disasters, natural, poverty, income distribution 01 2016 61 March 1640001 The Singapore Economic Review 1 36 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400014 AZREEN KARIM School of Economics and Finance, Victoria Business School, Victoria University of Wellington, New Zealand ILAN NOY #x2020;EQC-MPI Chair in the Economics of Disasters, School of Economics and Finance, POB 600, Wellington, New Zealand
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article THE ROLE OF FOREIGN DEBT AND FINANCIAL FRICTIONS IN A SMALL OPEN ECONOMY DSGE MODEL We examine the role of foreign debt and financial frictions in the Korean business cycle using a small open economy DSGE (dynamic stochastic general equilibrium) model where domestic banks borrow external funds, denominated in foreign currencies, for a risk premium and make loans to domestic producers. We find that the Korean economy is ‘financially vulnerable’, which means that the risk premium increases when the domestic currency depreciates. As a result, depreciation could cause recession, rather than expansion, when there exist substantial amount of foreign debt or financial frictions. A simulation shows that the Korean business cycle would suffer less volatility with a lower steady-state level of foreign debt or no financial frictions. Small open economy DSGE model, foreign debt, risk premium, Korean economy 05 2016 61 December 1550077 The Singapore Economic Review 1 23 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500770 MYUNG-SOO YIE yie@bok.or.kr Economic Research Institute, Bank of Korea, Seoul 100-794, Korea BYOUNG HARK YOO #x2020;Department of Economics, Soongsil University, Seoul, South Korea
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article THE LAW OF ONE PRICE IN CHINESE FACTOR MARKETS This paper investigates whether Chinese factor markets became more integrated in the period around World Trade Organization (WTO) accession. This would have required reductions in factor price dispersion. However, prices for 18 agricultural factors between 1998 and 2001 and for 118 industrial factors between 1999 and 2002 varied significantly across 36 cities. Variation declined temporarily for industrial factors, but not for agricultural factors. Sixteen factors displayed many city-specific price components, suggesting that they may have been subject to domestic trade restrictions. Idiosyncratic prices for agricultural factors were concentrated in two cities. However, most cities had idiosyncratic prices for at least some industrial factors. China, law of one price, local protectionism 04 2016 61 September 1550101 The Singapore Economic Review 1 31 http://www.worldscientific.com/doi/abs/10.1142/S0217590815501015 JEFFREY S. ZAX Department of Economics, University of Colorado Boulder, 256 UCB, Boulder, CO 80309-0256, USA YIN HE Department of International Trade, University of International Business and Economics, No. 10 Huixin East St., Chaoyang District, Beijing 100029, P. R. China
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article MARKET MECHANISMS TO ALLOCATE HERITAGE CONSERVATION FUND: AN EXPERIMENTAL STUDY The under-provision of efforts in built heritage conservation was due to market failure to allocate cost and benefit efficiently. Conservation agency could facilitate conservation effort, which was considered not beneficial from the point of view of the private owners of the heritage houses, by providing conservation subsidy. In this paper, we conducted three different experimental auctions, namely, (i) discriminative price auction, (ii) uniform price auction, and (iii) random nth price auction to investigate bidding behaviors and efficiency levels in allocating conservation subsidies. Both uniform and random nth price auctions were able to encourage cost revealing bids. Random nth price auction was able to engage the off-margin bidders. However, discriminative price auction was more cost efficient compared to the other two auctions. Built heritage conservation, conservation subsidy allocation, cost efficiency, experiment 05 2015 60 December 1550024 The Singapore Economic Review 1 19 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500241 KEAN SIANG CH’NG Economics Department, School of Social Sciences, Universiti Sains Malaysia, Minden Campus, 11800, Penang, Malaysia SUET LENG KHOO slkhoo@usm.my Development Planning and Management Department, School of Social Sciences, Universiti Sains Malaysia, Minden Campus, 11800, Penang, Malaysia
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article MOTIVATING FACTORS OF REMITTANCES INFLOWS INTO DEVELOPING ASIAN ECONOMIES Considering 11 major Asian migrant sending countries during 1975–2012, the study explores the factors that motivate migrants to remit their earnings to home countries. Using panel regressions, it finds that it is primarily the growth rate and interest rate differentials between the home and host, the household consumption and financial sector development at home along with per capita income of host countries which lead to remittances inflows. It concludes that it is not only the altruistic (or consumption) and higher interest income motives; but also the patriotic motives reflected from significant impact of past remittances, are crucial factors of such flows. Remittances, economic growth, interest rate, private investment and consumption 04 2016 61 September 1550063 The Singapore Economic Review 1 26 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500630 HRUSHIKESH MALLICK hrushi_isec@yahoo.co.in Centre for Development Studies (CDS), Trivandrum 695011, Kerala, India MANTU KUMAR MAHALIK Department of Humanities and Social Sciences, National Institute of Technology (NIT), Rourkela-769008, Odisha, India
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article NATURAL DISASTERS — BLESSINGS IN DISGUISE? This study examines the impact of natural disasters on stock market returns and on industries that are likely to be affected by such disasters. We find that different natural disasters have different effects on stock markets and industries. Our evidence suggests that while earthquakes, hurricanes and tornadoes could negatively affect market returns several weeks after the events, other disasters such as floods, tsunamis and volcanic eruptions have limited impact on stock markets. We also find that construction and materials industry is generally positively affected by natural disasters but non-life and travel industries are likely to suffer negative effects. Natural disasters, market returns, construction industry, non-life insurance industry, travel and leisure industry, cumulative abnormal returns 01 2016 61 March 1640004 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S021759081640004X HARDJO KOERNIADI Department of Finance, Faculty of Business and Law, Auckland University of Technology, 42 Wakefield Street, Auckland 1010, New Zealand CHANDRASEKHAR KRISHNAMURTI University of Southern Queensland, Queensland, Australia ALIREZA TOURANI-RAD Auckland University of Technology, Auckland, New Zealand
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article JOB OPPORTUNITY AND OWNERSHIP STATUS: RETURN DECISION AFTER THE GREAT EAST JAPAN EARTHQUAKE AND TSUNAMI Disasters result in disruptive effects on various aspects of community in different scales and disaster relief is important in understanding negative effects from the shock. Using unique dataset after the 2011 Great East Japan Earthquake and Tsunami, the decision return to the original residence is analyzed in this study. We find that having jobs related to the original region and ownership status have the largest impact on the return decision. Furthermore, these results are different for each age group. The Great East Japan Earthquake and Tsunami, disaster, migration, return decision, age, job opportunity 01 2016 61 March 1640008 The Singapore Economic Review 1 16 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400087 MOHAMMAD SANAEI Graduate School of Environmental Studies, Tohoku University, 6-6-20 Aramaki-Aza Aoba, Aoba-Ku, Sendai 980-8579, Japan SHINYA HORIE #x2020;Graduate School of Economics, Kobe University, 2–1, Rokkodaicho, Nada–Ku, Kobe 657–0013, Kobe, Japan SHUNSUKE MANAGI #x2021;Department of Urban and Environmental Engineering, School of Engineering, Kyushu University, 744 Motooka, Nishi-ku, Fukuoka 819-0395, Japan§Business School, Queensland University of Technology, Level 8, Z Block, Gardens Point, 2 George St., Brisbane QLD 4000, Australia
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article THE EVOLUTION OF GENDER WAGE DIFFERENTIALS IN THAILAND: 1991–2007 — AN APPLICATION OF UNCONDITIONAL QUANTILE REGRESSION Using unconditional quantile regression and an approach which allows the identification of the individual contributors to the gender wage gap and its over-time change, we study the gender wage differentials over the whole distribution in Thailand from 1991 to 2007. We also propose an extension of the single quantile decomposition to explore the origins of the distributional changes in gender wage differentials over time. A persistent sticky floor effect and declining gender wage gaps over time are observed. Aggregate decompositions using a reweighting approach show that most of the gap and changes in gaps are due to (changing) coefficients effect. Detailed decompositions show that within the (changing) characteristics effect, education contributes to the narrowing of the gap over the whole distribution, and within the coefficients effect age and the constant term are the most influential factors but with opposite effects. Thailand, unconditional quantile regression, gender wage differentials, sticky floors 05 2016 61 December 1550094 The Singapore Economic Review 1 30 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500940 KAMPON ADIREKSOMBAT kampon@gmail.com Economic Intelligence Center, Siam Commercial Bank, Thailand ZHENG FANG fangzheng@unisim.edu.sg #x2020;Division of Economics, Nanyang Technological University, Singapore CHRIS SAKELLARIOU #x2020;Division of Economics, Nanyang Technological University, Singapore
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article IMPACT OF WILDFIRES AND FLOODS ON PROPERTY VALUES: A BEFORE AND AFTER ANALYSIS One of the most evident casualties of a natural disaster is the property market. The private and social costs from such events run into millions of dollars. In this paper, we use a unique dataset to examine the impact on residential house prices affected by natural disasters using a hedonic property (HP) values approach. For this purpose, we use data before and after a wildfire and floods from Rockhampton in central Queensland, Australia. The data is unique because one suburb was affected by wildfires and another was affected by floods. For the analysis, three suburbs namely Frenchville, Park Avenue and Norman Gardens are used. Frenchville was significantly affected by wildfires in the latter part of 2009 and to a lesser extent in 2012, while Park Avenue was affected by floods at the end of 2010, January 2011–2013. Norman Gardens, which was relatively unaffected, is used as a control site. This enables us to examine the before and after effects on property values in the three suburbs. The results confirm that soon after a natural disaster property prices in affected areas decrease even though the large majority of individual houses remain unaffected. Furthermore, the results indicate that the largely unaffected suburb may gain immediately after a natural disaster but this gain may disappear if natural disasters continue to occur in the area/region due to the stigma created. The results have several important policy decision and welfare implications which are briefly discussed in the paper. Wildfires, floods, before and after effects on property values, hedonic property values approach, Australia 01 2016 61 March 1640002 The Singapore Economic Review 1 23 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400026 WASANTHA ATHUKORALA Department of Economics and Statistics, Faculty of Arts, University of Peradeniya, Sri Lanka WADE MARTIN #x2020;Department of Economics, California State University, MS 4607, Long Beach, CA 90840-4607, USA PRASAD NEELAWALA #x2021;School of Economics and Finance, QUT Business School, Queensland University of Technology, GPO Box 2434, Brisbane, QLD 4001, Australia DARSHANA RAJAPAKSA #x2021;School of Economics and Finance, QUT Business School, Queensland University of Technology, GPO Box 2434, Brisbane, QLD 4001, Australia CLEVO WILSON #x2021;School of Economics and Finance, QUT Business School, Queensland University of Technology, GPO Box 2434, Brisbane, QLD 4001, Australia
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article Review of “New Global Economic Architecture: The Asian Perspective” by Masahiro Kawai, Peter Morgan and Pradumna Rana 05 2015 60 December 1580006 The Singapore Economic Review 1 4 http://www.worldscientific.com/doi/abs/10.1142/S0217590815800065 STEPHEN GRENVILLE The Lowy Institute, Australia
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article HAPPINESS, INCOME AND HETEROGENEITY This paper investigates the relationship between happiness, income, and relative income, with an emphasis on heterogeneity between individuals. We develop a random coefficient model in which people are allowed to differ in baseline happiness, and the way they transform income and leisure into utility. We hypothesize that additional dollars of income and leisure (work) hours do not necessarily increase (decrease) the utility of all individuals in the same way, and relative income positions and heterogeneity around relative income positions are important explanations for happiness. Using eight waves Australian household panel data (HILDA), we find strong evidence of heterogeneity in the income-happiness relationship, and differences in baseline happiness were partially explained by personality traits. In addition, we also find relative income positions to play an important role in explaining happiness. In some instances the marginal utility estimates of relative income positions were larger in magnitude than the marginal utility estimate of absolute income, affirming EJ Mishan’s view that relative income is an important determinant of happiness. Income and happiness, relative income, subjective well-being, heterogeneity, random coefficients model 03 2016 61 June 1640017 The Singapore Economic Review 1 23 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400178 STEFANIE SCHURER School of Economics, The University of Sydney, Australia, New South Wales 2006, Australia JONGSAY YONG Melbourne Institute of Applied Economic & Social Research, The University of Melbourne, Parkville, Victoria 3010, Australia
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article GLOBALIZATION AND REAL GDP: NEW EVIDENCE USING PANEL VECTOR AUTOREGRESSION The existence and the direction of the relationship between globalization and real GDP (RGDP) are very debatable. By employing annual data of 92 countries from 1970 to 2011, we apply Pedroni’s [Econometric Theory, 20, (2004) 597–625] panel cointegration test and the panel vector autoregressions (VARs) model, proposed by Love and Zicchino [Quarterly Review of Economics and Finance, 46(2), (2006) 190–210], to investigate again the relationship between these two variables. The results first present the weak evidence of cointegration between RGDP and overall globalization and its three main sub-indices. Second, the empirical evidence shows a bidirectional causality between RGDP and overall globalization, economic as well as social, but higher political globalization harms RGDP in the sample countries. Hence, we offer evidence for a clear bidirectional effect between RGDP and each globalization index in Organization for Economic Cooperation and Development (OECD) countries, but not in non-OECD ones. Several empirical implications and suggestions are proposed through our observations. Globalization, real GDP, panel causality, panel cointegration 05 2016 61 December 1550065 The Singapore Economic Review 1 34 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500654 JUN WEN wjun1978@163.com School of Economics and Finance, Xi’an Jiaotong University, Shaanxi, China CHUN-PING CHANG Department of Marketing Management, Shih Chien University Kaohsiung Campus, Taiwan3School of Economics and Finance, Xi’an Jiaotong University, Shaanxi, China JIA-HSI WENG jhw654@faculty.nsysu.edu.tw Institute of China and Asia-Pacific Studies, National Sun Yat-Sen University, Kaohsiung, Taiwan JILIANG LIU jiliangliu@hotmail.com College of Education Capital Normal University, Beijing, China
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article CASH HOLDINGS WITH THE PRECAUTIONARY MOTIVE AMONG KOREAN CHAEBOL AND NON-CHAEBOL FIRMS: A QUANTILE REGRESSION APPROACH Using a quantile regression approach with a sample of Korean firms, this paper empirically investigates whether cash holding behaviors with the precautionary motive are different between Chaebol and non-Chaebol firms and they have changed before and after the financial crisis. We obtain the following empirical results. First, for non-Chaebol firms, the precautionary motive plays an important role in determining cash holdings throughout the sample period. In contrast, there is no empirical evidence supporting that Chaebol firms hold cash with the precautionary motive in the pre-crisis period: This motive becomes important only in the post-crisis period. Second Chaebol firms’ cash holdings with the precautionary motive are different from those of non-Chaebol firms in the pre-crisis period, but not in the post-crisis period. These imply that after experiencing financial crisis, Chaebol firms’ cash holding strategy has been changed substantially in a way to become more cautious in dealing with cash flow (CF) volatility. Cash holdings, precautionary motive, quantile regression, financial crisis, Chaebol firms 05 2015 60 December 1550047 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500472 YONG-SEOK CHOI Department of Economics, Kyung Hee University, 26 Kyungheedae-ro, Dongdaemoon-gu 130-701, Seoul, Korea INSIK MIN imin@khu.ac.kr Department of Economics, Kyung Hee University, 26 Kyungheedae-ro, Dongdaemoon-gu 130-701, Seoul, Korea
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article TRANSFER PAYMENTS AND UPPER SECONDARY SCHOOL OUTCOMES: THE CASE OF LOW-INCOME FEMALE STUDENTS IN THAILAND This study assesses the impact of cash transfers to low-income female Thai students on improving upper secondary school outcomes, as measured by grade point average (GPA) and transition to tertiary education. Utilizing official records from a charity organization providing substantial cash transfers to secondary students and student records from participating schools, we find the transfers have no effect on improving recipients’ GPAs compared to non-recipients. However, the scholarship recipients are 22% more likely to transition to university education than non-recipients and the presence of scholarship recipients in the classroom increases the likelihood of female non-recipients to attend university. Secondary education, cash transfer, academic performance, Thailand 05 2015 60 December 1550082 The Singapore Economic Review 1 19 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500824 JESSICA VECHBANYONGRATANA jessica.v@chula.ac.th Faculty of Economics, Chulalongkorn University, Phayathai Road, Bangkok 10330, Thailand SASIWIMON WARUNSIRI PAWEENAWAT sasiwimon_war@utcc.ac.th School of Economics, University of the Thai Chamber of Commerce, 126/1 Vibhavadee-Rangsit Road, Dindaeng Bangkok 10400, Thailand
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article SPECIAL ISSUE OF THE SINGAPORE ECONOMIC REVIEW — ECONOMICS OF CRISES AND DISASTERS 01 2016 61 March 1602001 The Singapore Economic Review 1 10 http://www.worldscientific.com/doi/abs/10.1142/S021759081602001X SHUNSUKE MANAGI Department of Urban and Environmental Engineering, School of Engineering, Kyushu University, Fukuoka, Japan2QUT Business School, Queensland University of Technology, Brisbane, Australia SUMAN K. SHARMA SumanSharma@ntu.edu.sg Division of Economics, Nanyang Technological University, Singapore
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article THE DETERMINANTS OF TOTAL FACTOR PRODUCTIVITY IN THE MALAYSIAN AUTOMOTIVE INDUSTRY: ARE GOVERNMENT POLICIES UPGRADING TECHNOLOGICAL CAPACITY? This paper examines the determinants of total factor productivity (TFP) in the Malaysian automotive industry, focusing on the effectiveness of government policies. Our panel data analysis shows that the productivity of the automotive industry in Malaysia highly depends on the technology embodied within imports. Government policies have not contributed to the technological upgrading of the industry. The policies to protect the domestic producers from international competition and to favor bumiputra firms seem to have adverse impacts on productivity. Malaysia, automotive industry, total factor productivity, R&D, government policies 04 2016 61 September 1550046 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500460 KOZO OTSUKA kotsuka@apu.ac.jp College of International Management, Ritsumeikan Asia Pacific University, 1-1 Jumonjibaru, Beppu-shi Oita, 874-8577, Japan KAORU NATSUDA College of International Management, Ritsumeikan Asia Pacific University, 1-1 Jumonjibaru, Beppu-shi Oita, 874-8577, Japan
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article EZRA MISHAN’S COST OF ECONOMIC GROWTH: EVIDENCE FROM THE ENTROPY OF ENVIRONMENTAL CAPITAL Ezra Mishan’s (1967) famous articulation of the costs of economic growth included amongst others the rearrangement and loss of nature. This paper builds on this theme by recourse to two important concepts in science, namely the assimilative capacity of nature and the entropy of law of thermodynamics. These concepts enable the formulation of an alternative conceptual framework for the explanation of national income (Y) in terms of factor-utilization. In this framework, environmental capital (KN) is an explicit factor besides manufactured capital (KM) and labor (L). A simple methodology that permits the estimation of the volume of KN utilized is used towards demonstrating that economic growth is an entropic process. Empirical illustration of KN utilization as point-estimates is made for Australia and South Korea. Economic growth, entropy, assimilative capacity, factor-utilization, environmental capital 03 2016 61 June 1640018 The Singapore Economic Review 1 10 http://www.worldscientific.com/doi/abs/10.1142/S021759081640018X DODO J. THAMPAPILLAI spptj@nus.edu.sg Lee Kuan Yew School of Public Policy, National University of Singapore, Singapore 259772, Singapore
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article FREE TRADE AGREEMENTS AND BRIDGEHEAD EFFECT: EVIDENCE FROM KOREA–CHILE FTA Recent literature on the dynamics of export destinations has argued that firms export their products to new markets that are geographically close and culturally related to their previous export destinations. A modified version of [Melitz, M (2003). The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica, 71(6), 1695–1725.] model suggests that a preferential trade agreement may provide inefficient firms with opportunities to export their products to third destination countries. This paper finds that new Korean products have been exported to the Chile market because of reductions in Chilean tariffs and the experience gained from exporting to the Chilean market has increased the likelihood of subsequent export to other countries in South America. The paper provides direct evidence that a free trade agreement (FTA) can serve as a stepping stone to other markets. Free trade agreement, export dynamics, Korea–Chile FTA 05 2016 61 December 1550098 The Singapore Economic Review 1 17 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500988 KICHUN KANG Yeungnam University, School of Economics & Finance, 280 Daehak–Ro, Gyeongsan, Gyeongbuk 38541, Korea PHYLLIS KEYS phyllis.keys@morgan.edu Morgan State University, Earl G. Graves School of Business & Management, 1700 E Cold Spring Ln, Baltimore, MD 21251, USA YOON S. SHIN YShin@loyola.edu Loyola University Maryland, Sellinger School of Business & Management, 4501 N Charles St, Baltimore, MD 21210, USA
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article HOW DO IMMIGRANTS FROM TAIWAN FARE IN THE U.S. LABOR MARKET? This paper presents evidence that since 1980, relative to native-born Americans and other immigrants, the earnings of Taiwanese immigrants have grown rapidly as they assimilate into the U.S. economy. Consistent with the existing U.S. evidence, I show that most of the immigrant–native earnings gaps can be explained by endowments, and the importance of endowments continues to increase. The estimates indicate that the improved endowments from education and U.S. experience, along with rising returns to both factors, largely explain Taiwanese immigrants’ economic assimilation experience. I show that more recently arrival cohorts of Taiwanese immigrants have earned more than the older ones since 1980. Taiwan, immigration, economic assimilation, earnings gap, decomposition, cohort effect, aging effect 05 2016 61 December 1550057 The Singapore Economic Review 1 38 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500575 CARL LIN Department of Economics, Bucknell University, 1 Dent Drive, Lewisburg, Pennsylvania 17837, USA2Business School, Beijing Normal University, Beijing, China3Institute for the Study of Labor (IZA), Bonn, Germany
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article BOOK REVIEW: "Japan and Asia: Economic Development and Nation Building" 05 2016 61 December 1680008 The Singapore Economic Review 1 4 http://www.worldscientific.com/doi/abs/10.1142/S0217590816800084 MARIKO J. HONMA mhonma@soka.ac.jp Soka University, Tokyo, Japan
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article EDITOR’S COMMENTS ON SPECIAL ISSUE IN HONOR AND MEMORY OF PROFESSOR EZRA J. MISHAN 03 2016 61 June 1602002 The Singapore Economic Review 1 2 http://www.worldscientific.com/doi/abs/10.1142/S0217590816020021 EUSTON QUAH ecsquahe@ntu.edu.sg Nanyang Technological University, Singapore
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article CENTRIST’S CURSE? AN ELECTORAL COMPETITION MODEL WITH CREDIBILITY CONSTRAINTS I analyze a model of electoral competition in which candidates’ need of credibility restricts their policy choice to a subset of the policy space, their ideology set. I focus on three party competition where candidates care about winning and their share of votes. I show that centrist parties are highly disadvantaged compared to leftist and rightist ones losing the election under a wide range of parameters. I also show that centrist parties’ winning opportunities increase under a run-off system. Electoral competition, plurality, run-off, credibility, spatial models 05 2015 60 December 1550055 The Singapore Economic Review 1 18 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500551 SELIM JÜRGEN ERGUN sergun@metu.edu.tr Middle East Technical University, Northern Cyprus Campus, Economics Program, Kalkanli (Güzelyurt), TRNC, Turkey
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article BOOK REVIEW: "Creating a Learning Society: A New Approach to Growth, Development and Social Progress" by Joseph E. Stiglitz and Bruce C. Greenwald 04 2016 61 September 1680003 The Singapore Economic Review 1 5 http://www.worldscientific.com/doi/abs/10.1142/S0217590816800035 STUTI RAWAT stuti.r@u.nus.edu Lee Kuan Yew School of Public Policy, National University of Singapore
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article POPULATION AGING AND PUBLIC PENSION: THE CASE OF BEIJING ANALYZED BY AN OLG MODEL This paper employs an overlapping-generations (OLG) model with altruistic motive and lifetime uncertainty to investigate the urban public pension system in China. Focusing on the case of Beijing, we examine the effects of the individual contribution rate, firm contribution rate, life expectancy and population growth rate on the capital-labor ratio, savings, per capita consumption and pension benefits. By controlling the firm contribution rate to adjust the capital-labor ratio of the market economy to the modified golden rule level, we find the optimal firm contribution rate. We also discuss the optimal firm contribution rate in Beijing under three cases: risen life expectancy, fallen population growth rate and the joint case of risen life expectancy and fallen population growth rate, and estimate the optimal firm contribution rate in 2020s. Integrating the established effects and the current economic goals, it is concluded that it will do more good than harm to strictly implement Beijing municipal population policy, improve the living and medical conditions, reduce the firm contribution rate, and raise the individual contribution rate. Population aging, public pension, Beijing, OLG model 04 2016 61 September 1550045 The Singapore Economic Review 1 14 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500459 ZAIGUI YANG yangzaigui@hotmail.com School of Insurance and China Institute for Actuarial Science, Central University of Finance and Economics, 39 South College Road, Haidian District, Beijing 100081, P. R. China
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article CATASTROPHES AND CONSUMPTION FAILURE Disaster research has been concerned with the role of adverse environmental conditions vis-à-vis adverse social conditions in determining food access during catastrophes. This paper investigates the issue, and presents household-data from flood-devastated Bangladesh to argue that, while hunger is clearly associated with exposure to disaster conditions, prior deficits in resources (given the education, occupation and ownership of productive assets of household-members) are more significant in determining the risk of consumption failure during catastrophes. The paper finds that, the risk-generating factors are often interrelated, but, their relative contributions vary across households having varying locations of natural hazards and in consumption distribution. Disasters, consumption, poverty, entitlement failure, Bangladesh 01 2016 61 March 1640006 The Singapore Economic Review 1 25 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400063 LOPAMUDRA BANERJEE banerjel@newschool.edu Department of Economics, New School for Social Research, The New School, 6 East 16th Street, New York, NY 10003, USA
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article BOOK REVIEW: "Regional Dynamics in a Decentralized Indonesia" 05 2016 61 December 1680006 The Singapore Economic Review 1 2 http://www.worldscientific.com/doi/abs/10.1142/S0217590816800060 MARGARET TRIYANA mtriyana@ntu.edu.sg Nanyang Technological University, Singapore
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article PRODUCT QUALITY AND INTRA-INDUSTRY TRADE In this study, we argue that the conventional intra-industry trade (IIT) index does not directly address the quality issue and propose a methodology to make full use of unit price gap information to deduce quality differences between simultaneously exported and imported products. By applying this measure to German trade data at the eight-digit level, we study the quality change of Chinese export goods in its IIT with Germany. We compare the case of China with those of Eastern European countries, which are also major trading partners of Germany. Our results show that the unit value difference in IIT between Germany and Eastern European countries is clearly narrowing. However, China’s export prices to Germany are much lower than Germany’s export prices to China, and this gap has not narrowed over the last 23 years. This is at odds with the common perception that China’s product quality has improved, as documented by Rodrik [Rodrik, D (2006). Whats so special about China’s exports? China and World Economy, 14(5), 1–19.] and Schott [Schott, P (2008). The Relative sophistication of Chinese exports. Economic Policy, 53, 5–49.]. Our results support Xu [Xu, B (2010). The sophistication of exports: Is China special? China Economic Review, 21(3), 482–493.], which argued that incorporating the quality aspect of the exported goods weakens or even eliminates the evidence of the sophistication of Chinese export goods in Rodrik [Rodrik, D (2006). Whats so special about China’s exports? China and World Economy, 14(5), 1–19.]. Product quality, intra-industry trade, unit value difference, Chinese exports 04 2016 61 September 1550106 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590815501064 TADASHI ITO Institute of Developing Economies, Japan External Trade Organization, 3-2-2 Wakaba, Mihama-ku, Chiba-shi, Chiba, Japan TOSHIHIRO OKUBO okubo@econ.keio.ac.jp Faculty of Economics, Keio University, 2-15-45, Mita, Minato-ku, Tokyo 108-8345, Japan
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article OVERCONFIDENCE AND REAL ESTATE RESEARCH: A SURVEY OF THE LITERATURE Real estate investment has recently been advancing rapidly in both volume and complexity. A sound understanding of behavioral issues in this sector benefits all stakeholders, such as investors, regulators and local residents. We focus on one of the most robust behavioral anomalies in business and finance research: overconfidence. Overconfidence significantly influences financial decision and investment performance. However, theoretical and empirical studies are lacking in real estate sector. We conduct a critical review of the overconfidence literature to bridge this gap, identify future research directions for the study of overconfidence in real estate markets, and suggest strategies to handle technical issues, such as the robustness of overconfidence measurement and data availability. Findings provide useful guidelines for researchers and practitioners to design and implement overconfidence studies in real estate research. Judgmental bias, behavioral finance, investment decision, overconfidence, real estate investment 04 2016 61 September 1650015 The Singapore Economic Review 1 24 http://www.worldscientific.com/doi/abs/10.1142/S0217590816500156 HELEN X. H. BAO Department of Land Economy, University of Cambridge, CB3 9EP, UK STEVEN HAOTONG LI hl442@cam.ac.uk Department of Land Economy, University of Cambridge, CB3 9EP, UK
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article FRAGMENTATION AND TRADE OF MACHINERY PARTS AND COMPONENTS IN MEKONG REGION This paper examines the trade of machinery parts and components between Thailand and the other Mekong countries though gravity model, for the purpose of assessing the existing production networks in Mekong region by applying fragmentation theory. The findings are: First, the evolution of production networks between Thailand and Vietnam was identified in terms of their two-way trade integration. Second, the trade intensity between Thailand and Vietnam was explained by the fragmentation factors, i.e., their gaps in per capita GDP and the relatively lower service-link costs in Vietnam. Third, the trade less-integration of Thailand with Cambodia and Myanmar was explained by their higher service-link costs. Fragmentation, trade of machinery parts and components, Mekong region, gravity trade model, international production networks 05 2015 60 December 1550041 The Singapore Economic Review 1 21 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500411 HIROYUKI TAGUCHI tagusaya0710@s3.wh.qit.ne.jp Saitama University, 225 Shimo-Ohkubo, Sakura-ku, Saitama 338-8570, Japan NI LAR ni.la@cmu.ac.th Chiang Mai University, 239/Huay Kaew Road, Suthep, Maung, Chiang Mai 50200, Thailand
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article LABORATORY EVIDENCE FOR EMOTIONAL EXTERNALITIES: AN ESSAY IN HONOR OF EJ MISHAN Professor EJ Mishan was a world expert on the idea of externalities. In this paper, we provide evidence for the intuitive idea of “emotional externalities”. These might be viewed as psychological spillovers from the well-being of one person upon the well-being of another. A new form of laboratory experiment is implemented. “Happiness” answers are elicited in the first few seconds of the experiment. Tragic life events — like family illness and bereavement — are then studied. The paper documents evidence consistent with a powerful caring-about-others effect. The paper’s results also suggest an approximate equivalence between life-satisfaction data and happiness data.Statistical offices should incorporate questions to capture people’s life evaluations, hedonic experiences and priorities … All these aspects of subjective well-being (cognitive evaluations, positive affects and negative affects) should be measured separately to get a satisfactory appreciation of people’s lives. Which of these aspects matters more, and for what purpose, is still an open question.Stiglitz et al., Commission on the Measurement of Economic Performance and Social Progress, 2009 Subjective well-being, happiness, life satisfaction, priming, experiments, surveys 03 2016 61 June 1640015 The Singapore Economic Review 1 25 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400154 DANIEL SGROI daniel.sgroi@warwick.ac.uk Department of Economics, University of Warwick, Gibbet Hill Road, Coventry CV4 7AL, UK EUGENIO PROTO eugenio.proto@warwick.ac.uk Department of Economics, University of Warwick, Gibbet Hill Road, Coventry CV4 7AL, UK ANDREW J. OSWALD a.j.oswald@warwick.ac.uk Department of Economics, University of Warwick, Gibbet Hill Road, Coventry CV4 7AL, UK ALEXANDER DOBSON a.c.dobson@warwick.ac.uk Department of Economics, University of Warwick, Gibbet Hill Road, Coventry CV4 7AL, UK
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article ECONOMIC GROWTH OF SELECTED EAST ASIAN COUNTRIES: A MACROECONOMIC VIEW OF THEIR DEPENDENCE ON THE US AND EUROPE This paper aims to ascertain whether direct macroeconomic linkages exist between some East Asian (EA) countries on the one hand and the United States (US) and Europe on the other, based upon quarterly real gross domestic product (GDP) series spanning from the early 1990s. Long-run and short-run lead-lag relations are explored within a trivariate modeling framework. Contrary to popular belief, the empirical evidence suggests generally either very nominal or no direct links at all between these EA countries and the US in terms of GDP. Direct links with Europe are completely ruled out. All these would allude to a very limited susceptibility of these EA economies to shocks in the US and Europe, barring a global economic crisis of catastrophic proportions. The growing belief that if China sneezes, the world catches the flu is also not borne out by the empirical results. Growth, cointegration, causality 05 2016 61 December 1550066 The Singapore Economic Review 1 15 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500666 EU CHYE TAN Faculty of Economics & Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia CHOR FOON TANG tcfoon@usm.my Centre for Policy Research and International Studies, Universiti Sains Malaysia, 11800 USM Penang, Malaysia
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article (DE)STABILIZING EXCHANGE RATE STRATEGIES IN EAST ASIAN MONETARY AND ECONOMIC INTEGRATION The East Asian monetary integration process is at the crossroads. Given very benign liquidity conditions in the US, the prevailing common US dollar peg has contributed to growing macroeconomic and financial instability in the region. This has sparked demands to embark on an independent monetary integration process in East Asia. The paper shows that, however, neither the Japanese yen nor the Chinese yuan can challenge the US dollar as anchor currency in the region. Large fluctuations of the Japanese yen against the US dollar have undermined the potential of the Japanese yen to become a regional anchor currency. Exchange rate stability of the Chinese yuan against the US dollar has enhanced intra-regional exchange rate stability and growth, stressing the potential of the Chinese yuan to emerge as a regional anchor currency. Yet, it is shown that underdeveloped Chinese capital markets and financial repression originating in US low interest rate policies constitute an insurmountable impediment for the Chinese yuan to gain anchor currency status in East Asia. Empirical estimations provide evidence in favor of positive growth effects of the exchange rate stability against the US dollar in East Asia. Japanese yen, Chinese yuan, intra-regional trade, informal dollar standard, exchange rate stabilization, business cycle stabilization, internationalization of the Chinese yuan 02 2016 61 June 1640021 The Singapore Economic Review 1 24 http://www.worldscientific.com/doi/abs/10.1142/S021759081640021X GUNTHER SCHNABL University of Leipzig, Grimmaische Str. 12, 04109 Leipzig, Germany KRISTINA SPANTIG kristina.spantig@giz.de Deutsche Gesellschaft für Internationale Zusammenarbeit, Friedrich-Ebert-Allee 36, 53113 Bonn, Germany
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article BOOK REVIEW: "Internationalization of the RMB: 2013 Annual Report" by the International Monetary Institute, Renmin University of China 04 2016 61 September 1680004 The Singapore Economic Review 1 2 http://www.worldscientific.com/doi/abs/10.1142/S0217590816800047 SL Paul Yip ASLYip@ntu.edu.sg Nanyang Technological University, Singapore
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article MIXING WASHINGTON CONSENSUS WITH BEIJING CONSENSUS AND CORRUPTION IN AFRICA In theory, trade intensity should positively affect the quality of domestic institutions and governance; the higher the economic openness, the lower the corruption. In practice, however, the growth of economic openness has not been accompanied by the expected improvements in corruption for 34 African countries between 1990 and 2009. This paper presents a plausible explanation for this conundrum. Results from panel data regression analyses indicate that a switch from trading with the Advanced Economies to trading with China increases the perceived corruption level. For instance, in a “representative” African country, a 10% point substitution from trading with the Advanced Economies to trading with China makes its ICRG corruption score decline—indicating increased corruption—by 29%. Intensity of trade, corruption, China, Africa 02 2016 61 June 1640029 The Singapore Economic Review 1 14 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400294 OMER GOKCEKUS omer.gokcekus@shu.edu School of Diplomacy and International Relations, Seton Hall University, USA YUI SUZUKI yui-szk@cc.musashi.ac.jp #x2020;Faculty of Economics, Musashi University, Japan
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article THE SIZE OF FOREIGN EXCHANGE RESERVES AND LOCAL CURRENCY INTERNATIONALIZATION: CROSS-COUNTRY EVIDENCE This paper produces the first cross-country evidence on the relationship between the size of foreign exchange reserves and local currency internationalization using a sample of Switzerland, Japan and the UK. It finds that a high ratio of foreign exchange reserves to international reserves has a significant, but negative, impact on local currency internationalization during the period 1976–2009. After controlling for interest rate differential, different indicators for long-run depreciation and volatility of exchange rates, as well as the once-in-a-century global financial crisis of 2007–2009, the above conclusion still holds. Additionally, these results are robust to different methods (Pooled OLS and Pooled IV/2SLS) and measures of the scale of foreign exchange reserves. This study is informative for any policy decisions and will provide a strategic reference for the Chinese government as it optimizes the composition of its international reserves, promotes the process of renminbi (RMB) internationalization and becomes a major power through financial development. Foreign exchange reserves, local currency internationalization, cross-country evidence, RMB internationalization 05 2016 61 December 1550081 The Singapore Economic Review 1 28 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500812 ZHIWEN ZHANG gmszzw@mail.sysu.edu.cn School of Global Studies, Sun Yat-sen University, Institute of Advanced International Studies, Sun Yat-sen University, Guangzhou, China
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article WELFARE EFFECTS OF DOWNSTREAM MERGERS AND UPSTREAM MARKET CONCENTRATION We consider a dominant upstream firm selling an input to several downstream firms through observable, non-discriminatory two-part tariff contracts. Downstream firms can alternatively buy the input from a less efficient source of supply. In this setting, we analyze the relationship between the competitive effects of downstream mergers and the level of concentration at the upstream level. We show that a downstream merger leads to lower wholesale prices. This translates into lower final prices only when the upstream market is sufficiently concentrated. In this case, a downstream merger tends to be both procompetitive and profitable. Downstream mergers, wholesale prices, two-part tariff contracts 05 2016 61 December 1550056 The Singapore Economic Review 1 16 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500563 RAMON FAULI-OLLER fauli@ua.es University of Alicante, Economics Department, Campus de Sant Vicent del Raspeig, E-03071, Alicante, Spain JOEL SANDONIS University of Alicante, Economics Department, Campus de Sant Vicent del Raspeig, E-03071, Alicante, Spain
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article ECONOMIC REPERCUSSIONS OF EXTREME EVENTS FOR AN ISLAND NATION: CASE OF SINGAPORE Having achieved an export-led exponential economic growth, Singapore remains vulnerable to both natural disasters and economic crises. However, the economic repercussions and policy responses to extreme events for an island nation like Singapore are not as widely known or studied. This paper illustrates that impacts of a health disaster [Severe Acute Respiratory Syndrome (SARS)] and an economic crisis [Global Financial Crisis (GFC)] on the Singapore economy based on selected indicators of the financial market, macroeconomy and property sector. Crises of different nature entail different policy responses of different scales and this is highlighted in the policy responses to both SARS and GFC toward economic recovery. In the case of SARS, there were preventive measures toward diseases but no reactive measures as the SARS virus was a new strain. For GFC, the policy measures were simply reactive as preventive measures failed to regulate the financial markets effectively. Our paper makes the case that the impacts of such extreme events are systemic as they affect all aspects of Singaporean society and that, moreover, the island nation is more vulnerable to these shocks than is currently acknowledged. Disaster management, economic crises, extreme events, global financial crisis, natural disaster, policy responses, severe acute respiratory syndrome, Singapore 01 2016 61 March 1640011 The Singapore Economic Review 1 19 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400117 SECK TAN Centre on Asia and Globalization, Lee Kuan Yew School of Public Policy, National University of Singapore, 469C Bukit Timah Road, Singapore 259772, Singapore ALLEN LAI YU-HUNG allen.lai@essec.edu #x2020;Institute of Health Economics and Management Asia-Pacific, ESSEC Business School, One North Gateway, Singapore 138502, Singapore
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article EZRA MISHAN, CONTRARIAN AND SAGE: AN APPRECIATION For many of us, the world is far too complicated to allow economic analysis to furnish a clear answer on an issue of policy. Ezra Mishan disagreed. For him, as for his teacher and mentor, Milton Friedman, economics was a system of reasoning that cried out to be used for that purpose - and especially so if prevailing orthodoxy was in error. Mishan was the first economist to attack the then universally held view that economic growth must be beneficial. Fifty years later, as we mourn his recent death, he is an inspiring and central figure in environmental economics, and an example of what can be done with practical welfare economics. Environmental economics, welfare economics 03 2016 61 June 1640012 The Singapore Economic Review 1 9 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400129 PETER SINCLAIR P.J.N.Sinclair@bham.ac.uk Department of Economics, University of Birmingham, Edgbaston, Birmingham, B15 2TT, UK
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article BOOK REVIEW: "Innovation Economics: The Race for Global Advantage" 05 2016 61 December 1680005 The Singapore Economic Review 1 2 http://www.worldscientific.com/doi/abs/10.1142/S0217590816800059 ELIZABETH WEBSTER emwebster@swin.edu.au Swinburne University of Technology, Australia
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article AN INTEGRATED METHODOLOGY FOR REGIONAL MACROECONOMIC LOSS ESTIMATION OF EARTHQUAKE: A CASE STUDY OF TEHRAN Rapid unmanaged growth of population and properties in metropolitan areas has increased the societal vulnerability to disasters. While the first step in disaster economic risk management is the quantification of economic losses, modeling unexpected events by equilibrium-oriented economic models which assume gradual and incremental changes over time and uniform spatial impacts poses analytical challenges. In this paper an integrated, operational methodology for evaluating the effects of earthquake on the economy based on the various types of losses and their relations is developed. A case study of Tehran shows future losses caused by studied earthquake scenarios will be more than 70% of gross regional product (GRP). Finally, a number of solutions for reducing negative impacts are introduced. Economic risk management, economic impacts, disasters economic losses, equilibrium-oriented macroeconomic models, input–output analysis, development studies 04 2016 61 September 1550025 The Singapore Economic Review 1 24 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500253 IMAN RAHIMI ALOUGHAREH Department of Civil Engineering, Science and Research Branch, Islamic Azad University, Tehran, Iran2Simon Bolivar Blvd, Ashrafi Isfahani Highway, Tehran, Iran MOHSEN GHAFORY ASHTIANY Department of Civil Engineering, Science and Research Branch, Islamic Azad University, Tehran, Iran2Simon Bolivar Blvd, Ashrafi Isfahani Highway, Tehran, Iran KIARASH NASSERASADI kiarash.n@gmail.com Department of Engineering, University of Zanjan, Zanjan, Iran
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article WELFARE-REDUCING GROWTH AND COST-BENEFIT ANALYSIS: ESSAY IN MEMORY OF E.J. MISHAN Mishan’s emphasis on the costs of economic growth half a century ago is becoming more important in this era of environmental concerns. More recently, another possible source of immiserizing growth is the one-child policy (recently relaxed) of China. This resulted in a biased sex-ratio and higher competition to earn incomes (to increase the probability of getting a wife), resulting in positive effects on GDP but negative effects on welfare. The implications of welfare-reducing growth for cost-benefit analysis and the legalization of prostitution are also discussed. Welfare-reducing growth, immiserizing growth, cost-benefits analysis, prostitution, polyandry 03 2016 61 June 1640013 The Singapore Economic Review 1 9 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400130 YEW-KWANG NG YKNg@ntu.edu.sg Nanyang Technological University, 14 Nanyang Drive, Singapore 637332, Singapore
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article CHINA’S EXCHANGE RATE SYSTEM REFORM: TWO POTENTIAL MISTAKES AND THE RECOMMENDED LONG-TERM SYSTEM Further to the author’s recommended transitory and medium-term exchange rate system reforms that was implemented in China since July 2005, this paper explains that: (1) a long-term reform towards a floating exchange rate system with free capital mobility will cause huge damages to the Chinese economy. It then proposes a long-term exchange rate system that would probably benefit China the most; and (2) there is a serious mistake in China’s latest exchange rate policy: The Chinese central bank has mistakenly allowed the renminbi exchange rate to rise with the strong rebound of the US dollar. This will cause not only a substantial drag in China’s export and GDP growth, but will also eventually make China’s financial and economic system vulnerable to a highly disruptive correction in the renminbi exchange rate. Exchange rate system, financial crisis, exchange rate crisis, asset bubble, China 02 2016 61 June 1640025 The Singapore Economic Review 1 40 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400257 PAUL S. L. YIP aslyip@ntu.edu.sg Economics Division, School of Humanities and Social Sciences, Nanyang Technological University, 14 Nanyang Drive, 637332, Singapore
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article Review of “Introduction to Numerical Simulation for Trade Theory and Policy” by John Gilbert and Edward Tower 05 2015 60 December 1580005 The Singapore Economic Review 1 3 http://www.worldscientific.com/doi/abs/10.1142/S0217590815800053 XIAOPING CHEN Division of Economics, Nanyang Technological University, Singapore
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article THE APPLICATION OF THE MINIMUM FOOD SECURITY QUOTA IN RESPONSE TO A POTENTIAL NATURAL DISASTER: THE CASE OF MALAYSIA Following the Minimum Food Security Quota (MFS-Quota) proposed by Ruiz Estrada (2010) to evaluate and determine the food sustainability of any given country in the event of any natural disaster, this paper sets out to apply the MFS-Quota to test Malaysia’s food storage and supply readiness for any potential natural disaster that may critically affect the socio-economic and political well-being of the country. The primary objective of the MFS-Quota is to calculate the approximate amount of annual food storage that any country needs in order to subsist through any potential natural disaster. As such, any country could build its own MFS-Quota based on its agriculture production system(s) and national food policy focus. Food security, economic development, Malaysia 01 2016 61 March 1640005 The Singapore Economic Review 1 19 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400051 MARIO ARTURO RUIZ ESTRADA Faculty of Economics and Administration (FEA), University of Malaya, 50603 Kuala Lumpur, Malaysia IBRAHIM NDOMA ibrahim.ndoma@yahoo.com Faculty of Economics and Administration (FEA), University of Malaya, 50603 Kuala Lumpur, Malaysia DONGHYUN PARK dpark@adb.org #x2020;Asian Development Bank (ADB), 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines
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article COST-BENEFIT ANALYSIS OF UNION MEMBERSHIP WITHOUT COLLECTIVE BARGAINING BENEFITS Traditional unions rely on collective bargaining benefits to attract workers to the union. A key ingredient of collective bargaining benefits is union wage premium which will force employers to retrench some workers. A macro-focused union differs from traditional union or micro-focused union in two ways. First, a macro-focused union will work together with the government and management to raise productivity and therefore shift the demand for labor curve upward. Second, the macro-focused union will want to maximize employment and therefore aim at competitive wage level for not only its members but non-union members too. Consequently, this may create a huge free ridership problem as workers may refuse to pay the member fee but still enjoy the club benefits. This paper focuses on a situation where a macro-focused labor union offers non-collective bargaining benefits through offering discount to a subset of consumption goods. However, individual workers’ preference is not publicly observed. The union leader may pay a certain survey fee to find out. Therefore, in the equilibrium, the union leader needs to weigh the benefits of larger union size against the costs of survey fee. Similarly, on the workers’ side, the tradeoff is the union member fee together with some psychology cost of being a union member against a discount on his favorable consumption goods. We develop a mathematical framework that incorporates all these elements above. We show both theoretically and quantitatively what determines the equilibrium union size and union leader’s survey decisions. Moreover, we also examine at the aggregate level, how the union workers’ and union leader’s welfare levels may respond to certain changes in economic fundamentals, such as preference shift and changes in survey fee, etc. Cost-benefit analysis, macro-focused union, quantitative equilibrium 03 2016 61 June 1640019 The Singapore Economic Review 1 14 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400191 SOON BENG CHEW ASBCHEW@ntu.edu.sg Nanyang Technological University, 50 Nanyang Avenue, Singapore, 639798, Singapore YANG TANG TANGYANG@ntu.edu.sg Nanyang Technological University, 50 Nanyang Avenue, Singapore, 639798, Singapore
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article CAN TOTAL DEREGULATION BE A BETTER OPTION THAN PARTIAL DEREGULATION? This paper examines entry deregulation in an industry where natural monopoly and potential competition are vertically related. We find that the upstream fixed cost plays an important role to affect the overall welfare comparison between total and partial deregulation. When the upstream fixed cost is sufficiently large, the number of downstream firms is limited in both situations; in other words, the duplication of downstream fixed costs is relatively irrelevant so that the double markup effect dominates. Consequently, the regulator can only replicate total deregulation to maximize social welfare in the event of partial deregulation. If it is the case, we suggest that total deregulation is superior to partial deregulation since the latter suffers more regulatory cost than that of the former. Upstream fixed cost, double markups, duplication of downstream fixed costs, average cost pricing 04 2016 61 September 1550044 The Singapore Economic Review 1 16 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500447 CHI-CHIH LIN cadylin@mail.fgu.edu.tw Department of Applied Economics, Fo Guang University, 160, Linwei Road, Jiaosi, Yilan County 26247, Taiwan
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article RONALD MCKINNON’S CONTRIBUTIONS TO ECONOMICS Ronald McKinnon contributed crucially to our knowledge of the key role of savings, investment and financial intermedication in economic growth. Financial repression by governemt spending on consumption and repressed interest rates leads to low savings which finances investment, thus slowing growth. This is Ron’s message even today. He has castigated the U.S. monetary authorities for falling into a “policy trap” of repressing interest rates, presumably to foster investment and growth. In fact, Ron points out that zero rates deter savings and thus punish both investment and growth. Savings, investment, financial repression 02 2016 61 June 1640024 The Singapore Economic Review 1 9 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400245 MICHAEL CONNOLLY mconnoll@bus.miami.edu School of Business Administration, University of Miami, USA
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article RISING OR FALLING INEQUALITY IN KOREA? POPULATION AGING AND GENERATIONAL TRENDS Using 30 years of the South Korean household income and expenditure surveys (HIES) from 1982 to 2011, this paper argues that Korea experienced significantly differing generational trends in consumption and income inequality when taking demographic changes related to population aging into account. While income inequality stagnated or slightly rose over the past two generations, consumption inequality in fact declined. These antagonistic trends are likely due to better access of poorer households to financial markets as well as the gradual expansion of the welfare state. In the absence of appropriate policies, rapid population aging will substantially increase overall inequality in the future. Consumption inequality, income inequality, cohort analysis, population aging, generational trends 05 2016 61 December 1550089 The Singapore Economic Review 1 26 http://www.worldscientific.com/doi/abs/10.1142/S0217590815500897 SUNG-JIN KANG sjkang@korea.ac.kr Department of Economics, Korea University, Seoul, South Korea ROBERT RUDOLF #x2020;Division of International Studies, Korea University, 145 Anam-ro, Seongbuk-gu, Seoul 136-701, South Korea
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article REFERENCE DEPENDENCE AND OTHER BEHAVIORAL FINDINGS: THE LIKELIHOOD OF SERIOUS EVALUATION AND POLICY BIASES Standard economic theory correctly prescribes willingnes-to-pay (WTP) to most accurately assess the welfare change of gains and WTA to measure the welfare change of losses, and, in recognition of reference dependence, reductions of losses. However, its additional assumption of near equivalence between the measures, used to justify the current practice of using WTP for essentially all analyses, has been contradicted by numerous empirical tests. For many areas, and especially environmental quality and health and safety, this institutionally encouraged continuing reliance on presumption over evidence likely leads to serious bias in benefit-cost and related analyses and distortions in policy guidance. Reference Dependence, Willing-to-Pay, Willing-to-Accept 03 2016 61 June 1640014 The Singapore Economic Review 1 11 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400142 JACK L. KNETSCH knetsch@sfu.ca Department of Economics, Simon Fraser University, Burnaby, British Columbia, Canada V5A 1S6, Canada
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article ANOTHER LOOK AT PRICE INSTABILITY AND CONSUMER WELL-BEING: NONDURABLE AND DURABLE (HOUSING) MARKETS We explore the implications of future price uncertainty, although in a different setting from McKinnon (1967). We identify a further, hitherto-overlooked mechanism that can overturn the well-known ‘Waugh paradox’ that risk-averse consumers benefit from price instability, and show that it also has a particularly interesting application to the housing tenure choice issue. Price instability, housing tenure choice, consumer well-being 02 2016 61 June 1640022 The Singapore Economic Review 1 9 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400221 BASANT K. KAPUR ecskapur@nus.edu.sg Department of Economics, National University of Singapore, Singapore 117570, Singapore
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article PUBLIC PROVISION OF PRIVATE GOODS IN DEVELOPING COUNTRIES In this paper, we characterize optimal redistributive taxes and subsidies on a discrete good which is available in different qualities. We assume that utility function of each consumer is such that his willingness-to-pay for quality increases with income. This separates the rich and the poor through the quality levels of the good actually purchased by them and allows the government to tax the rich and subsidize the poor. It is shown that the deadweight loss associated with the optimal policy may be zero. The notion of a consumer equilibrium introduced in the paper suggests a method for estimating the quality of a good as perceived by the consumers. Self-selection, discrete goods, product quality, redistribution, deadweight loss 03 2016 61 June 1640016 The Singapore Economic Review 1 13 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400166 PARKASH CHANDER pchander@jgu.edu.in Jindal School of Government and Public Policy, Haryana 131001, India
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article THE IMPACT OF NATURAL DISASTERS ON MANUFACTURING: PLANT-LEVEL ANALYSIS FOR THE GREAT HANSHIN-AWAJI EARTHQUAKE This paper investigates the impact of the Great Hanshin-Awaji earthquake on plant input, output, total factor productivity (TFP) and exit using Japanese plant-level manufacturing data. We employ the difference-in-differences (DID) estimation method to identify the effects of the quake and find that the quake had an impact on manufacturing. The results suggest that production was influenced by the quake, particularly in the first year after the quake. Furthermore, the quake did not influence manufacturing industries uniformly. The effects are different based on specifications, variables, and industries. However, the quake had little impact on the exit of plants. Natural disasters, earthquake, productivity, difference-in–differences 01 2016 61 March 1640010 The Singapore Economic Review 1 22 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400105 YUSUKE MATSUKI Faculty of Economics, Nagasaki University, 4–2–1 Katafuchi, Nagasaki 850–8506, Japan SHUNSUKE MANAGI Department of Urban and Environmental Engineering, Graduate School of Engineering, Kyushu University, 744 Motooka, Nishi–ku, Fukuoka 819–0395, Japan
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article SPILLOVER EFFECTS OF FOREIGN DIRECT INVESTMENT ON DOMESTIC MANUFACTURING FIRMS IN THAILAND This study investigates technological spillovers of foreign direct investment (FDI) in horizontal, upstream, and downstream industries on domestic manufacturing firms in Thailand, using firm level data from the 2012 industrial census conducted by the National Statistical Office. First, we measure total factor productivity (TFP) and estimate stochastic production frontier to find technical efficiency of firms. Next, we examine impacts of the FDI and other factors on the TFP and technical efficiency of domestic firms. The results provide no evidence on spillover effects of the FDI in horizontal industries on either the TFP or technical efficiency of domestic firms. While the FDI in upstream industries shows negative spillover effects, the FDI in downstream industries reveals positive and significant spillover effects on firms in all industry groups. Firm-specific characteristics such as age, size, availability of imported raw materials, location at industrial estates, and R&D activities all had positive effects on firms’ TFP and technical efficiency in total industries. Although export capability had a positive impact on total factor productivity and technical efficiency of domestic firms in the capital and technology-intensive industries, the effect was insignificant in the labor-intensive ones. The findings imply limited spillover effects of the FDI on domestic firms but highlight favorable effects of the openness policy (affecting availability of imported raw materials and exports), infrastructural investment (available in the industrial estates), and R&D activities. Incentives should be given to the FDI with vertical linkages with domestic input suppliers in order for local firms to gain the most from FDI technology transfers. Firm-level total factor productivity, technical efficiency, FDI spillover effects, manufacturing industries, Thailand 02 2016 61 June 1640028 The Singapore Economic Review 1 32 http://www.worldscientific.com/doi/abs/10.1142/S0217590816400282 PAITOON WIBOONCHUTIKULA Faculty of Economics, Chulalongkorn University, Bangkok, Thailand CHAYANON PHUCHAROEN psubusinessfinance@gmail.com Faculty of Economics, Chulalongkorn University, Bangkok, Thailand NUCHIT PRUEKTANAKUL nuchit.pr@gmail.com Faculty of Economics, Chulalongkorn University, Bangkok, Thailand