« Previous |
1 - 100 of 135
|
Next »
Number of results to display per page
Search Results
2. Technological Innovation and the Development of the Fuel Cell Electric Vehicle Industry Based on Patent Value Analysis
- Author:
- Yanfei Li, Jia Zhao, and Jianjun Yan
- Publication Date:
- 06-2023
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Currently, major economies are competing on the technological and industrial development of fuel cell electric vehicles (FCEVs). This paper discusses the relationship between the patent value of FCEVs and the commercialisation of this technology. First, the patent data of FCEVs are analysed, focusing on data of China, Germany, Japan, the Republic of Korea, and the United States. Then, the paper constructs the FCEV patent value index framework based on the technological value and economic value of patents. Finally, this paper conducts an empirical study to analyse the influence of patent value on the development of the FCEV industry. It is found that, under the current situation, individual patent value can significantly promote the development of the FCEV industry, whilst the gross patent value of a certain country even has a negative impact. In addition, the increase of hydrogen infrastructure, research and development expenditure, and market demand will significantly promote the development of the FCEV industry. The development level of related industries such as the battery electric vehicle industry and the reduction of environmental pollution are also significant drivers of the development of FCEVs.
- Topic:
- Development, Science and Technology, Innovation, Industry, and Electric Vehicles
- Political Geography:
- Asia
3. What Japanese Tourism Amenities are Influenced in Terms of Affecting Inbound Tourist Demand?
- Author:
- Yoko Konishi and Takashi Saito
- Publication Date:
- 08-2023
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Since 2012, the number of inbound tourists to Japan has increased every year, and new records of tourism-related economic indicators are being updated. On the other hand, the sudden inbound boom has led to a concentration of travel destinations, and over-tourism has become a problem. In this paper, we first statistically observe the concentration of tourists by accommodation type for each country of origin. Second, by identifying tourism amenities that contribute to inbound demand, we gain the knowledge necessary to shift demand from facilities with a high concentration of inbound tourists to facilities with lower occupancy. For the analysis, we utilised establishment data from the Online Travel Agency ‘Accommodation Travel Statistics Survey’ and data on tourism resources by region. The results show that the number of rooms, average price, membership of the hotel in a chain, internet availability, room type, number of World Heritage sites, and number of direct flights positively affect inbound demand. In particular, for ryokan (Japanese-style inns) with low occupancy rates and inbound guest ratios, their independence, internet availability, Western-style room availability, number of World Heritage sites, and hot spring facilities are effective in capturing demand.
- Topic:
- Economics, Tourism, Hospitality, and Travel
- Political Geography:
- Japan and Asia
4. The COVID-19 Pandemic and World Machinery Trade Network
- Author:
- Kozo Kiyota
- Publication Date:
- 08-2023
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- In light of the importance of the machinery trade in global trade, this study examines whether the patterns of machinery exports changed significantly after the COVID-19 pandemic. Frameworks of network analysis and structural break analysis are applied to monthly level bilateral export data from January 2016 to March 2022. The main findings are threefold. First, positive structural change is found in exports in major machinery-exporting countries. Second, negative structural change in centrality is found in Japan and some ASEAN Member States (AMS), which implies a decline in the relative importance of these countries in the global machinery network. Third, the decline in Japanese centrality was not caused by the decline in export values or number of destination countries. Rather, it is attributable to the decline in the centrality of Japan’s export destination countries such as AMS. Noting that Japan has a relatively strong trade relationship with AMS, these results together suggest that the negative shock of the pandemic spread throughout the supply chain, which led to the decline in the relative importance of some countries – such as Japan – in the global machinery trade network.
- Topic:
- Exports, Trade, ASEAN, and COVID-19
- Political Geography:
- Japan, Asia, and Southeast Asia
5. The Effects of the United States-China Trade War During the COVID-19 Pandemic on Global Supply Chains: Evidence from Viet Nam
- Author:
- Duc Anh Dang and Ngoc Anh Tran
- Publication Date:
- 08-2023
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- The trade war between the United States (US) and China has affected their bilateral trade as well as that with other countries. This study investigates how Vietnamese firms performed during the COVID-19 pandemic under the shadow of this trade war. The change in the log of Vietnamese exports to the US from 2017 to 2020 is used to measure the impact of the trade war, and the change in the log of Chinese exports to the US is then used as an instrument for the Vietnamese export change during the same period. It is found that firms that faced more trade war exposure increased their investment, profit, and value added, which may be due to the market exit of unproductive firms. Moreover, the trade war impact is more pronounced for large firms. Foreign-invested firms gained less from trade war exposure. The pandemic weakened the trade war effect on firm performances; however, it exacerbated the trade tension effect on foreign-trade firms.
- Topic:
- Bilateral Relations, Investment, Trade, and COVID-19
- Political Geography:
- China, Asia, North America, and United States of America
6. ASEAN Digital Community 2045
- Author:
- Lili Yan Ing, Yessi Vadila, Ivana Markus, and Livia Feliciani Nazara
- Publication Date:
- 11-2023
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Over the last decade, the Association of Southeast Asian Nations (ASEAN) has undergone significant development in digitalisation. The rapid digital transformation in ASEAN, however, has brought forth risks and challenges encompassing data security, cybersecurity, competition, and the digital divide. To effectively address these challenges and leverage the potential of the digital realm, ASEAN developed nine frameworks during 2016–2023. Yet, the focus is primarily on digital trade. We suggest that ASEAN embrace digital transformation by establishing the ASEAN Digital Community (ADC) 2045. This vision could provide guidance to Member States, enabling them to overcome regional challenges and unlock their digital potential. It is crucial for ASEAN to nurture digital development across the three key pillars: political-security, economic, and socio-cultural dimensions. The three pillars should be built on four fundamental elements: data governance, value-added enhancement, improved digital connectivity, and digital inclusivity. Through the establishment of ADC 2045, ASEAN could position itself as a significant player in the global digital economy while ensuring that digital transformation aligns with its sustainable and inclusive development agenda.
- Topic:
- Science and Technology, Investment, Innovation, Trade, ASEAN, Connectivity, and Competition
- Political Geography:
- East Asia, Asia, and Southeast Asia
7. New Dynamism in ASEAN and East Asia: The Role of the RCEP as a ‘Living’ Agreement
- Author:
- Shandre Mugan Thangavelu, Fukunari Kimura, and Dionisius Narjoko
- Publication Date:
- 12-2022
- Content Type:
- Policy Brief
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This policy brief highlights the importance of maintaining open regionalism and economic and regional integration for sustainable and inclusive regional and global growth in the Association of Southeast Asian Nations (ASEAN) and East Asia. With rising global uncertainties and global value chain (GVC) disruptions, the region requires a new economic and social agenda beyond trading arrangements, and the alignment of global, regional, and domestic policies and structural issues. The Regional Comprehensive Economic Partnership (RCEP) is expected to provide a new institutional framework under the built-in institutional feature (Chapter 18) of the agreement.
- Topic:
- International Trade and Finance, Regional Cooperation, Regionalism, and Global Value Chains
- Political Geography:
- Asia and ASEAN
8. Inclusive Education: Overcoming Barriers for Students with Disability in ASEAN
- Author:
- Rubeena Singh
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This policy brief highlights current practices in inclusive education in elementary and secondary schools at the regional level. Please refer to the complementary research paper for detailed information at the country level. Based on analysis of current practices, many countries are making a great effort to include students with disabilities; however, there are gaps in practice and variable understanding of the word ‘inclusion’. This brief provides a framework for action – specifically for schools, ministries, and the Association of Southeast Asian Nations (ASEAN) Member States – to implement the ASEAN Comprehensive Recovery Framework. This can help with an inclusive post-coronavirus disease (COVID-19) recovery, as well as address the United Nations Sustainable Development Goals.
- Topic:
- Education, Disability, Students, and Inclusion
- Political Geography:
- Asia and ASEAN
9. Mapping Innovation-Driven Entrepreneurial Ecosystems: An Overview
- Author:
- Alessandro Rosiello, Matjaz Vidmar, and Giulia Ajmone Marsan
- Publication Date:
- 05-2022
- Content Type:
- Policy Brief
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Innovation-driven entrepreneurship enables people and companies to pursue global opportunities based on innovative processes, products, or services. Studies show that innovation-driven entrepreneurial high-growth firms represent a small fraction (<10%) of all start-ups but create more than 50% of jobs and are more resilient during crises, including the recent coronavirus disease (COVID-19) pandemic. However, their growth depends on an entrepreneurial ecosystem surrounding them, including access to key markets, finance, networks, and human resources, especially new knowledge and education. To ensure the development of innovation-driven entrepreneurial activities, their geographical and sectoral distribution needs to be mapped, but indicators are lacking, especially for the Association of Southeast Asian Nations (ASEAN). New sources of data, including social media, offer a new way to expand these indicators, and we propose a new methodology to identify emerging places of innovation-driven entrepreneurship (E-PIE).
- Topic:
- Economics, Entrepreneurship, Business, and Innovation
- Political Geography:
- Asia and ASEAN
10. The Indo-Pacific Partnership and Digital Trade Rule Setting: Policy Proposals
- Author:
- Lurong Cheh
- Publication Date:
- 12-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- The idea of the Indo-Pacific was borne from a global trend that has (re)oriented the centre of the world’s economic gravity to the East. Accelerating digital transformation to harness gains from technology are in countries’ common interests. The launch of the Indo-Pacific Economic Framework for Prosperity tends to supplement economic benefits to the Indo-Pacific. Becoming more deeply involved in the digital economy will require Indo-Pacific members to commit to new international norms on digital trade, of which trade liberalisation of electronic transmissions, free flow of data with trust, cybersecurity, and intellectual property rights protection must be prioritised.
- Topic:
- Development, International Trade and Finance, Regional Cooperation, and Digital Economy
- Political Geography:
- Asia and Indo-Pacific
11. Women and Leadership in the ASEAN Digital Economy: Mapping the Rhetorical Landscape
- Author:
- Araba Sey and Sara Kingsley
- Publication Date:
- 12-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper assesses the nature of policy, media, and research representations of women’s inequality in digital leadership, reflecting on how clearly they define the issues, causes, solutions, and resource needs. Overall, women’s status in digital leadership receives patchy coverage in the media and insufficient depth of examination in academic and policy research. Existing rhetoric recognises women’s inequality as a serious problem in the ASEAN digital economy. However, the dimensions, causes, and solutions especially in terms of digital leadership are rarely clearly defined. There is a dominance of economic narratives to support the need for more women in digital leadership, which demonstrates a higher interest in women as an engine of economic growth than in equal representation as a matter of principle. A heavy dependence on global, European, or North American data highlights the need to improve the collection of gender-disaggregated data within the ASEAN economy.
- Topic:
- Women, Digital Economy, Feminism, and Gender
- Political Geography:
- Asia and ASEAN
12. Gender Security and Safety in the ASEAN Digital Economy
- Author:
- Araba Sey
- Publication Date:
- 12-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Gender-based cyber violence inhibits progress towards gender digital equality by discouraging women from participating in the digital economy. From the magnitude of the problem to its economic and social impacts, much remains to be understood about how women experience safety and security in the Association of Southeast Asian Nations (ASEAN) digital economy. Drawing on academic and grey literature, this paper reflects on the implications of gender-based cyber violence for digital equality and economic development. Overall, data are lacking on the prevalence, economic costs, and social impacts of gender-based cyber violence within ASEAN. Policy tends to focus more on measuring domestic and intimate partner violence, likely due to its designation as the main indicator for Sustainable Development Goal 5. Although a variety of national, regional, and global frameworks exist to address different dimensions of violence against women, cybersecurity, and workplace harassment, more work is needed to identify the scale and scope of gender-based cyber violence in the region, in order to target policy appropriately.
- Topic:
- Security, Women, Digital Economy, and Gender
- Political Geography:
- Asia and ASEAN
13. Global Value Chain Participation and Labour Productivity in Manufacturing Firms in Viet Nam: Firm-Level Panel Analysis
- Author:
- Upalat Korwatanasakul and Tran Thi Hue
- Publication Date:
- 10-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This study describes the status of global value chains (GVCs) in Viet Nam and examines the roles of GVC participation and technology in enhancing labour productivity in manufacturing firms. The estimation method is a panel fixed-effect regression employing unique firm-level data matching the Vietnam Technology and Competitiveness Survey and Vietnam Enterprise Survey, 2009–2018. The findings show the positive effect of backward GVC participation when considering firm GVC participation status (i.e. whether they engage with backward linkages). However, when accounting for GVC participation degree (i.e. GVC participation index), the results show a stark contrast, revealing the negative effect of backward GVC participation on labour productivity. The results, therefore, partly reject the learning-to-learn hypothesis. On the other hand, regardless of GVC indicators, forward GVC participation positively impacts labour productivity, confirming the views of learning-by-exporting and learning-by-supplying. The findings also suggest the significance of research and development, digital technology, and foreign investment in enhancing labour productivity. Therefore, policies promoting forward GVC participation should be the priority, while policies to promote backward GVC participation should be well designed and accompanied by policies that ensure technology transfer and domestic technology development to avoid the trap of a subordinate role.
- Topic:
- Labor Policies, Manufacturing, Industry, Global Value Chains, and Labor Market
- Political Geography:
- Asia and Vietnam
14. Japan and the Regional Comprehensive Economic Partnership (RCEP)
- Author:
- Mie Oba
- Publication Date:
- 10-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper aims to clarify the role of Japan in the process leading up to the establishment of the Regional Comprehensive Economic Partnership (RCEP). While emphasising that respect for the centrality of the Association of Southeast Asian Nations (ASEAN) was a principle of RCEP, Japan played a leading role in the process of RCEP negotiations. For Japan, RCEP is one of the fruits of its strategy in East Asia/Asia-Pacific that began the mid-1990s to protect and increase the interests and advantages of Japanese business and retain Japan’s political leverage in the region. When substantial negotiations for RCEP began in 2013, its importance for Japan was secondary to other free trade agreements (FTAs) including the Trans-Pacific Partnership, China–Japan–Korea FTA, and Japan–European Union FTA. However, the Government of Japan and the business community had set a lot of economic and strategic goals in promoting RCEP. After the withdrawal of the United States (US) from the Trans-Pacific Partnership, RCEP was seen as an essential framework for establishing a rules-based regional order in the Indo-Pacific region. Although it was after India’s withdrawal from the RCEP negotiations, Japan further emphasised the importance of RCEP as the measure to sustain and foster the rule-based regional order and simultaneously pursued the conclusion of negotiations and the establishment of high-level rules, achieving some success. Ultimately, the havoc brought about by the coronavirus disease (COVID-19) pandemic and the sense of crisis in the traditional liberal international order caused by the intensifying strategic competition between the US and China, drove the conclusion of RCEP. RCEP will be increasingly important for economic order in Japan and Asia in the coming years. Ironically, as the strategic competition between the US and China escalates and leads to a surge in protectionism, the economic and strategic importance of RCEP – an FTA that incorporates China – is becoming more significant as a measure to counter unilateralism and protectionism. In addition, RCEP needs elements that address globalisation’s adverse effects and pitfalls, in areas such as the environment, labour rights, and a reduction in the disparity between the rich and poor.
- Topic:
- Development, Economics, International Trade and Finance, and Regional Cooperation
- Political Geography:
- Japan and Asia
15. RCEP Services Liberalisation: Key Features and Implications
- Author:
- Ramonette B. Serafica and Intan Murnira Ramli
- Publication Date:
- 10-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- The Trade in Services Chapter of the RCEP Agreement establishes the rules for the progressive liberalisation of trade in the region and sets out regulatory disciplines to mitigate barriers to competition. Considered the most significant feature of the RCEP agreement compared to other FTAs of ASEAN is the scheduling of market access commitments using the negative list approach. Thus, an immediate challenge for members that initially adopted the positive list is the transition to the negative list scheduling approach. Furthermore, members will need to implement competitive and robust regulations in liberalising services. Developing countries, especially LDCs, might also face capacity constraints to fully take advantage of the market access given by the RCEP partners.
- Topic:
- International Trade and Finance, Regional Cooperation, Liberalism, and Progressivism
- Political Geography:
- Asia and ASEAN
16. International Production Network in the Next Generation and the Role of RCEP
- Author:
- Mitsuyo Ando, Fukunari Kimura, and Kenta Yamanouchi
- Publication Date:
- 10-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper attempts to discuss the potential role of RCEP from the perspective of two kinds of international division of labor, i.e., machinery international production networks (IPNs) and digital-related services trade. To consider the possible contribution of RCEP to the widening and deepening of IPNs, we first provide an overview of machinery IPNs in ASEAN and East Asia by employing international trade data, a value-added based index for global value chain (GVC) activities using international input–output tables, and a gravity equation exercise. Then, we focus on trade in two global innovator services – information and communication technology (ICT) services and other business services exports – to foresee the future of the new international division of labour and highlights some policy issues. RCEP should be an evolving, living one. In terms of liberalisation and facilitation as well as international rule-making, which cover the whole region, RCEP is expected to revise and upgrade the contents to support the dynamic international division of labour in East Asia. At the same time, RCEP may play an important role in reducing policy risks due to ad hoc trade policies based on political intension and defending the rules-based trading regime for the regional economy.
- Topic:
- Economics, International Trade and Finance, Labor Issues, and Digital Economy
- Political Geography:
- Asia and ASEAN
17. Potential Impact of RCEP and Structural Transformation on Cambodia
- Author:
- Shandre Mugan Thangavelu and Vutha Hing
- Publication Date:
- 10-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper examines the potential impact of the Regional Comprehensive Economic Partnership (RCEP) on the Cambodian economy in terms of trade, output growth, and employment. It also provides quantitative (structural gravity model estimation and simulation) and qualitative trade policy evaluation in terms of exports, output, and the structural transformation of the economy in global and regional value chains. The results highlight the importance of RCEP for the pandemic and post-pandemic recovery and the structural transformation of the Cambodian economy. The paper also provides key policy recommendations to fully maximise the benefits of RCEP for Cambodia for inclusive and sustainable growth.
- Topic:
- Economics, International Trade and Finance, Regional Cooperation, and Global Value Chains
- Political Geography:
- Asia and Cambodia
18. The Implications of the Regional Comprehensive Economic Partnership (RCEP) for Asian Regional Architecture
- Author:
- Shiro Armstrong and Peter Drysdale
- Publication Date:
- 10-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- East Asia’s Regional Comprehensive Economic Partnership (RCEP) came into force in 2022 as the world’s largest free trade agreement. RCEP was concluded, signed and brought into force in the face of major international uncertainty and is a significant boost to the global trading system. RCEP brings Australia, China, Japan, South Korea and New Zealand into the same agreement with the ten member ASEAN group at its centre. It keeps markets open and updates trade and investment rules in East Asia, a major centre of global economic activity, at a time of rising protectionism when the WTO itself is under threat. The agreement builds on ASEAN’s free trade agreements and strengthens ASEAN centrality. One of the pillars of RCEP is an economic cooperation agenda which has its antecedents in ASEAN’s approach to bringing along its least developed members and builds on the experience of capacity building in APEC and technical cooperation under the ASEAN Australia-New Zealand Free Trade Agreement. There is an opportunity to create a framework that facilitates deeper economic cooperation that involves experience-sharing, extending RCEP’s rules and membership at the same time as strengthening political cooperation. The paper suggests some areas that might be best suited to cooperation — that is confidence and trust building instead of or before negotiation — and discusses how non-members such as India may be engaged and the membership expanded. Options such as multilateralising provisions and becoming a platform for policy convergence and coordinating unilateral reforms are canvassed.
- Topic:
- Economics, International Trade and Finance, Regional Cooperation, and Architecture
- Political Geography:
- Asia and ASEAN
19. Restrictiveness of RCEP Rules of Origin: Implications for Global Value Chains in East Asia
- Author:
- Archanun Kohpaiboon and Juthatip Jongwanich
- Publication Date:
- 10-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This chapter aims to examine the restrictiveness of rules of origin (RoO) in the Regional Comprehensive Economic Partnership (RCEP) and other key multilateral free trade agreements (FTAs) in East Asia with a view to facilitating the operations of existing global value chains (GVCs). The analysis begins with dissecting PSRs in the RoO Chapter in these FTAs and quantifying them. The key finding is that product-specific rules in RCEP are the most flexible compared to the other multilateral FTAs and more facilitative to GVC operations. This is driven by RCEP-specific features, such as high intra-member trade and the member coverage. The main policy inference is that a full cumulation clause is needed in RCEP to allow a regional value content alternative to be in full effect. Harmonisation in RoO provision across these multilateral FTAs remains a challenge for ongoing negotiation. Monitoring the dynamics of RoO as well as the FTA utilisation is needed so that these multilateral FTAs could be a true stepping stone for trade liberalisation in the broader World Trade Organization multilateral trading system.
- Topic:
- Economics, International Trade and Finance, Regional Cooperation, and Global Value Chains
- Political Geography:
- Asia and ASEAN
20. Centrality and Community: ASEAN in the Regional Comprehensive Economic Partnership
- Author:
- Soo Yeon Kim
- Publication Date:
- 09-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper examines the Association of Southeast Asian Nations’ (ASEAN) role in the formation of the Regional Comprehensive Economic Partnership (RCEP) agreement. The RCEP project proceeded as trade governance has shifted from the multilateral trade regime under the World Trade Organization to free trade agreements and where the geopolitics of Asia has cast a shadow on the progress of regional integration efforts. The analysis in this paper focuses on ASEAN centrality, both as a concept and practice, in influencing the launch and progress of RCEP. Conceptually, ASEAN centrality is about the capacity of the 10-member group to help launch negotiations for the RCEP agreement and to shape its provisions for governing trade. In practice, the RCEP agreement consolidates and significantly unravels the numerous overlapping trade agreements between ASEAN, 38 in all between individual ASEAN members and its five RCEP partners, Australia, China, Japan, the Republic of Korea, and New Zealand. The paper also examines the relationship between the ASEAN Economic Community (AEC) and RCEP. RCEP provides for further tariff liberalisation between ASEAN members and its five RCEP partners and thus expands the zone of preferential treatment for goods exported from ASEAN and other RCEP members. RCEP also consolidates rules of origin requirements under one agreement, providing for diagonal cumulation and common rules of cumulation for agreement partners. The RCEP provisions can greatly facilitate production and trade along regional supply chains, thus accelerating the progress of the AEC as a single market and production base. Moving forwards, RCEP and ASEAN’s place in it, is likely to be shaped by challenges and opportunities from the Comprehensive and Progressive Transpacific Partnership and the Biden administration’s Indo-Pacific Economic Framework (IPEF) initiative. The ASEAN members with overlapping membership in the IPEF and RCEP will be pivotal in determining areas of cooperation. Regional integration will thus continue to be shaped by ASEAN centrality, and its progress will shape the ASEAN community.
- Topic:
- Diplomacy, Economics, International Trade and Finance, and Regional Cooperation
- Political Geography:
- Asia and ASEAN
21. Regional Comprehensive Economic Partnership: Economic Backgrounds of ASEAN and Its Dialogue Partners
- Author:
- Keita Oikawa, Fusanori Iwasaki, and Shujiro Urata
- Publication Date:
- 09-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- We overview the economic backgrounds of the countries participating in the Regional Comprehensive Economic Partnership (RCEP) negotiations and two Association of Southeast Asian Nations (ASEAN) Dialogue Partners – the United States (US) and the European Union (EU) – to understand their economic relationships before the signing of the RCEP and their economic interests in the RCEP. We discover that the 16 countries participating in RCEP negotiations vary in terms of economic size, income level, growth pattern, share of trade in the economy, and foreign direct investment (FDI) flows. Additionally, both lower- and higher-income ASEAN Member States (AMS) have received a large amount of FDI, in contrast to Japan and the Republic of Korea (henceforth, Korea), which have seen more FDI outflows from their countries than inflows. In terms of bilateral FDI inflows and outflows, as a centre for regional FDI, Singapore attracts FDI from developed countries (including the US and the EU) and reinvests it in India and other AMS. As an FDI hub, Singapore promotes liberalised regional markets to attract advanced country investors. By examining bilateral trade relationships, we find that as the centre of manufacturing in the world, ASEAN and China have participated in international production networks that also include Japan and Korea since 2000. Japan and Korea have maintained competitiveness in intermediate goods in the region’s production networks, while China notably exports final products to the US and the EU. Amongst the 16 countries participating in RCEP negotiations, India has not had a significant presence in the production networks. Indeed, India has expanded its bilateral trade deficit with China, which probably caused India to withdraw from RCEP negotiations to protect its manufacturing industry. Simulation results of the impacts of the RCEP, using a computable general equilibrium (CGE) model (Global Trade Analysis Project model), show that the countries participating in RCEP negotiations – particularly the less developed AMS – would gain greatly from lowering services trade costs and investment liberalisation. India would also gain significantly from the RCEP. In contrast, countries not participating in RCEP negotiations (the US and the EU) would experience small negative impacts of the RCEP through trade diversion effects.
- Topic:
- Diplomacy, Economics, International Trade and Finance, and Regional Cooperation
- Political Geography:
- Asia and ASEAN
22. Regional Comprehensive Economic Partnership, ASEAN’s Agency, and the Role of ASEAN Members in Shaping the Regional Economic Order
- Author:
- Huong Le Thu
- Publication Date:
- 09-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- The Regional Comprehensive Economic Partnership (RCEP) – a mega free trade agreement comprising 15 countries – the 10 Association of Southeast Asian Nations (ASEAN) Member States and the dialogue partners (China, Japan, the Republic of Korea, Australia, and New Zealand) was finalised in November 2020. This paper looks at the process of the RCEP negotiations as an example of an ASEAN exercising agency. This paper also argues that RCEP asserts the agency of smaller powers within the trade network – ASEAN and its member states – particularly the more active role of individual members, including Viet Nam and Singapore amongst the most diplomatically supportive of the deal. The circumstances under which RCEP came to life is not trivial. Under Viet Nam’s ASEAN chair in 2020, and amidst the global pandemic, RCEP was finalised. RCEP’s political and geo-economic significance arguably can overtake its economic role. In the time of great power competition where China becomes one of the key economic centres of the world, and the United States (US) competes with a vision of Indo-Pacific, the region’s middle and smaller powers are anxious about becoming ‘collateral damage’, particularly in the process of US–China ‘decoupling’. The ASEAN countries have emphasised the reluctance to ‘choose a side’. RCEP shows that they can show agency in carrying out trade liberalisation at the time when the global leader of the US in this field is missing. A mega-trade deal can be successfully led by smaller, and even developing, economies.
- Topic:
- Economics, Regional Cooperation, Social Order, and Strategic Interests
- Political Geography:
- Asia and ASEAN
23. Trade Facilitation in RCEP Countries
- Author:
- Weixiang Wang and Shandre Mugan Thangavelu
- Publication Date:
- 09-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- The trade facilitation under the Regional Comprehensive Economic Partnership (RCEP) is critical for regional trade and economic cooperation amongst the 15 member countries. This chapter examines the trade facilitation under RCEP using the available datasets on the trade facilitation index and compares the current trends in trade facilitation across RCEP countries in terms of four dimensions: the World Trade Organization’s Trade Facilitation Agreement, digital trade streamlining, ease of doing business, and trade logistics performance. The study finds that RCEP countries have improved significantly in trade facilitation measures, but they vary across the countries. For example, China should further enhance its performance in cross-border paperless trade, whilst the Association of Southeast Asian Nations countries should improve their performance in the documentary compliance of trade, the infrastructure of trade, and trade logistics performance.
- Topic:
- Economics, International Trade and Finance, Regional Cooperation, and Regionalism
- Political Geography:
- Asia and ASEAN
24. Opportunities and Challenges for ASEAN and East Asia from the Regional Comprehensive Economic Partnership on E-Commerce
- Author:
- Jane Kelsey
- Publication Date:
- 09-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- The Regional Comprehensive Economic Partnership (RCEP) is a microcosm of the current tensions in negotiations on digital trade involving parties that have divergent positions on the digital economy, data, and regulation, including within the Association of Southeast Asian Nations (ASEAN) itself. It adopts a prudent approach that recognises the state parties need flexibility and policy space at the national and regional levels to develop of policy and regulation in the rapidly changing digital ecosystem and seeks to advance their collective interests through dialogue and cooperation. This paper contrasts that approach with the disciplinary nature of binding legal obligations that are enforceable by other states and their investors, as in the Trans-Pacific Partnership Agreement and similar recent treaties. The analysis of key differences focuses on matters of particular importance to ASEAN, such as local content and government procurement, data rules and flexibilities, financial data, source codes, and transparency. RCEP’s cautious approach enables ASEAN members to deepen their national and regional understanding of the opportunities and challenges these agreements present, whilst developing and implementing their own digital development strategies. Yet those good efforts may be undermined through the binding and enforceable trade in services rules.
- Topic:
- Economics, Regional Cooperation, Digital Economy, and Economic Cooperation
- Political Geography:
- Asia and ASEAN
25. Traditional Services Trade in the Regional Comprehensive Economic Partnership
- Author:
- Zhang Yan and Shandre Mugan Thangavelu
- Publication Date:
- 09-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Traditional services trade (TST), including tourism and transport services, is the basic and key component of services trade in the Regional Comprehensive Economic Partnership (RCEP). The implementation of RCEP will provide a platform for further liberalisation in TST, thus effectively promoting the growth of the whole service trade and the development of the travel and transportation industry. In this paper we will first show the trade pattern of TST in RCEP. Then, the commitments by each RCEP member will be thoroughly analysed, and the Hoekman index will be constructed to measure the liberalisation levels for the RCEP members. In the last section, we outline some impacts of the COVID-19 pandemic on TST and propose policy implications for RCEP in the post pandemic era.
- Topic:
- Economics, Tourism, Services, and Transportation
- Political Geography:
- Asia and ASEAN
26. The Investment Chapter in the Regional Comprehensive Economic Partnership: Enhanced Rules without Enforcement Mechanism
- Author:
- Henry Gao
- Publication Date:
- 09-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper examines the legal rules in the investment chapter in the Regional Comprehensive Economic Partnership (RCEP). It starts with an overview and summary of the main provisions in the chapter, followed by an assessment of the rules by comparing established free trade agreements (FTAs), especially the Comprehensive and Progressive Trans-Pacific Partnership. In particular, it notes that the chapter, whilst largely following the established approaches to investment in other FTAs, also includes important twists to the common rules to favour the host states. The last part discusses the conspicuous absence of an investor–state dispute settlement mechanism, its pros and cons, and wider implications on regional integration, then concludes with some thoughts on future developments.
- Topic:
- Economics, Regional Cooperation, Economic Cooperation, and Strategic Interests
- Political Geography:
- Asia and ASEAN
27. How Preferential are RCEP Tariffs?
- Author:
- Kazunobu Hayakawa
- Publication Date:
- 09-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This study discusses the extent to which the tariffs provided in the Regional Comprehensive Economic Partnership (RCEP) are preferential. RCEP does not necessarily adopt a common concession rule in tariffs, and the speed and depth of tariff reduction/elimination also differ by country. We show that RCEP tariffs become the best choice in trading some specific products with some specific countries in some specific years. Furthermore, there are some specific cases where the use of RCEP tariffs becomes beneficial even if RCEP tariffs are not lower. Therefore, we demonstrate that RCEP tariffs are beneficial in specific types of supply chains. In short, this study aims to enhance our comprehensive understanding of how preferential RCEP tariffs are compared with other types of available tariffs.
- Topic:
- Diplomacy, Regional Cooperation, Tariffs, and Economic Cooperation
- Political Geography:
- Asia and ASEAN
28. The Regional Comprehensive Economic Partnership Agreement and Europe: Impact and Implications
- Author:
- Haans Gunther Hilpert
- Publication Date:
- 08-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- In the first 2 decades of the millennium, European Union (EU) trade policy underwent historic changes, amongst them an explicit pivot to Asia. Along with continued firm support of the rules-based World Trade Organization (WTO)-centred multilateral trading system, important new directions in the EU’s trade policy included a turn to competitive bilateralism, a strong focus on values, an ambition to protect and to promote European trade standards as well as the politicisation of trade policy. Asia’s outwards looking economic growth, the increasing trade interdependence in Asia as well as the various bilateral and multilateral trade agreements in the region, notably amongst them the Regional Comprehensive Economic Partnership (RCEP), attracted the EU’s attention, and have helped cause and drive these changes. There was no particular Asian influence on the EU’s own regionalisation, however. Meanwhile, trade and investment relations between Europe and Asia have intensified greatly over this period. But the EU has been slow and late to formulate a comprehensive strategy for the Indo-Pacific region. In spite of some notable successes, the EU’s trade policy remains fragmented with differentiated approaches for each trading partner. Opinions on the RCEP’s relevance and importance for Europe are divided. RCEP sceptics point to the overall shallow nature of the agreement. RCEP optimists emphasise the future potential of trade and investment integration within the newly established RCEP economic area and warn of the discriminatory effects for Europe’s economy and businesses. So, Europe’s business will have to invest in the new RCEP free trade zone to overcome trade diversion risks and to benefit from the RCEP market integration. More worrying from Europe’s perspective is RCEP’s potentially negative policy impacts: a relative loss in the EU’s trading power, the risk of Europe being sidelined in the make-up of future trade rules, and RCEP’s future impact on rules based multilateralism and the WTO. The EU has various trade policy options with regard to the Indo-Pacific trade area and RCEP in particular. The most promising options include the conclusion of free trade agreements with as many RCEP member countries as possible, with the Association of Southeast Asian Nations as a group (as a region-to-region agreement), with other trading partners (from the Indo-Pacific or from other world regions), or with the Comprehensive and Progressive Agreement for Transpacific Partnership area.
- Topic:
- Diplomacy, Economics, Regional Cooperation, and Economic Cooperation
- Political Geography:
- Asia and ASEAN
29. The Story of RCEP: History, Negotiations, Structure, and Future Directions
- Author:
- Aladdin D. Rillo, Anna Maria Rosario D. Robeniol, and Salvador Buban
- Publication Date:
- 08-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper is about the story of the Regional Comprehensive Economic Partnership (RCEP), including the history, dynamics of negotiations, and structure of this multilateral framework. Issues related to ASEAN centrality, sensitivities of negotiations, and other challenges are also highlighted and analysed. Nearly a decade in the making, RCEP represents a significant achievement for the region. As an ASEAN-led process, RCEP supports not only the region’s market integration but as well as ASEAN’s economic relations with the rest of the world, particularly with the 5 RCEP FTA Partners. Beyond the impact of RCEP in supporting the multilateral trading system, it is also intended to address the current challenges in the region, including the COVID-19 pandemic crisis. Thus, the narrative of RCEP provides a comprehensive overview of, and considers the potential implications for, trade in the region; for economic integration, and for the future of trade policy.
- Topic:
- Diplomacy, Economics, Regional Cooperation, Regionalism, and Economic Cooperation
- Political Geography:
- Asia and ASEAN
30. Comparison of the Regional Comprehensive Economic Partnership (RCEP) and Other Free Trade Agreements (FTAs)
- Author:
- Innwon Park
- Publication Date:
- 08-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This study evaluates the desirability of RCEP by comparing it with other mega-lateral FTAs. Evaluating the member-specific scale effects of the FTAs, we find that RCEP will generate significantly larger gains compared with the CPTPP. Evaluation of the provision-specific depth effects of RCEP suggests the possibility of positive gains but these gains may not be significant compared with those derived from the CPTPP. The existing CGE model analyses reveal that RCEP will generate greater gains than the CPTPP. RCEP will be more desirable for China, Japan, and the Republic of Korea and the estimated gains for ASEAN will notably increase as the model explicitly specifies the diagonal ROO cumulation scheme. Considering the sequence of implementing FTAs, we find that the CPTPP will generate greater gains for dual members, but the marginal gains enjoyed by RCEP members will not be substantial.
- Topic:
- Diplomacy, International Trade and Finance, Regional Cooperation, Free Trade, and Economic Cooperation
- Political Geography:
- Asia and ASEAN
31. The Post COVID-19 and RCEP: Pandemic Recovery in East Asia
- Author:
- Shandre Mugan Thangavelu, Shujiro Urata, and Dionisius Narjoko
- Publication Date:
- 08-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- The paper examines the impact of the Regional Comprehensive Economic Partnership (RCEP) on the COVID-19 pandemic recovery of the East Asian countries. Recent studies highlight the positive gains from the RCEP agreement for all 15 of its member countries (Itakura, 2022, Petri and Plummer, 2020; Park, 2022). However, the recovery will be not even across East Asia. The East Asian countries of China, Japan, and the Republic of Korea (CJK) are likely to have the largest gains, as these countries dominate the regional global value chain (GVC) activities. The ASEAN least developed countries of Cambodia, the Lao People’s Democratic Republic (Lao PDR), and Myanmar also experience positive gains from RCEP, but need to undertake deeper structural reforms to fully benefit from the agreement. The RCEP framework has elements that will be crucial for the post-pandemic recovery and regional transformation: (i) accelerating and enhancing GVC activities through the single rule-of-origin framework for the 15 RCEP member countries and CJK (China, Japan, and Korea) effects; (ii) services liberalisation and digital transformation in the key services trade of e-commerce, financial, professional, and telecommunications services; (iii) economic cooperation amongst the 15 RCEP member countries to address key contingency issues such as mass vaccination and health infrastructure, protocols for the movement of people, and trade capacity building for ASEAN least developed countries; and (iv) the ‘living’ nature of the RCEP agreement will be able to create a wider regional integration agenda to address key contemporary issues such as environment and climate change, skills development, green transformation, and developing digital and smart urban centres. ASEAN centrality, as highlighted by the RCEP framework, is critical for the post-pandemic recovery and structural transformation of the region.
- Topic:
- Regional Cooperation, Recovery, Pandemic, and COVID-19
- Political Geography:
- Asia and ASEAN
32. Australia’s Interests in East Asia’s Regional Comprehensive Economic Partnership
- Author:
- Shiro Armstrong
- Publication Date:
- 08-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- The Regional Comprehensive Economic Partnership (RCEP) agreement was seen as important for Australia economically and politically from its inception. RCEP economies account for roughly two-thirds of Australia’s total trade and being part of an Association of Southeast Asian Nations (ASEAN)-led initiative that progressed broader East Asian economic integration was consistent with the structure of Australia’s trade interests and with Australia’s support for the multilateral trading system. Australia has a track record of pursuing regional cooperation that supports multilateral trade and for supporting regional integration that is outward oriented. RCEP became more important economically, politically, and strategically throughout its negotiations. It furthered East Asian economic integration that avoided fragmentation but also to entrench the ASEAN Economic Community project. Concluding RCEP took on greater importance and urgency as a ballast against the rising protectionism globally in the latter half of 2010. The ASEAN–Australia–New Zealand Free Trade Area (AANZFTA) included an economic cooperation agenda focused on capacity building that was seen as a success for its members and shaped Australia’s approach and support towards economic cooperation being a pillar of RCEP. Negotiations for RCEP were chaired and led by Indonesia and ASEAN. Australia played a proactive role in pushing for high standards – credible market access commitments and new rules – in negotiations. Australia was one of the RCEP member countries that was also negotiating the Trans-Pacific Partnership (TPP) in parallel. The interest in the TPP was to keep the United States productively engaged in the region and to further rule-making and liberalisation amongst the TPP members. Having overlapping membership between the TPP and RCEP would mean that there was less chance of significant divergence or inconsistencies between them, although the approach differed. The deterioration of Australia’s economic and political relationship with China makes the RCEP framework potentially more important for facilitating the rebuilding of trust and confidence.
- Topic:
- Diplomacy, International Trade and Finance, Regional Cooperation, and Economic Cooperation
- Political Geography:
- Asia, Australia, and ASEAN
33. China and the Regional Comprehensive Economic Partnership: An Economic and Political Perspective
- Author:
- Zhang Yunling
- Publication Date:
- 08-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper studies China’s policies and participation in East Asian economic integration and cooperation. The progress of the Regional Comprehensive Economic Partnership (RCEP) is remarkable in the time when global as well as regional economies are facing so many challenges. China as the largest economy in East Asia plays a key role in sustaining regional dynamism. China is active and constructive in initiating the Association of Southeast Asian Nations (ASEAN+1) free trade agreements (FTAs) and an integrated framework of FTAs in East Asia. As RCEP was initiated by ASEAN and supported strongly by China it is essential to keep East Asian economic dynamism: the conclusion of the RCEP negotiations and the implementation has great effects. China’s gains from RCEP are not just economic, but also political. Whilst this paper focuses on economic gains for China, it also analyses the political gains for China, for example, against ‘decoupling’ and political division, which is harmful to East Asian integration and cooperation. The novel coronavirus disease (COVID-19) pandemic is still ongoing, so the timely enforcement of RCEP is important as it gives confidence to the region to keep the region open and to work together to make East Asia dynamic in facing the challenges. Some challenges for East Asia are (i) how to rebuild the supply chains that are either weakened or broken by the pandemic; (ii) how to overcome the new barriers created by government policies in the name of ‘national security’ both in trade and investment areas; and (iii) how to overcome the new divisions created by the United States’ policy under its comprehensive strategic competition with China that leads to the exclusive arrangements in East Asia. East Asian economic integration and cooperation are based on two basic principles: openness and inclusiveness. As a region with great diversity, it is crucial to provide opportunities for all parties with difference. China will continue its open policy and actively participate in multilateral and regional arrangements, and as the largest economy in East Asia it serves as a key pillar to be a centre of the global economy. China will take RCEP as an essential framework to enhance its interest and role in East Asia, as well as in the Asia-Pacific against a politically oriented Indo-Pacific initiative.
- Topic:
- Regional Cooperation, Geopolitics, Regionalism, and Economic Cooperation
- Political Geography:
- China, Asia, and ASEAN
34. Heyday of Asian Regionalism? The Implications of the Regional Comprehensive Economic Partnership for the United States
- Author:
- Mireya Solís
- Publication Date:
- 08-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper analyses the implications of the entry into force of the Regional Comprehensive Economic Partnership (RCEP) for the United States (US). Traditionally, trade policy has been central to the United States’ aim to position itself as a Pacific power and architect of the evolving regional economic architecture. Over the years, however, US trade strategy has evolved in distinct ways: from an emphasis on bilateral trade negotiations and open regionalism (in the Asia-Pacific Economic Cooperation [APEC] forum) to the pursuit of a high-standard transregional trade agreement (in the Trans-Pacific Partnership [TPP]); and more recently under the Trump administration the pursuit of unilateralism and the resort to tariffs as a form of leverage vis-à-vis competitors (China) and partners (allies in Europe and Asia) alike. When the RCEP negotiations launched, there was little concern in US policymaking circles that the emerging trade grouping in Asia could be disadvantageous for the US given that the TPP project was an effective vehicle to advance the US vision for quality economic integration and to cement its position in the dynamic Asian region. However, the US withdrawal from the TPP and the successful conclusion of the RCEP talks (even with the absence of India) have changed that calculus. This paper identifies three main implications of RCEP for the United States at this juncture: growing marginalisation from intra-Asian trade, diminished rulemaking capabilities as alternative standards disseminate widely in the region, and lessened diplomatic clout as the United States struggles to incorporate trade liberalisation into its Asia policy. A fourth possible consequence – a renewed interest in joining the Comprehensive and Progressive for Trans-Pacific Partnership – has not materialised. Instead, the Biden administration is developing an Indo-Pacific Economic Framework that will not include market access negotiations but will focus instead on issues such as supply chain resilience, infrastructure, and the digital economy. The ability of the United States to offer a compelling plan of economic engagement with the region is in question, raising the spectre of marginalisation whilst Asian regionalism makes strides.
- Topic:
- Diplomacy, Regional Cooperation, Regionalism, and Economic Cooperation
- Political Geography:
- Asia, North America, United States of America, and ASEAN
35. Changes in Trade and Investment Policies in Thailand and the Implications for Medium-term Growth
- Author:
- Archanun Kohpaiboon and Juthatip Jongwanich
- Publication Date:
- 08-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- his paper addresses the noticeable changes in trade and investment policies in Thailand in the new millennium and assesses their impact. These changes began with trade policy changes from the World Trade Organization to free trade agreement (FTA)-induced liberalisation, followed by changes in investment policies, all of which are to boost firms’ productivity and medium-term growth. Our results suggest that the policy changes are yet to produce the output the government expects. The signed FTAs’ impact on trade has been limited so far and has occurred selectively on certain product lines, as did the FTA-induced direct investment. Similarly, changes in investment policies had the impact of enticing direct investment but this varied across investors’ nationalities. The impact on firm productivity is also limited and found only for investment promotion policies. Our analysis highlights the role of traditional tools, i.e. trade openness, research and development, and skills upgrading, in fostering firm productivity. Whilst FTAs and investment promotion could be used as a catalyst for firms to enhance productivity, other supporting factors are also needed.
- Topic:
- International Trade and Finance, Regional Cooperation, Investment, Free Trade, and Economic Cooperation
- Political Geography:
- Asia and ASEAN
36. What Determines Interfirm Trade Credit? Empirical Evidence from the ASEAN
- Author:
- Sasidaran Gopalan and Ketan Reddy
- Publication Date:
- 06-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper empirically examines the link between the heterogeneity of firms and their probability of obtaining interfirm trade credit in Asia, with a specific focus on the Association of Southeast Asian Nations (ASEAN) bloc of economies. In doing so, the paper investigates the following three issues: to what extent firm size plays a role in obtaining trade credit, to what degree a firm’s integration into global value chains affects its probability of obtaining trade credit, and the impact of agglomeration on firms’ likelihood of obtaining trade credit.
- Topic:
- International Trade and Finance, Trade, Global Value Chains, and Credit
- Political Geography:
- Asia and ASEAN
37. Prediction Errors of Macroeconomic Indicators and Economic Shocks for ASEAN Member States, 1990‒2021
- Author:
- Masahito Ambashi, Fusanori Iwasaki, and Keita Oikawa
- Publication Date:
- 05-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- In this study, economic shocks on six selected Association of Southeast Asian Nations (ASEAN) Member States (i.e. Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Viet Nam) are analysed in three dimensions: global, domestic, and uncertainty. Annual actual and prediction values from 1990–2021 macroeconomic indicators – from international organisations such as the Asian Development Bank – were collected, and macroeconomic shocks were calculated based on prediction errors (i.e. actual values minus prediction values). The first finding is that if prediction errors of the real gross domestic product (GDP) growth rates are negative, on average, the countries were significantly subjected to negative economic shocks that were not anticipated. Second, according to a correlation analysis of the actual values and prediction errors of real GDP growth rates, economic fluctuations and shocks are highly synchronised within the countries as well as with the world, as previous literature has indicated. Finally, by conducting regression analyses regarding the prediction error of real GDP growth rates separately for each country, (i) variations of the global real GDP growth rate are positively associated with countries’ economic shocks; (ii) the previous estimates have different quantitative significance amongst the countries; (iii) residual variations approximate country-specific, domestic shocks; and (iv) global and country-level uncertainty indices are correlated with negative economic shocks in some countries. Based on this dataset, the effect of the COVID-19 pandemic is also reviewed, and economic and historical backgrounds are examined that caused past economic shocks to these ASEAN Member States.
- Topic:
- Economics, Regional Cooperation, Macroeconomics, and Economic Cooperation
- Political Geography:
- Asia and ASEAN
38. COVID-19, Telework Patterns Within a City, and Changes in Urban Structure – Preliminary Findings
- Author:
- Ikumo Isono and Kazuhiro Nara
- Publication Date:
- 04-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- With the coronavirus disease (COVID-19, the spread of teleworking means that people do not necessarily have to live near their place of work. Will the role of cities change in this case? Teleworking patterns within a city matter. According to data from the Tokyo metropolitan area, people who live in a particular part of the city or work in the city centre are more likely to telework. Areas with a higher proportion of managers and professionals have higher rates of telework. Those who can telework may move from central Tokyo to other parts of the country, but the destination is mainly the outskirts of Tokyo. In the suburban areas, there was a positive correlation between the rate of increase in the number of migrants from the 23 wards of Tokyo and the teleworking rate. It is reasonable to assume that areas offering a good living environment are unevenly distributed, that the telework rate is high in these areas, and that the number of migrants is increasing in these areas. The government’s story that more people will move to rural areas as a result of widespread telework may not be so simple.
- Topic:
- Labor Policies, Pandemic, COVID-19, and Remote Work
- Political Geography:
- Japan and Asia
39. Entry Mode Choice and Performance of Foreign Direct Investment Firms in Emerging Economies: Micro-evidence from Viet Nam
- Author:
- Linh Bui, Huyen Hoang, and Hang Bui
- Publication Date:
- 03-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Does the right entry mode choice help foreign direct investment (FDI) firms to perform efficiently in emerging economies? This study attempts to answer this question by examining the impact of the entry mode choice made by FDI firms on their post-entry performance in emerging markets. Using a dataset derived from specific firms for the period 2002–2016, this study accounts for the selection biases and inherent differences of FDI firms that affect their selection of entry strategies. The study found that, with regard to the manufacturing sector, the ownership type with a wholly owned subsidiary (WOS) had negative impacts on either the technical efficiency or the total factor productivity (TFP) of firms. Conversely, regarding all sectors in the economy, the WOS is likely to have a positive role on technical efficiency and TFP. It is also interesting to see that for firms with an equity joint venture (EJV) type, the higher proportion of capital contribution from domestic firms might lead to lower technical efficiency and TFP. It implies that the higher degree of management and control by the domestic firms compared with foreign firms would have negative impacts on the EJV firms’ performance.
- Topic:
- Economics, Foreign Aid, Foreign Direct Investment, and Emerging Powers
- Political Geography:
- Asia and Vietnam
40. Projecting Infrastructure Needs and the Financing Mechanism: A Review of Estimations by ADB, McKinsey, and the OECD
- Author:
- Fauziah Zen and Michael Regan
- Publication Date:
- 03-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- How much does a country, a region, and the world need to spend on infrastructure development to fulfil demand? This question has been asked frequently because governments try to see it as a reference for budget allocation and evaluation of development progress. Since infrastructure consists of a wide range of types, qualities, and sizes, it is difficult to come up with a number that represents these variants. Several widely cited attempts have been made to provide estimations of infrastructure needs. This paper aims to assess the features, scope, methods, and suggested financing mechanism of the projections made by the Asian Development Bank (2017), the Organisation for Economic Co-operation and Development (2017), and the McKinsey Global Institute (2016). It is not meant to focus on the limitations of these projections, but to understand the process used to put these estimates together and the extent to which they provide comparative information.
- Topic:
- Development, Economics, Emerging Markets, and Infrastructure
- Political Geography:
- Asia and ASEAN
41. Implicit Subsidies for Infrastructure and Their Implications for Contingent Liabilities in Selected East Asian Countries
- Author:
- Astrid Dita and Sandy Maulana
- Publication Date:
- 03-2022
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- A government's investment decision for infrastructure development is a form of budget commitment which results in direct liabilities and possible contingent liabilities. The latter is often overlooked when the project preparation is weak where potential risks are insufficiently identified and mitigated and its impact on budget sustainability may worsen in the absence of sound surveillance. Infrastructure projects may thus lead to unmitigated fiscal risk without proper investment decision-making and monitoring framework particularly in the presence of less-than-mature fiscal systems and low public investment management capacity (e.g. as demonstrated by the inability to develop sound project business cases or distinguish project financing from funding issues).
- Topic:
- Development, Infrastructure, Governance, and Investment
- Political Geography:
- Asia and ASEAN
42. Gender Digital Equality Across ASEAN
- Author:
- Araba Sey
- Publication Date:
- 02-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper provides an overview of the participation of women in the digital economy across ASEAN. By using available data sources, it compares and analyses levels of women participation in digital economy related occupations and activities across different ASEAN Member States. Overall, the analysis shows that the gap between women and men is bigger with respect to more advanced metrics of access to the digital economy (including skills; entrepreneurship opportunities; access to science, technology, engineering, mathematics, and tech occupations) than for more basic access metrics. Access to digital economy related occupations and activities is particularly important for ASEAN, which is amongst the fastest growing digital economies in the world. The shift towards digital technologies during the coronavirus disease (COVID-19) pandemic is accelerating pre-pandemic trends and making it even more relevant to gain a better understanding of women participation in the digital economy. The paper concludes by providing an overview of policy initiatives in ASEAN Member States and details possible policy options.
- Topic:
- Gender Issues, Inequality, Digital Economy, Leadership, and Feminism
- Political Geography:
- Asia and Southeast Asia
43. The Link Between Global Value Chain Activity and Local Human Capital: Evidence from Indonesia’s Manufacturing Sector
- Author:
- Rashesh Shrestha and Deborah Winkler
- Publication Date:
- 02-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- For developing countries, participation in global value chains (GVCs) provides an opportunity to expand domestic human capital. Since GVC firms require qualified workers to meet high production standards, they have an incentive to invest directly in their workers’ skills or to raise the demand for skilled workers, which indirectly creates an incentive for workers to enrol in vocational education. This paper explores the relationship between GVC activity and workers’ skills in Indonesia. It combines National Labor Force Survey (SAKERNAS) data with the Large/Medium Industry Survey (IBS) to construct a pooled cross-sectional data set of Indonesian manufacturing workers which takes into account measures of GVC activity at the district-sector-year level. The findings suggest that higher GVC activity in a worker’s district-sector-year is linked to a higher likelihood of vocational education of individual workers. A separate panel data analysis at the district level confirms the positive relationship between GVC activity and human capital. Finally, the results indicate that the wage premium for vocational education is higher in districts with greater intensity of GVC activity.
- Topic:
- Development, Education, Training, Manufacturing, Industry, and Global Value Chains
- Political Geography:
- Indonesia, Asia, and Southeast Asia
44. Getting to Grade 10 in Viet Nam: Challenges from Deprivation, Discrimination, and a Booming Job Market
- Author:
- Ian Coxhead, Nguyen Vuong, and Phong Nguyen
- Publication Date:
- 02-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Viet Nam has enjoyed more than a generation of rapid economic growth, led by labour-intensive exports. This form and pace of growth has increased schooling opportunities, but has also reduced incentives for some students to advance to higher education. We hypothesise that these conflicting influences help explain another puzzle – the relatively slow growth of educational progression to upper secondary school. Slow and unevenly distributed increases in schooling attainment are warning signs for the sustainability of future aggregate growth and for the distribution of growth gains. We use a new data set on participation rates and scores in an exam to enter Grade 10, the first year of upper secondary school, to analyse the variation in test participation rates due to demand- and supply-side factors. The data are drawn from less advanced provinces within Viet Nam. As such, they shed light on the challenges of expanding educational development at the extensive margins of lower socio-economic status and higher grades, especially in areas with large ethnic minority populations.
- Topic:
- Labor Issues, Employment, Economic Growth, Training, and Job Creation
- Political Geography:
- Asia, Vietnam, and Southeast Asia
45. Birth Order, Sibling Sex Composition, and Quantity–Quality Trade-offs – Evidence from India
- Author:
- Ilke Onur and Malathi Velamuri
- Publication Date:
- 02-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- We use two waves of data from the India Human Development Survey to investigate the effect of family size on (i) parental expenditures on children’s education; and (ii) test scores of proficiency in reading, writing, and maths for 8–11-year-old children. We investigate whether these effects vary by gender, birth order of children, and sibling sex composition. We address the endogeneity of family size, using an instrumental variable approach. Our ordinary least squares estimates provide evidence of quantity–quality trade-offs in children’s educational expenditures, the existence of birth-order effects, and a sizeable pro-son bias. For test scores as well, ordinary least squares estimates indicate negative spillovers from additional children. The instrumental variable estimates, in contrast, find no evidence of quantity–quality trade-offs, birth order, or sibling sex composition effects in either expenditures or test scores. However, instrumental variable estimates of the male premium are bigger than ordinary least squares estimates. They also suggest that children enrolled in private schools do no better than those in government schools. Moreover, the advantage that boys appear to have over girls in maths is largely reversed in private schools.
- Topic:
- Education, Gender Issues, Children, and Family
- Political Geography:
- India and Asia
46. Fuelling the Engines of Liberation with Cleaner Cooking Fuel
- Author:
- Tushar Bharati, Yiwei Qian, and Jeonghwan Yun
- Publication Date:
- 02-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Using the staggered roll-out of the Indonesian Conversion to Liquefied Petroleum Gas (LPG) Programme, we show that a subsidy for the labour- and time-saving cooking technology increased female labour force participation. The programme also increased household consumption expenditure and the decision-making power of women in the household, especially in financial matters. A back-of-the-envelope calculation suggests that the benefits of switching to LPG far outweighed the costs to the households. Based on previous research, we conjecture that intra-household externalities and gender differences in preferences drive the low rates of adoption of cost-effective technology. The programme’s impact on the financial decision-making power of women suggests that subsidies which empower women, even if temporary, can encourage the adoption and sustained use of beneficial technology.
- Topic:
- Gender Issues, Science and Technology, Labor Issues, Women, and Family
- Political Geography:
- Indonesia, Asia, and Southeast Asia
47. Understanding Quality Energy-Related Infrastructure Development in the Mekong Subregion: Key Drivers and Policy Implications
- Author:
- Han Phoumin, Sopheak Meas, and Hatda Pich An
- Publication Date:
- 03-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Many players have supported infrastructure development in the Mekong Subregion, bridging the missing links in Southeast Asia. While the influx of energy-related infrastructure development investments to the region has improved the livelihoods of millions of people on the one hand, it has brought about a myriad of challenges to the wider region in guiding investments for quality infrastructure and for promoting a low-carbon economy, and energy access and affordability, on the other hand. Besides reviewing key regional initiatives for infrastructure investment and development, this paper examines energy demand and supply, and forecasts energy consumption in the subregion during 2017–2050 using energy modelling scenario analysis. The study found that to satisfy growing energy demand in the subregion, huge power generation infrastructure investment, estimated at around $190 billion–$220 billion, is necessary between 2017 and 2050 and that such an investment will need to be guided by appropriate policy. We argue that without redesigning energy policy towards high-quality energy infrastructure, it is very likely that the increasing use of coal upon which the region greatly depends will lead to the widespread construction of coal-fired power plants, which could result in increased greenhouse gas and carbon dioxide emissions.
- Topic:
- Development, Energy Policy, Infrastructure, Renewable Energy, and Carbon Emissions
- Political Geography:
- China, Asia, Vietnam, Burma, Cambodia, Thailand, Southeast Asia, Laos, and Myanmar
48. The Impact of COVID-19 on Global Production Networks: Evidence from Japanese Multinational Firms
- Author:
- Hongyong Zhang
- Publication Date:
- 03-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Using aggregate-level data on Japanese multinational corporations (MNCs) in major host countries and regions, this paper investigates the impact of COVID-19 on global production and supply chains with a focus on East Asia. I use the numbers of COVID-19 cases and deaths as measures of the impact of the pandemic. I find that the pandemic had substantial impacts on the performance (sales, employment, and investment) of Japanese MNCs and global supply chains (exports to Japan and exports to third countries) in Q1–Q3 2020. China recovered quickly in Q2 and grew in Q3, whilst the countries of the Association of Southeast Asian Nations and the rest of the world had still not fully recovered in Q3 2020. Importantly, lockdown and containment policies in host countries had large negative impacts on the sales and employment of Japanese MNCs. In contrast, I did not find positive effects of economic support policies on firm performance. Interestingly, whilst the firm expectations and business plans of Japanese MNCs were negatively affected by the COVID-19 pandemic, their business confidence increased with strong overall government policy responses in host countries in Q1 2020.
- Topic:
- Economic Development, Pandemic, COVID-19, and Production
- Political Geography:
- Japan and Asia
49. Demand and Supply Shocks of COVID-19 and International Production Networks: Evidence from Japan’s Machinery Trade
- Author:
- Mitsuyo Ando
- Publication Date:
- 03-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper investigated the impacts of COVID-19 on international production networks in machinery sectors by shedding light on negative supply shocks, negative demand shocks, and positive demand shocks. Specifically, we examined changes in trade in the periods of falling trade during the first wave of COVID-19 using Japan’s machinery trade at the most disaggregated level and decomposed them into two intensive margins, i.e. the quantity effect and the price effect, and two extensive margins, i.e. the entry effect and the exit effect. Our empirical results demonstrated that i) trade relationships for parts and components are robust, and international production networks are almost intact, so far; ii) the intensive margin, mostly the negative quantity effect, induces the largest negative effects in the transport equipment sector amongst four machinery sectors; iii) positive demand shocks for specific products that are related to teleworking, disinfection, and stay-home activities partially explain sectoral differences; iv) direct negative supply shocks from China, suggested by a negative quantity effect and a positive price effect, exist in February 2020, with possible indirect negative supply shocks and substitution of source countries; and v) negative demand shocks are confirmed from negative quantity and price effects in many cases. As of October 2020, Japan’s machinery trade seems to have largely recovered. If the COVID-19 pandemic lasts long, however, prolonged negative demand shocks would hurt production networks in East Asia.
- Topic:
- Demand, Manufacturing, Economic Development, Pandemic, Industry, COVID-19, and Supply
- Political Geography:
- Japan and Asia
50. Demand and Supply Shocks of COVID-19 and International Production Networks: Evidence from Japan’s Machinery Trade
- Author:
- Mitsuyo Ando
- Publication Date:
- 03-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper investigated the impacts of COVID-19 on international production networks in machinery sectors by shedding light on negative supply shocks, negative demand shocks, and positive demand shocks. Specifically, we examined changes in trade in the periods of falling trade during the first wave of COVID-19 using Japan’s machinery trade at the most disaggregated level and decomposed them into two intensive margins, i.e. the quantity effect and the price effect, and two extensive margins, i.e. the entry effect and the exit effect. Our empirical results demonstrated that i) trade relationships for parts and components are robust, and international production networks are almost intact, so far; ii) the intensive margin, mostly the negative quantity effect, induces the largest negative effects in the transport equipment sector amongst four machinery sectors; iii) positive demand shocks for specific products that are related to teleworking, disinfection, and stay-home activities partially explain sectoral differences; iv) direct negative supply shocks from China, suggested by a negative quantity effect and a positive price effect, exist in February 2020, with possible indirect negative supply shocks and substitution of source countries; and v) negative demand shocks are confirmed from negative quantity and price effects in many cases. As of October 2020, Japan’s machinery trade seems to have largely recovered. If the COVID-19 pandemic lasts long, however, prolonged negative demand shocks would hurt production networks in East Asia.
- Topic:
- Demand, Manufacturing, Economic Development, Pandemic, Industry, COVID-19, and Supply
- Political Geography:
- Japan and Asia
51. Demand and Supply Shocks of COVID-19 and International Production Networks: Evidence from Japan’s Machinery Trade
- Author:
- Mitsuyo Ando
- Publication Date:
- 03-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper investigated the impacts of COVID-19 on international production networks in machinery sectors by shedding light on negative supply shocks, negative demand shocks, and positive demand shocks. Specifically, we examined changes in trade in the periods of falling trade during the first wave of COVID-19 using Japan’s machinery trade at the most disaggregated level and decomposed them into two intensive margins, i.e. the quantity effect and the price effect, and two extensive margins, i.e. the entry effect and the exit effect. Our empirical results demonstrated that i) trade relationships for parts and components are robust, and international production networks are almost intact, so far; ii) the intensive margin, mostly the negative quantity effect, induces the largest negative effects in the transport equipment sector amongst four machinery sectors; iii) positive demand shocks for specific products that are related to teleworking, disinfection, and stay-home activities partially explain sectoral differences; iv) direct negative supply shocks from China, suggested by a negative quantity effect and a positive price effect, exist in February 2020, with possible indirect negative supply shocks and substitution of source countries; and v) negative demand shocks are confirmed from negative quantity and price effects in many cases. As of October 2020, Japan’s machinery trade seems to have largely recovered. If the COVID-19 pandemic lasts long, however, prolonged negative demand shocks would hurt production networks in East Asia.
- Topic:
- Demand, Manufacturing, Economic Development, Pandemic, Industry, COVID-19, and Supply
- Political Geography:
- Japan and Asia
52. The COVID-19 Pandemic and the World Trade Network
- Author:
- Kozo Kiyota
- Publication Date:
- 03-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Global trade is expected to suffer a significant contraction as a result of the COVID-19 pandemic. Did the relative importance of countries in the world trade network change as a result of the pandemic? The answer to this question is particularly important for Association of Southeast Asian Nations (ASEAN) countries because of their strong trade linkages with China, where the COVID-19 virus originated. This paper examines how the world trade network has changed since the COVID-19 pandemic, with a particular focus on ASEAN countries. Tracking the changes in centrality from January 2000 to June 2020, we find no evidence that centrality changed significantly after the pandemic started for most ASEAN countries. Our results suggest that the relative importance of the ASEAN countries in the world trade network is unchanged and will remain unchanged even after the pandemic.
- Topic:
- Globalization, International Trade and Finance, Pandemic, and COVID-19
- Political Geography:
- Asia and Southeast Asia
53. How Is the Asian Economy Recovering from the COVID-19 Pandemic? Evidence from the Emissions of Air Pollutants
- Author:
- Kazunobu Hayakawa
- Publication Date:
- 03-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This study empirically examines how economic and social activities in Asia were affected by the COVID-19 pandemic by using the emissions amounts of various air pollutants to represent those activities. Review of the emissions data suggests that from 2019 to 2020, the amount of emitted air pollutants decreased in most subnational regions in Asia. Data also show how economic and social activities have restarted in some regions; regression analyses are used to uncover the regions that restarted early. Regional characteristics are identified by employing a remotely sensed land cover dataset (i.e. ESALC) and OpenStreetMap. Results reveal that for Association of Southeast Asian Nations (ASEAN) members, economic and social activities in cropland, industrial estates, accommodations, restaurants, education, and public services still have not returned to normal.
- Topic:
- Environment, Economy, Pandemic, COVID-19, Air Pollution, and Economic Recovery
- Political Geography:
- Asia and Southeast Asia
54. The COVID-19 Pandemic, Air Transport Perturbation, and Sector Impacts in ASEAN Plus Five: A Multiregional Input–Output Inoperability Analysis
- Author:
- Tamat Sarmidi, Norlin Khalid, Sufian Jusoh, and Muhamad Rias K.V. Zainuddin
- Publication Date:
- 04-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This study simulates the sector impacts of demand-side perturbations on air transport sectors due to the COVID-19 pandemic, focusing on ASEAN members plus Australia, China, Japan, the Republic of Korea, and New Zealand. This study involves (i) the generation of a multiregional input–output table from the latest Global Trade Analysis Project data, (ii) a network analysis to determine the importance of the air transport industry in each country, (iii) multiplier and linkages analyses, (iv) determinations of sector impacts from demand-side perturbations on air transport sectors due to the COVID-19 pandemic, and (v) simulation of the effect of fiscal and monetary measures to mitigate the pandemic’s impact. This study demonstrates that the aviation industry is a key sector in domestic and regional economic activities, and the reduction in air transport consumer demand due to the pandemic is estimated to cause gross domestic product (GDP) reductions from 0.4% to 2.1%. Government intervention, through fiscal and monetary policies, has, however, mitigated severe impact, moderating GDP and value-added losses. Thus, a viable policy prescription for the aviation industry is of utmost importance.
- Topic:
- Globalization, International Trade and Finance, Pandemic, COVID-19, and Travel
- Political Geography:
- Asia and Southeast Asia
55. COVID-19 and Services Trade in ASEAN+6: Implications and Estimates from Structural Gravity
- Author:
- Anirudh Shingal
- Publication Date:
- 04-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Given the importance of services for economic activity in general and the salience of reducing service link costs for overcoming the economic and health challenges emanating from COVID-19, we examine the implications of the pandemic for services trade in the original group of ASEAN+6 countries that began negotiating the Regional Comprehensive Economic Partnership agreement. Our analysis reveals that with the exception of the Philippines and Viet Nam for services exports, and Cambodia and India for services imports, up to half of total services trade for all other sample countries could be adversely affected by the pandemic. In the absence of bilateral services trade data for 2020, we proxy the impact of COVID-19 on services trade using bilateral data on announced greenfield investment in services sectors from fDi Markets. Structural gravity estimates suggest that a 1% increase in COVID-19-related deaths in the source country may have reduced ASEAN+6 bilateral greenfield investment by US$0.15 million in 2020 relative to the corresponding value in 2019.
- Topic:
- Investment, Services, Pandemic, and COVID-19
- Political Geography:
- Asia and Southeast Asia
56. The Effect of the COVID-19 Pandemic on Global Production Sharing in East Asia
- Author:
- Archanun Kohpaiboon and Juthatip Jongwanich
- Publication Date:
- 04-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper examines the effect of the COVID-19 pandemic on global production sharing in ASEAN Member States. Product-level analysis – on hard disk drives, air conditioners, microwaves, televisions, washing machines, and automotive parts – is undertaken to examine trade patterns between January 2019 and October/November 2020. The key finding suggests that the pandemic caused parts shortages, but this effect has been short-lived. There is no strong evidence that multi-national enterprises have altered their supply chains or means of sourcing parts and components in response to the pandemic. There is some indication that multi-national enterprises are moving away from China, but whether this reflects a ‘COVID-19 effect’ or the trade war between the United States and China is not clear. COVID-19, a once-in-a-century event, may not alone be a compelling reason to restructure supply chain management relating to global production sharing, which has been a structural phenomenon driving economic globalisation.
- Topic:
- Globalization, Pandemic, COVID-19, Supply Chains, and Production
- Political Geography:
- East Asia, Asia, and Southeast Asia
57. COVID-19 and Socio-Economic Inequalities in Indonesia: A Subnational-level Analysis
- Author:
- Aloysius Gunadi Brata, Eusebius Pantja Pramudya, Esther Sri Astuti, Heffi Christya Rahayu, and Heronimus Heron
- Publication Date:
- 04-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This study examines if COVID-19 has worsened socio-economic inequalities across provinces in Indonesia, and if it has affected the spatial disparity in provincial-level socio-economic indicators. Secondary provincial-level data are used from BPS for March 2015 to March 2020. Results indicate that provinces with more COVID-19 cases tend to have increased inequality in urban areas, but inequality in rural areas decreases, as measured by the Gini Index. Also, provinces with many COVID-19 cases tend to have a decrease in their poverty headcount ratios. Thus, COVID-19 may have various implications on the spatial inequality of the Gini Index and poverty headcount ratio.
- Topic:
- Inequality, Pandemic, COVID-19, and Socioeconomics
- Political Geography:
- Indonesia, Asia, and Southeast Asia
58. Facilitating Trade in Pharmaceuticals: A Response to the COVID-19 Pandemic
- Author:
- Ben Shepherd
- Publication Date:
- 04-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper reviews trade in pharmaceutical products, focusing on ASEAN countries. Trade in this sector is of singular policy importance as a result of the COVID-19 pandemic. First, the paper shows that pharmaceuticals are traded within Global Value Chains, which in turn means that international linkages are complex. Second, the paper shows that policy reforms can help boost trade in the sector, which has important human development implications during the pandemic period.
- Topic:
- Globalization, International Trade and Finance, Pandemic, Global Value Chains, COVID-19, and Pharmaceuticals
- Political Geography:
- Asia and Southeast Asia
59. Could the COVID-19 Crisis Affect Remittances and Labour Supply in ASEAN Economies? Macroeconomic Conjectures Based on the SARS Epidemic
- Author:
- Alberto Posso
- Publication Date:
- 04-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Debates on resilience to economic shocks in the ASEAN region focus on what policymakers can do to mitigate negative impacts associated with financial-economic crises. The COVID-19 pandemic has made it clear that the region is also vulnerable to health-economic crises. This study applies a difference-in-difference strategy to data from the 2003 SARS epidemic to shed light on how a global pandemic can affect labour supply and remittances in ASEAN economies. Findings suggest that even a relatively short-lived epidemic can have long-lasting effects on labour supply.
- Topic:
- Economics, Labor Issues, Pandemic, COVID-19, and Supply
- Political Geography:
- Asia and Southeast Asia
60. Financial Market Responses to Government COVID-19 Pandemic Interventions: Empirical Evidence from South-East and East Asia
- Author:
- Hai Anh La and Riyana Miranti
- Publication Date:
- 04-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This study investigates the impact of various government interventions on the spread of COVID-19 as well as stock markets in South-East and East Asia. It finds that stricter interventions – including gathering restrictions, public event cancellations, and mask requirements – helped mitigate the severity of the pandemic significantly in the region. Total border closures had a moderate effect on flattening COVID-19 spread, especially during the onset of the pandemic. Other policies, such as school closures or stay-at-home orders, worked effectively later in the pandemic. The study also shows evidence of herding behaviours in regional stock markets during the pandemic. School closures, gathering restrictions, stay-at-home orders, domestic travelling bans, robust testing policies, and government income support programmes tended to reduce herding behaviour. More stock market integration is found during the onset of the pandemic, compared to the periods before and later in the pandemic, implying the short-term impact of a sudden shock from COVID-19.
- Topic:
- Governance, Financial Markets, Pandemic, COVID-19, Stock Markets, and Financial Development
- Political Geography:
- Asia and Southeast Asia
61. How ASEAN Can Improve Its Response to the Economic Crisis Generated by the COVID-19 Pandemic: Inputs drawn from a comparative analysis of the ASEAN and EU responses
- Author:
- Antonio Fanelli
- Publication Date:
- 05-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper conducts a comparative review of the evolution of the economic crisis generated by the coronavirus disease (COVID-19) pandemic and the responses enacted by the Association of Southeast Asian Nations (ASEAN) and the European Union. It highlights differences and common elements in the strategic approaches, the intensity of the interventions, and governance structures. In the final section, it identifies short- and medium-term actions, inspired by the comparative analysis, which could contribute to improve the ASEAN response.
- Topic:
- Regional Cooperation, Governance, European Union, Leadership, Pandemic, and COVID-19
- Political Geography:
- Europe, Asia, and Southeast Asia
62. East Asian Production Networks Amidst the COVID-19 Shock
- Author:
- Ayako Obashi
- Publication Date:
- 06-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- In the East Asian context, previous studies showed that trade occurring through production networks remained relatively steady amidst an economic shock and recovered faster and stronger once the shock was over. Using finely disaggregated product-level monthly bilateral trade data, we examine whether network trade in the East Asian region has been robust and resilient in face of the COVID-19 crisis, as well as in normal times, by conducting a series of survival analyses. We find a new set of empirical evidence suggesting the robustness of East Asian network trade in normal times and its resilience even amidst the COVID-19 shock.
- Topic:
- International Trade and Finance, Public Health, Pandemic, COVID-19, and Production
- Political Geography:
- East Asia, Asia, and Southeast Asia
63. A ‘She-session’? The Impact of COVID-19 on the Labour Market in Thailand
- Author:
- Sasiwimon W. Paweenawat and Lusi Liao
- Publication Date:
- 06-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper studies the impact of COVID-19 on different demographic groups in the Thai labour market using the Labour Force Survey in 2018 and 2019. We construct a new set of COVID-19 impact indicators capturing both the degree of risk in industries and degree of occupational flexibility in the Thai context. Our results show that the impact of the COVID-19 pandemic is highly unequal across demographic groups and it may further worsen the pre-existing inequality in the Thai labour market as a result of the composition of industrial sectors and occupations. The results suggest that education attainments and income levels play a significant role in protecting individuals from the current crisis, indicating the important contribution of human capital. In addition, marriage affects men and women differently in the COVID-19 crisis, with married women suffering more. Finally, our study highlights the need for government supports that target vulnerable groups, including workers with low education, informal workers, private employees, older women, and the young, who are more likely to be affected by COVID-19.
- Topic:
- Labor Issues, Governance, Employment, Pandemic, COVID-19, and Labor Market
- Political Geography:
- Asia, Thailand, and Southeast Asia
64. COVID-19 Tourism Recovery in the ASEAN and East Asia Region: Asymmetric Patterns and Implications
- Author:
- Stathis Polyzos, Anestis Fotiadis, and Aristedidis Samitas
- Publication Date:
- 06-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- The aim of this paper is to produce forecasts for tourism flows and tourism revenue for ASEAN and East Asian countries after the end of the COVID-19 pandemic. By implementing two different machine-learning methodologies (the Long Short Term Memory neural network and the Generalised Additive Model) and using different training data sets, we aim to forecast the recovery patterns for these data series for the first 12 months after the end of crisis. We thus produce a baseline forecast, based on the averages of our different models, as well as a worst- and best-case scenario. We show that recovery is asymmetric across the group of countries in the ASEAN and East Asian region and that recovery in tourism revenue is generally slower than in tourist arrivals. We show significant losses of approximately 48%, persistent after 12 months, for some countries, while others display increases of approximately 40% when compared to pre-crisis levels. Our work aims to quantify the projected drop in tourist arrivals and tourism revenue for ASEAN and East Asian countries over the coming months. The results of the proposed research can be used by policymakers as they determine recovery plans, where tourism will undoubtedly play a very important role.
- Topic:
- Tourism, Economy, Public Health, Pandemic, and COVID-19
- Political Geography:
- Asia and Southeast Asia
65. How Do Sectoral Employment Structures Affect Mobility during the COVID-19 Pandemic?
- Author:
- Donny Pasaribu, Deasy Pane, and Yudi Suwarna
- Publication Date:
- 06-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- As people’s mobility determines the spread of COVID-19 virus, this paper scrutinises factors that drive their mobility responses during the pandemic. Utilising Google mobility data, labour force statistics and daily COVID-19 data, this study finds that mobility changes are induced by various heterogeneous behavioural responses across provinces in Indonesia. Variations in the pre-pandemic labour structure, people’s perception of health risks and local policy settings define the mobility changes. In addition, behavioural responses are larger in the early pandemic phase, indicating the importance of arrangements to manage the situation in the early period.
- Topic:
- Labor Issues, Employment, Mobility, Public Health, Pandemic, Job Creation, and COVID-19
- Political Geography:
- Asia and Southeast Asia
66. The Effect of Non-Tariff Measures on Global Value Chain Participation
- Author:
- Upalat Korwatanasakul
- Publication Date:
- 06-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This study examines the impact of non-tariff measures (NTMs) on global value chain (GVC) participation and the underlying mechanisms. Our study employs a novel approach using an additional compliance requirement indicator as a relative proxy for NTMs to measure their impact on GVC participation. We conduct a cross-sectional analysis at the industry level, spanning 19 industrial sectors in 30 countries in 2015. We combine our additional compliance requirement indicator dataset calculated from NTM data in the Trade Analysis Information System, with our dataset on trade in value added estimated from the Organisation for Economic Co-operation and Development Inter-Country Input–Output Table. Our analysis finds that, while NTMs and tariffs both negatively impact backward GVC participation, the impact of NTMs is greater than that of tariff measures. Moreover, the estimated results show that inward foreign direct investment is positively associated with backward GVC participation. Therefore, policies that reduce trade costs from policy barriers, especially NTMs, and attract more foreign direct investment can help promote GVC participation.
- Topic:
- Globalization, International Trade and Finance, Industry, Global Value Chains, and Non-Tariff Measures
- Political Geography:
- Asia and Southeast Asia
67. The Effects of SPSs and TBTs on Innovation: Evidence from Exporting Firms in Viet Nam
- Author:
- Duc Anh Dang and Vuong Anh Dang
- Publication Date:
- 06-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBTs) in destination markets may affect firms’ performance. In this paper, we examine how meeting foreign standards affects exporting firms’ innovation, reflected in the product quality, production processes, skills, and technological acquisition. The analysis relies on official regulations on non-tariff measures released by the United Nations Conference on Trade and Development (UNCTAD) and panel data for manufacturing firms in Viet Nam during 2013–2015. To correct for the potential endogeneity of SPS measures and TBTs and measurement errors, we use the number of SPS measures and TBTs imposed on other Association of Southeast Asian Nations (ASEAN) Member States as an instrument variable. Our results indicate that a higher number of SPS measures and TBTs applied by destination countries increases the probability of Vietnamese exporting firms’ skill acquisition. SPS measures also have higher positive impacts on product quality improvement and skill acquisition in the food processing sector. The SPS measures and TBTs have larger impacts on small firms than large firms. Foreign firms tend to acquire more technology and skills than domestic firms when facing SPS measures and TBTs by importing countries. Higher SPS measures and TBTs have more effects on the probability of acquiring skills by state-owned firms. However, the propensity of product quality and technological acquisition of non-state firms is much higher than that of state-owned firms when facing a greater level of SPS measures and TBTs.
- Topic:
- International Trade and Finance, Science and Technology, Governance, Innovation, and Trade
- Political Geography:
- Asia and Southeast Asia
68. Potential for India’s Entry into Factory Asia: Some Casual Findings from International Trade Data
- Author:
- Mitsuyo Ando, Kenta Yamanouchi, and Fukunari Kimura
- Publication Date:
- 06-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Despite its impressive economic growth in the past few decades, India is slow in adopting a task-by-task international division of labour or international production networks (IPNs). Using international trade data for international comparison from multiple angles, this paper visualises the position of India – particularly in machinery IPNs and information and communication technology (ICT) services. Although machinery industries are at the centre of IPNs in East Asia, the paper clearly visualises that India has not yet participated in Factory Asia. Rather, trade data indicate that India is still engaged in import-substituting industrialisation. The paper also argues that ICT services are a strength for the Indian economy, and its competitiveness could be utilised effectively by combining new technologies with traditional industries such as manufacturing. India still has huge potential for utilising the mechanics of a new international division of labour to accelerate economic growth, innovation, and poverty alleviation.
- Topic:
- Globalization, International Trade and Finance, Labor Issues, Manufacturing, Industry, and Global Value Chains
- Political Geography:
- India and Asia
69. Tracking the Ups and Downs in Indonesia’s Economic Activity During COVID-19 Using Mobility Index: Evidence from Provinces in Java and Bali
- Author:
- Yose Rizal Damuri, Prabaning Tyas, Haryo Aswicahyono, Lionel Priyadi, Stella Kusumawardhani, and Ega Kurnia Yazid
- Publication Date:
- 07-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- A timely and reliable prediction of economic activities is crucial in policymaking, especially in the current COVID-19 pandemic situation, which requires real-time decisions. However, making frequent predictions is challenging due to the substantial delays in releasing aggregate economic data. This study aims to nowcast Indonesia’s economic activities during the COVID-19 pandemic using the novel high-frequency Facebook Mobility Index as a predictor. Employing mixed-frequency, mixed-data sampling, and benchmark least-squares models, we expanded the mobility index and used it to track the growth dynamics of the gross regional domestic product of provinces in Java and Bali and performed a bottom-up approach to estimate the aggregated economic growth of the provinces altogether. Our results suggested that the daily Facebook Mobility Index was a considerably reliable predictor for projecting economic activities on time. All models almost consistently produced reliable directional predictions. Notably, we found the mixed data sampling-autoregressive model to be slightly superior to the other models in terms of overall precision and directional predictive accuracy across observations.
- Topic:
- GDP, Economy, Mobility, Pandemic, and COVID-19
- Political Geography:
- Indonesia, Asia, and Southeast Asia
70. Is the COVID-19 Pandemic Recasting Global Value Chains in East Asia?
- Author:
- Nobuaki Yamashita and K. Fukasaku
- Publication Date:
- 07-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper assesses how the current COVID-19 pandemic is shaping global value chains in East Asia after the formidable disruptions inflicted by the health crisis. Some have expressed the view that global value chains would readjust and production processes would move home, i.e. reshoring, facilitated by the recent movement of protectionism measures in the post-pandemic world. We evaluate such concerns and examine the role of policy with a focus on non-tariff measures in East Asia.
- Topic:
- Globalization, International Trade and Finance, Pandemic, Global Value Chains, and COVID-19
- Political Geography:
- East Asia and Asia
71. Economic and Emission Impact of Australia–China Trade Disruption: Implication for Regional Economic Integration
- Author:
- Xunpeng Shi, Tsun Se Cheong, and Michael Zhou
- Publication Date:
- 07-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This study examines the debates on supply chain resilience and the economic and emissions impact of supply chain rerouting using Australia and China trade as an example. The estimations demonstrate that, in both export and import cases, a trade embargo between Australia and China, despite being compensated by alternative supply chains, will cause gross domestic product loss and emissions increases for both countries. Moreover, even if all other countries gain from the markets left by China, many of them suffer from overall gross domestic product loss and emissions increase. The findings that ASEAN and China may also suffer from an Australia–China trade embargo, despite a gain in trade volume, suggests that no country should add fuel to the fire. The results suggest that countries need to defend rules-based trading regimes and continuously promote regional economic integration.
- Topic:
- Regional Cooperation, Economy, Global Value Chains, Carbon Emissions, and Economic Integration
- Political Geography:
- China, Asia, Australia, and Southeast Asia
72. East Asian Integration and Its Main Challenge: NTMs in Australia, China, India, Japan, Republic of Korea, and New Zealand
- Author:
- Yan Lili Ing and Grace Hadiwidjaja
- Publication Date:
- 07-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- While East Asia has been moving forward with its regional integration agenda, one main challenge remains and is growing – non-tariff measures (NTMs). Animal, vegetable, and food products tend to be more regulated than other products, largely due to quality and safety standards. NTMs affect 66%–98% of total trade in those sectors. Our paper presents the frequency index, coverage ratio, and prevalence score to measure NTMs in the region. They are highest amongst food, vegetable, and animal products; and vary amongst other products, depending on the economy. We find that the high frequency index of NTMs does not necessarily translate to a high value of coverage ratio for trade. One explanation could be that countries tend to regulate imported goods which compete with the domestic products more than imported goods which they need.
- Topic:
- Globalization, International Trade and Finance, Regional Cooperation, Tariffs, Non-Tariff Measures, and Economic Integration
- Political Geography:
- Japan, China, India, Asia, South Korea, Australia, Southeast Asia, and New Zealand
73. Impacts of COVID-19 on the Energy Demand Situation of East Asia Summit Countries
- Author:
- Shigeru Kimura, Ikarii Ryohei, and Endo Seiya
- Publication Date:
- 07-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- The coronavirus disease (COVID-19) pandemic has brought us a ‘New Normal’ life style and the lockdown has severely harmed economic growth, with many countries estimated to record negative economic growth in 2020. Due to the high correlation between energy demand and economic growth, energy demand is also affected. Against this background, ERIA analyses how energy demand has decreased as a result of the COVID-19 pandemic using East Asia Summit (EAS) energy outlook models that are regularly updated by ERIA and apply an econometric approach. The outlook models cover the Association of Southeast Asian Nations (ASEAN) 10 countries plus seven countries – Australia, China, India, Japan, Republic of Korea, New Zealand, and the United States. According to gross domestic product (GDP) growth estimates for EAS countries in 2020, only three countries – China, Lao PDR, and Viet Nam – show positive growth, though less than 2%, and the others show negative growth. Total Final Energy Consumption (TFEC) of the EAS countries fell in 2020, but it is expected to rebound in 2021 and projected to return to the originally forecast trend of energy demand up to 2050. Once official energy statistics become available, a comparison between model results and actual statistics will be made to understand how the energy outlook models trace the impact of the pandemic on energy demand.
- Topic:
- Energy Policy, Pandemic, COVID-19, and Models
- Political Geography:
- East Asia and Asia
74. Feeling the Pulse of Global Value Chains: Air Cargo and COVID-19
- Author:
- Christopher Findlay, Hein Roelfsema, and Niall Van De Wouw
- Publication Date:
- 07-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper focuses on air cargo market development, with special attention to the connections between countries in Asia, the European Union, and the United States. Before the coronavirus disease (COVID-19) crisis, we show that participation in global value chains played a crucial role in how countries in Asia increased their exposure to the European Union market, which was hit hardest by the COVID-19 crisis. Analysing the effects of the crisis in 2020- using a fuzzy set complexity approach and recent high-frequency data on air cargo transport - we show that such demand effects, together with domestic contraction conditions, explain a large share of variation in air cargo dynamics across countries in Asia. However, we also show that implementing best practices in pandemic control positively impacts air cargo recovery for countries that cannot rely on export market rebounds. After reviewing the convergence in air cargo business models since 2010, the paper continues to assess recovery options. The main conclusion is that business models will converge on long haul point-to-point models that combine passengers and cargo, moving away from the current hub and spoke system.
- Topic:
- Globalization, International Trade and Finance, Pandemic, Global Value Chains, and COVID-19
- Political Geography:
- Asia and Southeast Asia
75. Exploring Digital Economic Agreements to Promote Digital Connectivity in ASEAN
- Author:
- Sarah Y. Tong, Yao Li, and Tuan Yuen Kong
- Publication Date:
- 07-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper explores modules and articles on cooperation concerning the digital economy that are applicable for Association of Southeast Asian Nations (ASEAN) countries under certain circumstances. It investigates the progress of and obstacles to ASEAN’s digital connectivity, as well as features of existing Digital Economic Agreements and digital economy-related articles in other agreements. We propose the use of a differentiated strategy and steps to promote integration for ASEAN countries covered in this research.
- Topic:
- Economics, Globalization, International Trade and Finance, Digital Economy, and Digitalization
- Political Geography:
- Asia and Southeast Asia
76. Domestic Tourism as a Pathway to Revive the Tourism Industry and Business Post the COVID-19 Pandemic
- Author:
- Jennifer Chan
- Publication Date:
- 07-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This research aims to explore the potential of domestic tourism as a means to revitalise the tourism industry from the perspectives of local residents and tourism players. A quantitative online survey focused on domestic travel behaviour, motivation, places of interest, travel preferences, and willingness to travel within Malaysia; it was answered by 219 Malaysians. Interview data were collected using structured, open-ended interview questions through emails to eight respondents from tourism associations, five from the hotel sector, and two from the travel and tour sector. Data collection was carried out from 10 January to 15 February 2021. The findings reveal that domestic tourism has the potential to revive the tourism industry. A high percentage of respondents indicated the desire to travel domestically and being motivated by attractive tour packages at discounted prices. COVID-19 has impacted tourist behaviour and attitudes towards travelling, and people prefer to travel domestically rather than overseas. Furthermore, tourism players acknowledged the potential to revive the tourism industry and business via domestic tourism. Despite this, declarations of health, safety issues, flight availability, travel restrictions, and quarantine durations are key barriers to stimulating domestic tourism and rebuilding the tourism industry.
- Topic:
- Tourism, Public Health, Pandemic, and COVID-19
- Political Geography:
- Malaysia and Asia
77. Technical Barriers to Trade and the Performance of Indian Exporters
- Author:
- Pavel Chakraborthy and Rahul Singh
- Publication Date:
- 08-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- We study the effects of technical barriers to trade (TBTs) imposed by destination markets on prices, marginal costs, and markups of Indian manufacturing exporters. Using detailed firm-product-level data on prices and production from PROWESS, we first identify the underlying component of prices (i.e. marginal costs and markups), and use those as our outcomes of interest in the second stage. We find that (i) introduction of TBTs by importing countries increases marginal costs by 5% and prices by 4%, (ii) there is considerable heterogeneity based on exporters’ initial productivity, (iii) productive exporters (those belonging to the lower deciles) experienced an increase in marginal costs and decrease in markups compared to low productivity exporters, and (iv) overall effects are driven by private firms (both domestic and foreign) belonging to intermediate input industries.
- Topic:
- Globalization, International Cooperation, International Trade and Finance, and Exports
- Political Geography:
- India and Asia
78. Effective Rates of Protection in a World With Non-Tariff Measures and Supply Chains: Evidence from ASEAN
- Author:
- Ben Shepherd
- Publication Date:
- 08-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- The concept of effective rate of protection expresses protection on a sector’s final output relative to protection affecting its inputs. As such, it is well adapted to analysing the effects of trade policy from a supply chain standpoint. This paper makes two contributions to the literature on effective rates of protection. First, it draws on the literature on trade in value added to highlight an alternative to the traditional measure that better accounts for supply chain trade by considering both direct and indirect input use. Second, it includes data on ad valorem equivalents of non-tariff measures, which are increasingly important as trade policy instruments. In an analysis covering 17 aggregate goods sectors, I find that average tariff only effective rates of protection in ASEAN averaged 6.9% and ranged from zero to 23.4% in 2018. By contrast, effective rates including non-tariff measures averaged 14.0% and ranged from –6.2% to 44.0%. While patterns of escalation and even effective taxation differ substantially across sectors, most countries practice a tariff and NTM trade policy that is broadly neutral between input and output sectors, but which causes low to moderate isolation from world markets. Given the complexity of tariffs and NTMs from a supply chain perspective, there would likely be reductions in economic waste accompanying substantial simplification.
- Topic:
- Economics, Globalization, International Cooperation, International Trade and Finance, Protectionism, Non-Tariff Measures, and Supply Chains
- Political Geography:
- Asia and Southeast Asia
79. Reconciling Tax and Trade Rules in the Digitalised Economy: Challenges for ASEAN and East Asia
- Author:
- Jane Kelsey
- Publication Date:
- 08-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- As the digital economy expands in scale, scope, and form it poses major challenges for public revenue and tax policy and administration in Asia and other parts of the global South. When attempts led by developed countries at the OECD-led Inclusive Framework on Base Erosion and Profit Shifting (BEPS) to agree on new norms for taxing digital giants like Facebook, Google, and Amazon stalled, individual countries, including a number of developing countries in Asia, began developing their own responses, notably the adoption of digital services taxes. High-level compromises have recently been announced at the OECD, but the details are yet to come and are not expected to address the needs of developing countries to effectively tax the activities of digital giants operating from offshore. As countries seek effective and workable means to tax the digitalised economy, existing and proposed international rules on digital trade in free trade agreements, and plurilateral moves to develop electronic commerce rules in the World Trade Organization, may fetter their ability to do so. To date, very little attention has been paid in trade negotiations to the consequences of these developments for countries’ tax regimes. Nor have the adequacy, effectiveness, and workability of the tax exceptions in trade and investment agreements been properly re-assessed. Many governments are only becoming aware that trade rules may constrains their ability to regulate the (poorly understood and fast moving) digital domain after they have signed up to them. A series of investigations by the US government under Section 301 of the US Trade Act 1974 into digital services taxes, including those adopted by India and proposed by Indonesia, provides a real-world basis on which to assess how binding and enforceable digital trade rules might be used to challenge digital tax measures at the unilateral, bilateral, and multilateral levels. In highlighting these risks, the paper aims to provide a framework for the tax and trade divisions of governments in ASEAN and East Asia to reflect together on the potential for proposed digital trade rules to impact negatively on their public revenue.
- Topic:
- International Cooperation, International Trade and Finance, Digital Economy, Tax Systems, Commerce, and Digitalization
- Political Geography:
- Asia and Southeast Asia
80. The EU–China Comprehensive Agreement on Investment: Lessons Learnt for Indonesia
- Author:
- Yan Lili Ing and Junianto James Losarili
- Publication Date:
- 08-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- The European Union (EU) and China have recently reached an agreement: the EU–China Comprehensive Agreement on Investment (CAI). As one of the most recent investment agreements concluded by the EU, the paper aims to assess specific concessions made in the agreement, and provides lessons learnt for Indonesia on the ongoing negotiations of the Indonesia–EU free trade agreement, the Comprehensive Economic Partnership Agreement (IEU CEPA). The paper will present an overview of the main areas covered under the CAI, assess the potential impacts of the CAI on EU investment into Indonesia, and set out lessons that can be learnt from the CAI.
- Topic:
- Economics, International Cooperation, International Trade and Finance, European Union, and Investment
- Political Geography:
- China, Europe, Indonesia, and Asia
81. A Firm-level Analysis of the Impact of the Coronavirus Outbreak in ASEAN
- Author:
- Wasim Ahmad, Rishman Jot Kaur Chahal, and Shirin Rais
- Publication Date:
- 08-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This study examines the impact of the coronavirus pandemic on economic integration in the ASEAN-6 region. The study finds that the pandemic’s impact can be easily traced using stringency, bilateral exports, and tourist arrivals, indicating significant implications for the economic integration process. The firm-level analysis suggests that although the coronavirus outbreak’s uniformly impacted firms, the extent of the effect varies across ASEAN-6 nations. Large firms are strongly impacted by the pandemic. Overall, the findings of this study are relevant for policymakers and academia.
- Topic:
- Tourism, Global Markets, Public Health, Pandemic, and COVID-19
- Political Geography:
- Asia and Southeast Asia
82. Central Banks' Responses to COVID-19 in ASEAN Economies
- Author:
- Charan Singh and Panitra Kumar Jena
- Publication Date:
- 08-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- The effect of the COVID-19 pandemic on public health, social life, economic conditions, and financial markets has been significant for Association of Southeast Asian Nations (ASEAN) economies. The main objective of this study is to understand the response of central banks to COVID-19 in 10 ASEAN economies, i.e., Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. In this study, panel data as well as time-series data have been used to see the impact of COVID-19 on macroeconomic variables and financial variables. The period of the study ranges from 23 January 2020 to 11 December 2020. The first part of the study shows the trend analysis of macroeconomic variables of ASEAN economies and a descriptive analysis of various measures taken by the central banks of ASEAN economics. Further, a comparative analysis of monetary measures with advanced countries is depicted. Further, empirical findings of ARCH and GARCH indicate that recent as well as past COVID-19 news has a significant impact on stock market volatility in select ASEAN countries.
- Topic:
- Banks, Fiscal Policy, Pandemic, COVID-19, Financial Institutions, and Banking
- Political Geography:
- Asia and Southeast Asia
83. COVID-19 and Regional Solutions for Mitigating the Risk of Small and Medium-sized Enterprise Finance in ASEAN Member States
- Author:
- Farhad Taghizadeh-Hesary, Han Phoumin, and Ehsan Rasoulinezhad
- Publication Date:
- 08-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- One of the significant challenges small and medium-sized enterprises (SMEs) face is their difficulty in accessing finance. One way to reduce the risk of lending to SMEs is through the credit guarantee scheme (CGS). In this paper, we assess the determining factors of the optimal credit guarantee ratio for the banking industry in four Association of Southeast Asian Nations (ASEAN) countries, namely Indonesia, Singapore, the Philippines, and Malaysia, by employing statistical techniques and econometric models. The empirical findings prove that the loan default ratio (nonperforming loan/loan, or NPL/L) is the optimal credit guarantee ratio’s main determining factor. Our empirical findings confirm that in the ASEAN region, to help SMEs survive in the emergency stage of COVID-19, the credit guarantee ratio needs to be increased. Gradually, when moving to the new normal stage, the ratio needs to be lessened. Our results show that the credit guarantee ratio should vary for different countries based on the macroeconomic climate and also for each bank or, in other words, for banks with similar financial soundness. Governments should give a higher guarantee ratio to sound banks, whilst less healthy banks should receive a lower guarantee ratio. The study also provides policy recommendations for establishing a regional credit guarantee scheme in ASEAN to promote regional economic cooperation at the SME level for greater economic integration.
- Topic:
- Finance, Public Health, Pandemic, COVID-19, and Credit
- Political Geography:
- Asia and Southeast Asia
84. Aviation Market Development in the New Normal Post the COVID-19 Pandemic: An Analysis of Air Connectivity and Business Travel
- Author:
- Xiaowen Fu, David A. Hensher, Nicole T. T. Chen, and Junbiao Su
- Publication Date:
- 09-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This study quantifies the effects introduced by the COVID-19 pandemic on air connectivity and passenger travel behaviour. Our analysis suggests that the pandemic has led to significant connectivity loss at all airports, especially at large hubs and tourism destinations. Low-cost carriers’ operations at these airports, whose main targets are price-sensitive, non-business travellers, have been significantly reduced, too. There is preliminary evidence that network carriers at hub airports played more important roles amid the pandemic, likely due to the benefits associated with their hub-and-spoke networks. Connectivity losses at the smallest airports tended to be temporary and limited. These airports had limited aviation services to start with and, thus, it was not too costly to maintain the minimum connectivity. Empirical results obtained from a passenger preference study indicate that traveller subgroups are impacted in different ways. When there is no online meeting option, nearly 80% of the respondents prefer, and are willing to pay for, pandemic control measures. These ‘pro-control’ passengers perceive such measures and the associated high costs/fares as valuable and necessary to lower the health-related risks during air travel. When there is an online meeting option, the share of such passengers decreases to 44.5%, with the remaining 55.5% exhibiting disutility for the increased price and time associated with pandemic control measures. The average willingness-to-pay for pandemic control measures decreases significantly, whereas the value of time saved at health checkpoints increases significantly. The aviation industry thus faces a ‘double-hit’ problem: operation costs will increase due to pandemic control measures, and the resultant inconvenience and extra time and costs further reduce travel demand. Unlike previous short pandemics, business travel is likely to suffer with an extended decline until the pandemic is fully controlled. These results call for financial and operational support for aviation services, especially at major airports and tourism destinations. Because these large airports are expected to be profitable post the pandemic, they may resort to low-cost finance from the capital market in the short term. Because the value of time saved at checkpoints is very high, it is more important for government agencies to make the pandemic control and health measures efficient and smooth. For operations such as vaccination records, stakeholders in different countries should cooperate to facilitate seamless control and pleasant air travel experiences.
- Topic:
- Development, Financial Markets, Business, Public Health, Pandemic, COVID-19, and Travel
- Political Geography:
- Asia and Southeast Asia
85. COVID-19, Air Transportation, and International Trade in the ASEAN+5 Region
- Author:
- Anming Zhang, Xiaoqian Sun, Sebastian Wandelt, Yahua Zhang, Shiteng Su, and Ronghua Shen
- Publication Date:
- 09-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper provides an in-depth description of the coronavirus disease (COVID-19) pandemic and its interactions with air transportation in the Association of Southeast Asian Nations (ASEAN)+5 region, and then links the changes in air connectivity to trade using a gravity regression model. We find that almost all the countries probably reacted too late in their decision to reduce flights in the early stage of the pandemic. As the pandemic evolved, most countries have significantly cut the number of flight connections, especially international flights. The reduced connectivity is found to have a significantly negative impact on trade for time-sensitive merchandise that is essential to consumers and businesses. This points to the importance of the region seeking alternative arrangements to restore air connectivity. We offer a way to construct optimal travel bubbles by using risk indexes introduced here. Other policy issues such as uniform standards and regulations, and regional ‘open skies’, are also discussed.
- Topic:
- International Trade and Finance, Pandemic, COVID-19, and Travel
- Political Geography:
- Asia and Southeast Asia
86. The Trade Restrictiveness Index and Its Impact on Trade Performance in Selected East Asian Countries
- Author:
- Norlin Khalid, Muhamad Rias K.V. Zainuddin, Tamat Sarmidi, Sufian Jusoh, Faliq Razak, and Mohd Helmi Ali
- Publication Date:
- 09-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper aims to investigate the effect of non-tariff measures (NTMs) on trade in selected East Asian countries. In doing so, we first estimate the ad valorem equivalent (AVE) of NTMs and construct an augmented trade restrictiveness index (ATRI) by measuring the overall external regulations imposed by importing countries. Second, we analyse the effect of the AVE and trade restrictiveness index (TRI) of importing nations on the exports of various sub-sector products for each country in selected East Asian countries. Based on a standard gravity model framework, we perform a Poisson pseudo maximum likelihood (PPML) regression at the sectoral level (Harmonized System 2-digit) for total exports and major sub-sectors (agri-food, health, logistics, and manufacturing). The findings show that the ATRI has a negative and significant relationship towards bilateral exports for total exports, manufacturing, and logistics sub-sectors. The negative impacts of the ATRI also highlight that trade barriers play a significant role in bilateral exports. NTM restrictions (proxied by the calculated AVE of NTMs) imposed by importing countries have mixed results for technical and non-technical measures. Where technical measures have negative and significant impacts on bilateral exports for total exports, manufacturing, and health sub-sectors. This implies that implementation of technical NTMs such as sanitary and phytosanitary (SPS) and technical barrier to trade (TBT) measures in importing nations adversely affect bilateral exports for these sub-sectors. This is in line with our hypothesis, as exporters may face difficulties in meeting the current NTM specifications, leading to lower bilateral exports. In addition, the results show that most trade agreements have a positive and significant relationship with ASEAN and East Asia countries’ bilateral exports, suggesting that free trade agreements enhance trade between countries.
- Topic:
- Economics, Globalization, International Trade and Finance, and Non-Tariff Measures
- Political Geography:
- East Asia and Asia
87. Regulatory Distance, Margins of Trade, and Regional Integration: The Case of the ASEAN+5
- Author:
- Chandran Govindaraju, Neil Foster-McGregor, and Evelyn Shyamala Devadason
- Publication Date:
- 09-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper measures regulatory distance in non-tariff measures (NTMs) to examine the regulatory distance patterns and how the margins of trade respond to regulatory distance for the ASEAN+5 economies (the 10 Association of Southeast Asian Nations Member States plus Australia, China, India, Japan and New Zealand). It decomposes the margins of trade and regulatory distance by sector (agriculture and manufacturing) and NTM type (technical, non-technical, sanitary and phytosanitary (SPS), technical barriers to trade (TBTs), and pre-shipment inspections and other measures) for the 15 countries. At the country level, the results indicate a varying regulatory distance amongst the ASEAN+5 countries. Regulatory implementation also varies by sector and by the type of measure. Within sectors, SPS regulatory distance is higher in the agriculture sector, while for manufacturing, the regulatory distance in TBTs is higher. Notably, few countries recorded a higher regulatory distance for non-technical measures and pre-shipment inspections. Interestingly, for the ASEAN region, there seems to be no evidence supporting a reduction in regulatory distance from 2015 to 2018, despite efforts to harmonise NTMs since 2015. The results indicate that regulatory distance largely has a trade-reducing effect along the trade margins within ASEAN+5 bilateral trade. Technical measures have a greater trade-reducing effect than other measures along extensive and intensive trade margins – specifically SPS in the agriculture sector and TBTs in the manufacturing sector. Notably, there is also evidence of non-technical measures and pre-shipments and other formalities impacting trade along extensive margins, despite efforts to establish trade facilitation. The paper also describes some policy implications.
- Topic:
- Economics, International Cooperation, International Trade and Finance, Regulation, and Regional Integration
- Political Geography:
- Asia and Southeast Asia
88. Identifying the Impact of Supply Chain Disruption Caused by COVID-19 on Manufacturing Production in Japan
- Author:
- Tadashi Ito
- Publication Date:
- 09-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- COVID-19 has disrupted all aspects of our lives, including international trade. This paper investigates the effect of supply chain disruption on production activities, in particular by exploiting the difference in the timing of the lockdowns in China and Japan. Using monthly production data, monthly export and import data, Japan’s input–output tables, and international input–output tables, the analyses find evidence of a negative impact of supply chain disruption by COVID-19 on Japan’s manufacturing production activities.
- Topic:
- Manufacturing, Pandemic, COVID-19, Supply Chains, and Production
- Political Geography:
- Japan and Asia
89. Policy Strategies to Strengthen the Travel and Tourism Sectors from the COVID-19 Pandemic Shocks: A Computable General Equilibrium Model for the Indonesian Economy
- Author:
- Irlan Adiyatma Rum
- Publication Date:
- 09-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- The travel and tourism sectors have become the most vulnerable sectors to the COVID-19 pandemic. Studies have shown that most tourist-destination countries will experience economic shocks due to the pandemic. This study analyses the impact of the COVID-19 pandemic shock and the implications of policies taken by the government to strengthen the travel and tourism sectors. As the largest travel and tourism economy in ASEAN, this study uses Indonesia as a case study. It uses a computable general equilibrium (CGE) model using a detailed national input–output table for the creative sectors. The study develops baseline scenarios (low and lower-middle recovery), general policy scenarios (moderate and highly effective support) and specific policy scenarios for the travel and tourism sectors. Through changes in export demand, the impact of the pandemic depends on the existing conditions and policy interventions. The pandemic causes the nominal gross domestic product at the national level to decline by an interval of [–1.99%, –2.97%] and for tourism and travel sectors by [–6.81%, –10.38%] depending on the recovery period. If the recovery is low (all annual inbound tourism expenditure is removed), the Indonesian macroeconomy will be worse than under the lower-middle recovery, given the same government intervention. Thus, effectiveness becomes an important factor for creating a better impact. Adding capital stimulus into the tourism sector helps to further reduce output decline in the travel and tourism sectors, but it is not enough to help the economy recover from the pandemic. The best policy strategy is to make sure that the mitigation plan will be implemented effectively.
- Topic:
- Tourism, Economy, Public Health, Pandemic, COVID-19, and Travel
- Political Geography:
- Indonesia and Asia
90. Robustness and Resilience of Supply Chains During the COVID-19 Pandemic: Findings from a Questionnaire Survey on the Supply Chain Links of Firms in ASEAN and India
- Author:
- Yasuyuki Todo, Keita Oikawa, Masahito Ambashi, Fukunari Kimura, and Shujiro Urata
- Publication Date:
- 09-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Using a unique firm-level data set from the Association of Southeast Asian Nations (ASEAN) and India collected from November 2020 to February 2021, this paper examines how the robustness and resilience of supply chain links – i.e. maintaining links and substituting another for a disrupted partner, respectively – were determined when firms faced economic shocks due to the spread of the coronavirus disease (COVID-19). Focusing on the role of the characteristics of firms’ supply chains, we find that homophily, i.e. the tendency to form a group with similar agents, was often associated with the robustness of supply chain links, most likely because of the strength of homophilous ties. In particular, when a foreign-owned firm had a supply chain link with a firm located in the same country as its home country, the link was quite robust. We also find that the geographic diversity of customers and suppliers creates resilience of supply chains. When the demand or supply from a partner of a firm was disrupted because of COVID-19, the firm likely mitigated the damage from the disruption through substitution of partners if its supply chains were well diversified across countries. In addition, larger or younger firms tended to be resilient and robust. The robustness and resilience of supply chains are found to have led to higher performance.
- Topic:
- Globalization, International Trade and Finance, Pandemic, Resilience, COVID-19, and Supply Chains
- Political Geography:
- India, Asia, and Southeast Asia
91. Education for All? Assessing the Impact of Socio-economic Disparity on Learning Engagement During the COVID-19 Pandemic in Indonesia
- Author:
- Samuel Nursamsu, Winsu Harto Adiwijoyo, and Anissa Rahmawati
- Publication Date:
- 10-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper attempts to shed light on the impact of socio-economic disparity on learning engagement during the COVID-19 pandemic in Indonesia. Utilising search intensity data from Google Trends, school data from Dapodik (Education Core Database), and socio-economic data from the National Socioeconomic Survey, we conduct descriptive analysis, an event study, and difference-in-difference estimations. First, school quality differs in terms of the regions’ development level, especially between western and eastern Indonesia. However, densely populated and well-developed areas generally have lower offline classroom availability. In addition, the quality of public schools is generally lower than private schools. Second, our estimation results show that only online-classroom related search intensity that increased significantly after school closures on 16 March 2020, not in self-learning related search intensity. Further the analysis shows that socio-economic disparity within provinces widens the gap in online learning engagement, albeit with weak evidence from per capita expenditure. Interestingly, provinces with a higher inequality and rural population tend to have higher self-learning related search intensity due to students’ necessity to compensate for low learning quality from schools. In addition, technology adoption does not seem to give much of an increase to online-classroom related search intensity but contributes to lower self-learning related search intensity due to increased academic distraction. Our study provides evidence for the Indonesian government to make more precise policy in improving learning quality during the pandemic.
- Topic:
- Education, Children, Inequality, Pandemic, COVID-19, Socioeconomics, and Public Schools
- Political Geography:
- Indonesia and Asia
92. Spillover Effects of Social and Economic Interactions on COVID-19 Pandemic Vulnerability Across Indonesia’s Regions
- Author:
- Ernawati Pasaribu, Puguh B. Irawan, Tiodora H. Siagian, Ika Yuni Wulansari, and Robert Kurniawan
- Publication Date:
- 10-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This research study focuses on measuring the possible spillover effects of socio-economic interactions on COVID-19 pandemic vulnerability across Indonesia’s regions by utilising a spatial simultaneous model. The COVID-19 pandemic vulnerability level here is used to indicate the extent to which a region is susceptible to the spreading COVID-19 pandemic, as determined by not only the region’s COVID-19 related epidemiological factors but also by its relevant socio-demographic and economic aspects, housing, environmental health, and availability of health facilities. High COVID-19 pandemic vulnerability levels were mostly found in districts in Java Island and southern Sumatera, suggesting high population density and mobility in both regions. It was revealed that 31 districts have low COVID-19 risk levels (from epidemiological indicators-related measurements), but they have high COVID-19 vulnerability levels (from epidemiological and socioeconomic indicators-based measurements). Labour productivity was found to have a reciprocal relationship with COVID-19 vulnerability, proving that the COVID-19 pandemic has a significant impact on labour productivity and vice versa. On the other hand, regional independence affects COVID-19 vulnerability, but this does not apply the other way around. Moreover, this study has also proven that COVID-19 pandemic vulnerability levels have socio-economic spillover effects on neighbouring areas in Indonesia.
- Topic:
- Economics, International Cooperation, Pandemic, COVID-19, Socioeconomics, and Economic Integration
- Political Geography:
- Indonesia and Asia
93. China's Ties with Southeast Asia : From Green Shoots to Sustained Recovery
- Author:
- Kensuke Tanaka
- Publication Date:
- 01-2021
- Content Type:
- Policy Brief
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- China's rebound happened relatively quickly owing to a large extent to timely macroeconomic policy responses to the crisis. Lagging somewhat behind China, most Southeast Asian countries have now entered the transition from recession to recovery. Some export-dependent Southeast Asian countries shifted their export destination to China to benefit from its early recovery. This switch of export destination to China illustrates China's important role in leading the recovery of the region. Enhancing regional macroeconomic co-operation would help reduce vulnerability of the region and ensure a sustained recovery. Regional macroeconomic co-operation remains at an early stage in Southeast Asia, but possibilities for further co-operation should be explored.
- Topic:
- Development, Economics, International Cooperation, International Trade and Finance, and Economic Recovery
- Political Geography:
- China, Asia, and Southeast Asia
94. Scaling up Private Investment in Low-Carbon Energy Systems through Regional Cooperation: Market-Based Trade Policy Measures
- Author:
- Kaliappa Kalirajan, Huong Thi Thu Tran, and Yochang Liu
- Publication Date:
- 01-2020
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This study aims to analyse the possibility and challenges of encouraging private sector investment in low-carbon energy systems in Asia, particularly across the Regional Comprehensive Economic Partnership (RCEP) member countries, and to suggest an effective policy framework that governments could apply to improve the development and dissemination of low-carbon energy goods and technologies. The research questions examined in this study are: What type of policy measures affect trade in low-carbon energy systems transition, particularly the renewable energy transition? How can investment signals and incentives be reframed to scale up private finance in renewable energy through regional cooperation? The objective is to investigate and provide several market-based feasible trade policy and investment policy tools for both national and regional markets that governments could adopt to accelerate the speed of private financing of the low-carbon energy industry, particularly the renewable energy industry.
- Topic:
- Energy Policy, Markets, Trade, and Renewable Energy
- Political Geography:
- South Asia, East Asia, Asia, and Southeast Asia
95. Enhancing Inter-Firm Linkages through Clusters and Digitalisation for Productivity Growth
- Author:
- Vo Tri Tranh
- Publication Date:
- 01-2020
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper examines the policies for industrial cluster development in Viet Nam. The first export processing zone was established in 1991. Since 1994, Viet Nam has focused more on developing domestic productive capacity and thus various types of industrial estates were established. The key actors in industrial cluster policy are the government, Prime Minister, ministries, provincial people’s committees, and management boards of industrial and economic zones. The choice of industrial estate is often determined by factors such as geographic location, land, labour, infrastructure, industry, business environment, and incentives. Viet Nam has provided various incentives to industrial estates of various types, but the scope and extent of preferential policy support for firms in general and those operating in industrial and economic zones are rather modest. The industrial estates have contributed significantly to attracting foreign direct investment, to exports, to productivity improvement, etc. Looking forward, Viet Nam needs further efforts on industrial cluster development, including development of statistics, analysis of cluster policy impacts, and provision of FTA-consistent incentives.
- Topic:
- Development, Industrial Policy, Governance, Leadership, and Management
- Political Geography:
- Asia and Vietnam
96. Unlocking the Potential of Private Financing for Low-carbon Energy Transition: Ideas and Solutions from ASEAN Markets
- Author:
- Venkatachalam Anbumozhi
- Publication Date:
- 01-2020
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Under the Paris Agreement in 2015, the opportunities for the ASEAN Member States (AMS) to maximise low-carbon energy sources to achieve the Nationally Determined Contributions (NDC) target in reducing carbon emission levels have expanded. In order to move towards a low-carbon energy transition, private sector actors must work together with governments to implement strategies to invest in the low-carbon economy. However, major barriers such as insufficient enabling policy environment, availability of technologies and access to funding somehow impede the implementation. It is believed that unlocking the potentials of private sector would accelerate the transition of low-carbon energy. This paper, based on a market survey, which aimed to identify barriers and risks that private sectors face in accelerating the low-carbon investments. The survey respondents are divided into two categories, Lenders and Borrowers. Analysing 110 total respondents helped to identify the perceived and actual barriers as well as risks underlying to the access to financing and generated potential solution for policymakers to overcome these barriers. The survey results indicate that the main obstacles faced by private sectors are incoherent policies that created a high-risk environment for investment, a lack of access to de-risking mechanisms, and insufficient capacity to communicate the opportunities amongst financial institutions and project developers. To bare these risks, this paper suggests four interdependent solutions – establishment of a low-carbon transition fund, government warranty programme, broadening of de-risking mechanisms, and capacity building programme to accelerate the low-carbon energy transition across ASEAN.
- Topic:
- Energy Policy, Finance, Renewable Energy, and Private Sector
- Political Geography:
- Asia and Southeast Asia
97. Does Home (Output) Import Tariff Reduction Increase Home Exports? Evidence from Korean Manufacturing Plant–Product Data
- Author:
- Chin Hee Hahn and Ju Hyun Pyun
- Publication Date:
- 02-2020
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This study examines the effects of domestic output import tariff reduction on domestic plant export dynamics and clarifies the underlying mechanism, using rich plant–product data from the Republic of Korea for 1991–2002. We find that home import liberalisation increases domestic plants’ export market participation (extensive margins), particularly for industry where markup growth is more negative during tariff reductions. However, we do not find evidence that cutting import tariffs significantly affects incumbent home exporters’ export volume (intensive margins). This study unveils a new mechanism – ‘escape competition’ to foreign markets – by showing that reducing import tariffs leads domestic firms under heightened industry competition to look for an opportunity in foreign markets via export inauguration.
- Topic:
- Markets, Tariffs, and Imports
- Political Geography:
- Asia and South Korea
98. Effectiveness of Industrial Policy on Firms’ Productivity: Evidence from Thai Manufacturing
- Author:
- Juthatip Jongwanich and Archanun Kohpaiboon
- Publication Date:
- 02-2020
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper examines the role of industrial policy on firms’ productivity, using 3 years of panel data on Thai manufacturing as a case study. A range of industrial policy tools is defined – tariff measures, subsidies, and investment incentives through the Board of Investment (BOI) – which are the main tools used in Thailand. The effect on firm productivity of partial trade liberalisation undertaken through free trade agreements (FTAs) signed between Thailand and its trading partners is also examined. The key finding is that trade openness and research and development (R&D) are more crucial in fostering firms’ productivity than industrial policies. This is especially true for the narrow definition of industrial policy focusing on trade policy protection, measured by the effective rate of protection. In addition, the FTA-led trade liberalisation effect fails to add substantial competitive pressure and make firms improve productivity. Our results show that sectors benefiting from subsidies show noticeably lower productivity than others. Our study found weak support for investment promotion policy through the BOI, even when the domestic competitive environment is considered in our analysis.
- Topic:
- Industrial Policy, Manufacturing, and Productivity
- Political Geography:
- Asia and Thailand
99. Input Allocation Behaviour on Tariff Changes: The Case of Indonesia’s Manufacturing Industries
- Author:
- Samuel Nursamsu, Dionisius Narjoko, and Titik Anas
- Publication Date:
- 02-2020
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Can firms reallocate their imported inputs to domestic sources when faced with import tariffs? To answer this question, we analyse the input allocation behaviour of Indonesian medium and large-sized manufacturing firms in responding to the movement of import tariffs from 2000 to 2013 by utilising plant-level input data of Indonesian manufacturing. We find that an increase in tariffs only creates a weak substitution effect. Our findings indicate that firms reallocate their inputs towards domestic sources, although this is accompanied by a decrease in the firms’ value added. This implies that domestic inputs are worse substitutes for imported inputs and that firms’ capacity to switch over to domestic products is limited, suggesting that firms will immediately switch back to importing when the tariff is removed. We find no evidence that firms make any adjustment towards more domestic-oriented input composition over time; and heterogeneity exists within the result, as industries with a strong basis in the domestic market are more capable of adjusting.
- Topic:
- Industrial Policy, International Trade and Finance, Tariffs, and Manufacturing
- Political Geography:
- Indonesia and Asia
100. Foreign Direct Investment and Labour Market Dynamics in a Developing Country: Evidence from Indonesian Plant-Level Data
- Author:
- Toshiyuki Matsuura and Hisamitsu Saito
- Publication Date:
- 02-2020
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This study examines the impact of inward foreign direct investment on the wages and employment of skilled and unskilled workers in Indonesian manufacturing plants. Entry of multinational enterprises affects local labour markets through spillovers as well as labour and product market competition. Our results show that spillovers increase the labour demand of local plants for unskilled workers, but increased wages due to severe labour market competition reduce the demand for skilled workers. We also find that product market competition causes resource reallocation from low- to high-productivity plants. Thus, attracting inward foreign direct investment effectively enhances aggregate productivity growth, but may retard the transition to skill-intensive production in Indonesian manufacturing.
- Topic:
- Development, Foreign Direct Investment, Manufacturing, and Labor Market
- Political Geography:
- Indonesia and Asia