Asian Economies Research Articles

Businesspeople Becoming Politicians: A Paradigm Shift and Challenges/Opportunities Ahead

The political environment is one of the most crucial factors that shapes the direction of businesses at any point in time. Bangladesh has been practicing democracy for more than three decades and has enjoyed a period of relative stability for more than a decade. This emerging economy of South Asia has been witnessing a noticeable development in its business sector, which constitutes several industries across the country. As a parliamentary form of governance has now been in place for a period of time, a number of business leaders, primarily the owners of businesses in Bangladesh, have begun to engage in politics more actively than was the case previously. In Bangladesh, politics was formerly predominantly controlled by veteran politicians coming from the root level of the political parties, but now an evident transformation has occurred. This article aims to identify the influence of business leaders on policymaking. As policies ultimately determine the future of employees, who are also the citizens of Bangladesh, this whole issue clearly requires a close examination. The article employs secondary data in order to analyze the relationship between the business owners’ involvement in politics and the changes that have taken place as a result of this. As business and politics work hand in hand on a global scale, the author explains the potential opportunities and challenges that this paradigm shift will create for Bangladesh.

Multidimensional child poverty in South Korea: developing measures to assess progress towards the sustainable development goals

This article presents the development of a measure to assess the prevalence and patterning of multidimensional child poverty in South Korea. The first goal of UN’s Sustainable Development Goals (SDGs) is to reduce poverty in all its dimensions, and countries are increasingly developing their own measures of multidimensional poverty. This flourishing of different measures presents challenges for international comparisons. The article applies an internationally-validated method of assessing multidimensional poverty to demonstrate its suitability for use in a high-income Asian economy. Multidimensional child poverty is assessed by combining data on child material deprivation with their household income. Using data from the 2018 Korean National Children Survey, we show that child material deprivation is higher (15%) than income poverty (12%). When measured using a combined measure of material deprivation and income, around one in every three children in Korea were found to be either poor or vulnerable to poverty. These findings show that the official monetary poverty measure on its own may understate the percentage of children unable to afford necessities in Korea, as envisioned by international targets like the SDGs. In terms of policy, analysis of individual deprivations suggests that a combination of in-kind benefits such as vouchers for leisure activities or education and asset-building programmes as well as cash transfers are needed for tackling child poverty.

Подъем протекционизма в политике США и ЕС: как это повлияет на Восточную Азию?

Global political economy has been experiencing a new normal period through the COVID-19 pandemic and theUkraine War since Jan. 2020. At the same time, the trade conflict between the USA and China has been continuingsince the Trump Administration and even expanding to the technology conflict under the Biden Administration thathas enhanced protectionism in the world trade. Due to these conflicts, discussions on de-globalization or re-globalizationare raised. The two expected or unexpected historical events have resulted in a long wave of high inflation,energy and food crises, disorder of global supply chains etc. in the global economy, which is known as a new normalera shifted from low inflation, well-functioning global supply chains (GSCs) based on division of labor. In order tostrengthen its economic and political leadership, the Biden government has upgraded the Trump’s America FirstPolicy to the Made in America Policy based on Chips and Science Act (CSA) and Inflation Reduction Act (IRA),which represent a new era of protectionism. In parallel, the EU has also considered to impose Net Zero Industry Act(NZIA) and other Acts. The research hypothesis is that protectionism in the name of economic security generatesinstability of the world trade. Its result may be negative impacts of some East Asian economies. This paper aims toanalyze the new trend of protectionism in the USA and the EU. It also focuses on impacts of protectionism on EastAsia in general and South Korea in particular.

Assessing the Impact of Technological Innovations and Trade Openness on Environmental Sustainability: An Empirical Study of South Asian Economies Using Panel ARDL Approach

This study examines the major factors that influence environmental sustainability over a 20-year period (2000–2020) in the four South Asian economies. In this study, two methods of estimation including the Pool Mean Group (PMG) estimator and the panel autoregressive distributed lag (ARDL) approach are used. The findings explore that trade openness, energy consumption, and economic expansion have a long-term positive and considerable impact on environmental deterioration, conversely technical innovation has a long-term negative impact on the environment. In short run scenario, trade openness and energy usage have significant and favourable effects on environmental degradation, whereas the economic growth and technological advancement have had a substantial negative influence on the environment. From this study, the policy makers provide the direction to the government by incentivizing technology, enforcing energy-efficient laws, promoting renewable energy, aligning trade policies with environmental goals, and enhancing regional cooperation. In order to improve South Asian environmental sustainable policies, future research should examine energy-trade-growth-technology by employing advanced techniques, and prioritizing innovation.

India–ASEAN Economic Relations and North-east India: Act East Policy as a New Paradigm

The article delves into three aspects: (a) India–ASEAN economic relationship since the last three decades of Look East Policy (LEP), (b) the achievements of North-east India (NEI) under LEP and Act East Policy (AEP) and (c) adding a note on AEP as a new ‘development paradigm’ in NEI. The study finds that the India–ASEAN economic relationship deepened in the post-LEP period as merchandise trade and foreign direct investment (FDI) inflows increased manifold. However, neither LEP nor AEP made any significant impact on NEI in terms of economic growth, exports and FDI inflows. Economic growth stagnated and even decelerated in some states in NEI, while exports and FDI inflows remained abysmally low. LEP was a failed policy instrument for NEI despite many claims and assumptions. The major reason was infrastructure deficits and poor connectivity in the region for a prolonged period. AEP has emerged as a new ‘development paradigm’ with renewed thrust on infrastructure buildup and connectivity constructions. The ongoing and completed connectivity projects in rail, road, air and water, improvement in power and telecom, multimodal logistic park in Assam and improvement of trade infrastructure in NEI under AEP would attract investment from both domestic foreign sources, enhance productive capacity, increase exports and accelerate economic growth. AEP is expected to open new possibilities for trade and investments in NEI through regional economic integration with South Asian and South-east Asian economies given geographical location, ethno-cultural proximity, historical linkages and resource endowments.

From bottlenecks to inflation: Impact of global supply-chain disruptions on inflation in select Asian economies

Supply-chain bottlenecks emerged alongside unprecedented inflationary surges amid the resulting mismatches in supply and demand for goods and services throughout the COVID-19 pandemic. This study employs a local projection approach to investigate the inflationary impact of global supply-chain pressures in the Philippines and select East Asian neighbors. We find that supply-chain disruptions are followed by sizable and statistically significant increases in headline inflation in the Philippines, Rep. of Korea, Thailand, and Singapore. Supply-chain shocks also have a considerable impact on the tradable segment of core inflation. Meanwhile, non-tradable inflation has a generally smaller, short-lived, and insignificant response to global supply-chain pressures reflecting the limited presence of second-round, indirect effects.

Jumping up the sanitation ladder in rural Cambodia: The role of remittances and peer-to-peer pressure in adopting high-quality latrines

Over the last 50 years, a combination of factors has driven sanitation improvements in rural areas of low-income and emerging economies in Asia. While open defecation remains an important challenge in many countries, Cambodia has rapidly increased rural sanitation coverage in the last 20 years. Using data collected via 92 interviews and seven focus group discussions, this qualitative study analysed the macro-level, community, and individual factors that motivated rural households to invest in high-quality latrines in seven villages in Cambodia that achieved and sustained open defecation free status with at least 85% latrine coverage. Local demand for adoption of high quality latrine was stimulated by a number of factors which include: a) NGO-led interventions that included behaviour change communication, sanitation marketing, and community-led total sanitation, all magnified by the strong support of local leaders at the village and commune levels; b) an increased proportion of rural households engaging in factory work, with access to raising wages, higher disposable incomes, and remittances; and c) subsidies and microcredit. Furthermore, migrants not only transferred financial resources to their home villages, but also transferred a set of ideas, norms, expectations, information, and behaviors back to their communities that reflect the migrants’ new ways of life, and economic possibilities. We provide evidence that new habits among factory workers, and ownership and display of new technologies and consumer commodities as symbols of modern success and social status facilitated high-quality latrine adoption. Peer-to-peer pressure at the village level, and among adult children commuting to factories or visiting their rural hometown ensured widespread adoption.

EXPLORE THE ROLES OF FEMALE ENTREPRENEURSHIP IN PROMOTING ECONOMIC GROWTH IN ASIA: A PANEL DATA ANALYSIS

In Asia, there has been a notable surge in the representation of women in leadership roles and entrepreneurial endeavours, aligning with the increasing acknowledgement of women's importance in politics and the economy. It is predicted that the future development and economic prosperity of Asia will heavily rely on the advancement of female entrepreneurship and empowerment. This research aims to provide empirical evidence on the correlation between female entrepreneurship and economic advancement within the diverse landscape of Asia context, using panel data spanning from 1998 to 2021 across 47 Asian countries. The findings of fixed-effect regression reveal a consistently positive association between women's entrepreneurial activities and economic progress across all Asian economies, encompassing both developed and developing nations. These findings are pivotal for crafting tailored policies aimed at enhancing female participation in entrepreneurship, thereby catalyzing economic growth and advancing towards the most potential in terms of socio-economic conditions.

Precarious Tightrope Between External Debt and Economic Growth: A Comparative Analysis of Bangladesh and Sri Lanka

In recent years, the foreign debt in South Asian economies has risen to concerning levels, suggesting that these governments are unable to generate enough revenues to finance their budget, which could most likely increase the risks of a debt crisis. This study looks at the relationship between foreign debt and the economic growth of two South Asian countries—Sri Lanka and Bangladesh—using Autoregressive Distributed Lag (ARDL) models from the period of 1984 to 2022. The comparative results demonstrate a persistent detrimental impact of foreign debt on both countries' economic growth trajectories. Moreover, our research emphasizes the importance of the debt-to-ԌDP ratio, suggesting that a higher percentage of external debt increases the adverse impact on ԌDP growth. The study compares the external debt levels of both countries and its consequences on their economies. Both Bangladesh and Sri Lanka suffer negative consequences from external debt. However, the study indicates that Sri Lanka, burdened with heavier debt, experiences a more pronounced impact on its economic growth trend as compared to Bangladesh. The study aims to address the pressing issue of rising foreign debt in South Asian economies, provide empirical evidence of its impact on economic growth, and offer policy recommendations. The findings have implications for both Sri Lanka and Bangladesh, emphasizing the importance of managing debt effectively.

Commodity markets and the global macroeconomy: evidence from machine learning and GVAR

Based on a strongly data-intensive machine learning approach, this study first identifies the most essential globally traded commodities in view of their role for the global macroeconomic performance. At the second stage we estimate a global vector autoregressive model to assess in more detail these global reactions. Our results from the first stage indicate that of the 55 analyzed commodity markets, only four are revealed as the most important. At the second step, our GVAR analysis indicates that the commodity market effects on macroeconomic activity are neither unanimous across the commodities nor across macrovariables. As an overall result, the commodity market exposure is clearly stronger among the advanced countries such as the euro area, other developed economies, and China, compared to the emerging economies of Africa, Asia, and Latin America, at both the country and regional levels. This puts a lot of pressure on economic policies aimed at reducing, e.g., the depriving effects of commodity market price development on aggregate economic performance of these countries.

Cryptocurrency and Macroeconomic Dynamics: Case of 10 Asian Economies

This research study investigates the impact of cryptocurrency on economic growth in 10 countries across Asia during past period 2013–2020. For this purpose, the sample included a range of economies with the highest number of Bitcoin usages or transactions. For this purpose, the sample included a range of economies with the highest number of Bitcoin usages or transactions, according to recent international rankings. With specific empirical means on panel data modelling, we attempted to show that economic growth, was influenced negatively by the cryptocurrency ‘Bitcoin’, and we concluded that this instrument leads to an increase in the inflation rate in a country according to the quantity theory of money and leads to a disorder in the monetary policy of a country. Our framework shows that the economic growth proxy was substantially influenced positively by economic indicators such as technology, investment and education but negatively by the high rate of participation, which caused an increase in unemployment. Our empirical results offer insights and insist on the importance of the intervention of the authorities to oversee and control the use of the cryptocurrency Bitcoin to avoid its negative effects and implement a strategy that overcomes these effects from a macroeconomic perspective. JEL Classification: E22, E24, E42, F43, E44, E52

Examining the seniority-based pay system in Korean companies: current trends and its implications for Asian economies

ABSTRACT Human resource management, including the design and implementation of pay systems, is influenced by the specific national context in which it operates. Challenges often arise when HRM practices that have been established in advanced countries are transplanted to developing nations, as they may not fully align with the unique circumstances and cultural dynamics of the target country. Until the 1980s, rapidly growing South Korean companies embraced the seniority-based pay system (SPS) in order to encourage employee tenure. The 1997 IMF foreign currency crisis led to an effort to shift away from this model, which was seen as unrelated to job roles and performance, towards alternative systems. Despite two decades of reforming efforts, SPS pay still prevails, particularly among production workers at large manufacturing companies under trade unions. The workplace panel survey data provides evidence that the implementation of a SPS system does not display any significant negative impact on firm performance, as measured through various methods. As such, the question is not whether to abolish the old system, but instead how to accommodate the new system. The study emphasizes aligning pay systems with the nation’s history, culture and industrialization rather than imposing foreign models.

Servicification in Global Value Chains in Emerging and Developing Asian Economies

Servicification in global value chains (GVCs) in emerging and developing Asian economies has become a trend recently. However, there have been no scientific studies to elucidate the mechanism of servicification in GVCs. To fill this gap, this study aims to investigate the involvement of service sectors in GVCs in Asian economies in terms of the quantitative interactions between service inputs and manufacturing exports and inputs and between service inputs and service exports. For this purpose, a panel vector-autoregressive model and the Trade in Value Added database of the Organization for Economic Cooperation and Development (OECD) were used for the empirical analysis during 1995–2018. The estimation results find that, first, there exist reciprocal interactions between the business services and manufacturing sectors; foreign business service inputs are induced by manufacturing exports, whereas manufacturing inputs are induced by business service exports. Second, foreign manufacturing inputs facilitate foreign business service inputs. Third, business service inputs are promoted by business service exports. These trends in the involvement of business services’ involvement in GVCs have accelerated since the mid-2000s. To enhance the role of services in GVCs, Asian economies should facilitate the removal of explicit restrictions in service trade and address regulatory divergence across countries.

Can board funds, bank credit, and economic development improve food production? Evidence from South Asia

PurposeThis study investigates the impact of board funds, banking credit, and economic development on food production in the context of South Asian economies (India, Pakistan, Bangladesh, Sri Lanka, and Nepal).Design/methodology/approachThis study used data from the World Development Indicators covering the years 1991–2019. To investigate the relationship between the variables of the study, we employed the panel unit root test, panel cointegration test, cross-sectional dependence test, fully modified least squares (FMOLS), and panel dynamic least squares (DOLS) estimators.FindingsThe empirical results indicate that board funding significantly increase food production; however, banking credit had a negative impact. Furthermore, the findings indicate that economic development, Arable land, fertilizer consumption, and agricultural employment play a leading role in enhancing food production. The results of the Dumitrescu-Hurlin causality test also show substantiated the significance of the causal relationship among all variables.Practical implicationsSouth Asian countries should prioritize board funding, bank credit, and economic development in their long-term strategies. Ensuring financial access for farmers through micro-credit and public bank initiatives can spur agricultural productivity and economic growth.Originality/valueThis study is the first to combine board funding, banking credit, and economic development to better comprehend their potential impact on food production. Instead of using traditional approaches, this study focuses on these financial and developmental aspects as critical determinants for increasing food production, using evidence from South Asia.

An empirical investigation of the impact of energy consumption, globalization and natural resources on ecological footprint and economic growth, evidence from China, Japan, South Korea and China Taiwan

Natural resources are regarded as important indicators that make great contributions to reducing environmental pollution and promoting growth in today's era of globalization. Thus, a more rigorous assessment of the complexity of determining growth and ecological footprint is critical. This study examines the dynamic linkages between globalization, natural resources, renewable and non-renewable energy use, ecological footprint and growth in Taiwan, Japan, China, and South Korea from 1975 to 2020. In terms of the certainty of cross-sectional dependence of panel variable data, this study uses second-generation panel unit root, cointegration, long-term elasticity, and two-way causality estimation tests to obtain reliable and valid results. The findings explore the fact that environmental degradation is substantially mitigated by the using of renewable energy sources, while other underlying factors, such as non-renewable energy sources, natural resource rent (NRR), economic growth, and globalization, exacerbate environmental pollution. In addition, the use of renewable and non-renewable energy, NRRs and globalization drive economic progress. Globalization and ecological footprint have a bilateral causal association. The research analysis supports the feedback hypothesis based on a bidirectional causal relationship between renewable energy use and ecological footprint. Based on the empirical findings of the current study, various policy endorsements are proposed to scare and control environmental damage without hampering growth in specific East Asian economies.

Energy Dependency of South Asian Economies: A Comparative Analysis

The main purpose of this research study is to assess and compare energy dependency (ED) performance scores by focusing on South Asian economies within the Data Envelopment Analysis (DEA) framework. Data is utilized for the period 2003 to 2021. The results indicate that the energy sectors of Pakistan and India exhibited inefficient performance within the South Asian region. Both countries faced challenges in effectively using and producing energy from their primary energy resources, leading to a remarkable growth rate in ED. Considering these findings, it is crucial for Pakistan and India to critically review their existing energy policies based on scientific principles. The primary objective should be to develop and implement an appropriate energy policy that effectively reduces their dependency on energy imports and addresses the inefficiencies within their energy systems.

Exchange Rate Pass-Through and Inflation: Policy Insights for Vietnam Based on Comparative Analyses Across Asia

The exchange rate is a crucial macro indicator for any open economy, whereby any change in the rate would influence, to a certain extent, various socioeconomic facets. One of the significant impacts is revealed in the pass-through of exchange rate variations to price inflation, also known as the exchange rate pass-through (ERPT). This paper explores the effect of ERPT on domestic inflation in Vietnam by comparing with other Asian economies. Specifically, pass-through mechanisms are examined for every single price as well as a distribution chain from import price index (IMP), producer price index (PPI) to consumer price index (CPI). The empirical results show that exchange rate shocks positively influence the price changes in Vietnam as well as in other Asian countries. According to Cholesky decomposition, the exchange rate plays a limited role in regulating CPI movements. Besides, world commodity prices are found to have a significant impact on domestic inflation across the sample-countries. Our findings reveal profound implications for monetary policy management and price stability.

The Role of Green Technological Innovation, Fintech, and Financial Development in Environmental Sustainability: A Study on Selected Asian Countries

This study intends to explore the nexus of green technological innovations, financial development, and Fintech with environmental sustainability. It employs data from Asian economies spanning from 2012 to 2021. We intend to examine the impact of green innovations, Fintech, and financial development (measured through access to financial institutions and efficiency of financial markets) on Environmental Sustainability (measured through carbon emissions). After addressing the issues of slope heterogeneity, cointegration, and CSD, this study employs the CS-ARDL model to explore the connectedness between proposed variables. We find that Fintech and the efficiency of financial markets enhance carbon emissions, thus deteriorating environmental sustainability. On the other hand, access to financial institutions and green technological innovations improves ecological sustainability. The findings are essential for Asian economies and policymakers to attain better environmental quality.

Evaluating Preparedness and Overcoming Challenges in Electricity Trading: An In-Depth Analysis Using the Analytic Hierarchy Process and a Case Study Exploration

The economy of South Asia is experiencing growth, yet it faces constraints due to heavy reliance on fossil fuels and frequent power outages. Access to diverse energy sources, particularly electricity, is crucial for sustaining this growth. One feasible solution involves neighbouring countries engaging in the trade of renewable electrical energy. Hydropower stands as one of the many energy sources available in South Asia. However, sectorial constraints pose significant challenges to energy trade initiatives. This study utilises the Analytic Hierarchy Process (AHP) to evaluate Nepal’s readiness and identify obstacles to its cross-border energy trade with India and Bangladesh. A comprehensive analysis of these obstacles is imperative for formulating effective strategies and policies. Additionally, this study offers recommendations for enhancing preparedness and resolving issues related to energy trading, which may apply to similar cross-border situations. This study ranks energy trading obstacles with neighbouring nations using the AHP, offering key insights for stakeholders and policymakers. Using a non-probabilistic purposeful sampling technique, 25 expert respondents from the energy sector and prominent academicians were selected as part of the data collection procedure. At every level of the interview process, their perspectives were invaluable in guaranteeing a thorough and rigorous investigation.

Bilateral Remittance Inflows to Asia and the Pacific: Countercyclicality and Motivations to Remit

This paper examines the cyclicality of remittance inflows to economies in Asia and the Pacific, aiming to identify major factors associated with remittances using gravity models of bilateral remittances. An analysis that assesses correlation coefficients between the cyclical factors of remittances and gross domestic product suggests that remittances tend to be countercyclical, or acyclical, against the business cycle of the remittance-receiving economy relative to the sending economy. This observation is confirmed by the gravity models of bilateral remittances. Furthermore, the estimation results suggest that migrant stock is one of the most significant factors affecting bilateral remittances. The study also shows that an increase in bilateral remittances can be attributed to a higher occurrence of disasters triggered by natural hazards in receiving economies, an appreciation of the receiving economy’s currency value against the sending economy’s, a lower interest rate differential (receiver–sender), greater capital account openness, more political instability, and lower costs of remittances.