Emerging Asian Countries Research Articles

Financial integration of Asian markets: multivariate cointegration, causality and variance decomposition

The aim of this paper is to study financial integration of East Asian equity markets. We conduct a multivariate cointegration analysis using the Engle-Granger test to determine the presence of a long-term equilibrium relationship between the different equity indices. The Granger procedure defines the meaning of causality. Vector autoregression helps to model the dynamic relationships between the different markets. Forecast error variance decomposition captures much of the information on the dynamics of the indices' VAR system and allows for checking the relative contribution of each shock in explaining price movements. The results indicate that there are long-term stationary equilibrium relationships and causal links between these markets. The results on the forecast error variance decomposition show that the price indices of emerging Asian countries can explain their caused variance and confirm that financial integration prevails in the region.

Asymmetric Effects of Sustainability Indices in Emerging Asian Countries

Sustainable investing has become quite popular in emerging Asian countries as many developing economies are adopting it in their financial markets. This study aimed to analyze the asymmetric effect on the volatility of sustainability indices of five Asian emerging countries, that is, Korea, India, China, Indonesia and Malaysia, along with a developed nation's sustainability index, that is, USA using the exponential GARCH model. The paper also examined the movement of indices alongside each other using the correlation coefficient. The results indicated that even though the indices were correlated, there was an asymmetric impact on the volatility of the indices of emerging Asian countries. This will enable Asian investors to make better decisions regarding their portfolio diversification and selection.

Does financial development reinforce environmental footprints? Evidence from emerging Asian countries.

In the preceding two decades, the expansion of financial services has played a vital role in pursuing economic growth agendas in the developing Asian nations. However, its harmful effect on environmental quality cannot be denied. In this backdrop, in the present study, we investigated whether the financial sector development moderated the ecological footprint, carbon footprint, and land footprint in the eight developing nations of South and Southeast Asia from 1990 to 2015. In doing so, we included the per capita income, energy solutions, and trade expansions as determinants of the ecological indicators. The results of the second-generation unit root tests and Westerlund's cointegration test reported the long-run stability and cointegration, respectively. To navigate the possible cross-country dependency, we employed the cross-sectional augmented autoregressive distributed lag approach (CS-ARDL). The results confirmed that per capita income, energy solutions, trade expansion, and financial sector development invigorated the ecological footprint, carbon footprint, and land footprint in the long run. Further, it is reported that the development in the financial sector has a significant moderating impact on the nexus between energy and environmental footprints. In other words, the financial sector development drove the association between the overall environmental quality and energy solutions in the long run. Similarly, we observed that the financial sector development worked as a significant mediator between environmental proxies and trade expansion. By including the ecological footprint, carbon footprint, and land footprint as environmental proxies, the study provides the wider environmental spectrum. Based on the outcomes of the study, we proposed a novel scheme, which may help to address the harmful environmental impacts of the financial sector development in the selected developing nations.

EXPLORING INNOVATION FACTORS AFFECTING ECONOMIC PERFORMANCE IN EMERGING ASIAN COUNTRIES: A MACHINE LEARNING APPROACH

In this study, we aimed to identify the main innovation factors that affect the economic performance of emerging countries. We analyzed data on 21 innovation-related variables in six emerging Asian countries (China, Indonesia, Malaysia, the Philippines, Thailand and Vietnam) from 1990 to 2008. Using principal component analysis (PCA), we identified six factors that explained up to 90.6% of the variation of all of the variables. Taking the least absolute shrinkage and selection operator clustering approach to variable selection, along with the other classification and estimation methods, we explored the effects of the six identified factors on economic growth. Research and development expenditure and contract enforcement (cost) had negative effects on economic growth, whereas gross enrolment ratio (tertiary), primary-school pupil–teacher ratio (inverse), paved roads and number of registered carrier departures worldwide had positive effects on economic growth.

The Impact of Foreign Direct Investment, Capital Formation, Inflation, Money Supply and Trade Openness on Economic Growth of Asian Countries

Economic growth is currently an essential phenomenon for emerging countries worldwide and has gained the researchers' intentions. Thus, the current study aims to examine the role of foreign direct investment (FDI), capital formation, inflation, money supply, and trade openness on the economic growth of Asian countries. The data has been extracted from the twenty emerging Asian countries from 2007 to 2018 using the most popular database named World Development Indicators (WDI). The fixed-effects model, along with the robust standard error, has been used for checking the impact of predictors on the economic growth of Asian countries. The results revealed that the predictors such as FDI, capital formation, money supply, and trade openness have positive association with economic growth, while inflation has a negative association with the economic growth of Asian countries. These findings are suitable for the new arrivals who want to examine this area in the future and for the regular traders who want to develop policies related to economic growth.

Financial Development and Economic Growth in Asian Countries: A Panel Empirical Investigation

This study aimed to evaluate the association of financial development and economic growth by considering the case of 10 Asian countries. The study used quantitative research design where the preliminary testing was conducted using descriptive statistics and unit root testing. The sample size comprised of 10 emerging Asian countries (India, China, Malaysia, Philippines, Pakistan, Thailand, Singapore, Bhutan, Vietnam, and Bangladesh) and the time-frame for the study was 1990 to 2018. The main techniques of analysis were Pedroni cointegration, dynamic panel least squares (DOLS) and Granger Causality. This study concluded that long-run equilibrium existed between financial development and economic growth. The research was limited to the case of Asian countries, therefore, in future, the evaluation of European countries can be conducted or African region can also be undertaken into consideration.

The long-run and short-run influence of environmental pollution, energy consumption, and economic activities on health quality in emerging countries.

This study investigates the effect of energy utilization, greenhouses gasses emissions, and economic activities on health risks such as mortality rate and incidence of respiratory diseases in emerging Asian economies. The study analyzes a panel data from 1995 to 2018 to examine the long-run and short-run influence of environmental pollution on health issues. The empirical findings highlight that greenhouse gasses emissions, fossil fuel consumption, and natural resources depletion in the region are key factors to increasing health risks in the long-run period, while the use of clean energy and improvement in per capita economic growth is helping to improve the health status of the households. In ashort period, greenhouse gasses emission is the only significant factor responsible for thehigh mortality rate and occurrence of respiratory diseases in the emerging economies of Asia. According to the results, there is a need for government intervention programs to rescue the region from the negative effects of environmental pollution and the utilization of nonrenewable energy. In emerging Asian countries, the combustion of fossil fuels, environmental pollution, and limited access to clean energy are such factors responsible for high mortality rate and stimulating incidence of respiratory diseases in the individuals. The study suggests that alternative green energy can prove helpful to control greenhouse gasses emissions and to control health issues by improving environmental quality. The study further suggests that theuse of clean energy from water, wind, and sunlight may prove helpful to meet the energy requirement at the domestic level and improve the health status of the individuals by reducing the incidence of respiratory diseases in emerging countries of Asia.

Corporate Governance, Ownership Structure and Dividend Smoothing: The Mediating Role of Family Ownership and Board Diversity in Emerging Markets

Purpose: The study attempts to explore the determinants of dividend smoothing behavior of firms by using firm’s specific characteristics, corporate governance and ownership structure variables as determinants of dividend smoothing in emerging markets due to their unique features from Western markets. The current study is undertaken to fill this gap in the literature. Design/methodology/approach: In order to achieve the research objectives penal data (2009-2018) of more than 1000 Asian firms were analyzed by using Statistical techniques such as pool, fixed and random models. Findings: Based on gender critical mass theory, the study finds that the presence of gender critical mass is positive and significantly associated with firm dividend smoothing behavior; whereas, presence of fewer women depicts negative or insignificant association with dividend smoothing behavior. Importantly, the study also finds moderating role of gender diversity between family ownership and firm’s dividend smoothing behavior. Furthermore, contrary to the agency theory based on explanations of dividend smoothing, firms with family ownership smooth dividend more in emerging markets. Practical implications: This paper helps out to the current as well as future potential investors to make better decision in such a changing economy as well as to help investors in selecting better investment opportunity to make their investment more profitable. Originality/value: The current study is the first of its kind to investigate dividend-smoothing behavior for more than 1000 firms of emerging Asian countries based on cross country analysis.

Nexus between energy consumption, information and communications technology, and economic growth: An enquiry into emerging Asian countries

The development of every economic sector is significantly affected by information and communication technology (ICT), especially during the liberalization process. Though several studies have focused on economy–environment–financial development nexus, yet very limited literature has highlighted the impact of ICT on the relationship between economic growth, energy consumption, and financial development. We address this gap in the existing literature by investigating the nexus between ICT, energy consumption, and economic growth for a panel of 10 emerging and developing Asian countries selected on the bases of the highest current gross domestic product price (in US dollars), for a span of 17 years ranging from 2000 to 2017. Unlike the previous studies, this study employs the advanced econometric techniques that are robust to heterogeneities across nations and have proven to produce more reliable and efficient results. Our findings opine a bidirectional causality between ICT, energy consumption, and economic growth. Additionally, internet and mobile cellular subscriptions have a positive impact on economic growth, while energy consumption report negative impact, and the results for medium and high technological export reveals an insignificant impact on the economic growth of the 10 countries under study. Overall, the results are consistent for all the countries analyzed in this empirical study. The study provides valuable policy lessons to adopt ICT‐enabled technologies that will bring innovative changes and further lead to increased economic growth. It is recommended that the government must promote green ICT technology and enhance the technological industry that shall lead to higher productivity and sustainable development.

The effects of cross-functional coordination and competition on knowledge sharing and organisational innovativeness: A qualitative study in a transition economy

Adopting a coopetition framework and a qualitative study using depth-interviews of mid- and top-levels managers in Vietnamese business organisations, this study examines the potential significance of different coordination mechanisms (decentralisation, formalisation, lateral relations, informal networking, and shared vision) in fostering knowledge sharing between marketing and other departments in the presence of cross-functional competition. This study reveals the potentially significant effect of coopetition (i.e., simultaneous coordination and competition) on the degree of knowledge sharing between marketing and other departments in business organisations. The enhanced knowledge sharing can, in turn, positively improve organisational innovativeness. These findings add to limited research on intra-firm coopetition and shed light on how cross-functional coordination and competition can be managed to foster intra-organisational knowledge sharing towards enhancing innovation in the context of Vietnam, an emerging Asian country.

A goal programming model to study the impact of R&D expenditures on sustainability-related criteria: the case of Kazakhstan

PurposeMost countries face important economic, social and environmental challenges and are strongly committed to invest in research and development (R&D) activities to help support the long-run economic sustainable growth. This paper aims to extend the previous research on macro-economic growth models and introduces endogenous variables to determine the amount of investments in R&D activities.Design/methodology/approachThe model considers four different criteria and six economic sectors and aims at finding the optimal allocation of labor across different sectors. The model also endogenously determines the amount of investments in pollution abatement activities together with energy-related R&D efforts. The paper presents an application to the case of Kazakhstan, an emerging Asian country, that aims to become one of the top 30 most developed countries in the world by 2050.FindingsThe model shows the limits of the Kazakh agenda that identified too ambitious goals as the country has to go through a sociotechnical transition that involves a range of modifications in institutional structures, together with changes in user practices and the technological dimension. Kazakhstan should invest more in R&D activities able to develop sustainable energy sources to face the current electricity consumption demand and to reduce the greenhouse gas emission in the future.Originality/valueThe paper provides valuable knowledge for researchers and policy makers interested in the impact of R&D on the long-run economic sustainable growth.

An Experimental Approach to Examine the Antecedents of Attitude, Intention, and Loyalty Towards Cause-related Marketing: The Case of India and the Philippines

Firms utilize cause-related marketing (CRM) strategy to differentiate themselves by demonstrating their corporate responsibility efforts. However, national differences in the level of prior CRM exposure, local–global consumer values and culture can result in heterogeneity in consumer perceptions of CRM across countries. The authors reflect and examine national differences in customer attitudes, intention to participate in CRM and loyalty towards the company organizing the CRM campaign through variables like scepticism, perceived novelty, global connectedness and long-term orientation. They discuss and examine the impact of these variables on national preferences for CRM campaign variations by (a) type of company (local versus multinational) and (b) the time duration of CRM campaign (short term/long term). This research uses data from two emerging Asian countries—India and the Philippines. By diving deep into the nuances that drive consumers to participate in CRM, the research provides relevant strategies to drive CRM communication strategies that enhance consumer loyalty to the marketers of CRM campaigns of national, international and non-profit organizations.

A Cautionary Tale for Psychology and Higher Education in Asia: Following Western Practices of Incentivising Scholarship May Have Negative Outcomes

Cases of scientific fraud and research misconduct in general have escalated in Western higher education over the last 20 years. These practices include forgery, distortion of facts and plagiarism, the outright faking of research results and thriving black markets for positive peer reviews and ghost-written papers. More recently, the same abuses have found their way into Asian higher education with some high profile and widely covered cases in India, South Korea, China and Japan. Reports of misconduct are now reaching alarming proportions in Asia, and the negative consequences for individuals, institutions, governments and society at large are incalculable. The incentives for academic scientists in Asia are approaching and even surpassing those ordinarily seen in the West. Cash payments for publishing articles in high impact journals can double or even triple yearly salaries in some cases. Combining this environment with the simultaneous pressure to obtain oftentimes scarce funding for research has produced a culture of unethical behaviour worldwide. This article assesses three important issues regarding scientific fraud and research misconduct: distorted incentives for research and overreliance upon metrics, damage to the integrity of higher education and public trust and improving research environments so as to deter unethical behaviour. This is especially crucial for emerging Asian countries, in particular Association for Southeast Asian Nations (ASEAN), whose scientific infrastructure is less developed, but nonetheless has the potential to become a major player in the development of psychology as well as Science, Technology, Engineering and Mathematics (STEM) research and training.

A Study of the Formation of the New Middle Class in Emerging Asian Countries

A Study of the Formation of the New Middle Class in Emerging Asian Countries

Challenges and an Implementation Framework for Sustainable Municipal Organic Waste Management Using Biogas Technology in Emerging Asian Countries

Due to its ability to recover both material and energy from organic waste, biogas technology is considered one of the best technology for treating organic waste. While in many emerging Asian countries more than 50% of municipal waste is organic waste, the amount of organic waste treated with biogas technology remains very limited. This study identified key challenges faced by practitioners in sustaining biogas plants from literature and interviewed a number of sustainably operating biogas plant managers and, based on the findings, developed an implementation framework to help decision makers and practitioners in planning a sustainable municipal organic waste biogas plant facility.

Efficiency and economic benefit of dark-fermentative biohydrogen production in Asian circular economies: Evaluation using soft-link methodology with data envelopment analysis (DEA) and computable general equilibrium model (CGE)

This study combines a data envelopment analysis, a dynamic computable general equilibrium model with estimated secondary material flows for circular economy, based on economist Joseph Schumpeter's macroeconomic theory, to develop a novel soft-link model to determine the efficiency of forty-three dark-fermentative technology of biohydrogen, and technology improvement impacts on biohydrogen output and supply price for six major emerging Asian countries. The integrated model is found to be feasible.This study finds that efficiency of continuous technology significantly exceeds that of batch technology. Biomass substrate concentration is the most important input in the generation of biohydrogen statistically; pH influences the efficiency of the batch technology, and the efficiency of continuous production technologies significantly exceeds that of batch technologies, but still have a gap to improve to full production efficiency for most of continuous technologies. India and China generate highest output growth of biohydrogen in baseline scenario. Japan and India can most benefit from improvements in batch and continuous biohydrogen production technology. The models and results of this study provides guidelines and references for decision-makers in industry and government who are responsible for reforming future energy policy.

EU-Africa and Economic Partnership Agreements (EPAs) – Revisited

Il est largement admis que le commerce favorise la croissance économique et réduit la pauvreté dans les régions développées et en voie de développement du monde, y compris en Afrique. Le commerce est censé servir de relais par lequel les pays participants utilisent les avantages comparatifs de leurs ressources et capacités de production pour tirer parti de leurs atouts. Bien que le commerce entre pays puisse générer de la croissance à l’échelle mondiale, il arrive souvent que les avantages globaux ne soient pas répartis équitablement entre les partenaires commerciaux. Cela est évident dans le cas du continent africain, qui dépend entièrement de l’exportation de matières premières non transformées et de ressources minérales vers les pays développés et émergents d’Asie qui alimentent leur croissance économique. Cet article examinera, en termes généraux, les relations économiques et commerciales qui existent actuellement entre l’UE et l’Afrique. La position commerciale de l’Afrique est foncièrement fragile, caractérisée par une dépendance à l’égard des matières premières pour les exportations (avec une chute des prix sur les marchés internationaux) et un effondrement du secteur manufacturier qui nécessite l’importation de biens de consommation essentiels. L’Afrique a signé l’Accord de partenariat économique (APE) intérimaire sur les biens matériels avec l’Union européenne (UE) négociés dans le cadre de diverses RECs : par exemple, les blocs Afrique orientale et australe (ESA), CEDEAO, et CDAA. Les APE sont censés faciliter la mise en œuvre du libre-échange dans la mesure où l’UE offrira à l’Afrique un accès non assujetti aux droits de douane et aux quotas aux marchés de l’UE et lui concédera également son marché aux exportations européennes (réciprocité). Ainsi, les accords de partenariat économique constituent une menace pour la stratégie d’industrialisation des pays africains. La sortie britannique (BREXIT) de l’Union européenne a surpris les partisans de l’intégration régionale et du libre-échange. Les pays africains restent incertains quant aux impacts probables du BREXIT tant à l’intérieur qu’à l’extérieur du contexte des APE de l’UE. Le Brexit va sans aucun doute réduire l’accès au marché et l’aide au développement des pays en développement signataire de l’APE.

Does focus strategy work? A study of bank loan portfolios in Indonesia

PurposeThe purpose of this paper is to determine the impact of loan concentration on the returns of Indonesian banks and examines whether bank ownership types affect the relationship between concentration and returns.Design/methodology/approachThis research uses heuristic measures of concentration: The Hirschman–Herfindahl index and Deviation from Aggregated Averages are applied to Indonesian banks across all sectors. The data covers the pre and post global financial crises periods from 2003-2011 for 109 commercial banks in Indonesia. Panel feasible generalised least squares analysis was applied.FindingsThe findings show that loan concentration increases bank returns. The positive effect of concentration on returns tends to be more significant for domestic-owned banks. In addition, the interaction effect shows that the positive effect of concentration on returns is less for foreign-owned banks.Research limitations/implicationsThe Indonesian central bank changes to the reporting format of sectoral loan allocation by banks since 2012 in terms of the Indonesian Banking Statistics Details of Enhancement matrix requires separate data analysis for 2012 onwards. The findings of this paper could be enhanced by more detailed data like interest rate expenses and bank level sectoral non-performing loans data.Practical implicationsThe findings suggest that a focus strategy provides better returns. Moreover, bank ownership types is an important factor to consider when setting a bank lending policy.Originality/valueThis paper is among the few studies where different measures of loan concentration in combination with measures of return are applied in Indonesia as an emerging Asian country. The research also provides evidence of the impact of concentration on the interest earnings of the loan portfolios of banks in addition to return on assets and return on equity that are generally applied as measures of return in previous research.

Market concentration and bank competition in emerging asian countries over pre and post the 2008 global financial crisis

This paper examines the relationships between market concentration, bank competition, and efficiency in banking across six emerging Asian countries namely Bangladesh, India, Indonesia, Malaysia, the Philippines and Vietnam over the period 2005 to 2012. The countries selected for this study operate commercial banking activities with a comparatively large number of both publicly listed and private commercial banks providing a broad range of commercial banking services. For example, banks in Bangladesh, India and Vietnam used to be predominantly state-owned. But over the last few decades, governments have been issuing licenses to private owners. The methodological approach taken by our study provides an important and original contribution to the extant literature by testing various hypothesis that investigate the relationship between competition and efficiency across banks from a select group of Asian countries. We find that market concentration has a positive effect whereas competition has a negative effect on the efficiency of banks operating in these countries. This finding conveys a critically important message to the regulators of banks in these countries: there is a trade-off between quantity and quality. Our analyses also reveal that the effect of bank size on efficiency is positive whereas the effect of liquidity risk on efficiency is negative. This again supports the conventional wisdom that large banks are in a position to provide cost efficient services because they have the ability to attain economies of scale and scopes. Here again, the regulators have very important roles to play: while they have to put in place effective mechanism preventing big banks from being an oligarchy; at the same time, they should make sure that banks get liquidity support as funding pressure builds up.

Mechanism, Cause, and Control of Water, Solutes, and Gas Migration Triggered by Mining Activities

Although the growth in global coal consumption has been sharply slowed with the falls in China offset to a greater extent by the increasing demand in India and other emerging Asian countries, coal still remains the largest source of energy for the world with a share of almost 30% by 2040 [1]. Mining industry plays an important role in extracting underground resources, including coal [2]. However, a large number of disastrous mine accidents, such as flood, water inrush, tunnel collapse, gas outburst, and gas explosion, have been reported due to water and gas migration caused by the mining activities, posing a threat to the environment and also to the health and safety of field workers [3–5]. According to incomplete statistics, mining-induced accidents kill over thousands of workers around the world every year, especially in developing countries such as China and India. Water inrush and gas explosion accidents are the major causes for the reported mine accidents [6, 7].