Growth In Asia Research Articles

Uncovering Economic Growth Dynamics: The Role of Idiosyncratic Risk

Research Originality: This study provides a new perspective on the dynamics between foreign direct investment (FDI), idiosyncratic risk, and economic growth in ASEAN countries using structural equation modeling (SEM). It contributes to the literature by highlighting the nuanced role of idiosyncratic risk in shaping regional economic outcomes.Research Objectives: The study aims to examine the direct and indirect impacts of FDI inflows, idiosyncratic risk, and sectoral variables (manufacturing, agriculture, and services) on economic growth in ASEAN from 2013 to 2023.Research Methods: The study uses data from the ASEAN Statistical Database and applies SEM to estimate the relationships between these variables.Empirical Result: The main findings indicate that FDI inflows have minimal impact on idiosyncratic risk, as evidenced by regression coefficients below 0.001 for inward and intra-ASEAN FDI. In contrast, idiosyncratic risk significantly impacts economic growth. The results also reveal that sectoral variables such as manufacturing, agriculture, and services exhibit weaker associations with economic growth.Implications: This information suggests that policymakers should focus on exploiting idiosyncratic risk to improve economic development, while acknowledging the limited direct impact of FDI on risk management, thereby debating more appropriate strategies to promote sustainable economic growthJEL Classification: A11, E60, H11

The Impact of Demographic Change on Economic Growth in ASEAN

To study the impact of Demographic Change on Economic Growth in ASEAN. This study uses panel data from 1993 to 2022 from ASEAN countries by collecting data from the World Development Indicator, World Bank 2023, consisting of GDP per capita, working age population, Youth dependency population, and Elderly dependency population. We utilize the statistical completion program as a tool to help with the Panel Autoregressive Distributed Lag Approach (ARDL) method analysis. The results of the study found that variables are stationary at I(0) and I(1) level. Moreover, the estimated coefficients of the variables with the Pooled Mean Group reveals that Working age population had a positive impact in long-run on the GDP per capita in ASEAN countries, Youth dependency population had a negative impact in long-run on the GDP per capita in ASEAN countries, and also had a speed of adjustment to long-run equilibrium and for Elderly dependency population were not statistically significant. The result of Mean Group and Dynamic Fixed Effect further shows that there were not statistically significant. By means of the Hausman test, the results can be concluded that Pooled Mean Group estimation is most suitable.

International trade and economic growth in ASEAN

Purpose – This study aims to analyze the effects of international trade represented by imports and exports in the ASEAN region. Methods – This study uses import, export, labor, and FDI variables on GDP in 8 countries in ASEAN for the period 2000 – 2022 using a panel data regression approach. Findings – The results of this study are that international trade has an impact on economic growth. The results specifically show that the negative effects of imports and positive exports contribute to GDP and labor has a positive effect on GDP. Implication – This study recommends a clear international trade policy between countries, namely by simplifying trade restrictions and conditions between countries. Originality – This study contributes to empirical studies of international trade, especially for cases in ASEAN. Abstrak Tujuan – Penelitian ini bertujuan untuk menganalisis efek dari perdagangan internasional yang direpresentasikan oleh impor dan ekspor di wilayah ASEAN. Metode – Penelitian ini menggunakan variabel impor, ekspor, labor, dan FDI terhadap GDP pada 8 negara di ASEAN untuk periode 2000 – 2022 menggunakan pendekatan regresi data panel. Temuan – Hasil dari penelitian ini adalah bahwa international trade memili dampak terhadap pertumbuhan ekonomi. Hasil secara spesifik menunjukkan bahwa efek negatif impor dan positif ekspor berkontribusi terhadap GDP serta labor berpengaruh positif terhadap GDP. Implikasi – Penelitian ini merekomendasikan adanya kebijakan perdagangan internasional yang jelas antar negara yaitu dengan mempermudah batasan dan syarat perdagangan antar negara. Orisinalitas – Penelitian ini berkontribusi pada kajian empiris perdagangan internasional khususnya untuk kasus di ASEAN.

Assessing the Impact of ASEAN’s Harmonised Minimum Efficiency Performance Standards on AC Manufacturers

Abstract The residential sector in ASEAN is highly dependent on cooling as a primary energy use along with cooking, making up about 82% of the sector’s demand in 2050. Air conditioner (AC) is one of the cooling appliances in ASEAN that will drive energy demand growth in ASEAN. Consequently, this surge in demand also contributes significantly to the region’s CO2 emissions. Recognizing the impact of AC utilisation, energy efficiency in AC is considered the most effective way to propose energy savings and environmental impacts. In order to improve energy efficiency in AC, ASEAN has committed to stringent Minimum Energy Performance Standards (MEPS) by achieving a target for a Cooling Seasonal Performance Factor (CSPF) of 3.7 by 2023 and 6.09 by 2025. However, an update of MEPS across the ASEAN region has key two challenges: Firstly, the financial investment required by manufacturers; and secondly, the development and evolution of AC technology. This study aims to utilise Techno-Economic Assessment (TEA) to evaluate the impact of increased MEPS on AC manufacturers in the ASEAN region, with MEPS levels forming the framework for the TEA. The findings from this study offer valuable insights to manufacturers and policymakers, particularly regarding the impact of increased MEPS on AC manufacturers.

The decoupling dilemma: Examining economic growth and carbon emissions in emerging economic blocs

This study explores whether emerging economic blocs can decouple economic growth from carbon emissions amidst global climate change concerns, integrating Environmental Kuznets Curve (EKC) theory, Stakeholder theory, and Ecological Modernization Theory (EMT). Using fuzzy-set qualitative comparative analysis (fsQCA), it examines the relationship between monetary policy and carbon emissions in two key blocs: ASEAN and GCC. Findings reveal that robust GDP growth in ASEAN correlates with higher ecological footprints, underscoring the environmental cost of rapid expansion. Conversely, the GCC region highlights renewable energy consumption as crucial for managing ecological footprints, despite challenges in energy mix adequacy. These insights offer region-specific understandings, challenging conventional views and guiding policymakers in aligning economic growth with environmental sustainability. The research underscores the need for tailored strategies to develop sustainable economic models that decouple growth from environmental degradation.

An Examination of the Logistics Infrastructure's Impact on the Economic Growth of ASEAN

An Examination of the Logistics Infrastructure's Impact on the Economic Growth of ASEAN

Understanding Idiosyncratic Risk and Economic Growth in ASEAN

This study examines the relationship between idiosyncratic risks, foreign direct investment (FDI), and economic growth in ASEAN countries using data from 2013 to 2022. Idiosyncratic risks refer to specific assets or individual sectors, distinct from systemic or market-wide risk. This study aims to determine whether idiosyncratic risks affect the ASEAN region's FDI flows and economic growth. The study uses structural equation modeling (SEM) analysis to analyze the ASEAN Statistical Database data. Regression weights are used to evaluate the relationship between idiosyncratic risks, FDI, inflation, SDG availability, and economic growth. The results indicate that although there is no significant direct relationship between idiosyncratic risk and FDI inflows, there is a significant positive correlation between idiosyncratic risk and economic growth. These findings have implications for policymakers and investors seeking to promote sustainable economic development in ASEAN countries. Understanding the dynamics of specific risks can inform strategies to attract FDI and stimulate economic growth. This study contributes to the theoretical basis of risk management and economic development in emerging market economies such as those in the ASEAN region.

The Impact of Open Trade on Economic Growth in ASEAN Developing Countries

Trade openness promotes industrialization and has a significant impact on a nation's economic development. Increased economic growth can be a result of foreign investment, and state revenue can rise as a result of significant exports of domestic goods. This study aims to assess how economic trade openness affects the economic development of ASEAN nations. Cross-sectional and time-series analyses were conducted using panel data between 2013 and 2022. The study demonstrates that whereas FDI and positive and major economic growth, exports and positive and large economic growth, and imports and negative and insignificant economic growth, are all associated with significant inflation and negative economic growth. It is anticipated that the nation will raise the standard of goods to promote commerce and economic progress.

Reconstruction of July-September Standardized Precipitation-Evapotranspiration Index (SPEI) for the Hindu Kush region of Northern Pakistan

Abstract The Prolonged drought resulting from global warming is considered an important factor affecting the Asia's socioeconomic growth of West Asia, with a significant impact on the dynamic forecasting of water supply and forest ecosystems. In such a scenario, Understanding future long-term drought (SPEI) changes is crucial for accurately forecasting regional drought shifts in the Hindukush region. In this study, a 517-year (1506-2022 CE) long tree-ring width chronology of the Himalayan Cedar (Cedrus deodara D. Don) from the eastern Hindukush has been developed. The July-September SPEI has revealed a positive and significant relationship (r = 0.633, p < 0.001) with tree growth, which leads to SPEI reconstruction from AD 1626 in the Hindu Kush Region. Our reconstruction model has explained 40.01% of the climate variance during the instrumental period from AD 1965 to 2018. Fourteen wet periods (≥ 3 years) were observed before the instrumental period, specifically in C.E. 1629–1635, 1638–1658, 1666–1674, 1680–1701, 1715–1724, 1770–1776, 1794–1797, 1802–1810, 1822–1846, 1850–1857, 1872–1881, 1883–1890, 1906–1914, and 1921–1937. Similarly, twelve dry summer periods were also observed in the past 339 years, such as C.E. 1659–1665, 1675–1679, 1702–1714, 1725–1769, 1777–1793, 1798–1801, 1811–1821, 1847–1849, 1858–1871, 1891–1905, 1915–1920, and 1938–1963. Nevertheless, AD 1663 was individually the wettest (with a value of 2.13), while AD 1754 was the driest (-0.99) year. The spatial correlation analysis and its comparisons with Karakoram-Himalayan drought and precipitation reconstructions have convincingly confirmed the reliability of our SPEI reconstruction. Consequently, this reconstruction can effectively serve as a proxy for large-scale drought variability in the Hindu Kush region of northern Pakistan. Our findings strongly suggest the considerable dendrochronological potential for further climatological studies in the western Hindu Kush Mountains System.

Does The Military Expenditure Hurt The Economic Growth? Evidence Derive From South Asian Countries

Research Aims: This study examines the impact of military spending onthe economic growth in South Asian countries.Design/methodology/approach: It uses the 134 unbalanced data points ofsix South Asian countries collected from the various reports of the WorldBank. Descriptive and exploratory research designs are used. It is basedon the positivist research philosophy. Some statistical and econometrictools like descriptive statistics, panel unit root test, Johnsen and Kaoresidual cointegration test, and panel ARDL model are used to explorethe impact of military expenditure, inflation rate, unemployment rate,and gross capital formation on the economic growth of South Asiancountries.Research Findings: Inflation has a positive effect on economic growth inthe long run but a negative impact in the short run. Military expenditurehas a positive effect in the long run but a negative impact on economicgrowth; the unemployment rate is negative, and gross capital formationpositively impacts economic growth in the long and short run in SouthAsian Countries. Military spending does not significantly affect economicprogress in the long run, but military expenditure hurts economic growthin the short run. One unit increase in military spending results from a0.633 percent decrease in the GDP growth of South Asian countries. Theyouth unemployment rate negatively impacts economic growth in theshort and long run. One unit increase in the unemployment rate resultsfrom 0.093 and 0.319 unit decrease in economic growth in the long andshort run, respectively. Likewise, one unit increase in capital formationand inflation rate results from 0.203 and 0.116 unit increase in GDPgrowth in the long run, respectively. The inflation rate negatively impactseconomic growth in the short run. One unit increase in inflation rateresults from 0.191 unit decrease in GDP growth in short-run. Prioritizestrategies that mitigate short-term negative impacts of inflation andmilitary expenditure while fostering long-term economic growth throughinvestment in capital formation and addressing youth unemployment inSouth Asian countries.Keywords: Inflation, unemployment, panel data, Keynesian stimulushypothesis, stagnation

The Effect of Energy Security on Economic Growth in ASEAN During 2000–2020

Energy is an important input for economic growth. The increase in non-renewable energy consumption has an impact on energy insecurity. This study aims to calculate energy security and analyze its effect on ASEAN economic growth during the 2000–2020 period. The method used in this study is the Principal Component Analysis to calculate energy security and the Feasible Generalized Least Square panel data regression to analyze its effect on economic growth. The authors use four dimensions to build an energy security index, namely availability, accessibility, acceptability, and efficiency. Several variables are included in the model, are capital, labor, trade, and world oil price. The results of this study indicate that the index and dimensions of energy security have a positive influence on ASEAN economic growth, except for the efficiency dimension. Capital. employment, trade, and oil prices have a positive influence on ASEAN economic growth. Regional Governments need to reduce the gap in the electrification ratio in several countries and build energy infrastructure. The government also needs to increase the application of energy diversification, increase renewable energy production and the need to pay more attention to environmental policies in economic activities.

Does energy transition matter to sustainable development in ASEAN?

The energy transition towards renewable sources represents a pivotal factor in pursuing sustainable development. This study reviews the impact of renewable energy on three aspects of sustainable development, namely economic, social, and environmental aspects in ASEAN. To quantify these aspects, GDP per capita proxies for the economic dimension, unemployment rates for the social dimension, and CO2 emissions for the environmental dimension. The data used is panel data of 10 ASEAN countries from 1996-2020. Pooled Mean Group (PMG) estimation technique is applied to identify the relationship between renewable energy and the dimensions of sustainable development. The study results reveal that renewable energy has a significant influence on sustainable development in the long run. Specifically, renewable energy is able to stimulate GDP per capita levels, thus potentially serving as a determinant of sustainable economic growth in ASEAN. Furthermore, the findings of this study suggest that renewable energy has the capacity to reduce CO2 emissions in the long run. Efforts to increase the share of renewable energy usage are needed to mitigate the risk of environmental degradation. However, it is noteworthy that our study underscores the adverse impact of the energy transition on the social dimension, as it can potentially drive-up unemployment rates in the long run. This impact can be attributed to labor market relocations and structural changes. Novice workers in the renewable energy sector may face the risk of displacement. Consequently, this study has implications that underscore the need for inclusive approaches to elevate the usage of renewable energy. Furthermore, a well-structured policy framework is needed to encourage more investments and prepare the competent workforce in the renewable energy sector.

Construction of Skyscrapers: Boon or Bane from an Economic Perspective

The main objective of this paper is to explore the influence of the construction of skyscrapers on a nation's economy. It explores how skyscrapers influence the economic status of the nation worldwide. Drawing from an extensive literature review and the researcher's insights, the article underscores the growth of Asian and Western skyscrapers and their influence on the nation's economic status. It places equal emphasis on the historical aspects, with a vital role regarding the nation's economy and the economic crisis due to the construction of skyscrapers. Thematically, the researcher analyzed the literature regarding the construction of skyscrapers and its impacts and challenges. Firstly, the role of skyscrapers on the economic growth of a nation is described in detail, and the data related to Asian and Western high-rise buildings is reviewed. It shows that skyscrapers play a vital role in developing the economic condition of some nations. Secondly, the influence of the construction of tall buildings is also reviewed deeply, as well as the challenges and opportunities faced by the people and nation, like the economic crisis due to significant investments in skyscrapers. Overall, the high skyscrapers are the glory and identity of the nation. It enhances the nation's economic progress rather than being a burden.

The Impact of Digitalization on Economic Growth in ASEAN

Purpose – The study aims to confirm a positive relationship between digitalization and economic growth in ASEAN. It seeks to provide insights into the challenges and future directions for ASEAN’s economic growth by examining the impact of digitalization through broadband penetration. Design/Methodology/Approach – This study employs regression analysis using a fixed-effect model with data sourced from World Development Indicators (WDI) and the United Nations Development Programme (UNDP), covering the period from 2008 to 2020. Its primary objectives are to offer a comprehensive understanding of the relationship between digital technologies and the economic development of ASEAN, and to identify factors contributing to economic growth in the region. The focus is on Southeast Asian countries, namely Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam Findings – The findings yield compelling evidence in support of the hypothesis, emphasizing the pivotal role of expanding broadband infrastructure in fostering economic growth across ASEAN countries. Furthermore, the study underscores the importance of enhancing broadband infrastructure and highlights the potential impact on the economic development of developing nations. It emphasizes the crucial role played by fixed-broadband, mobile-broadband, and fixedtelephone subscriptions in contributing to the economic growth of ASEAN countries. Research Implications – This study proves a significant positive relationship between digitalization and economic growth in the region. It offers a preliminary understanding of the impact of digitalization on economic growth in ASEAN, laying the groundwork for future research.

Education and economic growth: Does the East Asian education fever overstate the growth effect?

This paper employs a cross-country regression to investigate the role of education in the growth of nations. The sample includes 101 countries over the period from 1980 to 2015. We have found that education, in general, has significant effects on economic growth. For the robustness of the results, several sensitivity tests were conducted using alternative measures of education, as well as a dummy variable to isolate an East Asian growth effect. The results were generally robust in that the growth effect of the quantity measure of schooling was statistically significant. However, the growth effect of quality measures of education was substantially mitigated and became insignificant when the East Asian effect was segregated from the regression. The results suggest that the significant growth effects of educational quality found in the literature could have been overstated because of the East Asian growth effect which was largely attributed to the education fever in East Asia.

ASEAN banking industry performance analysis

This research focuses on the banking industry in ASEAN. The ASEAN economy is one of the economic forces that needs to be considered. This is due to the fast and significant economic growth of ASEAN even in the midst of the 2008 financial crisis. In this study, we will look at the specific influence of banks, industry, macroeconomics and Country Governance Indicators in determining banking performance in ASEAN. The research period was taken during the post-crisis period, namely 2011 to 2019. The dependent variable used was bank performance as proxied by EARTA, while the independent variables were divided into 4 main categories, specific banks, industry, macroeconomics, and Country Governance Indicators. Country Governance Indicator variable using Corruption Index. The data used is sourced from the Osiris Database for all banks in ASEAN. This study uses multiple linear regression analysis techniques. The results showed that the bank-specific variables; there are 4 variables that have a significant effect on banking performance, industry indicators have no effect on bank performance, macroeconomic specific variables have a significant effect on bank performance, while the Country Governance Indicator proxied by the Corruption Index has an effect on bank performance.

Role of Socioeconomic Uncertainty on Foreign Direct Investment (FDI) Inflows and Economic Growth in ASEAN

The interconnectedness begins with active trade and foreign investment flowing to the host country, making the economies in the world integrated into one another. Unfortunately, the rise of interconnectedness has sky-rocketed uncertainty. Economists then build the considered socioeconomic index, namely the World Uncertainty Index (WUI). This research aims to determine whether such an index can affect Foreign Direct Investment (FDI) inwards and economic growth, especially in ASEAN. We use yearly data of FDI inflows, economic growth, and WUI as a proxy for the global level of domestic uncertainty, inflation, and real effective exchange rate from 2015 to 2019 for each ASEAN member state. We estimate a System Generalized Method of Moments (Sys-GMM) to see the dynamic relationship and the short- and long-run effect of the socioeconomic uncertainty proxies with respect to FDI inflows and economic growth. The results show that the uncertainty index with respect to FDI inflows and growth has been negative and significant. Meanwhile, only FDI inflows sensitively respond to socioeconomic uncertainty in the long run, despite the growth for ASEAN member state.

Analysing the impact of FDI and Institutional Quality on Economic growth in South Asian: Panel ARDL APPROACH

This study investigates the impact of institutional quality and foreign direct investment (FDI) on the economic growth of South Asia from 1996 to 2021. The analysis employs various statistical techniques, including panel unit root testing, panel cointegration testing, and Panel Autoregressive Distributive Lag (PARDL) models, to gain insights into the region's economic development. For finding the association between institutional quality, FDI, domestic investment and economic growth in South Asia, first tried to check the unit root problem in the selected series by employing the panel unit testing and results of these tests conclude that some variables are integrated at level while some other variables are integrated at the first difference, so for testing the cointegration or long-run relations among these variable the panel cointegration tests are employed and these tests conclude the long-run association among the variables. For checking the long and short-run impact of institutional quality, FDI, domestic investment and economic growth the panel ARDL test is employed. The results demonstrate the significant positive long and short-run impact of institutional quality, FDI, domestic investment on economic growth in the region of South Asia. These relationships demonstrate the persistent nature of interactions among these variables, emphasizing the importance of policies that promote strong institutions, attract foreign investments, and stimulate domestic capital formation to sustain regional economic growth. The study offers critical recommendations for South Asian countries to enhance their economic growth by focusing on the strengthening institutional quality, encouraging FDI, developing the special economic zones, promoting domestic investment, investing in the infrastructure and promoting regional economic integration. These recommendations offer a clear path for South Asian countries to achieve sustained economic growth by addressing the interplay between institutional quality, FDI and domestic investment dynamics. By implementing these measures, South Asia can secure lasting prosperity and enhance the well-being of its people in a rapidly evolving global economic landscape.

Determinants of market share in sharia banking of the ASEAN countries

This study analyzes the effect of Islamic banks on economic growth in ASEAN. This type of research is quantitative, with data analysis using multiple linear regression and classical assumption tests. The research sample is Islamic banking registered with World Bank ASEAN. The findings of this study consist of 1) competitiveness, capitalization, financing risk, size, and interest rates do not affect market share. 2) GDP and exchange rate effect on market share. The results of this study are expected to create an integrated and robust Islamic financial area, so there needs to be cooperation among relevant parties among ASEAN countries to reduce the gap. Sharia economic actors and practitioners must remain enthusiastic and optimistic in Sharia society and socialize Sharia. The benchmark of competitive advantage is internal strength that is better than its competitors, and the company can fix internal weaknesses. In addition, external factors also need attention, and companies must be observant to see existing opportunities and minimize threats.

Financial Development Analysis of Economic Growth in ASEAN

This study aims to analyze the effect of domestic credit to private sector, bank overhead cost to total assets, stock prices volatility and loand net bank to GDP on economic growth in ASEAN, research countries include Indonesia, Malaysia, Thailand, the Philippines and Vietnam during the period 2001-2020 by applying the panel equation analysis method. An important finding in this study is that domestic credit to the private sector has a negative and significant impact on economic growth in ASEAN, while bank overhead costs to total assets affect economic growth positively and significantly in ASEAN. Furthermore, stock price volatility affects economic growth negatively and is significantly influenced in ASEAN and net bank loans to GDP affects economic growth positively and significantly in ASEAN. This study recommends that policy makers need to seek appropriate economic strategies to increase economic growth from the aspect of financial development.