Pacific Economic Research Articles

Articulating the Pacific Economy: Chinese Mercury, American Silver, and Californian Sea Otters

Articulating the Pacific Economy: Chinese Mercury, American Silver, and Californian Sea Otters

Dynamics of energy transition and climate actions on sustainable cities: A cross country comparison of East Asia and Pacific

AbstractMassive energy consumption and poor regulatory framework in urban areas have created environmental slums and are a serious threat to sustainability. East Asian and Pacific economies are vulnerable to climate crises and striving for sustainability by transition to green energy and taking climate initiatives. In the past, no study has explored the effectiveness of energy transitions and climate actions in the context of East Asia and Pacific. To understand the effectiveness of these efforts, this study has been planned and executed to examine the impact of energy transition and climate actions, along with emissions from residential and commercial buildings, per capita income, and effective governance, on sustainable cities and communities in East Asia and the Pacific region. The study utilizes panel data of six high‐income countries and 11 lower‐middle and upper‐middle income countries from 2000 to 2022 for comparative empirical analysis. Empirical analysis is performed using truncated regression due to the nature of the data. The study found that energy transition, climate actions, and governance effectiveness increase the sustainability of cities and communities. However, emissions from residential buildings and per capita income adversely affect the sustainability of cities and communities. Furthermore, the dynamics of energy transition and climate change vary according to the income classifications of East Asian and Pacific countries. Energy transition and emissions showed a higher impact in HICs, while climate actions were more resilient in lower‐middle and upper‐middle income countries. These findings emphasize the transition to clean and green energy, prompt climate policy actions, and effective governance to ensure sustainability in East Asian and Pacific cities and communities.

Global liquidity spillovers in the Asia–Pacific region: policy-driven versus market-driven effects

This research investigates the spillovers of global liquidity to Asia–Pacific countries, focusing on the contradictory effects of policy-driven liquidity created by monetary stances in advanced economies and market-driven liquidity generated by the private banking sector. Our findings stand in sharp contrast to previous studies, showing that shifts in macro-financial indicators in Asia–Pacific economies are predominantly influenced by market-driven shocks rather than those of policy-driven liquidity. Specifically, liquidity shocks associated with surges in cross-border credit flows, especially those denominated in US dollars, drive up asset prices and have boosting effects on inflation and economic output. A positive shock to market liquidity also results in an appreciation pressure on domestic currencies and a short-term rise in interest rates. However, excess liquidity shocks caused by the Bank of Japan’s adjustments in shadow short rates and balance sheets have a negative effect on inflation and bring about temporary depreciation pressure on Asian currencies. Surprisingly, we find that Asian responses to financial easing associated with the Fed’s monetary policy change are not well-pronounced.

Did economic cooperation encourage trade in essential medical goods? Empirical evidence from the Asia–Pacific during COVID‐19

AbstractOur paper empirically investigates the role of economic cooperation involving trade in coronavirus disease (COVID‐19)‐related essential medical goods—vaccines and their value chains, personal protective equipment, and diagnostic test kits—across 29 Asia and the Pacific economies. The paper incorporates vaccines and their global value chain products trade for the first time in the empirical literature. We further investigate whether trade facilitation, proxied by membership in regional trade agreements (RTAs), can help mitigate any adverse impact on trade in essential medical goods, applying a structural gravity framework. The results confirm that while trade is critical for Asian economies, its nature differs. Low‐income economies are largely dependent on imports, whereas selected middle‐ and high‐income economies are part of two‐way trade and engaged in the low end of the vaccine value chain. We find that the onset of the pandemic has hurt exports of these goods. This adverse effect is found to be lowered for economies engaged in RTAs. This emphasizes the role of governments in committing to RTAs and implementing trade facilitation measures.

Economy and pollution by CO2 emissions; Kuznets environmental curve in Asia Pacific economies

<p>The economies of the Asia Pacific (APEC) region are among the most dynamic in the world with the highest levels of trade activity and environmental degradation. One way to study trends in the relationship between the economy and pollution is the Environmental Kuznets Curve (EKC). This perspective assumes that, in the long run, higher wealth levels would achieve lower pollution levels. The objective was to analyze whether the behavior of EKC occurs for APEC economies. The method used was an econometric model for carbon dioxide (CO2) emissions and GDP. The results showed a stationary unit root in the first differences, suggesting that the presence of EKC behavior was explained by a high probability that the GDP coefficient reached an inflection point to become negative and significant. However, when tests were carried out to find the differences between two groups of economies (developed and developing), it was found that the turning point for developing economies had not yet been reached, unlike developing economies.</p>

Does national intellectual capital matter for economic growth in the Asia–Pacific economies?

PurposeCountries worldwide aim to improve their comparative advantages by efficiently using scarce resources for economic growth and development. While many studies have been conducted to measure intellectual capital at the firm's level, measuring it at the national level has been under-examined. In addition, while the important role of national intellectual capital in economic growth has been theoretically recognized in literature, this important link has largely been ignored in empirical analyses.Design/methodology/approachThis study uses the newly developed index of national intellectual capital from Vo and Tran's (2022) study to examine its effects on national economic growth in the long run. The dynamic common correlated effects technique and the pooled mean group estimation are used on the sample of 23 economies in the Asia–Pacific region from 2000 to 2020.FindingsFindings from this study confirm the positive and significant contribution of the national intellectual capital to economic growth in the region. The authors also find that, as a feedback effect, economic growth will also enhance and improve the accumulation of national intellectual capital.Practical implicationsThe findings of this paper provide valuable evidence and implications for policymakers in managing and improving national intellectual capital in the Asia–Pacific region.Originality/valueTo the best of the authors’ knowledge, this is the first empirical study to examine the impact of national intellectual capital on economic growth in the long run in the Asia–Pacific economies.

From finance to sustainability: Understanding the financial development-environment nexus with the environmental Kuznets curve in East-Asia and Pacific economies

This study examines the effect of financial development on environmental quality in East Asia and the Pacific (EP) countries from 1995 to 2020. A unique technique, Dynamic Common Correlated Effects, is utilized to resolve cross-sectional dependence and heterogeneity. The Pooled Mean Group technique is also applied to verify the robustness of the results. The long-run analysis confirms financial development's positive and significant impact on CO2 and CH4 emissions while exhibiting an inverse impact on ecological footprint and N2O emissions in overall and developed EP countries. The study confirms the presence of an inverted U-shaped environmental Kuznets curve (EKC) when analyzing ecological footprint, CO2, and CH4 across all groups of selected countries. However, for N2O emissions, a U-shaped EKC pattern emerges specifically in less-developed and overall EP economies. It is proposed that governments of EP economies should maintain financial development while promoting sustainable environmental management to address climate challenges.

AN EVALUATION OF ROBO-ADVISOR RISK ASSESSMENT QUESTIONNAIRES IN SELECTED ASIA PACIFIC ECONOMIES

This study was conducted to evaluate the risk assessment questionnaires of a sample of 30 robo-advisors from seven selected Asia Pacific economies. Using a descriptive research approach, the study initially classified the questions gathered from the robo-advisor risk assessment questionnaires into risk capacity and risk tolerance, and further divided them into 26 subcategories. Then a comparison of the number of questions in each robo-advisor’s questionnaire was followed, where the risk tolerance wa found to have a higher proportion of questions than risk capacity. Next, the comparison of the questions per subcategory for each sample economy was done and reported that questions on investment amount dominate the risk capacity category, while risk versus return preference prevails in the risk tolerance category. Lastly, an analysis of the correlation between the answer value and percentage of equity in the recommended portfolios of robo-advisors in each sample economy was performed. The findings revealed that most of the robo-advisors formulate their portfolio recommendations without utilizing all the parameters or questions in the risk assessment questionnaires. The key influences of robo-advisors’ portfolio recommendations were asset allocation choices of the investors, followed by the investors’ attitude towards risk and risk versus return preference. This paper enriches the literature on robo-advisors by evaluating the risk assessment questionnaires adopted in the Asia Pacific region. In terms of practical implications, the results highlight the deficiencies of the existing questionnaires and assert that they should be reviewed and redesigned to more accurately capture investors’ risk characteristics and reflect all information gathered in the portfolio recommendations.

“Soft Gold” Before the Gold Rush: Sea Otter Pelts in the “Competitive Expansion” of Merchant Capitalism and the Creation of a Pacific Ocean Economy

Objective/Context: In this article, we examine how Chinese demand for pelts—of sea otters and other marine mammals—fueled the eighteenth-century competitive expansion of European and later American merchants and explorers in the Pacific islands and along the Pacific coast of North America. Sea otter pelts were a commodity directly linked to the creation of a Pacific Ocean economy, and California’s colonization resulted from imperial dynamics to which this trade gave rise. Methodology: Using both primary and secondary sources, we examine how these merchants’ quest to supply the lucrative Chinese luxury market with furs—“soft gold”—brought them into contact with indigenous peoples whose livelihoods and commercial networks would also be recruited into this global market but on quite unequal terms and with devastating consequences. Originality: The growth of this Pacific trade throughout the eighteenth century fueled geopolitical rivalries that led to the colonization of California with a system of missions and military garrisons (presidios) and, eventually, to a new ecology as a result of plants and animals brought from New Spain before the Gold Rush and the Treaty of Guadalupe Hidalgo. Many, including Marx and Engels, have claimed that the Gold Rush contributed significantly to the dynamics of industrial capitalism; nevertheless, we argue that its conditions of possibility were laid out centuries earlier via the complex geopolitical and ecological connections through which this Pacific economy was articulated. Conclusions: During the eighteenth century, the Pacific’s products were extracted and commodified in circuits whose demand center was China. It is precisely the prior existence of these global markets—centered on silver and “soft gold,” or sea otter furs—that explains the presence of Europeans and Americans in California eager to prospect for the yellow metal in 1848.

Human Capital, Trade Competitiveness and Environmental Efficiency Convergence Across Asia Pacific Countries.

This study mainly investigates 14 Asia Pacific economies' environmental efficiency. Departing from previous studies ignoring environmental technology heterogeneity, we evaluate environmental efficiency through metafrontier super epsilon based model (EBM). We compare environmental efficiency convergence across different regions via unit root test and truncated regressions. We analyze how trade competitiveness impact environmental efficiency. We also explore effect of green technology and human capital on environmental efficiency from the perspective of endogenous growth. Our findings indicate that stochastic and absolute β-convergence tendencies were confirmed. Human capital can enhance environmental efficiency convergence. Trade competitiveness showed a mixed impact on environmental efficiency convergence, confirming scale, composition and technical effects. It is better to enhance human capital, strengthening environmental regulations under international competition as well as relentlessly pursuing green industrialization across Asia Pacific countries.

The influences of telecommunication technology and gender differences on private savings in the Asia–Pacific region

PurposeThe purpose of this study is to examine empirically the impacts of gender differences, telecommunication technology (ICT) and other determinants on private savings in 28 selected Asia–Pacific countries.Design/methodology/approachThis study employs the panel data from 2010 to 2017 across 28 selected Asia–Pacific countries. To enhance robustness and address the possibility of endogeneity issue, the present study utilises the fixed effect instrumental variable (IV) estimator to estimate the private savings model for Asia–Pacific region.FindingsThe present study finds that private savings is positively related to disposable income and ICT, but it is negatively associated with the degree of dependency. However, the association between interest rates and private savings are inconclusive as both positive substitution and negative income effects on private savings were observed. Moreover, the results also indicate that working females tend to save less than working males and that of the educated female, despite their impacts are varied across educational attainment levels.Originality/valueThis study provides a novel insight into private savings patterns by focussing upon the gender differences and ICT aspects. In stark contrast to previous literature on the issue, the authors find that working and educated females negatively impact private savings in Asia–Pacific economies due to income inequality and consumption habits. However, the results show that ICT accelerates private savings as it provides easy access to financial services and the requisite frameworks, such as e-business platforms, for generating passive income as well as provide the modalities for more cost-efficient shopping such as price and product comparison frames that yield costs savings which can then be potentially channelled into private savings.

Who does it better and why? Empirical analysis of public-private partnership in infrastructure in Asia-Pacific

PurposeThis research has two primary goals: first, to develop a composite index that evaluates the degree to which Asian–Pacific economies are prepared to engage in public–private partnerships (PPPs), and second, to investigate the factors that have been most influential in the formation of PPP arrangements in the nations' infrastructure over the course of the period 1995–2016.Design/methodology/approachThe study constructs sectoral and overall index of possible determinants of PPP. Subsequently, it examines each constructed index's role in PPP investment. The author also conducted a panel data analysis to understand the role of each of the potential determinants on PPP projects and investments. This paper analyzes the author’s empirical models using a range of cross-section and panel estimators, including Poisson, zero-inflated Poisson and fixed effect.FindingsThe study’s results based on cross-section analysis suggest that regulatory and institution quality, institutional arrangement and regulatory frameworks, financial market development and macroeconomic stability positively impact investment in PPP. Moreover, the results depict that financial market development has the most substantial impact on PPP investment, followed by macroeconomic stability and prior experience with PPPs. The panel data analysis shows that per-capita income, financial development, inflation, debt, resource import and fuel export are crucial determinants of PPP in Asian–Pacific economies.Practical implicationsGovernments of the countries should promptly amend the important policies outlined in this study and adopt a more robust strategy to foster a competitive PPP environment. This will aid in maintaining transparency and gaining the confidence of investors. The study’s findings may assist policymakers in focusing on specific areas in need of improvement. Social welfare and industrialization are ultimately enhanced by the formulation of such policies and by attracting additional infrastructure investment.Originality/valueThis is the first attempt to rank countries on the basis of PPP enablers. Unlike previous studies, this study examines the role of a large number of indicators in determining PPP investment and projects in cross-section as well as panel data framework. The study also investigates the effects of PPP specific provisions and rules. Furthermore, the focus is specifically on Asian–Pacific countries, which are a mix of third-world, emerging, developing and developed countries. Focusing on Asia–Pacific is also crucial because the region is home to most of the world's population, and the region's infrastructure outcomes significantly impact their lives.

The value of lost output and cost of illness of noncommunicable diseases in the Pacific

Background and ObjectivesThe Pacific Island Countries face some of the highest rates of Noncommunicable Diseases (NCDs). This study estimates the economic costs of NCDs for each year from 2015 to 2040, focusing on eleven Pacific Island nations.Data and Methods:Two methods were used to estimate the mortality and morbidity costs using a ‘value of lost output’ and ‘cost of illness’ approach respectively. ResultsFive results stand out in terms of projected economic costs of NCD mortality and morbidity analyses in the Pacific: (i) The economic burden of NCDs in the Pacific is greater than expected for middle-income countries; (ii) Although cardiovascular disease is the biggest contributor to the mortality burden in the region, diabetes plays a far greater role in the Pacific countries compared to the global average; (iii) The economic burden of NCDs is increasing with time, especially as incomes rise; (iv)The biggest driver of lost output is the potential loss of labor due to early death from NCDs; and (v) The cost of illness due to diabetes is high across the Pacific countries, with highest among the Polynesian countries. ConclusionsNCDs alone can put enormous threat to the small Pacific economies. Targeted interventions to reduce disease prevalence, as outlined in the Pacific NCDs Roadmap, are vital to reduce the long-term costs associated with NCD mortality and morbidity.

House price decoupling in East Asia and the Pacific: Trilemma versus dilemma revisited

This paper investigates the extent to which local property prices co-move with global property prices for selected East Asia and the Pacific (EAP) economies. Having documented the existence of house price synchronicity, the main focus of the paper is on the extent to which global financial integration in the housing markets in the EAP economies is characterized by the monetary trilemma versus dilemma proposition. The paper finds that capital controls possess effective insulating properties while exchange rate flexibility does not, offering some evidence in favor of the dilemma rather than the trilemma. The paper also finds that borrower-based macroprudential policies can reduce synchronicity when capital accounts are open.

Cultural and educational releases of salmon in areas blocked by major hydroelectric projects on the Columbia River

Abstract Salmon are revered by Pacific Northwest Tribes as a central figure in their cultural and spiritual identity and have been a critical food resource for millennia. Historic commercial overfishing and hydropower development on the Columbia River have devastated salmon runs and altered tribal communities. Before European settlement of North America, most Pacific Northwest Tribal economies were based on obtaining salmon for food and bartering for other commodities. Despite extensive efforts to promote salmon recovery in downstream areas, most salmon populations continue to struggle throughout the Columbia River Basin. Over 1,800 km of historical salmon habitat remain inaccessible upstream of Chief Joseph and Grand Coulee dams due to lack of fish passage at these facilities. The Indian Tribes of the upper Columbia Basin are working collectively on salmon reintroduction efforts through both a long-term scientific phased approach and near-term cultural and educational releases. This paper will briefly outline the Phased approach and provide detail on the initial results of some recent cultural and educational releases of salmon in the blocked area. The cultural and educational releases had a goal of reconnecting the people with the salmon and the salmon with historic habitats. These salmon release events were diverse and included school children releasing juvenile fish they raised in the classroom, releasing adult salmon to swim free and reproduce, and tribal members harvesting salmon from their ancestral waters. Ceremonies were held to celebrate the significance of salmon to the tribal cultures and the salmon's return home. In addition to the ceremonies, some fish were tagged to evaluate survival and behavior and to begin to document the effectiveness of trap and haul efforts. The effort resulted in anadromous salmon reintroduction to their traditional waters for the first time in 60 to 110 years. These efforts have generated tremendous interest from the press and given the people of the region a glimpse at what is possible, building momentum for the larger Phased reintroduction effort.

The Impact of COVID-19 on Asia Pacific Economy

The Impact of COVID-19 on Asia Pacific Economy

Comments on the “Fringe Theory” of Hong Kong in the New Era

As the center of Asia Pacific economy, Kong has been playing an important role in China's economic development. However, with the continuous and rapid development of mainland cities, the economic gap between Kong and the mainland has gradually narrowed, which has led to a series of doubts about the of Kong. This paper uses SWOT analysis to refute a series of viewpoints such as Hong Kong's marginalization and Hong Kong will be replaced by the mainland.

The nexus between firm size, growth and profitability: new panel data evidence from Asia–Pacific markets

PurposeThe purpose of this paper is to examine the correlation between firm size, growth and profitability along with other firm-specific variables (like leverage, competition and asset tangibility), macroeconomic variable (like GDP growth-business cycle) and stock market development variable (like MCR).Design/methodology/approachUsing the COMPUSTAT Global database this work uses panel dynamic fixed effects model for nearly 12,001 unique non-financial listed and active firms from 1995 to 2016 for 12 industrial and emerging Asia–Pacific economies. This interrelationship was also examined for small, medium and large size companies classified based on three alternate measures such as total assets, net sales and MCR of firms.FindingsThe persistence of profits coefficient was found to be positive and modest. There is evidence of a negative size-profitability and positive growth-profitability relationship suggesting that initially profitability increases with the growth of the firm but eventually, overtime, gains in profit rates reduce, as size increases indicting that large size breeds inefficiency. The relationship between firm's leverage ratio and its asset tangibility is found to be negative with profitability. The business cycle and stock market development variables suggest a positive relationship with the profitability of firms. However, the significance of estimated coefficients was mixed and varied among different selected Asia–Pacific economies.Practical implicationsThe study has economic implications on issues such as industrial concentration, risk and optimum size of firms for practicing managers of modern enterprise in emerging markets.Originality/valueThe analysis of the relationship between the firm size, growth and profitability is uniquely determined under a dynamic panel fixed effects framework using firm-specific variables along with macroeconomic and financial development determinants of profitability. This relationship is estimated for a large and new data set of 12 industrial and emerging Asia–Pacific economies.

Determinants of the Russia and Asia–Pacific energy trade

Asia remained the largest energy consumer in 2020. The Russian Federation hopes to gain a greater share of the Asian energy market. This study examined the Russian Federation–Asia and Pacific energy trade patterns using gravity trade theory and GMM panel estimation for 17 selected Asia and Pacific economies. We found that the Russian Federation's energy exports to the Asia–Pacific region (APR) followed the Linder hypothesis, and economic growth positively influenced Russian energy exports in the region. Furthermore, The results indicated that the sanctions against Russia since 2014 stimulated an increase in Russian energy exports to the APR. To improve the region's energy security, we recommend developing an energy trading hub in the APR to increase regional pricing power.

Conservation Values and Actor Networks that Shape the Adams River Salmon Run in Tsútswecw Provincial Park, British Columbia

Sockeye salmon are deemed essential to life by Secwépemc Indigenous communities living near the Adams River in South Central British Columbia (BC). They are also an ecological keystone species and a significant contributor to the BC economy. However, salmon populations are in decline throughout the Pacific Northwest, putting communities, economies and ecosystems at risk. Using Actor-Network Theory (ANT) as a lens, we identify the network of actors connected to the Adams River salmon run, examine actor relationships, and consider the impacts these relations have on sustainable conservation practices. We use a community-based participatory research methodology and interviews to investigate the complexity of stakeholder relationships to wild Pacific salmon in BC. Based on our results, there is strong evidence to suggest that localized approaches to salmon conservation, ones guided by local experience and knowledge, are critical to developing inclusive and effective policies.