Asian Development Review

Journal Information
ISSN / EISSN : 0116-1105 / 1996-7241
Current Publisher: MIT Press - Journals (10.1162)
Total articles ≅ 136
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Wooyoung Lim, Sujata Visaria
Published: 1 September 2020
Asian Development Review, Volume 37, pp 77-99; doi:10.1162/adev_a_00150

Abstract:
Despite their predictable and regular incomes, Filipino domestic workers in Hong Kong, China commonly finance large expenses through interest-bearing loans rather than savings. Our analysis of survey data and records of a credit cooperative for migrant workers suggests that this cannot be explained by their inability to save, financial illiteracy, short time horizon, or limited liability. Instead, we speculate that the strict schedules and high interest rates of these loans create a disciplining effect that these individuals find desirable. This may help them avoid unnecessary consumption or demands from their social network. However, interventions should also consider that these workers often receive nonmonetary reciprocal benefits from members of their social network.
Yuki Higuchi, Miyuki Sasaki, Makiko Nakamuro
Published: 1 September 2020
Asian Development Review, Volume 37, pp 100-133; doi:10.1162/adev_a_00151

Abstract:
We conducted a randomized experiment targeting 322 Japanese high school students to examine the impacts of a newly developed English-language learning program. The treated students were offered an opportunity to communicate for 25 minutes with English-speaking Filipino teachers via Skype several times a week over a 5-month period as an extracurricular activity. The results show that the Skype program increased the interest of the treated students in an international vocation and in foreign affairs. However, the students did not improve their English communication abilities, as measured by standardized tests, probably because of the program's low utilization rate. Further investigation showed that the utilization rate was particularly low among students demonstrating a tendency to procrastinate. These results suggest the importance of maintaining students’ motivation to keep using such information and communication technology-assisted learning programs if they are not already incorporated into the existing curriculum. Having procrastinators self-regulate may be especially crucial.
Sujana Kabiraj
Published: 1 September 2020
Asian Development Review, Volume 37, pp 134-166; doi:10.1162/adev_a_00152

Abstract:
It is well established that misallocation of factor resources lowers productivity. In this paper, I use data from both formal and informal firms to study distortions in input and output markets as sources of misallocation in the Indian manufacturing sector. My work extends the seminal work of Hsieh and Klenow (2009). I consider output, capital, raw material, energy, and service sector distortions in a monopolistically competitive framework to measure the aggregate dispersion in total factor revenue productivity (TFPR). I also decompose the variance in TFPR and show that raw material and output distortions play a major role in defining aggregate misallocation.
Jeffrey B. Nugent, Jiaxuan Lu
Published: 1 September 2020
Asian Development Review, Volume 37, pp 45-76; doi:10.1162/adev_a_00149

Abstract:
This paper demonstrates that the largest business association of private firms in the People's Republic of China (PRC), the All-China Federation of Industry and Commerce (ACFIC), has induced its members to help achieve the goals of the PRC's extremely ambitious but risky Belt and Road Initiative (BRI) since its inauguration in 2013. Through its newspaper, the ACFIC has drawn the attention of its member firms to countries participating in the BRI, which has led to increased trade between provinces in the PRC and BRI-participating countries emphasized by the ACFIC's newspaper. The results show that the PRC's exports have been encouraged substantially more than its imports, which could be a cause for concern for the sustainability of the BRI. The results were obtained through various specially designed versions of the gravity model and have shown to be robust to the use of various methods for mitigating possible estimation biases.
Isaac Ehrlich, Yun Pei
Published: 1 September 2020
Asian Development Review, Volume 37, pp 225-263; doi:10.1162/adev_a_00155

Abstract:
Unlike physical capital, human capital has both embodied and disembodied dimensions. It can be perceived not only as skill and acquired knowledge but also as knowledge spillover effects between overlapping generations and across different skill groups within and across countries. We illustrate the roles these characteristics play in the process of economic development, the relation between income growth and income and fertility distributions, and the relevance of human capital in determining the skill distribution of immigrants in a balanced-growth global equilibrium setting. In all three illustrations, knowledge spillover effects play a key role. The analysis offers new insights for understanding the decline in fertility below the population replacement rate in many developed countries, the evolution of income and fertility distributions across developing and developed countries, and the often asymmetric effects that endogenous immigration flows and their skill composition exert on the long-term net benefits from immigration to natives in source and destination countries.
Matthew Krupoff, Ahmed Mushfiq Mobarak, Alexander Van Geen
Published: 1 September 2020
Asian Development Review, Volume 37, pp 21-44; doi:10.1162/adev_a_00148

Abstract:
The World Health Organization has labeled the problem of arsenic contamination of groundwater in South Asia as “the largest mass poisoning in human history.” Various technical solutions to the problem fall into one of two broad categories: (i) cleaning contaminated water before human consumption and (ii) encouraging people to switch to less contaminated water sources. In this paper, we review research on the behavioral, social, political, and economic factors that determine the field-level effectiveness of the suite of technical solutions and the complexities that arise when scaling such solutions to reach large numbers of people. We highlight the conceptual links between arsenic-mitigation policy interventions and other development projects in Bangladesh and elsewhere, as analyzed by development economists, that can shed light on the key social and behavioral mechanisms at play. We conclude by identifying the most promising policy interventions to counter the arsenic crisis in Bangladesh. We support a national well-testing program combined with interventions that address the key market failures (affordability, coordination failures, and elite and political capture of public funds) that currently prevent more deep-well construction in Bangladesh.
Chengzheng Li, Jiajia Cong, Haiying Gu
Published: 1 September 2020
Asian Development Review, Volume 37, pp 201-224; doi:10.1162/adev_a_00154

Abstract:
This paper uses historical fluctuations of weather variables within counties in the People's Republic of China to identify their effects on economic growth from 1996 to 2012. We find three primary results. First, higher temperatures significantly reduce the growth rate of county-level gross domestic product per capita: an increase in the annual average temperature of 1°C lowers the growth rate by 1.05%–1.25%. The effect of higher temperatures is nonlinear. Second, fluctuations in temperature and precipitation not only have a level effect, they also have a substantial cumulative effect. Third, weather fluctuations have wide-ranging effects. Beyond their substantial effects on the growth rate of agricultural output, they also affect nonagriculture sectors, labor productivity, and investment. Our findings provide new evidence for the impact of weather changes on economic development and have major implications for adaptation policies.
Thi Nguyet Anh Nguyen, Thi Hong Hanh Pham, Thomas Vallée
Published: 1 September 2020
Asian Development Review, Volume 37, pp 167-200; doi:10.1162/adev_a_00153

Abstract:
This paper investigates trade volatility in the Association of Southeast Asian Nations Plus Three (ASEAN+3) and its links with output volatility, export diversification, and free trade agreements. To achieve this research objective, we apply several econometric estimators to data from all ASEAN+3 member states over the period 1990–2016. We first find evidence of a positive relationship between output volatility and trade volatility. Second, we reveal that the way export diversification is measured can influence its impacts on bilateral export volatility. Moreover, the relationship between income volatility, trade volatility, and export diversification seems to depend on country size and the level of economic development.
Jesus Felipe, Scott Fullwiler
Published: 1 September 2020
Asian Development Review, Volume 37, pp 1-20; doi:10.1162/adev_a_00147

Abstract:
The ADB COVID-19 Policy Database displays the measures taken and monetary amounts announced or estimated by the 68 members of the Asian Development Bank, two institutions, and nine other economies (i.e., a total of 79 entries) until May 2020, to fight the coronavirus disease (COVID-19) pandemic. Measures are classified according to (i) the path a given measure takes to affect the financial system, spending, production, and so forth, i.e., provide liquidity, encourage credit creation by the financial sector, or directly fund households; and (ii) the effects on the financial statements of households, businesses, government, i.e., whether the measures create more debt or more income. This gives a total of nine categories. When the information is available, we report the amounts that governments have announced (intentions) they will allocate to each measure (in many cases, no amount is provided because the measure does not entail spending, e.g., interest rate reductions). These are a mix of actual amounts and estimates, today and in the future (without specifying when). The database will be updated, revised, and expanded as information is released. It is available at https://covid19policy.adb.org/.
Sung Jin Kang
Asian Development Review, Volume 37, pp 119-139; doi:10.1162/adev_a_00143

Abstract:
By classifying international green and non-green trade for the period 1980–2015, this study investigates trends in green trade, exports, and imports as shares of total trade, exports, and imports, respectively. The general findings are that these green shares increased during the review period, albeit with the green shares for member countries of the Organisation for Economic Co-operation and Development showing different trends than those of nonmember countries. Further, three countries at different stages of economic development—the People's Republic of China, the Republic of Korea, and the United States—each exhibit different trends in green trade over time. In particular, the green trade, export, and import shares of the People's Republic of China decreased over time, which is in contrast to the increases observed for the Republic of Korea and the United States during the review period. The findings suggest that efforts to persuade developing countries to accept international agreements to reduce greenhouse gas emissions should also consider the transboundary transmission of these emissions and their health effects.
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