Narrow Results

This paper investigates the degree of exchange rate pass-through for the selected Asian countries namely Malaysia, Thailand, Taiwan, and Singapore. Unlike past studies, this paper focuses on small open economies and includes exports of primary commodities in the investigation. We utilize cointegration techniques based on Engle and Granger (1987) and Johansen and Juselius (1990), and error correction modeling, to provide a more robust and rigorous investigation of the long run and short run pass-through of exchange rates. It is found that, in general, the degree of pass-through is high, although there is a small extent of pricing to market found for all countries. For Malaysia, the degree of pricing to market found suggests that there is intense competition in the export industries. In the case of Thailand, there is almost complete pass-through and this conforms to our a priori expectations. In the case of Singapore and Taiwan, we detect a higher degree of pass-through compared to past studies. For a country, the high degree of pass-through will support the adoption of more flexible exchange rate oriented monetary policies, and for firms it will reveal the limits of their price setting behavior amidst international competition.

This study examines the role of energy security in poverty reduction in the 12 poorest Asian economies from 2000 to 2019. We postulated an energy security index using principal component analysis. We adopted the system generalized method of a moment technique to manage endogeneity and dynamism in the model. For robustness, we applied a panel-corrected standard error (PCSE). We found a negative relationship between energy security and poverty reduction, suggesting that energy security helps reduce poverty. We conclude that energy security promotes sustainable poverty alleviation and recommends feed-in tariffs, net metering, tax credits, and energy resource diversification away from fossil fuels.

The paper’s main goal is to investigate and contrast the impacts of foreign direct investment (FDI) inflows on environmental protection in various Asian locations. In order to achieve this end, the validity of the Halo/Haven pollution hypothesis is examined using a panel data framework for the annual data of 32 Asian economies over the period of 2000–2019. While the sign of squared Gross Domestic Product (GDP) per capita is not statistically significant for low- and lower-middle-income group of Asian economies, which does not confirm the existence of EKC hypothesis in these countries, the main results showed that the Environmental Kuznets Curve (EKC) hypothesis exists in high- and upper-middle-income group of Asian nations. In the group of Asian nations with high- and upper-medium-incomes, there is the Halo hypothesis; in the group of nations with low- and lower-middle-incomes, there is the Haven pollution hypothesis. Important practical policies recommended by this research include promoting green finance methods, creating digital economic mechanisms, and revising laws and policies that encourage FDI in order to enhance their ability to attract foreign investors in the post-Corona era.

In this paper, we employ the input–output framework and recent global value chain (GVC) results to construct the index of foreign financial services adoption in manufacturing (FFSAM) that captures the role of foreign financial services in facilitating domestic manufacturing production. The FFSAM index shows that foreign financial services adoption by Asian economies has rapidly caught up with the Western world between 2007 and 2017. Asian economies tend to deploy more foreign financial services from high-income economies than low-income economies, and in high-technology manufacturing industries than low-technology manufacturing industries. Manufacturing industries that produce for domestic consumption and for exports tend to attract different groups of financial servicification providers. It is found that the FFSAM index is affected by the GVC position, financial institution factors, and financial market characteristics.

In Asia, small and medium-sized enterprises (SMEs) account for the major share of employment and dominate domestic economies, yet providing these companies with access to finance is a challenge across the region. Asian economies are often characterized as having bank-dominated financial systems and underdeveloped capital markets, in particular with regard to venture capital. As a result, banks are the main source of financing for SMEs. It is crucial for banks to be able to distinguish healthy from risky companies. If they can do this, lending and financing SMEs through banks will be easier. In this paper, we explain the importance of SMEs in Asia. Then, we provide a scheme for assigning credit ratings to SMEs by employing two statistical analysis techniques—principal component analysis and cluster analysis—applying 11 financial ratios of 1,363 SMEs in Asia. If used by the financial institutions, this comprehensive and efficient method could enable banks and other lending agencies around the world, and especially in Asia, to group SME customers based on financial health and adjust interest rates on loans and set lending ceilings for each group.

This paper contributes to the literature on growth in Asia in several respects. I provide estimates of potential growth for 21 Asian economies using an aggregate supply model with time-varying parameters and a Kalman filtering methodology. My estimates indicate that the actual growth slowdown experienced by many of these economies in the 2000s is associated with a falling trajectory in potential growth. Relying on Bayesian model averaging, I select robust determinants of potential growth and find that the latter is driven by the technology gap, trade, tertiary education, and institutional quality, as well as by working-age population growth. Effective reforms in these areas can help counterbalance declines in potential growth in Asia. I also investigate the relationship between business cycle features and potential growth, finding that higher volatility in actual growth has significantly negative effects on potential growth. Thus, stabilization policies can have beneficial effects on Asian economies’ long-term growth performance.

This paper investigates some features of investment-growth nexus in post-reform China with respect to the growth experiences of East Asian economies during similar phase of development. It characterizes the the pattern of investment-driven growth through calculating and decompositing the investment/GDP ratios, examining the sectors and ownerships accounting for incremental change of investments, and analyzing the incremental capital output ratios (ICORs) in real terms, with some comparisons with the NIEs in East Asia. It finds that China had realized its high growth without necessitating an increasing proportion of investment to GDP and without raising ICOR in 1980s. But since mid-1990s China seems to have experienced an excessive expansion of investment as a result of intensified inter-provincial excessive competition.