The Singapore Economic Review

Since the end of 2011, the U.S., the European Union (EU) and China have been searching for a trade remedy regarding each other’s photovoltaic (PV) industry. Based on the perspective of the value chain of Global Solar Energy PV industry, this paper examines related factors including the tax rate imposed on the PV industry, and uses the global simulation model (GSIM) to predict the trade impact and welfare effects generated from the “double-anti” policy (anti-dumping laws with countervailing duties). The results of the research showed that China has not yet formed a complete value chain of the PV industry that is internationally competitive. The economic effect of the “double-anti” policy on China as a result of the EU is more pronounced than that with the U.S. The “double-anti” policy will have a negative impact on China’s low carbon economy development. The authors conclude that the development of polycrystalline silicon in China needs to be supported by forcible policy measures and targeted measures are proposed.

Climate change is attracting increasing attention from the international community. To assess the impact of climate change on China’s rice production, this paper re-organizes the main rice-producing areas by adding up the annual production of the provincial level regions between 1979 and 2011, utilizes Cobb–Douglas function using daily weather data over the whole growing season. Our analysis of the panel data shows that minimum temperatures (Tmin), maximum temperatures (Tmax), temperature difference (TD) and precipitation (RP) are the four key climate determinants of rice production in China. Among these, temperature difference is surprisingly significant and all except maximum temperatures have positive effects. However, because the actual minimum temperatures and precipitation in China’s main rice-producing areas declined while the maximum temperatures and the temperature difference increased during our sample period, climate change has actually provided a negative contribution to the increase in China’s rice production.

China’s coal resource tax reform, introducing an ad valorem tax to replace previous volume-based tax from December 2014, marked a new stage of the resource pricing mechanism reform. In particular, coal, as a pollution-intensive energy, is the main source of energy for China. With this in mind, it is the time to ask what the impacts of this reform would be on Chinese economy. A computable general equilibrium (CGE) model is applied to explore the impact of a 5% ad valorem coal resource tax on Chinese economy under four scenarios involving distinguished electricity pricing mechanisms and tax revenue recycling scheme by deducting consumption tax. Simulation results show that levying ad valorem tax will reduce the output of energy-intensive industries with minor negative impact on economy. A consumption tax deduction can offset the negative impact on real GDP and help the economy to restructure. The concern that reform will push up inflation is unnecessary, even under the market price mechanism of electricity. In terms of winners, export-oriented industries benefit when no tax revenue recycling, while industries producing private consumption goods benefit when ad valorem coal resource tax revenue is used to deduct consumption tax.

A previous study that investigated the impact of exchange rate changes on the trade balance of Singapore with each of its 13 largest trading partners on bilateral basis found significant long-run effects in four out of 13 cases. In the trade balance between Singapore and Malaysia as a major partner, the real exchange rate had neither short-run nor long-run significant effects. To reduce the aggregation bias, in this paper, we disaggregate the trade flows between the two countries by industry and consider the trade balance of each of the 136 industries that trade between the two countries. We find that the trade balance of 79 industries are affected by exchange rate changes in the short run. However, short-run effects last into the long run in only 19 industries which mostly happen to be small industries.

The ASEAN countries have been experiencing drastic declines in fertility of more than 10 percent, particularly since the 1990s. Though the literature on fertility has clearly delineated the importance of income, female labor force participation and infant mortality as key determinants of fertility rates (FRs), the empirical findings from previous studies remains at best mixed. This study therefore identifies the determinants of female fertility for the countries, namely Indonesia, Malaysia, Philippines, Singapore and Thailand (ASEAN-5 countries), spanning the period 1980–2010. Using the Autoregressive Distributed Lag (ARDL) cointegration and causality techniques, the main findings of the study are summarized as follows: First, a long-run (LR) stable relationship is evident between female fertility, female labor force participation, income and infant mortality for ASEAN-5. Second, there is a deviation of FRs from the short-run (SR) to the LR equilibrium for ASEAN-5, with the highest and lowest speed of adjustment recorded for Malaysia and Thailand, respectively. Third, FR and economic stability are found to be complementary in the LR for ASEAN-5. When the joint LR and SR causalities are considered, we found that female labor force participation, income and infant mortality have dynamic relationships with FR for all the five ASEAN countries.

We show in this paper that a dominant supplier, under observable two-part tariff contracts and an alternative, less efficient supply of the input, could benefit from more intense competition downstream provided that it has strong enough market power upstream. This implies that the incentives of upstream suppliers to foreclose downstream firms are less important than the previous literature had suggested. In fact, we find that the result also holds under observable linear contracts when we consider free entry in the downstream market.

The purpose of this study is to examine the factors affecting the likelihood of consuming and the amount spent on tobacco in Thailand. Heckman’s sample selection model is applied to data from the 2009 socio-economic survey of Thailand in order to determine the factors determining the decision to consume tobacco. Demand elasticities are then calculated using the Extended Linear Expenditure System (ELES). Age, household size, gender, occupation and tenure are found to be common factors that influence both the probability of tobacco smoking and expenditure on tobacco products. Income also plays a key roles in explaining the amount spent on tobacco. Demand for tobacco is found to be inelastic for Thai smokers.

Using finely disaggregated data at six-digit harmonized code classification level, this paper examines the patterns and determinants of horizontal and vertical intra-industry trade in the automobile and electrical appliances sectors during the past few decades among the six major Southeast Asian countries. It is found from the analysis of the data that intra-industry trade is much higher than the inter-industry trade in each of these two sectors. Further, the determinants of these two types of trade are found to differ somewhat in terms of sign and magnitude across the sectors, implying the importance of sector-specific factors as influences on the pattern of trade.

Given that renminbi always breaks the historical high against USD, psychological literature on limited investor attention motivates me to consider whether this eye-grabbing event would have an impact on renminbi trading. Empirical evidence suggests that both nearness to the historical high and hitting the historical high negatively affect renminbi future returns. This result survives from a variety of robustness checks. My findings are consistent with the conservatism theory and suggest that investors tend to under-react in response to the news of breaking the historical high.

Policy discussions are dominated by the view that governmental safety nets offered to banks cause moral hazard and encourage risk-taking. However, [Cordella, T and E Levy Yeyati (2003). Bank bailouts: moral hazard vs. value effect. Journal of Financial Intermediation, 12, 300–330.] proposed that government support offered during crises may increase bank franchise value, resulting in less risk-taking. This paper presents additional theoretical results on the franchise value effect. The franchise value effect can dominate over the moral hazard effect even when there are no specific crisis periods. The franchise value effect dominates if bank shareholders have a weak time preference and if the decision on the intensity of risk monitoring is a long-term choice.

The Split Share Structure Reform in China offers a unique opportunity to test whether the supply of tradable shares (i.e., float) has a significant impact on the degree of speculation. After firms completed the reform, their float increased by 31% on average, while turnover and trading volume also increased substantially. We use information from firms’ reform plan to derive an estimate of the price premium of tradable shares over non-tradable shares before the reform and find that, after controlling for differences in liquidity and profitability, the price premium is significantly related to proxies for the level of speculative trading in tradable shares. Moreover, firms that were highly speculated before the reform had significantly smaller increase in turnover and trading volume than firms that were less speculated. Overall, our evidence confirms that there is a significant speculative component in the market price of tradable shares in China and a large increase in float dampens speculative trading.

This paper analyzed how South Korea’s intra-industry trade (IIT) with her major trading countries (i.e., China, the USA, and Japan (CUJ)) in the manufacturing sector changed over time for the period of 1994–2011. It was found that South Korea’s IIT with China mainly increased through economies of scale (ES), the ratio of inward and outward foreign direct investment to total investment (FDI), the ratio of intermediate cost to total cost (II), and R&D intensity (RD). On the other hand, South Korea’s IIT with the USA was found to mainly increase through ES, FDI, and RD. Finally, RD, FDI, and II variables are found to be the most important determinants for South Korea’s IIT with Japan.

Following recommendations from the Stiglitz et al. (2009) Commission, this paper proposes the use of a new methodology to measure the joint distribution of households’ income, consumption and wealth. Based on a multi-dimensional extension of the generalized mean framework, the paper justifies the application of this methodology based on a set of standard and acknowledged properties. The derived multi-dimensional index has an intuitive structure, which allows evaluating the overall material conditions of households under different perspectives and with varying sensitivity to distributional issues. Under its general form, the index encompasses a class of sub-indices that impose various restrictions on its parameters; the paper discusses the extent to which different restrictions on parameters affect the multi-dimensional assessments of various population groups, and provides some empirical illustrations using those different specifications. The question addressed by the multi-dimensional measure presented here is whether the joint consideration of household income, consumption and wealth modifies substantially the picture of material living standards of different individuals and groups relative to the one provided by income alone. Based on the dataset used here, the paper provides strong evidence on the importance of such a multi-dimensional assessment.