Asian-Pacific Economic Literature最新文献

World Bank considers financial inclusion a fundamental and practical mechanism for reducing poverty and boosting prosperity in developing and emerging markets. However, the direct benefits of financial inclusion to bank performance appear to have been largely ignored in the academic literature, in particular in the emerging markets in the Asian region. Unlike previous studies, both bank and country characteristics are considered in this paper. The financial inclusion index is estimated using four sub-indices that can be classified into two groups: the penetration and utilisation of financial products and services. Principal component analysis and dynamic generalized method of moments (GMM) are used on a sample of 1507 banks in emerging markets in Asia for the 2008–17 period. Findings indicate that, across various scenarios, financial inclusion provides a positive and significant contribution to bank performance in the Asian region. In addition, a larger distance to the bankruptcy of banks and higher national economic growth will enhance bank performance.

We analyse the value-added creation effect of global value chain (GVC) participation activities of APEC member economies, using a fixed-effects regression model analysis based on country–industry data from Organisation for Economic Co-operation and Development (OECD) Inter-country Input–Output Tables. We find that forward participation in GVCs is more desirable than backward participation for creating domestic value-added and that the industry position in the middle stages of the production line creates higher domestic value-added per output unit. These results hold regardless of the application of standard Ordinary Least Squares (OLS) or fractional logit for panel data and of the characteristics of the interconnected countries in GVCs (APEC member vs. non-APEC member economies, Asian APEC vs. non-Asian APEC members, developed vs. developing countries). This implies that the conventional firm- or product-specific U-shaped ‘smile curve hypothesis’ is not applicable at the economy-wide, country–industry level. This finding suggests that depending on the product type, manufacturing industries can be a major driving force for less-developed APEC member economies to climb the development ladder. Since GVC participation gains are diversified across industries and upgrading country–industry positions in GVCs are challenging for APEC member economies, we strongly recommend that they construct effective domestic value chains and coordinate with other members while upgrading their GVC participation.

This paper examines the effects of demographic dynamics on economic growth, with a focus on the working-age population and the saving rate in 17 Asian economies for the past and future periods of 1970–2018 and 2018–2050, respectively. The study applies a panel vector-autoregressive model, given the endogenous interactions among the variables. The main findings are as follows: first, the direct channel to economic growth is from the working-age population share and the indirect channel is through the saving rate; second, there is a feedback effect from economic growth to the saving rate; third, the contribution ratio of the population-bonus effect to economic growth for the 1970–2018 period was approximately 30 per cent on average, which was consistent with the ratios found in previous studies; and fourth, in the projections for 2018–2050, the magnitudes of the ‘population-onus’ effect in selected economies are very large (minus 1 or 2 per cent)—even greater than found in previous studies—which was due to the earlier onset of the ‘population onus’ with aging.

Economic growth in developing countries provides an opportunity to accelerate progress towards the UN Sustainable Development Goals (SDGs). However, in reality, the number of people living in extreme poverty remains unacceptably high. Utilising the experiences of 34 developing countries for the period 2009 to 2016, the role of microfinance on poverty in these countries is examined. The results imply that the degree to which the existing forms of microfinance effectively reduce extreme poverty is less workable in developing countries, particularly when the hardcore poor are likely being deprived of receiving access to microfinance. It is suggested that governments may need to revise the structure and strategy of microfinance to be more hardcore poor oriented. The hardcore poor have needs beyond pure monetary assistance. More hand-holding types of assistance are needed as most are also poor in respect of literacy, assets, and skills.

Mundell's trilemma theory says that capital flow, exchange rate stability, and monetary policy autonomy cannot be achieved simultaneously. Using monthly data from the People's Bank of China from 1999 to 2019, we find that the trilemma theory is not nearly as tight in China's practice as in theory, and the central bank can internally offset the effect of exchange rate volatility by ways other than the monetary base (such as central bank securities). Our results also indicate that, before 2012, monetary policy autonomy in China was weak due to the problem of ‘funds outstanding for foreign exchange’. With the reform of the Renminbi (RMB) exchange rate system in 2005, the effectiveness of central bank securities in compensating for the flow of foreign exchange reserves has gradually been strengthened in China.

The state of USA–China relations has become increasingly strained. The term ‘decoupling’ has been frequently used within the narrative of USA–China relations to describe the possible outcome of the relationship. A ‘decoupling’ of the USA and Chinese economies would trigger the restructuring of existing Global Value Chains (GVCs). Given this possibility, we use the 2014 World Input–Output Database (WIOD) and the hypothesis extraction method to simulate several scenarios of GVC reconstruction on economic growth and employment. From the analysis, we find that: (1) GVC reconstructions caused by USA–China decoupling would have a greater impact on China than on the USA. If USA–China bilateral trade is replaced by the surrounding economies, China's GDP and employment would fall by 2.57% and 2.34%, respectively. (2) The effects on regional economies are synergistic, with the countries directly surrounding China and the USA being more affected than India and most European countries. (3) USA manufacturing may benefit from the manufacturing repatriation policy, but the overall impact on economic growth would be limited. (4) In all reconstruction scenarios, global GDP figures are lower than they are today, demonstrating the importance of maintaining existing GVCs.