This study investigates the reasons behind the slowdown in real wages for Japan and Korea based on the aggregate and industry-level data for the respective countries. The findings suggest the following. First, both at the aggregate and industry level, there is a significant slowdown in both countries in the post-1995 period regarding labor productivity, which explains the overall slowdown in real wages. Second, the main reason for the gap between the growths in real wages and labor productivity is found to be the changes in the labor's terms of trade, which is defined as the consumer price index to GDP deflator ratio. Thus, the wage–labor productivity gap is not systematically connected to changes in labor income shares. Finally, the fall in the labor's terms of trade may be potentially related to an emphasis on exports and strong technological upgrading toward higher productivity growth products in both countries’ economic development.
{"title":"Why Do Real Wages Stagnate in Japan and Korea?","authors":"Hyunbae Chun, K. Fukao, H. Kwon, Jungsoo Park","doi":"10.1162/asep_a_00882","DOIUrl":"https://doi.org/10.1162/asep_a_00882","url":null,"abstract":"\u0000 This study investigates the reasons behind the slowdown in real wages for Japan and Korea based on the aggregate and industry-level data for the respective countries. The findings suggest the following. First, both at the aggregate and industry level, there is a significant slowdown in both countries in the post-1995 period regarding labor productivity, which explains the overall slowdown in real wages. Second, the main reason for the gap between the growths in real wages and labor productivity is found to be the changes in the labor's terms of trade, which is defined as the consumer price index to GDP deflator ratio. Thus, the wage–labor productivity gap is not systematically connected to changes in labor income shares. Finally, the fall in the labor's terms of trade may be potentially related to an emphasis on exports and strong technological upgrading toward higher productivity growth products in both countries’ economic development.","PeriodicalId":52020,"journal":{"name":"Asian Economic Papers","volume":null,"pages":null},"PeriodicalIF":9.7,"publicationDate":"2024-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139447185","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We use COVID-19 as an exogenous shock to analyze the impact of the COVID-19 pandemic on Japanese multinational affiliates’ performance, determining that the pandemic adversely impacted performance in general, but severe disruptions did not last longer than one year. The COVID-19 shock also affected global transaction networks, and affiliates’ total sales were severely affected by procurement challenges. Regarding heterogeneous effects, affiliates actively engaged in trade experienced worse conditions than local-oriented firms. Finally, we explore whether and which local backward linkages could mitigate such shocks, concluding that affiliates’ local procurement from companies beyond only Japanese firms could gain resilience.
{"title":"Resilience of Japanese Multinational Enterprise Production Networks during the COVID-19 Pandemic","authors":"Licheng Liang","doi":"10.1162/asep_a_00879","DOIUrl":"https://doi.org/10.1162/asep_a_00879","url":null,"abstract":"\u0000 We use COVID-19 as an exogenous shock to analyze the impact of the COVID-19 pandemic on Japanese multinational affiliates’ performance, determining that the pandemic adversely impacted performance in general, but severe disruptions did not last longer than one year. The COVID-19 shock also affected global transaction networks, and affiliates’ total sales were severely affected by procurement challenges. Regarding heterogeneous effects, affiliates actively engaged in trade experienced worse conditions than local-oriented firms. Finally, we explore whether and which local backward linkages could mitigate such shocks, concluding that affiliates’ local procurement from companies beyond only Japanese firms could gain resilience.","PeriodicalId":52020,"journal":{"name":"Asian Economic Papers","volume":null,"pages":null},"PeriodicalIF":9.7,"publicationDate":"2024-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139445768","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In May 2020, China formulated the Internal Circulation Strategy (ICS) to address the risks of global economic downturns caused by deglobalization. This study is the first to empirically examine the impacts of China's ICS on its stock market performance, focusing on investor behavior. Using data from the Baidu search index and the Shanghai and Shenzhen stock exchanges for the period 27 July 2020 to 5 May 2023, the results reveal that stock returns are negatively associated with investor attention to China's ICS, while stock volatilities are positively associated. This suggests that the ongoing and profound shift in economic strategy has raised concerns among investors. Furthermore, our analysis of heterogeneity finds that the negative association with stock market returns is statistically significant only during times of high policy uncertainty or geopolitical risk. The positive association with stock market volatility is statistically significant only during times of high geopolitical risk. This indicates that the stability of the internal and external environment plays a crucial role in alleviating investor concerns. We also observe mixed impacts on different sectors of the stock markets, with some sectors unaffected while others primarily experiencing a decline in returns.
{"title":"Exploring the Impact of China's Internal Circulation Strategy on its Stock Market under Deglobalization","authors":"Yujie Shi, Xinyi Hong, Liming Wang","doi":"10.1162/asep_a_00880","DOIUrl":"https://doi.org/10.1162/asep_a_00880","url":null,"abstract":"\u0000 In May 2020, China formulated the Internal Circulation Strategy (ICS) to address the risks of global economic downturns caused by deglobalization. This study is the first to empirically examine the impacts of China's ICS on its stock market performance, focusing on investor behavior. Using data from the Baidu search index and the Shanghai and Shenzhen stock exchanges for the period 27 July 2020 to 5 May 2023, the results reveal that stock returns are negatively associated with investor attention to China's ICS, while stock volatilities are positively associated. This suggests that the ongoing and profound shift in economic strategy has raised concerns among investors. Furthermore, our analysis of heterogeneity finds that the negative association with stock market returns is statistically significant only during times of high policy uncertainty or geopolitical risk. The positive association with stock market volatility is statistically significant only during times of high geopolitical risk. This indicates that the stability of the internal and external environment plays a crucial role in alleviating investor concerns. We also observe mixed impacts on different sectors of the stock markets, with some sectors unaffected while others primarily experiencing a decline in returns.","PeriodicalId":52020,"journal":{"name":"Asian Economic Papers","volume":null,"pages":null},"PeriodicalIF":9.7,"publicationDate":"2024-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139445902","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The EU is becoming more inward-looking and more hesitant toward globalization. This paper examines recent transformations in the EU's economic policies, with a focus on international trade and industrial policy. It argues that these changes reflect the EU's response to the evolving global economic and political landscape, driven by factors such as China's rise and the United States’ protectionist policies. By analyzing the potential consequences of these policy adjustments on EU industries’ competitiveness and trade relations, the paper offers insights into the future prospects of EU economic policies and their role in shaping the global economy.
{"title":"Navigating the New Normal: The European Union's Changing Stance on Globalization in the Era of Trade Conflicts","authors":"Fredrik Sjöholm","doi":"10.1162/asep_a_00886","DOIUrl":"https://doi.org/10.1162/asep_a_00886","url":null,"abstract":"\u0000 The EU is becoming more inward-looking and more hesitant toward globalization. This paper examines recent transformations in the EU's economic policies, with a focus on international trade and industrial policy. It argues that these changes reflect the EU's response to the evolving global economic and political landscape, driven by factors such as China's rise and the United States’ protectionist policies. By analyzing the potential consequences of these policy adjustments on EU industries’ competitiveness and trade relations, the paper offers insights into the future prospects of EU economic policies and their role in shaping the global economy.","PeriodicalId":52020,"journal":{"name":"Asian Economic Papers","volume":null,"pages":null},"PeriodicalIF":9.7,"publicationDate":"2024-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139447614","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The COVID-19 pandemic has drastically changed our daily lives in terms of eating, learning, working, and leisure time. So far, Japan has experienced eight waves of widespread infection and three emergency declarations but has coped with the crisis without mandatory lockdowns, behavioral restrictions, and mandatory mask-wearing that were seen in other countries. The response has mainly been an encouragement of behavioral changes in our daily lives. In this paper, we observe through “consumption big data” the initial disruption, the adaptation period, and the change to a new normal. We use point of sale (POS) data from supermarkets, convenience stores, home centers, drugstores, and consumer electronics mass merchandisers, as well as data from household bookkeeping applications, for the two years from January 2020 to December 2021. The POS data was used to observe item-level sales trends, while the household bookkeeping application data was used to observe trends in service expenditures and the prevalence of cashless payments. This made it possible to comprehensively understand the changes in consumer behavior during the pandemic.
{"title":"Change from the COVID-19 Pandemic to a New Normal: Documenting Consumption Behavior of Two Years with Big Data","authors":"Yoko Konishi, Takashi Saito, Hajime Kanai, Naoya Igei, Junichi Mizumura, Kyoko Shiga, Keita Sueyasu, Ryosuke Hamaguchi","doi":"10.1162/asep_a_00876","DOIUrl":"https://doi.org/10.1162/asep_a_00876","url":null,"abstract":"\u0000 The COVID-19 pandemic has drastically changed our daily lives in terms of eating, learning, working, and leisure time. So far, Japan has experienced eight waves of widespread infection and three emergency declarations but has coped with the crisis without mandatory lockdowns, behavioral restrictions, and mandatory mask-wearing that were seen in other countries. The response has mainly been an encouragement of behavioral changes in our daily lives. In this paper, we observe through “consumption big data” the initial disruption, the adaptation period, and the change to a new normal. We use point of sale (POS) data from supermarkets, convenience stores, home centers, drugstores, and consumer electronics mass merchandisers, as well as data from household bookkeeping applications, for the two years from January 2020 to December 2021. The POS data was used to observe item-level sales trends, while the household bookkeeping application data was used to observe trends in service expenditures and the prevalence of cashless payments. This made it possible to comprehensively understand the changes in consumer behavior during the pandemic.","PeriodicalId":52020,"journal":{"name":"Asian Economic Papers","volume":null,"pages":null},"PeriodicalIF":9.7,"publicationDate":"2024-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139446239","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Comments by Riatu Mariatul Qibtniyyah, on Change from COVID-19 Pandemic to a New Normal: Documenting Consumption Behavior of Two Years with Big Data","authors":"","doi":"10.1162/asep_a_00878","DOIUrl":"https://doi.org/10.1162/asep_a_00878","url":null,"abstract":"","PeriodicalId":52020,"journal":{"name":"Asian Economic Papers","volume":null,"pages":null},"PeriodicalIF":9.7,"publicationDate":"2024-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139446538","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Comments by Lu Ming, on Exploring the Impact of China's Internal Circulation Strategy on its Stock Market under Deglobalization","authors":"","doi":"10.1162/asep_a_00881","DOIUrl":"https://doi.org/10.1162/asep_a_00881","url":null,"abstract":"","PeriodicalId":52020,"journal":{"name":"Asian Economic Papers","volume":null,"pages":null},"PeriodicalIF":9.7,"publicationDate":"2024-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139446644","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Climate change is a severe threat to humankind. To keep global warming limited to 1.5C, it must reach net-zero emission by 2050. It is ambitious and challenging for Laos to achieve the target. The main objective of this paper is to identify the challenges and solutions to the decarbonization pathway in Laos. The net-zero emission by 2025 goal is too ambitious for Laos and the LDC countries, and there are several challenges, including human resources, funding, and technologies. Achieving the target requires extensive funding, human resources, and technologies. Therefore, the roles of developed countries and international donors are crucial.
{"title":"Decarbonization Pathways in Laos: The Challenges and Solutions","authors":"Phouphet Kyophilavong","doi":"10.1162/asep_a_00870","DOIUrl":"https://doi.org/10.1162/asep_a_00870","url":null,"abstract":"Abstract Climate change is a severe threat to humankind. To keep global warming limited to 1.5C, it must reach net-zero emission by 2050. It is ambitious and challenging for Laos to achieve the target. The main objective of this paper is to identify the challenges and solutions to the decarbonization pathway in Laos. The net-zero emission by 2025 goal is too ambitious for Laos and the LDC countries, and there are several challenges, including human resources, funding, and technologies. Achieving the target requires extensive funding, human resources, and technologies. Therefore, the roles of developed countries and international donors are crucial.","PeriodicalId":52020,"journal":{"name":"Asian Economic Papers","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-10-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136080047","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Environmental, Society, and Governance (ESG) investments have become increasingly popular in recent years, and, at the same time, many rating agencies provide ESG scores for each company. This means that the ESG investment model may have moved from the traditional two-factor model of risk-return to a three-factor model adding an ESG component to it. This paper highlights the potential for distortion of asset allocation through the shift from traditional risk-return considerations to ESG score considerations. This is equally true for green bonds, resulting in the potential for asset allocation to be distorted by green bond criteria. Furthermore, we show that imposing a net carbon tax on greenhouse gas (GHG) emissions is a measure to correct this distortion in asset allocation and make asset allocation more risk-return based, in addressing global environmental issues.
{"title":"Diversified ESG Evaluation by Rating Agencies and Net Carbon Tax to Regain Optimal Portfolio Allocation","authors":"Naoyuki Yoshino, Tomonori Yuyama, Farhad Taghizadeh-Hesary","doi":"10.1162/asep_a_00871","DOIUrl":"https://doi.org/10.1162/asep_a_00871","url":null,"abstract":"Abstract Environmental, Society, and Governance (ESG) investments have become increasingly popular in recent years, and, at the same time, many rating agencies provide ESG scores for each company. This means that the ESG investment model may have moved from the traditional two-factor model of risk-return to a three-factor model adding an ESG component to it. This paper highlights the potential for distortion of asset allocation through the shift from traditional risk-return considerations to ESG score considerations. This is equally true for green bonds, resulting in the potential for asset allocation to be distorted by green bond criteria. Furthermore, we show that imposing a net carbon tax on greenhouse gas (GHG) emissions is a measure to correct this distortion in asset allocation and make asset allocation more risk-return based, in addressing global environmental issues.","PeriodicalId":52020,"journal":{"name":"Asian Economic Papers","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-10-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136079426","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Euston Quah, Wai-Mun Chia, Tsiat-Siong Tan, Nick Ho
Abstract In Southeast Asia, the seasonal transboundary haze pollution stemming from slash-and-burn practices of traditional Indonesian farmers affects several countries in the region including Indonesia, Singapore, Malaysia, and Brunei. Despite both domestic and regional efforts that have been put in place to help fight against haze, Southeast Asian haze remains a long-term issue that recurs in a varying degree of intensity during every dry season in the region. While we remain optimistic that the problem will eventually be resolved, given that most of these fires are the result of human activity, solutions can be executed successfully only in the longer run. In the interim, one of Singapore's options is to adapt. A contingent valuation (CV) survey on 793 Singapore residents was conducted in Singapore between November and December 2017 to elicit their willingness-to-pay (WTP) for a haze adaptation program and a haze eradication program in Singapore. We use a double-bounded dichotomous choice CV survey design and the Kaplan-Meier-Turnbull method and the probit regression to infer the distribution of Singapore residents’ WTP for the two programs and find that they are willing to pay between S$ 46.46 and S$ 60.06 for a haze adaptation program that reduces the local impacts of haze and between S$ 51.66 and S$ 66.76 for a haze eradication program. These findings suggest that Singapore residents continue to value the government's effort to derive solutions to resolve the haze crisis that recurs intermittently.
{"title":"Willingness-to-pay for a Haze Adaptation Program and a Haze Eradication Program in Singapore: The 2015 Transboundary Haze","authors":"Euston Quah, Wai-Mun Chia, Tsiat-Siong Tan, Nick Ho","doi":"10.1162/asep_a_00868","DOIUrl":"https://doi.org/10.1162/asep_a_00868","url":null,"abstract":"Abstract In Southeast Asia, the seasonal transboundary haze pollution stemming from slash-and-burn practices of traditional Indonesian farmers affects several countries in the region including Indonesia, Singapore, Malaysia, and Brunei. Despite both domestic and regional efforts that have been put in place to help fight against haze, Southeast Asian haze remains a long-term issue that recurs in a varying degree of intensity during every dry season in the region. While we remain optimistic that the problem will eventually be resolved, given that most of these fires are the result of human activity, solutions can be executed successfully only in the longer run. In the interim, one of Singapore's options is to adapt. A contingent valuation (CV) survey on 793 Singapore residents was conducted in Singapore between November and December 2017 to elicit their willingness-to-pay (WTP) for a haze adaptation program and a haze eradication program in Singapore. We use a double-bounded dichotomous choice CV survey design and the Kaplan-Meier-Turnbull method and the probit regression to infer the distribution of Singapore residents’ WTP for the two programs and find that they are willing to pay between S$ 46.46 and S$ 60.06 for a haze adaptation program that reduces the local impacts of haze and between S$ 51.66 and S$ 66.76 for a haze eradication program. These findings suggest that Singapore residents continue to value the government's effort to derive solutions to resolve the haze crisis that recurs intermittently.","PeriodicalId":52020,"journal":{"name":"Asian Economic Papers","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-10-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136079103","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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