Economics Working Papers

The ADB Economics Working Paper Series is a forum for stimulating discussion and eliciting feedback on ongoing and recently completed research and policy studies undertaken by the Asian Development Bank (ADB) staff, consultants, or resource persons. The series deals with key economic and development problems, particularly those facing the Asia and Pacific region; as well as conceptual, analytical, or methodological issues relating to project/program economic analysis, and statistical data and measurement. The series aims to enhance the knowledge on Asia's development and policy challenges; strengthen analytical rigor and quality of ADB's country partnership strategies, and its subregional and country operations; and improve the quality and availability of statistical data and development indicators for monitoring development effectiveness.

  • 01 Jun 2011 | Publication

    Effectiveness of Capital Restrictions: Do Regional and Income Differences Matter?

    This study examines the differences in the effectiveness ofde jurecapital restrictions across economies in different regions (Asia versus non-Asia) and with varying income levels. It uses a panel of 45 economies over the period 1995 - 2007. The results show that differences in regional and income levels matter for the effectiveness of capital restrictions.
  • 01 May 2011 | Publication

    Effects of Financial Market Imperfections on Indian Firms' Exporting Behavior

    This paper investigates the impact of financial constraints on the exporting behavior of Indian manufacturing firms using data from more than 6,000 manufacturing firms in India for 1996-2008. The authors find empirical evidence that Indian manufacturing firms tend to self-finance their exporting without relying too much on external finances, which indicates that firms face financial constraints. Recent financial liberalization in India still does not seem to allow the financial system to meet the stronger demand for funds by firms.
  • 01 May 2011 | Publication

    Regional Corridors Development in Regional Cooperation

    Although regional corridors are popular components of regional cooperation initiatives, discussion about their development tends to be relatively general in scope and difficult to pin down in terms of content and implications. This paper elaborates on a simple analytical framework for regional corridors development anchored on the extent to which they are national or regional, and the area of their utilization. The framework is subsequently applied to the Greater Mekong Subregion regional cooperation program.
  • 01 May 2011 | Publication

    Financial Integration in East Asia: An Empirical Investigation

    This paper empirically examine the degree of linkage among the equity and bond markets of Hong Kong, China; Japan; the Republic of Korea; and Singapore using a financial gravity model. This paper find that financial linkages among the four economies are higher than predicted by the financial gravity model, driven by trade linkages.
  • 01 May 2011 | Publication

    Underlying Trends and International Price Transmission of Agricultural Commodities

    This paper conducts an empirical analysis of commodity prices. The aim of this paper is twofold: to study the underlying trends for selected international agricultural commodity prices, and to test for international price transmission employing the cointegration method in the presence of asymmetric error correction. Using commodity specific monthly data, this paper examines the extent to which increases in international food prices during the past few years have been transmitted to domestic prices in selected Asian developing countries.
  • 01 Apr 2011 | Publication

    Energy Security, Food Security, and Economics of Sugarcane Bioethanol in India

    India's ambitions on enhancing energy security through bioethanol largely rely on second-generation technologies. Using a cost-benefit analysis, this paper show that sugarcane bioethanol is not economically viable and competes with agricultural resources. Molasses ethanol can support up to 5% blending while improving social welfare.
  • 01 Mar 2011 | Publication

    When are Capital Controls Effective? Evidence from Malaysia and Thailand

    This paper examines the impact of capital controls in Malaysia and Thailand during the period 2000-2010 using newly constructed capital control indexes. The results show that capital restrictions introduced in Thailand have no significant effect on inflows, but liberalization of outflows is effective in both Malaysia and Thailand. In addition, capital controls is found to have no impact on real exchange rates in both countries.
  • 01 Mar 2011 | Publication

    Transforming the Philippine Economy: 'Walking on Two Legs'

    Norio Usui analyzes the long-term growth of the Philippine economy through the lens of structural transformation to clarify the root causes of the country's lagged growth performance in the regional context. The main culprit behind lagging growth is a chronic productivity growth deficit as a result of stagnant industrialization. High unemployment, slow poverty reduction, and stagnant investment are a reflection of stagnant industrialization.
  • 01 Mar 2011 | Publication

    Impact of International Financial Shocks on Small Open Economies: The Case of Four ASEAN Countries

    This paper simulates the impact of a short-term shock originating from the global financial system on small open economies in the Association of Southeast Asian Nations (ASEAN). The simulation uses empirically estimated general equilibrium models for Indonesia, Malaysia, the Philippines, and Thailand.
  • 01 Feb 2011 | Publication

    Cross-Border Mergers and Acquisitions and Financial Development: Evidence from Emerging Asia

    This paper examines the relationship between cross-border mergers and acquisitions (M&A) and financial development in emerging Asian economies. Bilateral data of cross-border M&A for nine emerging Asian economies during 2000-2009 are analyzed with a sample selection model and panel data model.

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