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 Jul 2011 | Publication

    South-South Trade: An Asian Perspective

    This paper examines trends and patterns of South-South trade in Asian economies, with emphasis on the implications of the growing importance of global production sharing and the rise of the People's Republic of China. The findings suggest that growth of South-South trade of Asian economies has not lagged behind what one would expect in terms of the standard determinants of trade potential, and that South-South trade is largely complementary to, rather than competing with, South-North trade.
  • 01 Jul 2011 | Publication

    Asia's Changing Role in World Trade: Prospects for South-South Trade Growth to 2030

    This paper projects the world economy to 2030 to demonstrate the extent to which developing Asia's rapid economic growth is likely to further shift the global industrial center of gravity away from the North Atlantic to Asia, increase the importance of Asia in world trade, and boost South-South trade.
  • 01 Jun 2011 | Publication

    Mapping Vertical Trade

    The paper develops a method to map global networks of production sharing and processing trade. Relying on highly detailed bilateral trade data across a matrix of 75 countries, a network index gauges countries' interdependence according to the extent of trade in parts and components for further processing and assembly of final export goods. The set of bilateral network relations is then subjected to an algorithm that lays it out for visualization as a world map of vertical trade networks.
  • 01 Jun 2011 | Publication

    When Fast Growing Economies Slow Down: International Evidence and Implications for the People's Republic of China

    Using international data starting 1957, this paper constructs a sample of cases where fast-growing economies slow down. The evidence suggests that rapidly growing economies slow down significantly, in the sense that the growth rate downshifts by at least 2 percentage points when their per capita incomes reach around $17,000 in year-2005 constant international prices, a level that the People's Republic of China should achieve by or soon after 2015. Among more provocative findings is that growth slowdowns are more likely in countries that maintain undervalued real exchange rates.
  • 01 Jun 2011 | Publication

    Can Skill Diversification Improve Welfare in Rural Areas? Evidence from the Rural Skills Development Project in Bhutan

    This paper investigates the short-term effects and the determinants of participation in a vocational skills training program that was intended to diversify incomes outside of agriculture. It finds limited positive impacts of the program along various economic, social, and psycho-social dimensions with the exception of diversifying household incomes into the skill areas. Females are significantly less likely to participate.
  • 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.

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