SOUTHEAST ASIAN JOURNAL OF ECONOMICS

The Performance of Alternative General Method of Moment Estimators with Application to Employment Panel Data Model

2024-03-26T15:25:07+07:00

Dynamic panel data models make it possible to address dynamic economic relationships through the inclusion of a lagged dependent variable among the explanatory variables. In the presence of a lagged dependent variable as a regressor, however, the least squares-based estimators may not be consistent. The generalized method of moments (GMM) estimators are the most popular in dynamic panel data estimation. Two issues concerning the GMM estimator are instruments proliferation and the choice of an initial weighting matrix. In this study, we propose alternative estimators that make use of sub-optimal weight matrices in combination with reduced instruments. The small sample performance of these estimators was investigated using a simulation study and an empirical example of panel data of employment for manufacturing firms. The results from Monte Carlo experiments and real data analysis show that the performance of sub-optimally weighted system GMM estimators that utilize collapsed as well as untransformed instruments seems promising.

Health Outcomes in Developing Countries: The Role of Government and Market Institutions

2024-02-27T15:47:44+07:00

Experts nowadays judge public health status mostly by looking at life expectancy and maternal and infant mortality. As such, this paper assesses human health outcomes in 23 developing nations in relation to public and private health investment, a stable political environment, the efficiency of the government, regulatory quality, education, and the development of financial institutions from the years 2000–2019. This paper employs the panel-corrected standard error (PCSE) strategy developed by Beck and Katz (1995). This technique is applied if the dataset violates the assumptions of serial correlation or autocorrelation and heteroskedasticity. The outcomes confirm that health spending in the public and private sectors, government effectiveness, regulatory quality, education, and financial institutions favor life expectancy while having a detrimental impact on maternal and infant mortality, except primary school enrollment and private spending on health areas. This paper’s findings imply that the authorities should prioritize public and private health sector development, institutional fairness, and financial institutions to strengthen public health outcomes.

Dynamics of Volatility Spillovers: Evidence from Implied Volatility Indexes to Conventional and Green Equities in the Indian Context

2024-02-23T10:20:23+07:00

Green investments are considered crucial for achieving inclusive and sustainable economic growth, necessitating profitability for companies
offering eco-friendly products. However, commodity price fluctuations can impact their profitability. This research investigates volatility transmission between the implied volatility indexes with traditional and green investments in the Indian market. Employing the dynamic conditional correlationgeneralized autoregressive conditional heteroskedasticity (DCC-GARCH) model, we analyze daily data from Nov 2012 to Oct 2023. Results suggest that there has been a strong and persistent spillover effect among these financial assets, as the joint values for all pairs are very high and statistically significant. This implies a strong positive correlation between the volatility of the implied volatility indexes with traditional and green investment indexes and suggests that when the implied volatility index rises, the volatility of green investments also tends to rise, and vice versa. The study’s findings have implications for both investment strategies and policy decisions.

Governance Capacity and Public Debt in Asian Countries

2024-03-20T22:08:55+07:00

This research focuses on the influence of governance capacity on public debt accumulation in Asian countries. We empirically assess the potential impact of governance capacity on public debt accumulation in 41 Asian countries over the period 2002–2019. Distinct from previous studies that mainly used the frequentist approach, we applied the non-frequentist method, Bayesian analysis. Findings from informative Bayesian linear regressions document that enhancing the governance capacity in voice and accountability, political stability, regulatory quality, the rule of law, and control of corruption affects the size of public debt positively. The findings also show that allocating the government’s budget funds to spur governance capacity in Asian countries could accelerate the level of public debt. Meanwhile, only government effectiveness indicates a negative association with public debt. The results of this paper contribute evidence and crucial implications to policymakers to improve the governance capacity concerning the management of public debt.

Analyzing the Asymmetric Impact of Taxation on Economic Growth: A Case Study of Vietnam

2024-04-24T14:26:57+07:00

Tax revenue can serve as a potential source to control fiscal deficit, but it may also hinder economic growth. Thus, our study is driven by the nonlinear effects between taxation and growth. The literature often overlooks emerging and developing economies, particularly transitional ones. This study investigates the asymmetric impact of taxes on Vietnam’s economic growth using time series data from 1990 to 2020, employing the NARDL framework. The results reveal that changes in tax rates can have asymmetric effects on production in the long run, and increasing tax collection rates will negatively impact economic growth. Specifically, a 1% increase in taxes leads to a 2.518% decrease in economic activity, whereas a 1% reduction in taxes results in a 0.714% increase in economic activity. These findings are significant for the quantitative analysis of taxation through fiscal policies in typical emerging economies.

Informal Workers and Income Inequality in the Context of COVID-19 in Vietnam

2023-11-01T10:08:25+07:00

This study provides empirical evidence on the impact of COVID-19 on the number of working hours and income of informal workers, thereby affecting overall income inequality in Vietnam. The least squares, Heckman Selection, Theil L index, and Blinder-Oaxaca decomposition method were implemented in the study. The results show that Vietnamese informal workers’ working hours and income have decreased significantly due to the COVID-19 pandemic. The study also demonstrates that informal workers are the main cause of overall income inequality in Vietnam. The group of labor-employment and geographic characteristics increased income inequality within the informal workers group, while the opposite trend was true for the group of individual characteristics. Notable, this study analyzes the reduction in informal workers’ working hours and income in Vietnam instead of approaching the reduction level as in previous analyses. It not only points out the causes of changes in overall income inequality but also evaluates the role of informal workers in this relationship. This is expected to be an overview of informal workers and income inequality in the context of COVID-19 in Vietnam.

Productivity Dynamics and Determinants in Agricultural Enterprises: Implications for Technology-Oriented Development in the Mekong Delta

2024-05-13T17:57:47+07:00

Agricultural enterprises are vital for rural socio -economic development yet face productivity and technology adoption challenges amid global economic integration. This study examines total factor productivity dynamics, technical efficiency, and technological progress for 87 agricultural enterprises from 2016 to 2021. Utilizing firm-level data from the Annual Survey on Enterprises, data envelopment analysis reveals a 6.5% increase in average technical efficiency but a concerning 12.7% annual decline in technological change. Mean total factor productivity also drops by 7.1% annually, indicating significant obstacles to overall productivity growth. The random effect regression results suggest that agricultural cooperatives experience slower technological advancements. Furthermore, being situated near a port and engaging in export activities help enterprises improve productivity. Investments in research and development positively impact total factor productivity changes, suggesting a crucial avenue for enhancing agricultural enterprise performance amidst evolving economic landscapes.