Financial permeation as a role of microfinance : has microfinance actually been helpful to the poor?

This article is distinct in its application of the logit transformation to the poverty ratio for the purpose of empirically examining whether the financial sector helps improve standards of living for low-income people. We propose the term financial permeation to describe how financial networks expand to spread money among the poor. We measure financial permeation by three indicators related to microfinance institutions (MFIs) and then examine its effect on poverty reduction at the macro level using panel data for 90 developing countries from 1995 to 2008. We find that financial permeation has a statistically significant and robust effect on decreasing the poverty ratio.

Market discipline by depositors : impact of deposit insurance on the Indonesian banking sector

This paper investigates market discipline by depositors in the Indonesian banking sector. Does depositor discipline fulfill its role in Indonesia? Does deposit insurance affect depositor behavior thereby imposing discipline on banks? These questions are empirically examined using panel data on Indonesian commercial banks from 1998 to 2009. In Indonesia deposit insurance was introduced in 2005. Depositor discipline is examined by two measures: change in the amount of deposits and interest rate. The empirical results show that depositors pay attention to bank soundness and riskiness and select banks based on the bank's condition with particular attention paid to equity ratio. It is found that depositors impose discipline on banks, but it varies according to regulatory and economic circumstances.

Economic restructuring and regional distrubution of enterprises in Vietnam

The change in the ownership structure of enterprises was one of the major features of the Vietnamese economy in the 2000s. Of the three sectors of state, private and FDI, the state sector, which employed the majority of enterprise workers at the beginning of the 2000s, became the smallest by the end of the decade. One of the factors contributing to such phenomenon was SOE restructuring. Earlier SOE restructuring in the early 1990s is said to have resulted in increased economic inequality among provinces. The purpose of this paper is to clarify the impact of the SOE restructuring and related changes in the ownership structure of enterprises on the regional distribution of economic activities in the 2000s.

Innovation networks in China, Japan, and Korea : further evidence from U.S. patent data

The growing importance of innovation in economic growth has encouraged the development of innovation capabilities in East Asia, within which China, Japan, and Korea are most important in terms of technological capabilities. Using U.S. patent data, we examine how knowledge networks have developed among these countries. We find that Japan's technological specialization saw gradual changes, but those of Korea and China changed rapidly since 1970s. By the year 2009, technology specialization has become similar across three countries in the sense that the common fields of prominent technology are electronics and semiconductors. Patent citations suggest that technology flows were largest in the electronics technology, pointing to the deepening of innovation networks in these countries. Together with our prior work, the Japanese and U.S. data produce similar conclusions about innovation networks.

Platforms, network effects and small business dynamics in China : case study of the Shanzhai cell phone industry

This paper seeks to argue the significance of platforms on emerging markets through a case study of the Shanzhai cell phone industry in Shenzhen, China. In this industry, value chains are being driven by both the technology platforms and the market platforms. The former include MTK baseband chipset, and so-called Shared PCBA and Shared Mould. The latter include the North Huaqiang Market and the Purchasing and Money Platform. Technology platforms greatly reduced the technological barriers to entry for independent design houses and system integrators, while market platforms markedly improved their poor marketing and purchasing abilities. Due to factors such as social networks, supporting industries, informality and platform governance, strong network effects have been exhibited in the two types of platforms, which have not only fostered numerous start-ups, but have also led to effective exploitation of emerging markets.

Seasonal migration and micro-credit in the lean period : evidence from northwest Bangladesh

This paper investigates the relationship between access to micro-credit and temporary seasonal migration, an issue which is largely ignored in the standard rural-urban migration literature. Seasonal migration due to agricultural downturns is a common phenomenon in developing countries. Using primary data from a cross-sectional household survey from the northwest part of Bangladesh, this study quantifies the factors that influence such migration decisions. Among other results, we find that network effects play a significant role in influencing the migration decision, with the presence of kinsmen at the place of destination having considerable impact. Seasonal migration is a natural choice for individual suffering periodic hardship; however the strict weekly loan repayment rules of Micro-credit Institutes can have an adverse effect on this process, reducing the ability of borrowers to react to a shock. Our result suggests that poor individuals prefer the option of not accessing the micro-credit and opt for temporal seasonal migration during the lean period. The results have numerous potential policy implications, including the design of typical micro-credit schemes.

Knowledge spillover in Indian automobile industry : the process and the coverage

In India, as the production of passenger cars increased, many local small and medium enterprises (SMEs) entered the parts and components manufacturing sector. The sources of knowledge for large enterprises and SMEs are different. Naturally, spillover effects among large enterprises and between large enterprises and SMEs are different. This paper focuses on knowledge spillover among large enterprises and from large enterprises to SMEs. Subcontractor can absorb relation-specific skills through repeated interaction with parent company. The results of field survey emphasizes that relation-specific skills are a determinant factor of spillover effects from assemblers and large auto component manufacturers to SMEs. Econometric analysis shows that spillover effects among medium and large automobile units and from medium and large automobile units to small units went beyond boundary of cluster.

Ramadan school holidays as a natural experiment : impacts of seasonality on school dropout in Bangladesh

In 2000, Ramadan school vacation coincided with the original annual exam period of December in Bangladesh. This forced schools to pre-pone their final exam schedules in November, which was the month before the harvest begins. 'Ramadan 2000' is a natural experiment that reduced the labor demand for children during the exam period. Using household level panel data of 2000 and 2003, and after controlling for various unobservable variations including individual fixed effects, aggregate year effects, and subdistrict-level year effects, this paper finds evidence of statistically significant impact of seasonal labor demand on school dropout in Bangladesh among the children from agricultural households.

Development of broiler integration in Peru

Production and consumption of broiler meat has expanded rapidly in Peru since the 1990s. This rapid expansion was possible due to technological changes in production as well as integration of various stages of production, such as breeding farms, hatcheries, feed mills and grow-out farms by so-called broiler integrators. However, there are some distinguishing characteristics in Peruvian broiler integration that differ from those in developed countries. One is the truncated scope of integration, in which the slaughtering and processing stages are not integrated. The other is that not slaughtering and processing companies, but grow-out farms have become the principal broiler integrators. This paper analyzes the factors associated with these characteristics.

Location choice in low-income countries : evidence from Japanese investments in East Asia

Unlike most existing studies, this paper examines the location choices of MNEs in developing countries. Specifically, we investigate the location choices of Japanese MNEs among East Asian developing countries by estimating a four-stage nested logit model at the province level. Noteworthy results of location elements are as follows. As is consistent with the mechanics of cheap labor-seeking FDI, Japanese MNEs are more likely to invest in locations with low income and low tariff rates on products from Japan. Also, accessibility to other locations and/or ports matters in attracting Japanese MNEs because it is crucial in importing materials and exporting their products. In addition, WTO membership and bilateral investment treaties are important because these contribute to the settlement of trade and investment disputes, which is more likely to be necessary in developing countries.

Establishing electoral administration systems in new democracies

The difficulty of holding fair elections continues to be a critical problem in many newly democratized countries. The core of the problem is the electoral administration's lack of political autonomy and capability to regulate fraud. This paper seeks to identify the conditions for establishing an autonomous and capable electoral administration system. An electoral administration system has two main functions: to disclose the nature of elections and to prevent fraud. We argue in this paper that an autonomous and capable electoral administration system exists if the major political players have the incentive to disclose the information on the elections and to secure the ruler's credible commitment to fair elections. We examine this argument through comparative case studies of Korea and the Philippines. Despite similar historical and institutional settings, their election commissions exhibit contrasting features. The difference in the incentive structures of the major political players seems to have caused the divergence in the institutional evolution of the election commissions in the two countries.

Agricultural efficiency of rice farmers in Myanmar : a case study in selected areas

This paper try to analyze unique data set for rice producing agricultural households in some selected areas of Bago and Yangon divisions to examine the households' profit efficiency and the relationship between farm and household attributes and profit inefficiency using a Cobb-Douglas production frontier function. The frequency distribution reveals that the mean technical inefficiency is 0.1627 with a minimum of 3 percent and maximum of 73 percent which indicates that, on average, about 16% of potential maximum output is lost owing to technical inefficiency in both studied areas. While 85% of the sample farms exhibit profit inefficiency of 20% or less, about 40% of the sample farms is found to exhibit technical inefficiency of 20% or less, indicating that among the sample farms technical inefficiency is much lower than profit inefficiency.

Low workforce participation of educated female and the role of work organizations in post-war Sri Lanka

Sri Lanka as a developing economy that achieved gender equity in education and a higher literacy rate (both adult and youth) in the South Asian region still records a low labor force participation and high unemployment rate of females when compared to their male counterparts. With the suggestion of existing literature on the non-conventional models of careers those adopted by young and female populations at the working age, this paper discusses the role of work organizations in absorbing more females (and even minority groups) into the workforce. It mainly focuses on the need of designing appropriate human resource strategies and reforming the existing organizational structures in order for contributing to the national development in the post-war Sri Lanka economy.

Consensus and democracy in Indonesia : Musyawarah-Mufakat revisited

This paper analyzes customary practices of consensus decision making, called musyawarah-mufakat, as a basis of democratic stability in Indonesia. Musyawarah and mufakat (deliberation and consensus) are a traditional decision-making rule in Indonesia which has often been observed in village meetings. This paper argues that this traditional decision-making rule is still employed even in a modernized and democratized Indonesia, not only at rural assemblies but in the national parliament as well. Furthermore, this consensus way of decision making provides an institutional basis for democratic stability by giving every parliamentary player, whether big or small, an equal opportunity to express his/her interests. On the other hand, this system of musyawarah‐mufakat decreases political efficiency in the sense that it takes a long time to deliberate drafted laws in the parliament.

Non-conventional provisions in regional trade agreements : do they enhance international trade?

The scope of recent regional trade agreements (RTAs) is becoming much wider in terms of including several provisions such as competition policy or intellectual property. This paper empirically examines how far advanced, non-conventional provisions in RTAs increase trade values among RTA member countries, by estimating the gravity equation with more disaggregated indicators for RTAs. As a result, we find that the provision on competition policy has the largest impacts on trade values, following that on government procurement. Our further analysis reveals that the more significant roles of these two provisions can be also observed in the impacts on the intensive and extensive margins.