Income Distribution and Poverty in a CGE Framework: A Proposed Methodology

The paper discusses methodologies addressing income distribution and poverty in a Computable General Equilibrium (CGE) model framework, by describing how to link CGE results with household survey data to analyze income distribution and poverty implications. The most basic approach is simply to fit the household income/expenditure to the survey data by suitable parametric distribution functions. The post-simulation poverty indices can be estimated by either assuming that the income of each individual household within the group moves proportionally with the group's mean income, or by our proposed elasticity method. In our proposed method, we use the elasticity estimated from existing surveys to calculate the change in expenditure of each subgroup category in response to change in the household category's mean consumption, supplied by the core model's simulation, to derive post-simulation poverty indices. Our approach may better capture intra-group income distribution of households and moderate gains or losses in welfare from economic growths.Computable General Equilibrium, Income Distribution, Poverty.

Firm Characteristic Determinants of SME Participation in Production Networks

This paper provides an empirical analysis of small and medium enterprise (SME) participation in production networks. It gauges firm characteristic determinants of SME participation in production networks. The empirical investigation utilizes results obtained from an ERIA Survey on SME Participation in Production Networks, conducted over a three month period at the end 2009 in most ASEAN countries (i.e., Thailand, Indonesia, Malaysia, Philippines, Vietnam, Cambodia, and Laos PDR) and China. The results suggest that productivity, foreign ownership, financial characteristics, innovation efforts, and managerial/entrepreneurial attitudes are the important firm characteristics that determine SME participation in production networks. The paper extends the analysis to identify the determinants that allow SMEs to move from low to high quality or value adding participation in production networks. The results suggest that size, productivity, foreign ownership, and, to some extent, innovation efforts and managerial attitudes, are the important firm characteristics needed by SMEs to upgrade their positions in production networks. The finding suggests that SMEs really exploit competitiveness from economies of scale only when they are able to engage in production networks.

SME Participation in ASEAN and East Asian Integration: The Case of Cambodia

Covering 201 firms, this study employs a questionnaire survey to explore the impact of trade policy on small and medium enterprises (SMEs) in Cambodia. The results show that more than half of the surveyed firms were aware of the ASEAN Economic Community (AEC) and larger firms tend to use FTAs more frequently than SMEs. The key reasons for not using FTAs were a lack of knowledge and not knowing how to use the forms. The strong import linkages with ASEAN and East Asia (as compared to export linkages) suggest that Cambodian firms take advantage of sourcing cheaper intermediate inputs from ASEAN and East Asian economies and then export the final products to the U.S. and EU markets through generalized system of preferences (GSP) and Everything But Arms (EBA) arrangements. The surveyed firms hold the perception that the AEC has or would decrease their domestic and export sales as well as their profitability, and face more competition in local and foreign markets. On the other hand, they think the AEC has or would decrease import costs and enhance accessibility to intermediate inputs. The impacts are believed to occur through the reduction of import and export tariffs/ duties, increase in custom procedures, standards and regulations, recognition of professional qualifications, improved investment processes, and better connectivity. The empirical results indicate that compared to non-users, the active FTA users appear to be larger, have higher labour productivity, and have experience with multiple export markets. They are also members of business associations, and have higher skill intensity and technological capability. Firm size, higher labour productivity, access to business networks, active use of information and communications technology (ICT), having more experiences with multiple export markets, skilled human capital and technological capability are important factors for firms to use multiple FTAs and participate in regional integration.Shandre M. Thangavelu, Sothea Oum and Samsen Nea

Constraints, determinants of SME innovation, and the role of government support

This paper provides an empirical analysis of potential constraints to SMEs upgrading their capability to innovate, and assesses the effectiveness of government support in overcoming these constraints. The justification for government support is that market failures can hinder SMEs\u27 access to information, finance, technology, and human resources. This paper focuses on the impact of the perceived effectiveness of government support through business development services in terms of providing: (i) training; (ii) counselling and advice; (iii) technology development and transfer; (iv) information; (v) business linkages; (vi) financing; and (vii) a conducive business environment. The effectiveness of this support is evaluated against the ability of SMEs to innovate

Economic integration in East Asia: production networks and small and medium enterprises

International production networks in manufacturing, particularly in machinery industries, have rapidly developed over the last two decades, resulting in dramatic increases in intra-regional and intra-industry trade, providing a key source of regional growth, integration and development in East Asia. This book provides a better understanding on how to effectively further increase SME participation in East Asian production networks, and in doing so identifies key challenges and issues that they need to address. This book aims to not only fill the theory-practice gap, but also to lay solid foundations for designing national arrangements and a regional institutional frameworks to further encourage and support SME engagement and participation in regional and global production networks. The book contains several country case studies and by drawing upon individual country experiences, at various stages of economic development, this book demonstrates the varying difficulty faced by SMEs in ASEAN member countries attempting to participate in regional production networks and highlighting differences in needs and policy priorities. This book offers both a more focused theme on the assessment of globalization and a rather unique approach by focusing upon the particular importance of SMEs, and by utilizing micro-level data at the firm or plant level. Its policy insights and the richness and uniqueness of the empirical findings will make the book an invaluable contribution to understanding East Asian production networks

Impact of Disasters and Role of Social Protection in Natural Disaster Risk Management in Cambodia SANN VATHANA Council for Agricultural and Rural Development, Social Protection Coordination Unit, Cambodia (CARD-SPCU) COLAS CHERVIER

Abstract: The pattern of risks faced by the poor and vulnerable in rural area

Small and medium enterprises’ (SMEs’) access to finance in selected East Asian economies

This paper attempts to shed light on the issues of SME financing in selected East Asian economies. It elaborates on the following questions: (i) what are the key sources of external finance for SMEs (ii) the extent to which, if any, the SME sector identified by size, country and in aggregate for a sample of countries in East Asia are systematically disadvantaged, or rationed, with respect to access to external financing, (iii) what are the key factors contributing to the extent of this rationing (stringent requirements) focusing upon firm characteristics, owner characteristics and firm performance, and (iv) identify the importance of rationing for the performance of SMEs in a sample of East Asian economies

ASEAN Rising: ASEAN and AEC Beyond 2015

SEAN RISING: ASEAN and AEC Beyond 2015 puts together ideas, thoughts and papers from more than 30 experts and specialists in the region on various areas relating to ASEAN and AEC beyond 2015. It discusses the challenges for ASEAN and AEC, how to face them and how ASEAN should move forward towards AEC 2015 and beyond. ASEAN is predicted to be highly populated by 2030, with about 720 million people, making the region a huge market. It is likely that by 2030, three or four ASEAN Member States (AMSs) are high income countries, two to four AMSs would become upper middle income countries, and three to four rising towards becoming upper middle income countries themselves. The AMSs should maintain the momentum of reforms, institutional development, and community building towards an integrated and highly contestable ASEAN, competitive and dynamic ASEAN, inclusive and resilient ASEAN, and a global ASEAN. This then translates into an ASEAN RISING indeed. ASEAN RISING: ASEAN and AEC Beyond 2015 is ERIA's latest endeavour to support ASEAN and the regional integration efforts in ASEAN and East Asia. The recommendations made in this project are hoped to help the region move forward confidently into 2015 and beyond