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Do Export Costs Matter in Determining Whether, When, and How Much African Firms Export?
Get PDFWhat is the impact of export costs on the speed and extent to which African firms exports? We answer this question using a sample of 49,584 (mostly formal) firms across 71 countries, including 5,839 firms in 16 African countries surveyed by the World Bank during 2002 and 2003. We find that firms in African countries face higher export costs on average than firms in other parts of the world. However we find that African firms are more likely to enter export markets, but that when they do the extent of their exports (exports as a share of their total sales) is on average less than that of firms elsewhere. Also, younger firms are more likely to start exporting than older firms. As for the impact on export costs, we establish that the costs of exporting (as measured in US dollars) lower the likelihood and the extent of African firms’ exports but not when African firms start exporting.research repor
Policy Challenges for Infrastructure Development in Asian LICs: Lessons from the Region
Get PDFThis paper discusses policy issues pertaining to infrastructure development in low income countries (LICs) in Asia. Infrastructure challenges in Asian LICs have not been adequately highlighted to date mainly because the international focus has often been on African LICs and because large countries such as China, India, and Indonesia attracted more interest among the developing Asian countries. While Asian LICs have sought to improve their infrastructure over the years, the quality and quantity is generally insufficient although significant variations exist between countries and sectors. Since their fiscal space and governmental capacities are limited despite large investment needs, each possible infrastructure investment must be placed in order of priority. In Asian LICs, spatially connective infrastructure (including logistics, telecommunications, and electricity) should be given priority to generate benefits from economies of agglomeration, fragmentation of production activities, and better connectivity to fast-growing large markets, although the trade-off between economic efficiency and spatially balanced growth is a difficult issue. Particularly, some large Asian LICs have great potential to become part of sophisticated regional production networks through effective infrastructure. Climate change, both the adaptation of infrastructure and mitigation through green development, also needs to be sufficiently taken into account or mainstreamed. The fact that the investment in public private partnerships (PPP) projects in infrastructure has recently been increasing in Asian LICs is encouraging. To scale up PPP, Asian LIC governments should clarify the contributions of the private sector (in such aspects as capital investment and operational efficiency), continue to improve the investment climate, policies, and regulations, and prepare bankable projects in which the roles of the public and private sectors are defined. The public sector will continue to be the main provider and regulator of infrastructure in Asian LICs. Although public sector performance should improve, there has been no single blueprint for it, and therefore country-specific approaches are called for. Donors should continue to support Asian LICs in scaling up infrastructure investment through project-financing, technical assistance, and capacity development.research repor
Expansion of Lowland Rice Production and Constraints on a Rice Green Revolution: Evidence from Uganda
Get PDFIn Uganda, rice production has increased rapidly in the past 10 years while the yield has been stagnant. To examine this mixed story in detail, we use data on 600 rural households with access to wetlands. The estimation results on the expansion of rice cultivation show that the high population density in upland farm areas has pushed farmers to rice cultivation in wetlands. Although applying proper cultivation practices such as constructing bunds, leveling, and transplanting is considered to be critical in yield enhancement, as well as using chemical fertilizer and improved varieties, such cultivation practices are rarely adopted in Uganda. The rice production function estimation results show that these practices do not increase the yield significantly once village fixed effects are controlled for. This suggests that these practices are not being adopted since the rice yield is not enhanced effectively by the cultivation practices. This is probably explained by the fact that the water supply in wetlands tends to be unstable and to suffer from drought and floods.research repor
The Labor Market Outcomes of Two Forms of Cross-Border Higher Education Degree Programs between Malaysia and Japan
Get PDFThis paper examines the labor market outcomes of two different forms of cross-border higher education degree programs (i.e., full study abroad vs. twinning) between Malaysia and Japan. Specifically, based on a new graduate survey, it examines whether there are differences in the labor market outcomes between the two programs and what other factors have significant effects on the labor market outcomes. The results of regression analysis indicate that there are no significant differences between the two programs in terms of employment immediately after graduation, being in graduate-level positions in current jobs, and in the levels of earnings in current jobs. Instead, among the variables related to education, the degree fields, internship experiences, and university rankings are significant for the first employment. For current work, the results suggest that the post-graduation qualifications such as junior engineers and English and Japanese language skills become important. Based on our findings, considering the labor market outcomes as a purpose of studying abroad, twinning program between two countries could be one of the tools of human capital development.research repor
99 Problems (But A Crisis Ain’t One) Political Business and External Vulnerability in Island Southeast Asia
Get PDFThis paper examines how political business relations have shaped country vulnerability to financial crises during periods of international financial contagion. While close relations between political and business elites in island Southeast Asia deepened vulnerability during the Asian Financial Crisis, the same does not hold during the global crisis of 2008-09—neither the countries where political business relations have changed (Indonesia) nor the countries where they are the same (Malaysia, the Philippines, and Singapore) have experienced a true economic or financial crisis. Instead, for island Southeast Asia this crisis is merely a trade and investment shock, and a relatively minor one at that. A comparison of the crises of 1997-98 and the non-crises of 2008-09 shows that political business relations only affect external vulnerability insofar as they interact with economic policy settings, regulatory regimes, and the beliefs of investors.research repor
General Budget Support in Tanzania Late Disbursement and Service Delivery
Get PDFThe actual flow of General Budget Support (GBS) is not well known in developing countries. There have been few empirical studies on the effect of late disbursement from donors to a recipient government and from the central government to local governments. This paper attempts to analyze this flow by focusing on donors’ GBS disbursement to Tanzania and on the intergovernmental money flows in Tanzania. This paper shows that such center-local transfers are significantly correlated with the timing of local government expenditures in general and health expenditures in particular. It also shows that development expenditures are more affected than recurrent expenditures by delays in the transfer. To improve service delivery on the ground, the transfers from donors to the central government and from the central government to local governments need to be timely.research repor
Location Choice and Performance of Furniture Workshops in Arusha, Tanzania
Get PDFThis study uses data collected in an emerging furniture cluster in the Tanzanian city of Arusha to investigate the determinants of location choice and location effect on the performance of micro and small furniture enterprises in Africa. Based on empirical analyses of a census of 234 workshops located in five sub-clusters, the results show that furniture producers tend to locate in sub-clusters where industrial peers from their own ethnic group have gathered. Meanwhile, the results, consistent with the literature on agglomeration economics, shows that entrepreneurs in Africa desire to locate in proximity to a large output market. However, performance analyses show that ethnic networks did not contribute to the performance of workshops as measured by DEA and product quality. In contrast, workshops located in sub-clusters with more machinery shops outperformed workshops located in sub-clusters with fewer machinery shops, implying that well-integrated upstream industries in the sub-cluster foster the development of the industry.research repor
Impact of Farmer Field Schools on Agricultural Income and Skills: Evidence from an Aid-Funded Project in Rural Ethiopia
Get PDFThis study estimates the effect of farmer field schools in rural Ethiopia on income from agriculture. The farmer field schools were established in association with participatory forest management associations for forest protection funded by Japanese aid. We employ a difference-in-differences propensity score matching approach to correct for possible biases due to selection of participants. We find that by participating in the farmer field schools, agricultural households increased their real income per worker by about 60-160 US dollars on average, which is equivalent to, or even more than, the average income per worker before the project. We also find evidence that the large increase in income is due to the use of new agricultural practices, such as new varieties, taught and promoted in the farmer field schools.research repor
Cross-Border Higher Education for Labor Market Needs: Mobility of Public-Funded Malaysian Students to Japan over Years
Get PDFAs globalization and the knowledge economy spreads, the demand for highly skilled workers has increased and developing countries are engaged in cross-border higher education to develop high level human resources for their nations. Using data on a cross-border higher education program between Malaysia and Japan, namely the Higher Education Loan Project (HELP1 and HELP2), this paper explores whether publicly funded cross-border higher education programs have yielded their expected outcomes (i.e., employment immediately after graduation) over the last ten years in the context of the rapidly changing Malaysian economic and higher education landscape. Our findings indicate that the program has met its intended outcomes, that is, the graduates have been absorbed in the industries they intended to work in or have continued with further studies, which are both conducive to Malaysian national development. However, our findings on the rates of graduates staying after completing their degrees imply that factors such as the host country’s immigration policies may influence the decision by graduates on where to work.research repor