Published papers

© 2020 Asian Development Bank Institute (ADBI) and Organisation for Economic Co-operation and Development (OECD). There is limited access for small and medium-sized enterprises (SMEs) to bank credit. This book proposes new and sustainable models to help ease the access of SMEs to finance and boost economic growth and job creation in Asia. This book looks at the difficulties of SMEs in accessing finance and suggests ways on how to mitigate these challenges. It suggests how we can develop credit information infrastructures for SMEs to remedy the asymmetric information problem and to utilize credit rating techniques for the development of a sustainable credit guarantee scheme. The book provides illustrations of various Asian economies that implemented credit guarantee schemes and credit risk databases and is a useful reference for lessons and policy recommendations.

This study is an attempt to ascertain how oil price shock can affect a trade-linked system via monetary variables. To this end, a simultaneous equation model (SEM) was applied through a Weighted Two Stage Least Squares (W2SLS) estimation method to different countries (21 cases) with business relations over the period from Q1 2000 to Q4 2015. In the case of oil-exporting countries consisting of Iran, Russian Federation, UAE, Indonesia, and Kazakhstan the findings revealed that they totally benefit from oil price increases. In the case of oil importing countries, the effects are more diverse. To derive a better interpretation, we divided them into four groups: European Union (EU) members (Germany, Italy, the Netherlands, and Poland); East and South East Asian nations (Japan; People's Republic of China; Republic of Korea; Viet Nam; Taipei China; Singapore; and Hong Kong, China); Commonwealth of Independent States (CIS) (Ukraine and Belarus) and others (the United States, India, and Turkey). The results showed that all these countries importing oil face a negative supply shock. Furthermore, the indirect effect coefficient almost received through trade for all these countries was positive.

Japan economy is dominated by Small and Medium enterprises. It covers around 99.7% of all enterprises operated in Japan and employs around 70% of the working population and account for a large portion of economic output. But, like other SMEs in the world, they also the ones that have hardly hit by COVID-19 quarantine and business closures. Japanese government made emergency loans and credit guarantee to assist SMEs. However, moral hazard problems of banks and SMEs have to be remedied. In the capital market, many investors take risk-averse behavior to anticipate further measures. Infrastructure investments are most needed in Asian region yet finance for infrastructure investments would face with shortage of funds due to low rate of return and risks. Private financing by long term investors such as pension funds and insurance better be directed to support infrastructure investment. Spillover tax revenues could be partly directed to increase the rate of return. The Japanese economy faces with aging population which would widen fiscal deficits unless postponement of retirement age and productivity-based wage rate rather than seniority wage rate facing with this crisis. Therefore, Japan government need to look into innovative policies options for sustainable economic growth.

This paper examines asset price and household income/consumption dynamics in a small open economy subject to terms of trade shocks, under two financial regimes. The first is a pure banking regime, in which firms borrow from banks for financing costs of labor, investment and intermediate goods for both the relatively riskless natural-resource traded sector and the non-traded sector. The second regime is more financially-inclusive banking/crowdfunding (BCF) regime, in which the households directly receive returns to capital from pooled lending to home-goods firms. Simulation results show that the banking regime better insulates the economy from negative shocks but limits the upside gain from positive shocks which would take place in the banking-crowdfunding regime.

Hong Kong's housing market witnessed a dramatic housing price appreciation in recent years, with the price index for private domestic housing units being three times higher than ten years ago. This trend is supported by both internal and external factors, as illustrated in this paper. By developing a theoretical model and an empirical analysis on the key variables influencing housing prices using monthly data from 1999 to 2018, we find that the main drivers of housing price appreciation are from the demand side and include income level, money supply and inflation. The main contribution of this study is the quantification of the role of Mainland China's macroeconomic factors in housing price booms in Hong Kong. Our study shows that capital inflow from and inflation and recessions in Mainland China contribute to increasing housing prices in Hong Kong because the city's real estate is seen as a way to preserve asset value. These findings call for the need for control of capital inflow between the two economies as well as for stricter regulations against empty houses in Hong Kong.