PUBLICATIONS

FORTHCOMING

The impact of global value chain integration on wages: evidence from matched worker-industry data in Thailand
Sasiwimon Warunsiri Paweenawat,
Journal of the Asia Pacific Economy , Forthcoming 2021. link

Introduction

Using a two-stage estimation of matched worker-industry data from 2000 to 2011, this study investigates the impact of global value chain (GVC) integration on wages and the skill premium in the 32 industries in Thailand, a country with recent heavy involvement in GVCs. This study employs foreign value added in both final and intermediate goods exports as a proxy for the degree of industry integration in GVCs and applies a panel fixed effects estimation on constructed panel data to investigate its relationship with wages. The main finding indicates that a higher level of industry integration with GVCs leads to higher wages and a higher skill premium, confirming the positive effect of GVC involvement on wages and the complementary effect of high demand for skilled workers in GVC-oriented industries in Thailand. Workers in industries with downstream position will earn a higher wage than those working in the upstream position.


The Inversion of Married Women’s Labor Supply and Wage: Evidence from Thailand
Liao, L. and Paweenawat, S.W.,
Asian-Pacific Economic Literature, Forthcoming 2021. link

Abstract

This paper proposes a new approach to the measurement of assortative mating and of the change over time in assortative mating. Non-assortative mating is viewed as independence between the characteristics of the husband and those of the wife. In our paper the characteristic we focus on is the educational level of the spouses. In measuring the change in assortative mating we use an algorithm that allows one to make a distinction between changes in the distribution of husbands and wives by educational level and a “pure change in assortative mating” that is the consequence of a change in the degree of independence between the educational levels of husbands and wives. We present an illustration of our approach, based on data for Thailand covering the period 1985–2019. It appears that while over the whole period 1985–2019 the increase in the Theil index of non-random mating was uniquely due to a change in the educational composition of the males and females (essentially of the female population), there are several sub-periods where the “pure change in assortative mating” played an important role.

On the measurement of non-random mating and of its change over time
Jacques Silber, Sasiwimon Warunsiri Paweenawat, and Lusi Liao,
Review of Economics of the Household, Forthcoming 2021. link

Abstract

This paper proposes a new approach to the measurement of assortative mating and of the change over time in assortative mating. Non-assortative mating is viewed as independence between the characteristics of the husband and those of the wife. In our paper the characteristic we focus on is the educational level of the spouses. In measuring the change in assortative mating we use an algorithm that allows one to make a distinction between changes in the distribution of husbands and wives by educational level and a “pure change in assortative mating” that is the consequence of a change in the degree of independence between the educational levels of husbands and wives. We present an illustration of our approach, based on data for Thailand covering the period 1985–2019. It appears that while over the whole period 1985–2019 the increase in the Theil index of non-random mating was uniquely due to a change in the educational composition of the males and females (essentially of the female population), there are several sub-periods where the “pure change in assortative mating” played an important role.

Alternative Boomerang Kids, Intergenerational Co-residence, and Maternal Labor Supply
Lusi Liao and Sasiwimon Warunsiri Paweenawat,
Review of Economics of the Household, Forthcoming 2021. link

Abstract

This study investigates the boomerang phenomenon among adult children in Thailand. We estimate the effect of having children on co-residence between parents and adult children using Socio-Economic Survey panel data. We find that adult children who have moved out tend to move back in with their parents after having children to save time and money on childcare. The presence of young children increases the likelihood of intergenerational co-residence by over 30%. This study is the first to provide empirical evidence of alternative boomerang kids in an Asian context, which is distinctive compared with Western countries. The relationship between intergenerational co-residence and the maternal labor supply is also examined using the instrumental variable approach based on the cross-sectional Labor Force Survey, which has data covering over 30 years. Our results show that co-residence increases the female labor supply by 21% and also extend women’s working hours by 10 hours.

 

Affect‐based nonconscious signaling: When do consumers prefer negative branding?
Dan King and Sumitra Auschaitrakul,
Psychology & Marketing,
Forthcoming. link

Abstract

When do consumers prefer negative branding, and why? One pilot study and four experiments, including an Implicit Association Test measuring nonconscious associations between negative words and dominance, converge on the conclusion that male consumers induced into same‐sex competition send energy‐efficient dominance signals to elicit fear and avoidance from competitors and maintain access over territory or resources. As a result of this competitive state, male consumers show a preference for negatively valenced words that can signal threat to rivals and elicit behavioral avoidance (“negative branding”). The preference for negative branding disappears under four conditions: (a) When dominance signaling is not needed because rivals are not physically dominant (smaller and weaker), (b) When visual associations show that the negative brand is no longer a dominance signal, (c) When male consumers are induced to think about masculinity but not dominance, or (d) When the male consumer has a low individual difference desire for intrasexual competition. Together, our findings contribute to the marketing literature by introducing a novel type of signaling (“dominance signaling”) that is distinct from prestige signaling and the conspicuous consumption of luxury goods. Dominance signaling and its influence on consumer product branding (“dominance goods”), as well as implications for evaluative conditioning, are discussed.

Do Parental Absence and Children’s Gender Affect Early Childhood Investment? Evidence from Rural Thailand
Weerachart T. Kilenthong and NGOC TÚ T. ĐINH,
The Singapore Economic Review, Forthcoming. link

Abstract

This paper studies how parental absence and children’s gender affect early childhood investment using a new dataset from rural Thailand. We found that relative to boys, girls received more time but less material investment. Relative to children with at least one parent present, children with absent parents received significantly less material investment; however, time investment was not significantly different between the two groups. Based on an economic model of early childhood investment, these results suggest that relative to material investment, time investment is more important for girls than for boys, and for households with absent parents than for households with at least one parent present. The estimation of the elasticity of substitution between time and material investments suggests that both types of investments are surprisingly complementary.

 

PUBLICATION YEAR: 2021

Short-Term Impact of an Early Childhood Education Intervention in Rural Thailand
Wisuwat Chujan and Weerachart T. Kilenthong,
Journal of Human Capital, Vol. 15, Issue 2. link

Abstract

This paper evaluates the short-term impact of an early childhood education intervention on child development. The program randomly assigned an additional 19 teachers to coteach using a new curriculum based on the HighScope approach, in 19 out of 50 child care centers in rural Thailand. The main result indicates that the intervention had a positive and significant effect on child development in gross motor and personal and social skills with an effect size of 0.40 standard deviations for the benchmark case.

A Market-Based Solution for Fire Sales and Other Pecuniary Externalities
Weerachart T. Kilenthong and Robert M. Townsend,
Journal of Political Economy, Vol. 129, Issue 4, 2021; pp. 981–1010. link

Abstract

In economies with a continuum of agents of different types, pecuniary externalities are removed with market exchanges. Agents choose from among various possible prices they want to prevail in the future and buy or sell rights in these market exchanges for future trade. Each agent can choose the exchange it wants without regard to what any other agent is doing. But crucially, the right to trade in each and every exchange is priced. The fee structure has a per-unit price and quantity decomposition: a price, as determined by the exchange chosen, times the quantity of rights acquired.

Trade, Global Value Chains, and SMEs in Thailand: A Firm-Level Panel Analysis
Korwatanasakul, U. and Paweenawat, S.W.,
in Urata, S. (Ed.), Enhancing SME Participation in Global Value Chains: Determinants, Challenges, and Policy Recommendations, Chapter 5,
Pages. 166-191, Tokyo: Asian Development Bank Institute. link

Introduction

Small and medium-sized enterprises (SMEs) are significant contributors to economic activity and employment worldwide and Thailand is no exception. SMEs represent the vast majority of firms and employ the bulk of the domestic workforce. According to the Office of SMEs Promotion (OSMEP) (2019), there were approximately 3 million companies considered SMEs, which accounted for 99.8% of the total number of companies, in 2018. Moreover, SMEs generate 14 million jobs, equal to 86% of the total employment. Over the last year, the number of SMEs and their consequent employment grew by 1% and 4.7%, respectively. SMEs also contributed enormously to Thailand’s gross domestic product (GDP) as they accounted for 45% of the national GDP, or around $215 billion. Despite SMEs’ important economic contributions, their participation in international trade and global value chains (GVCs) remains limited. In 2018, the export volume of SMEs made up only 29% of the total export or $76 billion, while showing small growth at 0.5% (OSMEP 2019). In contrast, large domestic firms and multinational enterprises (MNEs) dominate GVCs and therefore benefit largely from new opportunities emerging from their participation.


PUBLICATION YEAR: 2020

Symbolic Sequence Effects on Consumers’ Judgments of Truth for Brand Claims
Dan King and Sumitra Auschaitrakul,
Journal of Consumer Psychology, Vol. 30, Issue 2, 2020; pp. 304–313. link

Abstract

We introduce symbolic sequence effects—the consequences of whether the sequence of the initial letters of a pair of words (e.g., a word representing a putative cause and another word representing a putative effect) conforms to the structure of symbolic sequences that are stored in the mind as overlearned natural language traces (“natural sequence”). We synthesize insights from psychophysics as well as numerical and natural language symbolic representations to demonstrate that consumers are able to unconsciously perceive the mere sequence of symbols contained in a brand claim, and that this sequence information influences judgments of truth. Across three experiments, we showed that when a brand claim is structured in a way that is consistent with the natural sequence of symbols (“A causes B” rather than “B causes A”), people experience feelings of sequential fluency, which in turn influences judgments of truth. This occurs despite the inability of participants to attribute the true source of the feelings. Our results suggest that carefully designed brand claims are likely to benefit from this natural sequencing. These findings provide important contributions to the literatures on processing fluency, branding, and advertising. These findings also have sobering societal implications and warn that fake news might be more persuasive if the perpetrators understand symbolic sequencing techniques.

PUBLICATION YEAR: 2019​

Creating the British Academic Health Science Centres: Understanding the Microfoundations of the Translation of Organizational Forms
Panita Surachaikulwattana and Nelson Phillips,
Microfoundations of Institutions (Research in the Sociology of Organizations), Vol. 65B, Emerald Publishing Limited, pp. 273-296. link

Abstract

Drawing on a case study of the adoption of an American organizational form – the “Academic Health Science Centre” (or “AHSC”) – in English healthcare, the authors develop a model of the “translation work” required to translate an organizational form from one organizational field to another. The findings contribute to the literature on translation and shed light on the microfoundations of institutions by examining the complex relationship among agency, meaning, institutions, and temporality that underpin the translation of a contested organizational form. The authors also show the important, but limited, role of agency when translation occurs at the broad field level and argue that the translation of organization forms can, in at least some situations, best be understood as a “garbage can” rather than the linear and agentic view usually described in the translation literature.

Foreign direct investment and wage spillover in Thailand: Evidence from firm-level panel data
Sasiwimon Warunsiri Paweenawat,
International Journal of Social Economics, Vol. 46, Issue 10, 2019; pp.1198-1213. link

Abstract

Purpose
The purpose of this paper is to investigate whether foreign direct investment (FDI) benefitted Thai workers in domestic firms.

Design/methodology/approach
By utilizing existing firm-level unbalanced panel data from the survey of the Office of Industrial Economics, Ministry of Industry, Thailand, between 2004 and 2013, this study applies dynamic panel data analysis, using the generalized method of moments proposed by Arellano and Bond (1991), to estimate the wage spillover from multinational enterprises (MNEs) to domestic firms in Thailand.

Findings
The study reveals that there is a positive wage spillover from the presence of MNEs in the industry to domestic firms. Furthermore, a wage spillover also exists in the low-technology industry, as well as in firms located in the Metropolitan and Northern regions. These findings confirmed that FDI offers a significant advantage in Thailand’s labor market.

Originality/value
This study is the empirical research to utilize existing firm-level unbalanced panel data in Thailand, applying dynamic panel data analysis to data from 2004 to 2013 to estimate the wage spillover from MNEs to domestic firms.

The implications of central bank transparency for uncertainty and disagreement
Boonlert Jitmaneeroj, Michael J. Lamla and Andrew Wood,
Journal of International Money and Finance, Vol. 90, 2019; pp.222-240. link

Abstract

Using survey data from 25 economies we provide evidence that greater transparency surrounding monetary policy reduces uncertainty of interest rates and inflation, primarily by reducing uncertainty that is common to agents rather than disagreement between agents. This suggests that studies that focus on disagreement as a proxy for uncertainty understate the benefits of monetary policy transparency. The adoption of inflation targets and forward guidance are both associated with lower uncertainty, although inflation targets have a stronger impact on reducing uncertainty than forward guidance. Moreover, there are diminishing benefits from ever higher levels of transparency. Taken as a whole, our results support the contention that clarity of communication is as important as the magnitude of transparency.

Public service motivation and customer service behaviour: testing the mediating role of emotional labour and the moderating role of gender
Angsuthon Srisuthisa-ard,Wisanupong Potipiroon and Sue Faerman,
Public Management Review, Vol. 21, Issue 5, 2019; pp.650-668. link

Abstract

Prior research indicates that public service motivation (PSM) provides a motivational base for effective emotion regulation. This study extends this body of research by investigating how service workers in different gender groups regulate their emotions during service transactions. Analysis of survey data from public service workers in Thailand showed that ‘deep acting’ is the primary emotional labour strategy-linking PSM and customer service behaviour (CSB), whereas ‘surface acting’ does not play a mediating role. The results further revealed that PSM has a stronger association with male workers’ CSB only via deep acting. Theoretical and practical contributions are discussed.

Credit default swaps and the UK 2008–09 short sales ban
Boonlert Jitmaneeroj, Jerry Coakley and Andrew Wood,
The European Journal of Finance, Vol. 25, Issue 14, 2019; pp.1328-1349. link

Abstract

Most studies of the short sales ban of UK financial stocks from September 2008 to January 2009 fail to control for the UK’s worst ever banking crisis and the underlying increase in risk. This paper studies the ban’s impact on the 13 large financials with credit default swaps (CDS) and 20 smaller stocks without CDS. The results reveal that returns of banned stocks Granger cause CDS returns in the pre- and post-ban periods, but causality runs from CDS to stock returns during the ban period. Underlying risk proxied by the CDS probability of default increased during the ban and the immediate pre- and post-ban periods which highlights an endogeneity problem ignored in some studies. This increased risk provides a plausible rationale for why CDS and related equity bid-ask spreads – which increased during the ban period – failed to fall significantly in the post-ban period. Panel regression results indicate that probability of default was an important economic determinant of stock bid-ask spreads during the ban period. Finally, our results suggest that the ban offered direct price support for the smaller non-CDS stocks during the ban period and indirect support for CDS stocks from their pre-ban to their post-ban levels.

PUBLICATION YEAR: 2018

Is Thailand’s credit default swap market linked to bond and stock markets? Evidence from the term structure of credit spreads
Boonlert Jitmaneeroj,
Research in International Business and Finance, Vol. 46, 2018; pp.324-341. link

Abstract

When the term structure of credit spreads is used in a panel vector autoregression model, Granger causality tests provide strong evidence of bi-directional relationships among CDS, bond and stock markets. This study argues that extant research using only a 5-year credit spread tends to understate intermarket linkages since in practice investors are able to trade credit risk over the entire term structure of credit spreads. Interestingly, this study produces new empirical evidence that the term structure of CDS-bond basis displays a monotonically increasing trajectory. As the maturity lengthens, the arbitrage opportunity of companies with negative (positive) CDS-bond basis decreases (increases).

A latent variable analysis of corporate social responsibility and firm value
Boonlert Jitmaneeroj,
Managerial Finance, Vol. 44, NO. 4, 2018; pp.478-494.
link

Abstract

Purpose
Corporate social responsibility (CSR) has several dimensions that are inherently unobservable or measured with errors. Due to measurement errors of CSR proxies, regression analysis seems inappropriate for investigating the relationship between CSR and firm value. Accounting for CSR measurement errors, the purpose of this paper is to use a latent variable analysis to examine whether CSR affects firm value.

Design/methodology/approach
This study applies a latent variable model that directly takes into account the measurement errors of CSR proxies. Moreover, the inclusion of firm-fixed effects in the model controls for time-invariant unobservable firm-specific characteristics that may drive both CSR and firm value. CSR is measured by environmental, social, and corporate governance activities.

Findings
Based on data of US firms between 2002 and 2014, this study finds conflicting evidence of a direct association between each CSR proxy and firm value. When all CSR proxies are incorporated into a latent variable model, CSR significantly positively impacts firm value. Therefore, CSR strategies based on a single measure of CSR or the equal weighting of CSR measures tend to underestimate the influence of CSR on firm value.

Practical implications
Corporate managers should enhance firm value by simultaneously engaging in environmental, social, and corporate governance activities because there is a synergistic effect with firm value. Furthermore, investors who downplay CSR factors in firm valuation can lead to significant errors in making equity investment choices.

Originality/value
This study presents a novel examination of the price-earnings ratio in the CSR valuation by using the latent variable model with firm-fixed effects.

Does Being Smarter Make You Happier? Evidence from Europe
Rifaan Ahmed, Dusanee Kesavayuth and Vasileios Zikos
Journal of Behavioral and Experimental Economics, Vol. 76, 2018; pp.55-67. link

Abstract

In this paper we study the importance of cognitive abilities for the subjective well-being of older individuals. We draw unique panel data from the Survey of Health, Ageing and Retirement in Europe (SHARE) on a representative sample of individuals aged 50+. The analysis reveals that individuals with higher cognitive abilities have, on average, higher levels of subjective well-being. The result holds for two different well-being measures and remains robust under different specifications and limitations on the data. As such, it provides some of the first empirical evidence on the relationship between cognition and subjective well-being of older individuals in Europe.

Retirement and Health Behaviors
Dusanee Kesavayuth, Robert E. Rosenman and Vasileios Zikos
Applied Economics, Vol. 50, NO.54, 2018; pp.5859-5876. link

Abstract

This article investigates whether and to what extent retirement changes health behaviour. For identification we use an instrumental variable approach that exploits exogenous variations in the early and normal retirement ages within and across 10 European countries. Our results reveal that among those who abstained from alcohol and vigorous or moderate exercise at baseline, retirement increased those activities. Non-smokers did not increase smoking upon retirement. Retirement led to less smoking for those who smoked before retiring. It also brought about an increase in vigorous exercise for those who had the behaviour at baseline. These results further vary by a person’s job type, but less so with respect to gender or geographic region. Overall, our findings provide new empirical evidence on the causal link between retirement and health behaviours and how such link relates to four sources of individual heterogeneity: gender, European geographic region, job type and baseline health behaviour.

Endogenous Free Trade Agreements and International R&D Networks
Vasileios Zikos and Tat Thanh Tran,
The Manchester School, Vol. 86, NO.5, 2018; pp.641-664. link

Abstract

In this paper, we develop a network formation game in order to study how free trade agreements among countries and R&D networks among firms emerge in equilibrium. Prior research showed that free trade agreements discourage the formation of international R&D networks under the assumption that trade tariffs are exogenous. In contrast, we allow for endogenous trade tariffs, and show that free trade agreements promote R&D collaboration between firms. In terms of efficiency, we find that although countries can achieve an outcome that is socially desirable, the number of R&D collaborations between firms is likely to be excessive from a social viewpoint.

The gender‐corruption nexus in Asia
Sasiwimon W. Paweenawat,
Asian‐Pacific Economic Literature, Vol. 32, NO.1, 2018; pp.18-28. link

Abstract

This study investigates the relationship between the share of women in parliament and the level of corruption in a panel of Asian countries during the period 1997–2015. This study applies the instrumental variable (IV) fixed effect approach using a system of gender quotas, which are either reserved seats, legal candidate quotas, or voluntary political party quotas as instruments to control for unobserved heterogeneity across countries, and to alleviate endogeneity bias. In addition, the generalised method of moments (GMM) estimator is applied in order to address the persistence of corruption, which causes biased and inefficient estimators in estimation. The main finding is that a higher share of women in parliament is associated with a lower level of corruption, which is consistent with evidence from studies by Dollar et al. (2001) and Swamy et al (2001).

Merger and Innovation Incentives in a Differentiated Industry
Vasileios Zikos and, Dusanee Kesavayuth and Sang-Ho Lee,
International Journal of the Economics of Business, Vol. 25, NO.2, 2018; pp.207-221. link

Abstract

This paper considers a duopoly with product differentiation and examines the interaction between merger and innovation incentives. The analysis reveals that a merger tends to discourage innovation, unless the investment cost is sufficiently low. This result holds irrespective of whether side payments between firms are allowed. When side payments between insiders within the merged firm are permitted, a standard result in the literature is reconfirmed, which suggests that a bilateral merger-to-monopoly is always profitable. When such side payments are not permitted, however, it is shown that a merger is not profitable when the efficiency of the new technology is relatively high and the investment cost is below a particular level.

An Active Lifestyle and Cognitive Function: Evidence from China
Vasileios Zikos,Dusanee Kesavayuth and Y. Liang
The Journal of the Economics of Ageing, Vol. 12, 2018; pp.183-191. link

Abstract

How does an active lifestyle at baseline relate to cognitive functioning in later periods? To answer this question, we draw unique panel data from the China Health and Retirement Longitudinal Study (CHARLS). The analysis reveals that greater overall activity is associated with higher levels of memory and numeracy. The beneficial effects of being active vary across different activity types and aspects of cognition, but not so with respect to gender. Overall, these findings provide new empirical evidence on the relationship between an active lifestyle and cognitive functioning of older people in China.

Locus of Control and Financial Risk Attitudes
Dusanee Kesavayuth, Kaung MyatKo and Vasileios Zikos,
Economic Modelling, Vol. 72, 2018; pp.122-131. link

Abstract

An extensive literature in economics investigates the relationship between cognitive abilities and financial risk attitudes. Yet, little is known about the importance of non-cognitive skills for financial risk attitudes. In this study, we focus on one specific non-cognitive skill, namely locus of control, which represents the extent to which an individual believes that life events are outcomes of his/her own actions. Using Australian panel data, we show that locus of control is positively related to the risk attitudes of older individuals who also differ significantly from younger individuals. The observed difference in risk attitudes between the young and the old is found among females but not males. These findings provide new empirical evidence on financial risk attitudes and how they relate to three sources of individual heterogeneity: locus of control, gender, and age group.

Entrepreneurship and Family Businesses in Thailand
Weerachart T. Kilenthong and Kittipong Rueanthip,
Asian-Pacific Economic Literature, Vol. 32, NO.1, 2018; pp.77-93. link

Abstract

This paper investigates the impact of exposure to a family business and participating in a family business on an individual’s decision to start a business and the likelihood of its survival. We find that having a family member doing business increases the probability of starting a business but not its survival. In contrast, working in a family‐owned business for a high number of hours increases both the likelihood of entrepreneurship and survival. The impact of working hours in a family‐owned business remains significant even if the sample includes only individuals who are the spouses of business owners. Given the evidence, an apprenticeship scheme should be considered as a policy instrument for promoting entrepreneurial success.

The effect of the rebalancing horizon on the tradeoff between hedging effectiveness and transaction costs
Boonlert Jitmaneeroj,
International Review of Economics and Finance, Vol. 58, 2018; pp.282-298. link

Abstract

This paper examines the impact of the rebalancing horizon on the transaction costs per hedging effectiveness (TC/HE ratio) for dynamic hedging of the S&P 500 index with 21 commodity indices. This paper produces new evidence that as the rebalancing horizon lengthens, the TC/HE ratio exhibits a monotonically decreasing relationship with positive convexity. This asymmetric effect suggests that hedgers pay more attention to reductions rather than increases in the rebalancing horizons and hedging strategies at short rather than long rebalancing horizons. Although commodities can be used to hedge equity portfolios, they should be used with caution given their low hedging effectiveness.

Happy People are Less Likely to be Unemployed: Psychological Evidence from Panel Data
Vasileios Zikos and Dusanee Kesavayuth,
Contemporary Economic Policy, Vol. 36, NO. 2, 2018; pp.277-291. link

Abstract

There is a large literature showing that unemployment reduces people’s well‐being. Yet little is known about the reverse possibility, namely that well‐being itself may influence unemployment propensity. Understanding the potentials of human well‐being in relation to unemployment is important as many developed countries are currently facing high unemployment rates. As well‐being is likely to be endogenous, we use British panel data and implement Lewbel’s novel empirical approach for identification. We show that higher well‐being implies a negative causal effect on the probability of being unemployed. The result holds for two very different well‐being measures: life satisfaction and a 12‐item scale of mental health. As such, it provides new empirical evidence on the causal link between well‐being and unemployment propensity. (JEL D03, I31)

A synthetic cohort analysis of female labour supply: the case of Thailand
Sasiwimon Warunsiri Paweenawat & Robert McNown,
Applied Economics, Vol. 50, NO.5, 2018; pp.527-544. link

Abstract

This study analyzes trends and patterns in employment, hours worked, and women’s wages for Thai women, and relations among these variables in models of female labour supply. Labour supply behaviour of Thai women is investigated with synthetic cohort data defined by age, year of birth, and level of educational attainment, constructed from annual labour force surveys from 1985 to 2004. According to pseudo-panel estimates, wage increases lead to a reduction in hours worked, but also an increase in the employment/population ratio, with elasticity estimates that are robust across a variety of specifications. Estimates based on disaggregation by marital status show that marriage provides protection against wage decreases, allowing married women greater choice between hours of work and other household activities. Alternative disaggregations find that younger cohorts of women and those with the highest education show the greatest (positive) response of the employment rate to wage changes, leading to a future Thai labour force with more women and higher educational attainment.

PUBLICATION YEAR: 2017

The impact of corporate social responsibility on firm value: an application of structural equation modellingHappy People are Less Likely to be Unemployed: Psychological Evidence from Panel Data
Boonlert Jitmaneeroj,
International Journal of Business Governance and Ethics, Vol. 12, NO. 4, 2017; pp.306-329. link

Abstract

The current study aims to propose an alternative methodology to account for measurement errors in proxies for corporate social responsibility (CSR). In doing so, this study considers CSR as a latent variable measured by environmental and social category scores of Thomson Reuters ESG. To overcome limitations of a single-equation regression analysis, structural equation modelling (SEM) is employed to investigate the relationship between CSR and firm value. Based on data of US companies from 2002 to 2016, this study demonstrates that traditional regression analysis produces inconsistent relationships between CSR and firm value. By contrast, SEM provides strong evidence in support of the positive CSR effect on firm value. Interestingly, a main channel for CSR in driving firm value is social engagement rather than environmental involvement. These results have important implications for corporate managers in enhancing firm value through CSR strategies and socially responsible investors in making equity investment choices.

Beyond the equal-weight framework of the Social Progress Index: Identifying causal relationships for policy reforms
Boonlert Jitmaneeroj,
Review of Accounting and Finance, Vol. 16, NO.1, 2017; pp.125-140. link

Abstract

Purpose
Although the Social Progress Index offers a thorough overview of the top-ranked countries with a highly developed social performance, it assigns the same weight to all component scores, implying that each component has identical and independent contribution to the SPI. By removing these flawed assumptions, the purpose of this paper is to examine the causal relationships among component scores and identify the critical components for reform priorities.
Design/methodology/approach
The authors propose an alternative approach to exploring the causal relationships and prioritizing the underlying components of the SPI. The four-step methodology comprises cluster analysis, data mining, partial least square path modeling, and importance-performance matrix analysis.
Findings
The authors find evidence of causal interrelations between the 12 components of the SPI. To accelerate social progress, the authors suggest that policy makers should allocate resources in order of priority to personal freedom and choice, personal rights, access to advanced education, water and sanitation, access to information and communications, tolerance and inclusion, personal safety, shelter, ecosystem sustainability, nutrition and basic medical care, health and wellness, and, finally, access to basic knowledge.
Practical implications
Policy makers in government, business, and civil society should become aware of causal relationships among the 12 components of the SPI and select an appropriate methodology to prioritize areas where social improvement is most needed.
Originality/value
Allowing for unequal weighting and causal relationships between component scores of the SPI, the authors’ methodology is the first attempt to offer a concrete way to identify which areas of social progress should constitute priorities for policy reforms.

Does investor sentiment affect price-earnings ratios?
Boonlert Jitmaneeroj,
Studies in Economics and Finance, Vol. 34, NO. 2, 2017; pp.183-193. link

Abstract

Purpose
A large number of empirical studies investigate the determinants of price-earnings (P/E) ratio by focusing on fundamental factors. However, there has been an increasing concern that stock valuation is also driven by investor sentiment. This paper aims to extend the existing literature by exploring whether investor sentiment impacts the P/E ratio.
Design/methodology/approach
The paper examines the determinants of P/E ratio by applying latent variable models with investor sentiment as a latent variable and several fundamental factors as control variables. Investor sentiment is proxied by trading volume, advance-decline ratio and price volatility.
Findings
Using annual data of the US industries over the period of 1998-2014, the current paper produces new empirical evidence that investor sentiment significantly affects the P/E ratio. This result is robust to the inclusion of several control variables that have been documented to explain the P/E ratio.
Practical implications
The findings have important implications for investors, as downplaying sentiment can lead to significant errors in making equity investment choices based on the P/E ratio.
Originality/value
The analytical framework of the current paper is differentiated from the conventional analysis in which the P/E ratio is regressed against control variables and proxies for sentiment, thus falling into the trap of implicitly presupposing that proxies are perfect measures of investor sentiment. As all proxies may have measurement errors to the true but unobservable investor sentiment, the current paper uses latent variable models to shed new light on the influence of investor sentiment on the P/E ratio.

The impact of dividend policy on price-earnings ratio: The role of conditional and nonlinear relationshipBeyond the equal-weight framework of the Social Progress Index: Identifying causal relationships for policy reforms
Boonlert Jitmaneeroj,
International Journal of Social Economics, Vol. 44, NO.12, 2017; pp.2336-2350. link

Abstract

Purpose
This paper aims to examine the conditional and nonlinear relationship between price-earnings (P/E) ratio and payout ratio. A common finding of previous studies using linear regression model is that the P/E ratio is positively related to the dividend payout ratio. However, none of them investigates the condition under which the positive relationship holds.
Design/methodology/approach
This paper uses the fixed effects model to investigate the conditional and nonlinear relationship between P/E ratio and payout ratio. With the inclusion of fundamental factors and investor sentiment, this model allows for nonlinear relationship to be conditioned on the return on equity and the required rate of return.
Findings
Based on the annual data of industries in the USA over the period of 1998-2014, this paper produces new evidence indicating that when the return on equity is greater (less) than the required rate of return, the P/E ratio and dividend payout ratio exhibit a negative (positive) relationship and positive (negative) convexity.
Practical implications
Due to the curvature relationship between P/E ratio and payout ratio, the corporate managers and stock investors should pay more attention to the reduction in payout ratio than the rising payout ratio and the companies with low payout ratios than the companies with high payout ratios.
Originality/value
No previous study has tackled the issue of conditional and nonlinear relationship between P/E ratio and payout ratio. This paper attempts to fill the gap by allowing for nonlinear relationship conditional on the relative values of the return on equity and the required rate of return.

Observability and Endogenous Organizations
Weerachart T. Kilenthong and Gabriel A. Madeira,
Economic Theory, Vol. 63, NO. 3, 2017; pp.587-619. link

Abstract

This paper establishes a relationship between the observability of common shocks and optimal organizational design in a multiagent moral hazard environment. We consider two types of organizations, namely relative performance and cooperative regimes, and show that, with sufficient information regarding common shocks, a cooperative organization can be optimal even if outputs are highly correlated. The model is then embedded in a Walrasian general equilibrium model in which choices regarding organizations and investment in information on common shocks are jointly determined. Numerical results reveal that both cooperative and relative performance regimes can coexist in equilibrium but only cooperative organizations invest in full observability of common shocks. Changes in the cost of information and aggregate wealth can affect substantially the types of organizations operating and the matching patterns of heterogeneous agents in these organizations. General equilibrium effects are key in determining how information costs impact the way production is organized.

Application of business intelligence in the tourism industry: A case study of a local food festival in Thailand
Thanathorn Vajirakachorn,
Tourism Management Perspectives, Vol. 23, 2017; pp.75-86. link

Abstract

Local festivals and special events are known to have a great impact on the local community, society, economy, and culture. Massive data about products tourists purchase, services they experience, destination choices they evaluate, and accommodations they select at the events can be captured, but the key question is how to translate such data into meaningful information so that event organizers understand the behavior of tourists in order to increase their satisfaction and boost revenues and profits. This study outlines a way to integrate a business intelligence framework to manage and turn data into insights for festival tourism. This framework combines the architecture of database management, business analytics, business performance management, and data visualization to guide the analyst in drawing knowledge from the visitor data. A case study from a local festival in Thailand is conducted to demonstrate the practical validity of the proposed business intelligence framework.

The benefits of the reciprocal grantback clause in patent licensing
Dusanee Kesavayuth,
Economics of Innovation and New Technology, Vol. 26, NO. 5, 2017; pp.418-428. link

Abstract

This paper establishes a relationship between the observability of common shocks and optimal organizational design in a multiagent moral hazard environment. We consider two types of organizations, namely relative performance and cooperative regimes, and show that, with sufficient information regarding common shocks, a cooperative organization can be optimal even if outputs are highly correlated. The model is then embedded in a Walrasian general equilibrium model in which choices regarding organizations and investment in information on common shocks are jointly determined. Numerical results reveal that both cooperative and relative performance regimes can coexist in equilibrium but only cooperative organizations invest in full observability of common shocks. Changes in the cost of information and aggregate wealth can affect substantially the types of organizations operating and the matching patterns of heterogeneous agents in these organizations. General equilibrium effects are key in determining how information costs impact the way production is organized.

Online Display Advertising: The Influence of Web Site Type on Advertising Effectiveness
Sumitra Auschaitrakul and Ashesh Mukherjee,
Psychology and Marketing, Vol. 34, NO. 4, 2017; pp.463-480. link

Abstract

This research shows that online display advertising is more effective in terms of attitudes toward the ad and brand when it appears on commercial Web sites such as Walmart or Amazon, compared to social Web sites such as LinkedIn or Facebook. Consistent with a fit‐fluency mechanism, this effect of Web site type on advertising effectiveness was found to be driven by higher feelings of processing fluency on commercial compared to social Web sites. Further consistent with a fit‐fluency framework, online display advertising was found to be more effective on brand compared to personal pages of social Web sites. These results contribute to the literature on Internet advertising by identifying Web site type as a new antecedent and fit‐fluency as a new mechanism underlying the effectiveness of online display advertising.

R&D networks among suppliers and manufacturers
Vasileios Zikos and Tat Thanh Trana,
Economic Modelling, Vol. 60, 2017; pp.151-161. link

Abstract

Empirical evidence documents that R&D networks among vertically related firms are very common. Yet there is currently no formal modeling of such networks. In this paper, we develop a model of R&D networks among manufacturers and their suppliers in order to examine which network architectures emerge in equilibrium, and what their implications are from a welfare viewpoint. Our analysis reveals that private incentives to form R&D networks align with societal ones when vertical relations are non-exclusive, but may conflict when vertical relations are exclusive. In terms of policy, stricter antitrust regulation of exclusive vertical relations may, under certain conditions, be desirable from a social viewpoint.

PUBLICATION YEAR: 2016

Entrepreneurial Orientation as the Determinant of Entrepreneurial Marketing Behaviors
Pitsamorn Kilenthong, Claes M. Hultman and Gerald E. Hills,
Journal of Small Business Strategy, Vol. 26, NO. 2, 2016; pp.1-21. link

Abstract

Although entrepreneurial marketing(EM) behaviors are widely reported, there is little discussion onwhat determines the level of a firm’s behaviors.This study contributes to the knowledge in the fields of entrepreneurship and entrepreneurial marketing byproposing EO, entrepreneurial orientation, as an antecedent of EM behaviors and arguing that EO acts as a multidimensional construct when affecting EM behaviors. The relationships between EO and EM behaviors are empirically investigated using multi-group confirmatory factor analysis and structural equation modeling techniques. Results from the analysessupport the hypothesis that EM behaviors are driven by EO. Firms with a higher level of EO engaged in EM behaviors more than firms with a lower level of EO.At the dimension level, innovativeness, proactiveness, and risk-taking are found to independently affectEM behaviors. With innovativeness having the strongest impact, this study concludes that innovativeness is the leading essence of EM behaviors. The results support a new consensus among entrepreneurship research scholars who suggest a direction toward multidimensional EO.

Entrepreneurial Marketing Behaviours: Impact of Firm Age, Firm Size, and Firm’s Founder
Pitsamorn Kilenthong, Claes M. Hultman and Gerald E. Hills,
Journal of Research in Marketing and Entrepreneurship, Vol. 18, NO.1, 2016; pp.127-145. link

Abstract

Purpose
The purpose of this paper is to empirically test whether a systematic relationship exists between firms’ level of entrepreneurial marketing (EM) behaviours and firms’ characteristics, including firm age, firm size and firm’s founder.

Design/methodology/approach
This paper quantitatively investigates EM behaviours from data collected from 752 business owners through structured interviews. The data analysis applied was multi-group confirmatory factor analysis (multi-group CFA).

Findings
Results from the analysis show that not all of the firms’ characteristics determine firms’ level of EM practice. The level of EM behaviours has a systematic relationship with firms’ age but not with the founding status of the firms’ manager. The impact of firm size on the level of EM behaviours is evident only when the firms’ age is taken into account.

Research limitations/implications
This paper concludes that relationships between EM behaviours and firm characteristics are more complicated than anticipated. Firms’ characteristics alone may not be a good measure for identifying the level of a firm’s EM. EM cannot be conceptualized solely in relation to the activities of small firms, young firms or founder-operated firms.

Originality/value
This paper examines EM behaviours in a large survey and uses multi-group CFA to examine firms’ EM practice through latent variables, instead of observed variables. The findings should complement knowledge regarding the EM concept generated from existing literature.

Institutions as Process
Panita Surachaikulwattana and Nelson Phillips,
The SAGE Handbook of Process Organization Studies, 2016; pp.372. link

Retirement, Personality, and Well-Being
Dusanee Kesavayuth, Robert E. Rosenman and Vasileios Zikos,
Economic Inquiry, Vol. 54, NO.2, 2016; pp.733-750. link

Abstract

This study investigates how two sources of individual heterogeneity—personality and gender—impact the well‐being effects of retirement. Using data on older men and women from the British Household Panel Survey and its continuation, Understanding Society, we estimate the causal effect of retirement on satisfaction with overall life and domains of life in the presence of personality characteristics. As retirement is often considered to be a choice and thus may be endogenous to individual‐level characteristics, we use the eligibility ages for basic state pension in the United Kingdom as instruments for retirement. We find that retirement increases leisure satisfaction of both males and females but not necessarily life satisfaction and income satisfaction. We further show that certain personality characteristics affect the well‐being of female retirees. For males, however, personality does not seem to matter in how they cope with retirement. (JEL I31, J26, A12, C23)

Endogenous R&D Networks among Upstream Firms
Dusanee Kesavayuth, Constantine Manasakis and Vasileios Zikos,
Managerial and Decision Economics, Vol. 37, 2016; pp.79-94. link

Abstract

This paper studies the endogenous formation of R&D networks among upstream firms and the welfare implications thereof. Both under an upstream price setting and an upstream quantity setting, it is shown that the complete R&D network emerges in equilibrium but only if spillovers are sufficiently low. Yet, under a quantity setting, the complete network arises within a larger range of spillovers. In both cases, however, there is a potential conflict between private incentives for R&D collaboration and societal ones. We discuss policy measures that may help to steer firms towards a more socially desirable outcome. Copyright © 2014 John Wiley & Sons, Ltd.

PUBLICATION YEAR: 2015

An Empirical Investigation of Entrepreneurial Marketing Dimensions
Pitsamorn Kilenthong, Claes M. Hultman and Gerald E. Hills,
Journal of International Marketing Strategy, Vol. 3, NO.1, 2015; pp.1-18. link

Abstract

Although entrepreneurial marketing (EM) behaviors are widely reported within marketing practice today, there is no common agreement on how many dimensions are underlying EM behaviors. When investigating firms’ EM behaviors, researchers use different elements to represent dimensions of EM behaviors. The current study aims to identify dimensions underlying EM behaviors and to examine the existence of these EM dimensions using empirical data. Based on the literature review, we propose six dimensions underlying EM behaviors, namely growth orientation; opportunity orientation; total customer focus; value creation through networks; informal market analysis; and closeness to the market. These EM dimensions are quantitatively confirmed based on survey data and confirmatory factor analysis. Results show that a proposed model fits well with the data and fits better than other feasible alternative models. We believe that the empirically verified dimensions of EM behaviors should provide a foundation upon which researchers can build and test for a broader theory.

Political economy of agritourism initiatives in Thailand
Niorn Srisomyong and Dorothea Meyer,
Journal of Rural Studies, Vol. 41, 2015; pp.95-108. link

Abstract

The paper examines agritourism, rural development and related policy initiatives in two case study areas: Rayong and Samut Songkhram provinces in Thailand. The fieldwork combines varied sources, including in-depth interviews. Agritourism development in the case study areas was affected by restructuring in their local economies, involving growing economic difficulties for the agricultural sector, new investment in residential development and tourism, and growth in alternative income sources for the rural population. The government’s agritourism initiatives were affected by a changing national political and policy context. These interventions assisted the agricultural sector to survive the economic restructuring, providing supplementary income and local markets for their farm produce and crafts. The interactions between agritourism operators could be important for business survival, but some groups were set up largely to secure government funds and did not provide each other with substantial support. Agritourism could bring economic benefits for wider rural communities, but it could also encourage community conflicts.

Transfer payments and upper secondary outcomes: The case of low-income female students in Thailand
Jessica Vechbanyongratana and Sasiwimon Warunsiri Paweenawat,
Singapore Economic Review, Vol. 60, NO.5, 2015; pp.82 (19pages). link

Abstract

This study assesses the impact of cash transfers to low-income female Thai students on improving upper secondary school outcomes, as measured by grade point average (GPA) and transition to tertiary education. Utilizing official records from a charity organization providing substantial cash transfers to secondary students and student records from participating schools, we find the transfers have no effect on improving recipients’ GPAs compared to non-recipients. However, the scholarship recipients are 22% more likely to transition to university education than non-recipients and the presence of scholarship recipients in the classroom increases the likelihood of female non-recipients to attend university.

Wage Consequences of Rapid Tertiary Education Expansion in a Developing Economy: The Case of Thailand 
Sasiwimon Warunsiri Paweenawat and Jessica Vechbanyongratana,
The Developing Economies, Vol. 53, NO.3, 2015; pp.218-231. link

Abstract

In recent years, Thailand has experienced the emergence of “overeducated” workers as the supply of university graduates in T hailand has outpaced growth in high‐skilled employment opportunities. Using the 2007 to 2009 Thai Labor Force Survey, this paper quantifies the incidence of overeducation and estimates overeducation wage penalties among male university graduates. The results show that the incidence of overeducation is greatest among younger cohorts. Quantile wage regression results suggest that overeducation wage penalties for older workers capture the impact of unobserved low ability on wages. In contrast, persistent wage penalties of 11–26% across the wage/ability distributions for younger workers are consistent with structural imbalances in the T hai labor market. These imbalances make it difficult for university graduates to find jobs commensurate with their level of formal education and to achieve their full earning power. The wage penalties are especially large for new entrants into the labor market.

The Effect of International Trade on Labor Demand in ASEAN5
Kaung Myat Ko Poomthan Rangkakulnuwat and Sasiwimon W. Paweenawat,
Economics Bulletin, Vol. 35, NO.2, 2015; pp.1034-1041. link

Abstract

This paper assesses the effects of ASEAN5’s international trade on their level of employment. By applying the labor demand model of Greenaway et al. (1999), we classified ASEAN5’s international trade into two cases: (1) intra-ASEAN5 trade and (2) trade with the world market. Our estimated results show that an increase in intra-ASEAN5 imports reduces their level of employment, but that intra-ASEAN5 exports have no effect on employment. In the case of world market trade, ASEAN5’s world imports (exports) have a positive (negative) effect on employment depending
on the sort of trade.

The Impact of a Universal Allowance for Older Persons on Labor Force Participation: The Case of Thailand
Sasiwimon W. Paweenawat and Jessica Vechbanyongratana,
Population Review, Vol. 54, NO.1, 2015; pp.53-68. link

Abstract

This paper assesses the impact of the 2009 implementation of a universal Monthly Allowance for
Older Persons on the labor force participation of older workers in Thailand. Using the Thai Household
Socio-Economic Survey, we evaluate the effect of the program implementation on labor force
participation for older workers aged 61 to 75 years old over the years 2007 to 2011. We apply a
standard probit regression to model the work decision and a propensity-score matching approach to
address concerns regarding self-selection and endogeneity in the estimation. The expansion of the
social pension for the elderly from a targeted to a universal program starting in 2009 has little impact
on the overall labor force participation of older persons, but is associated with a decrease in labor
force participation by 6 to 7 percent among elderly from low-income households in areas outside the
Bangkok metropolis.

Personality and health satisfaction
Dusanee Kesavayuth Robert E. Rosenman and Vasileios Zikos,
Journal of Behavioral and Experimental Economics, Vol. 54, 2015; pp.64-73. link

Abstract

In this paper we explore how personality and gender influence how individuals cope with illness. Unsurprisingly, illness has a negative effect on an individual’s health satisfaction, but the strength differs by gender, personality and the presence of multiple physical illnesses. Men with multiple physical illnesses are more adversely affected than those with a single physical illness; women are not. Women with high levels of agreeableness or low levels of conscientiousness are less adversely affected by the incidence of mental illness than typical women. We find no evidence that personality matters for how men cope with illness.

The determinants of foreign direct investment in ASEAN: the first differencing panel data analysis
Phonesavanh Xaypanya, Poomthan Rangkakulnuwat and Sasiwimon Warunsiri Paweenawat,
International Journal of Social Economics, Vol. 42, NO.3, 2015; pp.239-250. link

Abstract

Purpose
The purpose of this paper is to investigate the significant factors determining foreign direct investment (FDI) in Cambodia, Laos, and Vietnam (ASEAN3) and Indonesia, Malaysia, the Philippines, Thailand, and Singapore (ASEAN5).
Design/methodology/approach
This paper applies the first differencing technique to estimate the parameters on the constructed panel data starting from 2000 to 2011.
Findings
Due to the different stages of economic development between ASEAN3 and ASEAN5, the determinants of FDI are different. We found that there are significantly positive effects of infrastructure facility, level of openness, and negative effect of inflation on FDI inflow in ASEAN3; while real exchange rate, gross domestic product and net official development assistance have no effect on its FDI. The finding in ASEAN5 showed that market size and infrastructure facility are significant factors to attract FDI. Furthermore, even though there are an increase in inflation rate as well as a decrease in level of openness measurement, ASEAN5 are still attractive to foreign investors.
Originality/value
The time variant and invariant unobserved effects that are ignored in the previous studies are considered in this study.

PUBLICATION YEAR: 2014

Downstream Research Joint Venture with Upstream Market Power 
Constantine Manasakis, Emmanuel Petrakis and Vasileios Zikos,
Southern Economic Journal, Vol. 80,NO.3 2014; pp782-802. link

Abstract

In a vertically related industry, we examine the downstream firms’ incentives to invest in cost‐reducing Research and Development (R&D), and to form a Research Joint Venture (RJV), under two alternative structures of input supply: exclusive vertical relations and a single supplier. In contrast to the “hold‐up” argument, in which downstream firms invest non‐cooperatively and spillovers are low, R&D investments are higher under a single supplier than under competing vertical chains. Downstream firms’ incentives to form a RJV are also stronger in the former case than they are in the latter. We identify conditions under which an RJV is beneficial for society. Integrated innovation and competition policies are also discussed.

Trade through endogenous intermediaries
Weerachart T. Kilenthong and Cheng-Zhong Qin,
Journal of Mathematical Economics, Vol. 50, 2014; pp.262-268. link

Abstract

We propose an intermediation core for an economy that explicitly specifies how traders organize themselves into trade cooperatives (intermediaries) and how trade between them gets carried out. The intermediation core allocations are closely related to the equilibrium allocations of a non-cooperative intermediation game in Townsend (1983). We show that the intermediation core contains all subgame perfect equilibrium allocations of the intermediation game, similar to the inclusion of competitive equilibrium allocations in the core usually studied. We identify intermediation core allocations that are also subgame perfect equilibrium allocations of the intermediation game in terms of the supporting intermediary structures. These results help to characterize subgame perfect equilibrium allocations of the intermediation game and to analyze their welfare and stability properties.

A loop diagram pedagogy: Seeing the unseen in the forward market efficiency hypothesis
Boonlert Jitmaneeroj,
Managerial Finance, Vol. 40, NO.2, 2014; pp.189-199. link

Abstract

Purpose
In an introductory finance course, business school students often report difficulty in dealing with several variables and regression equations in testing the forward market efficiency and its relevant hypotheses: forward rate unbiasedness, rational expectations, risk neutrality and homogeneous expectations. The paper aims to discuss these issues.
Design/methodology/approach
Although each of these hypotheses may be relatively easy to understand one by one, it is harder to see their linkages. Thus, the author develops the loop diagram for supplementing traditional instruction methods.
Findings
The author finds that a significant majority of students prefer the loop diagram approach. Furthermore, students using loop diagram display more understanding of the forward market efficiency than those with access to a conventional instruction.
Originality/value
The loop diagram provides students a simple visual aid for formulating a complete set of regressions and enables them to analyze a richer set of relationships between several hypotheses than what they typically see in finance textbooks.

The determinants of income inequality in Thailand: A synthetic cohort analysis
Sasiwimon Warunsiri Paweenawat and Robert McNown,
Journal of Asian Economics, Vol. 31-32, 2014; pp.10-21. link

Abstract

This paper presents tests and estimates of the human capital model of income inequality using synthetic cohort data for Thailand: 1992–2011. The model focuses on four primary determinants of income inequality: mean per capita income levels, the variances in years of education, in the number of children, and in the number of earners in the household. All of these factors are important sources of income inequality in Thailand, with relative impacts that differ across demographic groups and types of household structure. An inverted-U relation between mean per capita income levels and inequality is found, reflecting gender differences of the head of household, differences in household composition, and variation in access to finance. Although the human capital model emphasizes education, estimates presented here show other household characteristics, such as number of children and number of earners, can be even more important sources of inequality.

Local perspectives of community-based tourism: Case study from Thailand’s Amphawa Floating Market 
Thanathorn Vajirakachorn and Sanjay K. Nepal,
International Journal of Tourism Anthropology (IJTA)– Inderscience Publishers , Vol. 3, NO.4, 2014; pp.342-356. link

Abstract

Drawing on a case study of a floating market in Central Thailand, this study examines the processes of engaging the local community in the development and promotion of the Amphawa Floating Market (AFM) as a tourist attraction, documents residents’ views about community involvement, and determines the impact of tourism on local livelihood and associated costs. Results indicate that successful implementation of a community-based tourism is dependent on a few catalysts, strong economic interests of local residents, and their willingness to work together. As development succeeds, tourist numbers increase, and outsiders are attracted to the area as entrepreneurs and business competitors, the planning process can quickly get out of local control. Community-based tourism faces the same kinds of challenges as mainstream tourism in that economic interests outweigh environmental and social concerns, and that local communities tend to be less proactive as development proceeds beyond the initial stage.

Correction for “Collateral premia and risk sharing under limited commitment”
Weerachart T. Kilenthong,
Economic Theory Bulletin, Vol. 2, NO.1, 2014; pp.115-118. link

Abstract

This note provides a correction for Lemma 4 in Kilenthong (Econ Theory 46:475–501, 2011). As pointed out in Zierhut (Econ Theory Bull, 2013), Assumption 2 in Kilenthong (Econ Theory 46:475–501, 2011) is not sufficient to guarantee that optimal allocations will be full risk sharing as claimed in Lemma 4 in Kilenthong (Econ Theory 46:475–501, 2011). This note shows that the main result still holds for an economy in which risk sharing rule is linear by providing a corrected sufficient condition for full risk sharing.

PUBLICATION YEAR: 2013

The expectations hypothesis: New hope or illusory support?
Boonlert Jitmaneeroj and Andrew Wood,
Journal of Banking & Finance, Vol. 37, NO.3, 2013; pp.1084-1092. link

Abstract

Recent studies of the expectations hypothesis of the term structure (EHTS) find evidence in favor of the EHTS using post 1980s US data. This has been attributed to the relative macro stability of this period and greater market efficiency. Using a panel of forecasts for 3-month interest rates for ten countries we test separately for EHTS and rational expectations. Assuming rational expectations holds we find support for the EHTS is illusory due to an off-setting time-varying term premia and non-rational expectations. Previous forecast-based studies suggest biased expectations tend to reinforce the effect of a time varying term premium. This change can be understood in the context of Fama’s (2006) argument that markets tend to underestimate future spot rates during periods of long-run increases and overestimate during declines.

International and National R&D Networks in Unionized Oligopoly
Dusanee Kesavayuth and Vasileios Zikos,
LABOUR, Vol. 27, NO.1, 2013; pp.18-37. link

Abstract

We study the endogenous formation of R &D networks between two domestic and one foreign firms in a unionized oligopoly. We find that the equilibrium networks are sensitive to the extent of knowledge spillovers between networked firms. If spillovers are sufficiently low, the complete network will arise in equilibrium; however, if spillovers are sufficiently high, the foreign partial network that includes a domestic and a foreign firm will arise. Moreover, for intermediate spillovers, no equilibrium network emerges. These results have implications for aggregate outcomes: equilibrium networks are not necessarily optimal in terms of aggregate effective R &D and aggregate firm profits.

Wage-Setting Institutions and R&D Collaboration Networks
Ben Ferrettand and Vasileios Zikos,
Australian Economic Papers, Vol. 52, NO.2, 2013; pp.61-78. link

Abstract

We analyse how union structures that differ in the degree of wage‐setting centralisation affect the pattern of R&D network formation. Within the context of a three‐firm industry, a central union that sets a uniform wage is shown to induce a partial R&D network that includes two firms but excludes the third. In contrast, we find that, under less centralised union structures, firms have incentives to form R&D networks with a larger number of alliances. This result is consistent with the stylised facts for industrialised countries: recent decades have seen an upsurge in R&D alliances along with labour market deregulation towards more flexible wage‐setting institutions.

R&D versus output subsidies in mixed markets
Dusanee Kesavayuth and Vasileios Zikos,
Economics Letters, Vol. 118, NO.2, 2013; pp.239-269. link

Abstract

We analyse the relative welfare effects of an R&D and an output subsidy in a mixed duopoly. We show that an R&D subsidy is beneficial for society as a whole, and socially superior to an output subsidy, when spillovers are sufficiently high. Otherwise, an output subsidy is socially superior.

PUBLICATION YEAR: 2012

Village Economic Accounts: Real and Financial Intertwined
Archawa Paweenawat and Robert M. Townsend,
American Economic Review, Vol. 102, NO.3, 2012; pp.441-446. link

Abstract

We propose a framework to create village economic and balance of payments accounts from a micro-level household survey. Using the Townsend Thai data, we create the accounts for villages in rural and semi-urban areas of Thailand. We then study these village economies as small open countries, exploring in particular the relationship between the real and financial variables. We examine cross-village risk-sharing and the Feldstein-Horioka puzzle. Our results suggest that within-village risk-sharing is better than across-village and, while there is smoothing in both, the mechanisms are different. We also find that, unlike countries, the cross-village capital markets are highly integrated.

R&D, human capital, fertility, and growth
Frederic Tournemaine and Pongsak Luangaram,
Journal of Population Economics, Vol. 25, NO.3, 2012; pp.923-953. link

Abstract

This paper analyzes how the decisions of individuals to have children and acquire skills affect long-term growth. We investigate a model in which technical progress, human capital, and population arise endogenously. In such an economy, the presence of distortions (such as monopolistic competition, knowledge spillover, and duplication effects) leads the decentralized long-run growth to be either insufficient or excessive. We show that this result depends on the relative contribution of population and human capital in the determination of long-term growth, i.e., on how the distortions affect the trade-off between the quantity of offsprings and the quality of the family members.

Pricing knowledge and funding research of new  technology  sectors in a growth model
Etienne Chantrel, Andre Grimaud and Frederic Tournemaine,
Journal of Public Economic Theory, Vol. 14, NO.3, 2012; pp.493-520. link

Abstract

A radical evolution in intellectual property law and practices has followed the rise in importance of new technology industries. Nowadays, many patents directly protect knowledge. To account for this evolution, we construct a simple R&D‐based growth model where pieces of knowledge are directly protected by patents. To deal with the nonconvexity property of technologies in which knowledge is an input and show how research can be funded privately, we construct a dynamic general equilibrium with Cournot competition and free entry where knowledge is exchanged on markets that can be subject to imperfect exclusion. Under the assumption of perfect exclusion, we show that research is funded optimally as the distortion caused by the knowledge spillover vanishes when markets are complete. We then argue and demonstrate that insufficient research investments leading to an insufficient level of growth can be explained by the public good nature of knowledge itself, i.e., the problem of imperfect exclusion faced by the sellers of knowledge.

Upstream and downstream horizontal R&D networks
Dusanee Kesavayuth and Vasileios Zikos,
Economic Modelling, Vol. 29, NO.3, 2012; pp.742-750. link

Abstract

The existing literature on R&D networks has focused on networks among firms who compete in the product market (downstream networks). This article develops the literature by casting the analysis in the context of a vertically related industry, where both downstream firms and their upstream suppliers can form horizontal R&D networks.

Our analysis suggests that economic factors, such as within-network R&D spillovers, may be the driving forces behind the equilibrium network formations. Moreover, the equilibrium upstream R&D network may have the same architecture as the downstream R&D network or may differ from it. Interestingly, we find that stable networks can be socially optimal, but only in the case where their architectures differ across market tiers.

Forecast Rationality and Monetary Policy Frameworks : Evidence From UK Interest Rate Forecasts 
Georgios Chortareas, Boonlert Jitmaneeroj and Andrew Wood,
Journal of International Financial Markets Institutions and Money, Vol. 22, NO.1, 2012; pp.209-231. link

Abstract

A radical evolution in intellectual property law and practices has followed the rise in importance of new technology industries. Nowadays, many patents directly protect knowledge. To account for this evolution, we construct a simple R&D‐based growth model where pieces of knowledge are directly protected by patents. To deal with the nonconvexity property of technologies in which knowledge is an input and show how research can be funded privately, we construct a dynamic general equilibrium with Cournot competition and free entry where knowledge is exchanged on markets that can be subject to imperfect exclusion. Under the assumption of perfect exclusion, we show that research is funded optimally as the distortion caused by the knowledge spillover vanishes when markets are complete. We then argue and demonstrate that insufficient research investments leading to an insufficient level of growth can be explained by the public good nature of knowledge itself, i.e., the problem of imperfect exclusion faced by the sellers of knowledge.

PUBLICATION YEAR: 2011

Growth Effects of Environmental Policy When Pollution Affects Health
Marta Aloi and Frederic Tournemaine,
Economic Modelling, Vol. 28, NO.4, 2011; pp.1683-1695. link

Abstract

In this paper, we develop a R&D-based growth model with a pollution externality and a health production sector. We study how health-impairing pollution affects long term growth, and the effect of an emissions’ reduction policy (tax). We show that a tighter environmental tax has positive effects on growth via two channels. On the one hand, it improves workers’ health and, thereby, productivity; on the other hand, it induces a reallocation of resources towards R&D and, thereby, higher research intensity. The size of the growth effect of a tighter environmental tax, and the level of the optimal environmental tax, are both positively correlated with the weight individuals place on health relative to consumption. As for welfare, a tighter environmental tax brings about utility gains in the long run and, potentially, also in the short run.

R&D Subsidies, Spillovers, and Privatization in Mixed Markets
Maria Jose Gil Molto, Joanna Poyago-Theotoky and Vasileios Zikos,
Southern Economic Journal, Vol. 78, NO.1, 2011; pp.233-255. link

Abstract

We examine the use of subsidies to R&D in a mixed and a private duopoly market. We show that the socially optimal R&D subsidy is increasing in the degree of spillovers but it is lower in the private duopoly. The optimal R&D subsidy leads to an increase in total R&D and production, however, it does not lead to the equalisation of per firm output and therefore to an efficient distribution of production costs. We also find that privatization of the public firm reduces R&D activity and welfare in the duopoly market. This result stands even when optimal R&D subsidies are provided.

Social Conflict Growth and Factor Shares
Christopher Tsoukis and Frederic Tournemaine,
Metroeconomica, Vol. 62, NO.2, 2011; pp.283-304. link

Abstract

Standard growth theory is based on atomistic agents with no strategic interactions among them. In contrast, we model growth as resulting from a one‐off, strategic game between ‘workers’ and owners of capital (‘capitalists’) on factor shares, in an otherwise standard ‘AK’ growth model. The resulting distribution of income between factors further determines the marginal revenue product of capital and the rate of growth. We analyse the properties of four equilibria: competitive, Stackelberg equilibrium, a hybrid non‐cooperative regime and cooperative, in terms of labour shares, growth and welfare. Our model thus endogenizes key aspects of the ‘social contract’.

Information-Constrained Optima with Retrading: An Externality and Its Market-Based Solution
Weerachart T.Kilenthong and Robert M, Townsend,
Journal of Economic Theory, Vol. 146, NO.3, 2011; pp.1042-1077. link

Abstract

This paper studies the efficiency of competitive equilibria in environments with a moral hazard problem and unobserved states, both with retrading in ex post spot markets. The interaction between private information problems and the possibility of retrade creates an externality, unless preferences have special, restrictive properties. The externality is internalized by allowing agents to contract ex ante on market fundamentals determining the spot price or interest rate, over and above contracting on actions and outputs. Then competitive equilibria are equivalent with the appropriate notion of constrained Pareto optimality. Examples show that it is possible to have multiple market fundamentals or price-islands, created endogenously in equilibrium.

Collateral Premia and Risk Sharing Under Limited Commitment
Weerachart T.Kilenthong,
Economic Theory, Vol. 46, NO.3, 2011; pp.475-501. link

Abstract

A competitive general equilibrium model with complete collateralized contracts under limited commitment is proposed and analyzed. With limited aggregate collateral, risk sharing is imperfect. There exists a minimal spanning set of finite collateralized contracts that generates the feasible space and that contains more than the complete set of collateralized Arrow securities. Examples show that exogenously restricting feasible contracts has a significant impact on agents’ welfare. I prove that constrained optimal allocations can be decentralized as a general equilibrium with collateral constraints, and vice versa. Because a capital good serves as collateral, it has an additional value, called collateral premium. The collateral premium is zero if and only if risk sharing is perfect. This is a testable implication of the model.

PUBLICATION YEAR: 2010

Status, Fertility, Growth and The Great Transition
Frederic Tournemaine  and Christopher Tsoukis,
The Singapore  Economic Review, Vol. 55, NO.3, 2010; pp.553-574. link

Abstract

We develop an overlapping generation model to examine how the relationship between status concerns, fertility and education affect growth performances. Results are threefold. First, we show that stronger status motives heighten the desire of parents to have fewer but better educated children, which may foster economic development. Second, the government should sometimes postpone the introduction of an economic policy in order to maintain the process of economic development, although such a policy aims to implement the social optimum. Third, status can alter the dynamic path of the economy and help to explain the facts about fertility during the great transition.

The Returns to Education in Thailand : A Pseudo-Panel ApproachCollateral Premia and Risk Sharing Under Limited Commitment
Sasiwimon Warusiri  and Robert Mcnown,
World development, Vol. 38, NO.11, 2010; pp.1615-1625. link

Abstract

This study employs the pseudo-panel approach for estimating returns to education in Thailand, while treating the endogeneity bias common to estimates from data on individuals. Pseudo-panel data are constructed from repeated cross-sections of Thailand’s National Labor Force Surveys of workers born during 1946–67. Estimates show a downward bias of the returns to education in least squares regressions with individual data, a result confirmed with instrumental variable estimation. The overall rate of return is between 14% and 16%. Females have higher returns than males, and workers in urban areas have higher returns than those in rural areas.

Downstream R&D, Raising Rivals Costs, and Input—Price Contracts: A Comment On The Role of Spillovers
Vasileios Zikos and Dusanee Kesavayuth ,
Economic Bulletin, Vol. 30, 2010; pp.3018-3025. link

Abstract

We reconsider Banerjee and Lin [International Journal of Industrial Organization, 2003] by investigating the role of spillovers (or informational flows) for the profitability of input-price contracts in a vertically related industry. We show that spillovers influence the relative magnitude of the main forces operating in the model, which can either reinforce or alter some of the predictions.

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