This study examines how industrialization and technological upgrading measured through Sustainable Development Goal 9 (SDG 9) indicators influence total factor productivity in the industrial sector. Using panel data for 52 economies from 2012 to 2021 with the feasible generalized least squares method and a panel threshold regression model that applies the Economic Complexity Index as the threshold variable, the results show that a higher industrial share in gross domestic product (SDG 9.2.1) and greater medium- and high-technology value added (SDG 9.b.1) increase productivity, while a reliance on low-skilled manufacturing (SDG 9.2.2) and higher carbon dioxide emissions per unit of manufacturing value added (SDG 9.4.1) reduce it. The analysis indicates that the achievement of SDG 9 mainly strengthens technical efficiency through technology absorption and process improvements, rather than advancing the technological frontier. Productivity gains are stronger in economies with lower economic complexity but weaken in more advanced ones due to rising sustainability and compliance pressures. These findings highlight the need for industrial policies tailored to economies’ structural conditions.
Mongolia, a resource-rich economy, experienced a substantial decline in income inequality between 2007 and 2022: the Gini coefficient dropped from 0.44 to 0.32. Using nationally representative Household Socio-Economic Survey microdata, we analyze disposable household income, including imputed consumption from assets, and apply a Shapley value-based regression decomposition to identify the microeconomic drivers of inequality. Over the last 15 years, the significant reduction in inequality has been driven predominantly by broad-based asset accumulation-particularly improved urban housing and expanded livestock holdings-rather than by labor market changes. Expanding direct transfers financed by mining revenues further reinforced this decline. These findings highlight that sustained reduction in inequality in resource-dependent economies requires a combination of asset-building policies, well-targeted transfers, and inclusive human capital development.
This study examines the effectiveness of the welfare card program—an unconditional cash transfer program—in reducing poverty in rural Thailand. The study uses a difference-in-differences framework incorporated with coarsened exact matching from the Thailand–Vietnam Socio-Economic Panel project to assess both targeting effectiveness and household economic impact. The findings revealed significant targeting challenges, with both inclusion and exclusion errors. There is no significant evidence that unconditional cash transfers affect recipients’ economic outcomes in terms of increased accumulated wealth, savings, productive assets, or reduced debt. However, welfare cards increase the consumption expenditure of households earning below the minimum wage. Poverty reduction in Thailand requires shifting from marginal liquidity supplements to a holistic policy framework that combines rigorous eligibility screening with public investments in resilient coping capacities for rural households.
Ecological restoration has become an increasingly important development policy instrument for reshaping rural labor allocation, supporting capital deepening, and sustaining agricultural productivity under tightening environmental constraints. Yet evidence on whether such large-scale restoration initiatives can jointly deliver environmental and economic benefits remains limited. This paper evaluates these impacts using the People's Republic of China's Three-North Shelterbelt Program, one of the world's largest nature-based interventions, as a long-run setting. We find that villages initially most exposed to sandstorms experienced the largest reductions in storm severity and frequency. Beyond these environmental improvements, the program generated substantial economic gains by revitalizing agricultural production: Improved land conditions increased rural households' willingness to remain in farming, stimulated investment in productive fixed assets, and significantly enhanced agricultural total factor productivity. Together, these results highlight the dual role of ecological restoration in promoting environmental sustainability and reinforcing rural economic resilience, offering insights for the design of large-scale conservation policies.
We examine the impact of foreign direct investment (FDI) on the productivity of Vietnamese domestic firms, using annual enterprise survey data from 2009 to 2018, which cover approximately 300,000 firm–year observations. We estimate total factor productivity with the Levinsohn–Petrin method and relate it to lagged horizontal and backward foreign presence constructed from input–output linkages. Spillovers are examined by FDI origin (Association of Southeast Asian Nations; Japan; People’s Republic of China; and Taipei, China) and by firm characteristics, including size, export status, technology intensity, and absorptive capacity. We find little evidence of productivity gains from horizontal exposure, but robust positive backward-linkage spillovers, strongest for Japanese and Chinese investors. Effects are larger for small- and medium-sized enterprises and for firms with stronger absorptive capacity or greater trade engagement. Governance conditions also moderate spillover strength, underscoring origin-specific complementarities and capability upgrading in developing-country production networks.
This study reexamines the nonlinear relationship between prosperity and income inequality in member countries of the Association of Southeast Asian Nations during 1990–2023 and assesses how the rule of law shapes the sensitivity of inequality to economic growth. Using an instrumental variable strategy based on external trade shocks, the study addresses endogeneity and identifies the causal component of the growth–inequality relationship. The results indicate that most countries in the region lie on the left-hand side of the inverted U-shaped Kuznets curve, suggesting that they remain in a transitional stage of development. The findings further show that the interaction between economic growth and the rule of law is context dependent: Weaker legal environments are associated with steeper inequality responses to growth, while stronger legal institutions are linked to a flatter and more stable growth–inequality relationship. Market inequality is more sensitive to the inclusion of Singapore, whereas post-redistribution inequality remains substantially more stable across specifications.
We reexamine whether the economic benefits commonly attributed to rural road expansion hold in Nepal's transforming economy and investigate an important environmental externality. Across a broad set of plot- and household-level outcomes, we find little systematic evidence that better road access enhances economic outcomes. These null results persist across alternative specifications and geographical subsamples. In contrast, ward-level estimates reveal that the expansion of earthen (motorable) roads between 2016 and 2018 is associated with a significant increase in landslide-affected areas, whereas blacktop roads exhibit no detectable effect. The combination of muted economic impacts and heightened environmental risk-set against a backdrop of rapid out-migration and declining agricultural engagement-suggests that recent patterns of rural road proliferation in Nepal's Hill region may yield low or even negative net returns. The findings underscore the importance of context-specific infrastructure planning that accounts for demographic change, market conditions, and topographic fragility.
Despite significant economic growth in developing countries, child malnutrition remains a daunting challenge. Recent studies indicate that later-born children in these countries often face health disadvantages. This study examines the effects of birth order on child nutrition using four rounds of the Demographic and Health Survey in Bangladesh. We find a significant nutritional disadvantage for later-born children: specifically, second-born children are approximately 0.055 standard deviations shorter in height and 2.7 percentage points more likely to be stunted than their first-born siblings. Our heterogeneity analysis reveals differences in birth order effects across key individual and household characteristics-such as gender and household economic status-and we further show that the birth order effect emerges after the age of 2 years and can persist through the age of 4 years. Given the broader economic implications of child growth, our findings offer insights for development-focused policy agenda, especially Sustainable Development Goals in many developing countries including Bangladesh.
The rapid economic growth of members of the Association of Southeast Asian Nations (ASEAN) has relied heavily on effective transport infrastructure. This study analyzes the efficiency of 51 international airports in the ASEAN region from 2013 to 2023 to assess their impact on regional development. Using data envelopment analysis, this study identifies a significant efficiency divide, with major hubs like Singapore Changi and Jakarta Soekarno-Hatta performing optimally, while airports in Brunei Darussalam, Cambodia, and Myanmar lag considerably. This disparity highlights a critical bottleneck to balanced economic growth. The study's findings challenge policymakers to look beyond capital city hubs and invest strategically in secondary airports to alleviate congestion, stimulate ASEAN economies, and harness the full developmental potential of aviation. The study contributes to the literature on infrastructure and development by providing a novel application of efficiency analysis to inform regional policymaking in a key emerging market. Future research should explore the dynamic relationship between airport investment and localized economic outcomes.
This study examines the economic impact of Sindhuli Road-a 160-kilometer paved road constructed on former mountain trails-on new firm entry in Nepal. Propensity-score-weighted regression is employed to mitigate confounding bias due to the nonrandom placement of mountain roads. Nepal's 2018 National Economic Census data on all nonfarm establishments are used in conjunction with land maps generated from remote-sensing data. The results show that the opening of Sindhuli Road significantly increased new firm entry, employment, and sales in both formal and informal sectors along the corridor. The effects vary across construction sections, industries, and genders-with pronounced impacts on economic hub regions, the tourism industry, female-led businesses, and female employment. High transportation prices for porters and pack animals suggest that a modal shift toward vehicle transportation along the corridor should substantially reduce transportation costs. Thus, paved roads in mountainous regions promote local economic development in this particular corridor in Nepal.
Since their inception in 1987, debt-for-nature swaps (D4NS) have emerged as a popular policy tool to simultaneously address sovereign debt burdens and environmental challenges. Drawing on a newly constructed database of global D4NS transactions, this paper shows that Asian economies have played only a marginal role, accounting for just 13% of global transactions. I argue that a combination of limited debt distress, relatively inexpensive debt burdens, and low levels of privately held debt help explain this historical underrepresentation. Using a logit econometric model, the analysis identifies missed opportunities for D4NS transactions in the 1990s in countries such as Papua New Guinea, Thailand, and Turkmenistan. Applying this framework to current economic conditions highlights that, within Asia, Indonesia, the Lao People’s Democratic Republic, Maldives, Mongolia, and Thailand are particularly well positioned for future D4NS activity. The findings emphasize the need for a more proactive, anticipatory approach by fiscal policymakers, debt managers, and conservation organizations to capitalize on emerging opportunities in a region facing mounting debt and environmental pressures.
This paper explores the link between poverty and food insecurity in Pakistan using household survey data and three measures of food insecurity—average calorie availability, minimum dietary energy requirement, and the perception-based Food Insecurity Experience Scale—at national, rural, and urban levels. Our results reveal that poorer households are more likely to be food insecure across all measures. Although reduction in household consumption expenditures and increase in both dependency ratio and household size may worsen the situation of food insecurity, improved economic opportunities (agricultural employment), human capital (education of the household head), inflows of international remittances, ownership of assets (livestock and agricultural land), and access to clean drinking water alleviate food insecurity. Highlighting the need for multidimensional interventions, our analysis for Pakistan reveals that poverty alleviation alone is insufficient to ensure food security.
This study examines the role of financial services in Malaysia’s economy through a two-stage methodological framework. The first stage applies demand- and supply-driven input–output (IO) analysis to derive four indices: influence effect, induction effect, production-inducing effect, and supply-constraint effect. The second stage uses hybrid k-means hierarchical clustering to rank nonfinancial sectors based on their financial interdependence. Using Malaysia’s 2022 IO table and robustness checks from 2018 to 2021, results show that sectors like post and telecommunications; renting of machinery and equipment; wholesale and retail trade; and coke, refined petroleum, and nuclear fuel are highly influenced by financial services. Cluster analysis reveals that this key cluster is particularly sensitive to financial dynamics. Policy implications suggest that improving financial access, infrastructure, and resilience in this key cluster can accelerate Malaysia’s economic transformation. Aligning sectoral financing with IO linkages enables targeted interventions—such as credit guarantees and investment tools—to maximize multiplier effects and promote inclusive, sustainable growth.
India is currently one of the fastest-growing emerging economies in the world, with a continued focus on maintaining its growth momentum and enhancing the productivity of its manufacturing sector. This paper aims to examine the impact of technology imports and spillovers on the productivity of the Indian manufacturing sector. Applying econometric analysis to a panel of 4,293 firms from various manufacturing subsectors for the period 2006–2019, the study assesses the productivity impact on technology-importing firms and the productivity spillover effect of imported technology on domestic firms. Results suggest that firms in India have not only benefited from imports and the usage of foreign technology, but they have also gained due to technology spillovers. Foreign direct investment has been the most important horizontal spillover channel. Large and technically efficient domestic firms have also derived productivity gains from the horizontal spillover channels of trade, technology purchases, and skill spillovers.
Public capacity complements urban density because externalities abound in cities and urban scale makes it possible to share infrastructure that needs to be managed. Yet, urban governments face limitations that are not experienced by private sector entities. A city cannot just stop policing if it decides it is bad at policing. Typically, public compensation and personnel policies are highly regulated either by law or by union contracts. City governments do, however, have one great advantage over private entities: a greater ability to learn from their peers. City governments do similar things throughout the world, while companies frequently specialize. Private companies have strong incentives to hide the trade secrets that make them more productive, cities do not. As individual cities do not have an incentive to make it easier for other governments to learn from them, multinational entities like the Asian Development Bank and the World Bank could enable that learning. Since climate-change-related crises are relatively rare events, city-to-city learning seems particularly important for adapting to climate change.
Partial dollarization is a significant phenomenon in the banking sectors of many developing countries, yet evidence on its spread through bank branch networks remains scarce. This paper investigates interregional capital flows within Cambodia's banking system, characterized by the coexistence of multiple currencies. Using branch-level deposit and loan data, we developed a measure of the regional fund flows to fit the banking sector for developing countries. Our findings reveal that excess funds from deposits in Phnom Penh and wholesale funding significantly cover lending across provincial regions for both United States dollars and riels. However, banks reallocate funds in riel less actively, despite recent increases in riel deposits. Regional differences in loan and deposit demand between currencies further highlight distinct patterns. This study underscores the need to understand currency-specific trends to promote local currency usage and enhance financial inclusion in dollarized economies.
As countries in Asia and the Pacific continue to integrate into the global economy, what are the implications for women’s labor market participation in these countries? The literature on international trade considers the effects of import competition and export orientation on gender gaps in employment and earnings, while the literature on labor economics considers whether more competition implies an increase in women’s employment, as gender discrimination may be harder to sustain if firms are to remain profitable amid rising competition. Using a panel of Vietnamese firms from 2005 to 2018, we look at factors affecting women’s employment in Viet Nam during this time of change. We find that (i) exporting and foreign-owned firms have higher shares of female labor, and (ii) firms with higher shares of female labor were more likely to survive during this increasingly competitive period. Overall, we see an increase in formal employment for Vietnamese women during 2005–2018.
In this research, I investigate the relationship between different types of housing demolition compensation and entrepreneurship, utilizing data from the China Household Finance Survey. Employing economic analysis with a two-way fixed effects model, I find that among households that have experienced demolition, those receiving cash compensation are more likely to engage in entrepreneurial activities compared to those receiving other forms of compensation. This effect operates through a mechanism in which cash compensation alleviates liquidity constraints. The findings hold true for both established and nascent households and are particularly pronounced in urban areas and in the eastern region of the People's Republic of China. This study contributes to the developmental literature on demolition and entrepreneurship by highlighting the positive aspects and remedial potential of compensation. It offers a detailed examination of compensation types and links liquidity theory to the context of housing demolition.
This paper investigates the relationship between piped water access and food consumption in Pakistan utilizing the nationally representative Household Integrated Economic Survey. Access to piped water reduces exposure to waterborne illness, improving health and labor productivity, which can raise household income and food purchasing power. When households have access to piped water they spend less time collecting water from distant sources, freeing up time for other activities, including food production and preparation. The analysis employs a control function approach to address potential endogeneity, with piped water access as the treatment and weekly per adult equivalent food expenditure as the outcome. Results show that, on average, households with piped water spend PRs21 or 3.54% more per adult equivalent on food consumption per week. This finding suggests that improved water infrastructure enhances household food security through increased economic access, improved health, and the reallocation of women's time from water collection toward more productive uses.
