ชั้น 2 ธนาคารแห่งประเทศไทย
Why Does the WTO Prohibit Export Subsidies But Not Import Tariffs?
We develop a three-stage lobbying game to explain why the WTO prohibits export subsidies but not import tariffs. In this model, the government chooses trade policies (i.e., import tariffs or export subsidies) to maximize a weighted sum of social welfare and lobbying contributions. We argue that the economic rents from export subsidies cannot be contained exclusively within lobby groups because new capitalists, who will enter the growing export sector, freely benefit from export subsidies without paying political contributions at the time of lobbying. In the contracting import-competing industries, no new entrants erode the protection rents from tariffs. Therefore, the government receives large political contributions by protecting these import-competing industries. We show that, given that capital reallocation is costly, when the free-rider problem is severe the government will sign a trade agreement that prohibits only export subsidies.
Connecting Locals to Locals: Market Discovery through E-Commerce
Despite rapid growth in e-commerce, there has been little systematic research examining the impact of online commerce adoption on the entrepreneurs in ASEAN. Using a unique survey data of around 7,000 merchants on Shopee in Thailand, this paper seeks to fill that gap through a mix of econometric and trade connectivity analyses. We found that e-commerce adoption is associated with improvement in household incomes for the sellers. The benefits come from two different channels. First, e-commerce empowers existing SMEs by significantly boosting their revenue, efficiency, and profit growth. The improvement in profitability seems to go beyond a one-off gain as going online seems to also result in stronger profit growth rates. Second, our trade connectivity analysis illustrates how e-commerce allows merchants, especially those in the poorer regions, discover new market opportunity outside their own regions. In addition, e-commerce allows people of various employment status including full-time employees, homemakers, students, etc. to earn additional income, while maintaining other responsibilities.
Labor Income Inequality in Thailand: the Roles of Education, Occupation and Employment History
Thailand’s income inequality has reportedly declined since the mid-1990s. This paper examines possible mechanisms underlying the dynamic patterns of the country’s labor income inequality. Using the Thai labor force survey between 1988 and 2017, we document that the country’s reduction in income inequality is likely driven by the fact the earnings at the bottom part of the distribution have become more similar. The median wage gap between college and non-college workers, however, still gets larger over time. Our key explanation is the changes in education-occupation composition. Recently college graduates are no longer concentrated in high skill jobs. A larger share of secondary educated workers works in low-skill jobs instead of the middle-skill ones. Using panel administrative data from the Thai Social Security Office, we find that wage disparity can also be explained by employment history. The high wage earners earn more since they enter the market, and the gap gets wider as the workers age. Additionally, the top of the group can command higher wages by working at a large firm or switching to a new job. These findings highlight the fact that to tackle the income inequality issue, the country needs to understand the underlying mechanisms behinds its dynamics.
The European Smoking Bans and Mature Smokers: Can They Kick the Habit?
Using individual level data, this paper investigates whether nationwide smoke-free legislations in Europe lead to smoking reduction and cessation among mature smokers. It exploits cross-country data and the European Union’s multinational governance that provides a quasi-experimental setting. Top-down regulations on smoke-free environment by the EU mitigate the self-selection bias and endogeneity bias of smoke-free laws generally faced in other settings. The results show that comprehensive bans lower smoking propensity by approximately 7 percent and reduced smoking intensity by 10 percent. The effect persisted and increased over time. Light smokers and heavy smokers were 14.5 and 7.2 percent more likely to quit while there is no significant effect on average smokers. Those working in industry and occupation that faced with more comprehensive and strict bans were also more likely to quit, showing that comprehensive bans can increase smoking cessation even among mature smokers with well-established addiction.
Insurance and Propagation in Village Networks
We study the dual role of networks in providing insurance and in propagating idiosyncratic shocks by using variation in the timing of severe shocks on health spending experienced by households in Thai villages. We find no impacts on food consumption. Smoothing is largely achieved through local gift and loan networks. However, insurance is partial for some households so they adjust their production decisions-drawing on their working capital, cutting input spending, and reducing labor hiring, hence propagating the shocks to other households. Wefind that upstream businesses close to the underinsured households in the supply chain network experience reduced local sales and increased inventories. Likewise, workers closer to the underinsured households in the labor network experience declined probability of working locally and reduced earnings. We find evidence of ex-post adjustments of these upstream households through shifting resources towards activities with lower exposure to local shocks. Our results suggest that social (village-level) gains of expanding health insurance might be higher than private (household-level) gains.
Mapping Thailand’s Financial Landscape: A Perspective through Balance Sheet Linkages and Contagion
This paper conducts in-depth profiling of players and interlinkages in the Thai financial system based on sectoral balance sheet data and disaggregated supervisory data on banks and mutual funds. Several aspects of Thailand’s financial landscape have been documented. We find that financial interconnectedness has risen and become more complex, with the financial landscape increasingly tilted toward non-bank intermediaries. Network topology suggests a segmented landscape, with the presence of a core cluster where key players including households, firms, large domestic banks, and mutual funds of large banks’ asset management arms are located, indicating their tight interconnections. Leveraging on entity-level balance sheet profiles, we develop a stress-testing framework that is based on a network model of financial contagion. Two types of shocks are studied. For industry shocks, we find that losses generally propagate via the liability and ownership channel and the reverse liquidity channel. But when the losses are large enough, the fire-sale effects dominate. For bank reputational shocks, we simulate a loss of confidence in major banks via deposit withdrawal and fund redemption. While the overall losses are much smaller than those of industry shocks, these risks cannot be ignored since the mutual fund industry stands to suffer and panic selling could amplify the losses.
Should All Blockchain-Based Digital Assets Be Classified Under the Same Asset Class?
The literature is well aware that blockchain-based digital assets would constitute a new asset class. However, it has been rather silent about the distinction among them. This paper discusses the digital tokens’ differences and similarities by their (i) creation and initial distribution; (ii) intended properties; (iii) actual usage; and (iv) behaviors. Although the digital tokens are indistinguishable in some aspects, they differ in the way they are created and initially distributed. Some of them have distinguishable risk and return profiles. Therefore, we take a view that the digital tokens take (or will take) different roles in the financial systems; should be classified under different asset classes; and should be subject to different sets of regulations (although some may overlap).
Understanding Corporate Thailand I: Finance
This study analyzes the entire universe of registered firms in Thailand. There are five main findings. First, firm size distribution is smooth, with a majority of firms in the middle of the distribution; the apparent ”missing middle” phenomenon is entirely driven by arbitrary categorization of small and medium enterprises (SMEs). Second, the Thai corporate sector is very concentrated; the concentration has also risen over the past decade. Third, larger firms seem to have advantages over smaller firms regarding financing. Fourth, smaller firms tend to disproportionately invest less in fixed assets than larger firms. Finally, firms in the middle of the size distribution exhibit the highest return on asset (ROA) but have low leverage, consistent with the symptom of credit constraints. Large firms, in contrast, seem to have lower ROA but higher debt. Meanwhile, smaller firms seem to have both lower leverage and ROA. Overall, our results suggest that the Thai corporate sector exhibits both inefficient capital allocation and financial vulnerability. The paper has important policy implications on resource allocation in the economy, particularly, regarding appropriate assistance provided to small and medium enterprises.
Multinational Tax Avoidance and Anti-Avoidance Enforcement: Firm-level Evidence from Developing ASEAN Countries
We use firm-level data from ASEAN5 to examine the significance of tax-motivated profit shifting by multinational enterprises and to analyze how anti-avoidance measures mitigate the profit shifting. We show that (1) tax-motivated profit shifting is statistically and economically significant, especially for manufacturing firms, (2) auditing and transfer-pricing scrutiny is more effective in reducing profit shifting than documentation requirement alone, and (3) tax-motivated profit shifting is prominent for large firms, while anti-tax avoidance measures result in the absence of profit shifting detected from small manufacturing firms. The findings have important implications for developing countries with weak governance but dependent on MNEs.
“Gold Miss” or “Earthy Mom”? Evidence from Thailand
This paper investigates the impact of Thai women’s education on their marriage behavior and fertility. It first uses the data set from the Labor Force Survey to estimate the effect of education on the marriage market. The result from applying the recent doubly robust Inverse Probability Weighted Regression Adjustment (IPWRA) indicates that obtaining a university degree decreases the probability of women’s marriage by 14.8%, emphasizing the rise of the “Gold Miss” phenomenon in Thailand. It further examines the effect of education on fertility. By applying both the instrumental variable using the compulsory education reform as an instrument and pseudo-panel approaches to take into account the endogeneity of schooling, the result shows that education causally reduces fertility, which provides a convincing sequential explanation for the dramatic decline in fertility in Thailand.
The Impact of Regional Isolationism: Disentangling Real and Financial Factors
Recently, there is a pressure for isolation policies both within the United States and among the EU members. The pressure arises due not only to the difference between regions in the U.S. and/or countries in the EU, but also to the difference across their population which affect the gains and losses from economic integration, both real as from trade in a common market and financial as in a monetary financial union. To get a better understanding of this pressure, one would need a model of trade and capital flows that takes into account the difference between individuals in a region and differences across regions. There is also a need for detail data at the individual and aggregated level, which often are not available. In this paper, we use unique long-panel data of households in Thailand, and from these data, we construct the household financial accounts, the village economic accounts, and the village balance of payments account. We also provide stylized facts on factor prices, factor intensities, financial obstacles, and village openness document differences across regions. Finally at the national level it is clear there is co-mingled variation in trade via devaluations and in finance via policies toward off shore bank and within-country financial infrastructure.
We develop a heterogeneous-agent/occupational-choices/trade model with financial frictions carefully built up and calibrated around micro and regional facts, that is, at both the individual level and the aggregate level. Then, we conduct two counterfactual policy experiments. In the first counterfactual experiment, we distinguish the effects of trade from the effects of capital flows. More specifically, we determine what would happen if we allow the prices of goods to change as in baseline scenario while keep borrowing limits and interest rates constant, and vice versa. In the second counterfactual experiment, we determine the effect of isolation policies that impede trade and/or capital flows across regions. We find through these counterfactual experiments that both real and financial factors are at play, that there are differences across regions in impact even when (policy) movements in variables such as interest rates and relative prices, which are exogenous to the regions, are common; impacts can be large, and vary with policy; and impacts are significant heterogeneous with both gains and losses and non-monotone movement across wealth classes and occupations, even allowing for occupation shifts which apriori might have mitigated impact.
Alternative Boomerang Kids, Intergenerational Co-residence, and Maternal Labor Supply
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 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 extends women’s working hours by 10 hours.
Estimating Demand for Long-term Care Insurance in Thailand: Evidence from a Discrete Choice Experiment
At present, the Thai public health insurance schemes cover medical care. However, the financial risk associated with long-term care needs is unprotected. The increasing likelihood of Thai elderly living longer and living alone has raised great concern about their quality of life. In the wake of the declining informal support capacity, a public long-term care insurance (LTCI) system has been considered as a potential alternative. Because the public will have to contribute to the LTCI fund, this paper explores whether the Thai people are willing to pay for such a provision. The LTCI demand is estimated based on the stated preference survey data. Our results show that most respondents are willing to pay to insure against their risk associated with long-term care expenditure, but their preferences are very heterogeneous. Gains and losses for different policy scenarios, measured by consumer surplus, are discussed.
The Movement and Change in Online Price Within and Across Selected Major Retail Stores in Thailand
E-commerce has gained larger market shares in Thailand over the last decade. Yet there is a paucity of studies on online price behaviour and movement. This project is one of the first attempts to explore this topic in the Thai context. Using web scraping technique to acquire the data on price and product information from major retailers that have both physical and online outlets, this paper summarizes its findings into six stylized facts. In short, online price changes more frequent than its offline counterpart, yet the magnitudes of changes are generally much larger. Further, price heterogeneity exists across stores and product categories. However, pricing strategies of the same store seems to differ between its online and offline outlets.
Foreign Exchange Order Flows and the Thai Exchange Rate Dynamics
Applying the microstructure approach to exchange rates, this paper aims to shed light on the price formation process in the Thai foreign exchange market using a unique supervisory dataset of daily foreign exchange transactions from all licensed dealers in Thailand. We examine the main drivers of different types of order flows and the effect of resident and non-resident customer order flows on the Thai exchange rate. The results suggest that non-resident order flows have an important influence on movements in the Thai baht, while resident order flows do not. Regarding investors’ trading behavior, we find that non-resident order flows are driven by both fundamentals and movements of the Thai baht. Specifically, non-resident players appear to be ‘trend-followers’ with regard to exchange rate returns, exerting buying pressure when the baht recently appreciated. In contrast, domestic players tend to behave as ‘contrarians’, by buying the Thai baht after it depreciates.