WORKING PAPERS

April 2024

Estimating the Optimal Fare for a Toll Road in Indonesia Using Stated Preference Methodology

By Andres Pizarro, Anne Ong Lopez, and Jessica Halim*

Investing in an infrastructure project requires an understanding of the potential market share of future demand to ensure that the assumed economic benefits of the project can be reaped by those who use the infrastructure. Investing in an infrastructure project also requires an understanding of potential revenue flows so that investors can make a rational decision to invest.

March 2024

Firms’ Bond Market Access and Impact on Bank Borrowing Costs

This is a post-peer-review, pre-copyedit version of an article published in Journal of Financial Services Research. The final authenticated version is available online at: https://doi.org/10.1007/s10693-024-00424-y

By Jang Ping Thia, Xinyu Kong*

This paper documents that companies with bond issuance are larger, are more leveraged, and have higher financing needs, but have lower observed syndicated loan spreads.

March 2024

Do Unpriced Natural and Ecosystem Capital Affect Economic Output? Growth Regression Analyses

This is a post-peer-review, pre-copyedit version of an article published in Sustainable Development. The final authenticated version is available online at: https://doi.org/10.1002/sd.2943

By Jang Ping Thia, Jiaqi Su, and Xinyu Kong*

Services provided by nature and ecosystem capital are unpriced and their contributions cannot be observed through factor payments. Estimates of nature’s GDP contribution are thus based on bottom-up extrapolations of local ecological valuations or various sectoral dependency assumptions.

July 2023

Road Transport Performance In India

By Mert Kompil, Jingyu Gao, Yue Li, Abhinav Narayanan and Jiaqi Su*

Countries aim to develop and maintain efficient transport infrastructure to connect regions and make settlements accessible. Obviously, an area that is better connected and more accessible has higher potential to reach social and economic activities, and is more likely to participate in global value chains. This study measures road transport performance in India using a transport assessment framework recently implemented in European Union countries. It is the first time the framework is applied to an Asian country at a fine spatial granularity. The study finds that performance varies considerably across major Indian states. Mumbai and Delhi metropolitan areas are on par with European cities, but the majority of the subdistricts are far behind. It also shows that urban areas of some states underperform rural areas of other states, which differs from the pattern in Europe and contradicts conventional wisdom. Finally, the study also applies the framework to simulate the impact of the Gujarat Rural Roads project and the potential effects of connecting the planned Dholera (Gujarat) airport through different road investment projects.

April 2023

How Large is the Borrowing Cost Advantage of State-owned Enterprises？

This working paper has been peer-reviewed, revised, and published in Review of Development Finance. The final authenticated version is available online at: https://journals.co.za/doi/abs/10.10520/ejc-rdfin_v13_n1_a6

By Jang Ping Thia, Jiaqi Su, and Xinyu Kong*

We provide new evidence of lower borrowing costs for state-owned enterprises (SOEs). Using ORBIS ownership data matched to financing transactions in syndicated loan and bond markets, regressions and propensity score matching estimates confirm the lower financing costs for advanced and developing economies’ SOEs, compared to private sector, and especially for hard currency borrowings.

January 2023

Transport Infrastructure and Local Economy: Evidence from the Gujarat Rural Roads Project

By Jingyu Gao, Yue Li, and Abhinav Narayanan*

This paper estimates the effects of a statewide rural roads project in Gujarat, India, on three aspects of the local economy: output, employment, and agricultural trade.

July 2022

Infrastructure Quality and Trade Liberalization

This working paper has been peer-reviewed, revised, and published in Structural Change and Economic Dynamics. The final authenticated version is available online at: https://doi.org/10.1016/j.strueco.2023.04.012

By Jang Ping Thia* and Anne Ong Lopez^†

It is difficult to establish the impact infrastructure has on trade balances due to confounding factors. Our empirical approach leverages on episodes of trade liberalization, interacting such episodes with infrastructure.

June 2021

Do Power Outages Hurt Export Performance? Evidence From a Firm-Level Survey

By Abhijit Sen Gupta* and Prakash Singh^†

Power outages reduce the competitiveness of firms by increasing the cost of production and engendering loss of output, thereby making firms less likely to survive external competition.

December 2020

Increasingly Networked Lenders and Their Impact on Lending Spreads

By Jingyu Gao, Xinyu Kong and Jang Ping Thia

A large fraction of syndicated loans are now syndicated by top lenders. Top lenders have become more networked than smaller ones. Spreads of top lenders, however, have become persistently lower than those of small lenders. We provide evidence that top lenders have lower costs, but these translate to profitability rather than lower spreads.

August 2020

Hydropower Modernization Needs in Asia

By David Morgado, Nicholas Troja, Amina Kadyrzhanova and David Samuel*

Hydropower has and continues to make an essential contribution to increasing energy access, boosting prosperity and meeting climate targets. In 2019, hydropower accounted for nearly half of the global renewable energy capacity with just over 1,300 gigawatts(GW) and approximately 16 percent of global electricity generation.

June 2020

Impact of Infrastructure Investment on Developed and Developing Economies

This is a post-peer-review, pre-copyedit version of an article published in Economic Change and Restructuring. The final authenticated version is available online at: https://doi.org/10.1007/s10644-020-09287-4

By Xuehui Han, Jiaqi Su and Jang Ping Thia

This paper uses two longitudinal datasets - one with more limited coverage from the Organisation for Economic Co-operation and Development and another constructed using general government gross fixed capital formationjto test for the relative effects of infrastructure versus non-infrastructure investment on output per worker, between developed and developing economies. The paper presents evidence that increasing infrastructure per worker has a larger relative impact on developing economies. This also implies that the share of gross capital formation devoted to infrastructure should be higher in developing economies.

February 2020

Benchmarking Infrastructure Costs: A Case of Road and Water Basket of Locally-Obtained Commodities (BLOC)

By AIIB*, Centre for Comparative Construction Research (Bond University) and The Economist Intelligence Unit (EIU)

Although understanding drivers of infrastructure cost is an important part of cost management, data on costs are hard to obtain. Most importantly, cross-country comparisons of infrastructure costs are difficult to collect due to heterogeneity in infrastructure types and differences in country contexts. By standardizing input quantities and qualities of a road and a water infrastructure as well as accounting for currency variations, this paper documents a methodology to create a cross- city measure of infrastructure costs. Based on this benchmarking methodology, the derived cost differentials between pilot cities are attributable to factors other than quality, quantity, and the exchange rate.

February 2020

Protectionism and Trade in Renewable Energy Infrastructure

By Anne Ong Lopez

International trade in renewable energy infrastructure is essential for countries to meet their development and environmental objectives such as the Sustainable Development Goals. This paper explores the role of protectionism in renewable energy. Using detailed product-level data on imports, tariff and non-tariff measures, it presents evidence that burdensome measures negatively impact trade flows in this infrastructure. Results further suggest that these measures may have heterogenous impact on exporting countries depending on their level of development. This points to the need to lower costs to support renewable energy development.

October 2019

Deficits and Crowding Out Through Private Loan Spreads

This is a post-peer-review, pre-copyedit version of an article published in The Quarterly Review of Economics and Finance. The final authenticated version is available online at: https://doi.org/10.1016/j.qref.2020.01.009

By Jang Ping Thia

Post crisis, bank loan spreads increased and have remained elevated despite central bank actions, low LIBOR rates and observed Treasury yields. Using large syndicated loan dataset, this paper estimates that a one percentage point to GDP increase in government deficits increases spreads by around nine basis points on average. This is consistent with partial crowding out. Weaker country risk ratings, larger loan size also increase spreads. Finally, the paper provides evidence that US deficit spending results in a crowding out of around one-half in loan markets and have some crowding out of loans in other markets.

April 2018

Bank Lending - What Has Changed Post-Crisis?

This is a post-peer-review, pre-copyedit version of an article published in Journal of Economics and Finance. The final authenticated version is available online at: https://doi.org/10.1007/s12197-018-9441-2

By Jang Ping Thia

Using syndicated loan data, this paper finds that loan spreads have increased and have remained elevated post-2009. Regressions, controlling for currency fixed effects, loan types, loan sizes, number of participating banks and tenors confirm the higher spreads post-2009. Further analysis reveals that the average number of banks per syndication increased for developed economies but decreased for emerging economies. This is explained by the higher market shares of non-Japanese Asian banks in developing economies post-crisis, but with lower syndication intensity. Consistent with the capital shock hypothesis, Western and Japanese banks intensify the degree of syndication post-crisis, but other Asian banks do not. The lower syndication intensity suggests that market efficiency has declined for developing economies. Syndication should be further encouraged to reduce spreads.