https://so01.tci-thaijo.org/index.php/AEJ/issue/feedAsian Journal of Applied Economics2024-09-17T00:00:00+07:00Waleerat Suphannachartajae.eco@ku.thOpen Journal Systems<p><strong>Asian Journal of Applied Economics, ISSN 2985-1610 (Online)</strong>, formerly known as 'Applied Economics Journal (AEJ)' of Kasetsart University, Faculty of Economics, is a double-blind peer-reviewed journal devoted to the applications of economic theories to analyze well-defined research issues. It encourages empirical analysis, simulation, prediction and forecasting research. Although the journal primarily targets academics and policy makers with an interest in the Thai and Asian economies, it also welcomes articles that deal with global issues. Two online-only issues are published per year: No. 1 from January to June, and No. 2 from July to December. The categories of articles include research articles, review articles, and book reviews. All articles are available through open access, with no submission fees or page charges.</p>https://so01.tci-thaijo.org/index.php/AEJ/article/view/276301Editorial Note2024-09-12T16:18:07+07:00Waleerat Suphannachartwaleerat.sup@gmail.com<p>Volume 31, Issue 2 (July-December 2024) of the Asian Journal of Applied Economics (AJAE) presents eight articles addressing various economic challenges and opportunities across Asia. The first article employs machine learning techniques to analyze the insolvency risk of Thai SMEs, providing crucial insights for financial strategy and risk management. Focusing on agriculture, the second study explores how land rental markets can reduce farmland fragmentation in rural Thailand, promoting cohesive farming plots while balancing land consolidation with farm diversity. The third paper estimates the economic costs of traffic congestion in Bangkok, laying the groundwork for future research on optimal congestion pricing strategies.</p> <p>Shifting to the international arena, the fourth article applies game theory from an international political economy perspective to examine the potential for US-China cooperation within APEC, emphasizing the long-term benefits of strategic collaboration. The fifth paper analyzes how tertiary education and government spending affect high-technology exports in Asia-Pacific and European countries, offering policy recommendations to enhance high-tech exports through strategic education investment. The sixth article focuses on Azerbaijan, using an ARDL approach to investigate the long-term impact of FDI on unemployment, providing insights for policymakers on how FDI can reduce unemployment. Environmental concerns are addressed in the seventh paper, which examines the interplay between trade openness, economic growth, and environmental sustainability, supporting the Environmental Kuznets Curve hypothesis and advocating for balanced policies that promote both economic and environmental goals. Finally, the eighth article analyzes the effects of bank credit on Lao PDR's economic growth, recommending policies to promote private lending and stricter controls on state enterprise credit.</p>2024-09-17T00:00:00+07:00Copyright (c) 2024 Asian Journal of Applied Economicshttps://so01.tci-thaijo.org/index.php/AEJ/article/view/274847An Empirical Analysis of Private SMEs' Insolvency in Thailand Using Machine Learning2024-07-11T15:04:09+07:00Chalerm Jaitangchalerm.j@psu.ac.thZhaohua Lizhaohua.li@lincoln.ac.nzChristopher Ganchristopher.gan@lincoln.ac.nz<p>We investigate the insolvency of private Thai SMEs in the manufacturing, trading, and service sectors from 2017 to 2021. We model insolvency as a function of industry-relative financial ratios, firm characteristics, and local economic conditions using Least Absolute Shrinkage and Selection Operator (LASSO) logistic regression. The analysis shows the significant influence of financial ratios on the probability of insolvency for all sectors, particularly inventory turnover, accounts payable turnover, assets to equity, and debt to assets ratio. The service sector shows a unique positive effect of working capital to total assets on insolvency risk, implying that firms with high current assets or very low current liabilities are more prone to insolvency. Medium-sized firms, those registered as juristic ordinary partnerships, owned by foreigners, and located in less competitive areas are less likely to face insolvency.</p>2024-09-17T00:00:00+07:00Copyright (c) 2024 Asian Journal of Applied Economicshttps://so01.tci-thaijo.org/index.php/AEJ/article/view/274979Mitigating Farmland Fragmentation through Land Rental Markets: Evidence from Rural Households in Northeast and Central Thailand2024-07-29T17:09:30+07:00Uchook Duangbootseeuchook.d@ku.th<p>Land fragmentation poses a persistent challenge to rural agricultural sectors, particularly in Thailand, where it hinders productivity and efficient land use. This study explores the role of the land rental market in addressing this issue, using panel data from households in Northeast and Central Thailand. Trends from 2000 to 2017 show a steady decline in the size of land rented per household, while the land fragmentation index exhibits greater variability. Instrumental variable regression results indicate that increased land rental significantly reduces fragmentation, resulting in larger and more efficient farming plots. Larger households tend to rent less land, while older and more educated household heads are associated with lower fragmentation, highlighting the importance of experience and education in land management. Households with higher nonfarm income prioritize land consolidation, further reducing fragmentation, whereas those affected by shocks such as natural disasters experience increased fragmentation as a risk mitigation strategy. Rice farmers, in particular, operate on more fragmented land compared to upland crop farmers. However, an increase in farm activities leads to higher fragmentation, underscoring the need for policies that balance land consolidation with support for farm diversity. Government policy should focus on promoting land rentals by reducing transaction costs, such as revising the adverse possession law, which currently discourages landowners from leasing out their land.</p>2024-09-17T00:00:00+07:00Copyright (c) 2024 Asian Journal of Applied Economicshttps://so01.tci-thaijo.org/index.php/AEJ/article/view/274944The Cost of Traffic Congestion and Marginal Cost of Delay in Bangkok Metropolis2024-08-16T07:21:33+07:00Areerak Beerkaewareerak.beerkaew@gmail.comRawadee Jarungrattanapongrawadee@gmail.comOrapan Nabangchangnabangchang_o@icloud.comKanittha Tambunlertchaikanittha.t@chula.ac.th<p>Traffic congestion in Bangkok, particularly during rush hours, imposes significant private and external economic costs on society, a problem exacerbated by the rapid increase in the number of private vehicles in the city. To the best of our knowledge, no study has estimated the cost of traffic congestion in Thailand using a survey research design. This study aims to estimate both the cost and the marginal cost of heavy traffic during rush hours, utilizing data gathered from 215 commuters in Bangkok and nearby suburbs. The findings indicate that the annual traffic congestion costs per vehicle range between THB 77,021 and THB 76,155 (USD 2,567 and USD 2,538) at 2023 price levels, depending on the greenhouse gas (GHG) damage cost discount rates used. Additionally, the marginal cost of delay per vehicle due to heavy traffic is approximately THB 646 (USD 22) at 2023 price levels. This value can serve as a proxy for the benefit (or avoided cost) that commuters could gain if the government were to implement traffic congestion mitigation measures, such as congestion charges. While imposing fees could be one potential solution to address the traffic problem in Bangkok, further research is needed to determine the appropriate amount of charges, considering factors like the price elasticity of demand for congestion charges and their acceptability to the public.</p>2024-09-17T00:00:00+07:00Copyright (c) 2024 Asian Journal of Applied Economicshttps://so01.tci-thaijo.org/index.php/AEJ/article/view/273399Can APEC Bridge the Divide? A Game Theory Approach to US-China Cooperation2024-06-01T07:52:29+07:00Euamporn Phijaisaniteuamporn@econ.tu.ac.th<p>The escalating US-China rivalry threatens to impede economic integration within the Asia-Pacific Economic Cooperation (APEC) forum. This paper departs from the existing literature by analyzing specific actions of both countries that exemplify a focus on short-term gains. It argues that by understanding the dominance of short-run gains in current US-China actions, a framework that emphasizes long-term cooperation becomes particularly relevant. Employing game theory, the paper examines APEC's future prospects. The paper analyzes potential cooperation and conflict scenarios based on economic incentives and strategic considerations. While the current rivalry resembles a Prisoner's Dilemma, the paper explores alternative game structures, namely; Repeated Games and Supergames, that can incentivize cooperation on shared economic objectives. The analysis demonstrates that long-term benefits from cooperation can outweigh short-term temptations to defect, particularly if APEC institutions foster trust and transparency. Ultimately, the analysis highlights the critical role of a strengthened APEC in promoting a stable and cooperative equilibrium, thereby fostering long-term economic prosperity for the entire Asia-Pacific region.</p>2024-09-17T00:00:00+07:00Copyright (c) 2024 Asian Journal of Applied Economicshttps://so01.tci-thaijo.org/index.php/AEJ/article/view/274160The Impact of Government Expenditure and Tertiary Education on High-Technology Exports: Evidence from Asia-Pacific and European Nations2024-06-24T07:42:51+07:00Hieu Thi Thanh Nguyen526322@student.saxion.nlMy Hoang Ngoc Pham2021009210@sv.ufm.edu.vnThu Thi Nguyennguyenthithu1@tdtu.edu.vnKhoa Dang Duongduongdangkhoa@tdtu.edu.vn<p>This study extends the growing literature on the 4th and 9th Sustainable Development Goals by examining whether tertiary education moderates the relationship between government spending on education and high-technology exports. We employ Robust Least Squares Estimation to analyze an unbalanced panel of 24 Asia-Pacific countries and 37 European nations from 2007 to 2022. This method effectively handles outliers and heteroskedasticity in panel estimations. The empirical results indicate that both a higher ratio of tertiary education enrollment and government expenditure empower high-technology exports. Our findings support human capital, innovation, and endogenous growth theories, as well as prior literature. However, the study reveals significant regional disparities in the impact of education on high-technology exports. While higher tertiary enrollment boosts high-tech exports in Asia-Pacific countries, government spending has little impact. Conversely, in European countries, government spending positively influences high-tech exports, while tertiary enrollment shows no significant effect. This study contributes practical policy implications for sustainably improving high-technology exports in Asia-Pacific and European nations by fostering human capital development and efficient government spending on education.</p>2024-09-17T00:00:00+07:00Copyright (c) 2024 Asian Journal of Applied Economicshttps://so01.tci-thaijo.org/index.php/AEJ/article/view/274158An Empirical Investigation of the Relationship Between Foreign Direct Investment and Unemployment Rate in Azerbaijan: An ARDL Approach2024-05-26T18:52:57+07:00Mehman Karimovm.kerimov@atu.edu.azElcin Nesirovelcin.nesirov@adau.edu.azElay Zeynallie.zeynalli@adau.edu.azEmilia Huseynova emiliya.huseynova@mdu.edu.az<p>This paper aims to examine the effect of FDI on the unemployment rate in Azerbaijan from 1993 to 2022. The Augmented Dickey–Fuller (ADF) unit root test, Phillips-Perron (PP) unit root test, ARDL co-integration test, and Granger Causality test have been employed for the statistical analysis. The results of the ARDL approach indicated a significant relationship between FDI and the unemployment rate. The outcomes of the long-run analysis noted a negative and significant relationship between FDI and unemployment. In contrast, the short-run test showed a negative but insignificant relationship between FDI and unemployment. Moreover, the findings of the Granger causality test showed no causal link running from FDI to unemployment, meaning the null hypothesis that FDI does not Granger cause unemployment should be accepted. This suggests that FDI leads to employment in Azerbaijan. Conversely, a causal relationship running from unemployment to FDI was confirmed, indicating that the null hypothesis that unemployment does not Granger cause FDI should be rejected, and the alternative hypothesis that unemployment does Granger cause FDI must be accepted. This implies that the unemployment rate influences FDI inflow into the country. Hence, it has been demonstrated that FDI inflows decreased Azerbaijan's unemployment rate during the examined period.</p>2024-09-17T00:00:00+07:00Copyright (c) 2024 Asian Journal of Applied Economicshttps://so01.tci-thaijo.org/index.php/AEJ/article/view/274054Trade Openness, Economic Growth, and Greenhouse Gas Emissions: An Empirical Examination of Carbon Dioxide and Methane Emissions2024-08-16T16:20:30+07:00Rapeepat Manasoontornrapeepat.man@rmutr.ac.thAekkapat Laksanacomaekkapat.l@ku.th<p>This research investigates the complex relationships between economic factors and environmental outcomes, focusing on carbon dioxide (CO2) and methane (CH4) emissions across 24 countries from 1998 to 2019. Utilizing data from the World Development Indicators and the Penn World Table, the study employs a regression model incorporating scale, technique, and composition effects to analyze the determinants of emissions. The findings reveal nuanced dynamics: while income per capita positively correlates with emissions, an inverted U-shaped relationship between income and CO2 emissions supports the Environmental Kuznets Curve hypothesis. Furthermore, disparities in factor abundance and technological innovation demonstrate varying impacts on emissions. Importantly, the study highlights the need for policy interventions that foster economic development while promoting environmental sustainability, reducing emissions from international trade, and encouraging the widespread adoption of low-carbon technologies.</p>2024-10-03T00:00:00+07:00Copyright (c) 2024 Asian Journal of Applied Economicshttps://so01.tci-thaijo.org/index.php/AEJ/article/view/273575The Impact of Bank Credit on Economic Growth in Lao PDR2024-05-15T21:28:58+07:00Philavanh Homsombathnong.philavanh@gmail.comKeuangkham Sisengnamclevan5@iuj.ac.jpVannasinh Souvannasoukvannasinhnoummin@gmail.comSengsulixay Sykhanthongsengsulixayskt@cu.edu.la<p>This study examines the impact of bank credit on economic growth in Lao PDR from 1992 to 2022 using data from the World Development Indicators and the Bank of Laos. Employing the Cointegration and Error Correction Model (ECM) with the autoregressive distributed lag (ARDL) bounds testing approach, the results reveal that labor and bank credit to the private sector positively influence economic growth in both the short and long term, while credit to state enterprises has a negative impact. The findings suggest that the government should incentivize commercial banks to increase private sector lending and impose stricter regulations on state enterprise credit to mitigate non-performing loans (NPLs).</p>2024-10-14T00:00:00+07:00Copyright (c) 2024 Asian Journal of Applied Economics