Asian Journal of Applied Economics

Business Sentiment of Japanese Companies and Wages in Thailand

Hiroaki Sakurai — 2025-03-20

This study examines the relationship between Japanese companies' business sentiment toward Thailand and key economic factors, including wages, the industrial share of GDP, and international tourism. Using time series analyses—including the Vector Autoregression (VAR) model, Granger causality tests, and impulse response functions—this study analyzes data from 2003 to 2022 to identify the primary drivers of Japanese investment sentiment. The results indicate that business sentiment is significantly influenced by international tourism, reflecting Thailand’s market size and economic attractiveness. Contrary to survey responses, wage increases do not have a significant impact on Japanese companies’ business sentiment or their investment decisions. Additionally, business sentiment does not exert a direct influence on wages. These findings suggest that, in contrast to past assumptions that labor costs are a primary determinant of investment, Japanese companies now prioritize market size and economic stability when evaluating Thailand as an investment destination. This study contributes to the literature by reassessing investment drivers in an emerging market and providing insights for policymakers seeking to maintain Thailand’s competitiveness as a regional business hub.

Does Wealth Decrease Victimization in Property Crime?: Evidence from Thailand

Yuzhe Teng — 2025-03-20

The relationship between wealth and property crime victimization remains debated in criminological research. This study examines this relationship using data from Thailand’s Multiple Indicator Cluster Surveys (MICS) conducted in 2019 and 2022. While the MICS wealth index serves as the primary measure, potential endogeneity issues arise from unobserved factors, such as security investments in wealthier areas. To address this, the study employs an instrumental variable Probit (IV-Probit) model. The results reveal a negative association between wealth and property crime victimization in Thailand, contradicting conventional economic theory, which assumes wealthier individuals are more attractive crime targets. This unexpected finding suggests that enhanced security measures among affluent households may effectively deter criminal activity. The study contributes to the literature by overcoming methodological limitations of past research and providing evidence-based insights for targeted crime prevention policies. Policymakers may consider strengthening security infrastructure in lower-income areas to mitigate disparities in victimization risk.

Socioeconomic Determinants of Cybercrime Costs: A Panel Data Analysis of OECD Countries

Nitiphong Songsrirote — 2025-03-20

Cybercrime imposes significant financial burdens on economies, yet its relationship with socioeconomic factors remains underexplored. This study examines how key socioeconomic determinants influence cybercrime costs across 33 OECD countries from 2012 to 2023. Using a Random Effects model with Generalized Least Squares (GLS) estimation, the analysis identifies key drivers of cybercrime-related expenditures. The findings reveal two counterintuitive relationships: higher household debt and greater internet penetration are associated with lower cybercrime costs, suggesting that economic constraints and digital connectivity may reduce exposure to cyber threats. Additionally, a higher Corruption Perception Index (CPI)—which indicates lower corruption—is linked to increased cybercrime costs, possibly due to governance complacency or increased digital activity in well-regulated economies. These results challenge conventional assumptions about economic vulnerability and cybersecurity risks. The study underscores the need for targeted cybersecurity education, stronger institutional frameworks, and proactive investment in cyber resilience to mitigate financial losses. Policymakers should address economic constraints, promote digital literacy, and ensure cybersecurity measures evolve alongside governance improvements.

Multimarket Contact, Competition, and Performance: An Application to Turkish Deposit Banks

Berna Doğan Başar — 2025-03-20

The banking sector plays a pivotal role in financial markets, providing an ideal setting to examine multimarket contact (MMC)—a phenomenon where banks compete against the same rivals across multiple markets. This study investigates how MMC dynamics influence bank risk and performance, particularly in the context of technological advancements and the post-COVID-19 banking landscape. Using panel data from 17 deposit banks operating continuously in the Turkish banking system between 2012 and 2021, the study employs the Generalized Method of Moments (GMM) to analyze the effects of MMC. The findings indicate that MMC intensifies competition in the Turkish banking sector, leading to improved asset quality but negative impacts on profitability, overall performance, and bankruptcy risk. These results suggest that while broader market exposure enhances risk management and credit quality, heightened competition erodes profitability and financial stability. Given the increasing digitalization of banking services and the shift towards branchless banking, regulators and financial institutions should reconsider market expansion strategies, balancing competition with financial sustainability. This study contributes to the literature by offering empirical insights from an emerging market and highlighting the interplay between MMC, financial stability, and technological evolution in banking. The findings hold practical implications for policymakers, regulators, and financial institutions seeking to optimize competitive strategies while ensuring banking sector resilience.

Effects of Fiscal Policy in a Closed Economy: A Dynamic AD-AS Framework Analysis

Adirek Vajrapatkul — 2025-03-20

This study examines the effects of fiscal policies on economic indicators through an aggregate demand–aggregate supply (AD-AS) model in a closed economy. Using numerical methods, we analyze the immediate impacts of policy changes and establish conditions for economic model stability. The research focuses on three primary fiscal policy instruments: government spending, consumption tax, and investment tax. We evaluate their influence on national income through numerical simulations to provide quantitative support for policy recommendations. Our findings reveal a positive correlation between government spending and national income, highlighting public expenditure's potential role in stimulating economic growth. Conversely, the results demonstrate negative effects from increased taxation, as higher consumption and investment taxes contribute to declining national income. This inverse relationship suggests that elevated tax rates may impede economic vitality. Based on our numerical analysis, we propose strategic fiscal interventions to promote economic growth: increasing government spending can effectively enhance economic output by injecting resources and boosting aggregate demand, while reducing tax rates can decrease the burden on consumers and investors, thereby encouraging economic activity. The results also emphasize that fiscal expansion is most effective when inflationary pressures remain moderate, ensuring that growth does not come at the expense of macroeconomic stability. This study contributes to fiscal policy modeling by integrating stability analysis into AD-AS simulations and offers insights for policymakers balancing growth and inflation risks.

The COVID-19 Pandemic, Fiscal Policies, and the Korean Economy: A CGE Model Analysis

Geoffrey Musyoki Kitetu — 2025-03-20

The COVID-19 pandemic led to severe economic disruptions worldwide, necessitating targeted fiscal interventions. This study assesses the impact of the pandemic and fiscal policies on the Korean economy using a multi-region, multi-sector computable general equilibrium (CGE) model and the Global Trade Analysis Project (GTAP) database (version 11A). The model, based on 2017 data projected to 2020, evaluates two policy scenarios: (1) the macroeconomic consequences of the pandemic and (2) the effectiveness of fiscal stimulus measures. The findings indicate that the pandemic resulted in a 1.47% contraction of Korea's GDP in 2020, deviating from its pre-pandemic annual growth of approximately 2%. Welfare losses reached US$57.38 billion, primarily driven by reduced consumer spending and rising unemployment. Supply chain disruptions and increased trade costs significantly impacted import and export volumes, contributing to a narrowed trade deficit of US$197.04 billion. Despite government stimulus measures, economic recovery remained constrained, with fiscal interventions leading to a net positive impact of US$104.68 billion relative to a no-policy scenario. These findings underscore the need for strategic fiscal policies to mitigate economic shocks, including targeted support for affected sectors, initiatives to stimulate private consumption, and measures to enhance Korea’s international trade competitiveness. The study provides insights into the role of fiscal policy in crisis management and contributes to the broader discourse on economic resilience in the post-pandemic era.

Economic Implications of Digital Transformation on Pollution Reduction: A BART Analysis of Firm-Level Data

Xiaohui Xu — 2025-03-20

Prior research has primarily examined the average economic effects of digital transformation, with limited attention to its heterogeneous treatment effects. This study applies the Bayesian Additive Regression Tree (BART) approach to analyze how digital transformation influences firms’ pollution emissions and its broader economic implications. Using a dataset of 32,340 firm-year observations from Chinese A-share listed companies (2007–2022), we find that the impact of digital transformation on pollution emissions varies significantly across firms. The key economic mechanisms driving this effect include increased green innovation, more efficient factor allocation, and enhanced firm positioning within social networks. These findings offer new insights into the role of digital transformation in corporate environmental strategies, firm productivity, and economic sustainability, highlighting its differential effects across firms.

The Role of Microcredit in Poverty Reduction: Empirical Evidence from Thailand’s People Bank Loan Program

Jintana Muanglen — 2025-03-20

The purpose of this study is to: (1) examine the role of microcredit in reducing poverty among all households and its impact on net profit among households engaged in non-agricultural entrepreneurship, and (2) survey experiences and challenges associated with participation in Thailand’s People Bank project. Using nationally representative socio-economic household survey data from 2019 and 2021, covering approximately 50,000 households, the study finds that in 2019, households with at least one member participating in the People Bank project were less likely to be classified as poor. However, this estimated effect is not statistically significant when using the 2021 data. Additionally, households with at least one member borrowing from the People Bank project report significantly higher net profits compared to non-participating households. A survey of 400 residents in Chiang Rai reveals that about two-thirds of program participants report the highest level of satisfaction with the initiative. However, approximately 75 percent of non-participants had never heard of the program. Among respondents, the availability of products and services offered by the program was identified as the most important factor influencing participation.

Editorial Note

Waleerat Suphannachart — 2025-03-20

This issue, Vol. 32 No. 1 (Jan–June 2025), celebrates the Asian Journal of Applied Economics (AJAE)’s Tier 1 classification under the Thai Citation Index (TCI), effective January 1, 2025 – December 31, 2029, based on our 2021–2024 performance. We have diligently worked to meet TCI’s standards by standardizing referencing styles, fully transitioning to an online journal management system, increasing the number of articles per issue, and rebranding the journal title and website. While we take pride in these achievements, there is still room for improvement, particularly in increasing our citations within Thai journals under the TCI database to further strengthen our impact and visibility.

This issue presents eight diverse studies covering a range of applied economic topics. Articles explore investment sentiment and wage dynamics in Thailand’s Japanese business sector, the relationship between wealth and crime victimization, and the socioeconomic determinants of cybercrime costs across OECD countries. Additionally, this issue features research on multimarket competition in Turkish banking, the economic implications of fiscal policies in both closed and pandemic-affected economies, and the role of digital transformation in pollution reduction. Lastly, a study examines the impact of microcredit programs on poverty reduction in Thailand, offering insights into financial inclusion and household economic well-being.

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