Assessing Fiscal Risks in Bangladesh Leandro Medina∗ This paper identifies, quantifies, and assesses fiscal risks in Bangladesh. By performing sensitivity analysis and using stochastic simulations, it measures risks arising from shocks to gross domestic product growth, the exchange rate, commodity prices, and interest rates. It also analyzes specific fiscal and institutional risks, including those related to the pension system, issuance of guarantees, state-owned commercial banks,

Empowering Cities: Good for Growth? Evidence from the People’s Republic of China Megha Mukim and T. Juni Zhu∗ This paper utilizes a countrywide process of county-to-city upgrading in the 1990s to identify whether extending the powers of urban local governments leads to better firm outcomes. The paper hypothesizes that since local leaders in newly promoted cities have an incentive to utilize their new administrative remit

Gender Discrimination in Education Expenditure in Nepal: Evidence from Living Standards Surveys Shaleen Khanal∗ There is a significant amount of literature on the role of parental gender preferences in determining the level of education expenditure for children. In this study, I examine the effects of such preferences on parents’ education expenditure in Nepal. Using longitudinal data from three Nepal Living Standards Surveys, I apply several

Do Financing Constraints Impact Outward Foreign Direct Investment? Evidence from India Subash Sasidharan and M. Padmaja∗ This study examines the role of financing constraints in explaining outward foreign direct investment (FDI) using unique firm-level panel data on Indian manufacturing during the period 2007–2014. We consider the role of both internal and external finance, and employ instrumental variable probit and Tobit models to examine financing constraints

Does Environmental Governance Matter for Foreign Direct Investment? Testing the Pollution Haven Hypothesis for Indian States Vinish Kathuria∗ This paper attempts to examine the role of environmental governance on foreign direct investment by testing the pollution haven hypothesis for 21 Indian states for the period 2002–2010. To test for the hypothesis, this study computes an abatement expenditure index adjusted for industrial composition at the state

Does Plant Size Matter? Differential Effects of Foreign Direct Investment on Wages and Employment in Indian Manufacturing Shruti Sharma∗ This paper examines the differential effects, based on the size of the plant, of industry-level foreign direct investment (FDI) on plant-level employment and the wages of skilled and unskilled workers in India’s manufacturing sector. On average, there are strong positive differential effects of increased inward-level FDI

The Impact of Foreign Ownership on Research and Development Intensity and Technology Acquisition in Indian Industries: Pre and Post Global Financial Crisis Aradhna Aggarwal∗ This study examines how interfirm heterogeneities in modes of technology acquisition and technology intensities are linked to firm ownership in India using a panel data set of about 2,000 firms listed on the Bombay Stock Exchange for the period 2003–2014 drawn

Will Climate Change Cause Enormous Social Costs for Poor Asian Cities? Matthew E. Kahn∗ Climate change could significantly reduce the quality of life for poor people in Asia. Extreme heat and drought, and the increased incidence of natural disasters will pose new challenges for the urban poor and rural farmers. If farming profits decline, urbanization rates will accelerate and the social costs of rapid urbanization

Productivity Gains from Agglomeration and Migration in the People’s Republic of China between 2002 and 2013 Pierre-Philippe Combes, Sylvie Démurger, and Shi Li∗ We evaluate the evolution of productivity gains in cities in the People’s Republic of China between 2002 and 2013. In 2002, rural migrants exerted a strong positive externality on the earnings of urban residents, which were also higher on average in cities

Determinants of Urban Land Supply in the People’s Republic of China: How Do Political Factors Matter? Wen-Tai Hsu, Xiaolu Li, Yang Tang, and Jing Wu∗ This paper explores whether and how corruption and competition-for-promotion motives affect urban land supply in the People’s Republic of China. Conditional on demand-side factors, we find that corruption is highly correlated with an increase in land supply. The corruption effects

Real Estate Bubbles and Urban Development Edward L. Glaeser∗ Real estate booms have regularly occurred throughout the world, leaving painful busts and financial crises in their wake. Real estate is a natural investment for more passive debt investors, including banks, because real estate’s flexibility makes it a better source of collateral than production facilities built for a specific purpose. Consequently, passive capital may flow disproportionately

Evolution of the Size and Industrial Structure of Cities in Japan between 1980 and 2010: Constant Churning and Persistent Regularity Tomoya Mori∗ This paper investigates the evolution of the Japanese economy between 1980 and 2010 with regard to the population and industrial structure of cities. With the rural-to-urban transformation settling by the 1970s, Japan experienced the second stage of urbanization through the integration of nearby

Natural City Growth in the People’s Republic of China Peter H. Egger, Gabriel Loumeau, and Nicole Püschel∗ This paper analyzes the growth of Metropolitan Statistical Areas in the PRC between 1992 and 2013 by focusing on the night-light radiance—a measure of economic activity—of connected subcity places that we refer to as a natural city. This paper documents the rapid growth of natural cities in the

Transport Infrastructure and the Decentralization of Cities in the People’s Republic of China Nathaniel Baum-Snow and Matthew A. Turner∗ It is widely believed that transport infrastructure has important impacts on the development of cities. Until recently, however, there has been little systematic evidence with which to evaluate claims about the effects of transport infrastructure on the development of cities and regions. In this paper, we

Asia’s Geographic Development Klaus Desmet, Dávid Krisztián Nagy, and Esteban Rossi-Hansberg∗ This paper studies the impact of spatial frictions on Asia’s long-term spatial development. Using the framework provided in Desmet, Nagy, and Rossi-Hansberg (2016), we analyze the evolution of Asia’s economy and the relative performance of specific regions and countries. We then perform a number of counterfactual experiments and find that a worldwide drop in

Household Energy Consumption and Its Determinants in Timor-Leste ∗ DIL BAHADUR RAHUT, KHONDOKER ABDUL MOTTALEB, AND AKHTER ALI Using data from the 2007 Timor-Leste Living Standards Survey, this paper examines the determinants of household energy choices in Timor-Leste. The majority of households are dependent on dirty fuels such as fuelwood and kerosene for energy. Only a small fraction of households use clean energy such as

Determinants of Intra-ASEAN Migration ∗ MICHELE TUCCIO International labor mobility in Southeast Asia has risen drastically in recent decades and is expected to continue increasing with the establishment of the Association of Southeast Asian Nations (ASEAN) Economic Community in 2015. This paper looks at the determinants of the movement of workers and finds three structural factors that will likely drive further intra-ASEAN migration in the

Undervaluation, Financial Development, and Economic Growth ∗ JINGXIAN ZOU AND YAQI WANG This paper analyzes the effect of undervaluation on economic growth in the presence of borrowing constraints. Based on a two-sector, small open-economy model, we show that undervaluation can promote economic growth by partly correcting distortions in financial markets through the channels of increased within-sector productivity and the relative share of the tradable sector