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.


July 2020

Is Poor Infrastructure Affecting Trade Liberalization?

By Anne Ong Lopez and Jang Ping Thia*

It is difficult to establish the impact infrastructure has on trade balances due to confounding factors. Our empirical approach overcomes this by leveraging on episodes of trade liberalization, interacting these with infrastructure. Providing a simple extension to the gravity model, we find that infrastructure quality differences between trade partners result in trade imbalances, which liberalization then accentuates. For robustness checks, we interact the liberalization indicator against other confounding variables and do not find such consistent effects. We conclude that lack of quality infrastructure in developing economies contributes to larger trade deficits, and infrastructure development should be supported alongside trade liberalization.


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 formation—to 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.



Jang Ping Thia

Manager, Economics Unit


AIIB Working Papers describe research work in progress by the individual staff member(s), consultants, or collaboration with external parties, that are published to share knowledge, seek feedback and encourage debate. The working papers will focus on infrastructure development and finance. The papers are work in progress for quick dissemination, the content may or may not be fully peer-reviewed, and may be later modified for final presentation. The views expressed in these working papers are the authors’ own and do not necessarily reflect the views of AIIB, its Management, its Board of Directors, or its members. AIIB does not necessarily own each component of the content contained in or linked from these papers and will not be held accountable for any such third-party content. AIIB does not guarantee the accuracy of the data contained in or linked from these papers and accepts no responsibility for any consequences of their use. The mention of companies or any trademarked entity or object in this work does not imply that they are being endorsed or recommended by AIIB in preference to others that are not mentioned. Any designation of or reference to a specific territory or geographic area, or the use of the term “country” in this work does not constitute and shall not be construed as constituting an express or implied position, endorsement, acceptance or expression of opinion by AIIB as to the legal or other status of any territory or area.

Home News and Insights Media Center Working Papers