The tables at left show the pool’s geographic concentration by state/province concentrations greater than 5.0% and regional concentrations. Differences in geographic regions affect the probability of default by capturing variations in economic performances. In addition, high concentrations by geographic region can lead to increased volatility due to correlations.

China’s regions have been experiencing impressive growth over the past decades, but their potentials could be better exploited by creating a single product and labour market. Local protectionism increases transaction costs and hinders competition, thereby taking a toll on productivity. Administrative monopolies have long thrived and are hard to dismantle. Restrictions on the hukou and the fragmented pension system limit labour mobility. Local regulations aim at, among other things, securing the collection of local taxes, without which cities could not afford to offer the same public services to migrants as to urbanites. Hence, dismantling local regulations and creating a single product and labour market needs to go hand-in-hand with the reform of inter-governmental finances

Indonesia’s retail sector continues to be dominated by local operators, although the number of foreign players entering the market has increased in recent years. The segments of convenience stores (selling space of less than 400m²) and hypermarkets (selling space of over 2,500m²) are dominated by a few market players, while competition in the segments of supermarkets and online retailing is more intense. As the country limits the number of franchise outlets (traditional markets, shopping malls, modern stores and outlets) established by one company to a maximum of 250, the market growth of key players will eventually decline and newcomers will emerge. Traditional offline retailers are trying to tap into the promising e-commerce segment by establishing online retail units.