Economies

23 pages, 479 KiB

Open AccessArticle

Tourism, Economic Growth, and Environmental Pollution in APEC Economies, 1995–2020: An Econometric Analysis of the Kuznets Hypothesis

by César Lenin Navarro-Chávez, Francisco Javier Ayvar-Campos and Celeste Camacho-Cortez

Economies 2023, 11(10), 264; https://doi.org/10.3390/economies11100264 - 23 Oct 2023

Cited by 2 | Viewed by 1487

Abstract

Tourism plays an important role in fostering economic growth within the Asia-Pacific Economic Cooperation (APEC) forum member countries. Nevertheless, the development of this sector has resulted in significant depletion of natural resources and pollution. This research aims to determine the relationship between tourism, [...] Read more.

Tourism plays an important role in fostering economic growth within the Asia-Pacific Economic Cooperation (APEC) forum member countries. Nevertheless, the development of this sector has resulted in significant depletion of natural resources and pollution. This research aims to determine the relationship between tourism, economic growth, and environmental pollution in both developing and developed APEC economies from 1995 to 2020. By adopting the Environmental Kuznets Curve (EKC) framework, two dynamic panel data models are estimated employing Dynamic Ordinary Least Squares (DOLS), and causal relationships are established using the Dumitrescu–Hurlin test. The results indicate that tourism and economic growth have had a positive influence on the rise of environmental pollution in both groups of economies during the specified period. This research offers new insights by analyzing twelve developing and nine developed APEC economies over a span of 25 years, estimating two DOLS models, conducting Dumitrescu–Hurlin causality tests, and presenting evidence of EKC for both types of economies. Consequently, the implementation of policies that foster the preservation of natural areas, the utilization of renewable energies, and the promotion of sustainable tourism practices is recommended. Full article

(This article belongs to the Special Issue Economic Impacts of Climate Change)

21 pages, 387 KiB

Open AccessFeature PaperArticle

The Impact of Tourism on Energy Consumption: A Sectoral Analysis for the Most Visited Countries in the World

by María P. Pablo-Romero, Antonio Sánchez-Braza and Miguel A. García-Soto

Economies 2023, 11(10), 263; https://doi.org/10.3390/economies11100263 - 23 Oct 2023

Cited by 2 | Viewed by 2183

Abstract

Tourist activity has strategic importance in the global economy. Nevertheless, the tourism activities are linked to increased emissions, due to the sector’s energy intensity, especially in the transport and commercial sectors. The aim of this study is to analyze the relationship between final [...] Read more.

Tourist activity has strategic importance in the global economy. Nevertheless, the tourism activities are linked to increased emissions, due to the sector’s energy intensity, especially in the transport and commercial sectors. The aim of this study is to analyze the relationship between final energy consumption in the whole economy, the transport, commercial and public services sectors, and the tourist activity in the 15 countries with the highest number of international tourist arrivals in the world, in 2000–2019 period. The Energy–Environment Kuznets Curve (EKC) hypothesis extended with tourism has been tested. Obtained results show non-linear relationships between energy consumption and production levels. There is evidence in favor of the energy EKC hypothesis, and in favor of an inverted N-shaped relationship for transport and commercial and public services sectors. The results also show a positive, increasing relationship between energy consumption and tourist arrivals for the whole economy. However, there is some evidence of the tourism energy EKC hypothesis when considering the transport, commercial and public services sectors. Therefore, economies of scale are observed in these sectors. Accordingly, it is highly advisable to increase the economies of scale, coupled with a greater awareness on the use of renewable energy. Negative relationships are found between energy consumption and tourism receipts. Therefore, it is advisable to establish policies that encourage high quality tourism to control the economy’s energy consumption. Full article

12 pages, 1871 KiB

Open AccessArticle

Productivity and Global Value Chains: A Tale from the Indonesian Automobile Sector

by Padang Wicaksono, Yulial Hikmah and Rayinda Nur Ilmiawani

Economies 2023, 11(10), 262; https://doi.org/10.3390/economies11100262 - 23 Oct 2023

Viewed by 1725

Abstract

Low productivity and quality of employment have always been a big problem in Indonesia, caused by the lack and mismatch of skills in the workforce. Labor productivity (LP) describes the company’s ability to produce something. This can be determined by added value or [...] Read more.

Low productivity and quality of employment have always been a big problem in Indonesia, caused by the lack and mismatch of skills in the workforce. Labor productivity (LP) describes the company’s ability to produce something. This can be determined by added value or output. Several factors influence LP, such as education, age, and training. The concept of global value chains (GVCs) has become an integral part of economic activity, and trade within global production networks has grown more rapidly than conventional trade in final goods. GVCs have both positive and negative impacts on employment opportunities. The automotive industry is categorised as one of the ten primary priority industries in the Indonesian manufacturing sector. This research analyses the impact of LP on GVC integration in the Indonesian automotive industry. The data used in this research comes from the World Input–Output Database (WIOD) and the Central Statistics Agency (BPS) from 1995 to 2014. The variables used include the number of workers, added value, real wages, and GVC, which were calculated by the author using the Inter-Country Input–Output (ICIO) approach. Using ICIO analysis, the following matrix should be constructed to determine involvement in GVCs. This research shows that LP in the Indonesian automotive industry has a positive trend, and the GVC position in the Indonesian automotive industry has a positive trend line. The domestic value chain increased from 4% to 33%. This improves the ability to produce higher value-added and intermediate export goods. LP increases the domestic value chain in the Indonesian automotive industry, leading to global value chain integration. Thus, LP goes hand in hand with integrating GVCs. Full article

(This article belongs to the Special Issue Global Value Chains—Development Challenges in Uncertain Circumstances)

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20 pages, 1727 KiB

Open AccessArticle

Evaluating the Efficiency of Human Capital at Small and Medium Enterprises in the Manufacturing Sector Using the DEA-Weight Russell Directional Distance Model

by Aldebarán Rosales-Córdova and Rafael Bernardo Carmona-Benítez

Economies 2023, 11(10), 261; https://doi.org/10.3390/economies11100261 - 21 Oct 2023

Viewed by 1677

Abstract

The present research aims to analyze the efficiency of human capital in relation to sales in each of the subsectors of economic activity within Mexican small- and medium-sized enterprises in the manufacturing industry. To accomplish this, a panel data set covering the years [...] Read more.

The present research aims to analyze the efficiency of human capital in relation to sales in each of the subsectors of economic activity within Mexican small- and medium-sized enterprises in the manufacturing industry. To accomplish this, a panel data set covering the years 2009–2020 is utilized. The inputs used are investment in training, salary, and days worked, with sales as the output. Initially, due to the high variability (cv > 1) of both the inputs and the output, the information is divided into three groups by quartiles: Group 1 < 25%, Group 2 = 25–75%, and Group 3 > 75%. As a first step in the analysis, a hypothesis test identifies a significant increase in sales for those subsectors that reported investing in training compared with those that did not. As a result, for the efficiency analysis, SMEs that report not investing in training are removed from the sample. Subsequently, to confirm the statistical explanation of the inputs for the output, a regression analysis is performed. With an input-oriented DEA model, it is found that most subsectors exhibit high overall and pure efficiency (≥0.75) as well as increasing returns to scale. Interestingly, the research introduces a novel approach by proposing subgroups within SMEs, providing a more precise analysis. The findings of this study emphasize the fundamental role of human capital as a key driver of economic growth and innovation within the manufacturing sector. This research also highlights variations in efficiency among different subsectors, underscoring the need for tailored strategies for each. These results offer practical guidance for companies seeking to optimize their operations and contribute to the economic development of a developing country. In conclusion, this paper contributes both theoretically and practically to understanding the interaction between human capital and financial indicators. The results underscore the importance of investing in workforce development, ultimately promoting economic growth, improving productivity, and advancing social progress. Full article

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17 pages, 2442 KiB

Open AccessArticle

Productivity Change in the CEE Commercial Banks during a Period of Restricted Bank Regulation and Stable Economic Growth

by Igor Stubelj, Aleš Trunk, Barbara Švagan and Suzana Laporšek

Economies 2023, 11(10), 260; https://doi.org/10.3390/economies11100260 - 20 Oct 2023

Viewed by 1231

Abstract

The paper studies the productivity change of the commercial banks in the CEE countries over the post-crisis period 2013–2018. The productivity change is measured by the Malmquist Productivity Index and its sub-components, applying two approaches—the asset-oriented and profit-oriented intermediation approaches. The analysis uses [...] Read more.

The paper studies the productivity change of the commercial banks in the CEE countries over the post-crisis period 2013–2018. The productivity change is measured by the Malmquist Productivity Index and its sub-components, applying two approaches—the asset-oriented and profit-oriented intermediation approaches. The analysis uses data from a balanced panel of 181 commercial banks in 11 CEE countries. We find that commercial banks’ productivity, measured with the asset-oriented intermediation approach, decreased in most of the CEE countries over 2013–2018, with a decline ranging, on average, from 1% to 6.9%, driven mainly by a decline in technical efficiency. Nevertheless, estimates using the profit-intermediation approach point to productivity growth in commercial banks in all CEE countries, ranging, on average, from 0.5% to 6.3%. The empirical findings imply the need for the CEE commercial banks to further digital transformation and cost rationalization. Full article

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27 pages, 4938 KiB

Open AccessArticle

Why Has Trade Barely Moved Sub-Saharan Africa to Its Economic Potential?

by Brian Tavonga Mazorodze

Economies 2023, 11(10), 259; https://doi.org/10.3390/economies11100259 - 20 Oct 2023

Viewed by 1631

Abstract

The rise in global trade volumes since the early 90s has been welcomed by many under the notion that trade helps countries edge closer to their economic potential. A concerning observation, however, is that while Asia, Latin America, and Europe seem to have [...] Read more.

The rise in global trade volumes since the early 90s has been welcomed by many under the notion that trade helps countries edge closer to their economic potential. A concerning observation, however, is that while Asia, Latin America, and Europe seem to have witnessed a discernible rise in per capita income during this period and moved closer to their economic potential, sub-Saharan Africa (SSA) does not seem to have recorded as much success. Defining economic potential as maximum possible income from given resources and existing technology, the results presented here for a panel of 22 sub-Saharan countries observed between 1995 and 2021 confirm that the region’s ability to edge closer to its full potential was heavily undermined by its small and shrinking manufacturing sector, a result that is replicated by counterfactual methods. In policy senses against this background, SSA may need to reconsider its widespread deindustrialization model and rejuvenate manufacturing. This policy implication feeds into the broader discussion of premature deindustrialization in SSA and its economic consequences. Evidence suggests that reversing this trend through expanding manufacturing potentially lifts about 50% of the sampled countries (including Rwanda, Togo, Guinea, Niger, Sierra-Leone, Gambia, Benin, Uganda, and Mozambique) from low-income status to middle-income status. Full article

(This article belongs to the Section Economic Development)

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11 pages, 277 KiB

Open AccessArticle

Land Reform and Its Effect on Farm Household Income Inequality: Evidence from Georgia

by Ayal Kimhi

Economies 2023, 11(10), 258; https://doi.org/10.3390/economies11100258 - 17 Oct 2023

Cited by 1 | Viewed by 1360

Abstract

This article examines the importance of landholdings in explaining income inequality among family farms in four districts in Georgia following the land reform of the 1990s. Income inequality is decomposed by sources of income and by determinants of income. The results indicate that [...] Read more.

This article examines the importance of landholdings in explaining income inequality among family farms in four districts in Georgia following the land reform of the 1990s. Income inequality is decomposed by sources of income and by determinants of income. The results indicate that farm income is a disequalizing source of income among family farms in these districts. In addition, a uniform increase in landholding is expected to reduce income inequality. Combining the two results, we conclude that the impact of land reform on farm household income inequality depends on the resulting distribution of landholdings. It can reduce inequality if land is distributed relatively equally, but inequality can increase if the wealthier farmers are able to gain control of more (and perhaps better) land resources. A possible implication of this result is that for land reform to be equalizing, distributing land to smallholders should be accompanied by additional policies and regulations supporting small farmers, such as land titling and registration, support for cooperation, and access to credit and other market services. Full article

(This article belongs to the Collection Agricultural and Natural Resource Economics)

15 pages, 365 KiB

Open AccessFeature PaperArticle

Central Bank Credibility’s Effect on Stock Exchange Returns’ Volatility: Evidence from OECD Countries

by Ioannis Dokas, Georgios Oikonomou, Stephanos Papadamou and Eleftherios Spyromitros

Economies 2023, 11(10), 257; https://doi.org/10.3390/economies11100257 - 15 Oct 2023

Viewed by 1489

Abstract

Central bank characteristics are important determinants of stock market returns and their volatility. While the literature has examined the effects of transparency and independence, no research has been conducted so far on the effect of central bank credibility on stock market returns’ volatility. [...] Read more.

Central bank characteristics are important determinants of stock market returns and their volatility. While the literature has examined the effects of transparency and independence, no research has been conducted so far on the effect of central bank credibility on stock market returns’ volatility. A panel regression using financial and macroeconomic data from 45 OECD member countries over the period of 1998–2022 tested the hypothesis that central bank credibility determines stock exchange returns’ volatility. The results indicated that credibility reduces stock returns’ volatility, remaining robust and statistically significant across models. Economic growth also decreases stock market volatility, while money-market interest rates’ volatility, the stock market’s turnover ratio, and economic/financial crises act as amplifying factors of stock market volatility. All variables, except for economic growth, exhibit unidirectional causality, leading to changes in stock market volatility. Full article

(This article belongs to the Section Macroeconomics, Monetary Economics, and Financial Markets)

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20 pages, 1482 KiB

Open AccessArticle

Impact of Output Gap, COVID-19, and Governance Quality on Fiscal Space in Sub-Saharan Africa

by Blessing Katuka and Calvin Mudzingiri

Economies 2023, 11(10), 256; https://doi.org/10.3390/economies11100256 - 13 Oct 2023

Cited by 2 | Viewed by 1572

Abstract

This study examined the determinants of fiscal space within the Sub-Saharan Africa (SSA) region, utilising a panel of 33 countries from 2005 to 2021. The paper applied the panel threshold, difference, and system generalised method of moments (GMM) regression techniques. The empirical results [...] Read more.

This study examined the determinants of fiscal space within the Sub-Saharan Africa (SSA) region, utilising a panel of 33 countries from 2005 to 2021. The paper applied the panel threshold, difference, and system generalised method of moments (GMM) regression techniques. The empirical results found evidence of constrained fiscal space and poor governance in Central, Western, and Eastern Africa. The results further unveiled that an enhancement in governance indicators beyond −0.23 for the governance index, −0.15 for control of corruption, −0.98 for the rule of law, −0.37 for regulatory quality, −0.15 for voice and accountability, +0.36 for political stability, and −0.61 for government effectiveness, respectively, increase fiscal space. Moreover, the study concluded that the output gap, COVID-19, trade openness, and economic growth impact fiscal space availability in Central, Western, Southern, and Eastern Africa. The paper investigated whether the COVID-19 pandemic and governance quality significantly influenced fiscal space within SSA. We strongly recommend enhancement in all facets of governance through comprehensive restructuring of governance policies across all SSA countries. Another key recommendation is fostering trade openness to expand tax revenue generation and broaden the tax base, thereby providing the continent with greater fiscal space and improved resilience to unforeseen shocks. Full article

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16 pages, 619 KiB

Open AccessArticle

The Economic Efficiency of Coffee Growers in the Department of Caldas, Colombia

by Hugo Mauricio Salazar Echeverry, Hernando Duque Orrego and Juan Carlos Granobles-Torres

Economies 2023, 11(10), 255; https://doi.org/10.3390/economies11100255 - 12 Oct 2023

Viewed by 1640

Abstract

This work evaluates the economic efficiency of coffee growers and the decision-making processes in the configuration of their production systems and agronomic practices over time. For these purposes, information from 136 coffee growers in the department of Caldas was analyzed. These growers systematically [...] Read more.

This work evaluates the economic efficiency of coffee growers and the decision-making processes in the configuration of their production systems and agronomic practices over time. For these purposes, information from 136 coffee growers in the department of Caldas was analyzed. These growers systematically recorded and constructed their production costs for seven years (2015–2021) within the framework of the Business Management Program of the Departmental Committee of Coffee Growers of Caldas. Additionally, through a survey, more information on the socioeconomic types, production systems, and decision-making processes in the implementation of practices and use of technologies was obtained. Stochastic frontier analysis demonstrates that on average, these coffee farmers had an economic efficiency of 89%. The group of coffee growers with efficiency levels equal to or higher than 90% comprised 80 producers (59%). These results indicate that for the period of analysis, there are no structural inefficiencies that cannot be corrected; that is, these coffee growers can increase their efficiency and productivity levels with the available technologies. Full article

(This article belongs to the Special Issue Drivers for Competitiveness in Agri-Food Sector and Development of Rural Areas)

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19 pages, 445 KiB

Open AccessArticle

Productivity Gap between the “New” and “Old” Europe and Role of Institutions

by Zoran Borovic and Dragana Radicic

Economies 2023, 11(10), 254; https://doi.org/10.3390/economies11100254 - 12 Oct 2023

Cited by 3 | Viewed by 1465

Abstract

The present study examines how policy makers should consider the quality of institutional framework to reduce the productivity gap and increase a country’s ability to absorb superior technologies developed elsewhere. This paper analyzes the impact of components of economic freedom, such as the [...] Read more.

The present study examines how policy makers should consider the quality of institutional framework to reduce the productivity gap and increase a country’s ability to absorb superior technologies developed elsewhere. This paper analyzes the impact of components of economic freedom, such as the size of government, regulation, and freedom to trade internationally, and world government indicators, such as political stability and absence of violence/terrorism, regulatory quality, and control of corruption on the productivity gap between the “Old” and “New” Europe countries. This is among the first studies to investigate, in a sample of former socialistic countries, the impact of institutions on a country’s ability to adopt superior technology developed elsewhere. A static panel analysis was applied on cross-sectional data from the eleven EU countries. The results strongly support the productivity convergence between the “Old” and “New” Europe countries, with a positive impact of the institutions on the productivity growth. However, the impact of the institutions fades the further the country is from the frontier. Full article

24 pages, 2445 KiB

Open AccessArticle

Comparing Classical and Bayesian Panel Kink Regression Frameworks in Estimating the Impact of Economic Freedom on Economic Growth

by Emmanuel Mensaklo, Chukiat Chaiboonsri, Kanchana Chokethaworn and Songsak Sriboonchitta

Economies 2023, 11(10), 253; https://doi.org/10.3390/economies11100253 - 10 Oct 2023

Viewed by 1489

Abstract

This study aims to accomplish three main tasks. Firstly, it seeks to determine the more appropriate choice between classical and Bayesian methods in estimating a pooled panel kink regression model under the condition of a known but bounded policy variable choice that serves [...] Read more.

This study aims to accomplish three main tasks. Firstly, it seeks to determine the more appropriate choice between classical and Bayesian methods in estimating a pooled panel kink regression model under the condition of a known but bounded policy variable choice that serves as a kink point. Secondly, as a product of the first target, the study seeks to provide empirical evidence for the economic growth–economic freedom nexus in five top-performing economies in Sub-Saharan Africa. Using index explanatory variables, which are bounded between 0 and 100, and using both numerical and graphical methods, the findings show that the use of the Bayesian method is more appropriate in characterizing the data than the classical OLS framework, as the former better accounts for randomness via the use of posterior distributions. Finally, the study further employed both threshold and Bayesian pooled panel kink regressions, with mixed results. The Bai–Perron test confirmed that the economic freedom index has a single threshold value of 56.70. Whereas the threshold estimates show a negative impact of economic freedom on growth in both low and high regimes, the Bayesian estimates reveal that economic freedom has a negative impact on growth in a low regime but a positive impact in a high regime. Our novel findings show that there exists a nonlinear impact of economic freedom on growth. This provides some guidance and caution in charting policy paths that seek to achieve economic growth. Full article

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26 pages, 1428 KiB

Open AccessArticle

Trade Openness and Unemployment in Selected Southern African Development Community (SADC) Countries

by Dorcas Gonese, Kin Sibanda and Phillip Ngonisa

Economies 2023, 11(10), 252; https://doi.org/10.3390/economies11100252 - 09 Oct 2023

Cited by 1 | Viewed by 1939

Abstract

The relationship between trade openness and unemployment in Southern African Development Community (SADC) countries remains an area of significant interest and concern. While trade openness is often advocated for fostering economic growth and development, its potential effects on employment outcomes are complex and [...] Read more.

The relationship between trade openness and unemployment in Southern African Development Community (SADC) countries remains an area of significant interest and concern. While trade openness is often advocated for fostering economic growth and development, its potential effects on employment outcomes are complex and multifaceted. Understanding the nature and nuances of this relationship within the SADC region is crucial for policymakers and stakeholders seeking to design effective strategies that balance the benefits of trade openness with the goals of reducing unemployment and promoting inclusive growth. This study evaluates the effect of trade openness on unemployment in SADC from 1980 to 2019 using panel ARDL (pooled mean group—PMG) estimation techniques. The findings of the study show that trade openness and exports negatively impact unemployment, whereas imports positively affect unemployment in the long run. This suggests that while boosting exports and real trade, openness decreases unemployment, and imports increase job losses in the long run in the SADC region. This calls for more caution on trade openness regarding what to export and import when addressing regional unemployment reduction policies. Full article

(This article belongs to the Special Issue Labour Economics)

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9 pages, 313 KiB

Open AccessArticle

A Game Theoretic Approach to Collaboration in Policy Coordination

by Eleonora Herrera-Medina and Antoni Riera Font

Economies 2023, 11(10), 251; https://doi.org/10.3390/economies11100251 - 09 Oct 2023

Viewed by 1371

Abstract

Public policies are courses of action by a government in response to public problems in the real world with the aim of meeting the needs of society. Such policies must be coordinated to avoid inefficiencies. Most attempts to model public policy coordination are [...] Read more.

Public policies are courses of action by a government in response to public problems in the real world with the aim of meeting the needs of society. Such policies must be coordinated to avoid inefficiencies. Most attempts to model public policy coordination are qualitative and, therefore, do not yield precise conclusions. More accurate modelling attempts are found in game theory, but they are not entirely appropriate as models of policy coordination, because policy coordination involves a high degree of collaboration. There is only one game-theoretic model of collaboration, and it does not model public policy coordination. The aim of this article is to show that a collaboration-based game theory model is not only feasible, but also more realistic than current game theory models of policy coordination. This was performed by adapting Newton’s seminal model to a society capable of formulating and coordinating policies. When this adapted game was compared to alternative games used to explain policy coordination, it was found that the adapted game made more realistic assumptions, the modelling process was simpler, and it can be applied to a broader range of contexts. By demonstrating that the adapted model offers a feasible theoretical foundation for the modelling of policy coordination, this paper provides a starting point for future modelling efforts in this area. Full article

16 pages, 448 KiB

Open AccessArticle

Inflation Differentials of Euro Countries and Their Determinants

by Liargovas Panagiotis and Arvanitis Argyrios

Economies 2023, 11(10), 250; https://doi.org/10.3390/economies11100250 - 09 Oct 2023

Viewed by 2175

Abstract

The purpose of this paper is to examine the inflation differentials and their determinants in the first twelve euro countries that formed the eurozone. We focus on only these countries to capture the effects through the last 22 years from 1999 to 2020, [...] Read more.

The purpose of this paper is to examine the inflation differentials and their determinants in the first twelve euro countries that formed the eurozone. We focus on only these countries to capture the effects through the last 22 years from 1999 to 2020, without taking into consideration the changes in dynamics that were caused due to the integration of more countries since 2007. The dynamic panel data results, estimated with the system Generalised Method of Moments estimation method, show that it is mostly structural and cyclical factors that drive inflation differentials among these euro countries and that there are no significant indications that other convergence processes have taken place during this time span to explain increase in certain countries’ inflation. We conclude by mentioning the potential role that inflation differentials could play in the European Central Bank’s decision-making process. Full article

(This article belongs to the Section Macroeconomics, Monetary Economics, and Financial Markets)

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15 pages, 294 KiB

Open AccessArticle

Government Checks and Balances, Policy Credibility, and Foreign Direct Investment: A Cross-National Investigation

by Michael Touchton

Economies 2023, 11(10), 249; https://doi.org/10.3390/economies11100249 - 08 Oct 2023

Viewed by 1165

Abstract

Placing constraints on elected officials is thought to bind their hands and render government policies credible. In turn, credible policies attract investment because investors can extend their policy and regulatory time horizons. Yet, a scholarship on LMICs suggests that too many constraints on [...] Read more.

Placing constraints on elected officials is thought to bind their hands and render government policies credible. In turn, credible policies attract investment because investors can extend their policy and regulatory time horizons. Yet, a scholarship on LMICs suggests that too many constraints on policymakers may preclude necessary reforms, which repels capital. I motivate the study with an example from Liberia. Then, I evaluate political constraints and FDI for 182 countries between 1996 and 2022 and demonstrate that the rule of law conditions relationships between constraints on governments and FDI; in places with high rule of law, constraining government attracts FDI. In contrast, high constraints push investment away in contexts where the rule of law is lower. The logic is that constraining government makes credible high-income governments’ previous commitments to property rights and contract enforcement. However, the very same constraints on government may prevent LMICs from making credible commitments in the first place. Constraining government thus prevents desirable reforms under many circumstances, which I illustrate by returning to the Liberia example in the discussion. Ultimately, this study raises questions about universal benefits emerging from policy credibility and extends our understanding of political institutions, credible commitment, and FDI. Full article

14 pages, 2186 KiB

Open AccessPerspective

Dynamics of Bilateral Digital Trade: The Case of a Korea–EU Digital Partnership

by Irina Korgun and Altin Hoti

Economies 2023, 11(10), 248; https://doi.org/10.3390/economies11100248 - 08 Oct 2023

Cited by 1 | Viewed by 1732

Abstract

The rapid growth of digital trade has had a profound impact on global economies, revolutionizing trading practices and facilitating trade expansion. The purpose of this paper is to explore the digital partnership between Korea and the European Union (EU) and its implications for [...] Read more.

The rapid growth of digital trade has had a profound impact on global economies, revolutionizing trading practices and facilitating trade expansion. The purpose of this paper is to explore the digital partnership between Korea and the European Union (EU) and its implications for their shared agenda in digital trade to theorize the dynamics of digital trade. A case study method is used to explore trade between Korea and the EU with in-depth descriptive analysis. Digital trade-flow statistics were analyzed to develop the case for Korea and EU digital trade and derive implications for both countries. The findings were generalized by discussing the relevant literature and data from other countries to identify the wider implications. The analysis was focused on the areas of information and communication technology and e-commerce. The findings suggest uncovered trade imbalances, such as Korea’s surplus of ICT goods exports and the EU’s dominant position in online trade. There is an influence of supply chain dynamics, specifically the presence of Korean manufacturers’ production units in countries like Vietnam, and the same dynamics have shaped Korea’s actual place in the supply of ICT goods to the European market. While the digital partnership was established to align regulatory frameworks and foster trust, transparency, and harmonization in the digital domain, it has failed to adequately reflect the importance of digital trade. Although both sides are motivated to collaborate on the harmonization of digital trade rules, there have been instances where the partners’ interests diverge. It is concluded that some political and economic factors may hinder the effectiveness of the digital partnership, unless concrete measures that go beyond traditional bilateral policymaking approaches are implemented. It is therefore recommended to emphasize the need to enhance the efficacy of the digital partnership by taking bolder actions to develop digital trade. Full article

(This article belongs to the Special Issue Economic Development in the Digital Economy Era)

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21 pages, 1097 KiB

Open AccessArticle

The Impact of Green Finance on the Sustainability Performance of the Banking Sector in Palestine: The Moderating Role of Female Presence

by Nariman Abuatwan

Economies 2023, 11(10), 247; https://doi.org/10.3390/economies11100247 - 08 Oct 2023

Cited by 2 | Viewed by 5077

Abstract

This paper investigates the influence of “green finance” on the sustainability performance of banking institutions with a specific focus on the context of Palestine. A structured questionnaire was administered to gather data from a representative sample of 104 credit managers employed within Palestinian [...] Read more.

This paper investigates the influence of “green finance” on the sustainability performance of banking institutions with a specific focus on the context of Palestine. A structured questionnaire was administered to gather data from a representative sample of 104 credit managers employed within Palestinian banking, utilizing descriptive statistics, structural equation modeling, and multiple regression analysis. This study examines the intricate interplay of the social, economic, and environmental facets of green financing and their impact on sustainability performance. Moreover, the study explores the potential moderating effect of female representation within financial institutions. The findings suggest that gender diversity and exclusivity significantly contribute to reinforcing the favorable association between green finance and sustainability performance. Integrating green finance into the strategic frameworks of financial institutions can yield environmental benefits and enhance both long-term and short-term sustainability performance, particularly in emerging economies such as Palestine. Ultimately, this study offers valuable insights into the evolution of green finance and its consequential effects on the sustainability performance of financial institutions in emerging countries. Full article

(This article belongs to the Special Issue Economics of Energy Market)

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16 pages, 802 KiB

Open AccessArticle

Assessing the Effect of Internet Indicators on Agri-Food Export Competitiveness

by Arif Imam Suroso, Idqan Fahmi, Hansen Tandra and Adi Haryono

Economies 2023, 11(10), 246; https://doi.org/10.3390/economies11100246 - 06 Oct 2023

Viewed by 1504

Abstract

The agricultural sector contributes to the national economy by engaging in export activities within the global market. Conversely, the rapid development of the Internet has greatly impacted output production and has introduced heightened competitiveness among various countries. This study aims to examine the [...] Read more.

The agricultural sector contributes to the national economy by engaging in export activities within the global market. Conversely, the rapid development of the Internet has greatly impacted output production and has introduced heightened competitiveness among various countries. This study aims to examine the impact of Internet-related indicators on the competitive standing of agri-food industries on a global scope. These indicators are represented by user engagement, infrastructure availability, and security. The panel regression analysis focused on 126 countries from 2010 to 2020. The findings reveal that Internet infrastructure and security positively affect the competitiveness of agri-food exports. However, the indicator related to Internet users exhibits a negative impact. There is a change in competitiveness structure from enhancing the Internet indicator to 50%. After simulation, we found that 80 countries have a positive value of RSCA. It is lower than the actual value of RSCA in 89 countries. This study concluded that developing countries still have better opportunities to increase their agri-food export competitiveness than developed countries. Full article

(This article belongs to the Collection Agricultural and Natural Resource Economics)

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18 pages, 639 KiB

Open AccessArticle

Fertility in Russia: A Re-Examination Using Microdata

by Kazuhiro Kumo and Anna Kechetova

Economies 2023, 11(10), 245; https://doi.org/10.3390/economies11100245 - 04 Oct 2023

Viewed by 1594

Abstract

This paper employs the microdata of the Russia Longitudinal Monitoring Survey (RLMS-HSE) to discuss the impact of economic factors, such as household income and female wages, and subjective well-being, such as life satisfaction and health condition, on childbirth probability in Russia, which, following [...] Read more.

This paper employs the microdata of the Russia Longitudinal Monitoring Survey (RLMS-HSE) to discuss the impact of economic factors, such as household income and female wages, and subjective well-being, such as life satisfaction and health condition, on childbirth probability in Russia, which, following a continuous decline in birth rate throughout the 1990s, began to increase in the 2000s, and rose thereafter almost continuously. The following results were obtained: higher household incomes serve to encourage childbirth, while female wages are seen to act by curtailing childbirth, and when indicators such as life satisfaction and health condition are high, the likelihood of childbirth is increased significantly. Most previous research concerning the determinants of the birth rate in Russia has shown that household income has no effect at all, but the findings in this paper suggest that this may have been due to the special circumstances that existed at the beginning of the economic transformation period in the 1990s. Full article

(This article belongs to the Section Health Economics)

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14 pages, 998 KiB

Open AccessArticle

A Comparative Analysis of the Determinants of Foreign Direct Investment: The Case of Top Ten Recipients of Foreign Direct Investment in Africa

by Johnson Adelakun and Kanayo Ogujiuba

Economies 2023, 11(10), 244; https://doi.org/10.3390/economies11100244 - 30 Sep 2023

Cited by 1 | Viewed by 3300

Abstract

Through mechanisms including knowledge transfer and productivity spillovers, foreign direct investment (FDI) is viewed as a critical driver of growth in developing economies. However, the majority of African nations require capital inflows, particularly foreign direct investment (FDI), as a result of insufficient capital [...] Read more.

Through mechanisms including knowledge transfer and productivity spillovers, foreign direct investment (FDI) is viewed as a critical driver of growth in developing economies. However, the majority of African nations require capital inflows, particularly foreign direct investment (FDI), as a result of insufficient capital accumulation. The capacity of African governments to deliver top-notch infrastructure and social services has been diminished as a result. However, there has not been any independent research on how FDI inflows have affected Africa’s top 10 nations between 1970 and 2021. Most studies on the subject overlooked the impact of institutional quality on FDI inflows and omitted pertinent indicators of infrastructure development. The purpose of this article is to present a comparative analysis of the factors influencing the top ten beneficiaries of FDI in Africa. The ARDL bound test was employed to confirm the co-integration of the variables over the long term. The major goal is to confirm the relationship between the short- and long-term determinants of foreign direct investment in the top ten African recipients. This estimation was performed based on the unique characteristics of each country to make comparisons and inferences easier. The results of the limit test demonstrated the existence of a long-term connection between the examined determinants. The study found that infrastructure gaps, poor domestic savings, and price inflation were some of the mitigating factors preventing FDI from entering these countries. Additionally, the study found poor governance, which may impede the growth of effective institutions and capital inflows. It is crucial that these nations undertake both fiscal and monetary policies in order to address these issues, draw in private investments that allow for significant economic activity, and boost their economies’ prosperity. Full article

(This article belongs to the Section International, Regional, and Transportation Economics)

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14 pages, 249 KiB

Open AccessArticle

The Structural Convergence of New Members of the European Union: An Input-Output Perspective

by Petre Caraiani

Economies 2023, 11(10), 243; https://doi.org/10.3390/economies11100243 - 30 Sep 2023

Viewed by 976

Abstract

This paper aims to approach the topic of structural convergence for new member states from the perspective of input-output analysis. Using a set of input-output measures, based on the OECD RStan database, and a number of unit-root tests, both for individual time series [...] Read more.

This paper aims to approach the topic of structural convergence for new member states from the perspective of input-output analysis. Using a set of input-output measures, based on the OECD RStan database, and a number of unit-root tests, both for individual time series and panel data, this paper tests whether there is convergence relative to the production structure of the German economy. Although the individual tests are somewhat mixed, the panel unit-root tests indicate the presence of convergence. The results highlight the importance of assessing structural convergence based on panel tests. They also highlight that as nominal and real convergence are gradually achieved, structural convergence should also become more prioritized. Full article

14 pages, 336 KiB

Open AccessConcept Paper

Immigrant Entrepreneurs in the U.S.: Firm Performance Based on Entrepreneurial Competencies

by Honghua Li, Yemisi Awotoye and Robert P. Singh

Economies 2023, 11(10), 242; https://doi.org/10.3390/economies11100242 - 28 Sep 2023

Viewed by 1610

Abstract

Although immigrants represent a sizeable and growing portion of the total U.S. population and immigrant entrepreneurs play an important role in the U.S. economy, they remain relatively understudied within the literature. Existing research suggests that immigrants are more likely to start a business [...] Read more.

Although immigrants represent a sizeable and growing portion of the total U.S. population and immigrant entrepreneurs play an important role in the U.S. economy, they remain relatively understudied within the literature. Existing research suggests that immigrants are more likely to start a business than non-immigrants in the U.S. and face unique challenges while doing so. This paper attempts to contribute to the existing literature by examining the impact of entrepreneurial competencies of immigrant entrepreneurs on their firms’ performance. Given that entrepreneurial success, performance, and growth depend heavily on entrepreneurial competencies, we develop a conceptual discussion and three propositions indicating that immigrant-owned firm performance is influenced by three specific competencies held by immigrant entrepreneurs: proficiency in the host country’s language, knowledge about the host country, and cultural intelligence. Following a review of the literature and the development of the propositions, we discuss implications, limitations, and future research directions for researchers and practitioners. Full article

(This article belongs to the Section Economic Development)

22 pages, 1733 KiB

Open AccessArticle

Determinant Factors of M&As in Emerging Economies: The Impact of Financial Performance in Romanian Minority Acquisitions

by Liviu-George Maha, George-Marian Aevoae, Elena-Daniela Viorică and Roxana-Manuela Dicu

Economies 2023, 11(10), 241; https://doi.org/10.3390/economies11100241 - 28 Sep 2023

Viewed by 1139

Abstract

The paper aims at describing two dimensions of acquirers’ behaviour when purchasing minority shares in Romanian listed target companies, based on a sample of 710 Romanian minority acquisitions. The first dimension regards the acquirer’s decision to invest a certain amount, being influenced by [...] Read more.

The paper aims at describing two dimensions of acquirers’ behaviour when purchasing minority shares in Romanian listed target companies, based on a sample of 710 Romanian minority acquisitions. The first dimension regards the acquirer’s decision to invest a certain amount, being influenced by the profitability of the target company The relationship was found to be positive and significant. To test the model further, a sample of 308 transactions was used, after excluding the transactions involving primary sector and blue-chip target companies. The second dimension focuses on the amount of purchased stake, which leads to either financial gains or the takeover intention, under the influence of the target company’s operational profit. The results show a positive and significant relationship for the small stakes and a non-significant one for the high stakes. Full article

(This article belongs to the Section Economic Development)

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10 pages, 586 KiB

Open AccessArticle

Trade Openness and Inflation Rate in China: Empirical Evidence from Time Series Data

by Muhammad Tahir, Norulazidah Omar Ali, Imran Naseem and Umar Burki

Economies 2023, 11(10), 240; https://doi.org/10.3390/economies11100240 - 27 Sep 2023

Viewed by 2105

Abstract

This study empirically examines the influence of trade openness on the rate of inflation by focusing on the Chinese economy. The study utilizes data covering the period 1987–2019 and employs the autoregressive distributed lag model (ARDL) for the extraction of results from the [...] Read more.

This study empirically examines the influence of trade openness on the rate of inflation by focusing on the Chinese economy. The study utilizes data covering the period 1987–2019 and employs the autoregressive distributed lag model (ARDL) for the extraction of results from the designed models. The results of the study indicate that trade openness has indeed impacted the rate of inflation not only negatively but also significantly. This means that trade openness could be used as a tool to fight against higher inflation. Similarly, government expenditure, economic growth, exchange rate and money supply positively affect inflation. Money supply and government expenditures positively affect the rate of inflation in the short run. The study has important policy implications for the Chinese economy. Full article

(This article belongs to the Section Economic Development)

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Economies, Volume 11, Issue 10 (October 2023) – 25 articles

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