Economies

22 pages, 1838 KiB

Open AccessArticle

The Impact of Restrictive Macroprudential Policies through Borrower-Targeted Instruments on Income Inequality: Evidence from a Bayesian Approach

by Lindokuhle Talent Zungu and Lorraine Greyling

Economies 2024, 12(9), 256; https://doi.org/10.3390/economies12090256 - 23 Sep 2024

Viewed by 1052

Abstract

This study used the panel data from 15 emerging markets to examine the impact of restrictive macroprudential policies on income inequality from 2000–2019 using Bayesian panel vector autoregression and Bayesian panel dynamics generalised method of moments models. The chosen models are suitable for [...] Read more.

This study used the panel data from 15 emerging markets to examine the impact of restrictive macroprudential policies on income inequality from 2000–2019 using Bayesian panel vector autoregression and Bayesian panel dynamics generalised method of moments models. The chosen models are suitable for addressing multiple entity dynamics, accommodating a wide range of variables, handling dense parameterisation, and optimising formativeness and heterogeneous individual-specific factors. The empirical analysis utilised various macroprudential policy proxies and income inequality measures. The results show that when the central banks tighten systems using macroprudential policy instruments to sticker debt-to-income and financial instruments for lower-income borrowers (the bottom 40% of the income distribution), they promote income inequality in these countries while reducing income inequality for high-income borrowers (the high 1 percent of the income distribution). The impact of loan-to-value ratios was found to be insignificant in these countries. Fiscal policy through government expenditure and economic development reduces income inequality, while money supply and oil-price shocks exacerbate it. The study suggests implementing a progressive debt-to-income (DTI) ratio system in emerging markets to address income inequality among lower-income borrowers. This would adjust DTI thresholds based on income brackets, allowing lenient credit access for lower-income borrowers while maintaining stricter limits for higher-income borrowers. This would improve financial stability and reduce income disparities. Additionally, targeted financial literacy programs and a petroleum-linked basic income program could be implemented to distribute oil revenue to lower-income households. A monetary supply stabilisation fund could also be established to maintain financial stability and prevent excessive inflation. Full article

(This article belongs to the Special Issue Monetary and Fiscal Economics in the Context of Macroeconomic Stability)

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23 pages, 4566 KiB

Open AccessArticle

Comprehensive Assessment of Slovakian Hospitals Using Financial and Non-Financial Criteria in the COVID-19 Context

by Sylvia Jenčová, Petra Vašaničová and Marta Miškufová

Economies 2024, 12(9), 255; https://doi.org/10.3390/economies12090255 - 21 Sep 2024

Viewed by 692

Abstract

Comparing hospitals using multicriteria methods facilitates a thorough assessment of performance across multiple dimensions, supports informed decision-making, promotes accountability, and drives continuous improvement in healthcare delivery. This paper aims to apply multicriteria methods to assess hospitals in Slovakia in the pre-crisis (2019), crisis [...] Read more.

Comparing hospitals using multicriteria methods facilitates a thorough assessment of performance across multiple dimensions, supports informed decision-making, promotes accountability, and drives continuous improvement in healthcare delivery. This paper aims to apply multicriteria methods to assess hospitals in Slovakia in the pre-crisis (2019), crisis (2021), and post-crisis (2023) periods of the COVID-19 pandemic. The assessment is conducted using four multicriteria methods, i.e., a ranking method, scoring method, normed variable method, and TOPSIS method, and nonmetric multidimensional scaling (NMDS). The research sample comprises a group of hospitals classified under the sector (SK) NACE 86.1—Hospital activities. Seven indicators (financial and non-financial) were entered into the analysis. The results show that the agreement among the employed multicriteria evaluation methods was statistically significant. Moreover, the findings demonstrate that Slovak hospital rankings based on the selected criteria vary over time. The perfect quality of the NMDS models, as indicated by stress values below 0.025, shows that NMDS analysis provides a highly accurate and reliable representation of hospital comparisons. By combining multicriteria methods with NMDS, we harness the strengths of each approach to improve decision-making and achieve greater insights into intricate datasets. A comprehensive assessment of hospitals allows for the identification of the system’s strengths and weaknesses, which can be utilized to formulate new improvement strategies. As an additional benefit, this paper includes a bibliometric analysis, offering a systematic evaluation and synthesis of existing research on multicriteria evaluation methods. Full article

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19 pages, 1210 KiB

Open AccessArticle

The Analysis of Trigger Factors of the Environmental Entrepreneurship Process in Saudi Arabia: An Innovative Approach

by Wided Ragmoun

Economies 2024, 12(9), 254; https://doi.org/10.3390/economies12090254 - 21 Sep 2024

Cited by 1 | Viewed by 819

Abstract

Environmental entrepreneurship is considered a critical avenue for sustainable development. Despite increasing studies on its benefits and impacts, we lack insights about its corresponding process. There is an increasing need for policymakers to know how to develop this process and what is required [...] Read more.

Environmental entrepreneurship is considered a critical avenue for sustainable development. Despite increasing studies on its benefits and impacts, we lack insights about its corresponding process. There is an increasing need for policymakers to know how to develop this process and what is required for its definition. This research aims to build an innovative theoretical model to explore the trigger factors for the environmental entrepreneurship process in Saudi Arabia, which is the ultimate focus point of this research. To achieve this objective, a deep literature review and a survey of expert entrepreneurs’ opinions were performed. Experts and professionals in entrepreneurship validated the opportunity of readiness factors identified. Data were gathered using a combined approach based on closed-ended questionnaires and arranged interviews according to a schedule. Employing the mixed influence matrix of cross-impact multiplications applied to classification (MICMAC) and the Interpretive Structural Modeling (ISM) approach, the research identifies a hierarchical model of these factors, addressing why and how they interact according to a specific order and priorities. The investigation reveals 15 factors that are structured into three main levels of influence: (1) factors driving the adoption of environmental entrepreneurship orientation, (2) factors related to environmental entrepreneurship intention, and (3) factors for materializing environmental entrepreneurship behavior. The findings emphasize the complementarity between environmental entrepreneurship intention and orientation as a key factor in generating entrepreneurial behavior. This research pioneers the empirical exploration of environmental entrepreneurship as a process. It contributes significantly to theoretical and practical domains by offering a pragmatic framework and better understanding for policymakers and stakeholders to focus on key factors that facilitate this process. This paper is innovative because it uses the integrative ISM–MICMAC approach, supported by a primary and brief bibliometric analysis of entrepreneurship. Full article

(This article belongs to the Section Economic Development)

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30 pages, 680 KiB

Open AccessArticle

Technological Innovation and Agricultural Productivity in Nigeria Amidst Oil Transition: ARDL Analysis

by Joel T. Adeyemo, Adel Ahmed, Dominic T. Abaver, Hosam Alden Riyadh, Mosab I. Tabash and Adedoyin Isola Lawal

Economies 2024, 12(9), 253; https://doi.org/10.3390/economies12090253 - 20 Sep 2024

Viewed by 1366

Abstract

In contemporary discourse, Nigeria’s reliance on its oil sector is proving insufficient for sustained economic growth. The volatility of oil prices, geopolitical tensions, technological advancements, and environmental sustainability concerns have exposed the vulnerabilities of an oil-dependent economy, emphasizing the need for diversification and [...] Read more.

In contemporary discourse, Nigeria’s reliance on its oil sector is proving insufficient for sustained economic growth. The volatility of oil prices, geopolitical tensions, technological advancements, and environmental sustainability concerns have exposed the vulnerabilities of an oil-dependent economy, emphasizing the need for diversification and a renewed focus on agriculture. This study investigates the relationship between technological innovation and agricultural productivity in Nigeria, contrasting it with the oil sector. Using the ARDL estimation technique, our findings reveal a significant negative influence of immediate lagged agricultural productivity (AGTFP(−1)), indicating technological constraints. Technological innovation, proxied by TFP, shows a substantial impact on agricultural productivity, with a negative long-term effect (−90.71) but a positive, though insignificant, impact on agricultural output (0.0034). The comparative analysis underscores that the agricultural sector tends to benefit more from technological innovation than the oil sector. This highlights the critical need to prioritize technological advancements in agriculture to drive sustainable growth and economic resilience in Nigeria. Full article

(This article belongs to the Special Issue Economic Analysis and Policy before, during and after a Public Debt Crisis, a Pandemic and an Inflationary Outburst)

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14 pages, 300 KiB

Open AccessArticle

Investigating the Drivers of Firm Internationalisation: A Fuzzy Set Analysis Using Global Entrepreneurship Development Index Data

by Takawira Munyaradzi Ndofirepi

Economies 2024, 12(9), 252; https://doi.org/10.3390/economies12090252 - 18 Sep 2024

Viewed by 1389

Abstract

Firm internationalisation, a key driver of global economic growth, is influenced by various entrepreneurial resources. This study explores the relationships between human capital, risk capital, risk acceptance, opportunity perception, and firm internationalisation using cross-national data from the Global Entrepreneurship Development Index (GEDI). Employing [...] Read more.

Firm internationalisation, a key driver of global economic growth, is influenced by various entrepreneurial resources. This study explores the relationships between human capital, risk capital, risk acceptance, opportunity perception, and firm internationalisation using cross-national data from the Global Entrepreneurship Development Index (GEDI). Employing fuzzy set qualitative comparative analysis (fsQCA), this study analyzes data from 137 countries. The findings highlight two primary configurations driving internationalisation: (1) risk acceptance and opportunity perception, and (2) risk capital and opportunity perception. Opportunity perception emerges as a critical factor in both configurations, while human capital is not found to be a necessary condition. These results contribute to a better understanding of the factors that foster firm internationalisation and inform policies aimed at promoting global entrepreneurial ecosystems. Full article

12 pages, 307 KiB

Open AccessArticle

The Contribution of Green, Blue, and Energy Sources to Economic Development in Central Asia

by Massimiliano Caporin, Bekhzod Kuziboev, Ergash Ibadullaev, Elbek Khodjaniyazov, Peter Marty and Olimjon Saidmamatov

Economies 2024, 12(9), 251; https://doi.org/10.3390/economies12090251 - 17 Sep 2024

Viewed by 1369

Abstract

Central Asia (CA) is a young integrated region formed after the collapse of the Soviet Union, with most of its infrastructure based on fossil fuels. The traditional energy and water infrastructure is facing huge inefficiency and technical losses. This study investigates the transition [...] Read more.

Central Asia (CA) is a young integrated region formed after the collapse of the Soviet Union, with most of its infrastructure based on fossil fuels. The traditional energy and water infrastructure is facing huge inefficiency and technical losses. This study investigates the transition of the green, blue, and energy economies in Central Asia using a small-dimensional panel dataset on five countries, Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan, and Turkmenistan, over the period 1995–2018. The authors analyze the impact of ecological footprint, water withdrawal, and energy consumption on gross domestic product. In applying the Panel Vector Error Correction Model, evidence was found supporting the long-running association between variables. Furthermore, the adjustment coefficients suggest that only GDP growth will adjust toward equilibrium. Overall, the findings suggest a more effective role of green transition compared to blue and energy transitions. Full article

(This article belongs to the Special Issue Emerging Economies and Sustainable Growth (2nd Edition))

18 pages, 692 KiB

Open AccessArticle

What Determines the Crime Rate? A Macroeconomic Case Study

by Tomas Karpavicius, Andriy Stavytskyy, Vincentas Rolandas Giedraitis, Erstida Ulvidienė, Ganna Kharlamova and Brigita Kavaliauskaite

Economies 2024, 12(9), 250; https://doi.org/10.3390/economies12090250 - 17 Sep 2024

Viewed by 1852

Abstract

This study examines the relationship between economic indicators and crime rates in six European countries: Lithuania, Germany, Greece, Portugal, Finland and Sweden. By examining macroeconomic factors such as GDP, security spending and per capita consumption, the study aims to understand how these variables [...] Read more.

This study examines the relationship between economic indicators and crime rates in six European countries: Lithuania, Germany, Greece, Portugal, Finland and Sweden. By examining macroeconomic factors such as GDP, security spending and per capita consumption, the study aims to understand how these variables affect crime dynamics. Using robust econometric techniques, including panel regression with fixed effects, the study identifies significant correlations and patterns. The findings reveal that the crime rate has a high degree of inertia and is significantly influenced by the previous level. Contrary to expectations, increased per capita consumption is associated with higher crime rates, which may indicate that wealthier societies are experiencing an increase in economic crime. Furthermore, higher spending on security does not necessarily reduce crime, suggesting that types of crime evolve as detection capabilities improve. This study highlights the complexity of the nexus between crime and the economy, highlighting the need for multifaceted, long-term policies to effectively combat crime and increase public safety. The results offer valuable insights for policymakers to develop comprehensive crime prevention and economic development strategies. Full article

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

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21 pages, 3707 KiB

Open AccessArticle

Quantifying Loss to the Economy Using Interrupted Time Series Models: An Application to the Wholesale and Retail Sales Industries in South Africa

by Thabiso Ernest Masena, Sandile Charles Shongwe and Ali Yeganeh

Economies 2024, 12(9), 249; https://doi.org/10.3390/economies12090249 - 17 Sep 2024

Cited by 1 | Viewed by 644

Abstract

A few recent publications on interrupted time series analysis only conduct preintervention modelling and use it to illustrate postintervention deviation without quantifying the amount lost during the intervention period. Thus, this study aims to illustrate how to estimate and quantify the actual amounts [...] Read more.

A few recent publications on interrupted time series analysis only conduct preintervention modelling and use it to illustrate postintervention deviation without quantifying the amount lost during the intervention period. Thus, this study aims to illustrate how to estimate and quantify the actual amounts (in South African Rands—ZAR) that the negative impact of the intervention effects of the COVID-19 pandemic had on the South African total monthly wholesale and retail sales using the seasonal autoregressive integrated moving average (SARIMA) with exogenous components (SARIMAX) model. In addition, the SARIMAX model is supplemented with three approaches for interrupted time series fitting (also known as a pulse function covariate vector), which are: (i) trial and error, (ii) quotient of fitted values and actual values, and (iii) a constant value of 1 throughout the intervention period. Model selection and adequacy metrics indicate that fitting a pulse function with a trial-and-error approach produces estimates with the minimum errors on both datasets, so a more accurate loss in revenue in the economy can be approximated. Consequently, using the latter method, the pandemic had an immediate, severe negative impact on wholesale trade sales, lasting for 15 months (from March 2020 to May 2021) and resulted in a loss of ZAR 302,339 million in the economy. Moreover, the retail sales were also negatively affected, but for 8 months (from March 2020 to October 2020), with a 1-month lag or delay, suggesting the series felt the negative effects of the pandemic one month into the intervention period and resulted in a loss of ZAR 87,836 million in the economy. Full article

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21 pages, 10990 KiB

Open AccessArticle

Accessibility and Older and Foreign Populations: Exploring Local Spatial Heterogeneities across Italy

by Massimo Armenise, Federico Benassi, Maria Carella and Roberta Misuraca

Economies 2024, 12(9), 248; https://doi.org/10.3390/economies12090248 - 16 Sep 2024

Viewed by 707

Abstract

The interplay between accessibility and population change is a relatively new subject in Italian academic research. Along with social and economic factors such as regional economic prosperity, the ease of movement inside and outside an area can play a pivotal role in shaping [...] Read more.

The interplay between accessibility and population change is a relatively new subject in Italian academic research. Along with social and economic factors such as regional economic prosperity, the ease of movement inside and outside an area can play a pivotal role in shaping population dynamics. This study seeks to explore the spatial distribution and spatial relationships of three indicators, including one related to real accessibility (RAI) and two others related, respectively, to the shares of the older population (SOP) and of the foreign population (SFP). An exploratory spatial data analysis is, therefore, conducted at the local level using Italian municipalities as the statistical units for the empirical analysis. Local univariate spatial autocorrelation analysis is used together with a regression analysis based on ordinary least squares (OLS) and geographically weighted regression (GWR) models. The results provide valuable insights into the local heterogeneity that characterizes the distribution of each indicator and the local relationship between them, highlighting the importance of thinking locally in quantitative social sciences. Full article

(This article belongs to the Special Issue Demographics and Regional Economic Development)

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18 pages, 736 KiB

Open AccessArticle

Sustainable Development of Small Business in Kazakhstan

by Venera Zarubina, Mikhail Zarubin, Zhaukhar Yessenkulova, Tursyngul Gumarova, Almira Daulbayeva, Zhuldyz Meimankulova and Aizhan Kurmangalieva

Economies 2024, 12(9), 247; https://doi.org/10.3390/economies12090247 - 14 Sep 2024

Viewed by 1044

Abstract

The small business sector in Kazakhstan demonstrates dynamic growth, but its sustainable development in modern conditions requires activation from government agencies, society and entrepreneurs themselves. The purpose of the article was to study the development of small entrepreneurship in Kazakhstan and develop a [...] Read more.

The small business sector in Kazakhstan demonstrates dynamic growth, but its sustainable development in modern conditions requires activation from government agencies, society and entrepreneurs themselves. The purpose of the article was to study the development of small entrepreneurship in Kazakhstan and develop a mechanism for sustainable development based on network interaction “business entities–society–state” with the identification of priority areas of development based on a rating approach. The methods of bibliographic analysis of scientific literature, statistical, correlation analysis, survey, comparative analysis and ranking based on data normalization were used. The results revealed the need to formalize indicators of sustainable development of the small business sector in strategic development programs; create conditions, support, explain the importance and prospects of investing in sustainable innovations by small businesses and form a balanced strategy for achieving carbon neutrality based on network interaction “business entities–society–state” with the identification of priority areas of development based on a rating approach to ensure transparency and publicity of decisions made. Conclusions were made about the need to popularize sustainable development among business entities, stimulate investment activity through government participation, enact legislative regulation of public presentation of non-financial reporting, and assist society in the formation of an ESG culture. Full article

(This article belongs to the Special Issue Emerging Economies and Sustainable Growth (2nd Edition))

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19 pages, 925 KiB

Open AccessArticle

Earmarking Taxation and Compliance: Some Evidence from Car Ownership in Italy

by Lory Barile, Giulio Grossi, Patrizia Lattarulo and Maria Grazia Pazienza

Economies 2024, 12(9), 246; https://doi.org/10.3390/economies12090246 - 12 Sep 2024

Viewed by 709

Abstract

This study focuses on tax evasion within the framework of earmarking taxation, specifically focusing on the evasion of car ownership taxes. We utilize a unique and extensive micro-database that combines information on regular payments of the tax due, late payments following friendly warnings, [...] Read more.

This study focuses on tax evasion within the framework of earmarking taxation, specifically focusing on the evasion of car ownership taxes. We utilize a unique and extensive micro-database that combines information on regular payments of the tax due, late payments following friendly warnings, and non-payment of vehicle ownership taxes, integrated with fiscal data, individual data, and municipal-level data. The empirical analysis examines individual, socio-economic, and institutional factors related to this issue. Drawing a rich dataset from the 2014 Tuscany car tax, we employ a multilevel logistic model for our empirical investigation. Our findings reveal that tax evasion poses an equity problem, as the inclination to evade vehicle ownership taxes is concentrated among specific demographic categories and types of vehicles. We also suggest that regional-level policies, such as friendly warnings, could be more effective if implemented with greater rigour. Lastly, our results indicate that reinforcing civic responsibility and enhancing institutional and political quality could prove particularly beneficial in enhancing tax compliance. Full article

(This article belongs to the Special Issue Shadow Economy and Tax Evasion)

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15 pages, 764 KiB

Open AccessArticle

Demand and Nutrient Elasticities of Egg Consumption: Evidence from Saudi Arabia

by Dana Alsaad and Mohammed Al-Mahish

Economies 2024, 12(9), 245; https://doi.org/10.3390/economies12090245 - 11 Sep 2024

Viewed by 1125

Abstract

Chicken eggs are a staple food widely consumed directly or indirectly (as an ingredient in other food items) in Saudi Arabia. Due to the importance of eggs in Saudi consumers’ diet, this study aimed to determine the sociodemographic factors affecting Saudi consumer demand [...] Read more.

Chicken eggs are a staple food widely consumed directly or indirectly (as an ingredient in other food items) in Saudi Arabia. Due to the importance of eggs in Saudi consumers’ diet, this study aimed to determine the sociodemographic factors affecting Saudi consumer demand for eggs and how changes in egg prices and consumer income may influence dietary intake derived from eggs. This study analyzes survey data from 466 respondents. We used a double-log demand model to obtain the price and income elasticities of egg demand. The results show that the price elasticity of egg demand is negative and inelastic, indicating that changes in egg price have a small influence on egg demand. Additionally, income elasticity is positive and <1, implying that eggs are a necessary food item. Cross-price elasticities show that cheese and milk complement egg consumption. Meanwhile, cornflakes (a breakfast cereal) were found to be a good substitute for eggs. Furthermore, the results show that consumer demand for eggs is expected to increase as household size increases. Women exhibited a higher demand for eggs, compared with men. Nutrient income elasticity shows that an increase in consumer income increases protein, fat, and calorie intake from eggs. Nutrient price elasticity shows that an increase in egg price has the greatest negative influence on protein intake, resulting from a decrease in egg consumption. This study recommends that decision makers actively monitor egg prices and take all necessary actions to prevent spikes in egg prices, as this will improve nutritional and food security and help consumers maintain a stable protein intake from egg consumption. Full article

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16 pages, 328 KiB

Open AccessArticle

Economic Policy Uncertainty, Managerial Ability, and Cost of Equity Capital: Evidence from a Developing Country

by Arafat Hamdy, Aref M. Eissa and Ahmed Diab

Economies 2024, 12(9), 244; https://doi.org/10.3390/economies12090244 - 11 Sep 2024

Viewed by 749

Abstract

This study investigates the relationship between economic policy uncertainty (EPU) and the cost of equity capital (CoEC). It also reveals the moderating role of managerial ability (MA) in the relationship between EPU and CoEC in Saudi Arabia. The study sample consists of listed [...] Read more.

This study investigates the relationship between economic policy uncertainty (EPU) and the cost of equity capital (CoEC). It also reveals the moderating role of managerial ability (MA) in the relationship between EPU and CoEC in Saudi Arabia. The study sample consists of listed non-financial firms in Tadawul from 2008 to 2019. We analyzed data using STATA, depending on Pearson correlation analysis, two independent sample t-tests, OLS regression, and OLS with robust standard errors clustered by firm. Our study shows a positive effect of EPU on the CoEC. In addition, the results confirm that MA mitigates the positive effect of EPU on the CoEC. This is the first research to investigate the influence of the relationship between EPU on CoEC in Saudi Arabia, one of the largest emerging economies in the Middle East and Gulf countries. Our findings motivate decision-makers to strengthen their MA and establish a safe and stable investment environment to ensure better financing and investment decisions during uncertain times. Lending agencies, investors, and other stakeholders should consider the MA of corporations when making investment decisions. Full article

(This article belongs to the Special Issue Financial Market Volatility under Uncertainty)

19 pages, 1303 KiB

Open AccessArticle

Learn from Whom? An Empirical Study of Enterprise Digital Mimetic Isomorphism under the Institutional Environment

by Ying Chen, Haiyan Ma and Tianyi Zhou

Economies 2024, 12(9), 243; https://doi.org/10.3390/economies12090243 - 11 Sep 2024

Cited by 1 | Viewed by 734

Abstract

The digital economy is a prevailing trend in global development, yet traditional firms still face challenges in digital transformation. Under institutional pressure, firms might imitate the digital strategy of their peers to mitigate these issues; there is still a lack of empirical research [...] Read more.

The digital economy is a prevailing trend in global development, yet traditional firms still face challenges in digital transformation. Under institutional pressure, firms might imitate the digital strategy of their peers to mitigate these issues; there is still a lack of empirical research to support this. Therefore, this study, drawing on new institutional theory, focuses on investigating whether and how the institutional environment influences companies in embracing digital transformation in the digital economy era. We employ generalized least squares (GLS) regression models on a sample of 2862 non-IT listed firms in China from 2012 to 2020. In addition, we conduct a series of robustness checks. The results show that firms’ mimetic isomorphism of digital transformation is related to the institutional environment. Specifically, both industrial digitalization and regional digitalization promote digital mimetic isomorphism independently; their interaction is positively related to the digital mimetic isomorphism of successful firms but negatively related to similar firms. The results provide empirical evidence for non-IT firms to converge upwards in digital transformation and achieve high-quality development. Full article

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

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11 pages, 558 KiB

Open AccessArticle

“Optimal Honesty” in the Context of Fiscal Crimes

by Lory Barile, John Cullis and Philip Jones

Economies 2024, 12(9), 242; https://doi.org/10.3390/economies12090242 - 11 Sep 2024

Viewed by 624

Abstract

This paper begins by contrasting the caricatures ‘homo and femina economicus’ with ‘homo and femina realitus’. Against this backdrop, the paper considers three ‘apparently falsified’ empirical predictions of the standard expected utility model of individual decision-making concerning participation in [...] Read more.

This paper begins by contrasting the caricatures ‘homo and femina economicus’ with ‘homo and femina realitus’. Against this backdrop, the paper considers three ‘apparently falsified’ empirical predictions of the standard expected utility model of individual decision-making concerning participation in fiscal crimes: that tax evasion and benefit fraud can be treated identically; fiscal crimes should be endemic; and that all individuals, depending on parameter values, should be either honest or dishonest. A utility function relating to decisions with a moral dimension is used to offer insight into the rationalization of the predictions and involves defining an individual’s ‘optimal honesty’ in the context of fiscal crimes. The policy implications of the approach are briefly explored. Full article

(This article belongs to the Special Issue Shadow Economy and Tax Evasion)

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19 pages, 1762 KiB

Open AccessArticle

The Structure and Nature of Social Capital in the Relationship between Spin-Offs and Parent Companies in Information Technology Clusters in Brazil and Spain

by Flávio Manoel Coelho Borges Cardoso, Maria Teresa Martínez-Fernández, Marcos de Moraes Sousa and Valmir Emil Hoffmann

Economies 2024, 12(9), 241; https://doi.org/10.3390/economies12090241 - 10 Sep 2024

Viewed by 1050

Abstract

The objective of this research is to determine how proximity between organizations promotes the intensity of relationships and facilitates the exchange of information and knowledge in the relationship between the parent firm and the spin-off and its influence on organizational performance. Therefore, four [...] Read more.

The objective of this research is to determine how proximity between organizations promotes the intensity of relationships and facilitates the exchange of information and knowledge in the relationship between the parent firm and the spin-off and its influence on organizational performance. Therefore, four constructs related to business competitiveness are integrated: networks, social capital, spin-offs, and innovation. The loci of the research were two clusters of Information and Communication Technology, with a sample of 166 companies in Brazil and 66 in Spain. Structural Equation Modeling was applied. The results indicate that geographical proximity between organizations promotes the intensity of relationships and facilitates the exchange of knowledge between the parent firm and the spin-off, but it cannot be said that geographical proximity impacts innovation for the parent firm. Furthermore, because the parent firm relates to its spin-off, the parent firm did not perform better than the nonparent companies with other companies. This study improves the understanding of companies that are in a business cluster, and its results have both institutional and business implications for the Information and Communication Technology (ICT) sector. Full article

(This article belongs to the Special Issue Industrial Clusters, Agglomeration and Economic Development)

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17 pages, 447 KiB

Open AccessArticle

Is the Nexus between Gender Diversity and Firm Financial Distress Moderated by CEO Duality?

by Muhammad Tahir Khan, Waqar Ahmad, Sajjad Nawaz Khan, Valentin Marian Antohi, Costinela Fortea and Monica Laura Zlati

Economies 2024, 12(9), 240; https://doi.org/10.3390/economies12090240 - 9 Sep 2024

Viewed by 740

Abstract

This study examines the impact of gender diversity in the positions of board commissioners, executive directors, and audit committee members on the financial performance of firms experiencing financial trouble. It also evaluates whether the presence of a CEO with multiple responsibilities moderates this [...] Read more.

This study examines the impact of gender diversity in the positions of board commissioners, executive directors, and audit committee members on the financial performance of firms experiencing financial trouble. It also evaluates whether the presence of a CEO with multiple responsibilities moderates this relationship. The analysis encompassed 224 publicly traded companies from the non-financial sector, spanning the years 2012 to 2021. The study employed the dynamic panel model system GMM to address issues of endogeneity, simultaneity, and heterogeneity in the data. The findings indicate that the presence of women on supervisory boards and in senior positions has a substantial impact. Companies with a higher number of female board members have reduced financial hardship among Malaysian listed enterprises. Female directors exhibit a greater level of caution and risk aversion while participating in management choices, which is a significant conclusion. Research indicates that the majority of financial variables are inherently endogenous, so dynamic models are better suited for analyzing the interaction between these variables. This study also presents the notable correlation between gender diversity on boards of management, CEO duality, and financial difficulty. Full article

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20 pages, 422 KiB

Open AccessArticle

Corruption’s Crossroads: Exploring Firm Performance and Auditors’ Role in Emerging Markets

by Sheela Sundarasen, Izani Ibrahim, Ahnaf Ali Alsmady and Tanaraj Krishna

Economies 2024, 12(9), 239; https://doi.org/10.3390/economies12090239 - 9 Sep 2024

Viewed by 1593

Abstract

This study examines the relationship between country-level corruption (proxied by the Corruption Perception Index, CPI) and firm performance (measured by Return on Assets, ROA) across 18,286 firms in the East Asia, South Asia, and Southeast Asia regions. Additionally, the moderating effects of audit [...] Read more.

This study examines the relationship between country-level corruption (proxied by the Corruption Perception Index, CPI) and firm performance (measured by Return on Assets, ROA) across 18,286 firms in the East Asia, South Asia, and Southeast Asia regions. Additionally, the moderating effects of audit quality (proxied by auditors’ reputation) on the relationship are examined. The findings of the study indicate a positive association between corruption and ROA in high-income nations, thus providing evidence in favor of the “greasing the wheel” theory. On the other hand, a negative association is documented in the upper middle- and low-income nations, which is consistent with the “sanding the wheel” notion. Notably, audit quality has a positive moderating influence on the relationship between corruption and ROA, especially in nations with low corruption levels, reaffirming the pivotal role of reputable auditors in enhancing firm performance within these economic contexts. The results of this study have important ramifications for forming policy suggestions and enhancing governance. The findings highlight the opportunity to improve governance practices and regulations to reduce corruption and increase transparency. Policymakers can develop ways to strengthen institutional frameworks by recognizing the complex link between corruption, corporate profitability, and the function of respected auditors. Full article

20 pages, 2817 KiB

Open AccessArticle

The Impact of COVID-19 Pandemic on the Jordanian Stock Market Returns Volatility: Evidence from ASE20

by Nahil Ismail Saqfalhait and Omar Mohammad Alzoubi

Economies 2024, 12(9), 238; https://doi.org/10.3390/economies12090238 - 6 Sep 2024

Viewed by 775

Abstract

This research examines the impact of the COVID-19 pandemic on the volatility behavior of Amman Stock Exchange (ASE) returns using ARMA–GARCH-type models for three sub-periods: pre-COVID-19, during COVID-19, and post-COVID-19. The research finds that volatility persistence is significant across all periods, with the [...] Read more.

This research examines the impact of the COVID-19 pandemic on the volatility behavior of Amman Stock Exchange (ASE) returns using ARMA–GARCH-type models for three sub-periods: pre-COVID-19, during COVID-19, and post-COVID-19. The research finds that volatility persistence is significant across all periods, with the pandemic period showing the highest impact of shocks. Bad news has no statistically significant impact on volatility in the pre-COVID-19 period or during the pandemic, while in the post-pandemic period, good news significantly influences volatility. Additionally, there exist notable changes in the autocorrelation and the shock structure of the AR and MA components. Considering these alterations in the asymmetric effects, the AR and MA components suggest significant shifts in market dynamics, investor sentiments, and economic policies in response to pandemic experiences. Full article

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19 pages, 472 KiB

Open AccessArticle

The Role of Customs Policy in Maximizing the Benefits of Economic Blocs: The Case of Egypt

by Mahmoud Magdy Barbary and Abdalla Ramadan Tawfiq

Economies 2024, 12(9), 237; https://doi.org/10.3390/economies12090237 - 4 Sep 2024

Viewed by 829

Abstract

This study aims to examine the relationship between customs policy and the economic blocs of which Egypt is a member, with a focus on the theory of New Regionalism and modern trends in customs policies. Egypt joined numerous economic blocs following its accession [...] Read more.

This study aims to examine the relationship between customs policy and the economic blocs of which Egypt is a member, with a focus on the theory of New Regionalism and modern trends in customs policies. Egypt joined numerous economic blocs following its accession to the world trade organization (WTO) in 1995, yet this membership has not yielded significant positive impacts on the performance of Egyptian exports or the trade balance. The study utilized panel data analysis of Egypt’s international trade from 2001 to 2023. The results indicate that, despite Egypt’s limited success in reaping the benefits of most economic blocs, largely due to the concentration of Egyptian exports in primary and agricultural products and the low tariff rates, factors such as customs clearance processes, tariff barriers, non-tariff barriers, regional trade agreements, and technology adoption still play a crucial role in influencing trade volume among member countries. The findings highlight the significance of effective customs procedures and the reduction of trade barriers in boosting trade volumes within regional trade agreements. The study proposes a strategy for Egypt’s customs policy to maximize benefits from economic blocs, focusing on four key areas: aligning customs policy planning with targeted export sectors to realize trade creation and trade diversion effects; fully implementing trade facilitation programs and liberalizing customs policy procedures; adopting a national strategy to stimulate high value-added export industries as a long-term solution; and adopting regional trade agreements that support cumulative origin as a short-term solution. Full article

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

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18 pages, 308 KiB

Open AccessArticle

Air Transport Resilience, Tourism and Its Impact on Economic Growth

by Chien-Van Nguyen

Economies 2024, 12(9), 236; https://doi.org/10.3390/economies12090236 - 3 Sep 2024

Viewed by 2328

Abstract

The aims of this study are to evaluate the influence of air transport and tourism on economic growth in selected Southeast Asian countries such as Thailand, Philippines, Vietnam, Indonesia, Malaysia, and Singapore in the period 1970 to 2021. The study applies the ordinary [...] Read more.

The aims of this study are to evaluate the influence of air transport and tourism on economic growth in selected Southeast Asian countries such as Thailand, Philippines, Vietnam, Indonesia, Malaysia, and Singapore in the period 1970 to 2021. The study applies the ordinary least squares (OLS), fixed effects (FEM), and random effects (REM), especially to robustness test of the research results by deploying the DOLS, and IV-GMM regression for endogeneity and autocorrelation analysis. The research results confirmed that air transport has a significant and positive impact on economic growth, especially because the positive impact increased in normal economic conditions and decreased during the COVID-19 pandemic. Therefore, if the air transport recovers, it is likely to boost economic development. In addition, there is no impact of tourism on economic growth. The research results also confirmed the positive impact of foreign direct investment and international trade on the economic growth of Southeast Asian countries; however, there is a negative impact of renewable energy consumption on economic growth. Full article

(This article belongs to the Special Issue Foreign Direct Investment and Investment Policy (2nd Edition))

32 pages, 396 KiB

Open AccessArticle

Underestimating the Pandemic: The Impact of COVID-19 on Income Distribution in the U.S. and Brazil

by Federica Alfani, Fabio Clementi, Michele Fabiani, Vasco Molini and Francesco Schettino

Economies 2024, 12(9), 235; https://doi.org/10.3390/economies12090235 - 3 Sep 2024

Viewed by 900

Abstract

The COVID-19 pandemic has exposed individuals to various risks, including job loss, income reduction, deteriorating well-being, and severe health complications and death. In Brazil and the U.S., as well as in other countries, the initial response to the pandemic was marked by governmental [...] Read more.

The COVID-19 pandemic has exposed individuals to various risks, including job loss, income reduction, deteriorating well-being, and severe health complications and death. In Brazil and the U.S., as well as in other countries, the initial response to the pandemic was marked by governmental underestimation, leading to inadequate public health measures to curb the spread of the virus. Although progressively mitigated, this approach played a crucial role in the impacts on local populations. Therefore, the principal aim of this paper is to evaluate the impact of COVID-19 and, indirectly, of the policies adopted by the U.S. and the Brazilian governments to prevent pandemic diffusion on income distribution. Utilizing available microdata and employing novel econometric methods (RIF-regression for inequality measures) this study shows that growth in COVID-19 prevalence significantly exacerbates economic disparities. Furthermore, the impact of COVID-19 on inequality has increased over time, suggesting that this negative impact has been intensifying. In the U.S., results indicate that working from home, the inability to work, and barriers to job-seeking significantly increase inequalities. Although further data are necessary to validate the hypothesis, this preliminary evidence suggests that the pandemic has significantly contributed to increased inequality in these two countries already characterized by increasing polarization and significant social disparities. Full article

(This article belongs to the Special Issue From Permacrisis to Technological Breakthrough: Prospects for the Global Economy Post-COVID-19)

23 pages, 1038 KiB

Open AccessArticle

IMF Conditionality and Government Education Spending: The Case of 10 MENA Countries

by Hassan Sherry and Hussein Zeaiter

Economies 2024, 12(9), 234; https://doi.org/10.3390/economies12090234 - 30 Aug 2024

Viewed by 1447

Abstract

This study explores the impact of International Monetary Fund (IMF)-linked conditionality on government education expenditures in the Middle East and North Africa (MENA) region. Understanding the impact of conditional lending by international financial institutions on education spending is important due to the pivotal [...] Read more.

This study explores the impact of International Monetary Fund (IMF)-linked conditionality on government education expenditures in the Middle East and North Africa (MENA) region. Understanding the impact of conditional lending by international financial institutions on education spending is important due to the pivotal role education plays in fostering social and economic development. We use country-level panel data encompassing a representative set of 10 MENA countries from 1990 to 2020 and employ a cross-national fixed effects regression model. Our findings suggest that IMF conditionality demonstrates a positive relationship with government education expenditures in the MENA region. The proposed explanation is that the application of IMF policy advice can have a catalytic effect on donor financing, including for education. This indicates that the Fund’s financing arrangements in the region can free up fiscal space for social spending, which, in turn, signals a sort of departure of the IMF from the reputation that typically precedes it—its traditional bias for macroeconomic stability irrespective of social costs. We argue that our findings are instructive for policy, especially if one shares the idea that education is a necessary prerequisite for achieving Sustainable Development Goal (SDG) 4: guaranteeing inclusive and equitable quality education and promoting enduring learning opportunities for all. Full article

(This article belongs to the Section Labour and Education)

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16 pages, 1274 KiB

Open AccessArticle

ELECTRE-TRI Multicriteria Approach for Measuring Performance of Rural Co-Operatives in Southwest Paraná, Brazil

by Leomara Battisti Telles, Luciano Medina Macedo and Juliana Vitória Messias Bittencourt

Economies 2024, 12(9), 233; https://doi.org/10.3390/economies12090233 - 29 Aug 2024

Viewed by 518

Abstract

The maintenance of a satisfactory quality of life in rural areas is fundamental for sustainable development. One of the ways to improve quality of life indicators is through the gathering of rural workers in solidarity economy organizations as these enterprises aim to integrate [...] Read more.

The maintenance of a satisfactory quality of life in rural areas is fundamental for sustainable development. One of the ways to improve quality of life indicators is through the gathering of rural workers in solidarity economy organizations as these enterprises aim to integrate development with economic, social, and environmental sustainability. Because solidarity economy organizations have a robust social purpose, their performance must be evaluated based on both social and financial indicators. The objective of this article is to propose a performance evaluation model for rural solidarity economy enterprises, aiming to support decision making in these enterprises based on multicriteria decision analysis (MCDA), particularly the ELECTRE-TRI methodology. In order to demonstrate the applicability of the developed model and to perform sensitivity analyses, the model was applied to a group of eight family agriculture co-operatives in the southwest state of Paraná, Brazil. All the participating co-ops were considered part of the solidarity economy, and they served 2500 rural producer families across at least 15 municipalities. The results showed the applicability and stability of the model, enabling us to identify the dimensions in which each co-op should concentrate their efforts to improve not only their performance but also the outcomes for the farmers that they serve. Based on these results, organizational and improvement activities can be developed and implemented. This analysis contributes to economic and social indicators by offering improvement strategies for the professionalization and strategic management of RSEEs, thus strengthening these enterprises and, consequently, family agriculture. Full article

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32 pages, 3170 KiB

Open AccessArticle

Inequality in the Distribution of Wealth and Income as a Natural Consequence of the Equal Opportunity of All Members in the Economic System Represented by a Scale-Free Network

by John G. Ingersoll

Economies 2024, 12(9), 232; https://doi.org/10.3390/economies12090232 - 29 Aug 2024

Cited by 1 | Viewed by 809

Abstract

The purpose of this work is to examine the nature of the historically observed and empirically described by the Pareto law inequality in the distribution of wealth and income in an economic system. This inequality is presumed to be the result of unequal [...] Read more.

The purpose of this work is to examine the nature of the historically observed and empirically described by the Pareto law inequality in the distribution of wealth and income in an economic system. This inequality is presumed to be the result of unequal opportunity by its members. An analytical model of the economic system consisting of a large number of actors, all having equal access to its total wealth (or income) has been developed that is formally represented by a scale-free network comprised of nodes (actors) and links (states of wealth or income). The dynamic evolution of the complex network can be mapped in turn, as is known, into a system of quantum particles (links) distributed among various energy levels (nodes) in thermodynamic equilibrium. The distribution of quantum particles (photons) at different energy levels in the physical system is then derived based on statistical thermodynamics with the attainment of maximal entropy for the system to be in a dynamic equilibrium. The resulting Planck-type distribution of the physical system mapped into a scale-free network leads naturally into the Pareto law distribution of the economic system. The conclusions of the scale-free complex network model leading to the analytical derivation of the empirical Pareto law are multifold. First, any complex economic system behaves akin to a scale-free complex network. Second, equal access or opportunity leads to unequal outcomes. Third, the optimal value for the Pareto index is obtained that ensures the optimal, albeit unequal, outcome of wealth and income distribution. Fourth, the optimal value for the Gini coefficient can then be calculated and be compared to the empirical values of that coefficient for wealth and income to ascertain how close an economic system is to its optimal distribution of income and wealth among its members. Fifth, in an economic system with equal opportunity for all its members there should be no difference between the resulting income and wealth distributions. Examination of the wealth and income distributions described by the Gini coefficient of national economies suggests that income and particularly wealth are far off from their optimal value. We conclude that the equality of opportunity should be the fundamental guiding principle of any economic system for the optimal distribution of wealth and income. The practical application of this conclusion is that societies ought to shift focus from policies such as taxation and payment transfers purporting to produce equal outcomes for all, a goal which is unattainable and wasteful, to policies advancing among others education, health care, and affordable housing for all as well as the re-evaluation of rules and institutions such that all members in the economic system have equal opportunity for the optimal utilization of resources and the distribution of wealth and income. Future research efforts should develop the scale-free complex network model of the economy as a complement to the current standard models. Full article

(This article belongs to the Special Issue Innovation, Reallocation and Economy Growth)

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17 pages, 331 KiB

Open AccessArticle

Coupling and Coordinated Development of Environmental Regulation and the Upgrading of Industrial Structure: Evidence from China’s 10 Major Urban Agglomerations

by Xiaozhou Zheng, Renming Liu and Huiping Wang

Economies 2024, 12(9), 231; https://doi.org/10.3390/economies12090231 - 29 Aug 2024

Viewed by 1073

Abstract

Exploring the coupling and coordinated development of formal and informal environmental regulation, as well as their impact on the upgrading of the industrial structure of urban agglomerations, represents a new breakthrough. The comprehensive index of formal environmental regulation, informal environmental regulation, and industrial [...] Read more.

Exploring the coupling and coordinated development of formal and informal environmental regulation, as well as their impact on the upgrading of the industrial structure of urban agglomerations, represents a new breakthrough. The comprehensive index of formal environmental regulation, informal environmental regulation, and industrial structure upgrading is calculated using the entropy method based on sample data from 127 cities in China’s ten major urban agglomerations between 2003 and 2019. The characteristics of the coupling and coordinated development between formal and informal environmental regulation in these urban agglomerations are examined using a coupling coordination degree model. Furthermore, the effects of the coupling and coordinated development of formal and informal environmental regulation on the industrial structure upgrading in urban agglomerations are analyzed through fixed-effect and threshold regression models. The findings demonstrate that although the development of urban agglomerations remains unbalanced, the overall coupling coordination degree between formal and informal environmental regulation is increasing. Generally, the ten major urban agglomerations have transitioned from a state of reluctance coordination to primary coordination. The Pearl River Delta urban agglomerations have progressed from reluctance coordination to middle coordination, while the Yangtze River Delta, Shandong Peninsula, Central Plains, and Beijing–Tianjin–Hebei urban agglomerations have advanced from reluctance coordination to primary coordination. The remaining five urban agglomerations have shifted from near disorder to reluctance coordination. The coupling and coordinated development of formal and informal environmental regulation significantly promote the upgrading of the industrial structure in both overall and grouped samples of urban agglomerations, and the higher the degree of coupling coordination, the greater the promoting effect. Moreover, when informal environmental regulation is considered as a threshold variable, the coupling coordination degree exhibits a broken-line relationship with the industrial structure upgrading in urban agglomerations. Currently, the intensity of informal environmental regulations is relatively reasonable in China’s ten major urban agglomerations, and the coordinated development of formal and informal environmental regulations has an impact on the industrial structure of urban agglomerations. Finally, this paper proposes corresponding suggestions encompassing the construction of an environmental regulation policy system, differentiated industrial policy, and the coordinated promotion of various policies. Full article

(This article belongs to the Topic Sustainable Investments in Urban, Peri-Urban and Industrial Areas: Novel Approaches and Methods)

30 pages, 3617 KiB

Open AccessArticle

Exploring Work–Life Balance among Female Staff Members (Teaching and Non-Teaching) in Higher Educational Institutions of Oman: A Study

by Navaneetha Krishnan Rajagopal, Maryam Khalid Ahmed Ba Zanbour and Noor Mohammed Alawi Al Kaaf

Economies 2024, 12(9), 230; https://doi.org/10.3390/economies12090230 - 29 Aug 2024

Viewed by 971

Abstract

This research investigates the intricacies of work–life balance among female staff members (including teaching and non-teaching) in higher educational institutions within the Sultanate of Oman. Despite the increasing participation of women in the workforce, achieving a satisfactory work–life balance remains a challenge. This [...] Read more.

This research investigates the intricacies of work–life balance among female staff members (including teaching and non-teaching) in higher educational institutions within the Sultanate of Oman. Despite the increasing participation of women in the workforce, achieving a satisfactory work–life balance remains a challenge. This study delves into the factors influencing work–life balance perceptions, considering individual, organizational, and cultural dynamics within the Omani context. Drawing on a quantitative approach, data were collected through structured questionnaires from 268 female respondents. The study explores the impact of factors such as organizational support, workload, family responsibilities, cultural norms, and career development opportunities on work–life balance. The findings reveal both strengths and areas for improvement within organizational support systems, workload management practices, and family-friendly policies. Additionally, cultural factors significantly influence work–life dynamics, emphasizing the need for culturally sensitive interventions. Career development opportunities also play a crucial role in shaping work–life balance perceptions. Statistical analysis, including mean scores, provides insights into the areas of strength and concern, guiding recommendations for policy and practice improvements tailored to the educational sector in Oman. Overall, this study contributes to a deeper understanding of the work–life balance complexities among female staff members (teaching and non-teaching) and offers insights for enhancing employee well-being and organizational effectiveness in Oman’s higher education institutions. Full article

(This article belongs to the Topic Sustainability Efforts and Importance of Change Management)

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10 pages, 488 KiB

Open AccessArticle

US Dollar Exchange Rate Elasticity of Gold Returns at Different Federal Fund Rate Zones

by Michael D. Herley, Lucjan T. Orlowski and Mark A. Ritter

Economies 2024, 12(9), 229; https://doi.org/10.3390/economies12090229 - 28 Aug 2024

Viewed by 966

Abstract

We examine the relationship between gold prices and the U.S. dollar exchange rate, arguing that their interactions are state-dependent and asymmetric under different market conditions. State dependency hinges on different short-term interest rate zones. To prove this point, we determine three distinct levels [...] Read more.

We examine the relationship between gold prices and the U.S. dollar exchange rate, arguing that their interactions are state-dependent and asymmetric under different market conditions. State dependency hinges on different short-term interest rate zones. To prove this point, we determine three distinct levels or zones of the effective federal funds rate using SETAR(2,p) tests. Subsequently, we perform conditional least square estimations of log changes in gold prices as a function of log changes in the nominal broad U.S. dollar exchange rate index for each of the obtained zones. Their relationship is consistently inverse, suggesting that gold and the U.S. dollar are risk-hedging substitutes for normal market periods. This also implies that gold is a safe-haven asset against the U.S. dollar exchange rate risk against a broad range of currencies. The substitution is weaker in the low-interest rate zone, more robust in the intermediate zone, and very pronounced in the high zone. We also perform a Markov switching test on the double-log function of gold prices and the exchange rate. The tests show a pronounced inverse relationship, i.e., substitution between assets, at normal market conditions. The relationship becomes significantly positive during episodes of financial distress, indicating complementarity between gold and U.S. dollar assets. Full article

(This article belongs to the Special Issue Exchange Rates: Drivers, Dynamics, Impacts, and Policies)

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19 pages, 604 KiB

Open AccessArticle

Does Industrial Structure Upgrading Promote China’s Outward Foreign Direct Investment (OFDI) in ASEAN Countries? Evidence from Provincial Panels

by Ai Li, Jinjing Zhao, Zhenqing Su and Miao Su

Economies 2024, 12(9), 228; https://doi.org/10.3390/economies12090228 - 28 Aug 2024

Viewed by 995

Abstract

Numerous studies have explored the impact of Outward Foreign Direct Investment (OFDI) on upgrading industrial structures in home countries. However, a notable gap exists in the literature regarding the reverse relationship. Based on the cross-border greenfield investment data of Chinese provinces in Association [...] Read more.

Numerous studies have explored the impact of Outward Foreign Direct Investment (OFDI) on upgrading industrial structures in home countries. However, a notable gap exists in the literature regarding the reverse relationship. Based on the cross-border greenfield investment data of Chinese provinces in Association of Southeast Asian Nations (ASEAN) countries from 2003 to 2021, this study employed the Ordinary Least Squares (OLS) model to evaluate the impact of industrial upgrading in each province on OFDI to address this gap. The findings suggest that China’s industrial structure upgrading significantly promotes OFDI toward ASEAN countries, though the effect varies by region within China and by the income levels of host countries. Regionally, industrial upgrading in eastern China notably stimulates OFDI growth, while the effect is not significant in the central and western regions, reflecting inconsistent evolution of industrial structures in various regions. Regarding host country income levels, the promotion effect of industrial structure upgrading on OFDI is influenced by the economic development level of the host country. Furthermore, we find that R&D intensity acts as a moderator that links industrial structural upgrading to OFDI responses. These findings withstand robustness checks, including tests for endogeneity. Ultimately, this study provides policy insights for strengthening the virtuous cycle between industrial upgrading and OFDI. Full article

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24 pages, 1072 KiB

Open AccessArticle

Econometric Analysis of South Africa’s Fiscal and Monetary Policy Effects on Economic Growth from 1980 to 2022

by Luyanda Majenge, Sakhile Mpungose and Simiso Msomi

Economies 2024, 12(9), 227; https://doi.org/10.3390/economies12090227 - 26 Aug 2024

Viewed by 1875

Abstract

This study examined South Africa’s economic growth rate from 1980 to 2022 through an econometric analysis of fiscal and monetary policies. The study sought to investigate the relationships between the economy’s growth rate and various fiscal and monetary policy variables, taking into account [...] Read more.

This study examined South Africa’s economic growth rate from 1980 to 2022 through an econometric analysis of fiscal and monetary policies. The study sought to investigate the relationships between the economy’s growth rate and various fiscal and monetary policy variables, taking into account different economic approaches such as Keynesian, monetarist, and Wagner’s perspectives. The methodology used consisted of data preparation, multiple unit root tests, Autoregressive Distributed Lag (ARDL) cointegration analysis, diagnostic tests, and pairwise Granger causality analysis. The empirical analysis found a long-term cointegration among the economic growth rate, government debt, expenditure, and revenue in fiscal policy, though government debt and expenditure were not statistically significant. Contrary to economic theory, increased government revenue had a negative correlation with economic growth. There was no long-term relationship found between the economic growth rate and monetary policy variables such as the official exchange rate, inflation rate, real interest rates, and M3 money supply. Pairwise Granger causality tests revealed a one-way relationship between government spending and economic growth, providing support to the Keynesian approach to fiscal policy. This study also discovered evidence that economic growth Granger-causes inflation, implying that economic growth may have predictive power for inflation, consistent with the demand-pull inflation hypothesis. However, no direct predictive relationships were found between the selected monetary policy variables and economic growth, supporting the long-run theory of monetary neutrality. This study suggests evaluating spending, managing inflation, implementing reforms, closing infrastructure gaps, encouraging investment, and ensuring fiscal sustainability. Full article

(This article belongs to the Special Issue Monetary and Fiscal Economics in the Context of Macroeconomic Stability)

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Economies, Volume 12, Issue 9 (September 2024) – 35 articles

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