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Book part
Publication date: 7 November 2011

Rémy Herrera

This chapter is a radical critique of the neoclassical growth theory, justifying ways out of mainstream economics. It has three parts. The first one analyzes growth…

Abstract

This chapter is a radical critique of the neoclassical growth theory, justifying ways out of mainstream economics. It has three parts. The first one analyzes growth theories from the Classical representation to the endogenous growth models. The second part demonstrates that the “new growth theory” is not a break with Solow's formalization. To prove it, we build an original Solowian endogenous growth model. Then, this neoclassical macrodynamic framework is technically, deeply critized in a third part. We show that both exogenous and endogenous neoclassical models prove to be incapable to explain growth in the long period. We concentrate on the ambiguities surrounding the hypothesis of single agent, as well as on the role of the state, in particular when it is considered as a “planner” by the neoclassicals. Endogenous growth models do not correspond to macrodynamization of the Walrasian general equilibrium, nor have solid microeconomic bases. We advocate in favor of rehabilitating state's intervention in social areas and of reactivating Marxist theoretical reflections regarding social planning and class analysis in the current time of structural crisis of the capitalist world system.

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Revitalizing Marxist Theory for Today's Capitalism
Type: Book
ISBN: 978-1-78052-255-5

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Book part
Publication date: 1 November 2011

Donald A.R. George

This chapter considers the lag structures of dynamic models in economics, arguing that the standard approach is too simple to capture the complexity of actual lag…

Abstract

This chapter considers the lag structures of dynamic models in economics, arguing that the standard approach is too simple to capture the complexity of actual lag structures arising, for example, from production and investment decisions. It is argued that recent (1990s) developments in the the theory of functional differential equations provide a means to analyze models with generalized lag structures. The stability and asymptotic stability of two growth models with generalized lag structures are analyzed. The chapter's penultimate section includes a speculative discussion of time-varying parameters.

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Economic Growth and Development
Type: Book
ISBN: 978-1-78052-397-2

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Book part
Publication date: 26 November 2019

Ozoemena Stanley Nwodo and Ezebuilo Romanus Ukwueze

The greatest challenge facing most economies today is how to grow their economies and reduce over-dependence on imports in the midst of increasing integration of world…

Abstract

The greatest challenge facing most economies today is how to grow their economies and reduce over-dependence on imports in the midst of increasing integration of world economies. Addressing this challenge seems to be difficult despite all efforts by policymakers at different times to salvage the situation, the problem persists as evident in the global financial crisis of 2008 and the Eurozone crisis of 2012 which were generally viewed as a glaring illustration of limitless pursuit of economic integration and governance failure at the expense of carefulness, prudence, due diligence, and regulation. It also reflects the lack of proper coordination and lack of proper economic integration facing most emerging market economies of the world. Against this background, this study focuses on the reexamination of the impact of trade openness (TOP) and financial openness (FOP) on economic growth in emerging market economies. The direct and interaction effect of the both openness variables on economic growth in these markets is investigated using data from 2000 to 2017 adopted from World Development indicators of the World Bank. Over 30 emerging market economies covering Asia, Latin America, and Europe are included in the study. For empirical analysis, the study uses one measure of FOP: de facto (total capital flow) variables following Aizenman and Noy (2009) and a measure of TOP as total trade–GDP ratio. The study applies the Dynamic Panel Approach, that is, the Arellano–Bond GMM estimation technique and Granger Causality Test to address the objectives. The results of this study show that TOP has a positive and significant impact on all the countries studied, whereas FOP has positive but no significant impact on economic growth of these countries, implying that these countries have not harnessed the benefit of financial liberalization and integration. It is recommended that the emerging market economies should open not only their economies to trade but also open their economies to finance so as to reap the benefits of FOP and integration.

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The Gains and Pains of Financial Integration and Trade Liberalization
Type: Book
ISBN: 978-1-83867-004-7

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Article
Publication date: 8 November 2013

Olivier Cardi

Abstract

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Indian Growth and Development Review, vol. 6 no. 2
Type: Research Article
ISSN: 1753-8254

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Content available
Article
Publication date: 11 September 2018

Vivian Bushra Kheir

The purpose of this study is to empirically examine the impact of financial development on poverty reduction in Egypt. The paper also investigates whether financial…

Abstract

Purpose

The purpose of this study is to empirically examine the impact of financial development on poverty reduction in Egypt. The paper also investigates whether financial development affects poverty via gross domestic product (GDP) growth.

Design/methodology/approach

This study uses the autoregressive distributed lag approach to estimate two specifications. The first is dependent on poverty by the ratio domestic credit to the private sector (percentage of GDP) and the second is dependent on the poverty by the ratio liquid liabilities to GDP or M3/GDP. The data are annual and cover the period from 1980 to 2015.

Findings

In long run, the study finds that relationship between economic growth and poverty is bidirectional. Financial development and poverty (household final consumption expenditure per capita) are complementary as bidirectional (in Granger sense). In short run, the study finds the bidirectional causality between financial development (real domestic credit to private sector per capita) and poverty reduction.

Practical implications

The findings suggest that governments should remove policies that impede the ability of banks to offer loan products or undermine the commercial incentive structure for banks or borrowers. It is crucial to enhance the role of specialized state-owned banks in financial intermediation.

Social implications

Several attempts have been made to investigate the relationship between financial development and other macroeconomic variables, but few studies have examined the impact of financial development on poverty reduction. Furthermore, the majority of the previous studies are based on Asia and Latin America – affording Egypt very little or no coverage at all.

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Review of Economics and Political Science, vol. 3 no. 2
Type: Research Article
ISSN: 2631-3561

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Article
Publication date: 13 April 2012

Peter E. Robertson

The purpose of this paper is to provide a quantitative assessment of the factors contributing to India's growth acceleration since 1970, based on the neoclassical growth model.

Abstract

Purpose

The purpose of this paper is to provide a quantitative assessment of the factors contributing to India's growth acceleration since 1970, based on the neoclassical growth model.

Design/methodology/approach

A feature of neoclassical growth models is that capital accumulation is induced by both productivity growth and increases in investment rates. The paper uses a growth decomposition method based on that of Robertson. The method reconstructs India's actual growth path exactly, then decomposes the growth using counterfactual simulations, holding investment rates constant and productivity growth constant. The role of human capital is also discussed.

Findings

An increase in the productivity growth rate from 1970 accounts for 68per cent of India's post 1970s growth and the rise in the investment rate accounts for 30 per cent. Hence an upward trend in productivity growth has been more than twice as important as the doubling of the investment rate. A similar conclusion applies for the post 2000 era, where a rise in investment from 25 per cent to 37 per cent of GDP, only adds about 0.7 percentage points of growth to the 4.5 per cent annual growth rate over this period.

Originality/value

The paper provides quantitative estimates of the role of investment and productivity to India's growth based on the neoclassical growth model. It thus improves upon existing growth accounting studies by allowing for the induced effect of productivity growth on capital accumulation. It also improves upon existing development accounting techniques that rely on steady state restrictions, and which would therefore be inappropriate for evaluating India's recent transitional growth.

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Indian Growth and Development Review, vol. 5 no. 1
Type: Research Article
ISSN: 1753-8254

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Article
Publication date: 2 September 2020

Clement Olalekan Olaniyi and Adebayo Adedokun

This study examines the moderating effect of institutional quality on the finance-growth nexus in South Africa from 1986 to 2015.

Abstract

Purpose

This study examines the moderating effect of institutional quality on the finance-growth nexus in South Africa from 1986 to 2015.

Design/methodology/approach

This study adopts unit root tests, cointegration test and autoregressive distributed lag (ARDL) model.

Findings

The findings reveal that institutional quality constitutes a drain to the growth benefits of financial development (FD) in South Africa in the short-run while FD and institutional quality converge to enhance growth process of the country in the long-run. Also, the threshold of institutional quality beyond which institution stimulates strong positive impact of finance on growth is estimated to be 6.42 on a 10-point scale.

Practical implications

This study, therefore, suggests that institutional quality matters in the way FD influences economic growth in South Africa. Hence, stakeholders are encouraged to trace and block lapses and loopholes in the institutional framework guiding financial system in South Africa so as to maximize growth benefits of FD.

Originality/value

This study contributes to the extant studies by introducing a country-specific analysis into the empirical examination of how institutional quality influences the impact of FD on economic growth. Also, this study deviates from other studies by determining the threshold of institutional quality beyond which FD stimulates strong positive effect on economic growth in South Africa

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International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 1 April 2014

Anthony Adu-Asare Idun and Anthony Q.Q. Aboagye

This paper takes the finance-growth nexus further by looking at the relationship between bank competition, financial innovations and economic growth in Ghana. The purpose…

Abstract

Purpose

This paper takes the finance-growth nexus further by looking at the relationship between bank competition, financial innovations and economic growth in Ghana. The purpose of this paper is to find the causality among bank competition, financial innovations and economic growth in Ghana.

Design/methodology/approach

The relationship between bank competition, financial innovations and economic growth was established through the framework of the endogenous growth model. In addition, the paper employed the bound testing ARDL cointegration procedures to enable us to establish both short-run and long-run relationship between bank competition, financial innovations and economic growth. Granger causality test were also estimated to determine the direction of causality.

Findings

The results showed that, in the long run, bank competition is positively related to economic growth while financial innovation is negatively related to economic growth. In the short run, bank competition is negatively related to economic growth. By the same token, financial innovation is positively related to economic growth in the short run. In terms of causality, the results showed that there is unidirectional Granger causality from bank competition to economic growth. However, there is bidirectional Granger causality between financial innovation and economic growth.

Practical implications

The study therefore, recommends for more regulations toward a more competitive banking system with more innovative products tailored toward mobilization of savings and investment to growth induced sectors of the economy.

Originality/value

This paper provides a time series perspective to the finance-growth nexus and highlights the potential contribution of effective banking development to the economic welfare of the Ghanaian citizens.

Details

African Journal of Economic and Management Studies, vol. 5 no. 1
Type: Research Article
ISSN: 2040-0705

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Article
Publication date: 11 July 2016

Ángela Martínez-Pérez, Pedro M. García-Villaverde and Dioni Elche

This paper aims to analyze the extent to which social capital (SC) spurs innovation in firms located within tourism clusters. Specifically, the study focuses on the…

Abstract

Purpose

This paper aims to analyze the extent to which social capital (SC) spurs innovation in firms located within tourism clusters. Specifically, the study focuses on the mediating role of ambidextrous knowledge strategy (AKS) on the relationship between SC and innovation.

Design/methodology/approach

A structural model is used on a sample of 215 firms of the hospitality and tourism industry located in World Heritage Cities of Spain. Data analysis is carried out using partial least squares.

Findings

The combination of bonding and bridging capital yields higher innovation performance through AKS.

Research limitations/implications

This analysis does not take into account the full set of confounding factors that influence innovation. The factors captured by this study significantly explain heterogeneity in the intensity of innovation among the studied firms.

Practical Implications

The main recommendation is that firms located in cultural tourism clusters (CTCs) do not restrict the focus on either local or outside relations only but pursue a strategy based on the combination of internal and external relations. This will enable ambidextrous knowledge strategies and better innovation performance.

Originality/value

There are numerous studies on the relation between some dimensions of SC, some knowledge strategies and some types of innovation. The value added of the present study is the articulation of complementarities among these dimensions. In particular, this study integrates bonding and bridging dimensions of SC, exploration and exploitation of knowledge and incremental and radical innovation. In addition, the paper provides an empirical identification of World Heritage Cities of Spain as CTCs.

Details

International Journal of Contemporary Hospitality Management, vol. 28 no. 7
Type: Research Article
ISSN: 0959-6119

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Article
Publication date: 1 September 1997

Bruce Lloyd and Art Kleiner

In a discussion with Bruce Lloyd, Art Kleiner, author of The Age of Heretics, defines the organizational heretic and discusses their role in continuous improvement. Argues…

Abstract

In a discussion with Bruce Lloyd, Art Kleiner, author of The Age of Heretics, defines the organizational heretic and discusses their role in continuous improvement. Argues that these counter‐cultural people should be listened to, as they are on the fulcrum of organizational learning. Discusses how to be a heretic and still be effective.

Details

Leadership & Organization Development Journal, vol. 18 no. 5
Type: Research Article
ISSN: 0143-7739

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