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1 – 10 of 795Shekhar Saroj, Rajesh Kumar Shastri, Priyanka Singh, Mano Ashish Tripathi, Sanjukta Dutta and Akriti Chaubey
Human capital is a portfolio of rich skills that the labour possesses. Human capital has attracted significant attention from scholars. Nevertheless, empirical findings on the…
Abstract
Purpose
Human capital is a portfolio of rich skills that the labour possesses. Human capital has attracted significant attention from scholars. Nevertheless, empirical findings on the utility of human capital have often been divided. To address the research gap in the literature, the authors attempt to understand how human capital plays a significant role in financial development and economic growth nexus.
Design/methodology/approach
The authors rely on secondary data published by the World Bank. The authors use econometric tools such as the autoregressive distributive lag (ARDL) model and related statistical tests to study the relationship between human capital, India's financial growth and gross domestic product (GDP) growth.
Findings
Study findings suggest that human capital and financial development contribute significantly to economic growth. Further, the authors found that human capital has a positive and significant moderating effect on the path of joining financial development and economic growth.
Practical implications
The study contributes to the human capital debate. Despite the rich body of literature, the study based on World Bank data confirms the previous findings that investment in human capital is always useful for the financial and economic growth of the nation.
Originality/value
This paper reveals some unique findings regarding effect of financial development and economic growth nexus which opens the window of new dimension to think about their nexus. It also provides a different pathway to foster the economic growth by using human capital and financial development as together, especially in India.
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Muhammad Bahrul Ilmi, Muslim Har Sani Mohamad and Ros Aniza Mohd. Shariff
This study aims to investigate the growth of Indonesian Islamic banks and explores organisational growth determinants from different perspectives, namely, organisational climate…
Abstract
Purpose
This study aims to investigate the growth of Indonesian Islamic banks and explores organisational growth determinants from different perspectives, namely, organisational climate, intellectual capital (IC) and organisational service orientation. The study also attempts to develop a model to measure the growth of Islamic banks and uncovers the root causes of the stagnancy in Indonesian Islamic banking.
Design/methodology/approach
The study used survey questionnaires distributed to Islamic bank managers, who were considered representative experts in the field of Islamic banking. The data collected were analysed using the Statistical Package for Social Sciences (SPSS Version 21.0), and two analyses were performed with different strategies to build the regression model, namely, multiple linear regression and automatic linear regression.
Findings
The study found that IC significantly affected Islamic banks’ growth in Indonesia; however, organisational climate and service orientation did not predict such growth. Concerning service orientation as a mediating model, climate or IC had no indirect effect on growth.
Research limitations/implications
This study’s results contribute to fill the gap by analysing the growth of Islamic banks. Hence, the study results will be especially practical and helpful for Islamic bank managers and policymakers to help develop mechanisms for Islamic banks in Indonesia.
Originality/value
By combining the aspects of organisational climate, IC and service orientation from earlier studies and categorising them by organisational growth, together with a comprehensive literature review, the study proposes a model specific to Islamic banks. It also offers new insight and discussion for determining organisational growth in Indonesian Islamic banks.
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Le Thanh Tung and Le Nguyen Hoang
Emerging economies have been highlighted as an important growth source of the global economy. However, this group of countries has not received enough academic attention yet…
Abstract
Purpose
Emerging economies have been highlighted as an important growth source of the global economy. However, this group of countries has not received enough academic attention yet. Therefore, this study aims to identify the impact of research and development (R&D) expenditure on economic growth in emerging economies.
Design/methodology/approach
The theoretical framework of the production function is applied to quantitatively analyse the impact of R&D expenditure on economic growth with a sample of 29 emerging economies in the period between 1996 and 2019.
Findings
The panel cointegration test confirms the existence of long-run cointegration relationships between economic growth and independent variables in these emerging economies. Besides, the estimated results show that the national R&D expenditure has positive effects on economic growth from both direct and interaction dimensions. This evidence has filled the empirical research gap in the R&D-growth nexus in the case of emerging economies. Finally, while gross capital and education have positive impacts on growth, corruption has a harmful effect on economic growth in these countries.
Practical implications
The results highlight that policymakers should enhance R&D expenditure and R&D activities as the key national development strategy. The investment in R&D not only helps emerging economies avoid the middle-income trap but also pushes these countries to successfully join the group of developed countries.
Originality/value
To the best of the authors’ knowledge, this research is among the first to examine the impact of R&D expenditure on economic growth with a homogeneous sample of emerging economies. The results are obviously helpful for policymakers to use R&D as the key development strategy for supporting economic growth in emerging economies in the future.
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Samson Edo and Osaro Oigiangbe
The purpose of this study is to empirically investigate how external debt vulnerability has affected the economy of emerging countries over time, with particular reference to…
Abstract
Purpose
The purpose of this study is to empirically investigate how external debt vulnerability has affected the economy of emerging countries over time, with particular reference to Sub-Saharan African countries. It also deals with the policy issues associated with the economic effects.
Design/methodology/approach
The techniques of dynamic ordinary least squares and fully modified ordinary least squares are used in this investigation, covering the period 1990–2022. A panel of 43 Sub-Saharan African countries is used in the study.
Findings
The estimation results reveal that external debt vulnerability impacted negatively on economic growth, thus validating the concerns raised about the debt problem in Sub-Saharan Africa. Furthermore, the results revealed that domestic credit and openness of economy played a passive role and were therefore unable to cushion the adverse effect of debt vulnerability. Capital stock, however, stands out as the only variable that played a significant positive role in facilitating economic growth. The results are considered to be highly reliable for short-term forecast of economic growth and formulation of relevant policies.
Originality/value
Over the years, economic analysts and stakeholders have expressed concern about the inadequate ratio of foreign reserves to external debt in developing countries. The effect of this external debt vulnerability on the economy of these countries has yet to be given sufficient attention by researchers. In view of this perceived void, this current study is carried out to determine the economic and policy consequences of the problem.
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Fisnik Morina, Albulena Syla and Sadri Alija
Purpose: This study analyses how investments and specific financial factors affect the financial performance of businesses in Kosovo. Exploring the relationship between…
Abstract
Purpose: This study analyses how investments and specific financial factors affect the financial performance of businesses in Kosovo. Exploring the relationship between investments and financial performance and their impact on performance volatility, performance is assessed using return on assets (ROA) and return on equity (ROE) investments.
Methodology: Quantitative methods using secondary data from audited financial statements of Kosova manufacturing and commercial enterprises cover a 3-year period (2019–2021), involving 40 enterprises with 120 observations. Statistical tests such as descriptive statistics, correlation analysis, linear regression, Hausman–Taylor regression, fixed effects, random effects, and generalised estimating equations (GEE) model are applied. The study also utilises ARCH–GARCH analysis to assess the relationship between investments and performance volatility.
Findings: Investments positively impact the financial performance of Kosova businesses and significantly reduce performance volatility. Long-term liabilities, retained earnings, and short-term liabilities also play a role in reducing asset return volatility, while cash flow from financial activities increases it. Investments, cash flows from financial activities, long-term liabilities, short-term liabilities, retained earnings, and solvency affect equity return volatility.
Practical Implications: The study sheds light on how investments and financial factors influence the financial performance and volatility of Kosova businesses. Policymakers can use these insights to create policies that foster the development of commercial and manufacturing enterprises, given their importance in Kosovo’s economy.
Significance: This research provides valuable insights for business managers to enhance investment strategies and improve financial performance. Policymakers can rely on this academic study to enhance the economic environment and promote the growth of businesses in Kosovo.
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In this chapter, the author considers a three-sector general equilibrium model in the context of a developing nation to find out the impact of an increase in foreign capital…
Abstract
In this chapter, the author considers a three-sector general equilibrium model in the context of a developing nation to find out the impact of an increase in foreign capital inflow on the welfare level of the nation. Comparative static analysis reveals that an increase in the inflow of foreign capital causes redistribution across the factors of production and a reallocation of resources, reflected through the change in output. Moreover, the author considers the case of technology transfer and proves that an increase in foreign capital inflow makes the country better off in terms of social welfare even if the foreign capital is fully repatriated. Hence, this work shows that in the absence of any trade distortion, a partial investment liberalisation causes a welfare gain for a small open economy.
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Aaron Fernstrom, Mary Margaret Frank, Samuel A. Lewis, Pedro Matos and John G. Macfarlane
The case examines the development and launch of an exchange-traded fund (ETF) based on JUST Capital's socially responsible corporate ranking methodologies. The case provides a…
Abstract
The case examines the development and launch of an exchange-traded fund (ETF) based on JUST Capital's socially responsible corporate ranking methodologies. The case provides a market overview of Environment, Social, and Corporate Governance (ESG) and socially responsible investing (SRI), what has driven growth in those areas worldwide, and several best-practice investment approaches. Following the overview, the case describes the founding and development of JUST Capital, explores JUST Capital's ranking methodologies, and presents the decision point faced by the CEO: requisite selection of one of three strategies in order for JUST Capital to generate “self-sustaining” revenue.
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This chapter examines the influence of external public borrowing resources on economic progress in Tunisia. The study focuses on two stages: First, the influence is studied in a…
Abstract
This chapter examines the influence of external public borrowing resources on economic progress in Tunisia. The study focuses on two stages: First, the influence is studied in a direct sense and then in an indirect sense, i.e., through a transmission channel of this influence. By applying the autoregressive distributed technique with staggered lags (ARDL), over a period ranging from 1986 to 2019, the results showed that the influence of external borrowing resources on growth seems to be unfavorable in the short term but positive in the long term, hence the importance of the empirical technique chosen. Second, three interaction variables were tested, namely total government expenditure, government investment expenditure, and the real effective exchange rate. The results obtained call for better attention to the channels identified to maximize the positive influence of external public debt on the country's economic progress.
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Biswajit Patra and Narayan Sethi
This paper analyzes the direct effect of financial development and the mediating impact of financial development through foreign direct investment (FDI), foreign aid and trade on…
Abstract
Purpose
This paper analyzes the direct effect of financial development and the mediating impact of financial development through foreign direct investment (FDI), foreign aid and trade on economic growth for all Asian countries.
Design/methodology/approach
A fixed-effect model with Driscoll–Kraay panel corrected estimators was employed to find the direct and mediating impact of financial developments on growth for all 47 Asian economies from 1980 to 2020. The bootstrapped panel-quantile regression (BPQR) model is used to check how this effect varies for different income groups of countries.
Findings
The results demonstrated that financial development positively impacts countries' economic growth. The interaction effect of financial development with FDI, foreign aid and foreign trade negatively impacts economic growth. The BPQR results showed that FDI and foreign aid help in the growth of lower quantile economies; however, the impact is negative for middle- and upper-income countries. Trade impacts growth positively for all the quantiles of economies.
Research limitations/implications
The results suggest that the Asian economies must continue to provide thrust on the financial development of their own countries to achieve better growth. It also implied that the dependence on external finance is good for low-income countries and not advisable for middle- and upper-income countries.
Originality/value
To the best of the authors’ knowledge, the current study is the first to provide empirical evidence on analyzing both the direct and interaction effect of financial development on economic growth by considering all the Asian economies.
Peer review
The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-09-2022-0587
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This study empirically demonstrates a contradiction between pillar 3 of Basel norms III and the designation of Systemically Important Banks (SIBs), also known as Too Big to Fail…
Abstract
Purpose
This study empirically demonstrates a contradiction between pillar 3 of Basel norms III and the designation of Systemically Important Banks (SIBs), also known as Too Big to Fail (TBTF). The objective of this study is threefold, which has been approached in a phased manner. The first is to determine the systemic importance of the banks under study; second, to examine if market discipline exists at different levels of systemic importance of banks and lastly, to examine if the strength of market discipline varies at different levels of systemic importance.
Design/methodology/approach
This study is based on all the public and private sector banks operating in the Indian banking sector. The Gaussian Mixture Model algorithm has been utilized to classify banks into distinct levels of systemic importance. Thereafter, market discipline has been observed by analyzing depositors' sentiments toward banks' risk (CAMEL indicators). The analysis has been performed by employing the system Generalized Method of Moments (GMM) to estimate models with different dependent variables.
Findings
The findings affirm the existence of market discipline across all levels of systemic importance. However, the strength of market discipline varies with the systemic importance of the banks, with weak market discipline being a negative externality of the SIBs designation.
Originality/value
By employing the Gaussian Mixture Model algorithm to develop a framework for categorizing banks on the basis of their systemic importance, this study is the first to go beyond the conventional method as outlined by the Reserve Bank of India (RBI).
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