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Book part
Publication date: 29 February 2008

Jennifer L. Castle and David F. Hendry

Structural models' inflation forecasts are often inferior to those of naïve devices. This chapter theoretically and empirically assesses this for UK annual and quarterly…

Abstract

Structural models' inflation forecasts are often inferior to those of naïve devices. This chapter theoretically and empirically assesses this for UK annual and quarterly inflation, using the theoretical framework in Clements and Hendry (1998, 1999). Forecasts from equilibrium-correction mechanisms, built by automatic model selection, are compared to various robust devices. Forecast-error taxonomies for aggregated and time-disaggregated information reveal that the impacts of structural breaks are identical between these, helping to interpret the empirical findings. Forecast failures in structural models are driven by their deterministic terms, confirming location shifts as a pernicious cause thereof, and explaining the success of robust devices.

Details

Forecasting in the Presence of Structural Breaks and Model Uncertainty
Type: Book
ISBN: 978-1-84950-540-6

Article
Publication date: 20 April 2022

Ijaz Hussain Shah, Kinza Aish and Islam Kashif

This research aims to examine the impact of money laundering (ML) and corruption on the asset quality of conventional and Islamic banks.

Abstract

Purpose

This research aims to examine the impact of money laundering (ML) and corruption on the asset quality of conventional and Islamic banks.

Design/methodology/approach

The current study used the data of conventional and Islamic banks of Pakistan from 2012 to 2018. In this study, we used fully modified ordinary least squares, dynamic ordinary least squares and pooled ordinary least square methods to analyze the data.

Findings

The results found that corruption and ML positively affect the conventional banking non-performing loans (NPLs). In contrast, corruption and ML harm the Islamic bank’s loan portfolio quality.

Originality/value

To the best of the authors’ knowledge, the relationship between corruption, ML and NPLs in conventional and Islamic banks of Pakistan are examined for the first time.

Practical Implications

According to the study’s findings, bank authorities should establish an effective method for monitoring loan activities and developing new and innovative products in Islamic banks. Additionally, the Pakistani government needs to improve anti-corruption and anti-ML policies to earn investors’ trust.

Details

Journal of Money Laundering Control, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1368-5201

Keywords

Book part
Publication date: 9 June 2022

Amrita Chatterjee

There is a long-lasting debate on the relationship between democracy and economic growth, though it remained inconclusive. On the other hand, corruption is one of the…

Abstract

There is a long-lasting debate on the relationship between democracy and economic growth, though it remained inconclusive. On the other hand, corruption is one of the greatest challenges of the contemporary world that lessens the efficiency of a good government, distorts public policy, leads to the misallocation of resources, harms the private sector and particularly hurts the poor. Moreover, the corruption–growth relationship has been shown to be contingent upon the political regime. This chapter has chosen a set of emerging market economies (EMEs), which consists of democratic as well as authoritarian countries, to throw light on democracy–growth relationship through the channel of corruption using a system generalized method of moments estimation of a panel of 27 countries for a period of 2006–2018. Results show that democracy is growth-enhancing but corruption dampens its positive impact to some extent. However, for authoritarian countries corruption can enhance growth.

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Environmental Sustainability, Growth Trajectory and Gender: Contemporary Issues of Developing Economies
Type: Book
ISBN: 978-1-80262-154-9

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Book part
Publication date: 3 August 2015

Alexander W. Salter and Abigail R. Hall

This paper applies the logic of economic calculation to the actions of autocrats. We model autocrats as stationary bandits who use profit-and-loss calculations to select…

Abstract

This paper applies the logic of economic calculation to the actions of autocrats. We model autocrats as stationary bandits who use profit-and-loss calculations to select institutions that maximize their extraction rents. We find in many cases autocrats achieve rent maximization through creating and protecting private property rights. This in turn yields high levels of production, with expropriation kept low enough to incentivize continued high production. Importantly, while this leads to increasing quantities of available goods and services over time, it does not lead to true development; that is, the coordination of consumer demand with producer supply through directing resources to their highest-valued uses. We apply our model to the authoritarian governments of Singapore and the United Arab Emirates, showing how they function as quasi-corporate governance organizations in the business of maximizing appropriable rents.

Details

New Thinking in Austrian Political Economy
Type: Book
ISBN: 978-1-78560-137-8

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Book part
Publication date: 16 November 2016

Matthew Loveless

Using original mass public surveys in nine East European, European Union (EU) member countries (2007), I develop a micro-level approach linking individuals’ perceptions of…

Abstract

Using original mass public surveys in nine East European, European Union (EU) member countries (2007), I develop a micro-level approach linking individuals’ perceptions of inequality and corruption. Merging an instrumental variables approach with an emerging body of comparative scholarship, I demonstrate that individuals’ perceptions of inequality can be seen to contribute to their perceptions of corruption based on individuals’ normative concerns of the failure of democratic institutions to address issues related to inequality. Thus, for these countries, this region, the EU, as well as other new democracies, we can better understand these potential threats to the development of stable, sustainable democracy.

Details

Inequality after the 20th Century: Papers from the Sixth ECINEQ Meeting
Type: Book
ISBN: 978-1-78560-993-0

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Book part
Publication date: 13 May 2019

Amit Majumder, Megnath Routh and Dipayan Singha

One of the noteworthy developments in the world economy is the cryptocurrency in general and the bitcoin in particular. Although several types of cryptocurrency are in…

Abstract

One of the noteworthy developments in the world economy is the cryptocurrency in general and the bitcoin in particular. Although several types of cryptocurrency are in operation in the current digital economy, the most prevalent is the bitcoin, which was launched formally in 2009 by an individual or group known under the pseudonym Satoshi Nakamoto. The value of bitcoin has increased to such an extend that it reached 19.7 billion US dollars by January 2, 2018 (Statista, 2018). As the bitcoin price touches a new high day by day, various terrorist organizations are using this cryptocurrency to anonymously finance their grotesque terrorist activities around the world by bypassing the surveillance mechanism of the banking system of the respective countries. Against this backdrop, this chapter aims to understand the mechanism of cryptocurrencies in general and the bitcoin in particular. Finally, it also endeavors to identify the trend of the bitcoin economy and its impact on nefarious activities in general and terrorism financing in particular. It has been revealed from the study that cryptocurrency economy has become so popular across the world that it has created an alternative virtual economy devoid of regulations from a specific country or a group of countries. By using vector error correction model (VECM), it had been observed that there exists a statistically significant long-run association between terrorist incidences and bitcoin transaction/circulation in the panel of 12 countries for 2010–2016. However, there is a huge concern over its way of operation and its unholy nexus with terrorism financing.

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The Impact of Global Terrorism on Economic and Political Development
Type: Book
ISBN: 978-1-78769-919-9

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Book part
Publication date: 13 April 2015

Stephen O. Oluwatobi

The objective of this chapter is to explain how an innovation-driven economic development model can help to mitigate corruption and facilitate competitiveness in Nigeria.

Abstract

Purpose

The objective of this chapter is to explain how an innovation-driven economic development model can help to mitigate corruption and facilitate competitiveness in Nigeria.

Methodology/approach

With the use of descriptive narratives, Nigeria was examined in comparison with other countries such as South Korea. The chapter argues that Nigeria has not experienced development as much as South Korea because of her primary dependence on crude oil for economic sustenance.

Findings

Evidence from the statistics showed that innovation-driven economies are more competitive and less corrupt compared to natural resource-driven economies such as Nigeria. Nigeria has performed poorly in terms of competitiveness, transparency, and governance owing to her dependence on natural resources as a major means for economic sustenance.

Originality/value

Helps to explain why an innovation-driven economic development model is the solution to mitigating corruption and facilitating competitiveness in Nigeria.

Details

Beyond the UN Global Compact: Institutions and Regulations
Type: Book
ISBN: 978-1-78560-558-1

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Article
Publication date: 24 January 2022

Emre Kuvvet

The purpose of this study is to examine whether foreign firms pay disproportionately higher monetary penalties after controlling for factors that affect the sanctioning of…

Abstract

Purpose

The purpose of this study is to examine whether foreign firms pay disproportionately higher monetary penalties after controlling for factors that affect the sanctioning of the firm.

Design/methodology/approach

In this paper, a cross-sectional data analysis has been used to examine the enforcement actions of the Foreign Corrupt Practices Act (FCPA) against all private and public companies from 1978 to 2019.

Findings

The findings indicate that that foreign firms pay disproportionately higher monetary penalties than domestic firms after controlling for factors that affect the sanctioning of firms. On average, foreign firms pay $43.3m more to the US government than US firms pay. This is a considerable difference in monetary penalties and equal to 68.95% of the average monetary penalty.

Originality/value

This paper shows that the US government treats US firms more favorably than foreign firms in monetary sanctions. Because the FCPA is not applied equally, this is contrary to US government guidelines and to the rule of law. The government needs to reconsider the consequences of imposing disproportionately higher penalties on foreign firms. Given the lack of judicial scrutiny of the FCPA settlement amounts against foreign firms, prosecutorial harshness against them can be remedied by amending the FCPA to eliminate the unequal treatment of foreign entities.

Details

Journal of Financial Crime, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1359-0790

Keywords

Article
Publication date: 22 December 2021

Nadir Hussain, Salman Masood Sheikh and Ijaz Hussain Shah

Corruption and money laundering (ML) are severe concerns for both developing and developed countries. According to international organizations, such as Transparency…

Abstract

Purpose

Corruption and money laundering (ML) are severe concerns for both developing and developed countries. According to international organizations, such as Transparency International, the Basel Institute on Governance and the International Country Risk Guide, corruption and ML exist in every country. This research aims to investigate the impact of corruption and ML on the loan portfolio quality of banks.

Design/methodology/approach

From 2013 to 2019, this study used the panel data of 132 countries, including 87 highly corrupt and 45 least corrupt countries: the fixed effect and random effect econometric regression techniques for data analysis. Additionally, this study used the generalized methods of moment technique to check the result’s robustness.

Findings

This study shows that corruption and ML have diverse relationships with non-performing loans in highly corrupt and low corrupt countries. It is potentially because of the differences in the regulatory structure of a highly corrupt and least corrupt environment.

Originality/value

To the best of the authors’ knowledge, this study is the first attempt that provides a unique perspective on corruption, ML and its effect on the loan’s portfolio quality of banks. Furthermore, this study suggests that governments in highly corrupt environments develop robust anti-corruption and anti-ML regulations.

Details

Journal of Financial Regulation and Compliance, vol. 30 no. 3
Type: Research Article
ISSN: 1358-1988

Keywords

Article
Publication date: 30 December 2021

Brenda Silupu, Belen Usero and Ángeles Montoro-Sánchez

The formalization of a company is a process that requires compliance with standards established by government institutions. In developing countries, many businesses start…

Abstract

Purpose

The formalization of a company is a process that requires compliance with standards established by government institutions. In developing countries, many businesses start this process, but do not finish it, with different levels of formality. The objective of this research is to analyze how the perception of entrepreneurs about bureaucratic procedures and the sector determine the level of formality regarding an established company that has taken the first step to formality.

Design/methodology/approach

The National Survey of Micro and Small Enterprises (MSEs) is used with a sample of 4,619 Peruvian MSEs with more than three years of operation within the manufacturing and services sector. The data are analyzed with the ordered logistic regression technique.

Findings

The results show that the more favorable the perception of entrepreneurs about the ease of bureaucratic procedures, the higher the level of business formality; and companies in the manufacturing sector are less formal than those in the services sector. In addition, the perceptions of entrepreneurs positively moderate the level of formality in the case of companies in the manufacturing sector.

Originality/value

Levels of formality in established companies are analyzed, defined by the compliance degree with the requirements to be a formal company. The literature on business informality in emerging countries is expanded, particularly in Latin America, incorporating the analysis of the formalization process.

Propósito

La formalización de una empresa es un proceso que exige el cumplimiento de normas establecidas por las instituciones de gobierno. En países en desarrollo, muchas empresas empiezan este proceso, pero no lo terminan, existiendo diferentes niveles de formalidad. El objetivo de esta investigación es analizar cómo la percepción de los empresarios sobre los trámites burocráticos y el sector determina el nivel de formalidad de una empresa establecida que ha dado el primer paso hacia la formalidad.

Diseño/metodología/enfoque

Se utiliza la Encuesta Nacional de la Micro y Pequeña Empresa con una muestra de 4.619 micro y pequeñas empresas peruanas de los sectores de manufactura y servicios con más de tres años de operación. Los datos son analizados con la técnica de regresión logística ordenada.

Hallazgos

Los resultados muestran que cuanto más favorable es la percepción de los empresarios sobre la facilidad de los trámites burocráticos mayor es el nivel de formalidad empresarial, y las empresas del sector manufactura son menos formales que las del sector servicios. Además, las percepciones de los empresarios moderan positivamente en el nivel de formalidad para el caso de las empresas del sector manufactura.

Originalidad/valor

Se analizan niveles de formalidad en empresas establecidas, definidas por el grado de cumplimiento de las exigencias para ser una empresa formal. Se amplía la literatura sobre informalidad empresarial en países emergentes, particularmente en América Latina, incorporando el análisis del proceso de formalización.

Details

Academia Revista Latinoamericana de Administración, vol. 35 no. 1
Type: Research Article
ISSN: 1012-8255

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