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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.

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

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Article
Publication date: 16 November 2020

Qamar Uz Zaman, Kinza Aish, Waheed Akhter and Syed Anees Haidder Zaidi

The purpose of this paper is to address the effect of corruption and money laundering (ML) on banking profitability and stability.

Abstract

Purpose

The purpose of this paper is to address the effect of corruption and money laundering (ML) on banking profitability and stability.

Design/methodology/approach

This study uses the panel data of 72 banks of Pakistan and Malaysia from 2012–2018. This paper uses fixed effect (FE) and random effect (RE) regression techniques for empirical testing and generalized methods of moment (GMM) technique for robustness tests.

Findings

This study founds consistent evidence that corruption has a positive and ML has a negative relationship with the banking profitability of Pakistan and Malaysia while the empirical evidence suggests that corruption and ML have a diverse impact on the banking stability of Pakistan and Malaysia. Further, this paper also founds that corruption and ML moderates the relationship between risk and banking profitability and stability.

Practical implications

The results reveal that the banks of the highly corrupt environment are more affected by corruption and ML than the least corrupt environment. Thus, it is recommended that the Government of Pakistan should formulate strong anti-corruption and anti-money laundering policies.

Originality/value

As per the knowledge of the authors, this research contributes to understanding the role of corruption and money laundering on the stability and profitability of Pakistan and, in general, it is the first attempt investigating the moderating role of corruption and ML between risk and banking profitability and stability.

Details

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

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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.

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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.

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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: 28 July 2020

Folorunsho M. Ajide and John A. Olayiwola

In this paper, we investigate the impact of remittances on control of corruption in Nigeria for a period of 1986–2016.

Abstract

Purpose

In this paper, we investigate the impact of remittances on control of corruption in Nigeria for a period of 1986–2016.

Design/methodology/approach

The study uses ARDL modeling framework, dynamic OLS estimation, variance decomposition and impulse response analysis to examine the relationship between the two variables.

Findings

The study finds that remittances significantly improve the control of corruption in Nigeria. We further examine the robustness test of the results using dynamic OLS estimation, variance decomposition and impulse response analysis. Our results remain significant and consistent to the earlier one reported in ARDL framework which supports the extant literature.

Practical implications

Our study suggests that international remittances can be used, through the cross-border transfer of norms and practices, to significantly impact the socioeconomic progresses of a country by reducing corruption.

Originality/value

The existing studies on the relationship between corruption and remittances document conflicting results. In addition, study on corruption - remittances nexus that specifically focuses on any African country is largely absent despite the fact that most of the countries in the region are recognized as highly corrupt. This paper provides insights on how remittances can be used as part of tool kits to control corruption in African nation.

Details

Journal of Economics and Development, vol. 23 no. 1
Type: Research Article
ISSN: 1859-0020

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Article
Publication date: 18 March 2020

Guych Nuryyev and Charles Hickson

This study aims to examine the effect of the crude oil price crash of 2014 on corruption decentralisation. In a corrupt state, a significant decrease in the state revenue…

Abstract

Purpose

This study aims to examine the effect of the crude oil price crash of 2014 on corruption decentralisation. In a corrupt state, a significant decrease in the state revenue might lead to concentration of power in the hands of the political elite who try to maintain their income, or to a weakening of the elite’s control as the bureaucrats compete for bribes.

Design/methodology/approach

Crude oil price crash provides a rare opportunity to test the effect of reduced state revenue on corruption decentralisation. This study constructs a measure for corruption decentralisation and analyses how it is affected by state income in 18 resource-rich and corrupt states.

Findings

The empirical model suggests that there is a positive relationship between corruption decentralisation and state oil and gas revenue, implying that as the revenue decreases, political elite in the exporting countries manage to maintain their control over the bureaucrats.

Originality/value

The results are important for academics as well as for policymakers, as they allow adjustment of anti-corruption efforts based on the level of corruption decentralisation.

Details

International Journal of Development Issues, vol. 19 no. 1
Type: Research Article
ISSN: 1446-8956

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Article
Publication date: 29 June 2020

Biswajit Mandal and Alaka Shree Prasad

This paper aims to strive to model virtual trade resulting from time zone differences in an otherwise Heckscher–Ohlin set up which is absent in the literature. So, the…

Abstract

Purpose

This paper aims to strive to model virtual trade resulting from time zone differences in an otherwise Heckscher–Ohlin set up which is absent in the literature. So, the paper adds some value to the existing literature on time zones (TZ) and trade.

Design/methodology/approach

A competitive general equilibrium model is developed first to capture the effect of TZ differences on virtual trade. Then the authors examine, in brief, if distance can be accommodated in such framework. Finally, the authors extend the model to incorporate informality.

Findings

It is seen that exploitation of time zone difference benefits skilled labor and hurts capital under reasonable assumption. In what follows, time zone difference exploiting sector expands, whereas the other sector contracts. Then, the model has been extended to examine how distance may also lead to similar outcomes. In addition, the model is further modified to explore the effect of virtual trade in an informality and associated extortion ridden economy. Interestingly, virtual trade turns out to be beneficial to unskilled workers as well, and leads to a fall in the number of extortionists, though informal production is augmented.

Research limitations/implications

This model is a competitive model that may not clearly reflect the realistic world. However, interestingly this may form the basis of looking into some other appealing dimensions of the real world.

Originality/value

TZ and related communication-cost-driven trade arguments are relatively less explored theoretically. Therefore, the work adds some value to the theoretical understanding of outsourcing in service trade that uses day-night differences across the globe.

Details

Indian Growth and Development Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8254

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Article
Publication date: 20 July 2020

Zuhairan Yunmi Yunan

This paper aims to examine whether the level of corruption affects profitability and soundness of Islamic banking.

Abstract

Purpose

This paper aims to examine whether the level of corruption affects profitability and soundness of Islamic banking.

Design/methodology/approach

This paper uses a dynamic panel of 61 Islamic banks from 12 Organization of Islamic Cooperation (OIC) countries covering the period between 2016 and 2018.

Findings

This paper finds that the empirical evidence examined shows that corruption does affect the profitability and soundness of Islamic banks.

Originality/value

The value of this paper is to emphasize further understanding of corruption behaviour on Islamic banking in Islamic countries. This paper contributes to filling the gaps in the current literature on corruption and Islamic banking. Existing literature has only focussed on either profitability or soundness of Islamic banking, whereas this paper analyses the impact of corruption levels for both performance measurements simultaneously.

Details

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

Keywords

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