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Article
Publication date: 25 November 2014

Muhammad Azam and Chandra Emirullah

The purpose of this paper is to explore the impact of corruption as an important element of weak governance, with control variables such as inflation rate, openness to trade and…

1695

Abstract

Purpose

The purpose of this paper is to explore the impact of corruption as an important element of weak governance, with control variables such as inflation rate, openness to trade and dependency ratio on gross domestic product (GDP) per capita income of nine selected countries in Asia and the Pacific.

Design/methodology/approach

This study is based on an annual panel data covering the period from 1985 to 2012, and a simple multiple regression for empirical investigation is used. Both fixed effects and random effects models were used as analytical techniques.

Findings

The study reveals that both corruption and inflation rate are negatively related to GDP per capita and are statistically significant. As to the impacts of the control variables i.e., dependency ratio is found to be negative and openness to trade to be statistically significant which shows a positive impact on GDP per capita.

Practical implications

The results resoundingly confirmed the importance of good governance, therefore, reducing endemic corruption and controlling inflation needs to be among the foremost factors for consideration for policymakers in adopting and implementing macroeconomic and public policies. In order to be most effective in tackling corruption, it is important to get to the root of the problem. In light of the study findings, it is suggested that corruption need to be put under control and economies be made more open to attain more benefits and accelerate economic growth and development.

Originality/value

Explicitly, this study provides some valuable evidence on the linkage between endemic corruption and economic growth in some Asia and the Pacific countries in particular and on developing world in general. Presumably, this is the first inclusive investigation on the subject under the study in the context of Asia and the Pacific countries and will emphatically contribute to the literature as well.

Details

International Journal of Social Economics, vol. 41 no. 12
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 22 June 2022

Noraziah Che Arshad and Tubagus Thresna Irijanto

This paper aims to investigate empirically whether creative industries are boosting the economic performance of the ASEAN countries (Malaysia, Indonesia, Singapore, Thailand…

Abstract

Purpose

This paper aims to investigate empirically whether creative industries are boosting the economic performance of the ASEAN countries (Malaysia, Indonesia, Singapore, Thailand, Vietnam and Brunei Darussalam) during the Coronavirus disease (COVID-19) pandemic.

Design/methodology/approach

This paper applied a random effect and fixed effect estimation approach to investigate the impact of creative industries’ development (government expenditure on education, export of creative industries, trade openness, innovation index, sukuk issuances) on the economic performance spanning from 2010 to 2020.

Findings

The economic performance was proxied by two dependent variables, namely, the gross domestic product and the Misery Index. On top of containment and vaccination measures, the findings demonstrated that creative industries are enhancing economic growth in Association of Southeast Asian Nations (ASEAN) countries, supported by the significant role of the sukuk market as a vital contributor to economic growth.

Originality/value

This study is unique because it provides novel and empirical results of the creative industries’ development on economic performance in the ASEAN countries before and during the COVID-19 pandemic.

Details

International Journal of Ethics and Systems, vol. 39 no. 3
Type: Research Article
ISSN: 2514-9369

Keywords

Open Access
Article
Publication date: 11 June 2019

Ruilong Yang

Over the past four decades, China has strived to make the market mechanism play a decisive role in resource allocation under the conditions of adhering to the basic socialist…

1920

Abstract

Purpose

Over the past four decades, China has strived to make the market mechanism play a decisive role in resource allocation under the conditions of adhering to the basic socialist economic system. The paper aims to discuss this issue.

Design/methodology/approach

On this matter, this paper proposes a three-phase transition hypothesis for the Chinese institutional change models, namely, a de facto path, which gives potential to a successful incremental transition of a centralized country from planned economy to a market economy, lies in the incremental transitions of the institutional change models from a supply-oriented model at initial reform to a middle-proliferation model and to a demand-induced model along with the gradual establishment of exclusive property rights, thereby completing the transition to a socialist-market-economic system.

Findings

The Chinese economic model’s unique connotation is the reason why the solution to this model often baffles both the traditional political-economic logic and western mainstream institutional change theory.

Originality/value

This hypothesis corroborates that China’s unswerving practice of economic reform has provided unprecedented opportunities and challenges for the development of economic theory. The Chinese model constitutes the source of innovation for the subject of Economics with Chinese Studies.

Details

China Political Economy, vol. 2 no. 1
Type: Research Article
ISSN: 2516-1652

Keywords

Article
Publication date: 26 February 2020

Surya Nepal, Sae Woon Park and Sunhae Lee

The purpose of this paper is to empirically assess the impact of remittances on the economic performance of the 16 Asian developing countries, taking account of their…

Abstract

Purpose

The purpose of this paper is to empirically assess the impact of remittances on the economic performance of the 16 Asian developing countries, taking account of their institutional qualities.

Design/methodology/approach

A panel of 16 Asian developing countries (Central Asia, South Asia, and ASEAN) over the period of 2002–2016 is employed in the analysis. To assess the impact of remittances on economic performance in consideration of institutional quality, OLS estimates as well as GMM are used.

Findings

The effect of remittances on economic growth is statistically significant. In addition, they also impact economic growth when they interact with institutional or financial development variables. For the long-run growth process of Central Asian, South Asian, and ASEAN countries, a sound and smooth institutional framework appears to be indispensable. Also, it was found that more fragile economies tend to achieve bigger growth than less fragile economies, as this kind of growth is triggered by more remittances flowing into fragile economies. However, the impact of remittances on growth does not depend on the level of ICT. FDI and financial development have positive impact on growth.

Research limitations/implications

There are limitations to this research as well. Due to the unavailability of data, several countries had to be removed from this study. The cost of sending money might be an important variable for this study. However, the data on this variable from reliable sources are almost impossible to gather. Therefore, this variable is also not included in this research. The savings from remittances when intermediated through formal financial channels will, in fact, produce a positive allocation and distribution of resources that may eventually become an important source of growth. However, one precondition for larger and greater growth is that remittances need to be well and properly utilized by the financial sector. Therefore, quality institutions should be formed first, which can facilitate investment activities and make the flow of remittances more convenient.

Originality/value

This paper exclusively considers the case of Asian developing countries (Central Asia, South Asia, and ASEAN) to assess the impact of remittances on the economic performance of these countries, with special consideration of the interaction effects of remittances and institutional quality in these emerging Asian economies. The previous studies on the effect of remittances on growth do not conform to one concrete conclusion. This study is undertaken in a bid to get the best possible result on the impact of remittances on the growth of the selected countries, majority of which attract substantial chunk of remittances into their economies.

Details

Journal of Economic Studies, vol. 47 no. 3
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 6 September 2022

Vernesa Lavic

To answer the following research questions: (1) What is the tax burden, on average, as a percentage of the generated revenues of companies in BiH? (2) Are there differences in the…

Abstract

Purpose

To answer the following research questions: (1) What is the tax burden, on average, as a percentage of the generated revenues of companies in BiH? (2) Are there differences in the load level in relation to: (a) company size, (b) company location, (c) company age, (d) hiring of tax advisors and other external consultants on CIT issues and (e) company business activity.

Design/methodology/approach

In order to answer the research questions asked, quantitative analysis of primary data purposefully collected for this research will be used. The empirical part of the paper relies on the collection of primary data through survey using the method of stratified random sampling from the population of SMEs enterprises registered in BiH focusing only on FBIH and the RS. Regression analysis (OLS model) was used to estimate results.

Findings

Average share of tax compliance costs in SME revenues is 8.3%. Tax compliance costs are regressive, dependent on company age, location and business activity as well as on whether companies hire external consultants.

Research limitations/implications

The chosen research method is a telephone survey, with the aim of encouraging respondents to give answers to the questions asked, using experienced interviewers from the market research agency. However, the use of this method is not without limitations, and they refer to the time-limited duration of telephone interviews that require shorter questions, and pre-prepared answer options to make it easier for respondents to give answers. One of the challenges is the fact that most respondents do not want to talk to strangers over the phone and answer unknown numbers. This risk was especially pronounced because the topic of the research is related to CIT, so many respondents expressed doubts about the purpose of the question, refusing to provide accurate data. This risk was mitigated by asking questions to include certain scales in terms of income, number of employees and gross wages, to make respondents feel free to share this type of sensitive data with interviewers.

Practical implications

First, the analysis of this paper showed that specific, identified factors contribute to, or directly affect, the level of the tax compliance costs of corporate income tax in BiH. Second, there is currently no comprehensive analysis of the tax burden in BiH in the literature that would quantify the tax compliance costs, both at the BiH level and at the entity level. Based on the aforementioned, it is necessary to design a fiscal policy in such a way as to eliminate or, in cases where this is not possible, reduce the tax burden on the private sector in general. Based on the data collected in this research, fiscal policy should pay special attention to the tax treatment of start-ups, small and medium-sized enterprises and enterprises operating in services and other sectors by introducing tax incentives that will be of a general nature and that will be applicable to multiple activities and categories of enterprises, in order to eliminate the current negative effects of existing incentives aimed at predefined categories. Finally, it would be necessary to consider the possibility of closer and more extensive harmonization of entity tax laws, in accordance with international practices and accounting standards - in order to reduce the difference in burden primarily between entities, which would facilitate foreign investors and contribute to increased competitiveness in the domestic, regional and ultimately the global market. It would be desirable to use harmonization as a tool in support of promoting the competitiveness of the country in order to attract and maintain the level of foreign direct investment.

Originality/value

There is currently no comprehensive analysis of the tax burden in BiH in the literature that would quantify the tax compliance costs, both at the BiH level and at the entity level.

Details

Journal of Entrepreneurship and Public Policy, vol. 12 no. 1
Type: Research Article
ISSN: 2045-2101

Keywords

Book part
Publication date: 24 April 2023

Saraswata Chaudhuri, Eric Renault and Oscar Wahlstrom

The authors discuss the econometric underpinnings of Barro (2006)'s defense of the rare disaster model as a way to bring back an asset pricing model “into the right ballpark for…

Abstract

The authors discuss the econometric underpinnings of Barro (2006)'s defense of the rare disaster model as a way to bring back an asset pricing model “into the right ballpark for explaining the equity-premium and related asset-market puzzles.” Arbitrarily low-probability economic disasters can restore the validity of model-implied moment conditions only if the amplitude of disasters may be arbitrary large in due proportion. The authors prove an impossibility theorem that in case of potentially unbounded disasters, there is no such thing as a population empirical likelihood (EL)-based model-implied probability distribution. That is, one cannot identify some belief distortions for which the EL-based implied probabilities in sample, as computed by Julliard and Ghosh (2012), could be a consistent estimator. This may lead to consider alternative statistical discrepancy measures to avoid the problem with EL. Indeed, the authors prove that, under sufficient integrability conditions, power divergence Cressie-Read measures with positive power coefficients properly define a unique population model-implied probability measure. However, when this computation is useful because the reference asset pricing model is misspecified, each power divergence will deliver different model-implied beliefs distortion. One way to provide economic underpinnings to the choice of a particular belief distortion is to see it as the endogenous result of investor's choice when optimizing a recursive multiple-priors utility a la Chen and Epstein (2002). Jeong et al. (2015)'s econometric study confirms that this way of accommodating ambiguity aversion may help to address the Equity Premium puzzle.

Details

Essays in Honor of Joon Y. Park: Econometric Methodology in Empirical Applications
Type: Book
ISBN: 978-1-83753-212-4

Keywords

Executive summary
Publication date: 12 July 2023

LEBANON: Economic distortions have social costs

Details

DOI: 10.1108/OXAN-ES280458

ISSN: 2633-304X

Keywords

Geographic
Topical

Abstract

Details

Explaining Growth in the Middle East
Type: Book
ISBN: 978-0-44452-240-5

Article
Publication date: 1 November 2006

Sorin Burnete

To highlight the key‐role of macroeconomic management in a dysfunctional emerging market economy.

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Abstract

Purpose

To highlight the key‐role of macroeconomic management in a dysfunctional emerging market economy.

Design/methodology/approach

The analysis – focused on the particular case of Romania, where the transition to market economy is underway – relies on two basic hypotheses. According to the former, the reform programs implemented during the 1990s failed to take into account some fundamental correlations such as the one between reform measures and the real state of the economy (more specifically, the presence or absence of distortions). Another important correlation must exist between various types of macroeconomic policies, whether designed to trigger changes in the real economy (e.g. transfer of ownership, etc.) or aimed at securing macro‐stabilization. According to the latter hypothesis, overlooking such correlations will jeopardize both macroeconomic equilibrium and the soundness of future growth.

Findings

The data illustrating the evolution of Romania's economy during 1995‐2003 confirm the aforementioned hypotheses. Although the economy started growing at a fairly‐high rate after 1999, growth has been mostly immiserizing and hardly sustainable since. This outcome can be illustrated by using well‐known models such as Bhagwati's generalized theory of distortions and welfare and Mundell's approach of macroeconomic policies under imperfect capital mobility.

Originality/value

The use of the “immiserizing growth” concept in depicting Romania's economic evolution after 2000 is most likely an element of originality. The paper might be valuable for emphasizing the imperfections of the Romanian “government‐central bank” tandem.

Details

Journal of Organizational Change Management, vol. 19 no. 6
Type: Research Article
ISSN: 0953-4814

Keywords

Book part
Publication date: 1 November 2011

Milad Zarin-Nejadan

The relative size of the State in industrialized economies has increased dramatically during the past century giving rise to legitimate fears that such a trend might end up having…

Abstract

The relative size of the State in industrialized economies has increased dramatically during the past century giving rise to legitimate fears that such a trend might end up having an adverse impact on growth. This chapter explores the relationship between the development of government activities and economic growth. It starts by evoking problems related to the measurement of the public sector before reviewing statistical evidence on the long-term growth of the share of the State in the economy. It then provides a number of explanations for this phenomenon including those pertaining to the functioning of the political system itself thereby pointing toward inefficiencies. The next step is to explore the principal avenues along which government interventions can positively or negatively interfere with the growth potential of the economy. It turns out that while public expenditures – especially those responding to market failures – tend to be favorable to growth, most taxes are growth-hindering. The final part of the chapter singles out some pitfalls in the empirical investigation of this relationship. The conjecture is that the nonlinear and possibly endogenous nature of the hypothesized nexus can explain the lack of consensus in empirical studies conducted so far.

Details

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

Keywords

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