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The purpose of this study is to analyze how institutional governance and business environment affect countries’ competitiveness and their relative importance.
Abstract
Purpose
The purpose of this study is to analyze how institutional governance and business environment affect countries’ competitiveness and their relative importance.
Design/methodology/approach
In this paper, the authors analyze how institutional governance and business environment affect countries’ competitiveness, their relative importance and what are the implications for Brazil. The authors have collected data from 131 countries related to the institutional governance, business environment and competitiveness of these countries. For the analysis of the mentioned influences, the technique of partial least squares structural equations modeling is used.
Findings
Results indicate that the main role in countries’ competitiveness is played by the quality of institutional governance. The quality of the business environment reinforces the positive effect of the quality of institutional governance on countries’ competitiveness (mediation effect). Brazil has poor governance quality indicators when compared to high-middle income countries, especially regarding government effectiveness, political stability and control of corruption.
Research limitations/implications
The study provides a better understanding of the relative importance of governance quality and business environment quality for countries’ competitiveness. One limitation of this study is that the research was restricted to data related to the year 2019.
Practical implications
For strategists and decision-makers, understanding these effects on countries’ competitiveness and their relative importance is fundamental to understanding what makes their companies internationally competitive.
Social implications
The presence and appreciation of institutional governance quality need to be cultivated in society.
Originality/value
Instead of using the original diamond model, which presents circular relationships, the authors have used the business environment construct, composed of elements of the diamond model to test the relationships between the quality of institutional governance, competitiveness and the business environment.
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The present study aims to examine the moderating impact of governance quality on the tourism poverty nexus using a panel of six South Asian Association for Regional Cooperation…
Abstract
Purpose
The present study aims to examine the moderating impact of governance quality on the tourism poverty nexus using a panel of six South Asian Association for Regional Cooperation (SAARC) countries during the period 2002 to 2019.
Design/methodology/approach
For the soundness of the results, fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) econometric models were applied to determine the long-run relationship.
Findings
The findings confirmed the positive and significant impact of tourism development (international tourism arrival) and governance quality (effectiveness of governmental services) on poverty (per capita household consumption) reduction. Interestingly results confirm that governance quality and tourism development have complementary impacts on poverty reduction.
Originality/value
The present study has twofold contributions; First, despite the high potential of SAARC tourism, research remains limited in studies examining the role of tourism and governance quality on poverty reduction within the SAARC region. As a result, the present paper presents critical insights into the impact of tourism inflow and governance quality on poverty reduction in South Asian countries. Second, to the best of the author's knowledge, this is the first attempt to conduct an econometric analysis to examine the role of governance quality on the relationship between tourism inflow and poverty reduction in SAARC countries.
The purpose of this paper is to examine the status of governance and administration in Sri Lanka in light of current crises and the impact on the quality of governance.
Abstract
Purpose
The purpose of this paper is to examine the status of governance and administration in Sri Lanka in light of current crises and the impact on the quality of governance.
Design/methodology/approach
The mixed method approach is employed to explore the problem based on secondary data and results from two major surveys.
Findings
This paper shows political and administrative commitment and quality of governance are two basic ingredients for rapid development and fighting administrative malpractices. Sri Lanka’s system of governance is a mixture of paternalism and alliance developed through political dynasty, kinship, ethnicity, caste, religion, and elitism.
Originality/value
This study fills the research gap as few studies have examined the recent crises of Sri Lanka’s governance and the impacts on governance quality.
Policy implications
Only by implementing administrative and policy reforms will not improve governance quality in the absence of strong political and bureaucratic commitment. Moreover, global anti-corruption measures are unlikely to work in the Sri Lankan context.
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Martin Botha, Merwe Oberholzer and Susanna Levina Middelberg
The purpose of this paper is to investigate current practices of water governance disclosure in the food, beverage and tobacco industry and to determine whether the quality of…
Abstract
Purpose
The purpose of this paper is to investigate current practices of water governance disclosure in the food, beverage and tobacco industry and to determine whether the quality of disclosure has a positive association with integrated reporting (IR).
Design/methodology/approach
A water governance disclosure index was developed that used content analysis to code the latest standalone social, environmental and sustainability reports or integrated reports of 49 companies in the food, beverage and tobacco industry. The selected companies are listed on three indices, the ASX, JSE and DJSI. This was followed by quantitatively testing the association between IR and the quality of water governance disclosure, as measured against the qualitatively developed index.
Findings
It was found that the 18 IR companies’ water governance disclosure quality significantly outperformed the 31 companies in the non-IR group, with a calculated index score of 71.67% and 40.97%, respectively.
Research limitations/implications
The evidence indicates that IR is superior to non-IR water governance disclosure, and the study, therefore, contributes to the literature around the legitimacy theory by concluding that IR is supportive to companies to legitimise their being.
Originality/value
The originality of this paper stems from the comparison of water governance disclosures between IR and non-IR firms. Considering that IR preparers outperformed companies in the non-IR group could provide insights to academics, regulators and reporting organisations that IR could be used to enhance water governance disclosure.
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Rexford Abaidoo and Elvis Kwame Agyapong
This study examines how institutional quality influences variability in financial development among economies in Sub-Saharan Africa (SSA).
Abstract
Purpose
This study examines how institutional quality influences variability in financial development among economies in Sub-Saharan Africa (SSA).
Design/methodology/approach
Empirical estimations verifying various relationships are performed using the limited information maximum likelihood (LIML) estimation technique.
Findings
The results suggest that institutional quality enhances the pace of financial development among economies in the sub-region all things being equal. In a further micro-level analysis where components of institutional quality index are examined separately, the study’s results suggest that effective governance, regulatory quality, rule of law and accountability tend to have a significant positive impact on financial sector development.
Research limitations/implications
Findings of the study suggest that policies geared towards improving governance and regulatory institutions can augment development of the financial sector among economies in SSA; governments and policymakers are therefore encouraged to resource noted institutions to play effective roles for the development of the financial sector.
Originality/value
Compared to related studies, this study reorients existing paradigm, which emphasizes the role of governance and institutional variables in the economic growth discourse. The authors’ empirical inquiry rather focuses on how governance and institutional structures influence regional financial development dynamics. Specifically, this study differs from most macro-level studies found in literature because it examines the impact of hitherto unexamined governance and institutional variables on financial development among economies in SSA.
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Mazignada Sika Limazie and Soumaïla Woni
The present study investigates the effect of foreign direct investment (FDI) and governance quality on carbon emissions in the Economics Community of West African States (ECOWAS).
Abstract
Purpose
The present study investigates the effect of foreign direct investment (FDI) and governance quality on carbon emissions in the Economics Community of West African States (ECOWAS).
Design/methodology/approach
To achieve the objective of this research, panel data for dependent and explanatory variables over the period 2005–2016, collected in the World Development Indicators (WDI) database and World Governance Indicators (WGI), are analyzed using the generalized method of moments (GMM). Also, the panel-corrected standard errors (PCSE) method is applied to the four segments of the overall sample to analyze the stability of the results.
Findings
The findings of this study are: (1) FDI inflows have a negative effect on carbon emissions in ECOWAS and (2) The interaction between FDI inflows and governance quality have a negative effect on carbon emissions. These results show the decreasing of environmental damage by increasing institutional quality. However, the estimation results on the country subsamples show similar and non-similar aspects.
Practical implications
This study suggests that policymakers in the ECOWAS countries should strengthen their environmental policies while encouraging FDI flows to be environmentally friendly.
Originality/value
The subject has rarely been explored in West Africa, with gaps such as the lack of use of institutional variables. This study contributes to the literature by drawing on previous work to examine the role of good governance on FDI and the CO2 emission relationship in the ECOWAS, which have received little attention. However, this research differs from previous work by subdividing the overall sample into four groups to test the stability of the results.
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Happiness levels differ among the Middle East and North African (MENA) countries and follow a downtrend, making such heterogeneity a popular topic to investigate. The paper aims…
Abstract
Purpose
Happiness levels differ among the Middle East and North African (MENA) countries and follow a downtrend, making such heterogeneity a popular topic to investigate. The paper aims to study the contribution of governance quality on the heterogeneity in happiness levels across MENA countries while controlling for demographic and socioeconomic variables.
Design/methodology/approach
The paper applies panel random-effects regression analysis on three samples: full sample, rich and poor subsamples, using data from 20 MENA countries over the 2007–2017 period.
Findings
The empirical results for the full sample conclude that better technical quality of governance increases happiness in the region. Furthermore, findings suggest that political stability and absence of violence matters for people's happiness only in rich countries. Whereas, control of corruption is positively associated with happiness level in the full sample and poor subsample. Across all three samples, voice and accountability has no impact on happiness.
Research limitations/implications
A possible limitation of the paper is using an index for happiness based on a subjective weight distribution. Therefore, researchers are encouraged to implement a novel method using data envelopment analysis.
Practical implications
This paper includes implications for policymakers in the MENA region. Governments should strengthen existing laws and create a comprehensive database of laws, fight corruption and prioritize raising income.
Originality/value
This paper is the first to categorize MENA countries into rich and poor to analyze how governance quality contributes to the heterogeneity in happiness levels.
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Banna Banik, Chandan Kumar Roy and Rabiul Hossain
This study aims to investigate the consequence of the quality of governance (QoG) in moderating the effect of healthcare spending on human development.
Abstract
Purpose
This study aims to investigate the consequence of the quality of governance (QoG) in moderating the effect of healthcare spending on human development.
Design/methodology/approach
The authors employ a two-step Windmeijer finite sample-corrected system-generalized method of moments (sys-GMM) estimation technique on a panel dataset of 161 countries from 2005 to 2019. The authors use healthcare expenditure as the main explanatory variable and the Human Development Index (HDI) as the dependent variable and also consider voice and accountability (VnA), political stability and absence of terrorism (PSnAT), governance effectiveness (GoE), regulatory quality (ReQ), rules of law (RLaw) and control of corruption (CoC) dimensions of governance indicators as proxies of good governance. The authors develop a new measure of good governance from these six dimensions of governance using principal component analysis (PCA).
Findings
The authors empirically revealed that allocating more healthcare support alone is insufficient to improve human development. Individually, PSnAT has the highest net positive effect on health expenditure that helps to increase human welfare. Further, the corresponding interaction effect between expenditure and the Good Governance Index (GGI) is negative but insignificant for low-income countries (LICs); negative and statistically significant for sub-Saharan African (SSA) economies and positive but insignificant for South Asian nations.
Originality/value
This study is an in-depth analysis of how governance impacts the effectiveness of healthcare expenditure to ensure higher human development, particularly in a large panel of 161 countries. The authors have developed a new index of good governance and later extended the analysis by separating countries based on the income level and geographical location, which are utterly absent in existing literature.
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Fisayo Fagbemi, Opeoluwa Adeniyi Adeosun and Kehinde Mary Bello
The article examines the possible long-run and short-run impact of regulatory quality on stock market performance in Nigeria for 1996–2019 period.
Abstract
Purpose
The article examines the possible long-run and short-run impact of regulatory quality on stock market performance in Nigeria for 1996–2019 period.
Design/methodology/approach
The study adopts autoregressive distributed lag (ARDL) bounds test and cointegrating regression techniques.
Findings
Findings reveal that regulatory quality positively and significantly influences the performance of stock market, which strengthens the view that market-enhancing governance can engender an improvement in stock market performance. The study further demonstrates that quality of the regulatory environment is a critical component of market operations, since the improvement of the operation of stock market performance depends on appropriate policy measures, which could be the outcome of improved governance.
Practical implications
It is suggested that, while improving the institutional environment is a challenge to regulators, there is need for strong and effective regulatory mechanism to enhance the development of stock market in the country.
Originality/value
Based on the two competing hypotheses and limited attention, previous studies accorded the role of regulatory quality in the performance of stock market in the context of Nigeria. This study assessed the gap in the literature by taking the task of validating the impact of regulatory quality on stock market development.
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Mohamed Samy El-Deeb, Tariq H. Ismail and Alia Adel El Banna
This paper aims to examine the impact of environmental, social and governance (ESG) disclosure and firm value (FV), as well as, pinpoints the role of the audit quality (AQ) as a…
Abstract
Purpose
This paper aims to examine the impact of environmental, social and governance (ESG) disclosure and firm value (FV), as well as, pinpoints the role of the audit quality (AQ) as a moderating variable on such impact; where the authors hypothesize that AQ modulates the relationship between ESG disclosure and the FV.
Design/methodology/approach
Data of a sample of firms listed on the Egyptian Stock Exchange Market (EGX) were collected over the period of 2017–2021 and analyzed using the regression and 2SLS models.
Findings
The results suggested that: (1) the ESG has a significant positive impact on the FV in the EGX, and (2) AQ has a significant impact, as a moderating variable, on the relationship between ESG disclosure and FV.
Research limitations/implications
The findings would help the Egyptian market authorities in realizing the importance of integrating ESG information within the financial reports of the listed firms. The findings could also help in developing effective disclosure procedures to provide shareholders with useful information.
Originality/value
This paper contributes to the literature regarding the ESG disclosure components and the FV value by considering AQ in testing such relationship.
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