Search results

1 – 10 of over 10000

Abstract

Details

Economics, Econometrics and the LINK: Essays in Honor of Lawrence R.Klein
Type: Book
ISBN: 978-0-44481-787-7

Article
Publication date: 2 July 2021

Ahmet Eren Yıldırım and Mete Dibo

This study analyzes the impacts of income inequality after direct taxation on the gross domestic product as a fiscal policy tool in the development process.

Abstract

Purpose

This study analyzes the impacts of income inequality after direct taxation on the gross domestic product as a fiscal policy tool in the development process.

Design/methodology/approach

The model of the study is based on Munielo-Gallo and Roca-Sagales (2013), which examined the fiscal policy, income inequality and economic growth simultaneously. The study uses two models to analyze the relationship between income inequality and gross domestic production under direct taxation by employing autoregressive distributed lag (ARDL) model for selected emerging market economies.

Finding

Empirical results reveal a negative long-run relationship between variables in some countries in line with the literature, despite a positive relationship in others. Moreover, the results exhibit the negative impact of income inequality after direct taxation on the gross domestic product decreases.

Originality/value

Results of the study highlight the importance of direct taxation on income inequality concerning the reflects on economic growth. It suggests that when the income distribution is fairer, it may positively affect the gross domestic product. The study provides a new perspective to the related literature by investigating the role of income inequality under direct taxation for gross domestic product.

Details

International Journal of Social Economics, vol. 48 no. 10
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 18 May 2010

Konstantinos P. Vergos, John Mylonakis and Apostolos G. Christopoulos

The purpose of this paper is to investigate the effect of macroeconomic factors in income growth, as defined by IS‐LM, and the relation between these factors and economic…

2230

Abstract

Purpose

The purpose of this paper is to investigate the effect of macroeconomic factors in income growth, as defined by IS‐LM, and the relation between these factors and economic cycles. More precisely, the paper aims to investigate how the demand and supply factors affect income growth, while the relation between these factors and economic cycles is also examined.

Design/methodology/approach

The sample under examination is the annual US data for 1928‐2007, using the official data as released in the US Bureau of Economic Analysis, while for the crises the used data have been provided by the National Bureau of Economic Research, Graduate Center of the City University of New York. The Business Cycles were examined, using the methodology developed by the National Bureau of Economic Research, Graduate Center of the City University of New York.

Findings

The research findings imply that government consumption expenditure growth is the most important factor that affects Gross Domestic Product growth positively. A change of 10 percent in Government consumption leads to 1.65 percent Gross Domestic Product growth. Also, the duration of crises is affected by lowering interest rates, while being also affected by government and personal consumption. Overall, the empirical findings of the study indicate that the role of private investments for Gross Domestic Product growth may be overrated among policy makers, given the low contribution of this factor to Gross Domestic Product growth.

Research limitations/implications

The model used has some limitations. First, it does not examine the effect of a policy over Gross Domestic Product growth in longer time‐spans. Second, it does not investigate factor inter‐reactions. It could also be argued that other factors that would stimulate growth or affect crisis are not accounted for, such as wars, tax policies, international trade and population growth. Finally, the model investigates only the US economy; therefore, it could be argued that the findings may not coincide with findings from other economies.

Originality/value

The paper contributes to the economics literature by adding a further insight into the possible mix of policy that could be followed by regulatory authorities and governments for both the boost of economy and the finalization of economic crises.

Details

EuroMed Journal of Business, vol. 5 no. 1
Type: Research Article
ISSN: 1450-2194

Keywords

Article
Publication date: 2 October 2019

Justin Joy and Prasant Kumar Panda

This paper aims to analyze the pattern of public debt in Brazil, Russian Federation, India, China and South Africa (BRICS) in a comparative perspective. Besides, an…

Abstract

Purpose

This paper aims to analyze the pattern of public debt in Brazil, Russian Federation, India, China and South Africa (BRICS) in a comparative perspective. Besides, an attempt is made to verify the existence of debt overhang as suggested by Krugman (1988) among BRICS nations.

Design/methodology/approach

Annual panel data for BRICS for the period 1980-2016 has been used for the analysis. Percentage ratio method has been used to analyze the pattern of debt. Panel covariate augmented Dickey–Fuller (pCADF) test has been used to verify the time series properties of the variable, while panel cointegration test of Pedroni (1999) is used to check the existence of any co-integrating vector among the variables. Panel Granger causality test is used to check the causality between the variables.

Findings

Co-integration result suggests that there exists a strong long-run equilibrium relationship between debt service, domestic savings, capital formation and economic growth of BRICS nations. From Granger causality test, it is observed that domestic savings and capital formation are Granger caused by debt servicing. The coefficients from fully modified ordinary least squares measure a negative impact of debt service on gross capital formation and gross domestic saving. This suggests that the payment for debt service affects capital formation and gross domestic savings adversely. Thus, it gives primary signals for debt overhang effect in BRICS nations.

Practical implications

Allowing debt service to negatively affect the investment and potential investment will result in slowdown or stagnation in economic growth in the long run, so strategies need to be taken in BRICS nations to check the adverse effects of rising level of debt-service-payment-to-gross national income ratio on domestic savings and capital formation. BRICS nations need to reduce their debt service payment by undertaking appropriate strategy of debt overhaul and fiscal management so that domestic savings and capital formation in the country will not be adversely affected. Besides, BRICS nations need to take measures to augment its domestic savings and capital formations.

Originality/value

To the best of the authors’ knowledge, no published works have analyzed the pattern of public debt for BRICS (major developing nations). Debt servicing is also not checked for BRICS in recent papers, considering overhang approach.

Article
Publication date: 2 August 2022

Opoku Adabor

The “resource curse phenomenon” has received a lot of attention from researchers; however, there has not been any sound explanation to back this phenomenon since the main…

Abstract

Purpose

The “resource curse phenomenon” has received a lot of attention from researchers; however, there has not been any sound explanation to back this phenomenon since the main reason why natural resource should restrain economic growth instead of boosting economic growth remains unanswered. This paper contributes to literature on “resource curse hypothesis” by examining the role of government effectiveness in influencing the impact of gas resource rent on economic growth.

Design/methodology/approach

The study adopted the Cobb-Douglass production and incorporated gas resource rent, institutional quality (government effectiveness), inflation and exchange rate as additional variables that influences total output (gross domestic product). The author estimated the empirical form of the Cobb-Douglass production using autoregressive distributed lag model (ARDL) and Toda and Yamamoto (1995) as the main estimation strategies while other time series approaches were used as a robustness check.

Findings

The estimates from the ARDL short-run and the long-run dynamics suggest that the direct impact of gas resource rent on economic growth was positive but not statistically significant. At the same time, the interacting of gas resource rent and government effectiveness showed a positive and statistically significant effect of nearly 0.4123 and 0.8724 on economic growth in the long run and short run, respectively. The results from the Toda and Yamamoto (1995) also indicated that economic growth has a strong influence on gas resource rent while government effectiveness drives economic growth and not vice versa.

Research limitations/implications

The findings from this study imply that government effectiveness plays a crucial role in averting the “resource curse phenomenon”. Hence, improving government effectiveness and efficiency through minimizing corruption among state institutions would be imperative in curbing the “resource curse phenomenon” in developing countries.

Originality/value

The influential role of government effectiveness on the relationship between gas resource rent on economic growth is examined.

Details

Management of Environmental Quality: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1477-7835

Keywords

Article
Publication date: 26 July 2011

Palamalai Srinivasan, M. Kalaivani and P. Ibrahim

This paper aims to investigate the causal nexus between foreign direct investment (FDI) and economic growth in SAARC countries.

2893

Abstract

Purpose

This paper aims to investigate the causal nexus between foreign direct investment (FDI) and economic growth in SAARC countries.

Design/methodology/approach

Johansen's cointegration test was employed to examine the long‐run relationship between foreign direct investment and economic growth in SAARC countries. Besides, the vector error correction model (VECM) was employed to examine the causal nexus between foreign direct investment and economic growth in SAARC countries for the years 1970‐2007. Finally, the impulse response function (IRF) has been employed to investigate the time paths of log of foreign direct investment (LFDI) in response to one‐unit shock to the log of gross domestic product (LGDP) and vice versa.

Findings

The Johansen cointegration result establishes a long‐run relationship between foreign direct investment and gross domestic product (GDP) for the sample of SAARC nations, namely, Bangladesh, India, Maldives, Nepal, Pakistan and Sri Lanka. The empirical results of the vector error correction model exhibit a long‐run bidirectional causal link between GDP and FDI for the selected SAARC nations except India. The test results show that there is a one‐way long‐run causal link from GDP to FDI for India.

Research limitations/implications

This paper employed annual data to examine the causal nexus between FDI and economic growth. Therefore, researchers are encouraged to test the FDI‐growth relationship further by using quarterly data.

Practical implications

The SAARC nations should adopt effective policy measures that would substantially enlarge and diversify their economic base, improve local skills and build up a stock of human capital recourses capabilities, enhance economic stability and liberalise their market in order to attract as well as benefit from long‐term FDI inflows.

Originality/value

This paper would be immensely helpful to the policy makers of SAARC countries to plan their FDI policies in a way that would enhance growth and development of their respective economies.

Details

Journal of Asia Business Studies, vol. 5 no. 2
Type: Research Article
ISSN: 1558-7894

Keywords

Article
Publication date: 2 March 2015

Lukman Raimi, Innocent Akhuemonkhan and Olakunle Dare Ogunjirin

This paper aims to examine the prospect of utilising corporate social responsibility and entrepreneurship (CSRE) as antidotes for mitigating the incidences of poverty…

2171

Abstract

Purpose

This paper aims to examine the prospect of utilising corporate social responsibility and entrepreneurship (CSRE) as antidotes for mitigating the incidences of poverty, insecurity and underdevelopment in Nigeria. The paper derives its theoretical foundation from the stakeholder, instrumental and legitimacy theories, which all justify the use of CSRE for actualisation of Triple Bottom Line (i.e. the social, economic and environmental concerns of business organisations).

Design/methodology/approach

The study used the quantitative research method relying on the use of secondary data published by institutional bodies. The quantitative method entail a systematic extraction of reliable data on corporate social responsibility (CSR), insecurity, poverty and development from the publications of Office of the Millennium Development Goals in Nigeria, CLEEN Foundation, National Bureau of Statistics and Central Bank of Nigeria, respectively. For missing years, the authors improvised using projections as well as proxies. The extracted data, which spanned a period of 13 years, were subjected to econometric tests using SPSS, on the basis of which informed conclusions were drawn.

Findings

The first econometric result indicates a negative relationship between gross domestic product and poverty. The second result indicates that there is a positive significant relationship between gross domestic product and total crime rate. The third result indicates that there exists a positive relationship between gross domestic product and unemployment rate. The fourth result indicates that there is a negative relationship between gross domestic product and industrial growth rate. The last result indicates that there is a significant positive relationship between gross domestic product and CSR.

Research limitations/implications

The results of this research have macro-level application, hence the outcomes cannot be narrowed to any particular sector of the economy. A micro-level analysis across diverse sectors of the economy is recommended in future studies. The implication of this empirical research is that policymakers in the Nigerian private sector need to reinvent their CSR programmes as mechanisms for poverty eradication, entrepreneurship development (CSRE), dousing tension of restive youth, empowerment/support for security agencies for better crime prevention and for impacting on sustainable development.

Practical implications

In the face of dwindling financial resources in the treasury of governments, the reinvention of CSRE by private sector organisations as complementary mechanisms for combating social problems is becoming acceptable in both developed and developing nations. This paper therefore boldly recommends that policymakers reinvent CSRE as development mechanisms through a sound partnership between government, advocacy groups and business corporations in Nigeria.

Social implications

The paper explicates that CSR can indeed be reinvented by corporations as part of their social concerns to their operating environment instead of leaving all social problems to governments.

Originality/value

The research lends credence to stakeholder, instrumental and legitimacy theories of CSR. It also justifies the plausibility of CSRE, a novel concept being promoted in this research.

Details

Social Responsibility Journal, vol. 11 no. 1
Type: Research Article
ISSN: 1747-1117

Keywords

Book part
Publication date: 4 November 2021

Chaido Dritsaki and Melina Dritsaki

The term “economic growth” refers to the increase of real gross national product or gross domestic product or per capita income. National income or else national product

Abstract

The term “economic growth” refers to the increase of real gross national product or gross domestic product or per capita income. National income or else national product is usually expressed as a measure of total added value of a domestic economy known as gross domestic product (GDP). Generally, GDP measures the value of economic activity within a country during a specific time period. The current study aims to find the most suitable model that adjusts on a time-series data set using Box-Jenkins methodology and to examine the forecasting ability of this model. The analysis used quarterly data for Greece from the first quarter of 1995 until the third quarter of 2019. Nonlinear maximum likelihood estimation (maximum likelihood-ML) was applied to estimate the model using the Broyden-Fletcher-Goldfarb-Shanno (BFGS) algorithm while covariance matrix was estimated using the negative of the matrix of log-likelihood second derivatives (Hessian-observed). Forecasting of the time series was achieved both with dynamic as well as static procedures using all forecasting criteria.

Details

Modeling Economic Growth in Contemporary Greece
Type: Book
ISBN: 978-1-80071-123-5

Keywords

Article
Publication date: 1 April 2000

Wilco W. Chan and Joseph C. Lam

Focuses on the estimation of the contribution of the hotel industry to Hong Kong’s gross domestic product (GDP) and an analysis of the factors influencing the hotel…

2402

Abstract

Focuses on the estimation of the contribution of the hotel industry to Hong Kong’s gross domestic product (GDP) and an analysis of the factors influencing the hotel industry’s recent and likely future contribution to the GDP. The investigation also covers a method of speeding up the calculation of the hotel industry’s contribution to GDP. It has been found that the hotel industry constituted about 1 per cent of the GDP, and the value added per capita in the hotel industry’s work force was close to the overall average. The research further estimates that the cumulative loss in the hotel industry’s GDP due to the recent Asian financial crisis and the 1997 handover issue has reached HK$28.8 billion. The adjusted short‐term forecast predicts that the value added contributed by the local hotel industry will be approximately HK$54,361 million by the year 2000.

Details

International Journal of Contemporary Hospitality Management, vol. 12 no. 2
Type: Research Article
ISSN: 0959-6119

Keywords

Open Access
Article
Publication date: 17 May 2021

Felicitas Nowak-Lehmann and Elena Gross

This paper aims to analyze the effectiveness of aid in stimulating investment using different measures of aid and up-to-date panel time-series techniques. This study…

Abstract

Purpose

This paper aims to analyze the effectiveness of aid in stimulating investment using different measures of aid and up-to-date panel time-series techniques. This study controls for endogeneity by using dynamic ordinary least squares (DOLS) and minimizes the risk of running a spurious long-run relationship by using series that are cointegrated. This paper finds evidence that aid promotes investment in countries with good institutional quality and gain interesting insights on the influence of country characteristics and the amount of aid received. Aid is ineffective in countries with unfavorable country characteristics such as a colonial past, being landlocked and with large distances to markets. Aid can boost investment in regions that receive high (above-median) amounts of aid such as Africa and the Middle East but not in regions that receive low amounts of aid. Investment-targeted aid is effective but non-investment-related aid can also enhance investment.

Design/methodology/approach

Regressions on the aid-investment nexus are based on either a rather simple (115 countries) or an extended/augmented investment model (91 countries). The data covers the period of 1973–2011 and 1985–2011 if the institutional quality is included. This study estimates the relationship between aid and investment by applying the DOLS/dynamic feasible generalized least squares technique which is based on a long-run relationship of the regression variables (cointegration). In this framework, this paper incorporates country-fixed effects, control for endogeneity, autocorrelation and take heteroscedasticity and cross-country correlation of the residuals into account.

Findings

This study finds empirical evidence that aid promotes investment in countries with good institutional quality and gain interesting insights on the role played by country characteristics and the amount of aid received. Aid is ineffective in countries with unfavorable country characteristics such as the colonial past, being landlocked, distant from markets. Aid can boost investment in regions that receive high (above-median) amounts of aid such as Africa and the Middle East. Investment-targeted aid is effective but non-investment-related aid also able to enhance investment.

Research limitations/implications

The study looks at the investment to gross domestic product (GDP) ratio (including domestic investment and foreign direct investment (FDI)) and, hence does not disentangle these factors. It looks at the net effect (positive and negative impact together) and, therefore does not allow to identify the direct crowding out the impact of aid. Of course, if this paper finds that aid has a negative impact on investment, it is clear that aid must have crowded out either domestic investment or FDI or both.

Practical implications

The authors think that it is relevant to have identified the circumstances and settings in which foreign aid can be particularly effective and in which foreign aid needs accompanying measures that improve the effectiveness of aid. Also, it is relevant that the relative amount of aid received (aid-to-GDP ratio) must be quite high so that aid can increase investment.

Social implications

This study sees that the least developed, low-income countries and (in terms of regions) the sub-Saharan Africa countries benefit from aid. This is very desirable. This paper further sees that higher relative amounts of aid do help more and that it is helpful to care about a better institutional quality in developing countries. Hence, this study provides some support for the desirability of aid.

Originality/value

The paper was done very diligently, and this study is very confident that the results are robust. This paper is also confident that this study has studied the long-run (which is of special importance) nexus between aid and investment. The estimation technique used is original, as it combines regular DOLS with corrections for autocorrelation and cross-section dependence.

Details

Applied Economic Analysis, vol. 29 no. 87
Type: Research Article
ISSN:

Keywords

1 – 10 of over 10000