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Book part
Publication date: 26 November 2019

Dipyaman Pal, Chandrima Chakraborty and Arpita Ghose

The present study aims to determine the existence of simultaneous relationship between economic growth, income inequality, fiscal policy, and total trade of the 13 emerging market…

Abstract

The present study aims to determine the existence of simultaneous relationship between economic growth, income inequality, fiscal policy, and total trade of the 13 emerging market economies as a group for the period 1980–2010. After establishing the existence of simultaneity between the above relationships, a simultaneous panel model has been formulated and estimated incorporating the nonlinearity among the variables as suggested by the existing literature. An inverted U-shape relationship is evident between (1) economic growth, income inequality, and total trade in economic growth equation, (2) income inequality, economic growth, and per capita income in income inequality equation, and (3) total trade and economic growth in total trade equation. Thus, the existence of a two-way nonlinear relationship is highlighted between economic growth, income inequality, and total trade. Apart from these nonlinear relationships, positive and significant effect of (1) gross capital formation, inflation, population growth, human capital, fiscal policy, monetary policy, and domestic credit to private sector on economic growth; (2) civil liabilities on income inequality; (3) gross capital formation and inflation on total trade; (4) total trade, population growth of those aged 65 years and above, political system on fiscal policy is highlighted. Also, negative and significant effect of (1) fiscal policy on income inequality and (2) income inequality on fiscal policy is revealed.

Details

The Gains and Pains of Financial Integration and Trade Liberalization
Type: Book
ISBN: 978-1-83867-004-7

Keywords

Book part
Publication date: 1 November 2011

Erling Steigum

This chapter examines the implications of introducing “robot capital goods” in a one-sector optimal growth model, assuming a high elasticity of substitution between workers and…

Abstract

This chapter examines the implications of introducing “robot capital goods” in a one-sector optimal growth model, assuming a high elasticity of substitution between workers and robots. The growth path will either converge to a steady state, or involve endogenous growth without scale effects. In the latter case, the optimal growth rate of output per worker will converge to a positive number that depends on both technological and preference parameter. Moreover, the rate of growth could be increased permanently by subsidizing saving.

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

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Book part
Publication date: 21 July 2004

Kwang-Hyun Chung

Acquisition is one of key corporate strategic decisions for firms’ growth and competitive advantage. Firms: (1) diversify through acquisition to balance cash flows and spread the…

Abstract

Acquisition is one of key corporate strategic decisions for firms’ growth and competitive advantage. Firms: (1) diversify through acquisition to balance cash flows and spread the business risks; and (2) eliminate their competitors through acquisition by acquiring new technology, new operating capabilities, process innovations, specialized managerial expertise, and market position. Thus, firms acquire either unrelated or related business based on their strategic motivations, such as diversifying their business lines or improving market power in the same business line. These different motivations may be related to their assessment of market growth, firms’ competitive position, and top management’s compensation. Thus, it is hypothesized that firms’ acquisition decisions may be related to their industry growth potential, post-acquisition firm growth, market share change, and CEO’s compensation composition between cash and equity. In addition, for the two alternative acquisition accounting methods allowed until recently, a test is made if the type of acquisition is related to the choice of accounting methods. This study classifies firms’ acquisitions as related or unrelated, based on the standard industrial classification (SIC) codes for both acquiring and target firms. The empirical tests are, first, based on all the acquisition cases regardless of the firm membership, and then, deal with the firms acquiring only related businesses or unrelated businesses exclusively.

The type of acquisitions was more likely related to industry growth opportunities, indicating that the unrelated acquisition cases are more likely to be followed by higher industry growth rate than the related acquisition cases. While there were a substantially larger number of acquisition cases using the purchase method, the related acquisition cases used the pooling-of-interest method more frequently than in the unrelated acquisition cases. The firm-level analysis shows that the type of acquisition decisions was still related to acquiring firms’ industry growth rate. However, the post-acquisition performance measures, using firm’s growth and change in market share, could support prior studies in that the exclusive-related acquisitions helped firms grow more and get more market share than the exclusive-unrelated acquisitions. CEO’s compensation composition ratio was not related to the types of acquisition.

Details

Advances in Management Accounting
Type: Book
ISBN: 978-0-76231-118-7

Book part
Publication date: 15 August 2007

Ritab S. Al-Khouri

This paper presents new evidence of the relationship between financial market development (banking sector) and economic growth for a set of seven Middle East and North African…

Abstract

This paper presents new evidence of the relationship between financial market development (banking sector) and economic growth for a set of seven Middle East and North African economies over the period 1965–2002. We find evidence that in six of the seven countries, banking-sector development Granger causes increases in economic growth. However, in three of those six countries, economic growth also Granger causes banking development. Our co-integration analysis reveals that there is a stable long-run equilibrium relationship between banking-sector development and economic growth for all our countries. However, based on vector error-correction models, there is limited evidence that banking-sector development boosts economic growth in the short run.

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Issues in Corporate Governance and Finance
Type: Book
ISBN: 978-1-84950-461-4

Book part
Publication date: 30 December 2013

Hou Na and Chen Bo

In this study, we empirically investigate the effect of military expenditure on economic growth in the five South Asian countries of Bangladesh, India, Pakistan, Nepal, and Sri…

Abstract

In this study, we empirically investigate the effect of military expenditure on economic growth in the five South Asian countries of Bangladesh, India, Pakistan, Nepal, and Sri Lanka over the period of 1990–2006. By applying a Solow Growth Model, empirical evidences derived from panel estimation methods indicate that defense has a negative effect on economic growth in the region.

Details

Cooperation for a Peaceful and Sustainable World Part 2
Type: Book
ISBN: 978-1-78190-655-2

Open Access
Article
Publication date: 19 March 2024

María María Ibañez Martín, Mara Leticia Rojas and Carlos Dabús

Most empirical papers on threshold effects between debt and growth focus on developed countries or a mix of developing and developed economies, often using public debt. Evidence…

Abstract

Purpose

Most empirical papers on threshold effects between debt and growth focus on developed countries or a mix of developing and developed economies, often using public debt. Evidence for developing economies is inconclusive, as is the analysis of other threshold effects such as those probably caused by the level of relative development or the repayment capacity. The objective of this study was to examine threshold effects for developing economies, including external and total debt, and identify them in the debt-growth relation considering three determinants: debt itself, initial real Gross Domestic Product (GDP) per capita and debt to exports ratio.

Design/methodology/approach

We used a panel threshold regression model (PTRM) and a dynamic panel threshold model (DPTM) for a sample of 47 developing countries from 1970 to 2019.

Findings

We found (1) no evidence of threshold effects applying total debt as a threshold variable; (2) one critical value for external debt of 42.32% (using PTRM) and 67.11% (using DPTM), above which this factor is detrimental to growth; (3) two turning points for initial GDP as a threshold variable, where total and external debt positively affects growth at a very low initial GDP, it becomes nonsignificant between critical values, and it negatively influences growth above the second threshold; (4) one critical value for external debt to exports using PTRM and DPTM, below which external debt positively affects growth and negatively above it.

Originality/value

The outcome suggests that only poorer economies can leverage credits. The level of the threshold for the debt to exports ratio is higher than that found in previous literature, implying that the external restriction could be less relevant in recent periods. However, the threshold for the external debt-to-GDP ratio is lower compared to previous evidence.

Details

EconomiA, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1517-7580

Keywords

Open Access
Article
Publication date: 13 March 2024

Keanu Telles

The paper provides a detailed historical account of Douglass C. North's early intellectual contributions and analytical developments in pursuing a Grand Theory for why some…

Abstract

Purpose

The paper provides a detailed historical account of Douglass C. North's early intellectual contributions and analytical developments in pursuing a Grand Theory for why some countries are rich and others poor.

Design/methodology/approach

The author approaches the discussion using a theoretical and historical reconstruction based on published and unpublished materials.

Findings

The systematic, continuous and profound attempt to answer the Smithian social coordination problem shaped North's journey from being a young serious Marxist to becoming one of the founders of New Institutional Economics. In the process, he was converted in the early 1950s into a rigid neoclassical economist, being one of the leaders in promoting New Economic History. The success of the cliometric revolution exposed the frailties of the movement itself, namely, the limitations of neoclassical economic theory to explain economic growth and social change. Incorporating transaction costs, the institutional framework in which property rights and contracts are measured, defined and enforced assumes a prominent role in explaining economic performance.

Originality/value

In the early 1970s, North adopted a naive theory of institutions and property rights still grounded in neoclassical assumptions. Institutional and organizational analysis is modeled as a social maximizing efficient equilibrium outcome. However, the increasing tension between the neoclassical theoretical apparatus and its failure to account for contrasting political and institutional structures, diverging economic paths and social change propelled the modification of its assumptions and progressive conceptual innovation. In the later 1970s and early 1980s, North abandoned the efficiency view and gradually became more critical of the objective rationality postulate. In this intellectual movement, North's avant-garde research program contributed significantly to the creation of New Institutional Economics.

Details

EconomiA, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1517-7580

Keywords

Article
Publication date: 4 March 2024

Lukman Raimi, Nurudeen Babatunde Bamiro and Hazwan Haini

The relationships among institutions, entrepreneurship, and economic growth are hotly contested topics. The objective of this present study is to conduct a systematic literature…

Abstract

Purpose

The relationships among institutions, entrepreneurship, and economic growth are hotly contested topics. The objective of this present study is to conduct a systematic literature review aimed at comprehensively assessing the relationships between institutional pillars, entrepreneurship and economic growth.

Design/methodology/approach

Specifically, a comprehensive analysis of 141 empirical publications was carried out using the PRISMA protocol. The reviewed publications were taken from the Web of Science, Scopus and Google Scholar databases. Thirty-three articles that met the eligibility criteria of quality, relevance and timeliness of the publications were included in the the study.

Findings

Three key lessons emerged from the review. First, it was discovered that entrepreneurship and economic growth are influenced by three institutional pillars at various levels, including the regulatory, cognitive and normative pillars. Second, according to the type of institutional quality, the institutional pillars in a causal framework have a good or negative impact on entrepreneurship. Third, novel enterprise creation, self-employment, citizen employment, poverty alleviation, radical innovation, formalization of the informal sector, promotion of competition in existing and new markets, Gross Domestic Product (GDP) growth and the emergence of new business models that significantly improve quality of life.

Originality/value

The study proposes a conceptual framework for further exploring this important relationship based on solid empirical evidence. By providing a theoretically grounded framework, the paper fills the gaps in the literature and helps to clarify the relationship between institutional foundations, entrepreneurship and economic progress.

Details

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

Keywords

Open Access
Article
Publication date: 14 March 2024

Rakesh Kumar

India started economic reforms at a rapid pace to catch up the world economy by following the services-led-growth model during the post-liberalisation period. Over the years, the…

Abstract

Purpose

India started economic reforms at a rapid pace to catch up the world economy by following the services-led-growth model during the post-liberalisation period. Over the years, the growing unemployment rate posits a re-look into the dynamics of growth model for wider work force participation. In this backdrop, the paper aims to examine the dynamics of structural changes in employment pattern in view of economic growth led by services-led growth model in India.

Design/methodology/approach

The study employs a non-linear autoregressive model (NARDL) to examine the effect of the growth rates in three broad economic sectors namely agriculture and allied, services and industry on work force participation representing the employment opportunities in India.

Findings

The results highlight that the rapid expansion of the service sector has not occurred with enough employment opportunities by the same rate. By contrast, the growth in the industrial sector significantly creates employment opportunities in the short and long run. These results support the industry led growth model over the services for sustainable and inclusive economic growth in the country.

Research limitations/implications

The study relies on combined labour force participation rates rather than gender-specific rates. Further, the regulatory, working conditions and economic incentives may affect the gender-specific engagement of the labour force in three broad sectors.

Practical implications

The results offer important insight into changing patterns in employment with policy lessons. A wider workforce force participation calls for expansion of manufacturing activities through pro-industry programmes.

Originality/value

The study makes pioneer efforts to examine the dynamics of labour force participation with respect to the growth of three broad economic sectors of the Indian economy. The results provide new insights with policy implications for the changing employment pattern and policy response.

Details

Review of Economics and Political Science, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2356-9980

Keywords

Article
Publication date: 16 February 2024

Noha Emara and Raúl Katz

The purpose of this study is to use the structural model to determine the influence of mobile telecommunication on Egypt’s economic growth from 2000 to 2009. By focusing on mobile…

Abstract

Purpose

The purpose of this study is to use the structural model to determine the influence of mobile telecommunication on Egypt’s economic growth from 2000 to 2009. By focusing on mobile unique subscribers and mobile broadband-capable device penetration as indicators of telecommunications adoption, the authors seek to understand their overarching effects on the nation’s economic landscape.

Design/methodology/approach

The paper uses quarterly time-series data set over the period 2000–2019 and uses a structural econometric model based on an aggregate production function, a demand function, a supply function and an infrastructure function to detect causality and examine long-run relationships between variables.

Findings

The findings of the structural model reveal that both mobile unique subscribers and mobile broadband-capable device penetration significantly contributed to Egypt’s gross domestic product (GDP) growth from 2000 to 2019. Specifically, a 1% increase in mobile unique subscriber penetration and mobile broadband-capable device adoption is estimated to result in an average annual contribution to GDP growth of 0.172% and 0.016%, respectively.

Research limitations/implications

The scarcity of panel data is the main research limitation for comparative study with other Middle East and North African Region (MENA) countries. Research extensions would include testing the significance of complementarities such as improving governance measures and building human capacity for both households and firms, which are necessary to boost the impact of telecommunication on economic growth in the MENA region.

Practical implications

Based on these findings, the study puts forth policy recommendations aimed at maximizing investment in network utilization, including mobile and internet services, as well as fixed broadband subscriptions. It highlights the crucial role of these investments in promoting social and economic development, not only in Egypt but also across the MENA region as a whole.

Social implications

The findings of this research emphasize the importance of strategic investments in network utilization, encompassing mobile, internet services and fixed broadband subscriptions. Such investments are pivotal for fostering social and financial inclusion. The study underscores the potential of these investments to drive social and economic progress, not just within Egypt but throughout the entire MENA region.

Originality/value

Overall, existing literature generally supports the notion that the telecommunications sector has a positive economic impact. However, there is a gap in the literature when it comes to understanding the specific effects of the Egyptian telecommunications sector on the country’s economy, particularly in relation to the Egypt Vision 2030. The study aims to fill this gap by focusing specifically on Egypt and providing additional insights into the direct and indirect effects of the Egyptian telecommunications sector on the economy. By conducting a thorough analysis of the sector’s role, the authors aim to contribute to the existing literature by providing context-specific findings and recommendations.

Details

Digital Policy, Regulation and Governance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2398-5038

Keywords

1 – 10 of over 204000