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This study aims to investigate whether Bangladesh would avoid the middle-income trap (MIT) in its transition to a high-income country (HIC) according to its “Vision 2041”.
Abstract
Purpose
This study aims to investigate whether Bangladesh would avoid the middle-income trap (MIT) in its transition to a high-income country (HIC) according to its “Vision 2041”.
Design/methodology/approach
Using both actual and forecasted secondary data, three MIT models of different approaches were used to evaluate the government’s vision-based projections. Moreover, crucial indicators of deindustrialization and institutional strength were linked to the investigation of potential transitions.
Findings
According to the absolute definition and international forecasts, the Bangladesh economy might not fall into an MIT at its lower-middle-income level within the intended period due to being shorter than the defined limit. However, its real GDP per capita relative to the USA would remain far below the defined threshold limit of an upper-middle-income country (UMC) in 2041. Meanwhile, Bangladesh has reached the third of the five gradual phases and is awaiting a new transition in 2029. However, its vision-based plan would face challenges such as skills gaps, institutional reforms and successive global crises.
Practical implications
Bangladesh might be trapped in MIT at the UMC level in the 2030s, with no path to renovate after the demographic dividend ends in 2047. In this regard, the government must demonstrate a strong political will to ensure the effectiveness of its policies and the viability of its institutions.
Originality/value
This study not only compared projections to forecasts using different MIT models but also connected transition phases to industrial policies and institutional strengths.
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The purpose of this paper is to thoroughly investigate the interplay between institutions, foreign direct investment (FDI) and entrepreneurship in the context of emerging markets…
Abstract
Purpose
The purpose of this paper is to thoroughly investigate the interplay between institutions, foreign direct investment (FDI) and entrepreneurship in the context of emerging markets (EMs).
Design/methodology/approach
The authors argue that the impact of FDI on entrepreneurial activity depends on different natures of capital flow and entrepreneurial motivation and relates to the quality of institutional environment. First, the roles of inward and outward FDI are examined in connection with the new firm creation by opportunity- and necessity-motivated entrepreneurs. Second, the integrated influences of (inward/outward) FDI and governance quality (GQ) on (opportunity/necessity) entrepreneurship are tested. This nexus of relationships is analyzed through segmented regressions using the GEM data of 39 EMs over the 2004–2015 period.
Findings
It is evidenced that the quality of governance infrastructure affects the relationship between FDI and entrepreneurship: in emerging countries with low GQ, opportunity entrepreneurship is stimulated by inward FDI and diminished by outward FDI; and in emerging countries with high GQ, necessity entrepreneurship is discouraged by inward FDI and promoted by outward FDI.
Practical implications
This research has implications for the institutional context-based execution of public policy in emerging economies. As the entrepreneurial effects of inward and outward FDI are pronounced differently under the two types of entrepreneurship and the two extremes of GQ, public policy makers who recognize the catalytic role of FDI in domestic business development should take the distinct institutional context of their country into consideration.
Originality/value
The paper contributes to the extant literature on international entrepreneurship in emerging economies by making a breakdown on the roles played by different types of FDI in the entrepreneurial activity, analyzing the mediating effects of GQ on the relationship between inward/outward FDI and entrepreneurship, and interpreting the capital and institutional determinants of entrepreneurship in terms of entrepreneurial motivations by opportunity and necessity.
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Nombulelo Braiton and Nicholas M. Odhiambo
The purpose of the paper is to examine macroeconomic and institutional factors that influence capital flows to low-income sub-Saharan African (SSAn) countries. It analyzes capital…
Abstract
Purpose
The purpose of the paper is to examine macroeconomic and institutional factors that influence capital flows to low-income sub-Saharan African (SSAn) countries. It analyzes capital flows in a disaggregated manner: foreign divert investment, portfolio equity and portfolio debt. There is a gap in the empirical literature in examining the factors that are important for various types of capital flows to low-income SSAn countries. Low-income SSAn countries attract very low levels of foreign investment compared to other developing economies in the SSAn region and other developing economies and this paper attempts to make a contribution in this area.
Design/methodology/approach
This paper examines data on capital flows and that of various push and pull factors. Trends and dynamics of capital inflows and their macroeconomic and institutional drivers are analyzed for low-income sub-Saharan African countries. Such an analysis has not been fully explored for low-income SSAn countries.
Findings
Capital inflows to low-income sub-Saharan Africa (SSA) have increased sevenfold since the 1990s, dominated by foreign direct investment (FDI). They overtook official development assistance and aid in the 2010s. Mozambique and Ethiopia attract the largest size of FDI compared to other low-income SSAn economies, with natural resources as key factors in the former. The largest share of FDI to low-income SSAn countries comes from other SSAn countries, mostly South Africa and Mauritius. Among macroeconomic push factors, capital inflows are more closely related to commodity prices, while the volatility index and global liquidity are also important. Among macroeconomic pull factors, trade openness and economic growth appear more closely related to capital inflows. The surge in capital inflows in the 2000s also followed the implementation of several regional trade and investment agreements in the region. The improvement in internal conflict in the 1990s and mid-2000s seems to have helped support the increase in capital inflows during that period. This institutional quality variable appears to more closely track capital inflows compared to other institutional quality indicators. There were also improvements in the investment profile, law and order, and government stability in the 1990s to early 2000s when capital inflows picked up.
Research limitations/implications
This study focuses on low-income SSAn countries, which are less studied in the empirical literature and that face immense developmental needs that require foreign and domestic capital.
Practical implications
Findings of this paper can shed light to policy makers on the factors that are most important to help the region attract capital inflows and areas where further improvement is needed in the macroeconomic and institutional environment.
Originality/value
There is a gap in the empirical literature in examining the factors that are important for attracting capital flows to low-income SSAn countries. To our knowledge, this study may be the first to explore dynamics of capital flows against institional quality for low-income SSAn countries at a disaggregated level.
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Becky Wai-Ling Packard, Beronda L. Montgomery and Joi-Lynn Mondisa
The purpose of this study was to examine the experiences of multiple campus teams as they engaged in the assessment of their science, technology, engineering and mathematics…
Abstract
Purpose
The purpose of this study was to examine the experiences of multiple campus teams as they engaged in the assessment of their science, technology, engineering and mathematics (STEM) mentoring ecosystems within a peer assessment dialogue exercise.
Design/methodology/approach
This project utilized a qualitative multicase study method involving six campus teams, drawing upon completed inventory and visual mapping artefacts, session observations and debriefing interviews. The campuses included research universities, small colleges and minority-serving institutions (MSIs) across the United States of America. The authors analysed which features of the peer assessment dialogue exercise scaffolded participants' learning about ecosystem synergies and threats.
Findings
The results illustrated the benefit of instructor modelling, intra-team process time and multiple rounds of peer assessment. Participants gained new insights into their own campuses and an increased sense of possibility by dialoguing with peer campuses.
Research limitations/implications
This project involved teams from a small set of institutions, relying on observational and self-reported debriefing data. Future research could centre perspectives of institutional leaders.
Practical implications
The authors recommend dedicating time to the institutional assessment of mentoring ecosystems. Investing in a campus-wide mentoring infrastructure could align with campus equity goals.
Originality/value
In contrast to studies that have focussed solely on programmatic outcomes of mentoring, this study explored strategies to strengthen institutional mentoring ecosystems in higher education, with a focus on peer assessment, dialogue and learning exercises.
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Cristian Barra and Pasquale Marcello Falcone
The paper aims at addressing the following research questions: does institutional quality improve countries' environmental efficiency? And which pillars of institutional quality…
Abstract
Purpose
The paper aims at addressing the following research questions: does institutional quality improve countries' environmental efficiency? And which pillars of institutional quality improve countries' environmental efficiency?
Design/methodology/approach
By specifying a directional distance function in the context of stochastic frontier method where GHG emissions are considered as the bad output and the GDP is referred as the desirable one, the work computes the environmental efficiency into the appraisal of a production function for the European countries over three decades.
Findings
According to the countries' performance, the findings confirm that high and upper middle-income countries have higher environmental efficiency compared to low middle-income countries. In this environmental context, the role of institutional quality turns out to be really important in improving the environmental efficiency for high income countries.
Originality/value
This article attempts to analyze the role of different dimensions of institutional quality in different European countries' performance – in terms of mitigating GHGs (undesirable output) – while trying to raise their economic performance through their GDP (desirable output).
Highlights
The paper aims at addressing the following research question: does institutional quality improve countries' environmental efficiency?
We adopt a directional distance function in the context of stochastic frontier method, considering 40 European economies over a 30-year time interval.
The findings confirm that high and upper middle-income countries have higher environmental efficiency compared to low middle-income countries.
The role of institutional quality turns out to be really important in improving the environmental efficiency for high income countries, while the performance decreases for the low middle-income countries.
The paper aims at addressing the following research question: does institutional quality improve countries' environmental efficiency?
We adopt a directional distance function in the context of stochastic frontier method, considering 40 European economies over a 30-year time interval.
The findings confirm that high and upper middle-income countries have higher environmental efficiency compared to low middle-income countries.
The role of institutional quality turns out to be really important in improving the environmental efficiency for high income countries, while the performance decreases for the low middle-income countries.
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Aleksandra Gaweł and Katarzyna Mroczek-Dąbrowska
Although several theoretical concepts imply different determinants of female entrepreneurship, the literature lacks a consensus on their significance. The aim of this paper is to…
Abstract
Purpose
Although several theoretical concepts imply different determinants of female entrepreneurship, the literature lacks a consensus on their significance. The aim of this paper is to verify how industry specificity influences the gender pay gap and its relation to female entrepreneurship.
Design/methodology/approach
The authors distinguish industries based on the gender equality level, measured jointly by two factors: pay gap level and female participation rate. The study has been conducted among 22 European countries with relatively similar institutional backgrounds. The authors carry out the analysis based on the panel regression models, which enable the authors to verify two predefined research questions.
Findings
The results of panel regression models indicate that industry specificity plays a significant role in the relation between the pay gap and female entrepreneurship. Generally, it can be concluded that gender pay gap as a measure of gender inequality is dependent on the industry specificity. The dependence is especially visible in the breakdown of male- and female-dominated industries.
Originality/value
The findings are consistent with the assumption that the gender pay gap is a discriminatory factor for women willing to become entrepreneurs in certain industries. The findings of the study may constitute a vital tool in planning to overcome it.
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Rukaiyat Adebusola Yusuf and Loan Thi Quynh Nguyen
This research examines how shadow economy affects foreign direct investment (FDI).
Abstract
Purpose
This research examines how shadow economy affects foreign direct investment (FDI).
Design/methodology/approach
The study utilizes a panel dataset including 124 nations between 1997 and 2015. Information on shadow economy, FDI and macro-economic characteristics is obtained from the United Nations Conference on Trade and Development (UNCTAD) and World Bank database. Various econometric methods are employed, such as the panel ordinary least squares (OLS) with fixed-effect estimator and the two-step system generalized method of moments estimation.
Findings
The findings of the study illustrate that shadow economy negatively influences total FDI inflows, and this adverse impact is mainly driven by greenfield investments – a component of FDI. Moreover, the authors provide evidence that the shadow economy has more devastating influences on FDI inflows in countries with higher corruption levels and fewer land resources.
Practical implications
Overall, this research suggests an important policy implication that the shadow economy should be controlled more strictly since it harms the FDI inflows, especially greenfield investment.
Originality/value
This research is among the first attempt of evaluating the effect of shadow economy on different FDI types. Furthermore, it examines how the shadow economy–FDI inflows nexus is changed when considering factors including corruption and land resource.
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This paper aims to apply the debt sustainability framework using various ratios to review the current state of sovereign debt of Economic Community of West African States (ECOWAS…
Abstract
Purpose
This paper aims to apply the debt sustainability framework using various ratios to review the current state of sovereign debt of Economic Community of West African States (ECOWAS) member countries.
Design/methodology/approach
Debt sustainability framework using various ratios (which include the present value approach, Country Policy and Institutional Assessment debt policy assessment ranking and solvency ratio of external debt) for the period 2010 and 2017 were used for the analysis to determine external debt sustainability and solvency of ECOWAS members.
Findings
The findings indicate that most ECOWAS countries are already turning at the unsustainable debt path and may renege in their debt obligations, thus creating a vicious cycle of external borrowing that could lead to capital flight.
Originality/value
This paper offers the empirical evidence to identify which of the ECOWAS countries are already at the threshold of external debt stress, and in the likelihood to renege on their debt obligations.
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This paper analyses the degree of political decentralisation and its relation to the local councils in Tanzania. It explores the institutional and political set-up of the local…
Abstract
Purpose
This paper analyses the degree of political decentralisation and its relation to the local councils in Tanzania. It explores the institutional and political set-up of the local councils originating from the degree of political decentralisation and how it influences the tension between the bureaucrats and local politicians.
Design/methodology/approach
Qualitative approach by a comparative case study is adopted to investigate the phenomenon in two local governments in Tanzania. The data were collected through interviews with 37 senior local government officials and eight focus group discussions with 48 administrators and councillors.
Findings
The findings indicate that the two local governments are subjected to a similar political system guided by similar rules and guidelines from the central government bureaucracy for implementing the party manifesto and central government priorities. Thus, the local politicians have little room for negotiation in adopting local agenda to reflect the preferences of the local community. Any attempt to challenge this status quo creates political tensions between bureaucrats and the administrators.
Originality/value
The findings provide invaluable insights to different stakeholders such as political scientists, government officials, and policymakers with interests in research or practice of political decentralization and political-administrative relation.
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Trang Thi Ngoc Nguyen and Phuong Kim Bui
The purpose of this paper is to examine the relationship between dividend policy and earnings quality of Vietnamese listed firms.
Abstract
Purpose
The purpose of this paper is to examine the relationship between dividend policy and earnings quality of Vietnamese listed firms.
Design/methodology/approach
The sample includes firms listed on Vietnam stock exchange during the period between 2010 and 2016. Two measures of earnings quality are the annual firm-specific absolute value of residuals from Dechow and Dichev’s (2002) model and from Dechow and Dichev (2002) as modified by McNichols’s (2002) model. The firms’ dividend policy is captured by dividend paying status. This is a dummy variable that takes the value of 1 if the firm pays dividends and 0 otherwise. In addition, dividend yield and dividend payout ratio, which are continuous variables, are also used in this paper as alternative proxies for dividend policy.
Findings
Using panel data analysis, this paper documents that dividend payers have higher earnings quality than dividend non-payers. Dividends are an indicator of earnings quality. These findings are consistent with prior studies. After controlling for variables that may be related to earnings quality as well as for the year and industry fixed effects, this relation remains unchanged. In addition, this result is also robust after controlling for firm fixed effects.
Originality/value
This paper offers the empirical evidence on the relation between dividend policy and earnings quality in Vietnam, which is a frontier market.
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