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The purpose of this paper is to investigate the factors that are significant in contributing to the per capita income growth of countries that are experiencing or have experienced the lower-middle and upper-middle income traps.

The study comprises 85 countries over the period 1960 to 2017 spanning across three income groups: lower-middle, upper-middle and high. A panel data structure was used to run a fixed effect and random effect estimation on three models of income groups. The Hausman specification test, which was used for further statistical fitness, confirmed the appropriateness of fixed effect over the random in explaining the estimation of factor variables.

The results show that unemployment is a pervasive problem that negatively affect countries at all income levels. Foreign direct investment and population of dependents are associated with economic progression of countries that have experienced or are experiencing the lower-middle income trap. Furthermore, rising income inequality and foreign aid assistance are detrimental to countries that have experienced or are experiencing the upper-middle income trap. Moreover, income inequality, disproportionate urban population and rising dependent population are damaging for high income countries that never experienced any of the middle-income traps. Conversely, openness to trade, inflation and exchange rate volatility had limited capacity in explaining growth dynamics.

This study could not incorporate geopolitical, demographic, geographical and other such exogenous factors, which could have episodes of influences on the economic development of countries. These were outside the study's realm of quantitative analysis.

This paper contributes to existing literature by providing an empirical cross-sectional comparative analysis of countries belonging to different income groups. The prevailing literature lacks such a cross-tabulated presentation of factors affecting countries that avoided the middle income trap and those that could not.

The purpose of this paper is to estimate foreign direct investment (FDI) premia in the former Soviet states.

The authors follow an empirical approach. Using Orbis data for a sample of more than 3,000 companies, the authors characterize FDI involvement and FDI premia of firms from three distinctive groups of former Soviet states, designated “upper-middle”-income, “lower-middle”-income and “high”-income countries. This yields interesting within-group and between-group results on the effects of outward FDI (OFDI) and inward FDI (IFDI) on firm-level innovation.

The authors unveil new facts about innovation and FDI in the former Soviet states. FDI firms innovate more than non-FDI firms and OFDI firms innovate more than IFDI firms. The innovation effect of OFDI is the largest for firms from the “lower-middle” countries, followed by the “high” and “upper-middle” countries. The innovation effect of IFDI is the largest for firms from the “lower-middle” countries, followed by the “upper-middle” and “high” countries. FDI to and from Europe has the largest impact on innovation; this holds across country groups.

The estimates of this paper document robust FDI premia, i.e., a positive and significant correlation between firm-level innovation and FDI. However, the cross-sectional nature of the data does not permit a proper causality analysis.

The paper contributes to the literature on FDI premia by: considering IFDI and OFDI in a unified empirical framework; dissecting IFDI and OFDI by location; measuring firm-level productivity in terms of innovation; and providing cross-country comparable evidence on both emerging and advanced economies. At the same time, the paper contributes to the literature on FDI from emerging economies by: taking a firm-level quantitative approach; focusing on a relatively unexplored set of countries; and providing comparable cross-country evidence on both emerging and advanced economies.

This paper examines the effects of foreign aid type on human well being. Cross‐country regressions revealed aid for education and water to be positively correlated with human well being in low‐income countries while aid for education and health are positively correlated with human well being in lower‐middle‐income countries. The results also confirm growth in output and gross domestic investment to be positively associated with human well being in low‐ and lower‐middle‐income countries. In the low‐income countries, it is also found that unproductive government expenditure, conflicts and rural populations are negatively correlated with human well being. Conflicts and rural populations are also negatively correlated with human well being in the middle‐income countries.

This study is aimed at better understanding the evolution of inequality in carbon emission in intraincome and interincome groups in the world, and then to uncover the driving factors that affect inequality in carbon emission.

The approach is developed by combining the Theil index and the decomposition technique. Specifically, the Theil index is used to measure the inequality in carbon emissions from the perspective of global and each income group level. The extended logarithmic mean Divisia index was developed to explore the driving factors.

This study finds that the inequality in carbon emissions of intraincome group is getting better, whereas the inequality in carbon emission of interincome group is getting worse. And the difference in global carbon emissions between income groups is the main source of global carbon emission inequality, which is greater than that within each income group. In addition, the high-income group has transferred their carbon emissions to upper-middle income group by importing high-carbon-intensive products to meet the domestic demand, while lower-middle-income group do not fully participate in the international trade.

To alleviate the global carbon inequality, more attention should be paid to the inequality in carbon emission of interincome group, especially the trade between high-income group and upper-middle income group. From the perspective of driving factors, the impact of import and export trade dependence on the per capita carbon emissions of different income groups can almost offset each other, so the trade surplus effect should be the focus of each group.

In order to consider the impact of international trade, this study conducts a comprehensive analysis of global carbon emissions inequality from the perspective of income levels and introduces the import and export dependence effect and the trade surplus effect into the analysis framework of global carbon emission inequality drivers, which has not been any research carried out so far. The results of this paper not only provide policy recommendations for mitigating global carbon emissions but also provide a new research perspective for subsequent inequality research.

The purpose of this study is to investigate the nexus between financial inclusion and human development for countries belonging to different income groups during 2009–2019, and whether this relation differs across these groups.

The paper constructs an index of financial inclusion (IFI) for different income group countries employing dynamic panel data models estimated by generalized method of moments (GMM) to analyse the relation between financial inclusion and human development.

Financial inclusion in low and lower-middle-income countries has higher effect on human development than in high and upper-middle income countries.

The study examines the effect of IFI on the human development index (HDI) at the aggregate level. Future research can tackle the IFI effect on every component of HDI and other aspects of financial inclusion could be incorporated like financial technology.

The originality lies in constructing an index for financial inclusion using the most recent data for a wide range of countries, in addition to examining the impact of financial inclusion on the human development levels of different income groups allowing for more accurate analysis tackling the differences in terms of adopted policies across various income groups; unlike other studies that are carried out on a one country basis or only across one or two country groups that do not allow for comparison across various groups of countries.

This paper aims to assess whether the coronavirus disease 2019 (COVID-19) pandemic has encouraged governments to take actions towards fostering digital means of payments and financial transactions to stimulate economic activities and achieve higher financial inclusion.

Using a logit model, this paper tests the impact of the level of income and GDP per capita, government effectiveness, digital adoption, number of commercial banks and the pandemic-related closure of business and stores due to full lockdowns on governments’ policy response regarding digital means of payments.

The author finds that low- and lower-middle-income countries had significantly responded to the surged need for digital means of payment during the pandemic compared to the upper-middle-income and high-income countries. The author also finds that government effectiveness and the number of commercial banks were predictors of government policy response, while the full lockdown of countries and the overall digital adoption were not.

Data of the post-COVID-19 pandemic are limited, and the sample size is small.

This is the first paper to empirically model governments' response during the pandemic to promote digital means of payments. This paper gives insight into post-crisis potential changes in digital payment adoption in the upcoming years.

This paper provides a state-of-the-art review of the financial development in the Middle East and Central Asia (MECA) and examines its impact on its economic growth.

The authors use a Panel Data Regression Analysis on a sample of 21 countries in MECA for the period 2008–2018.

Using the financial development indices and subindices retrieved from IMF, the study finds that the whole region has a below average index compared to other developing regions. However, this hides a great deal of variation across MECA countries. Surprisingly, financial development does not necessarily contribute to economic growth. It seems that some developing countries are still not predisposed to benefit from financial development due to several obstacles.

The authors recommend policymakers and regulators in MECA to promote financial stability and keep inflation in check so that economic agents can reap the fruits of financial development and foster economic growth. Policymakers should also stimulate competition in the financial sector, build skillful human capital, attract foreign direct investments, strengthen supervision and forensic audit and more importantly reinforce the independence of central banks.

The authors mitigate the shortcomings of single indicators as proxies for financial development by using the IMF Financial Development index that captures the depth, access and efficiency of both financial institutions and financial markets. The authors employ lower-middle-, upper-middle and high-income country groups to test the magnitude of income level on the relationship between financial development and economic growth.

This study aims to revisit the empirical debate about the asymmetric relationship between oil prices, energy consumption, CO₂ emissions and economic growth in a panel of 184 countries from 1981 to 2020.

A relatively new research method, the PVAR system GMM, is applied.

The outcome of the PVAR system GMM model at the group level in the study suggests that oil prices exert a positive but statistically insignificant effect on economic growth. Energy consumption is inversely related to economic growth but statistically significant, and the correlation between CO₂ emissions and economic growth is negative but statistically insignificant. The Granger causality test indicates that oil prices, CO₂ emissions, oil rents, energy consumption and savings jointly Granger-cause economic growth. A unidirectional causality runs from energy consumption, savings and economic growth to oil prices. At countries’ income grouping levels, oil prices, oil rent, CO₂ emissions, energy consumption and savings jointly Granger-cause economic growth for the high-income and upper-middle-income countries groups only, while those variables did not jointly Granger-cause economic growth for the low-income and lower-middle-income countries groups. The modulus emanating from the eigenvalue stability condition with the roots of the companion matrix indicates that the model is stable. The results support the asymmetric impacts of oil prices on economic growth and aid policy formulation, particularly the cross-country disparities regarding the nexus between oil prices and growth.

From a methodological perspective, to the best of the author’s knowledge, the study is the first attempt to use the PVAR system GMM and such a large sample group of 184 economies in the post-COVID-19 era to examine the impacts of oil prices on countries’ growth while controlling for other crucial variables, which is noteworthy. Two, using the World Bank categorisation of countries according to income groups, the study adds another layer of contribution to the literature by decomposing the 184 sample economies into four income groups: high-income, low-income, upper-middle-income and lower-middle-income groups to investigate the potential for asymmetric effects of oil prices on growth, the first of its kind in the post-COVID-19 period.

This study aims to examine the Environmental Kuznets Curve (EKC) hypothesis in the case of 100 developed and developing nations by taking into account the role of institutional quality (IQ). Using generalized method of moments (GMM) estimators, we find an inverted U-shaped relationship between economic growth and carbon dioxide (CO₂) emissions only in the developed world but not in the developing nations. It is also revealed that control of corruption plays a vital role in reducing CO₂ emissions in high income countries. Furthermore, rule of law is found to have a beneficial effect on the environment in all countries except for low income countries. Overall, our results confirm the importance of IQ in reducing CO₂ emissions. Additionally, foreign direct investment contributes to CO₂ reduction in rich countries while deteriorates the environmental quality in developing nations. Trade openness was shown to exert a positive impact on environmental quality in developing countries. These findings can be of great importance to policy makers of different income groups in designing appropriate economic and environmental policies toward the dual goals of high growth and low pollution.

The purpose of this paper is to examine the determinants of bank interest rate spread in Sub-Saharan African countries, which were categorized into macro-specific, bank-specific and institutional variables.

The authors used fixed effects estimations to analyze the data. The data were drawn from a pool of 20 Sub-Saharan African countries for a period of ten years spanning 2003–2012. The countries were categorized into low-income, lower middle-income and upper middle-income countries based on World Bank income classifications.

The results show that inflation has a negative and significant effect on interest rate spread, while operating costs and bank concentration have a positive and significant effect on interest rate spread. Similarly, government effectiveness, rule of law and political stability are negatively related to the interest rate spread.

The paper provides evidence that interest rate spread is determined by both bank-specific, macro-economic and institutional variables. The paper also indicates that the income status of a country is important in explaining the variations in the interest rate spread across the region. Therefore, the policy makers should design policies that take into account the variables in order to help in planning by all economic agents, including banks.

The paper uses data from Sub-Saharan Africa and introduces institutional variables in the model, which have been found to be critical in the context.