Search results

With the growth of income at the global level, the World Bank data show that there are rising levels of income disparity across countries, groups, regions and within the countries. This fact otherwise hints at the inter-country divergence in incomes, particularly between the developed and developing countries of the world. This chapter, therefore, attempts to examine the convergence or divergence in credit, GDP and HDI across the 10 selected countries for the period of 1990–2019 applying the neoclassical growth approach and the time series approach. The results of the exercise in line with the neoclassical theories on absolute convergence and sigma convergence show that the countries are unquestionably converging in GDP and HDI with mixed results in case of credit. The results of convergence in GDP and HDI in all the countries and their developed and developing counterparts provide a possible explanation as to why the cross countries’ income inequalities as well as world inequality in income and development are reducing over time. On the other hand, the results of the time series approach display that credit and HDI are converging in both absolute and conditional terms but the countries are converging in conditional terms only for GDP. Thus, the claims of the World Bank are not valid for the selected countries in the chapter, rather, they can be verified by taking other countries and groups into consideration.

The purpose of this study is to examine whether variation in franchising across US states can be explained by differences in state regulatory burdens.

Three years of US state-level panel data is used on measures of franchising activity published by the International Franchise Association. The authors measured variation in regulatory burdens across state governments using the regulatory freedom index, developed by the Cato Institute. Multiple regression analysis was the statistical technique used.

Controlling for state-level per capita personal income, educational attainment, unemployment and share of population identifying as non-white, the authors find states with fewer regulatory burdens for business owners have more franchises and franchise jobs per 100,000 residents, higher franchise output per capita and a larger share of small businesses are franchises. These results were robust to alternative econometric specifications. The results support our hypothesis that states with lower regulatory burdens will have more franchising activity.

Only three years of data are currently available; however, our research provides some practical avenues for managers and policy makers to explore when considering new franchise opportunities or developing policies that impact regulatory burdens for small businesses.

This study contributes to the literature by providing supporting evidence for the relationship between US state institutional factors and franchised small businesses, and it adds a cross-state study to the existing literature using cross-country and cross-city data.

Our paper studies a central issue with a long history in economics: the relationship between population and economic growth. We analyze the joint dynamics of economic and demographic growth in 111 countries during the period 1960–2019.

Using the concept of economic regime, the paper introduces the notion of distance between the dynamical paths of different countries. Then, a minimal spanning tree (MST) and a hierarchical tree (HT) are constructed to detect groups of countries sharing similar dynamic performance.

The methodology confirms the existence of three country clubs, each of which exhibits a different dynamic behavior pattern. The analysis also shows that the clusters clearly differ with respect to the evolution of other fundamental variables not previously considered [gross domestic product (GDP) per capita, human capital and life expectancy, among others].

Our results indirectly suggest the existence of dynamic interdependence in the trajectories of economic growth and population change between countries. It also provides evidence against single-model approaches to explain the interdependence between demographic change and economic growth.

We introduce a methodology that allows for a model-free topological and hierarchical description of the interplay between economic growth and population.

This study aims to offer an up-to-date estimate of capital flight from selected emerging Asian economies and examine the anti-growth phenomenon of capital flight by using annual data for the period 1981–2019.

The study relies on residual methods to derive the estimate of capital flight with necessary adjustments. It then applies the autoregressive distributed lag Bounds testing approach in examining the impact of capital flight on the economic growth of Asian emerging economies.

The study identifies capital flight as the attributor to the slower economic growth of the selected emerging economies of Asia.

Apart from appropriate policies addressing the issues causing capital flight, unleashing the way of private sector-led growth of the emerging countries with necessary policy, infrastructural, institutional and regulatory support can rather help them retain and repatriate domestic capital.

The capital flight estimates in earlier studies are antithetical as they differ in terms of definition and estimation procedure. Again, the growth effect of capital flight in these economies has received meager attention in research and policy debates. Furthermore, being country-specific or region-specific, existing studies are unable to compare the growth effect of capital flight for different emerging economies in this region. Examining the growth effects for a large number of countries separately based on a common estimate of capital flight can resolve these issues that this study aims to do.

This paper aims to investigate the performance of OECD countries' long-term productivity during the period of 1975–2018.

This study employed different approaches to evaluate how efficiency scores vary with changes in inputs and outputs: Data Envelopment Analysis (CRS, VRS and FDH), TOPSIS and TOPSIS of these scores.

The findings suggest that, during the period of this study, countries with higher freedom of religion and with Presidential democracy regimes are positively associated with higher productivity.

To the best of the authors’ knowledge, this is the first study that uses efficiency models to assess the productivity levels of OECD countries based on several contextual variables that can potentially affect it.

The authors analyse a growth model to explain how economic fluctuations are primarily driven by productive capacities (i.e. capacity utilization driven by innovations and know-how) and productive inefficiencies.

This study’s methodology consists of the combination of the economic growth model, à la Solow–Swan, with a sigmoidal production function (in capital), which may explain growth, poverty traps or fluctuations depending on the relative levels of inefficiencies, productive capacities or lack of know-how.

The authors show that economies may experience economic growth, poverty traps and/or fluctuations (i.e. cycles). Economic growth is reached when an economy experiences both a low level of inefficiencies and a high level of productive capacities while an economy falls into a poverty trap when there is a high level of inefficiencies in production. Instead, the economy gets in cycles when there is a large level of the lack of know-how and low levels of productive capacity.

The authors conclude that more capital per capita (greater savings and investment) and greater productive capacity (with less lack of know-how) are the economic policy keys for an economy being on the path of sustained economic growth.

The principal aim of this paper is to review three basic theoretical growth models, namely the Harrod-Domar model, the Solow model and the Ramsey model, and examine their implications for economic policies.

The paper utilizes a positivist research framework that emphasizes the causal relationships between the variables in each of the three models. Mathematical methods are employed to formulate and examine the three models under study. Since the paper is theoretical, it does not use any empirical data although numerical illustrations are provided whenever they are appropriate.

The Harrod-Domar model explains why countries with high rates of saving may also enjoy high rate of economic growth. Both the Solow and Ramsey models can be used to explain the medium-income trap. The paper examines the impact of Covid shocks on the macroeconomy. While the growth rate can be recovered, it may not always possible to recover the output level.

For the Harrod-Domar model, the public spending decreases the private consumption at the period 1, but there is no change in the capital stock and hence the production in subsequent periods. For the Ramsey model with AK production function, both the private consumption and the outputs will be lowered. In both the Harrod-Domar and Ramsey models with Cobb-Douglas production function, if the debt is not high and the interest rate is sufficiently low, it is better to use public debt for production rather than for consumption. If the country borrows to recover the Total Factor Productivity after the Covid pandemic, both the Harrod-Domar and Ramsey models with Cobb-Douglas production function show that the rate of growth is higher for the year just after the pandemic but is the same as before the pandemic.

The economy can recover the growth rate after a Covid shock, but the recovery process will generally take many periods.

This paper focuses on economic implications and does not aim to examine social implications of policy changes or Covid-type shock.

The paper provides a comparison of three basic growth models with respect to public spending, public debts and repayments and Covid-type shocks.

Sequel to the results of the preceding chapter that depicted positive associations of credit with the indicators of growth and development, the present chapter aims at investigating the interrelationships of credit with GDP and HDI separately in a bivariate framework for the selected countries for the period 1990–2019. For this purpose, this chapter first develops a theoretical model in line with the Barro (1991) model where bank credit is introduced as a good institutional component of endogenous growth. Then, it goes for a time series exercise to establish the long-run relations and short-run dynamics for the pairs of variables, credit-GDP and credit-HDI, to justify the linkages between the financial sector and the real sector. The study arrives at mixed results across the countries. In many cases, credit has been identified to be strongly related to income and development indicators in the long run through cointegrated stable relationships. Furthermore, credit makes a causal influence on GDP and HDI in some developed countries whereas GDP becomes a causal factor to credit in some developing countries. It is thus recommended for further aggravation of the two sectors’ linkages under the patronisations of the governments and the monetary authorities of the countries to have high growth of income and development so that a part of the sustainable development goal can be achieved through the financial sector.

This paper aims to explore the construction of a valid and reliable measure for the competitiveness of cities that excludes the drivers of competitiveness from the index construction. Not incorporating these drivers in the index avoids the problem of assuming relative contributions (i.e. weights) of these drivers on competitiveness as a maintained hypothesis.

From the definition that competitiveness is the ability of a city to sustain prosperity, this study derives a model called the hedonic well-being index (HWI) in which prosperity is measured by using the consumption of goods and service including leisure. This study then uses secondary data sources to construct an exploratory HWI (assuming a Cobb Douglas functional form) and compare this index to three benchmarks, namely, income, gross domestic product (GDP) per capita and the World Happiness Report (WHR) index. This study also review the component expenditure of the index across geographical locations.

The HWI is better predicted by the WHR index (a subjective well-being index) than by the GDP per capita (a measure of output), owing to the inclusion of leisure and household production absent in per capita GDP. This study explored and found regional variations in the distribution of the expenditure components in the HWI.

This paper demonstrates the feasibility of constructing an exploratory HWI to measure the competitiveness of cities using secondary data. The reliability of the index can be improved using primary data in future research. Separating the drivers from the definition of competitiveness allows testing of the contribution and interaction of these drivers on competitiveness.

This study empirically examines the impact of rural roads on consumption of households in Ethiopia.

Both descriptive statistics and econometric techniques are used to address the aforementioned objective. Specifically, quantile regression, fixed- and random-effect models are used to understand the impact of rural road quality on welfare.

The econometric analysis revealed that improving the quality of rural roads and/or creating access to all-weather roads raises households' average real consumption per capita by as much as 10%. The other transport indicator – mode of transport – also has a positive effect on real consumption per capita. The result indicated that real consumption per capita for households using the traditional mode of transport would increase by as much as 7% compared to those using foot as a major mode of transport. However, the fixed quantile estimation result revealed that rural road access has a positive and significant effect on consumption per capita only for the 0.8th and 0.9th percentiles, indicating that the access to roads is not pro-poor.

Improving rural roads to a level of all-weather road standards and provision of agricultural transport facilities should be strategic priorities.

This study provides empirical evidence pertinent to the effect rural mobility has on the consumption of households as well as the pro-poorness of such investments in rural settings.