Search results

This paper investigates the effect of the volatility of resource revenue on the volatility of non-resource revenue.

The empirical analysis has utilized an unbalanced panel data set comprising 54 countries over the period 1980–2015. The two-step system generalized methods of moments (GMM) is the main economic approach used to carry out the empirical analysis.

Results show that resource revenue volatility generates lower non-resource revenue volatility only when the share of resource revenue in total public revenue is lower than 18%. Otherwise, higher resource revenue volatility would result in a rise in non-resource revenue volatility.

In light of the adverse effect of volatility of non-resource revenue on public spending, and hence on economic growth and development prospects, countries whose total public revenue is highly dependent on resource revenue should adopt appropriate policies to ensure the rise in non-resource revenue, as well as the stability of the latter.

Economic diversification in resource-rich countries (particularly in developing countries among them) could contribute to reducing the dependence of economies on natural resources, and hence the dependence of public revenue on resource revenue. Therefore, policies in favour of economic diversification would contribute to stabilizing non-resource revenue, which is essential for financing development needs.

To the best of our knowledge, this topic has not been addressed in the literature.

This paper aims to assess the efficiency of public investment in West African Economic and Monetary Union (WAEMU) countries at both the global and sectoral level over the 2005–2015 period.

This paper estimates efficiency scores using stochastic frontier analysis (SFA) models. Efficiency is divided into managerial efficiency (related to inputs management) and technological efficiency (related to production technology). A Tobit model is then used to investigate the determinants of public investment efficiency.

The findings suggest that, at the global level, WAEMU countries are less efficient than sub-Saharan African and Asian reference countries. However, the breakdown of global efficiency into managerial and technological reveals that WAEMU countries are more efficient than sub-Saharan African countries in terms of technological efficiency. Moreover, these findings are robust to nonparametric estimation. The assessment of financing sources indicates that external debt has a more positive and significant effect on public investment efficiency than internal debt does.

This paper is unique in that it disentangles managerial efficiency from the technological efficiency of public investment in WEAMU countries and highlights how financing sources of investment affect its efficiency. In terms of policy implications, the underlying message of the results is that the rules and conditions of domestic or regional debt in the WAEMU countries must be strengthened to ensure better monitoring and then better efficiency of these resources.

This paper aims to examine how the volatility of foreign direct investment (FDI) inflows affects the volatility of corporate income tax revenue.

The study has used an unbalanced panel data set of 129 countries over the period 1981–2016 and the two-step system generalized methods of moment approach to perform the empirical analysis.

The main findings are that FDI volatility enhances the volatility of corporate income tax revenue in less advanced economies, but reduces it in relatively advanced countries. The positive corporate income tax revenue volatility effect of FDI inflows is far higher in non-tax haven countries than in tax haven countries. Additionally, FDI volatility exerts a higher positive effect on corporate income tax revenue volatility as countries experience greater dependence on natural resources. Finally, the positive effect of FDI volatility on corporate income tax revenue volatility is further amplified by higher FDI volatility.

One important limitation of the present analysis is the use of aggregate FDI inflows because of the lack of data over a long period on greenfield FDI inflows and cross-border mergers and acquisitions FDI inflows. Therefore, an avenue for future research could be to explore separately the effect of the volatility greenfield FDI inflows and the volatility of cross-border mergers and acquisitions FDI inflows on the volatility of corporate income tax revenue, when long-time series data (covering many countries) would be available.

These outcomes particularly shed light on the role of FDI volatility on the volatility of corporate income tax revenue, particularly in countries that are highly dependent on natural resources. Foreign capital flows, notably FDI flows, play an essential role for countries’ economic development through, inter alia, technology transfer, jobs creation and economic growth. Policymakers should aim to attract FDI, while also reducing their volatility, by designing and implementing policies and measures (such as those in favor of business environment improvement, property rights enforcement and political stability) that would assure foreign investors of the continuous high returns of their investments.

To the best of the author’s knowledge, this is the first time this topic is being addressed empirically in the literature.

This paper aims to explore the effect of non-resource tax revenue instability on non-resource tax revenue in developed and developing countries.

The analysis has used an unbalanced panel data set of 146 countries over the period 1981–2016, as well as the two-step system generalized methods of moment approach.

The empirical analysis has suggested that non-resource tax revenue instability influences negatively non-resource tax revenue share of gross domestic product. The magnitude of this negative effect is higher in less developed countries than in relatively advanced countries. This negative effect materializes through public expenditure instability: non-resource tax revenue instability exerts a higher effect on non-resource tax revenue share as the degree of public expenditure instability increases. Finally, non-resource tax revenue instability exerts a higher negative effect on non-resource tax revenue share as economic growth volatility rises, inflation volatility increases and terms of trade instability increases.

The main policy implication of this analysis is that policies that help ensure the stability of non-resource tax revenue also contribute to improving countries’ non-resource tax revenue share. For example, governments’ measures that help cope with or prevent the severe adverse effects of shocks on economies (shocks that could translate into higher tax revenue instability) would ultimately help enhance countries’ tax revenue performance.

The severity of the current COVID-19 pandemic shock (which is a supply and demand shock) and the macroeconomic uncertainty that it has generated – inter alia, in terms of economic growth instability, terms of trade instability, inflation volatility and public expenditure instability – are likely to result in severe tax revenue losses. Governments in both developed and developing countries would surely learn from the management of this crisis so as to prepare for possible future economic, financial and health crises with a view to dampening their adverse macroeconomic effects, including here their negative tax revenue effects.

To the best of the author’s knowledge, this topic is being addressed in the empirical literature for the first time.

This study aims to evaluate the resource curse hypothesis in an oil-dependent economy, Saudi Arabia, through examining the impact of oil price volatility on foreign ownership among Saudi listed firms.

The study analyzes a unique data set of firm-level data on foreign ownership for the period 2009–2015. A multivariate regression model was applied to analyze the relationships under study.

The analysis reveals a negative association between oil price volatility and foreign ownership in firms with high leverage and low stock volatility.

Policymakers are encouraged to develop policies to control shocks in the supply and demand of oil and enforce economic diversification. Investors can better understand the dynamics of an oil-based economy stock market based on the investment behavior of foreign investors and their response to oil price shocks.

This study adds to the literature by analyzing the relationship understudy in an oil-rich and oil-dependent emerging economy, where its critical economic parameters are influenced by oil price volatility and it has the largest and the most liquid stock exchange in the MENA region.

This article aims to examine empirically the relationship between budget periodicity and expenditure volatility in state governments. Using a large panel dataset for fifty states over the years 1960-2012, after controlling for institutional, economic, and political factors, we find general expenditure of biennial states has been significantly less volatile than that of annual states. The finding suggests that a choice between annual and biennial budget period can emerge as a feasible and effective countercyclical strategy to overcome fiscal difficulties in the short run and promote fiscal stability in the long run.

Managers often face a number of dilemmas with respect to their stakeholders: Who are the most salient ones? How many should they target? How to allocate attention/efforts among them? Based on stakeholders and market orientation research this paper aims to address these dilemmas.

The study is based on a survey of managers in a cross‐industry sample of 115 firms. The authors first identify a specific group of salient stakeholders – those providing the firm with revenues and financial support. The article then studies the conditions under which firms should adopt a key approach to stakeholders' management – a “generalist” stakeholder strategy, that is, deal with a larger number of revenue and funding producing stakeholder types, and/or more evenly spread attention/efforts among them.

The findings suggest that a generalist stakeholder strategy has a positive effect on firms' performance among resource‐rich firms and among firms who face dissimilar (“unrelated”) stakeholders. Also, degree of environmental volatility was not found to moderate the relationship between a generalist stakeholder strategy and firms' performance.

The study contributes to the marketing and stakeholder literatures by identifying and studying a group of important stakeholders beyond final consumers – those providing the firm with revenues and financial support, and by studying the conditions under which firms benefit from one key approach to stakeholders – a “generalist” stakeholder strategy. The study's limitations characterize most cross‐sectional survey research (e.g. single informants, subjective performance assessments). However, substantial efforts were made to ensure the validity and robustness of the findings.

The study offers managers insight into the organizational and environmental conditions under which firms should adopt a generalist stakeholder strategy.

This is one of the few papers that integrate into the marketing literature the study of stakeholders. Specifically, it introduces the concept of a generalist stakeholder strategy.

We use a new dataset on nonresource GDP to examine the impact of commodity price volatility on economic growth in a panel of up to 158 countries during the period 1970–2007. Our main finding is that commodity price volatility leads to a significant increase in nonresource GDP growth in democracies, but to no significant increase in autocracies. To explain this result, we show that increased commodity price volatility leads to a statistically significant and quantitatively large increase in net national saving in democracies. In autocracies, on the contrary, net national saving decreased significantly. Our results hold true when using indicators capturing the quality of economic institutions in lieu of indicators of political institutions.