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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…

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…

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…

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…

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…

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

Article
Publication date: 24 November 2022

Yali Han, Krishna P. Paudel, Junyi Wan and Qinying He

China's economy has transformed from a high-speed growth phase to a high-quality development phase. The agriculture sector has grown substantially since the economic…

Abstract

Purpose

China's economy has transformed from a high-speed growth phase to a high-quality development phase. The agriculture sector has grown substantially since the economic reform in 1978. Considering the five-year plan (FYP) as a collection of policies, this study explores the relationship between the FYP and agricultural total factor productivity (TFP).

Design/methodology/approach

This study uses 31 provincial-level panel data of the five FYPs from 1996 to 2020. The data envelopment analysis (DEA) is used to compute Malmquist productivity indexes. The authors analyze the temporal and spatial changes and convergences of China's agricultural TFP, and investigate the impact of economic planning on China's agricultural TFP and its regional difference.

Findings

There is a slow but upward growth trend in China's agricultural TFP. The technical change has played a leading role in the growth of China's agricultural TFP. The agricultural TFP of all provinces has shown a “catch-up” effect and is developing toward their respective steady-state levels. The regional difference in productivity growth among the eastern, central and western regions exists. Test results show that the FYP has a positive effect on the agricultural TFP, and the effect has obvious regional heterogeneity. The FYP also plays a positive role in the gross value of agricultural output, and the impact effect is greater than that on the improvement of agricultural productivity.

Originality/value

There are many forms of industrial policy in China, among which the FYP is the guiding document of industrial policy, which makes a systematic plan for industrial development in the subsequent five years. The development objectives, guidelines and overall deployment for agriculture in the FYP not only describe the general context of China's agricultural development but also show the key ideas of agricultural development. Therefore, this study explores its impact on agricultural quality development from the perspective of FYP. The results provide evidence for examining the governance performance of the government and the objective evaluation and restraint of the FYP. As agriculture moves toward the stage of high-quality development, the Chinese government should strengthen the critical guiding role of the FYP and pay attention to quality indicators such as technical progress, efficiency improvement and regional coordination in the formulation of the FYP.

Details

China Agricultural Economic Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1756-137X

Keywords

Open Access
Article
Publication date: 17 November 2022

Yudong Qi and Xi Chu

Currently, China’s economy is in the critical phase of transforming economic development patterns and replacing old growth drivers with new ones. Whether it can…

Abstract

Purpose

Currently, China’s economy is in the critical phase of transforming economic development patterns and replacing old growth drivers with new ones. Whether it can successfully overcome the “middle-income trap” has become a significant issue attracting wide attention.

Design/methodology/approach

Driven by underlying digital technologies such as artificial intelligence, blockchain, cloud computing and big data, the fourth industrial revolution featuring the booming digital economy has provided significant opportunities for China’s economy to “overtake” and overcome the “middle-income trap”. The transformation of economic development pattern, the optimization of industrial structure, and the change of growth drivers, brought by the deep integration of digital and real economies are the keys to leaping over the “middle-income trap”.

Findings

From the supply side, the digital economy can improve the quality and efficiency of the supply side and promote the supply-side structural reform and economic growth from the following three aspects: First, promote the quality, efficiency and diversification of the supply system; second, promote networking, opening-up and synergy in the innovation system and third, promote the socialization, modularization and flexibility of production pattern. From the demand side, the digital economy can boost the new drivers of the “troika” of economic growth consisting of consumption, exports and investment by changing the market investment direction, promoting consumption upgrade and fostering export strengths. However, once these two attributes interact with each other, especially when data is combined with capital, the most adhesive factor in the market economy, a series of new social relations will then be produced based on the technical attribute, resulting in significant adjustments in social relations, involving both positive and negative externalities.

Originality/value

To overcome the “middle-income trap”, it is necessary to adapt to the laws of economic evolution and promote a fundamental change in economic growth drivers; boost the high-quality development of the digital economy by strengthening the support role of data in the digital economy; and accelerate digital industrialization and industrial digitalization to realize the integration of digital and real economies.

Details

China Political Economy, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2516-1652

Keywords

Article
Publication date: 11 November 2022

Özcan Karahan and Olcay Çolak

The direction of the causality relationship between Foreign Direct Investment (FDI) and economic growth is a highly controversial issue in the literature. There are two…

Abstract

Purpose

The direction of the causality relationship between Foreign Direct Investment (FDI) and economic growth is a highly controversial issue in the literature. There are two basic approaches advocating different causal directions between FDI and growth, which are called hypotheses of FDI-led Growth and Growth-led FDI. The aim of this study is to analyze the causality relationship between FDI and economic growth in RCEP countries and thus make a new contribution to the discussions in the relevant literature. In addition, the results of the study are expected to provide important implications for the policies to be designed for economic growth based on FDI flows to RCEP countries. Thus, by examining the direction of causality between FDI and economic growth in RCEP countries, we aim to provide a new contribution to related literature and make some implications for the policy design process of economic growth in the RCEP area.

Design/methodology/approach

We empirically examined the direction of a causal link between FDI and economic growth in the context of Regional Comprehensive Economic Partnership (RPEC) countries in order to test the hypothesis of FDI-led growth and Growth-led FDI. Accordingly, as our main variables of interest, we incorporated the inward foreign direct investment stock to gross domestic product ratio (FDI) and gross domestic product per capita (GDP). Hatemi-J (2012) asymmetric causality test has been employed in the investigation of the direction of causality between FDI and GDP over the period of 1980–2020. Thus, unlike most of the studies investigating the direction of causality between FDI and growth using the linear causality analysis method, our study performed a nonlinear causality analysis.

Findings

Empirical results reveal that the causal relationship between FDI and national income in RPEC countries is non-linear or asymmetric . The results of the symmetric causality test for both from FDI to national income and from national income to FDI are statistically insignificant for all countries. Therefore, this finding obtained from the study provided an important guide to the econometric methods to be used in other studies to be conducted in the same region in the future. Concerning the asymmetric causality relationship from FDI to growth, positive FDI shocks are an important cause of national income in most RCEP countries. However, the effect of negative FDI shocks on national income is quite weak compared to positive shocks. Regarding the asymmetric causality relationship from growth to FDI, positive national income shocks do not create a significant causal relationship with FDI. Similarly, the effects of negative national income shocks on FDI are statistically insignificant. Overall, asymmetric causality test results reveal that positive FDI shocks have an important causal impact on economic growth in most RCEP countries. Thus, the results of econometric analysis mostly support the argument that the FDI-led growth hypothesis rather than the Growth-led FDI hypothesis in RCEP countries. Accordingly, policy-makers in most of the RCEP countries should continue to provide more incentives and facilities to multinational companies in order to ensure constant economic growth.

Originality/value

Our study brings a significant difference in the econometric method used compared to most of the other studies in the literature. Existing empirical studies on the direction of causality between FDI and growth mostly use standard Granger-linear causality-type tests to detect the direction of causality among FDI and growth. Unlike most of the studies in the literature, our study adopted a different methodological approach, namely the Hatemi J test to detect the non-linear causality between FDI and economic growth in RCEP countries. Therefore, this paper made a new methodological contribution significantly to the literature focusing on the causal relationship between FDI and economic growth by using a non-linear causality method rather than a linear causality one.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

Keywords

Article
Publication date: 22 November 2022

Cleopatra Oluseye Ibukun and Wuraola Mahrufat Omisore

This paper examines the long-run and dynamic causal relationship among air pollution, health expenditure and economic growth in Mexico, Indonesia, Nigeria and Turkey (MINT…

Abstract

Purpose

This paper examines the long-run and dynamic causal relationship among air pollution, health expenditure and economic growth in Mexico, Indonesia, Nigeria and Turkey (MINT countries).

Design/methodology/approach

The bounds test approach to cointegration and causality test was employed on data covering 1995–2018.

Findings

The study shows evidence of a long-run relationship among the variables in MINT countries and the causality test confirms the existence of a bidirectional causal nexus between health expenditure and economic growth in the four countries. It also confirms that there is a bidirectional causal relationship between carbon dioxide (CO2) emission and economic growth, except in Nigeria where a unidirectional causal relationship was found running from CO2 emissions to economic growth. In addition, a bidirectional causal relationship was found between air pollution and health expenditure in Turkey, while no causal relationship was found among these variables in Nigeria.

Research limitations/implications

This study is limited by available data and it only focuses on four emerging economies. To address this, future studies can expand this scope to more emerging economies with severe air pollution and also extend the scope when more recent data becomes available.

Practical implications

This study suggests that pollution standards in MINT countries should be monitored and enforced with transparency so as to mitigate its health implications and ensure the sustainability of economic growth.

Social implications

The study confirms the importance of keeping air pollution as low as possible because of its negative effect on health and economic output.

Originality/value

The study accounts for the complexity of each MINT country instead of providing a general discussion on the relationship between air pollution, health expenditure and economic growth in MINT countries.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

Keywords

Article
Publication date: 19 October 2022

Peterson K. Ozili, Adekemi Ademiju and Semia Rachid

The impact of financial inclusion on economic growth is a topic that is generating widespread interest among researchers and practitioners. In this paper, the authors…

Abstract

Purpose

The impact of financial inclusion on economic growth is a topic that is generating widespread interest among researchers and practitioners. In this paper, the authors review the existing literature to highlight the state of research in the literature and identify new opportunities for innovative research.

Design/methodology/approach

The authors used a thematic literature review methodology which involves dividing the review along relevant themes.

Findings

The authors find that significant research on the topic emerged in the post-2016 years. Most of the existing studies are from developing countries and from the Asian and African regions. Existing studies have not utilized relevant theories in explaining the impact of financial inclusion on economic growth. Most studies report a positive impact of financial inclusion on economic growth while very few studies show a negative impact. The most common channel through which financial inclusion affects economic growth is through greater access to financial products and services offered by financial institutions that increases financial intermediation and translates to positive economic growth. The common empirical methodology used in the literature are causality tests, cointegration and regression methods. Multiple proxies of financial inclusion and economic growth were used in the literature which partly explains the conflicting result among existing studies. The review paper concludes by identifying some directions for future research.

Originality/value

This paper presents the first rigorous thematic review of the existing literature on the impact of financial inclusion on economic growth. It highlights the main approach that researchers have taken on this topic and identifies some important research areas for future investigation.

Peer review

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-05-2022-0339.

Details

International Journal of Social Economics, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0306-8293

Keywords

1 – 10 of over 185000