A. K. Srinivasa, K. Praveen, S. Padmaja, M. Nithyashree, G. Jha
PurposeThis paper examines whether farmers' knowledge of the minimum support prices (MSPs) affects farm-gate prices. MSP is the minimum guaranteed price for agricultural commodities announced by the Government of India for 24 commodities. Most farmers in India prefer to sell their produce at the farm-gate due to a small marketable surplus and hence do not directly benefit from MSP. The authors test the common argument in the political discourse that if farmers have knowledge of MSP, then they can bargain with traders during the farm-gate transaction and demand a better price close to MSP.Design/methodology/approachThe authors use matching methods to examine the impact of knowledge of MSP on farm-gate prices.FindingsUsing nationally representative data, the authors show that there is no empirical evidence that the knowledge of MSP of the crops leads to higher bargaining power and better farm-gate prices.Practical implicationsPrice information (MSP in this case) alone cannot improve the bargaining power of farmers and result in a better price realization. As a safety net, MSP fails in the absence of procurement of products by the government. This also raises the question of the equitability of the price support system in India and calls for a rethink of the MSP policy.Originality/valueThis study is the first of its kind to examine the anchoring effect of knowledge of MSP on farm-gate prices using a nationally representative dataset.
{"title":"Does a farmer's knowledge of minimum support price (MSP) affect the farm-gate price? Evidence from India","authors":"A. K. Srinivasa, K. Praveen, S. Padmaja, M. Nithyashree, G. Jha","doi":"10.22004/AG.ECON.315205","DOIUrl":"https://doi.org/10.22004/AG.ECON.315205","url":null,"abstract":"PurposeThis paper examines whether farmers' knowledge of the minimum support prices (MSPs) affects farm-gate prices. MSP is the minimum guaranteed price for agricultural commodities announced by the Government of India for 24 commodities. Most farmers in India prefer to sell their produce at the farm-gate due to a small marketable surplus and hence do not directly benefit from MSP. The authors test the common argument in the political discourse that if farmers have knowledge of MSP, then they can bargain with traders during the farm-gate transaction and demand a better price close to MSP.Design/methodology/approachThe authors use matching methods to examine the impact of knowledge of MSP on farm-gate prices.FindingsUsing nationally representative data, the authors show that there is no empirical evidence that the knowledge of MSP of the crops leads to higher bargaining power and better farm-gate prices.Practical implicationsPrice information (MSP in this case) alone cannot improve the bargaining power of farmers and result in a better price realization. As a safety net, MSP fails in the absence of procurement of products by the government. This also raises the question of the equitability of the price support system in India and calls for a rethink of the MSP policy.Originality/valueThis study is the first of its kind to examine the anchoring effect of knowledge of MSP on farm-gate prices using a nationally representative dataset.","PeriodicalId":34568,"journal":{"name":"Journal of Economics and Development","volume":"63 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-07-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84768712","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-06-27DOI: 10.1108/jed-06-2022-0105
Nicholas Addai Boamah, Francis Ofori-Yeboah, K. Appiah
PurposeThe study investigates the effect of political instability and employee tenure security on the performance of firms in middle-income economies (MIEs) after controlling for the influence of corruption, international quality certification, external auditor services and firm age. It examines whether ownership and sector effects matter in the explored relationships.Design/methodology/approachThe study adopts the generalized method of moments estimator and collects firm-level cross-sectional data from 77 MIEs.FindingsThe evidence shows that political uncertainty, employee tenure security and firm age negatively impact firm performance. Also, external quality assurance mainly improves firm performance. Additionally, foreign-owned firms benefit from corruption more than their domestic counterparts. Moreover, there are ownership and sector effects in the firm performance drivers.Practical implicationsThe findings suggest the need for MIE firm managers to implement policies and programs to improve permanent employees' efficiency, commitment and honesty. Policy makers and political actors must work toward a stable political environment in MIEs. The policy must also focus on at least minimizing corruption.Originality/valueThe study shows the contributions of employee tenure security, political instability and corruption to the performance of MIE firms. It documents sector and ownership effects in the factors influencing firm performance.
{"title":"Political environment, employee tenure security and firm performance in middle-income economies","authors":"Nicholas Addai Boamah, Francis Ofori-Yeboah, K. Appiah","doi":"10.1108/jed-06-2022-0105","DOIUrl":"https://doi.org/10.1108/jed-06-2022-0105","url":null,"abstract":"PurposeThe study investigates the effect of political instability and employee tenure security on the performance of firms in middle-income economies (MIEs) after controlling for the influence of corruption, international quality certification, external auditor services and firm age. It examines whether ownership and sector effects matter in the explored relationships.Design/methodology/approachThe study adopts the generalized method of moments estimator and collects firm-level cross-sectional data from 77 MIEs.FindingsThe evidence shows that political uncertainty, employee tenure security and firm age negatively impact firm performance. Also, external quality assurance mainly improves firm performance. Additionally, foreign-owned firms benefit from corruption more than their domestic counterparts. Moreover, there are ownership and sector effects in the firm performance drivers.Practical implicationsThe findings suggest the need for MIE firm managers to implement policies and programs to improve permanent employees' efficiency, commitment and honesty. Policy makers and political actors must work toward a stable political environment in MIEs. The policy must also focus on at least minimizing corruption.Originality/valueThe study shows the contributions of employee tenure security, political instability and corruption to the performance of MIE firms. It documents sector and ownership effects in the factors influencing firm performance.","PeriodicalId":34568,"journal":{"name":"Journal of Economics and Development","volume":"29 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87271984","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-06-22DOI: 10.1108/jed-01-2023-0015
Thanh Cong Nguyen, Thi Linh Tran
PurposeThis paper examines the political budget cycles in emerging and developing countries using a sample of 91 countries from 1992 to 2019.Design/methodology/approachThis paper employs a pool Ordinary Least Squares (OLS) model with clustered standard errors at the country level. To address endogeneity issues, the authors also employ a two-step system generalized methods of moments model.FindingsThe authors find clear evidence of political budget cycles in emerging and developing countries. The authors consistently find that incumbents increase total government spending, particularly in economic affairs, public services and social welfare, in the year before an election and the election year. In contrast, they contract spending in the year after an election.Research limitations/implicationsPolicymakers should be aware of the political budget cycles during election years. Promoting control of corruption and democracy helps to alleviate the effects of the political budget cycles in emerging and developing countries.Originality/valueThe authors are among the first to explore the political budget cycles in emerging and developing countries by focusing on the total government spending and its main compositions, including expenditures on economic affairs, public services and social welfare. Besides, the authors also explore the conditioning effects of control of corruption, political ideology and democracy.
{"title":"The political budget cycles in emerging and developing countries","authors":"Thanh Cong Nguyen, Thi Linh Tran","doi":"10.1108/jed-01-2023-0015","DOIUrl":"https://doi.org/10.1108/jed-01-2023-0015","url":null,"abstract":"PurposeThis paper examines the political budget cycles in emerging and developing countries using a sample of 91 countries from 1992 to 2019.Design/methodology/approachThis paper employs a pool Ordinary Least Squares (OLS) model with clustered standard errors at the country level. To address endogeneity issues, the authors also employ a two-step system generalized methods of moments model.FindingsThe authors find clear evidence of political budget cycles in emerging and developing countries. The authors consistently find that incumbents increase total government spending, particularly in economic affairs, public services and social welfare, in the year before an election and the election year. In contrast, they contract spending in the year after an election.Research limitations/implicationsPolicymakers should be aware of the political budget cycles during election years. Promoting control of corruption and democracy helps to alleviate the effects of the political budget cycles in emerging and developing countries.Originality/valueThe authors are among the first to explore the political budget cycles in emerging and developing countries by focusing on the total government spending and its main compositions, including expenditures on economic affairs, public services and social welfare. Besides, the authors also explore the conditioning effects of control of corruption, political ideology and democracy.","PeriodicalId":34568,"journal":{"name":"Journal of Economics and Development","volume":"26 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-06-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75114331","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-04-10DOI: 10.1108/jed-10-2022-0214
Rukaiyat Adebusola Yusuf, L. Nguyen
PurposeThis research examines how shadow economy affects foreign direct investment (FDI).Design/methodology/approachThe 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-effects estimator and the two-step system generalized method of moments estimation.FindingsThe 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 implicationsOverall, 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/valueThis 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.
{"title":"Shadow economy and FDI: the role of corruption and land resource","authors":"Rukaiyat Adebusola Yusuf, L. Nguyen","doi":"10.1108/jed-10-2022-0214","DOIUrl":"https://doi.org/10.1108/jed-10-2022-0214","url":null,"abstract":"PurposeThis research examines how shadow economy affects foreign direct investment (FDI).Design/methodology/approachThe 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-effects estimator and the two-step system generalized method of moments estimation.FindingsThe 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 implicationsOverall, 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/valueThis 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.","PeriodicalId":34568,"journal":{"name":"Journal of Economics and Development","volume":"124 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-04-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75809585","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-04-07DOI: 10.1108/jed-10-2022-0217
Eva Seewald, Samantha Baerthel, T. Nguyen
PurposeThis study aims to investigate whether the participation in land rental markets helps to mitigate impacts by climate change on multidimensional poverty in Thailand and Vietnam.Design/methodology/approachThe authors use precipitation data from the National Aeronautics and Space Administration (NASA) and self-reported shocks from the Thailand Vietnam Socio-Economic Panel (TVSEP) project to estimate climate change. Data from the TVSEP are also used to calculate a multidimensional poverty index (MPI). Fixed-effects logit panel regressions with interaction terms are implemented to analyze the above mentioned.FindingsThe results show that land rental markets are used as mitigation strategies to climate change in Thailand and Vietnam. The participation in land rental markets also reduces multidimensional poverty. However, as a mitigation strategy, land rental markets are only successful in certain circumstances.Research limitations/implicationsThe results show that there is potential in using land rental markets as mitigation strategies to climate change. Further research is needed to better understand which adaptation strategies, besides land rental market participation, and which combinations of different adaptation strategies are successful to mitigate negative effects induced by climate change.Practical implicationsThe results show that there is potential in using land rental markets as mitigation strategies to climate change. Therefore, education in the participation in land rental markets and how to use them as a mitigation strategy can be a way to increase households' resilience to negative effects induced by climate change. Households make better decisions regarding their land when they are better informed on the functionality of land rental markets. Additionally, being better informed increases self-confidence to participate in land-rental markets.Originality/valueLand rental markets as a mitigation strategy to climate change rarely have been studied, and if so, mainly the effect of leasing land has been studied. Additionally, the authors implement new measures of poverty – a multidimensional view on poverty which provides new insights into who are the poor and how they can be lift out of poverty.
{"title":"Land rental markets as a poverty reduction strategy: evidence from Southeast Asia","authors":"Eva Seewald, Samantha Baerthel, T. Nguyen","doi":"10.1108/jed-10-2022-0217","DOIUrl":"https://doi.org/10.1108/jed-10-2022-0217","url":null,"abstract":"PurposeThis study aims to investigate whether the participation in land rental markets helps to mitigate impacts by climate change on multidimensional poverty in Thailand and Vietnam.Design/methodology/approachThe authors use precipitation data from the National Aeronautics and Space Administration (NASA) and self-reported shocks from the Thailand Vietnam Socio-Economic Panel (TVSEP) project to estimate climate change. Data from the TVSEP are also used to calculate a multidimensional poverty index (MPI). Fixed-effects logit panel regressions with interaction terms are implemented to analyze the above mentioned.FindingsThe results show that land rental markets are used as mitigation strategies to climate change in Thailand and Vietnam. The participation in land rental markets also reduces multidimensional poverty. However, as a mitigation strategy, land rental markets are only successful in certain circumstances.Research limitations/implicationsThe results show that there is potential in using land rental markets as mitigation strategies to climate change. Further research is needed to better understand which adaptation strategies, besides land rental market participation, and which combinations of different adaptation strategies are successful to mitigate negative effects induced by climate change.Practical implicationsThe results show that there is potential in using land rental markets as mitigation strategies to climate change. Therefore, education in the participation in land rental markets and how to use them as a mitigation strategy can be a way to increase households' resilience to negative effects induced by climate change. Households make better decisions regarding their land when they are better informed on the functionality of land rental markets. Additionally, being better informed increases self-confidence to participate in land-rental markets.Originality/valueLand rental markets as a mitigation strategy to climate change rarely have been studied, and if so, mainly the effect of leasing land has been studied. Additionally, the authors implement new measures of poverty – a multidimensional view on poverty which provides new insights into who are the poor and how they can be lift out of poverty.","PeriodicalId":34568,"journal":{"name":"Journal of Economics and Development","volume":"62 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-04-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85383191","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-03-28DOI: 10.1108/jed-11-2022-0230
Anna-Lena Weber, Brigitte Ruesink, Steven Gronau
PurposeThis article aims to investigate the impact of (1) the establishment of a refugee settlement, (2) the energy demand of a host and refugee population, (3) the residence time of refugees and (4) interventions in the energy sector on sustainable utilization of the forest.Design/methodology/approachRefugee movements from the Democratic Republic of Congo and settlement construction in a Zambian host society provide the setting. An agent-based model is developed. It uses survey data from 277 Zambian households, geographic information system coordinates and supplementary data inputs.FindingsThe future forest stock remains up to 30 years without an influx of refugees. Refugee developments completely deplete the forest over time. The settlement construction severely impacts the forest, while refugees' energy needs seem less significant. Compared with the repatriation of refugees, permanent integration has no influential impact on forest resources. Interventions in the energy sector through alternative sources slow down deforestation. Once a camp is constructed, tree cutting by hosts causes forest covers to decline even if alternative energy is provided.Practical implicationsThe analysis is useful for comparable host–refugee settings and United Nations High Commissioner for Refugees interventions in settlement situations. Forest and energy sector interventions should involve host and refugee stakeholders.Originality/valueThis article adds value through an agent-based model in the Zambian deforestation–refugee context. The study has a pilot character within the United Nation's Comprehensive Refugee Response Framework. It fills a gap in long-term assessments of refugee presence in local host communities.
{"title":"Dynamics of refugee settlements and energy provision: the case of forest stocks in Zambia","authors":"Anna-Lena Weber, Brigitte Ruesink, Steven Gronau","doi":"10.1108/jed-11-2022-0230","DOIUrl":"https://doi.org/10.1108/jed-11-2022-0230","url":null,"abstract":"PurposeThis article aims to investigate the impact of (1) the establishment of a refugee settlement, (2) the energy demand of a host and refugee population, (3) the residence time of refugees and (4) interventions in the energy sector on sustainable utilization of the forest.Design/methodology/approachRefugee movements from the Democratic Republic of Congo and settlement construction in a Zambian host society provide the setting. An agent-based model is developed. It uses survey data from 277 Zambian households, geographic information system coordinates and supplementary data inputs.FindingsThe future forest stock remains up to 30 years without an influx of refugees. Refugee developments completely deplete the forest over time. The settlement construction severely impacts the forest, while refugees' energy needs seem less significant. Compared with the repatriation of refugees, permanent integration has no influential impact on forest resources. Interventions in the energy sector through alternative sources slow down deforestation. Once a camp is constructed, tree cutting by hosts causes forest covers to decline even if alternative energy is provided.Practical implicationsThe analysis is useful for comparable host–refugee settings and United Nations High Commissioner for Refugees interventions in settlement situations. Forest and energy sector interventions should involve host and refugee stakeholders.Originality/valueThis article adds value through an agent-based model in the Zambian deforestation–refugee context. The study has a pilot character within the United Nation's Comprehensive Refugee Response Framework. It fills a gap in long-term assessments of refugee presence in local host communities.","PeriodicalId":34568,"journal":{"name":"Journal of Economics and Development","volume":"13 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-03-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82058898","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-03-27DOI: 10.1108/jed-10-2022-0213
Naod Mekonnen Anega, B. Alemu
PurposeThis study empirically examines the impact of rural roads on consumption of households in Ethiopia.Design/methodology/approachBoth 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.FindingsThe 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.Research limitations/implicationsImproving rural roads to a level of all-weather road standards and provision of agricultural transport facilities should be strategic priorities.Originality/valueThis 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.
{"title":"The effect of rural roads on consumption in Ethiopia","authors":"Naod Mekonnen Anega, B. Alemu","doi":"10.1108/jed-10-2022-0213","DOIUrl":"https://doi.org/10.1108/jed-10-2022-0213","url":null,"abstract":"PurposeThis study empirically examines the impact of rural roads on consumption of households in Ethiopia.Design/methodology/approachBoth 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.FindingsThe 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.Research limitations/implicationsImproving rural roads to a level of all-weather road standards and provision of agricultural transport facilities should be strategic priorities.Originality/valueThis 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.","PeriodicalId":34568,"journal":{"name":"Journal of Economics and Development","volume":"27 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-03-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89898252","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-03-03DOI: 10.1108/jed-07-2022-0125
J. Jalles
PurposeEarly evidence suggests that coronavirus disease 2019 (COVID-19) caused a sharp deterioration in fiscal accounts worldwide. This paper empirically assesses the fiscal impact of previous pandemics and epidemics.Design/methodology/approachUsing a large sample of 170 countries from 2000 to 2018, this study relies on Jordà's (2005) local projection method to trace pandemics' short- to medium-term dynamic impact on several fiscal aggregates.FindingsThis paper shows that (qualitatively) similar responses to those observed more recently with COVID-19 have characterized the effects of previous pandemics. While the fiscal effect has been economically and statistically significant and persistent, it varies; pandemics affect government expenditures more strongly than revenues in advanced economies, while the converse applies to developing countries. The author also finds that asymmetric responses depend on whether a country is characterized as a chronic fiscal surplus or deficit type. Another factor that generates an asymmetric fiscal response is the prevailing phase of the business cycle the economy was in when the pandemic shock hits.Research limitations/implicationsThis paper's findings provide a lower bound to what the current COVID-19 pandemic will inflict on countries’ fiscal situation. That said, the set of pandemics and epidemics used in this paper are geographically more concentrated and did not affect all countries in such a systemic and synchronized manner as did COVID-19 more recently.Originality/valueThis is the first paper to explore the fiscal side of this type of health-related shocks, as most of the literature has focused on the more traditional macroeconomic effects.
{"title":"Governments' accounts and pandemics","authors":"J. Jalles","doi":"10.1108/jed-07-2022-0125","DOIUrl":"https://doi.org/10.1108/jed-07-2022-0125","url":null,"abstract":"PurposeEarly evidence suggests that coronavirus disease 2019 (COVID-19) caused a sharp deterioration in fiscal accounts worldwide. This paper empirically assesses the fiscal impact of previous pandemics and epidemics.Design/methodology/approachUsing a large sample of 170 countries from 2000 to 2018, this study relies on Jordà's (2005) local projection method to trace pandemics' short- to medium-term dynamic impact on several fiscal aggregates.FindingsThis paper shows that (qualitatively) similar responses to those observed more recently with COVID-19 have characterized the effects of previous pandemics. While the fiscal effect has been economically and statistically significant and persistent, it varies; pandemics affect government expenditures more strongly than revenues in advanced economies, while the converse applies to developing countries. The author also finds that asymmetric responses depend on whether a country is characterized as a chronic fiscal surplus or deficit type. Another factor that generates an asymmetric fiscal response is the prevailing phase of the business cycle the economy was in when the pandemic shock hits.Research limitations/implicationsThis paper's findings provide a lower bound to what the current COVID-19 pandemic will inflict on countries’ fiscal situation. That said, the set of pandemics and epidemics used in this paper are geographically more concentrated and did not affect all countries in such a systemic and synchronized manner as did COVID-19 more recently.Originality/valueThis is the first paper to explore the fiscal side of this type of health-related shocks, as most of the literature has focused on the more traditional macroeconomic effects.","PeriodicalId":34568,"journal":{"name":"Journal of Economics and Development","volume":"13 29","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-03-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72491961","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-02-13DOI: 10.1108/jed-09-2022-0166
Rexford Abaidoo, Elvis Kwame Agyapong
PurposeThe study examines the effect of macroeconomic risk, inflation uncertainty and instability associated with key macroeconomic indicators on the efficiency of financial institutions among economies in sub-Saharan Africa (SSA).Design/methodology/approachData for the empirical inquiry were compiled from 35 SSA economies from 1996 to 2019. The empirical estimates were carried out using pooled ordinary least squares (POLS) with Driscoll and Kraay’s (1998) standard errors.FindingsReported empirical estimates show that macroeconomic risk and exchange rate volatility constrain the efficiency of financial institutions. Further results suggest that inflation uncertainty has a significant influence on the efficiency of financial institutions among economies in the subregion. Additionally, reviewed empirical estimates show that institutional quality positively moderates the nexus between inflation uncertainty and financial institution efficiency. At the same time, political instability is found to worsen the adverse effect of macroeconomic risk on the efficiency of financial institutions.Practical implicationsFor policymakers and governments, improved institutional structures are recommended to ensure the operational efficiency of financial institutions, especially during an inflationary period. For decision-makers among financial institutions, the study recommends policies that have the potential to make their institutions less vulnerable to macroeconomic risk and exchange rate fluctuations.Originality/valueThe approach adopted in this study differs significantly from related studies in that the study examines and reviews interactions and relationships not readily found in the reviewed literature.
{"title":"Inflation uncertainty, macroeconomic instability and the efficiency of financial institutions","authors":"Rexford Abaidoo, Elvis Kwame Agyapong","doi":"10.1108/jed-09-2022-0166","DOIUrl":"https://doi.org/10.1108/jed-09-2022-0166","url":null,"abstract":"PurposeThe study examines the effect of macroeconomic risk, inflation uncertainty and instability associated with key macroeconomic indicators on the efficiency of financial institutions among economies in sub-Saharan Africa (SSA).Design/methodology/approachData for the empirical inquiry were compiled from 35 SSA economies from 1996 to 2019. The empirical estimates were carried out using pooled ordinary least squares (POLS) with Driscoll and Kraay’s (1998) standard errors.FindingsReported empirical estimates show that macroeconomic risk and exchange rate volatility constrain the efficiency of financial institutions. Further results suggest that inflation uncertainty has a significant influence on the efficiency of financial institutions among economies in the subregion. Additionally, reviewed empirical estimates show that institutional quality positively moderates the nexus between inflation uncertainty and financial institution efficiency. At the same time, political instability is found to worsen the adverse effect of macroeconomic risk on the efficiency of financial institutions.Practical implicationsFor policymakers and governments, improved institutional structures are recommended to ensure the operational efficiency of financial institutions, especially during an inflationary period. For decision-makers among financial institutions, the study recommends policies that have the potential to make their institutions less vulnerable to macroeconomic risk and exchange rate fluctuations.Originality/valueThe approach adopted in this study differs significantly from related studies in that the study examines and reviews interactions and relationships not readily found in the reviewed literature.","PeriodicalId":34568,"journal":{"name":"Journal of Economics and Development","volume":"55 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-02-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86526495","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-02-07DOI: 10.1108/jed-10-2022-0206
L. Nguyen, Rizwan Raheem Ahmed
PurposeThis study investigates the impact of global economic sanctions on foreign direct investment (FDI).Design/methodology/approachData were gathered from several sources, including the United Nations Conference on Trade and Development (UNCTAD), the Global Sanction and the World Bank database, to build a dataset that consists of 172 countries during the period 2003–2019. The panel ordinary least square (OLS) with a fixed-effects estimator was exploited to achieve the research objective.FindingsThe research findings reveal that sanction exerts a detrimental effect on the total inflows of FDI and its components. Regarding different types of sanctions, while military and trade sanctions have little or even no impact on greenfield investment, they have more adverse and sizable effects on cross-border mergers and acquisitions (M&As). The authors further show that sanctions exert devastating influences through the infrastructure and economic development channels.Practical implicationOverall, this study implies that a closer look at particular types of FDI is required when implementing policies as different types of FDI may be affected differently by changes in the economy, such as economic sanctions.Originality/valueThis paper is the first empirical study that critically investigates the impact of sanctions on the total inward FDI flows and its two components: greenfield investment and cross-border M&As. It then explores how the sanction–FDI nexus varies depending on several country-level economic factors to understand better how sanctions and different types of sanctions are related to international trade and relations.
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