Pub Date : 2023-09-01DOI: 10.1353/jda.2023.a908660
Samod O. Lawal-Arogundade, Lateef O. Salami
ABSTRACT: The debate on the exchange rate–oil price nexus usually rests on the fact that oil price is quoted in US dollar (USD) and therefore, fluctuations in oil price may affect the exchange rate behavior of trading nations through the USD. However, it might be inaccurate to generalize the dynamic of the nexus for both net oil-exporting and net oil-importing economies particularly when exchange rates in these economies are running under floating regime. As a result, we revisit the dynamics of returns and volatility spillovers between exchange rates and oil prices in the turbulent period of COVID-19 from the perspective of the oil-exporting/oil-importing dichotomy, using the cases of Nigeria and South Africa. According to the results of the various pre-estimation tests, we find the VARMA-DCCGARCH model to be the best fit for modelling the interdependence of exchange rates and oil prices in the investigated economies. Empirically, we show that regardless of the oil-exporting or oil-importing peculiarity of an economy, unanticipated events in exchange rates and oil prices in the current period have the potential to fuel volatility in their returns in the preceding period. Also, not only is the magnitude and direction of the spillovers different under the different waves of COVID-19 but also sensitive to whether an economy is oil-exporting or oil-importing. Thus, while South Africa and Nigeria are among the top 5 African countries with the highest incidences of COVID-19, the permanency or transitory dynamics of the shocks to exchange rates and oil prices during the COVID-19 pandemic appears to be sensitive to whether an economy is oil-exporting or oil-importing. It is in view of this, among other things, that we herein infer that while the immediate policy response to an exogenous shock such as COVID-19 may be global and general for all countries, as is the case with the lockdown initiative, the long-run efforts at recovering from the shock may require that the peculiarities of the individual economies be taken into consideration, as is obvious from the findings of this study.
{"title":"Revisiting the Exchange Rate -Oil Price Nexus in Turbulent Period: What Can We Learn From Nigeria and South Africa During Covid-19?","authors":"Samod O. Lawal-Arogundade, Lateef O. Salami","doi":"10.1353/jda.2023.a908660","DOIUrl":"https://doi.org/10.1353/jda.2023.a908660","url":null,"abstract":"ABSTRACT: The debate on the exchange rate–oil price nexus usually rests on the fact that oil price is quoted in US dollar (USD) and therefore, fluctuations in oil price may affect the exchange rate behavior of trading nations through the USD. However, it might be inaccurate to generalize the dynamic of the nexus for both net oil-exporting and net oil-importing economies particularly when exchange rates in these economies are running under floating regime. As a result, we revisit the dynamics of returns and volatility spillovers between exchange rates and oil prices in the turbulent period of COVID-19 from the perspective of the oil-exporting/oil-importing dichotomy, using the cases of Nigeria and South Africa. According to the results of the various pre-estimation tests, we find the VARMA-DCCGARCH model to be the best fit for modelling the interdependence of exchange rates and oil prices in the investigated economies. Empirically, we show that regardless of the oil-exporting or oil-importing peculiarity of an economy, unanticipated events in exchange rates and oil prices in the current period have the potential to fuel volatility in their returns in the preceding period. Also, not only is the magnitude and direction of the spillovers different under the different waves of COVID-19 but also sensitive to whether an economy is oil-exporting or oil-importing. Thus, while South Africa and Nigeria are among the top 5 African countries with the highest incidences of COVID-19, the permanency or transitory dynamics of the shocks to exchange rates and oil prices during the COVID-19 pandemic appears to be sensitive to whether an economy is oil-exporting or oil-importing. It is in view of this, among other things, that we herein infer that while the immediate policy response to an exogenous shock such as COVID-19 may be global and general for all countries, as is the case with the lockdown initiative, the long-run efforts at recovering from the shock may require that the peculiarities of the individual economies be taken into consideration, as is obvious from the findings of this study.","PeriodicalId":84983,"journal":{"name":"Journal Of Developing Areas","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135640186","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 : 2023-09-01DOI: 10.1353/jda.2023.a908663
Imoh Ekpenyong
ABSTRACT: The present study adds to the existing literature by grouping countries in sub-Saharan Africa into two broad health systems (public and private). A country's health system is classified as predominantly public if the average share of public health expenditure for the period under study is greater than the average share of private health expenditure; it is classified as predominantly private if the reverse is the case. The aim is to derive the income elasticities of health expenditure in other to unravel countries in the sub region where health provision is likely to be a necessary good. To capture the dynamic nature of the relationship, the study's methodology relies on several econometric procedures (pooled mean group, mean group, and common correlated error mean group estimators). Other variables included in the model are official development assistance, the price level, population above 65 and migrant remittances. The unit root test performed showed that most of the variables in the study are not stationary at level; however, they are cointegrated in the long run, justifying the choice of the estimation techniques. The empirical results reveals that the short run income elasticity of health expenditure in sub-Saharan Africa is 0.36 and in the long run, the value becomes 1.18 with a speed of adjustment of 0.41. This suggest that 41% of the short run disequilibrium is dissipated in the current period. Other variables that were included in the model as controls were not statistically significant. In the reduced model that has only income as regressor, the short run and long run income elasticities in the overall sample continues to remain significant, however, the income elasticity in the predominantly public health system is greater than the elasticity in the predominantly private health system. This suggests that health is more of a development issue in a predominantly private health system in sub–Saharan Africa. An implication of the present study is that citizens of sub-Saharan African countries that rely more on private financing of health expenditure are likely to be exposed to catastrophic health financing. Hence, policymakers can avert this by encouraging more public financing of healthcare provision.
{"title":"Determining the Income Elasticity of Health Expenditure in Sub Sharan","authors":"Imoh Ekpenyong","doi":"10.1353/jda.2023.a908663","DOIUrl":"https://doi.org/10.1353/jda.2023.a908663","url":null,"abstract":"ABSTRACT: The present study adds to the existing literature by grouping countries in sub-Saharan Africa into two broad health systems (public and private). A country's health system is classified as predominantly public if the average share of public health expenditure for the period under study is greater than the average share of private health expenditure; it is classified as predominantly private if the reverse is the case. The aim is to derive the income elasticities of health expenditure in other to unravel countries in the sub region where health provision is likely to be a necessary good. To capture the dynamic nature of the relationship, the study's methodology relies on several econometric procedures (pooled mean group, mean group, and common correlated error mean group estimators). Other variables included in the model are official development assistance, the price level, population above 65 and migrant remittances. The unit root test performed showed that most of the variables in the study are not stationary at level; however, they are cointegrated in the long run, justifying the choice of the estimation techniques. The empirical results reveals that the short run income elasticity of health expenditure in sub-Saharan Africa is 0.36 and in the long run, the value becomes 1.18 with a speed of adjustment of 0.41. This suggest that 41% of the short run disequilibrium is dissipated in the current period. Other variables that were included in the model as controls were not statistically significant. In the reduced model that has only income as regressor, the short run and long run income elasticities in the overall sample continues to remain significant, however, the income elasticity in the predominantly public health system is greater than the elasticity in the predominantly private health system. This suggests that health is more of a development issue in a predominantly private health system in sub–Saharan Africa. An implication of the present study is that citizens of sub-Saharan African countries that rely more on private financing of health expenditure are likely to be exposed to catastrophic health financing. Hence, policymakers can avert this by encouraging more public financing of healthcare provision.","PeriodicalId":84983,"journal":{"name":"Journal Of Developing Areas","volume":"91 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135640980","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 : 2023-09-01DOI: 10.1353/jda.2023.a908644
Achoja Roland Onomu
ABSTRACT: The smallholders' transformation from the passive nature of farming using crude implements into active and rewarding market participation remains problematic. Over the years, smallholder farming and market have been associated with trails of many middlemen, farm gate sales, and consumption. However, there is a lack of information on the recent changes that have occurred due to government intervention, globalization, and the fourth industrial revolution in Nigeria and many other developing countries. Hence, this study investigates the smallholders' market participation, level of participation, determinants of the smallholders' market participation, driving force behind the smallholder farming, tractor-use, and tractor-use impact on the smallholders' market participation. A multistage sampling technique was applied to select 280 smallholder farmers for the research. Descriptive statistics and propensity score matching (PMS) were used to analyze the data. The findings revealed that the smallholders' market participation level is low. Most smallholders (62 percent) could not sell up to 50 percent of their products. The study showed that smallholders participate in the market at different output sales levels, with most tractor-users participating in the market at a high output sales level. In contrast, many non-tractor users participated at low output sales, indicating poor market participation. Most smallholders sell their produce at the farm gate to date. Smallholder tractor use remains low. Only 28 percent of the total respondents used tractors. The PSM analysis revealed that tractor-use significantly impacts the smallholders' market participants alongside the education level, area cultivated, and access to information on farming activities such as market information. The smallholders' involvement in another occupation negatively impacts their market participation. The year(s) of farming experience did not positively impact the smallholder's market participation, which could be due to poor adoption of technology. The farming and market participation seems unchanged, with most individuals, not collective smallholders, not frequently producing for the market. Their market participation has not experienced meaningful progress despite income generation forming the major motive behind their farming. It is true that some smallholders mainly produce for consumption, but the sole purpose of ensuring households' food security is the least reason many households embark on farming. Positive transformation of the smallholder into active and mainstream market participation is possible if technology, including tractor, and suitable approaches are adopted, as evidenced by this research among smallholders who used tractors. It was recommended that the smallholders' tractor-use issue be prioritized in all policies addressing the smallholders' market participation. Smallholders should not be viewed as farmers who only went into farming for consumption.
{"title":"Smallholder's Market Participation, Characteristics, Tractor Use Implication and Determinants in Nigeria","authors":"Achoja Roland Onomu","doi":"10.1353/jda.2023.a908644","DOIUrl":"https://doi.org/10.1353/jda.2023.a908644","url":null,"abstract":"ABSTRACT: The smallholders' transformation from the passive nature of farming using crude implements into active and rewarding market participation remains problematic. Over the years, smallholder farming and market have been associated with trails of many middlemen, farm gate sales, and consumption. However, there is a lack of information on the recent changes that have occurred due to government intervention, globalization, and the fourth industrial revolution in Nigeria and many other developing countries. Hence, this study investigates the smallholders' market participation, level of participation, determinants of the smallholders' market participation, driving force behind the smallholder farming, tractor-use, and tractor-use impact on the smallholders' market participation. A multistage sampling technique was applied to select 280 smallholder farmers for the research. Descriptive statistics and propensity score matching (PMS) were used to analyze the data. The findings revealed that the smallholders' market participation level is low. Most smallholders (62 percent) could not sell up to 50 percent of their products. The study showed that smallholders participate in the market at different output sales levels, with most tractor-users participating in the market at a high output sales level. In contrast, many non-tractor users participated at low output sales, indicating poor market participation. Most smallholders sell their produce at the farm gate to date. Smallholder tractor use remains low. Only 28 percent of the total respondents used tractors. The PSM analysis revealed that tractor-use significantly impacts the smallholders' market participants alongside the education level, area cultivated, and access to information on farming activities such as market information. The smallholders' involvement in another occupation negatively impacts their market participation. The year(s) of farming experience did not positively impact the smallholder's market participation, which could be due to poor adoption of technology. The farming and market participation seems unchanged, with most individuals, not collective smallholders, not frequently producing for the market. Their market participation has not experienced meaningful progress despite income generation forming the major motive behind their farming. It is true that some smallholders mainly produce for consumption, but the sole purpose of ensuring households' food security is the least reason many households embark on farming. Positive transformation of the smallholder into active and mainstream market participation is possible if technology, including tractor, and suitable approaches are adopted, as evidenced by this research among smallholders who used tractors. It was recommended that the smallholders' tractor-use issue be prioritized in all policies addressing the smallholders' market participation. Smallholders should not be viewed as farmers who only went into farming for consumption.","PeriodicalId":84983,"journal":{"name":"Journal Of Developing Areas","volume":"188 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135640507","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 : 2023-09-01DOI: 10.1353/jda.2023.a908659
Pawan Singh, Kalandi Charan Pradhan
ABSTRACT: Remittances from migrant workers are the major sources of financial inflows into the Nepalese economy. The World Bank's data of 2021 suggests that Nepal is one of the top ten recipients of remittances in terms of its share of GDP. Even though remittances make up a significant portion of foreign capital flows, the macroeconomic impact of these transfers on economic growth has not been sufficiently studied. Therefore, the aim of our study is to investigate the impact of remittances on the Nepalese economy for the period 1990 -2021 using the autoregressive distributed lag (ARDL) model. The ARDL approach is applied to identify the long-term and short-term effects of worker remittances on the Nepalese economy. The model uses real GDP as a proxy for economic growth and uses workers' remittances as main explanatory variable along with gross fixed capital formation, trade openness, foreign aid, and human capital as the control variables. The findings of the bound test suggest that there is a long-run relationship between remittances and economic growth. Furthermore, it is also demonstrated that remittances, gross fixed capital formation and foreign aid have a positive effect on real GDP. While we found a negative effect of trade openness and human capital on real GDP in short run and long run dynamics. The positive influence of remittances appears to be very weak, as a significant portion of remittances to Nepal are used for private domestic consumption. Moreover, the negative contribution of imports to economic growth suggests that a larger portion of remittances is spent on daily consumption and consumer durable items such as television, refrigerator, washing machine, air conditioning, and so on. Based on the analysis of the results, Nepal needs to develop an integrated policy to motivate migrants in intensity of saving and investment on multiple productive sectors rather spending on basic consumption. In doing so, such practice helps in channelising the remittances into economic growth through the multiplier effect. The transaction cost of remitting money is another challenging issue in Nepal. Therefore, policy measures must be focused on minimising transaction cost of remittances through the formal and organised channels.
{"title":"Do Remittances Stimulate Economic Growth In Nepal? Evidence From ARDL Approach","authors":"Pawan Singh, Kalandi Charan Pradhan","doi":"10.1353/jda.2023.a908659","DOIUrl":"https://doi.org/10.1353/jda.2023.a908659","url":null,"abstract":"ABSTRACT: Remittances from migrant workers are the major sources of financial inflows into the Nepalese economy. The World Bank's data of 2021 suggests that Nepal is one of the top ten recipients of remittances in terms of its share of GDP. Even though remittances make up a significant portion of foreign capital flows, the macroeconomic impact of these transfers on economic growth has not been sufficiently studied. Therefore, the aim of our study is to investigate the impact of remittances on the Nepalese economy for the period 1990 -2021 using the autoregressive distributed lag (ARDL) model. The ARDL approach is applied to identify the long-term and short-term effects of worker remittances on the Nepalese economy. The model uses real GDP as a proxy for economic growth and uses workers' remittances as main explanatory variable along with gross fixed capital formation, trade openness, foreign aid, and human capital as the control variables. The findings of the bound test suggest that there is a long-run relationship between remittances and economic growth. Furthermore, it is also demonstrated that remittances, gross fixed capital formation and foreign aid have a positive effect on real GDP. While we found a negative effect of trade openness and human capital on real GDP in short run and long run dynamics. The positive influence of remittances appears to be very weak, as a significant portion of remittances to Nepal are used for private domestic consumption. Moreover, the negative contribution of imports to economic growth suggests that a larger portion of remittances is spent on daily consumption and consumer durable items such as television, refrigerator, washing machine, air conditioning, and so on. Based on the analysis of the results, Nepal needs to develop an integrated policy to motivate migrants in intensity of saving and investment on multiple productive sectors rather spending on basic consumption. In doing so, such practice helps in channelising the remittances into economic growth through the multiplier effect. The transaction cost of remitting money is another challenging issue in Nepal. Therefore, policy measures must be focused on minimising transaction cost of remittances through the formal and organised channels.","PeriodicalId":84983,"journal":{"name":"Journal Of Developing Areas","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135641147","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 : 2023-09-01DOI: 10.1353/jda.2023.a908658
Adekunle Chioma Patricia
ABSTRACT: Reducing poverty in developing economies is a major challenge faced by the development stakeholders. Although poverty is a worldwide phenomenon, it has been observed that Nigeria is one of the countries that is worst hit by the poverty with biting effects more on the rural dwellers where the bulk of the population lives. Using the nationally representative household survey panel data by the World Bank/National Bureau of Statistics, from the 2012 to 2016 period to provide answers to what are the household demographic, farm, and geospatial characteristics that drive the likelihood of farm households entering, exiting, and re-entering poverty using the costs of basic needs approach as a marker of poverty. Four poverty levels were used in analyzing the household survey data. The two waves of poverty mobility in Nigeria approximately revealed 51.2 percent of poor farm households' in wave 1, and 42 percent in wave 2 were at risk of spending their entire lives in poverty. The probability of existing and entering two-year poverty mobility which started at 25 percent rose to 45 percent for four-year poverty mobility indicating that over time more farm households, have experienced changes in the status of their consumption expenditure relative to the poverty line. Close to households who begin poor, those who moved out of poverty in any of the other years had better endowments in terms of land and livestock ownership, urban residence, and involvement in non-farm income portfolios. It is concluded that older heads, higher educational attainment, engagement in crop/livestock production, and non-farm livelihood activities, strongly reduce the likelihood of farm households' poverty entry. Therefore, policy strategies aimed at dealing with poverty mobility should be heterogeneous across the poor farm households. Also, as the chronically poor lack physical assets and earning endowments, policy efforts should focus on education or other forms of skills acquisition programs in order to raise their livelihood portfolios and boost their earning capacity.
{"title":"Who are the Poor Farm households' in Nigeria and is this Population Changing Over Time?","authors":"Adekunle Chioma Patricia","doi":"10.1353/jda.2023.a908658","DOIUrl":"https://doi.org/10.1353/jda.2023.a908658","url":null,"abstract":"ABSTRACT: Reducing poverty in developing economies is a major challenge faced by the development stakeholders. Although poverty is a worldwide phenomenon, it has been observed that Nigeria is one of the countries that is worst hit by the poverty with biting effects more on the rural dwellers where the bulk of the population lives. Using the nationally representative household survey panel data by the World Bank/National Bureau of Statistics, from the 2012 to 2016 period to provide answers to what are the household demographic, farm, and geospatial characteristics that drive the likelihood of farm households entering, exiting, and re-entering poverty using the costs of basic needs approach as a marker of poverty. Four poverty levels were used in analyzing the household survey data. The two waves of poverty mobility in Nigeria approximately revealed 51.2 percent of poor farm households' in wave 1, and 42 percent in wave 2 were at risk of spending their entire lives in poverty. The probability of existing and entering two-year poverty mobility which started at 25 percent rose to 45 percent for four-year poverty mobility indicating that over time more farm households, have experienced changes in the status of their consumption expenditure relative to the poverty line. Close to households who begin poor, those who moved out of poverty in any of the other years had better endowments in terms of land and livestock ownership, urban residence, and involvement in non-farm income portfolios. It is concluded that older heads, higher educational attainment, engagement in crop/livestock production, and non-farm livelihood activities, strongly reduce the likelihood of farm households' poverty entry. Therefore, policy strategies aimed at dealing with poverty mobility should be heterogeneous across the poor farm households. Also, as the chronically poor lack physical assets and earning endowments, policy efforts should focus on education or other forms of skills acquisition programs in order to raise their livelihood portfolios and boost their earning capacity.","PeriodicalId":84983,"journal":{"name":"Journal Of Developing Areas","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135640190","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 : 2023-09-01DOI: 10.1353/jda.2023.a908645
Thando Mkhombo, Andrew Phiri
ABSTRACT: The Southern African Customs Union is the oldest customs union in the world and the member states form a currency union with the South African Rand being the regional currency anchor. Therefore, currency movements amongst SACU member are dependent on the developments on the Rand which, in turn, can affect stock market development in the region. We examine the time-frequency relationship between exchange rates and stock market returns in SACU countries using continuous wavelet transforms. Our empirical analysis is two-staged. Firstly, we employ wavelet power spectrum to examine the time-frequency properties of the individual series. Secondly, we use wavelet coherence analysis and phase dynamics to examine the synchronization between the variables in a time-frequency space. Our findings show stronger (weaker) exchange rate-stock returns relations are found during periods of higher (lower) inflation whereas we observe a stronger (weaker) relationship during periods of lower interest rate environment. Moreover, we find more significant long-run relationships for countries with more independent monetary policy (South Africa and Botswana) whereas these relations are more prominent over the short-run for countries with pegged exchange rates (Eswatini and Namibia). We also observe that periods of oil and currency shocks impact the exchange rate-stock returns relationship in SACU countries with pegged exchange rates (Eswatini and Namibia). Our findings bear important implications for different stakeholders. For instance, this study has implications for exchange rate policy as it addresses the issue of whether the exchange rate can be used to improve market performance or exchange rate developments spillover into the stock market. Furthermore, corporate managers and stock market participants would be interested in our findings as it identifies periods of market inefficiency when exchange rates can be used to beat the stock market.
{"title":"Wavelet-Based Analysis of the Comovement Between Exchange Rate and Stock Returns in Sacu Countries","authors":"Thando Mkhombo, Andrew Phiri","doi":"10.1353/jda.2023.a908645","DOIUrl":"https://doi.org/10.1353/jda.2023.a908645","url":null,"abstract":"ABSTRACT: The Southern African Customs Union is the oldest customs union in the world and the member states form a currency union with the South African Rand being the regional currency anchor. Therefore, currency movements amongst SACU member are dependent on the developments on the Rand which, in turn, can affect stock market development in the region. We examine the time-frequency relationship between exchange rates and stock market returns in SACU countries using continuous wavelet transforms. Our empirical analysis is two-staged. Firstly, we employ wavelet power spectrum to examine the time-frequency properties of the individual series. Secondly, we use wavelet coherence analysis and phase dynamics to examine the synchronization between the variables in a time-frequency space. Our findings show stronger (weaker) exchange rate-stock returns relations are found during periods of higher (lower) inflation whereas we observe a stronger (weaker) relationship during periods of lower interest rate environment. Moreover, we find more significant long-run relationships for countries with more independent monetary policy (South Africa and Botswana) whereas these relations are more prominent over the short-run for countries with pegged exchange rates (Eswatini and Namibia). We also observe that periods of oil and currency shocks impact the exchange rate-stock returns relationship in SACU countries with pegged exchange rates (Eswatini and Namibia). Our findings bear important implications for different stakeholders. For instance, this study has implications for exchange rate policy as it addresses the issue of whether the exchange rate can be used to improve market performance or exchange rate developments spillover into the stock market. Furthermore, corporate managers and stock market participants would be interested in our findings as it identifies periods of market inefficiency when exchange rates can be used to beat the stock market.","PeriodicalId":84983,"journal":{"name":"Journal Of Developing Areas","volume":"74 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135640305","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 : 2023-09-01DOI: 10.1353/jda.2023.a908646
Bhabesh Hazarika
ABSTRACT: One of the most fundamental yet unresolved health policy issues is whether public expenditure on healthcare leads to improved health outcomes. Given that health reflects one of the critical aspects of human capital, having implications for economic growth and other development goals, there has been enormous advocacy towards investing significantly in the health systems across the countries to improve the overall health status. However, the effect of public spending on health outcomes remains inconclusive. The present paper analyses the impact of public health spending on mortality probability, taking into account the role of governance while treating public spending as an endogenous variable. The study uses individual level data from the National Family Health Survey (NFHS) Round 5 and a few state-level characteristics. For estimation purpose, it uses a two-level mixed effect model to capture the benefit incidence of public spending on Individual mortality probability. The findings reveal that public spending has a significant but differential impact on mortality across the Indian States, whereas the quality of governance is found to be a mediator. Given a level of public spending, States with better government effectiveness and rule of law can translate public health spending more effectively in reducing mortality at the individual level. The study also found heterogeneous mortality status across gender, location of stay, wealth status, and age groups with a differential impact of public spending across gender, wealth, and age groups. The variation in average distance of mortality probability level in each state from the overall mean mortality probability indicates that the states are very different in terms of health challenges that they are facing. The policy options call for state-specific health interventions to reduce the mortality rather than one-size-fits-all health policies. There needs to more unconditional grants/transfers from the Union Government to the States so that states will be able to tailor policy responses to address the unique challenges faced by the respective states. At the same time, states need to adopt output-based conditions with greater flexibility to deliver services and greater accountability to improve transparency, governance quality, and implementation capacity.
{"title":"Public Spending, Governance, and Mortality Probability in the Indian Subnational: A Two-Level Random Intercept Analysis","authors":"Bhabesh Hazarika","doi":"10.1353/jda.2023.a908646","DOIUrl":"https://doi.org/10.1353/jda.2023.a908646","url":null,"abstract":"ABSTRACT: One of the most fundamental yet unresolved health policy issues is whether public expenditure on healthcare leads to improved health outcomes. Given that health reflects one of the critical aspects of human capital, having implications for economic growth and other development goals, there has been enormous advocacy towards investing significantly in the health systems across the countries to improve the overall health status. However, the effect of public spending on health outcomes remains inconclusive. The present paper analyses the impact of public health spending on mortality probability, taking into account the role of governance while treating public spending as an endogenous variable. The study uses individual level data from the National Family Health Survey (NFHS) Round 5 and a few state-level characteristics. For estimation purpose, it uses a two-level mixed effect model to capture the benefit incidence of public spending on Individual mortality probability. The findings reveal that public spending has a significant but differential impact on mortality across the Indian States, whereas the quality of governance is found to be a mediator. Given a level of public spending, States with better government effectiveness and rule of law can translate public health spending more effectively in reducing mortality at the individual level. The study also found heterogeneous mortality status across gender, location of stay, wealth status, and age groups with a differential impact of public spending across gender, wealth, and age groups. The variation in average distance of mortality probability level in each state from the overall mean mortality probability indicates that the states are very different in terms of health challenges that they are facing. The policy options call for state-specific health interventions to reduce the mortality rather than one-size-fits-all health policies. There needs to more unconditional grants/transfers from the Union Government to the States so that states will be able to tailor policy responses to address the unique challenges faced by the respective states. At the same time, states need to adopt output-based conditions with greater flexibility to deliver services and greater accountability to improve transparency, governance quality, and implementation capacity.","PeriodicalId":84983,"journal":{"name":"Journal Of Developing Areas","volume":"298 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135641151","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 : 2023-09-01DOI: 10.1353/jda.2023.a908651
Rishab Lodh, Oindrila Dey
ABSTRACT: India's pharmaceutical sector has been one of the largest manufacturers of generic drugs globally. During the pandemic, most countries were dependent on imports of generic drugs from India. However, India has been relying on resources from China for Active Pharmaceutical Ingredients (APIs) which are the raw material for preparing generic drugs. We considered, in our analysis, branded product groups of Paracetamol and Amoxicillin due to their extensive use in the treatment of COVID-19. From a thorough market analysis of both the drugs, we conclude that firms have a monopoly over their brands but compete within the same product group and operate in their respective market under varying prices within certain bandwidths which resembles the feature of monopolistic competitive market. We have introduced compensating function a la Helpman (1981) in the pharmaceutical goods market with the assumption that an 'ideal product' exists among the pharmaceutical goods. Given the framework, this paper explores a general equilibrium model set in a monopolistic competitive product market for branded drugs. We concluded through our propositions that expanding the pharmaceutical sector will increase the employment of unskilled labor under no capacity constraint. We will observe an increase in wages of unskilled labor only under full employment conditions wherein we would observe that the expansion of pharmaceutical good will increase wages in the unskilled labor market. However we obtain an intriguing result wherein we obtain that despite instances of limiting trade dependence on China through implementation of policies like 'Aatmanirbhar Bharat' and 'profit linked incentive schemes', yet to maintain the status quo in the global market for generic drugs, India's dependence on China would increase, owing to API imports due to the pandemic crisis. While India can grab the opportunity in the form of increased demand for pharmaceutical goods to increase the employment level of the economy but this improvement in welfare is also dependent on the degree of dependency of API India has on China. The Indian government has recognized the same through the incorporation of 'Covid-Suraksha' and PLI schemes to minimize import dependency, and accelerate the development of APIs and the production of indigenous drugs.
{"title":"Trade Implications on Active Pharmaceutical Ingredients (APIS) Due to COVID-19 Pandemic and India China Altercation","authors":"Rishab Lodh, Oindrila Dey","doi":"10.1353/jda.2023.a908651","DOIUrl":"https://doi.org/10.1353/jda.2023.a908651","url":null,"abstract":"ABSTRACT: India's pharmaceutical sector has been one of the largest manufacturers of generic drugs globally. During the pandemic, most countries were dependent on imports of generic drugs from India. However, India has been relying on resources from China for Active Pharmaceutical Ingredients (APIs) which are the raw material for preparing generic drugs. We considered, in our analysis, branded product groups of Paracetamol and Amoxicillin due to their extensive use in the treatment of COVID-19. From a thorough market analysis of both the drugs, we conclude that firms have a monopoly over their brands but compete within the same product group and operate in their respective market under varying prices within certain bandwidths which resembles the feature of monopolistic competitive market. We have introduced compensating function a la Helpman (1981) in the pharmaceutical goods market with the assumption that an 'ideal product' exists among the pharmaceutical goods. Given the framework, this paper explores a general equilibrium model set in a monopolistic competitive product market for branded drugs. We concluded through our propositions that expanding the pharmaceutical sector will increase the employment of unskilled labor under no capacity constraint. We will observe an increase in wages of unskilled labor only under full employment conditions wherein we would observe that the expansion of pharmaceutical good will increase wages in the unskilled labor market. However we obtain an intriguing result wherein we obtain that despite instances of limiting trade dependence on China through implementation of policies like 'Aatmanirbhar Bharat' and 'profit linked incentive schemes', yet to maintain the status quo in the global market for generic drugs, India's dependence on China would increase, owing to API imports due to the pandemic crisis. While India can grab the opportunity in the form of increased demand for pharmaceutical goods to increase the employment level of the economy but this improvement in welfare is also dependent on the degree of dependency of API India has on China. The Indian government has recognized the same through the incorporation of 'Covid-Suraksha' and PLI schemes to minimize import dependency, and accelerate the development of APIs and the production of indigenous drugs.","PeriodicalId":84983,"journal":{"name":"Journal Of Developing Areas","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135640187","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 : 2023-09-01DOI: 10.1353/jda.2023.a908664
Godwin E. Uddin
ABSTRACT: The strive for economic sustainability in world economies, most especially Less-Developed Countries (LDCs) in recent time notably see also an unwelcome comeback of the Import-Substitution (IS) trade strategy whose efficacy established overtime has been mixed. Thus, a systematic/meta-narrative review of literature on the appropriateness of the IS trade strategy in absolute terms to world economies, more particularly LDCs in contemporary time and among policy-alternatives, bearing in mind its tenets as well as its implications was carried out. The PRISMA methodology adapted here alongside an exploration of over 100 relevant literature through salient themes aid to present a synopsis of lessons from emerging market economies, and clear-cut submissions in a bid to inform policy directions. Amidst others, this review findings identify resource deficiencies, some time-lag considerations as such that attest the limited applicability of the IS trade strategy in absolute terms , and also emphasize the notion that Developing Economies or LDCs still need give allowance for certain imports, such as capital-goods imports, into their domestic economy for industrial productivity growth. Consequently from the review presented, efforts by LDCs to accommodate Multinational enterprises (MNEs) and or attract Foreign Direct Investment (FDI) to achieve technology transfer must be continually implemented.
{"title":"Could Import-Substitution be a Sustainable Industrialization Pathway for Less-Developed Countries?","authors":"Godwin E. Uddin","doi":"10.1353/jda.2023.a908664","DOIUrl":"https://doi.org/10.1353/jda.2023.a908664","url":null,"abstract":"ABSTRACT: The strive for economic sustainability in world economies, most especially Less-Developed Countries (LDCs) in recent time notably see also an unwelcome comeback of the Import-Substitution (IS) trade strategy whose efficacy established overtime has been mixed. Thus, a systematic/meta-narrative review of literature on the appropriateness of the IS trade strategy in absolute terms to world economies, more particularly LDCs in contemporary time and among policy-alternatives, bearing in mind its tenets as well as its implications was carried out. The PRISMA methodology adapted here alongside an exploration of over 100 relevant literature through salient themes aid to present a synopsis of lessons from emerging market economies, and clear-cut submissions in a bid to inform policy directions. Amidst others, this review findings identify resource deficiencies, some time-lag considerations as such that attest the limited applicability of the IS trade strategy in absolute terms , and also emphasize the notion that Developing Economies or LDCs still need give allowance for certain imports, such as capital-goods imports, into their domestic economy for industrial productivity growth. Consequently from the review presented, efforts by LDCs to accommodate Multinational enterprises (MNEs) and or attract Foreign Direct Investment (FDI) to achieve technology transfer must be continually implemented.","PeriodicalId":84983,"journal":{"name":"Journal Of Developing Areas","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135640677","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 : 2023-09-01DOI: 10.1353/jda.2023.a908648
Susan Akinwalere, Kirk Chang
ABSTRACT:Due to the importance of foreign direct investment (FDI), scholars are always keen to explore FDI determinants and analyze their implications. Nevertheless scholars have proposed mixed viewpoints of FDI and interpreted its determinants differently, which do not contribute to the knowledge advancement and amalgamation of FDI literatures. The current research, therefore, aims to advance the knowledge of FDI determinants in Nigeria through a new investigation on the key determinant factors affecting Nigeria's inward FDI. Data were collected from UNCTAD (1970-2014) and analyzed by auto-regressive distributed lag tests (ARDL). A comprehensive theory-based model was developed accounting for many variables, such as the interest rate, external debt, oil rents, the Gross Domestic Product (GDP) growth rate, trade and exchange rate volatility. The analysis of FDI determinants in the Nigerian economy yielded reliable, robust, and economically meaningful results thereby offering an insight into the driving factors of inward FDI. Findings indicate that the interest rate, external debt, oil rents, and GDP growth are all important determinants, possessing a long-run effect on FDI. Different from the literature, however, trade and exchange rate volatility are barely important to FDI. Several policy implications flow from the findings. From a policy point of view, regarding the GDP growth rate, there should be concerted efforts to boost the performance of the non-oil sector in Nigeria through more investments in the agricultural and industrial sectors making the growth of the economy spread across other sectors and, in turn, encouraging inward FDI in such areas. Countries such as Nigeria, endowed with natural resources, should pursue policies targeted at full deregulation (privatisation) of their natural resource sector to better utilize the abundance of their natural resources thereby attracting additional FDI. Nigeria should also pursue better debt management practices. When debts are acquired, they should be targeted towards future consumption and longer-term investments. Most importantly, as an import-dependent economy, the Nigerian government should also formulate export-driven and appropriate fiscal policies that will stabilize Nigeria's trade relationship with other world economies. The Nigerian government should create the necessary environment that will regulate macroeconomic and specifically monetary policy (interest rate) which is essential for the attraction of FDI inflows into the economy. Finally, Nigeria should ensure that the quality of exportable commodities is improved to enhance international competitiveness.
{"title":"The Determinants of Foreign-Direct-Investment (FDI) Inflows in Nigeria","authors":"Susan Akinwalere, Kirk Chang","doi":"10.1353/jda.2023.a908648","DOIUrl":"https://doi.org/10.1353/jda.2023.a908648","url":null,"abstract":"ABSTRACT:Due to the importance of foreign direct investment (FDI), scholars are always keen to explore FDI determinants and analyze their implications. Nevertheless scholars have proposed mixed viewpoints of FDI and interpreted its determinants differently, which do not contribute to the knowledge advancement and amalgamation of FDI literatures. The current research, therefore, aims to advance the knowledge of FDI determinants in Nigeria through a new investigation on the key determinant factors affecting Nigeria's inward FDI. Data were collected from UNCTAD (1970-2014) and analyzed by auto-regressive distributed lag tests (ARDL). A comprehensive theory-based model was developed accounting for many variables, such as the interest rate, external debt, oil rents, the Gross Domestic Product (GDP) growth rate, trade and exchange rate volatility. The analysis of FDI determinants in the Nigerian economy yielded reliable, robust, and economically meaningful results thereby offering an insight into the driving factors of inward FDI. Findings indicate that the interest rate, external debt, oil rents, and GDP growth are all important determinants, possessing a long-run effect on FDI. Different from the literature, however, trade and exchange rate volatility are barely important to FDI. Several policy implications flow from the findings. From a policy point of view, regarding the GDP growth rate, there should be concerted efforts to boost the performance of the non-oil sector in Nigeria through more investments in the agricultural and industrial sectors making the growth of the economy spread across other sectors and, in turn, encouraging inward FDI in such areas. Countries such as Nigeria, endowed with natural resources, should pursue policies targeted at full deregulation (privatisation) of their natural resource sector to better utilize the abundance of their natural resources thereby attracting additional FDI. Nigeria should also pursue better debt management practices. When debts are acquired, they should be targeted towards future consumption and longer-term investments. Most importantly, as an import-dependent economy, the Nigerian government should also formulate export-driven and appropriate fiscal policies that will stabilize Nigeria's trade relationship with other world economies. The Nigerian government should create the necessary environment that will regulate macroeconomic and specifically monetary policy (interest rate) which is essential for the attraction of FDI inflows into the economy. Finally, Nigeria should ensure that the quality of exportable commodities is improved to enhance international competitiveness.","PeriodicalId":84983,"journal":{"name":"Journal Of Developing Areas","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135640813","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}
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