Open AccessArticle
Socio-Economic Implications of Drought in the Agricultural Sector and the State Economy
Economies 2016, 4(3), 19; doi:10.3390/economies4030019 -
Abstract
In 2011, the most severe drought in Texas history caused $7.62 billion in losses in the agricultural sector alone. This paper analyzes ripple effects of the 2011 drought in Texas agriculture on the entire state economy retrospectively in an effort to foster [...] Read more.
In 2011, the most severe drought in Texas history caused $7.62 billion in losses in the agricultural sector alone. This paper analyzes ripple effects of the 2011 drought in Texas agriculture on the entire state economy retrospectively in an effort to foster discussion on targeted mitigation measures in the long term. By using an Input-Output and social accounting matrix model, direct effects on livestock, cotton, sorghum, wheat, corn, hay, and timber production, as well as indirect effects on other related sectors, and finally induced effects from changing consumers behavior have been estimated. According to the results, the 2011 drought caused economic losses of $16.9 billion in the entire Texas economy and increased the unemployment by around 166,895 people. The agricultural sector alone lost around 106,000 jobs. The cotton farming experienced 91% of revenue losses (as compared to 2010), while the livestock production lost 32% in revenue. The decreased production yields and limited market supply directly influence market prices for those products, which might create additional spillover effects on export and import quantities. The presented analysis can be helpful for designing policies to launch mitigation programs for drought events in the future. Full article
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Open AccessArticle
Going Forward from B to A? Proposals for the Eurozone Crisis
Economies 2016, 4(3), 18; doi:10.3390/economies4030018 -
Abstract
After reviewing the main determinants of the current Eurozone crisis, this paper discusses the feasibility of introducing fiscal currencies as a way to restore fiscal space in peripheral countries, such as Greece, which have so far adopted austerity measures in order to [...] Read more.
After reviewing the main determinants of the current Eurozone crisis, this paper discusses the feasibility of introducing fiscal currencies as a way to restore fiscal space in peripheral countries, such as Greece, which have so far adopted austerity measures in order to abide by their commitments with Eurozone institutions and the IMF. We show that the introduction of fiscal currencies would speed up the recovery, without violating the rules of Eurozone Treaties. At the same time, these processes could help the transition of the euro from its current status of single currency to a status of “common clearing currency” along the lines proposed by Keynes at Bretton Woods as a system of international settlements. Eurozone countries could therefore move from “Plan B” aimed at addressing member state domestic problems, to a “Plan A” of a better European monetary system. Full article
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Open AccessArticle
Why Migrate: For Study or for Work?
Economies 2016, 4(3), 17; doi:10.3390/economies4030017 -
Abstract
Over the past decades, globalization has led to a huge increase in the migration of workers, as well as students. This paper develops a simple two-step model that describes the decisions of an individual vis-à-vis education and migration, and presents a unified [...] Read more.
Over the past decades, globalization has led to a huge increase in the migration of workers, as well as students. This paper develops a simple two-step model that describes the decisions of an individual vis-à-vis education and migration, and presents a unified model, wherein the two migration decisions are combined into a single, unique model. This paper shows that under the plausible assumption that costs of migration differ over the human life cycle, the usual brain drain strategy is sub-optimal. With an increase in globalization, the brain drain strategy will be replaced by the strategy of migration of students. Full article
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Open AccessArticle
Convergence and Heterogeneity in Euro Based Economies: Stability and Dynamics
Economies 2016, 4(3), 16; doi:10.3390/economies4030016 -
Abstract
Cluster analysis is used to explore the performance of key macroeconomic variables in European countries that share the euro, from the inception of the currency in 2002 through to 2013. An original applied statistical approach searches for a pattern synthesis across a [...] Read more.
Cluster analysis is used to explore the performance of key macroeconomic variables in European countries that share the euro, from the inception of the currency in 2002 through to 2013. An original applied statistical approach searches for a pattern synthesis across a matrix of macroeconomic data to examine if there is evidence for country clusters and whether there is convergence of the cluster patterns over time. A number of different clusters appear and these change over time as the economies of the member states dynamically interact. This includes some new countries joining the currency during the period of examination. As found in previous research, Southern European countries tend to remain separate from other countries. The new methods used, however, add to an understanding of some differences between Southern European countries, in addition to replicating their broad similarities. Hypotheses are formed about the country clusters existing in 2002, 2006 and 2013, at key points in time of the euro integration process. These hypotheses are tested using the rigour of a bivariate analysis and the multivariate method of Qualitative Comparative Analysis (QCA). The results confirm the hypotheses of cluster memberships in all three periods. The confirmation analysis provides evidence about which variables are most influencing cluster memberships at each time point. In 2002 and 2006, differences between countries are influenced by their different Harmonised Index of Consumer Prices (HICP) and labour productivity scores. In 2013, after the crisis, there is a noticeable change. Long term interest rates and gross government debt become key determinants of differences, in addition to the continuing influence of labour productivity. The paper concludes that in the last decade the convergence of countries sharing the euro has been limited, by the joining of new countries and the circumstances of the global economic crisis. The financial crisis has driven divergences from pre-existing integration. Country convergence needs to be understood as a dynamic and multivariate concept. This is a significant development of convergence theory and is an addition to how the concept has been understood previously. Full article
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Open AccessArticle
The Formation of Immigrant Networks in the Short and the Long Run
Economies 2016, 4(3), 15; doi:10.3390/economies4030015 -
Abstract
In this paper, we present a formal framework of possible network formations among immigrants. After arriving in the new country, one of the new immigrant’s important decisions is with whom to maintain a link in the foreign country. We find that the [...] Read more.
In this paper, we present a formal framework of possible network formations among immigrants. After arriving in the new country, one of the new immigrant’s important decisions is with whom to maintain a link in the foreign country. We find that the behavior of the first two immigrants affects all those who come after them. We also find that in the long run, under specific conditions, the first immigrant will become the leader of the immigrant society. Over time, as the stock of immigrants in the host country increases, the investment in the link with the leader will increase as well. Full article
Open AccessArticle
Influence Determination of Social Responsibility to the Productivity Enterprise Activity Level
Economies 2016, 4(3), 14; doi:10.3390/economies4030014 -
Abstract
The purpose of this paper is to develop a scientific and methodical approach for determination of the comprehensive social responsibility indicator in this paper based on estimation of influence degree for the economical, ecological, social and labour, standard and legal components. There [...] Read more.
The purpose of this paper is to develop a scientific and methodical approach for determination of the comprehensive social responsibility indicator in this paper based on estimation of influence degree for the economical, ecological, social and labour, standard and legal components. There is allowance for determining of some level of enterprise social responsibility. In addition, there is a basis for development some ways of their increasing. The essence of the used approach is clotting of the individual indicators set to four intermediate indicators of the economic, ecological, social and labor, standard and legal components, which can be boiled down to the generalizing activity productivity indicator based on the matrix and range approach. An economical and mathematical model of the social responsibility influence level to the enterprise activity productivity level, which is based on enterprise propose harmonization with the participants’ interests, was being built. The paper proposes the mathematical model, which allows detecting a necessary time period for enterprise activity productivity ensuring due to social responsibility implementation. Full article
Open AccessArticle
The Growth Path of Agricultural Labor Productivity in China: A Latent Growth Curve Model at the Prefectural Level
Economies 2016, 4(3), 13; doi:10.3390/economies4030013 -
Abstract
Given the shrinking proportion of agriculture output and the growing mobility of the labor force in China, how agricultural labor productivity develops has become an increasingly attractive topic for researchers and policy makers. This study aims to depict the development trajectory of [...] Read more.
Given the shrinking proportion of agriculture output and the growing mobility of the labor force in China, how agricultural labor productivity develops has become an increasingly attractive topic for researchers and policy makers. This study aims to depict the development trajectory of agricultural labor productivity in China after its WTO entry. Based on a balanced panel data containing 287 Chinese prefectures from 2000 to 2013, this study applies the Latent Growth Curve Model (LGCM) and finds that the agricultural labor productivity follows a piecewise growth path with two breaking points in the years of 2004 and 2009. This may stem from some exogenous stimulus, such as supporting policies launched in the breaking years. Further statistical analysis shows an expanding gap of agricultural labor productivity among different Chinese prefectures. Full article
Open AccessArticle
Real Effective Exchange Rate of Rouble and Competitiveness of Russian Agrarian Producers
Economies 2016, 4(3), 12; doi:10.3390/economies4030012 -
Abstract
A number of development projects were launched in Russia to support agro-producers, emphasizing increasing potential and perspective significance of Agrarian sector in the Russian economy. In light of this, it becomes interesting to investigate the position of agro-producers both in comparison to [...] Read more.
A number of development projects were launched in Russia to support agro-producers, emphasizing increasing potential and perspective significance of Agrarian sector in the Russian economy. In light of this, it becomes interesting to investigate the position of agro-producers both in comparison to producers from other domestic sectors and relatively to its main foreign competitors. An analysis of the recent dynamics (from 2000 to 2014) of the real effective exchange rate of Russian rouble serves in the present study as an indicator of price competitiveness, which determines relative position of domestic producers in external markets. The actual competitive state of Russian agro-producers is analyzed by the means of revealed comparative advantage indices proposed by Balassa, Vollrath and Lafay. The calculations have shown that the entire analyzed period can be generally characterized as the period of significant real appreciation of the Russian rouble and the reason behind this is the difference in inflation rates in Russia and its main foreign trade partners. This predetermined the relatively low price competitiveness of agro-producers, which was mostly confirmed by calculated values of Balassa Revealed Comparative Advantage (RCA) index, Vollrath Revealed Competitiveness index (VRC) and Lafay Trade Specialization index (LFI). The short-term real depreciations of the rouble did not have any expected substantially positive impacts on their competitive position. Full article
Open AccessArticle
Annual City Festivals as Tools for Sustainable Competitiveness: The World Port Days Rotterdam
Economies 2016, 4(2), 11; doi:10.3390/economies4020011 -
Abstract
Many cities organize annual local festivals for the positive effects on urban development, although success is far from straightforward. This article reviews a case study of the World Port Days in Rotterdam in order to demonstrate how annual city festivals can contribute [...] Read more.
Many cities organize annual local festivals for the positive effects on urban development, although success is far from straightforward. This article reviews a case study of the World Port Days in Rotterdam in order to demonstrate how annual city festivals can contribute to sustainable competitiveness, despite limitations as well. We show how this maritime event—that is jointly organized by the business community, the Port Authority and the City Government—offers benefits for citizens as well as for firms. Our empirical results unveil that the business value of the event includes generation of societal support, image improvement, labor market development and networking, while the value for society refers to education, leisure and to a certain degree to social inclusion. The direct value of the event for business in terms of sales and recruitment is limited, while the long-term effects of educational function deserve further attention. Finally, we provide policy lessons that, when properly contextualized, other cities may help to use annual local festivals as tools for sustainable competitiveness. Full article
Open AccessArticle
Sustainable Development and Corporate Social Responsibility in Sub-Saharan Africa: Evidence from Industries in Cameroon
Economies 2016, 4(2), 10; doi:10.3390/economies4020010 -
Abstract
Present technological innovations and social organizations continue to impose risks and limitations on the efficient performance of the biosphere. Human activities have increasingly short-lived sustainable natural endowments, to the extent that, the multiplier effects have ripples beyond the traditional benefits of economic [...] Read more.
Present technological innovations and social organizations continue to impose risks and limitations on the efficient performance of the biosphere. Human activities have increasingly short-lived sustainable natural endowments, to the extent that, the multiplier effects have ripples beyond the traditional benefits of economic production and consumption. Therefore, this study addressed practical concerns on how industries in Sub-Saharan Africa promote sustainable development in their corporate social responsibility models, using industries in Cameroon as a case study; it examined economic, social, and environmental components of sustainable development and corporate social responsibility (CSR). Our sample consists of 335 business enterprises from the last Censure Survey of Enterprises in Cameroon. The study adopted a systematic analysis through the Adjusted Residual Test, and the Phi and Cramer’s V tests. Findings revealed that industries in Cameroon prioritize environmental and social dimensions over economic dimensions. However, a few large enterprises implement a broad CSR that promotes sustainable business practices, whereas smaller ones do not; industries in Cameroon implement environmental dimensions of CSR as a safe buffer and a social dimension as philanthropy. Hence, there is no concrete evidence that industries promote sustainable development via CSR in Cameroon. The implementation of a sustainable business model is a precondition for promoting sustainable development via CSR. Industries should realize the concrete value in implementing a sustainable business model that helps to adjust to the complex and increasingly changing business environment. Full article
Open AccessArticle
Modelling Monetary and Fiscal Governance in the Wake of the Sovereign Debt Crisis in Europe
Economies 2016, 4(2), 9; doi:10.3390/economies4020009 -
Abstract
This paper analyzes different government debt relief programs in the European Monetary Union. I build a model and study different options ranging from debt relief to the European Stability Mechanism (ESM). The analysis reveals the following: First, patient countries repay debt, while [...] Read more.
This paper analyzes different government debt relief programs in the European Monetary Union. I build a model and study different options ranging from debt relief to the European Stability Mechanism (ESM). The analysis reveals the following: First, patient countries repay debt, while impatient countries more likely consume and default. Second, without ESM loans, indebted countries default anyway. Third, if the probability to be an impatient government is high, then the supply of loans is constrained. In general, sustainable and unsustainable governments should be incentivized differently especially in a supranational monetary union. Finally, I develop policy recommendations for the ongoing debate in the Eurozone. Full article
Open AccessArticle
Germany versus the United States: Monetary Dominance in the Eurozone
Economies 2016, 4(2), 8; doi:10.3390/economies4020008 -
Abstract
This study inspects if there is greater convergence with Germany amongst the Eurozone founding members and if their relations with the hegemonic economy have been more symmetrical after “euroization”. The dimensions explored are those inspired by the optimum currency areas (OCA) framework. [...] Read more.
This study inspects if there is greater convergence with Germany amongst the Eurozone founding members and if their relations with the hegemonic economy have been more symmetrical after “euroization”. The dimensions explored are those inspired by the optimum currency areas (OCA) framework. To some extent, the findings could signify if real convergence has been significantly endogenous. At the same time, to assess the relative dominance of Germany, the features against Germany are compared to those against US. In addition, the paper also appraises some aspects of economic performance to check whether economic conditions across the states have improved and converged after unification. In some convergence aspects, findings suggest remarkable convergence with Germany and across the states but also relative convergence with US. On economic performance, results indicate substantial improvements in inflation and unemployment. Amongst the founding states, Ireland has idiosyncratically shown serious divergences in a number of the convergence and performance measures. Full article
Open AccessArticle
Foreign Direct Investment, Trade, and Economic Growth: An Empirical Analysis of Bangladesh
Economies 2016, 4(2), 7; doi:10.3390/economies4020007 -
Abstract
The study reveals that there is a relationship between foreign direct investments, trade, and growth rate of per capita GDP for Bangladesh with the help of annual time series data for 1973 to 2014. The Vector Error Correction Model (VECM) analysis shows [...] Read more.
The study reveals that there is a relationship between foreign direct investments, trade, and growth rate of per capita GDP for Bangladesh with the help of annual time series data for 1973 to 2014. The Vector Error Correction Model (VECM) analysis shows that there is a long-term relationship between these variables. To check the validity of the VECM model, we did a few post-estimation diagnostic tests, and found that the residuals of the regressions have a normal distribution and do not show any auto-correlation. The trade and foreign investment variables have a significant impact on the growth rate of GDP per capita. Because FDI and trade are two important components of economic growth in Bangladesh, it is important to frame policies that promote growth and reduce the barriers for capital flows. Full article
Open AccessArticle
Nonlinear Monetary Policy Rules: An Essay in the Comparative Study on Egyptian and Tunisian Central Banks
Economies 2016, 4(2), 6; doi:10.3390/economies4020006 -
Abstract
The purpose of this paper is to evaluate the behavior of monetary authorities in Tunisia and Egypt, in response to changes in macroeconomic variables over time based on LSTR model. In this sense, we estimate Taylor-type equations for short-term interest rate in [...] Read more.
The purpose of this paper is to evaluate the behavior of monetary authorities in Tunisia and Egypt, in response to changes in macroeconomic variables over time based on LSTR model. In this sense, we estimate Taylor-type equations for short-term interest rate in Tunisia and Egypt using quarterly data covering the period 1998.Q4–2013.Q2. We find strong evidence that the real decision-making process followed by these central banks varies from one central bank to another and that it exhibits nonlinear patterns that better capture special events and unexpected contingencies i.e., the terrorist attack in the US in September 2001, the global financial crisis in 2008, and the effect of political instability with the onset of the revolution. Additionally, the presence of asymmetries in the reaction function of the Tunisian and Egyptian Bank requires disconnection from their automatic pilot rules and use of judgement to make decisions. Full article
Open AccessArticle
Impact of Economic Freedom on the Growth Rate: A Panel Data Analysis
Economies 2016, 4(2), 5; doi:10.3390/economies4020005 -
Abstract
This study looks at some non-conventional determinants of economic growth, with the help of the newly developed economic freedom index datasets of the Heritage Foundation/Wall Street Journal(HF/WSJ), which is a cumulative index derived from several sub-indices (trade freedom index, financial freedom, labor [...] Read more.
This study looks at some non-conventional determinants of economic growth, with the help of the newly developed economic freedom index datasets of the Heritage Foundation/Wall Street Journal(HF/WSJ), which is a cumulative index derived from several sub-indices (trade freedom index, financial freedom, labor freedom, business and fiscal freedom index). The cumulative economic freedom index show us how open and business friendly a country is. The sub-indices show us openness across different sector of the economy, for example, the financial sector or the trade sector etc. Traditional neo-classical economic theories have explained economic growth looking at the supply of labor, capital and state of technology, with little attention being paid to institutional factors. The study presents evidence based on two panel data-sets. The first set consists of 186 countries over the period 2013, 2014 and 2015 that show institutional factors play a crucial role in economic growth. A second data-set with data for 57 countries for the period 2004–2014 also show a positive impact on the index on the growth rate of per capita GDP. Full article
Open AccessArticle
Does Trust Matter for Entrepreneurship: Evidence from a Cross-Section of Countries
Economies 2016, 4(1), 4; doi:10.3390/economies4010004 -
Abstract
Differences in trust levels between countries explain the observed discrepancies in entrepreneurial spirit amongst them. We test this hypothesis with a cross-section of 60 countries in 2010. Our findings suggest that about half of the variation in entrepreneurial spirit across countries in [...] Read more.
Differences in trust levels between countries explain the observed discrepancies in entrepreneurial spirit amongst them. We test this hypothesis with a cross-section of 60 countries in 2010. Our findings suggest that about half of the variation in entrepreneurial spirit across countries in the world is driven by trust considerations. This result is robust to regional clustering, outliers and alternative conditioning variables. The findings of the study indicate that while formal incentives to nurture entrepreneurship must be maintained, policy makers should also seek to pay attention to the role of trust cultivated through informal networks. Full article
Open AccessArticle
Drivers of Growth in the Travel and Tourism Industry in Malaysia: A Geweke Causality Analysis
Economies 2016, 4(1), 3; doi:10.3390/economies4010003 -
Abstract
The travel and tourism industry has been growing in importance for several developing countries. It has not only generated considerable foreign exchange revenues but has also contributed to the overall output and socio-economic development of these countries. Within the Asia and Pacific [...] Read more.
The travel and tourism industry has been growing in importance for several developing countries. It has not only generated considerable foreign exchange revenues but has also contributed to the overall output and socio-economic development of these countries. Within the Asia and Pacific region, data for 2014 indicates that Malaysia was ranked very highly at no. 26 out of the 184 countries in the world in terms of the relative importance of the contribution of the travel and tourism industry to its national output. In this light, this paper aims to undertake an empirical examination of the factors driving international tourist arrivals into Malaysia. The paper attempts to identify the causal determinants of the growth of the travel and tourism industry, using quarterly data from 2000 to 2012, under a Geweke causality framework. The empirical results suggest Malaysia’s government expenditures on tourism promotion as well as infrastructure investments such as enhancing airport facilities are causal and significant determinants of growth in the travel and tourism industry. Full article
Open AccessArticle
Falling Behind, Forging Ahead and Falling Behind Again: Thailand from 1870 to 2014
Economies 2016, 4(1), 1; doi:10.3390/economies4010001 -
Abstract
The paper argues that Thailand’s economic and social development from the late 19th century to the early 21st century presents a puzzle. For much of the period from 1870 to 1940, the country’s economic growth was slow, and the economy remained agricultural, [...] Read more.
The paper argues that Thailand’s economic and social development from the late 19th century to the early 21st century presents a puzzle. For much of the period from 1870 to 1940, the country’s economic growth was slow, and the economy remained agricultural, with little diversification into modern industry or services. It was the only Southeast Asian country to escape direct colonization, and yet it did not use its relative freedom from colonial control to embark on a programme of accelerated economic, social and political modernization. The contrast with Meiji Japan has been made by several Thai and foreign scholars, but Thailand’s growth was also slow in comparison with several neighbouring countries under colonial control. Only in the late 1950s did economic growth start to accelerate and by 1996, per capita GDP was well ahead of other ASEAN countries except Malaysia and Singapore. The paper explores the reasons for the accelerated growth, looking particularly at the role of government. The paper also examines the reasons for the growth collapse of 1997/1998, and the slower economic growth since then. Full article
Open AccessEditorial
Acknowledgement to Reviewers of Economies in 2015
Economies 2016, 4(1), 2; doi:10.3390/economies4010002 -
Abstract The editors of Economies would like to express their sincere gratitude to the following reviewers for assessing manuscripts in 2015. [...] Full article
Open AccessArticle
Revisiting “Southern” Sprawl: Urban Growth, Socio-Spatial Structure and the Influence of Local Economic Contexts
Economies 2015, 3(4), 237-259; doi:10.3390/economies3040237 -
Abstract
Given its unpredictable nature, urban sprawl in the Mediterranean region is considered an intriguing (and intricate) socioeconomic issue. Since the 1970s, urban dispersion advanced rapidly in southern Europe—irrespective of a city’s size and morphology—with urbanization rates growing faster than population. A comparison [...] Read more.
Given its unpredictable nature, urban sprawl in the Mediterranean region is considered an intriguing (and intricate) socioeconomic issue. Since the 1970s, urban dispersion advanced rapidly in southern Europe—irrespective of a city’s size and morphology—with urbanization rates growing faster than population. A comparison between the metropolitan areas of Barcelona, Rome and Athens reveals how sprawl has occurred in different ways in the three cities, highlighting peculiar relationships between urbanization, land-use and economic structures. Sharing common drivers of change related to population dynamics, socio-spatial structure and deregulated urban expansion, sprawl has adapted to the local economic, cultural and environmental context. Barcelona shows a dispersion pattern towards a more spatially-balanced morphology, with expanding sub-centres distributed around the central city, Rome appears to be mostly scattered around the historical city with fragmented urban fabric and heterogeneous economic functions, Athens is denser, with polarized economic spaces and social segregation. Understanding how place-specific factors influence processes of settlement dispersion in Mediterranean contexts may inform policies of urban containment and land-use management. Full article