Economies, Volume 12, Issue 3 (March 2024) – 24 articles

The aim of this study is to explore the multidimensional relationships among factors influencing decision-making processes regarding women’s willingness to marry and childbirth in South Korea with recognizing the context of family development in East Asian cultures. To this end, we employed three different analytical approaches, including classification tree modeling, Cox proportional hazard modeling, and permutation feature importance evaluation. Leveraging longitudinal data specific to Korean women, we highlighted the significance of socio-economic factors in family development dynamics. Our findings revealed that financial stability played a crucial role. Unmarried women’s willingness to marry was influenced by their perspectives on economic stability, while households’ consumption capacity and financial capability determined childbirth decisions and timing. We observed a trend of postponed marriage among women in their marriageable age range, particularly those with stable economic situations, reflecting a prevalent trend of skepticism of marriage in Korean society. Additional findings related to values, cultural factors, and personal happiness also suggested the challenges that discourage younger generations from entering into marriage and starting families in South Korea. By offering insights into these dynamics, our study provides practical implications for addressing the obstacles faced, contributing to a better understanding of family development dynamics. Full article

Interest rate dynamics are influenced by various economic factors, and central bank meetings play a crucial role concerning this subject matter. This study introduces a novel approach to modeling interest rates, focusing on the impact of central banks’ scheduled interventions and their implications for pricing bonds and path-dependent derivatives. We utilize a modified Skellam probability distribution to address the discrete nature of scheduled interest rate jumps and combine them with affine jump-diffusions (AJDs) in order to realistically represent interest rates. We name this class the AJD–Skellam models. Within this class, we provide closed-form formulas for the characteristic functions of a still broad class of interest rate models. The AJD–Skellam models are well-suited for using the interest rate version of the Fourier-cosine series (COS) method for fast and efficient interest rate derivative pricing. Our methodology incorporates this method. The results obtained in the paper demonstrate enhanced accuracy in capturing market behaviors and in pricing interest rate products compared to traditional diffusion models with random jumps. Furthermore, we highlight the applicability of the model to risk management and its potential for broader financial analysis. Full article

In this study, we explored the impact of bank leverage and financial frictions on the transmission of real and financial shocks. Two new Keynesian dynamic stochastic general equilibrium (DSGE) models, with and without financial frictions, were employed in the context of the Tunisian economy. In the analysis, we considered three types of shocks—productivity, monetary, and adverse bank capital shocks. The findings reveal that, in the model with financial frictions, the response of macroeconomic and financial variables to demand and supply shocks was more pronounced than in the baseline model, where frictions primarily exist at the borrower level. In this study, we underscored the significance of financial shocks, particularly negative bank capital shocks, in triggering substantial macroeconomic and financial fluctuations, especially when banks operate with higher leverage ratios. Additionally, the inclusion of financial frictions in the DSGE model enhanced its ability to capture the empirical features of real and financial shocks, providing valuable insights for effective monetary policymaking. The results provide foundational insights for Tunisian policymakers to assess the impact of financial frictions in the context of the Tunisian economy. This is significant for the Central Bank of Tunisia, which has not yet adopted a specific DSGE model. Therefore, through our analysis, we determined the amplificatory role of financial frictions in the dynamics of macroeconomic and financial variables in Tunisia and examined the main transmission channels of shock propagation. Full article

Southern African Customs Union (SACU) countries are under pressure to commit themselves to sustainable environmental activities. This study employed data from 2007 to 2021 using quantile regression to determine the heterogenous effects of industrialisation on environmental degradation in SACU countries. Prior to the main results, this study investigated and confirmed the existence of a long-run relationship between industrialisation and environmental degradation. This study confirms the heterogeneous effect of industrialisation on environmental degradation. The results through quantile process estimates demonstrated an inverted U-shaped curve. The inverted U-shape suggests that industrialisation at lower and higher quantiles has a minor effect on the environment compared to medium quantiles, where it has a higher effect. This study found that industrialisation increases environmental degradation in the 4th to 6th quantiles, whereas in the 7th to 8th quantiles, industrialisation reduces environmental degradation. Therefore, it is recommended by this study that to mitigate environmental degradation, firms in SACU countries are encouraged to adopt environment-friendly technologies in their production. Full article

Economic integration, which in today’s global trade is the fundamental component of linking economic ties between countries, is another important factor in the acceleration of economic growth. The provision of trade logistics services is essential to a nation’s economic success in international trade activities. It is essential for enterprises engaged in active international trade to achieve competitive advantages. The international trade and localised commercial activity, to a large extent, is dependent on the logistics and supply chain infrastructure and operational capacity. However, the area received little attention from the perspective of applied economics. The in-depth empirical studies on the impacts of logistics on trade efficiency are few and limited. The study aims to investigate the role of logistics and supply chains in international and national trade in a developing country. It uses secondary data for the analysis. The model and software used in the study are the gravity model and GTAP10a. The time horizon used spans 2014–2030. The results show that in order to enhance trading and commercial activities, a developing country should develop logistics and supply chain infrastructure, train people, and design a flexible logistics policy. Full article

This paper addresses the role of the U.S. dollar in fostering global economic growth during the post-war period. The existing literature lacks a comprehensive understanding of the true implications of the U.S. dollar’s status as a reserve currency and a dearth of studies examining its impact. In this study, we explore the dynamic long-run and short-run relationships between cross-border U.S. dollar claims, global GDP, and global trade while gauging the impact of the Global Financial Crisis (GFC) and the COVID-19 pandemic. In doing so, we use ARDL methodology for a data set that spans the period of 1980 to 2022. The estimation results reveal a robust long-run relationship between U.S. dollar claims, global GDP and global trade and no clear evidence of asymmetric effects. Our findings are of great significance for monetary authorities, emphasising the need for a nuanced understanding of the implications of the U.S. dollar’s conducive role in shaping global economic dynamics and fostering growth. Full article

In recent years, the issue of income inequality has ascended to the forefront of national and international agendas, underscored by the urgency to navigate the complexities of market-driven economies without exacerbating social disparities. These challenges are particularly pronounced in the post-communist nations of Central and Eastern Europe, where the transition legacy and the marketization forces present unique dynamics in the evolution of income disparities. This research investigates the intricate mechanisms through which marketization impacts income inequality within the Central and Eastern European countries context, aiming to uncover how economic transformations influenced by global sustainability goals can contribute to narrowing the income gap. By employing panel data estimation techniques and Generalized Method of Moments (GMM) analysis, this study highlights the enduring nature of income disparities and the critical roles played by economic growth, education investment, labor market reforms, globalization, and governance quality in shaping equitable income distributions. Findings reveal that, despite the competitive nature of market economies potentially creating disparities, strategic policy interventions in education, economic policy, and labor market regulations can mitigate the adverse effects of marketization on income inequality. Additionally, this research emphasizes the importance of strong institutional frameworks and the nuanced role of the informal economy in influencing income distribution dynamics. Full article

This study analyzes the impact of Chinese shipment volumes measured in TEUs on US stock performance in the initial stages of the COVID-19 outbreak. The analysis indicates that, initially, US stocks were negatively affected irrespective of firms’ trade engagements with China; however, as the global pandemic unfolded, companies with elevated imports from China exhibited more pronounced abnormal returns. The findings further reveal an increased influence of debt level and cash holdings on stock performance as the crisis intensified in Europe and the USA. These results highlight the evolving nature of global trade dynamics and their implications for financial markets amid global crises. Furthermore, this study provides valuable insights into the resilience of global supply chains during crises like the COVID-19 pandemic. The observed pattern, where companies with greater import volumes from China experienced better stock returns, underscores the importance of adaptable supply chains during disruptions. Full article

The purpose of this study is to analyze significant variables that permit us to ascertain the profitability of Bangladeshi Shariah-based banks. In doing so, two profitability measurements, namely, return on asset (ROA) and return on equity (ROE), have been used as dependent variables, while capital adequacy, asset management quality, operational efficiency, credit risk, liquidity, and the size of the bank have been considered as bank-specific independent variables. In addition, the rate of interest, inflation, and GDP growth rate have also been taken as macroeconomic independent variables. This study examined panel data of eight Shariah-based Islamic banks over a thirteen-year period spanning from 2010 to 2022, applying different kinds of linear regression models, including pooled ordinary least squares (OLS), fixed effects, and random effects. Subsequently, the generalized method of moments (GMM) approach is also applied to assess the robustness of the findings. The results revealed that the profitability of Bangladeshi Shariah-based Islamic banks is positively associated with asset management quality, liquidity, and credit risk. In contrast, capital adequacy, operational efficiency, and bank size are negatively correlated with the bank’s profitability. Concerning the macroeconomic factors, the findings indicated a notable positive correlation between the profitability of Shariah-based banks in Bangladesh and both the inflation rate and the interest rate spread. However, this study has also found that the profitability of the sample banks of Bangladesh is not significantly influenced by GDP growth. By providing fresh empirical data, the current research aimed to close a significant vacuum in the body of knowledge on banks and provide important insights for policymakers, managers, and other stakeholders by focusing on particular bank-specific and macroeconomic aspects that influence the profitability of Shariah-based Islamic banks in Bangladesh. Full article

In a European context in which the objectives of climate neutrality and digitalization appear fundamental, the work analyzes the relationships between the price of the main stock market indices and the most representative variables such as carbon emissions, digitalization, use of renewable energy, research and development expenses, environmental taxes, and all economic and management activities aimed at reducing or eliminating any form of pollution. The analysis was developed through three different regressions involving the long period 1995–2020 and the short period 2017–2020. The results show how increasing carbon emissions and environmental taxes positively impact stock indices. The former is linked to an increase in production and, therefore, economic growth, and the latter encourages sustainability. Taxes on transport and energy in the long term generate higher costs, which damage profitability and negatively impact the performance of stock indices. Finally, in the short term, implementing environmental protection measures or the sustainable management of resources may lead to higher operating costs for the companies involved. These cost increases can negatively impact profit margins and reduce the value of companies. These results, therefore, show us how environmental sustainability has a significant impact on European stock markets; consequently, the relevant regulations and policies should also consider the economic and managerial impacts that companies implement to achieve their objectives of the Green Deal. Full article

COVID-19 and SARS are epidemics which have influenced the largest global economic crisis in recent years. This research reveals that both SARS and COVID-19 have led to fluctuations in the prices of gold and the US dollar index; however, there is no direct causal relationship be-tween COVID-19 and the price of bitcoin. The USD index saw a significant increase during the SARS outbreak, while gold prices surged during the COVID-19 pandemic. The notion that cryptocurrency will surpass the value of gold or traditional currencies seems improbable, given the lack of evidence linking bitcoin prices to COVID-19. Gold is expected to maintain its value in the long term, offering lower risk compared to other currencies. Full article

This research thoroughly examines the dynamic relationship between the European Union’s economic growth and rapid advancements in Information and Communication Technology (ICT). Specifically, it assesses how certain ICT indicators are associated with significant economic growth. Utilizing an extensive dataset from the Digital Economy and Society Index 2022 (DESI), the Statistical Office of the European Union (EUROSTAT), and the Organisation for Economic Co-operation and Development (OECD), this study encompasses data from all 27 European Union member states. Employing structural equation modelling, our analysis illustrates the positive correlation between ICT development and the Gross Domestic Product (GDP) index. Our findings highlight the critical role of swiftly evolving technological landscapes, emphasizing the growing influence of new Artificial Intelligence (AI) technologies in business sectors. Furthermore, this study showcases the need to enhance human capital and expedite the growth of e-government technologies. These advancements are pivotal in strengthening the infrastructure supporting citizens and public enterprises across European countries, thereby contributing to their economic vitality. Full article

This article highlights the complexity of taxation surrounding cryptocurrency transactions due to the lack of uniform regulation, creating uncertainty for both taxpayers and tax authorities. After determining the tax obligations of individuals in taxation, a survey has been conducted to assess the level of knowledge and compliance with tax obligations related to cryptocurrencies. The survey, in which 103 people participated, reveals the confusion and errors that prevail in perceptions of the tax obligations for cryptocurrencies, particularly in transactions such as swapping and staking in personal income tax. This results in almost half of the respondents (49.5%) not declaring any of their operations with cryptocurrencies. The reasons for this include the fact that the majority of respondents (66%) find the regulation of cryptocurrencies in Spain confusing and difficult to understand. Additionally, 87.4% believe that tax agencies should provide more information and resources on the taxation of cryptocurrencies and digital assets, and that there should be clearer and more comprehensive regulation. However, it should be noted that 41.7% also consider that tax regulation discourages investment in cryptocurrencies. Full article

The EU energy sector became a very important one as a result of the war in Ukraine. On the other hand, the EU started in defining and implementing new strategies regarding green economy and sustainability. Even though these strategies cover short and medium periods, they have as a main goal the decrease in the EU’s dependence of energy imports. This research is focused on present challenges, risks, and uncertainties related to energy production and consumption in all EU member states. In order to achieve the research objectives, a huge statistical database, which covered 2012–2021, was used. The analysis is based on specific indicators regarding primary energy production; imports and exports; gross available energy; final energy consumption; non-energy consumption; energy dependency; and energy intensity. There are at least three research procedures used in this paper: a meta-analysis, a statistical analysis, and an econometric analysis, as well. Finally, the analysis points out the disparities between member states regarding energetic resources and energy dependency using a new model for quantifying risk factors in the European energy system. Moreover, new public policies are proposed by the authors under a cluster approach of the EU’s regions. Full article

Although the movement of people from rural to urban areas has caused the increased use of energy, the abundance of water resources can be made into a form of renewable energy known as hydroelectricity. As European countries are ranked as the first users and exporters of hydropower, the production of renewable energy in developed countries such as the Nordic region has caused great impacts on economic growth and human development. The importance of this paper is to investigate the relationship between hydroelectricity and the Human Development Index by depending on some variables such as urbanization, rule of law, corruption, trade openness, and GDP per capita from 2002 to 2021 in Nordic countries. The results were estimated depending on impulse response function after conducting the Vector autoregressive model (VAR) model and Granger causality test. Results showed a negative impact from hydro plants in the short run but a significant positive impact in the long run in Nordic countries. The long-term sustainment of Human Development Index (HDI) is due to policies limiting the immigration of labor as well as protection of energy use. Water batteries are gaining popularity across Europe and their implementation is near mandatory. Full article

In order to explore the causal relationship between the level of urban digital construction and urban economic growth, this paper takes 280 cities in China as the research object and constructs a comprehensive indicator evaluation system covering digital infrastructure, overall economic level, innovation development level, digital industry development status, and ecological environment conditions. Using the entropy method to weigh various indicators, this paper has obtained the evaluation results of the digital construction level of each city from 2011 to 2021. Furthermore, a panel data regression model is used to empirically analyze the impact of urban digital construction level on urban economic growth. The results show that for every 1% increase in the level of urban digital construction, the GDP will increase by 0.974. Through the above research, we hope to further enrich the theoretical and empirical research in the field of the digital economy, provide a scientific and reasonable method for quantitatively evaluating the level of urban digital construction, and provide decision-making references for improving the level of urban digital construction and promoting sustainable urban development. Full article

This paper investigates the impact in the short/medium term of M&As made by 14 Italian banks quoted on the stock exchange for the period 1999–2016. After dividing the banks into two groups by size and degree of internationalisation, we sought to ascertain whether different initial conditions produce different final effects. Based on three assumptions, supported by three separate econometric approaches, our empirical analysis shows that the stronger banks increased their competitiveness while the weaker banks did not achieve the same results since they were motivated to grow “by desperation”. Full article

This study provides insights into food inflation by investigating the dynamic interconnectedness of the prices of olive oil, soybean oil, sunflower oil, and palm oil. Using data from January 1990 to October 2023, averaged dynamic and extended joint connectedness analyses are conducted by employing the innovative Time-Varying Parameter Vector Autoregressive (TVP-VAR) methodology. The findings reveal that olive oil presents a low connection with substitute oils and generates net spillover effects, especially at the onset of COVID-19 but also at later stages and during the Russia–Ukraine war. Palm oil transmits effects on the system of oils before the Global Financial Crisis (GFC) but renders a net receiver afterward, while sunflower oil follows the opposite way. Systemic connectedness is the highest during the GFC and remains elevated during QE-tapering. It slightly increases during COVID-19 outbursts and illustrates higher spikes when the Russia–Ukraine conflict begins. These linkages are even stronger among only the substitute oils. Full article

Strategic asset seeking foreign direct investment has undergone tremendous growth over the past decade. This paper first attempts to evaluate the location choice of such investments in Europe. We find that Chinese companies target strategic assets in Europe. The paper then moves to understand the efficacy of these investments in terms of the creation of strategic assets in the Chinese parent company. Our results show the intangible assets of Chinese domestic parent firms significantly increase in the wake of their investments. For greenfield investments, there is a longer time-lag in creation of intangible strategic assets than for acquisitions. However, greenfield investments result in a larger increase in intangible asset creation than acquisition investments. Full article

This study examines the ways in which firms recover from stagnation or sales decline, with a focus on two key aspects: traditional high-growth companies and growth restarts within the framework of organizational life cycle theory. Analyzing a dataset of 1883 Russian firms from 2013 to 2021, this research employs logistic regression to identify factors that promote growth. These factors include the youth of the firm, investment intensity, and significant sales drops during periods of stagnation. The study introduces a new economic category, termed ‘restarting growth’, which signifies a firm’s sustained expansion following an extended period of stagnation. This category is crucial for identifying factors that increase the likelihood of a company transitioning to growth after prolonged stagnation or production downturn. The findings of this study reveal that firms that are younger, invest more intensively in fixed capital, and have experienced a larger sales drop during a period of stagnation are more likely to transition to growth. These results are juxtaposed with the growth factors characteristic of traditional high-growth companies, as well as with the theoretical approaches explaining growth restarts within the framework of organizational life cycle theory. Such distinctions are pivotal both for academic understanding and practical applications in discerning how companies rebound from crises. Moreover, the research identifies several highly significant factors—indicators that can assist investors in selecting promising firms for financing. Full article

This study delves into the dynamic interplay between green finance, Fintech adoption, digital awareness, and digital transformation in the Croatian banking industry. Amidst the emerging trend of sustainable banking practices and technological advancements, this research aims to examine the influence of green finance on Fintech adoption and banking sustainability. Employing a quantitative research design, this study gathered data through a survey questionnaire of 304 participants, comprising customers and employees of various banks in Croatia. The respondents’ insights were analyzed using IBM SPSS for the demographic analysis and SmartPLS for structural equation modeling (SEM). The results reveal a significant impact of green finance on Fintech adoption and digital awareness. Additionally, digital awareness significantly influenced Fintech adoption. However, the direct effect of digital transformation on Fintech adoption was not significant. This study also confirmed the significant influence of Fintech adoption on banking sustainability and identified the mediating role of digital awareness between green finance and Fintech adoption. This research contributes novel insights into the relationship between sustainable finance initiatives and digital banking trends. It underscores the need for increased digital awareness and the integration of green finance principles in the banking sector. These findings offer practical implications for banks in Croatia, suggesting a strategic focus on digital awareness programs, leveraging Fintech for enhanced customer experience, and fostering collaboration for a conducive Fintech environment. Full article

This study aims to investigate economic development in the digital economy and uncover trends and insights that might contribute to future research. Furthermore, the study, examining English-language publications from 2000 to 2023 in the Web of Science Core Collection, employs bibliometric and content analysis to statistically evaluate the field of economic development in the digital economy. Co-citation, co-authorship, and bibliographical coupling analyses revealed China, the Chinese Academy of Sciences (CAS), and “Sustainability” as the leading influencers in terms of country, institution, and journal, respectively. Five key themes emerged: (1) the interplay between digital technologies and economic growth, (2) leveraging digital tools for businesses, (3) the applications and impacts of diverse digital technologies across sectors, (4) the broader social implications of the digital economy, and (5) government policies for fostering digital economic progress. The study concludes by proposing avenues for further investigation. Full article

Floods destroy crop production; nevertheless, the extent of their impact on farmers’ livelihoods in developing countries has been poorly investigated. This paper contributes to the growing evidence-based assessment of the impacts of shocks on communities. It assessed the post-disaster livelihood of farmers affected by the 2012 flooding in the semi-arid zone of Benin. To this end, a survey was conducted on 228 farmers in two municipalities of the flood-prone part of the semi-arid zone of Benin (Malanville, Karimama). Information on the well-being of households was collected using semi-structured interviews. Data were analyzed using income and consumption approaches focusing on poverty and on subjective assessment using happiness approach. Additionally, a probit model was used for a poverty assessment. The survey revealed that flooded farmers were amongst the poorest in the study system. Seven variables determined poverty in this study: household size, location, the percentage of the farm size that was flooded, fishing, the farmer’s gender, farm size, and “holding a secondary activity”. Regarding happiness, 99% of the flooded farmers were unhappier after the flood in 2012. The results clearly show that being subjected to floods increases the incidence of poverty. The capacity of flood risk management and governance should be strengthened in the study system. Full article

Sustainable development is a core concept in regional development. Sustainability is characterized by supporting the building of resilient infrastructure and promoting the sustainable industry. In this context, sustainable transport is particularly important as it represents an opportunity for regional development. This research aims to quantify the impact of investments through structural instruments, specifically EU funds, on promoting a sustainable transport system and eliminating barriers from large-scale transport networks. This study focuses on the impact of these investments on regional economic development in Romania. The analysis used data from all eight development regions of the Romanian economy between 2014 and 2020. Panel data regression models, including the generalized difference method of moments (Dif-GMM) and the system GMM method (Sys GMM), were employed. This study confirms the idea that European structural and investment funds (ESIFs) play a positive role in promoting sustainable transport for regional economic development. Additionally, the quality of regional governance is identified as a key factor in economic development. This study, therefore, reveals a convergence effect between regions. Regions with a lower initial GDP per capita develop quicker compared to regions with a higher initial GDP per capita, indicating a “catch-up” effect. From a policy perspective, these issues can guide decision making and resource allocation. Full article