Economies

15 pages, 259 KB

Open AccessArticle

Financial Sector Development and Energy Poverty: Evidence from Eleven Southeast Asian Economies

by Duy Hung Bui and Thu Minh Do

Economies 2026, 14(6), 238; https://doi.org/10.3390/economies14060238 - 22 Jun 2026

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This study investigates whether financial sector development, and, critically, which dimension of it, is associated with the dual energy transition across eleven Southeast Asian economies over 2004–2020. The empirical strategy combines Pooled OLS with Driscoll–Kraay standard errors, two-way fixed effects, Pooled Mean Group [...] Read more.

This study investigates whether financial sector development, and, critically, which dimension of it, is associated with the dual energy transition across eleven Southeast Asian economies over 2004–2020. The empirical strategy combines Pooled OLS with Driscoll–Kraay standard errors, two-way fixed effects, Pooled Mean Group ARDL error correction, and Method-of-Moments quantile regression. The results reveal a stark asymmetry: the Financial Institutions Index is positively and robustly associated with clean cooking access across all estimators. Quantile regressions confirm that the FI association with clean cooking is significant across the entire distribution, with the largest coefficients at the lower quantiles. Sub-sample analysis reveals that the FI–clean cooking relationship is especially pronounced in the frontier Cambodia–Lao PDR–Myanmar–Vietnam–Timor-Leste group, where within-country fixed effects yield a coefficient of 257.54 (p < 0.01). Although these associations do not establish strict causality, the findings are consistent with prioritising deepening institutional banking and digital financial inclusion rather than equity-market development as the primary financial-sector channel associated with lower energy poverty in Southeast Asia, although such policy directions require further micro-level validation. Full article

(This article belongs to the Section Macroeconomics, Monetary Economics, and Financial Markets)

17 pages, 877 KB

Open AccessArticle

Digital Infrastructure Development and Corporate Labor Productivity—A Multi-Period DID Study Based on “Broadband China” Pilot Cities

by Tianyou Li, Dehua Zhang and Weichen Xu

Economies 2026, 14(6), 237; https://doi.org/10.3390/economies14060237 - 20 Jun 2026

Viewed by 458

Abstract

Digital infrastructure may improve firm productivity, yet its economic value depends on whether firms can absorb external connectivity and embed it in production, management, and investment decisions. Using the staggered implementation of the “Broadband China” pilot policy as a quasi-natural experiment, this study [...] Read more.

Digital infrastructure may improve firm productivity, yet its economic value depends on whether firms can absorb external connectivity and embed it in production, management, and investment decisions. Using the staggered implementation of the “Broadband China” pilot policy as a quasi-natural experiment, this study examines the effect of city-level broadband infrastructure on the revenue-based labor productivity of Chinese A-share listed firms from 2009 to 2023. A multi-period difference-in-differences model shows that the pilot policy is associated with an increase in revenue per employee. The baseline estimate implies an economically meaningful increase of approximately 4.1%, and the result remains robust to alternative productivity measures, sample restrictions, stricter fixed effects, placebo tests, PSM-DID, and IPW-DID. CSDID estimates are positive but not statistically significant at conventional levels and are therefore interpreted as directionally consistent rather than independently confirmatory. Evidence based on total factor productivity, management expense intensity, and investment adjustment is consistent with production efficiency, management coordination, and organizational adjustment channels. Heterogeneity tests show stronger effects among non-state-owned, eastern region, and non-manufacturing firms. The findings suggest that broadband infrastructure generates productivity benefits when firms have the organizational absorptive capacity to convert external digital connectivity into internal operational efficiency. Full article

(This article belongs to the Special Issue Macroeconomics of the Labour Market)

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25 pages, 1783 KB

Open AccessArticle

Tariff Cascades and Global Value Chain Participation: A Portable Diagnostic Framework with Evidence from a Global Dyadic Panel

by Hadi Zarea, Sina Mirzaye Shirkoohi, Zhan Su, Anne-Marie Côté and Ekaterina Turkina

Economies 2026, 14(6), 236; https://doi.org/10.3390/economies14060236 - 18 Jun 2026

Cited by 1 | Viewed by 467

Abstract

This paper develops a theory-first framework explaining how tariff policy reshapes participation and position in global value chains (GVCs). Building on the input–output price model and value-added trade accounting, we formalize the tariff cascade and introduce three portable diagnostics: the Tariff Propagation Multiplier [...] Read more.

This paper develops a theory-first framework explaining how tariff policy reshapes participation and position in global value chains (GVCs). Building on the input–output price model and value-added trade accounting, we formalize the tariff cascade and introduce three portable diagnostics: the Tariff Propagation Multiplier (TPM), the Backward/Forward Tariff Elasticity Decomposition (BFTED), and the Stage-Shift Metric (SSM). We derive sign-robust propositions and provide aggregate-level empirical evidence consistent with the cascade mechanism using a dyadic panel of 260,473 observations spanning 1999–2018. Results show that home input tariffs significantly compress both backward and forward GVC participation, and that apparent GVC upgrading frequently reflects measurement composition rather than genuine technological relocation. A policy simulation calibrated to 25% tariff escalation scenario projects significant participation losses, with Canada’s high-exposure manufacturing sectors facing amplified cascade effects due to their dense cross-border input linkages. The framework offers actionable diagnostics for trade and industrial policy in an era of renewed protectionism. Full article

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23 pages, 1329 KB

Open AccessArticle

Impact of Globalization, Energy Consumption, Economic Growth, Urbanization and Trade Openness on Environmental Degradation: Evidence from Pakistan

by Imran Khan, Qadri Al-Jabri, Muhammad Farooq, Asim Yaqoob and Minhaj Ali

Economies 2026, 14(6), 235; https://doi.org/10.3390/economies14060235 - 17 Jun 2026

Cited by 1 | Viewed by 597

Abstract

This study investigates the impact of globalization, energy consumption, economic growth, urbanization, and trade openness on environmental degradation in case of Pakistan. The dynamic autoregressive distributed lag (DARDL) technique was applied to measure the short- and long-term estimates, which are robust and have [...] Read more.

This study investigates the impact of globalization, energy consumption, economic growth, urbanization, and trade openness on environmental degradation in case of Pakistan. The dynamic autoregressive distributed lag (DARDL) technique was applied to measure the short- and long-term estimates, which are robust and have higher predictive power compared to the conventional ARDL technique with a dataset that spans from 1980 to 2023 for Pakistan. The empirical findings confirm a significant long-run cointegrating relationship among the variables under investigation. Specifically, globalization and trade openness are found to exert a significant negative impact on CO₂ emissions, suggesting their potential role in fostering environmental amelioration. Conversely, energy consumption and economic growth demonstrate a significant positive impact on CO₂ emissions, indicating their contribution to increased environmental degradation. Notably, urbanization does not show a significant relationship with CO₂ emissions, a finding attributed to Pakistan’s inefficient and environmentally unfriendly urban infrastructure, despite a substantial 2.93 percent annual rate of urbanization. Furthermore, the widely posited Environmental Kuznets Curve (EKC) hypothesis is not supported by the data; instead, economic growth appears to be associated with an exponential increase in CO₂ emissions. The findings offer crucial policy insights for sustainable development initiatives for Pakistan and generally for developing nations. Full article

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20 pages, 1101 KB

Open AccessArticle

Labour Market Effects of the Digital Transition: An Analysis of Low- and Medium-Skilled Occupations in the EU

by Zoltán Musinszki, Erika Horváthné Csolák and Gábor Béla Süveges

Economies 2026, 14(6), 234; https://doi.org/10.3390/economies14060234 - 17 Jun 2026

Viewed by 679

Abstract

Technological change appears with different levels of intensity across occupations, countries and regions. This study examines the labour market effects of digitalisation in the European Union, focusing on blue-collar occupations, specifically ISCO major group 7, Craft and related trades workers, and low-skilled occupations, [...] Read more.

Technological change appears with different levels of intensity across occupations, countries and regions. This study examines the labour market effects of digitalisation in the European Union, focusing on blue-collar occupations, specifically ISCO major group 7, Craft and related trades workers, and low-skilled occupations, specifically ISCO major group 9, Elementary occupations. The empirical basis of the study is the Cedefop Skills-OVATE database. The large-scale analysis covers the content of online job advertisements in 2020 and 2024. The results show that digitalisation does not affect the labour market in a uniform way. In blue-collar occupations, demand for digital skills shows a relatively stable pattern over the period examined. In contrast, in low-skilled occupations, a decline can be observed in the share of explicitly required digital skills. This suggests that digitalisation affects occupational groups in differentiated ways. The findings also reveal persistent patterns across EU Member States. Countries with higher levels of technological development consistently show higher digital intensity, while lower values are more characteristic of former socialist countries. The comparison of the two years indicates that these structures changed only to a limited extent, suggesting that the digital divide remains relatively stable in spatial terms. Full article

(This article belongs to the Special Issue Labour Market Dynamics in European Countries)

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19 pages, 500 KB

Open AccessArticle

Tax Incentives and Firms’ Decision on Innovation and Export: Case from Chinese Listed Advanced Manufacturers

by Sangho Kim and Zhe Li

Economies 2026, 14(6), 233; https://doi.org/10.3390/economies14060233 - 16 Jun 2026

Viewed by 440

Abstract

This study applies the bivariate probit model to a panel of Chinese listed advanced manufacturers to investigate the relationship between tax incentives and firms’ decision on export and R&D. Estimations show that VAT refund and income tax deduction are positively related to firms’ [...] Read more.

This study applies the bivariate probit model to a panel of Chinese listed advanced manufacturers to investigate the relationship between tax incentives and firms’ decision on export and R&D. Estimations show that VAT refund and income tax deduction are positively related to firms’ decision on exporting and starting R&D, respectively. Regarding firms’ export decisions, VAT refund is associated much greatly with R&D firms’ decisions on becoming exporters than non-R&D firms’ decisions on becoming exporters. However, the relationship between tax deduction and firms’ R&D decisions depends on firm size. For large firms, tax deduction is associated relatively greatly with exporters in starting R&D activity than with domestic firms in starting R&D activity, whereas, for small firms, tax deduction is associated much more greatly with domestic firms in starting R&D activity than with exporters in starting R&D activity. The study suggests that the relationship between tax incentives and firms’ decisions on becoming exporters and R&D firms varies depending on firms’ status and size. Full article

(This article belongs to the Section Economic Development)

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20 pages, 1534 KB

Open AccessArticle

Do Virtual Water Exports to the EU Drive Morocco’s Economic Growth? Evidence from an ARDL Approach

by Mounsif Ridaoui, Aziz Razzouki, Oudgou Mohammed and Abdeslam Boudhar

Economies 2026, 14(6), 232; https://doi.org/10.3390/economies14060232 - 15 Jun 2026

Viewed by 623

Abstract

The concept of virtual water is currently one of the most important issues in water resource management, especially in a context marked by structural water scarcity. Beyond the analysis of virtual water flows, which has been widely studied in the literature, this study [...] Read more.

The concept of virtual water is currently one of the most important issues in water resource management, especially in a context marked by structural water scarcity. Beyond the analysis of virtual water flows, which has been widely studied in the literature, this study aims to better understand the relationship between virtual water exports and economic growth. This paper analyzes the dynamic relationship between Morocco’s economic growth and agricultural virtual water exports to the European Union over the period of 1986–2023. An ARDL model was used based on annual data to test cointegration and estimate short- and long-term effects, controlling for gross fixed capital formation and agricultural value added. The bounds test confirms the existence of a stable long-term relationship between the variables. The results suggest that export specialization may be associated with foreign earnings and agricultural activity while also coinciding with greater pressure on resources and potential adaptation costs, especially for blue water resources. However, estimates indicate that in the long term, investment is positively and significantly associated with growth, while virtual water exports are associated with a negative effect on GDP, suggesting that export gains may be offset by increasing water constraints and sectoral trade-offs, and that agricultural value added mainly influences short-term dynamics. The results highlight the importance of integrating water footprint and virtual water trade concepts, as well as climate constraints, into agricultural and trade strategy planning while strengthening policies on water efficiency, innovation, and governance. Full article

(This article belongs to the Collection Agricultural and Natural Resource Economics)

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32 pages, 428 KB

Open AccessArticle

Green Transition in Europe: The Effectiveness of Environmental Taxes and Green Innovation in Reducing CO₂ Emissions

by Jafar Babakhonov, Hilola Qosimova, Samariddin Makhmudov, Yuldoshboy Sobirov, Feruza Murodkhujayeva, Daniyor Kurbanov and Bakhodir Ruzmetov

Economies 2026, 14(6), 231; https://doi.org/10.3390/economies14060231 - 15 Jun 2026

Viewed by 701

Abstract

This study examines the determinants of carbon dioxide (CO₂) emissions across 25 European Union countries over the period 2000–2021, with particular emphasis on the roles of environmental taxation and green innovation in shaping environmental sustainability. The analysis is grounded in ecological [...] Read more.

This study examines the determinants of carbon dioxide (CO₂) emissions across 25 European Union countries over the period 2000–2021, with particular emphasis on the roles of environmental taxation and green innovation in shaping environmental sustainability. The analysis is grounded in ecological modernization theory, endogenous growth theory, and the Environmental Kuznets Curve hypothesis, which collectively explain the long-run and dynamic interactions between environmental policy, economic activity, structural transformation, and environmental outcomes. To ensure robust empirical inference, this study applies a comprehensive econometric framework that accounts for cross-sectional dependence, heterogeneity, non-stationarity, cointegration, and endogeneity. The empirical strategy begins with Pesaran cross-sectional dependence tests and slope heterogeneity diagnostics, followed by second-generation panel unit root tests (Pesaran CADF/CIPS) and Westerlund cointegration tests to establish the existence of long-run equilibrium relationships among the variables. Long-run coefficients are estimated using Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), Canonical Cointegrating Regression (CCR), and Common Correlated Effects Mean Group (CCEMG) estimators. In addition, the Panel Autoregressive Distributed Lag (ARDL) model is employed to capture both short-run dynamics and long-run adjustment processes, while the System Generalized Method of Moments (System GMM) estimator addresses potential endogeneity, reverse causality, omitted variable bias, and dynamic persistence in CO₂ emissions. The empirical results indicate that environmental taxation has a positive and statistically significant association with CO₂ emissions, suggesting that current fiscal environmental policies in EU-25 countries may not yet be sufficiently effective in discouraging pollution-intensive activities. In contrast, green innovation is found to significantly reduce CO₂ emissions, underscoring the critical role of innovation-driven environmental investment and technological progress in improving environmental quality. Economic growth, exports, and urbanization are associated with higher emissions, while imports contribute to emission reductions, reflecting differences between domestic production-based effects and trade-related structural adjustments. The System GMM results further confirm the persistence of CO₂ emissions over time and validate the robustness of the long-run relationships identified by alternative estimators. Likewise, the CCEMG and Panel ARDL results support the stability and consistency of the findings under conditions of cross-sectional dependence and heterogeneous country dynamics. Taken together, the results highlight the importance of integrating environmental taxation with green innovation policies, innovation-driven investment, and sustainable trade policies to achieve long-term emission reductions in the European Union. This study contributes to the environmental economics literature by providing robust empirical evidence using second-generation panel econometric techniques that explicitly address cross-sectional dependence, heterogeneity, and endogeneity in the analysis of environmental sustainability. Full article

(This article belongs to the Special Issue Economics for a Low Carbon Future: Renewable Energy, Pollution Abatement and Policy Effectiveness)

15 pages, 669 KB

Open AccessReview

Debt Service vs. Debt Stock in Sovereign Credit Ratings: A Systematic Review and Meta-Regression Analysis

by Mohamed Abdelmohsen, Hadir Abdelmohsen, Awadelkarim Elamin Altahir Ahmed and Ehab Ebrahim Mohamed Ebrahim

Economies 2026, 14(6), 230; https://doi.org/10.3390/economies14060230 - 14 Jun 2026

Viewed by 788

Abstract

Sovereign credit ratings are central to a country’s access to international capital markets, yet the relative informational content of debt service obligations versus aggregate debt stock for rating outcomes remains empirically unsettled. This systematic review synthesises econometric evidence on both measures across 23 [...] Read more.

Sovereign credit ratings are central to a country’s access to international capital markets, yet the relative informational content of debt service obligations versus aggregate debt stock for rating outcomes remains empirically unsettled. This systematic review synthesises econometric evidence on both measures across 23 primary studies published between 1996 and 2024. The central message of this paper is that debt service indicators—capturing near-term liquidity and refinancing pressure—are at least as informative as, and on average more informative than, debt stock ratios for sovereign credit assessments, particularly in emerging-market contexts and ordered-response specifications. This finding holds across heterogeneous study designs and is confirmed by meta-regression analysis, which shows that debt service effects are significantly more negative than debt stock effects (β = −0.09, p = 0.004) after controlling for sample composition, model family, and rating agency. Emerging-market samples and ordered-response estimators yield stronger associations than advanced-economy samples and linear (OLS) specifications. No consistent differences across the major rating agencies are found once study-design moderators are included. Because primary studies differ in model families, samples, and variable construction, we emphasise transparent reporting, avoid over-interpreting pooled magnitudes, and focus on robust qualitative patterns and moderator-based explanations of heterogeneity. The findings contribute to the literature on sovereign rating determinants and have practical implications for fiscal monitoring, suggesting that debt management aimed at improving near-term servicing capacity matters for credit assessments in ways that are not fully captured by stock-based fiscal anchors. Full article

(This article belongs to the Special Issue International Finance and Macroeconomics: Methods, Models and Analysis (2nd Editon))

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39 pages, 852 KB

Open AccessArticle

Capital Deepening and Employment Dynamics in UK Information-Intensive Services: Evidence from SVAR Analysis

by Yiu-Fai Chan and Yuvraj V. Bheekee

Economies 2026, 14(6), 229; https://doi.org/10.3390/economies14060229 - 13 Jun 2026

Viewed by 444

Abstract

This paper documents a fundamental sectoral divergence in capital–employment relationships using UK quarterly data (2014Q1–2024Q4, N = 44). While manufacturing automation studies consistently find negative employment effects, we show that information-intensive service sectors (SIC J: Information and Communication; K: Financial and Insurance; M: [...] Read more.

This paper documents a fundamental sectoral divergence in capital–employment relationships using UK quarterly data (2014Q1–2024Q4, N = 44). While manufacturing automation studies consistently find negative employment effects, we show that information-intensive service sectors (SIC J: Information and Communication; K: Financial and Insurance; M: Professional/Scientific/Technical) exhibit robust positive co-movement between capital formation and employment. Structural vector autoregression analysis reveals persistent positive employment responses following capital shocks, with effects peaking at 5–6 quarters and remaining significant through 10 quarters. This pattern holds across eight alternative specifications with varying lag structure, variable ordering, and subsample periods. Granger causality tests reveal bidirectional temporal relationships (capital → employment: F = 3.932, p = 0.028; employment → capital: F = 5.659, p = 0.007), indicating joint determination from anticipated demand growth rather than unidirectional technology-driven dynamics. This finding—while complicating causal interpretation—strengthens the contribution by providing honest empirical characterization of coordination mechanisms in information-intensive sectors. Our capital formation proxy measures all investment in AI-intensive sectors (buildings, equipment, conventional IT, emerging AI systems) rather than AI expenditure specifically, creating measurement ambiguity we acknowledge transparently. The sectoral focus (J+K+M sectors with 22–34% AI adoption rates exceeding the 15% economy-wide average) provides indicative evidence that patterns relate to advanced technology deployment, but measurement breadth prevents definitive AI-specific conclusions. The contribution lies not in establishing AI-specific causality—which aggregate time-series methods cannot achieve—but in documenting robust sectoral heterogeneity using methodology comparable to manufacturing displacement studies. The positive association in information-intensive services contrasts sharply with manufacturing’s negative relationship, suggesting technology–employment dynamics vary fundamentally across sectors with different task structures. Three limitations constrain interpretation: (i) recursive identification cannot definitively rule out common demand shocks, (ii) the 44-quarter sample provides limited statistical power for precise magnitude estimation, and (iii) external validity to other countries, time periods, or service sectors remains uncertain. The findings motivate sector-specific rather than economy-wide technology policy approaches, recognizing that extrapolating manufacturing evidence to service-dominated economies may systematically mischaracterize employment dynamics. Full article

(This article belongs to the Topic Artificial Intelligence and Sustainable Development)

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17 pages, 463 KB

Open AccessEditor’s ChoiceArticle

Heterogeneous Regional Convergence in the European Union: Club Dynamics, Structural Breaks, and Spatial Spillovers

by Greta Mockevičienė and Mindaugas Butkus

Economies 2026, 14(6), 228; https://doi.org/10.3390/economies14060228 - 13 Jun 2026

Viewed by 737

Abstract

This study examines income convergence among EU NUTS-2 regions from 2000 to 2023 using a combination of Phillips-Sul (PS) club convergence methodology,

β

-convergence, and spatial econometric models. The results reveal that regional convergence in Europe is heterogeneous and nonlinear: four stable convergence [...] Read more.

This study examines income convergence among EU NUTS-2 regions from 2000 to 2023 using a combination of Phillips-Sul (PS) club convergence methodology,

β

-convergence, and spatial econometric models. The results reveal that regional convergence in Europe is heterogeneous and nonlinear: four stable convergence clubs emerge, while overall convergence is rejected. Convergence was faster before 2012 and weakened afterward. A single income threshold and two structural breaks (2005 and 2012) mark shifts in growth dynamics. Spatial models reveal that neighboring regions affect each other’s growth, indicating that regional development in Europe depends on both local conditions and interactions across regions. Full article

(This article belongs to the Section Economic Development)

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22 pages, 612 KB

Open AccessArticle

Market Signals and Investor Behavior in Green Bond Pricing: Evidence from China

by Xinyan Deng, Kentaka Aruga, Yoshihiro Zenno, Mengge Li, Yue Ban and Chaofeng Tang

Economies 2026, 14(6), 227; https://doi.org/10.3390/economies14060227 - 12 Jun 2026

Viewed by 800

Abstract

This study examines how green bond financing costs in China are jointly shaped by market pricing mechanisms and institutional investor behavior. It develops an integrated two-level framework linking issuance-level bond characteristics with investor decision-making to explain green bond pricing in an emerging market. [...] Read more.

This study examines how green bond financing costs in China are jointly shaped by market pricing mechanisms and institutional investor behavior. It develops an integrated two-level framework linking issuance-level bond characteristics with investor decision-making to explain green bond pricing in an emerging market. Using a comprehensive dataset of Chinese green bond issuances, the results show that financing costs are driven mainly by conventional credit-related signals, including issuer and bond ratings, guarantee structures, issuance size, and maturity. However, market frictions such as liquidity constraints and rating inertia weaken the capitalization of environmental attributes in yields. A survey-based Logit analysis of institutional investors in Shanghai further shows that green bond investment is influenced more by trading activity, information transparency, and risk management than by environmental awareness alone. Institutional heterogeneity also suggests that securities firms display stronger participation than investment companies, reflecting differences in bond-market exposure, product familiarity, and institutional investment mandates. Overall, the findings reveal a feedback mechanism in which market signals shape investor behavior, which in turn reinforces or moderates pricing dynamics. The study clarifies the structural and behavioral drivers of green bond pricing and offers policy implications for improving transparency, liquidity, and investor incentives. Full article

(This article belongs to the Topic Sustainable and Green Finance)

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20 pages, 2090 KB

Open AccessArticle

Digital Economy, Regional AI Orientation, and Industrial Structure Upgrading Under Economic Policy Uncertainty: Evidence from China

by Zhidi Yin and Jiamei Che

Economies 2026, 14(6), 226; https://doi.org/10.3390/economies14060226 - 12 Jun 2026

Cited by 1 | Viewed by 513

Abstract

This study examines whether the digital economy helps provincial economies sustain industrial structure upgrading under economic policy uncertainty (EPU), and whether regional AI orientation strengthens this role. Using a balanced panel of 30 Chinese provinces from 2015 to 2023, the study uses the [...] Read more.

This study examines whether the digital economy helps provincial economies sustain industrial structure upgrading under economic policy uncertainty (EPU), and whether regional AI orientation strengthens this role. Using a balanced panel of 30 Chinese provinces from 2015 to 2023, the study uses the standardised logarithm of a provincial digital economy index as its core measure of digital development. Province and year fixed-effects models show that the triple interaction among digital economy development, regional AI orientation, and high EPU is positive and statistically significant. Marginal effect analysis indicates that the digital economy effect under high EPU only becomes positive when regional AI orientation exceeds a threshold, suggesting a conditional rather than universal effect. Robustness checks, alternative dependent variables, province-grouped machine learning validation, and supplementary policy exposure evidence based on Broadband China pilots are consistent with this state-dependent complementarity, although the estimates are interpreted as conditional associations rather than definitive causal effects. Full article

(This article belongs to the Special Issue Emerging Trends in the Digital Economy: Opportunities, Challenges, and Implications for Developing Countries)

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20 pages, 626 KB

Open AccessArticle

Fiscal Antibodies: How Public Health Expenditures Strengthen National Economic Vulnerability to Climate Change

by Abdelmoneim Bahyeldin Mohamed Metwally and Mai M. Yasser

Economies 2026, 14(6), 225; https://doi.org/10.3390/economies14060225 - 12 Jun 2026

Viewed by 543

Abstract

This study investigates the relationship between public health expenditures and national climate vulnerability, measured by the Notre Dame Global Adaptation Initiative (ND-GAIN) Index, across 62 developed and developing countries from 2000 to 2023. Motivated by contradictory findings in the prior literature and a [...] Read more.

This study investigates the relationship between public health expenditures and national climate vulnerability, measured by the Notre Dame Global Adaptation Initiative (ND-GAIN) Index, across 62 developed and developing countries from 2000 to 2023. Motivated by contradictory findings in the prior literature and a lack of large-scale panel econometric evidence, this research aims to determine whether health investments significantly increase climate vulnerability. Using a dynamic generalized method of moments (GMM), the findings show that public health expenditure per capita has a statistically significant positive impact on the ND-GAIN composite index. Findings show that public health expenditure per capita has a statistically significant positive impact on the ND-GAIN composite index—where higher ND-GAIN values indicate lower climate vulnerability and greater adaptive capacity—implying that increased public health spending is associated with reduced national climate vulnerability. In high-income countries, health spending may improve adaptive capacity by leveraging established infrastructure and governance. As a result, policymakers should make funding for public health a top priority in their plans for adapting to climate change. This is because investing in health alone is not enough; they also need to invest in infrastructure, governance, and adaptive capacity, especially in developing countries. Full article

(This article belongs to the Special Issue Health Expenditures and Economic Resilience: Macro Perspectives)

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25 pages, 310 KB

Open AccessArticle

Trade Intensity and Global Value Chain Participation: Evidence from Developing Economies

by Vladimir Ristanović, Jasmina Mlađenović and Davor Huška

Economies 2026, 14(6), 224; https://doi.org/10.3390/economies14060224 - 11 Jun 2026

Viewed by 819

Abstract

This paper investigates the role of cross-border trade in shaping participation in global value chains (GVCs) in developing and emerging economies over the period 2000–2022. It tests the central hypothesis that greater trade intensity enhances integration into fragmented global production systems. Using panel [...] Read more.

This paper investigates the role of cross-border trade in shaping participation in global value chains (GVCs) in developing and emerging economies over the period 2000–2022. It tests the central hypothesis that greater trade intensity enhances integration into fragmented global production systems. Using panel data methods, the analysis examines the effects of trade openness alongside foreign direct investment, logistics performance, GDP per capita, and domestic value added. The results provide strong evidence that trade openness is the dominant driver of GVC participation, with a robust and economically meaningful elasticity. Domestic value added is also positively associated with GVC integration, suggesting that deeper global engagement can coincide with increased domestic value creation. GDP per capita exerts a weaker but significant effect, while foreign direct investment and logistics performance do not show direct statistical significance in the preferred specification. These findings highlight trade as the primary transmission mechanism linking national economies to global production networks, while also pointing to a complementary role of domestic capabilities. At the same time, increased reliance on cross-border trade may heighten exposure to external shocks, underscoring a key policy trade-off. The study concludes that effective GVC integration requires balancing openness with strategies that strengthen resilience and value capture. Full article

(This article belongs to the Special Issue Emerging Trends in the Digital Economy: Opportunities, Challenges, and Implications for Developing Countries)

25 pages, 1057 KB

Open AccessArticle

When Does Green Innovation Matter? Financial Globalization and Pollution Abatement Across the Ecological Footprint Distribution in the EU

by Ayhan Kuloğlu, Furkan Yıldırım, Ulaş Ünlü, İhsan Yapar and Özkan Çıtak

Economies 2026, 14(6), 223; https://doi.org/10.3390/economies14060223 - 11 Jun 2026

Viewed by 383

Abstract

This study examines when green innovation contributes to pollution abatement by analyzing how financial globalization and different forms of innovation jointly shape ecological pressure across European Union (EU) countries over the period 1992–2021. The findings show that financial globalization consistently increases ecological pressure, [...] Read more.

This study examines when green innovation contributes to pollution abatement by analyzing how financial globalization and different forms of innovation jointly shape ecological pressure across European Union (EU) countries over the period 1992–2021. The findings show that financial globalization consistently increases ecological pressure, with stronger effects at upper quantiles (0.8–0.9). Technological innovation exhibits a nonlinear pattern: general RD increases ecological pressure at lower quantiles (0.1–0.4), but this effect becomes insignificant and then negative at higher quantiles (0.7–0.9). In contrast, environmental innovation (EI) reduces CO₂ emissions at middle and upper quantiles (0.5–0.8), suggesting a stronger environmental contribution under medium-to-high ecological pressure conditions. Overall, the results demonstrate that the environmental impact of innovation depends on both the type of innovation and the prevailing level of ecological pressure. Specifically, general R&D and environmental innovation exhibit different environmental effects across lower and upper quantiles, suggesting that environmentally oriented innovation policies may be more effective under higher ecological pressure conditions. Full article

(This article belongs to the Special Issue Economics for a Low Carbon Future: Renewable Energy, Pollution Abatement and Policy Effectiveness)

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27 pages, 510 KB

Open AccessArticle

Oil Price Transmission, Synthetic-Rubber Substitution, and Inventory Regimes in China–Thailand Rubber Markets

by Montchai Pinitjitsamut

Economies 2026, 14(6), 222; https://doi.org/10.3390/economies14060222 - 11 Jun 2026

Viewed by 610

Abstract

This paper examines how international crude-oil price movements are transmitted to natural-rubber prices through the petrochemical–synthetic-rubber chain, with implications for Thailand as the world’s leading natural-rubber exporter and China as the dominant consumer. Using monthly data from April 2003 to March 2026 on [...] Read more.

This paper examines how international crude-oil price movements are transmitted to natural-rubber prices through the petrochemical–synthetic-rubber chain, with implications for Thailand as the world’s leading natural-rubber exporter and China as the dominant consumer. Using monthly data from April 2003 to March 2026 on the OPEC reference basket, butadiene, styrene–butadiene rubber (SBR), and the Shanghai natural-rubber benchmark, the analysis combines a nonlinear ARDL specification with a Pesaran–Shin–Smith bounds test, a long-run association decomposition into direct and synthetic-rubber-mediated components with bootstrap inference, and a threshold-NARDL extension that conditions the decomposition on the inventory state. Three findings stand out. First, the synthetic-rubber-mediated component accounts for approximately three-quarters of the estimated oil–natural rubber long-run association (73.5 percent, 95 percent bootstrap CI [60.6, 87.2]), with the residual direct component accounting for the remainder. Second, long-run pass-through is directionally consistent with concentration in the synthetic-rubber component, although Wald tests do not reject symmetry at conventional levels for either the synthetic-rubber component (Wald

p = 0.135

) or the direct oil component (

p = 0.166

). Third, the synthetic-rubber-mediated share is consistently larger in low-inventory regimes by 26 to 66 percentage points across three alternative regime variables, although the magnitude amplification of asymmetric pass-through itself is not robust. Asymmetric local projections and a Diebold–Yilmaz spillover analysis are reported as complementary horizon-indexed and network checks. The results imply that the synthetic–natural rubber spread, conditioned on the inventory state, may be more informative for natural-rubber price-risk monitoring than crude-oil prices alone. These findings have implications for commodity price-risk monitoring, export-income exposure, and stabilisation design in rubber-exporting economies. Because crude-oil shocks are not externally identified, all estimates are interpreted as decompositions of long-run association rather than causal mediation effects. Full article

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25 pages, 627 KB

Open AccessArticle

The Role of Manufacturing in Economic Growth in the Countries of the Andean Community of Nations (ACN), 1993–2019

by Diego Alejandro Ochoa Jiménez, Alexis Polibio Gaona Albito and Christian Fernando Pereira Jaramillo

Economies 2026, 14(6), 221; https://doi.org/10.3390/economies14060221 - 11 Jun 2026

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Abstract

Whether Kaldor’s three growth laws still operate in commodity-dependent middle-income economies—and through what transmission mechanism—is an open empirical question after three decades of trade liberalisation, financial opening, and the 2002–2014 commodity super-cycle. This paper provides the first bloc-level panel test of the three [...] Read more.

Whether Kaldor’s three growth laws still operate in commodity-dependent middle-income economies—and through what transmission mechanism—is an open empirical question after three decades of trade liberalisation, financial opening, and the 2002–2014 commodity super-cycle. This paper provides the first bloc-level panel test of the three laws for the Andean Community of Nations (ACN—Bolivia, Colombia, Ecuador, and Peru) over 1993–2019, combining static feasible generalised regressions with dynamic Arellano–Bond difference-GMM and long-run multipliers. The predictions are as follows: manufacturing growth is positively associated with aggregate output (long-run multiplier 0.91), the Verdoorn coefficient is positive and significant at 0.42, and labour reallocation from non-manufacturing activities is associated with rising aggregate productivity over the time. The headline finding, however, is a decomposition failure: the Verdoorn and employment elasticities coefficients sum up to 0.35 rather than 1 as required by the accounting identity, leaving a residual of 0.65. We term this “jobless manufacturing growth” (capital-deepening). This suggests that the Kaldorian regime in the ACN has neither collapsed nor remained intact, but has mutated into a capital-intensive, labour-saving form consistent with Dutch-disease. Thus, industrial policy alone would deepen the jobless pattern: structural transformation in these economies requires pairing subsidy plans with the macroeconomic management of commodity-dependent exchange rates. Full article

(This article belongs to the Special Issue Institutions, Structural Change, and Inclusive Growth in Developing Economies)

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26 pages, 1987 KB

Open AccessArticle

A Blockchain System for Scalable Tokenized Equity and Efficient Dividend Distribution in Agricultural Cooperatives

by Juan Minango, Alberto Paradisi, Silvia Marion, Andreza Lona and Ivan Bergier

Economies 2026, 14(6), 220; https://doi.org/10.3390/economies14060220 - 11 Jun 2026

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Abstract

Agricultural cooperatives in developing economies struggle with capital access and typically depend on subsidized credit with rigid repayment schedules that create vulnerability during low-production cycles. In this paper, we present a mathematical framework implemented through a smart contract to tokenize cooperative capital. Our [...] Read more.

Agricultural cooperatives in developing economies struggle with capital access and typically depend on subsidized credit with rigid repayment schedules that create vulnerability during low-production cycles. In this paper, we present a mathematical framework implemented through a smart contract to tokenize cooperative capital. Our mathematical framework uses magnified accumulators (scaled accumulator variables) to maintain temporal fairness, allocating dividends proportionally based on token holding periods through correction factors. The dividend distribution model operates with

O (1)

computational complexity, regardless of cooperative size. The CooperativeToken smart contract combines ERC20 standards with automated dividend distribution, democratic governance mechanisms, and a hybrid payment architecture supporting both cryptocurrency and fiat transactions. Deployment verification and a gas analysis demonstrate operational viability with consistent performance and minimal transaction costs, enabling scalability from small to large cooperatives. The proposed system offers agricultural cooperatives a debt-free alternative to conventional financing, democratizing access to tokenized capital structures that were previously restricted to large agribusinesses. While the model is validated via Ethereum Sepolia testnet simulation, real-world deployment and field testing in active cooperatives remain necessary to confirm practical feasibility. This study provides the algorithmic and economic foundation for such pilots. Full article

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40 pages, 733 KB

Open AccessArticle

Governance and Institutional Quality as Double-Edged Determinants of FDI Inflows: Evidence from South and Central Asia

by Artikov Beruniy, Saburov Javokhir, Bozorov Islom, Tokhirov Javlon, Makhmudov Samariddin, Avezov Mirzobek and Yusupov Sherzodbek

Economies 2026, 14(6), 219; https://doi.org/10.3390/economies14060219 - 10 Jun 2026

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Abstract

This study examines the role of governance and institutional quality in shaping FDI inflows across twelve South and Central Asian economies from 2002 to 2023. The analysis incorporates key macroeconomic determinants, including trade openness, economic growth, population, inflation, six governance dimensions, and a [...] Read more.

This study examines the role of governance and institutional quality in shaping FDI inflows across twelve South and Central Asian economies from 2002 to 2023. The analysis incorporates key macroeconomic determinants, including trade openness, economic growth, population, inflation, six governance dimensions, and a composite institutional quality index constructed through principal component analysis. Driscoll–Kraay standard errors, Feasible Generalized Least Squares (FGLS), and Method of Moments Quantile Regression (MMQR) techniques are employed to capture heterogeneity and distributional effects. The findings show that trade openness, economic growth, and population consistently stimulate FDI inflows, whereas inflation discourages foreign investment. More importantly, the study reveals a counterintuitive institutional effect: stricter governance mechanisms-including stronger rule of law, regulatory quality, and anti-corruption measures-can temporarily constrain FDI inflows by increasing compliance costs, administrative complexity, and adjustment burdens for foreign investors in transitional economies. This suggests that institutional strengthening operates as a double-edged process, promoting long-term economic credibility while potentially discouraging short-term foreign capital inflows. The study therefore highlights the importance of balancing institutional reforms with procedural efficiency and investor-friendly implementation strategies in South and Central Asia. Full article

(This article belongs to the Special Issue Foreign Direct Investment and Investment Policy (3rd Edition))

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1 pages, 284 KB

Open AccessCorrection

Correction: Giraldo-Gordillo and Bustillo-Mesanza (2026). The Impact of Mobile Money and CBDCs on Remittance Fees: Evidence from Nigeria and Sub-Saharan Africa. Economies, 14(2), 65

by Francisco Elieser Giraldo-Gordillo and Ricardo Bustillo-Mesanza

Economies 2026, 14(6), 218; https://doi.org/10.3390/economies14060218 - 10 Jun 2026

Viewed by 255

Abstract

In the original publication (Giraldo-Gordillo & Bustillo-Mesanza, 2026), there was a mistake in Figure 8; the study was conducted in Nigeria, but by error, we typed the Bahamas [...] Full article

(This article belongs to the Special Issue Unveiling the Power of Remittances: Drivers, Effects, and Trends)

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24 pages, 1226 KB

Open AccessArticle

Unpacking the Nonlinear Effects of Renewable Energy on Socioeconomic Disparities Across the Global South

by Dong Manh Cuong, Cao Thuy Linh, Phuong Huu Khiem and Hoang Thi Ngoc Anh

Economies 2026, 14(6), 217; https://doi.org/10.3390/economies14060217 - 10 Jun 2026

Viewed by 611

Abstract

The global energy transition is frequently advocated as a means to achieve environmental sustainability. However, its distributional impacts remain inadequately understood, particularly in developing nations where approximately 666 million individuals still lack access to electricity. This study investigates whether the expansion of renewable [...] Read more.

The global energy transition is frequently advocated as a means to achieve environmental sustainability. However, its distributional impacts remain inadequately understood, particularly in developing nations where approximately 666 million individuals still lack access to electricity. This study investigates whether the expansion of renewable energy consumption mitigates or exacerbates socioeconomic inequality across 82 developing economies from 2000 to 2022. Employing a multi-method econometric framework that considers cross-sectional dependence, heterogeneity, and nonlinear dynamics, we analyze three dimensions of equity: income inequality, monetary poverty, and disparities in electricity access between urban and rural populations. The findings reveal a complex relationship. While the expansion of renewable energy is associated with improvements in income distribution, it is also linked to persistent poverty and unequal access to energy services. This tension reflects what we term the “biomass paradox,” wherein the continued reliance on traditional biomass in low-income countries constrains the inclusiveness of energy transitions. Quantile regression analysis reveals that the effect of renewable energy reverses across the distribution: renewable energy slightly widens the energy access gap in countries where disparities are already small, but narrows it substantially in countries where the gap is widest. The results further indicate that the equity effects of renewable energy vary across contexts and are particularly sensitive to initial conditions and institutional capacity. In settings with weak governance, renewable expansion shows no statistically distinguishable effect on equity outcomes, whereas in stronger institutional environments, its effects become more transformative. These findings suggest that aggregate renewable energy targets that do not differentiate between traditional and modern sources may be misleading. More broadly, achieving a just energy transition necessitates not only expanding renewable capacity but also strengthening governance frameworks and directing investments toward contexts where energy inequalities are most pronounced. Full article

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15 pages, 266 KB

Open AccessArticle

Foreign Direct Investment and Economic Growth in Morocco: Revisiting the Evidence with 2SLS

by Fatine El Ghali Ghorafi

Economies 2026, 14(6), 216; https://doi.org/10.3390/economies14060216 - 9 Jun 2026

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Abstract

Background and Motivation: Foreign direct investment (FDI) has been widely examined as a potential driver of economic growth, yet empirical evidence for Morocco remains inconclusive due to methodological limitations and endogeneity concerns. This study re-examines the FDI–growth relationship in Morocco over the period [...] Read more.

Background and Motivation: Foreign direct investment (FDI) has been widely examined as a potential driver of economic growth, yet empirical evidence for Morocco remains inconclusive due to methodological limitations and endogeneity concerns. This study re-examines the FDI–growth relationship in Morocco over the period 1977–2022 using a five-equation simultaneous system estimated by Two-Stage Least Squares (2SLS). The framework jointly models GDP growth, FDI, exports, human capital, and domestic investment in order to account for bidirectional relationships among the main variables. Methods: Unit root and Johansen cointegration tests support the existence of long-run equilibrium relationships among the series, while a Chow test identifies a significant structural break in 2003 (F = 11.43, p = 0.003). Diagnostic tests confirm instrument relevance (Cragg–Donald F > 10) and fail to reject over-identification validity (Hansen J p > 0.10). Results: The results indicate a positive but statistically fragile association between FDI and economic growth—positive in sign across all specifications but sensitive to sample size and instrument choice (β = 2.179, t = 1.728, p = 0.092; 90% CI: [−0.341, 4.699] in constant 2015 USD billions). FDI is associated with growth primarily through indirect channels—particularly export expansion and human capital accumulation—rather than through direct capital deepening alone, consistent with an absorptive-capacity interpretation. The estimated structural break in 2003 reflects a broader package of concurrent institutional and macroeconomic reforms; the model cannot isolate the independent contribution of FDI within this composite effect. The results should therefore be interpreted as evidence of long-run reduced-form associations rather than definitive causal effects. Conclusions: Overall, the study contributes to the Morocco-specific literature by integrating simultaneous equations, indirect transmission channels, and structural break analysis within a unified long-run framework. Full article

(This article belongs to the Special Issue Foreign Direct Investment and Investment Policy (3rd Edition))

22 pages, 4170 KB

Open AccessArticle

Energy Transition and Economic Diversification in Egypt: Resolving the Green Dependency Paradox for Long-Term Gains

by Ahmed M. Sedqy, Awadelkarim Elamin Altahir Ahmed, Abdelsamiea Tahsin Abdelsamiea and Ehab Ebrahim Mohamed Ebrahim

Economies 2026, 14(6), 215; https://doi.org/10.3390/economies14060215 - 9 Jun 2026

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Abstract

This study investigates the relationship between renewable energy (RE) expansion and economic diversification in Egypt over 1990–2023 using a nonlinear autoregressive distributed lag (NARDL) framework. Egypt’s fossil fuel share stands at approximately 93% of primary energy supply, yet the country has committed to [...] Read more.

This study investigates the relationship between renewable energy (RE) expansion and economic diversification in Egypt over 1990–2023 using a nonlinear autoregressive distributed lag (NARDL) framework. Egypt’s fossil fuel share stands at approximately 93% of primary energy supply, yet the country has committed to a 42% renewable electricity target by 2035. Despite quadrupling utility-scale RE capacity from 2.8 GW to 11.2 GW between 2015 and 2023, the Economic Diversification Index (EDI) has remained broadly stagnant. The bounds test confirms long-run cointegration (F = 6.760), exceeding small-sample critical values at the 1% level. Long-run estimates reveal that positive RE shocks are associated with lower diversification (θ⁺ = −0.571, p = 0.035) and negative shocks exhibit a statistically similar adverse effect (θ⁻ = −0.271, p = 0.024). Oil rents exhibit a positive long-run association (β = 0.145, p = 0.003). The error-correction term (−0.569) indicates approximately 57% annual adjustment. The Wald test provides marginal evidence against long-run symmetry (F = 2.999, p = 0.097). To complement the Granger causality analysis and address small-sample concerns, we additionally implement the Toda and Yamamoto augmented VAR procedure, which confirms robust unidirectional temporal precedence from LRE to LEDI (χ² = 23.48, p < 0.001) without reverse feedback (χ² = 2.25, p = 0.133). These patterns are interpreted through the lens of the Green Dependency Paradox—a conceptually distinct framework characterized by three mechanisms absent from classical resource curse theory: technology-mediated capital flight, procurement-induced deindustrialization, and policy-reversible lock-in operating under conditions of high import content, absent local content mandates, and fragmented industrial policy coordination. A tri-phase, evidence-grounded policy framework is proposed. All findings are explicitly conditional on Egypt’s current institutional context. Full article

(This article belongs to the Topic Energy Transition: Balancing Economic, Political, and Social Realities)

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22 pages, 2087 KB

Open AccessArticle

Governing Platform Work in the Digital Economy: Comparative Policy Models in Southeast Asia and Pathways to Inclusive Labour Protection

by Nguyen Thi Giang

Economies 2026, 14(6), 214; https://doi.org/10.3390/economies14060214 - 5 Jun 2026

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Abstract

Platform work governance has emerged as a pressing policy challenge in emerging economies, yet comparative scholarship remains dominated by advanced-economy cases and tends to analyse regulatory instruments in isolation rather than as interdependent governance configurations. This article addresses that gap through a theory-informed [...] Read more.

Platform work governance has emerged as a pressing policy challenge in emerging economies, yet comparative scholarship remains dominated by advanced-economy cases and tends to analyse regulatory instruments in isolation rather than as interdependent governance configurations. This article addresses that gap through a theory-informed qualitative comparative documentary analysis of platform work governance across three Southeast Asian countries, Singapore, Malaysia, and Vietnam, selected through a most-different-systems logic to maximise institutional variation. Drawing on a systematically constructed corpus of 127 national policy documents (2015–2024) and a five-dimensional analytical framework—legal classification, social protection, platform accountability, worker representation, and governance capacity—the study tests three falsifiable propositions linking institutional capacity to governance design. The documentary analysis identifies three distinct regulatory pathway designs in the 127-document corpus: managed flexibilisation (Singapore), coordinated transition (Malaysia), and controlled experimentation (Vietnam). Rather than converging on a universal model, platform governance appears to be path-dependent, institutionally mediated, and development-specific, at least in the three cases examined here. The central theoretical contribution is the concept of modular regulation a development-oriented framework proposing that governance configurations, not individual instruments, are the primary unit of cross-national variation in platform labour policy. A four-pillar policy architecture derived from the analysis provides context-sensitive guidance for emerging economies. The principal limitation is the study’s reliance on documentary evidence, which documents governance design but cannot assess implementation quality or worker-level outcomes. Full article

(This article belongs to the Special Issue Emerging Trends in the Digital Economy: Opportunities, Challenges, and Implications for Developing Countries)

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20 pages, 1204 KB

Open AccessArticle

Asymmetric Moderating Role of Geopolitical Risk in the Relationship Between Oil Rents and CO₂ Emissions in Saudi Arabia: An NARDL Approach

by Mohammed Sultan Alsubaie

Economies 2026, 14(6), 213; https://doi.org/10.3390/economies14060213 - 5 Jun 2026

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Abstract

Oil is a major source of income and emissions in the Saudi economy. Thus, this study examines the symmetrical and asymmetrical impacts of oil rents (ORs) on CO₂ emissions using data from 1970 to 2024. For this purpose, the Nonlinear Autoregressive Distributed [...] Read more.

Oil is a major source of income and emissions in the Saudi economy. Thus, this study examines the symmetrical and asymmetrical impacts of oil rents (ORs) on CO₂ emissions using data from 1970 to 2024. For this purpose, the Nonlinear Autoregressive Distributed Lag (NARDL) model is applied, while the conventional ARDL model is used as a baseline model. In addition, the moderating effect of geopolitical risk (GPR) is also tested in the association between OR and emissions. The Environmental Kuznets Curve is validated in both the long run and the short run. Moreover, OR is found to be a major driver of emissions, and positive shocks amplify emissions more than negative shocks reduce them. GPR has a negative relationship with emissions, and the impact of positive shocks in GPR is found to be greater than the impact of negative shocks in GPR. However, the interaction between OR and GPR shows that simultaneous increases in both factors exacerbate emissions, whereas the effect of negative shocks in this interaction is insignificant. Thus, asymmetry is corroborated in all investigated relationships. Moreover, the Wald tests also confirm significant asymmetric relationships. The findings suggest reducing oil dependence and adopting GPR-sensitive planning to mitigate the environmental impacts of the oil sector in line with Vision 2030 and the Sustainable Development Goals (SDGs). Full article

(This article belongs to the Special Issue Economics for a Low Carbon Future: Renewable Energy, Pollution Abatement and Policy Effectiveness)

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24 pages, 1540 KB

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Egypt’s Accession to BRICS+: A Multidimensional Assessment of Economic Integration, Political Relations, and Broader Institutional Impacts

by Amr Feteha Hanafy Mahmoud Sakr, Aya Alhewy, Esraa Rashed, Mohamed Elsayed and Adel Zalouke

Economies 2026, 14(6), 212; https://doi.org/10.3390/economies14060212 - 5 Jun 2026

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Abstract

This study evaluates the implications of Egypt’s accession to the BRICS+ bloc by integrating a Poisson Pseudo-Maximum Likelihood gravity model with a comprehensive PESTEL analysis. Using panel data on Egypt’s bilateral trade with BRICS+ from 2005 to 2024, our econometric results reveal that [...] Read more.

This study evaluates the implications of Egypt’s accession to the BRICS+ bloc by integrating a Poisson Pseudo-Maximum Likelihood gravity model with a comprehensive PESTEL analysis. Using panel data on Egypt’s bilateral trade with BRICS+ from 2005 to 2024, our econometric results reveal that partner-country economic size and cultural proximity are the primary drivers of trade, whereas geographical distance exerts a negligible effect. Furthermore, trade policy variables—specifically tariffs, exchange rate fluctuations, and existing preferential trade agreements—significantly shape trade flows, while logistics performance and general trade openness demonstrate limited short-term impact. Beyond trade mechanics, the PESTEL analysis indicates that while BRICS+ membership enhances Egypt’s strategic autonomy and broadens its political influence, tangible economic gains remain heavily constrained by persistent structural trade imbalances and a lack of export diversification. Although the bloc offers valuable opportunities for human capital development and green infrastructure financing, technological cooperation is hindered by capacity disparities, and the soft-law nature of the alliance limits the enforceability of economic agreements. Ultimately, this study concludes that to maximize the benefits of BRICS+, Egypt must implement sustained structural reforms aimed at upgrading industrial competitiveness, diversifying its export base, strengthening domestic technological capabilities, and embedding itself more deeply within global value chains. Full article

(This article belongs to the Special Issue Institutions, Structural Change, and Inclusive Growth in Developing Economies)

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15 pages, 281 KB

Open AccessArticle

Asymmetric Effect of Trade Openness and Exchange Rate on Economic Expansion

by Thomas Habanabakize and Zandri Dickason-Koekemoer

Economies 2026, 14(6), 211; https://doi.org/10.3390/economies14060211 - 5 Jun 2026

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Abstract

Understanding the complex interplay between trade openness and fundamental economic factors is essential for promoting sustainable economic development. The current study analyses the asymmetric impact of trade openness and exchange rate on South Africa’s economic expansion. The study applied the Nonlinear Autoregressive Distributed [...] Read more.

Understanding the complex interplay between trade openness and fundamental economic factors is essential for promoting sustainable economic development. The current study analyses the asymmetric impact of trade openness and exchange rate on South Africa’s economic expansion. The study applied the Nonlinear Autoregressive Distributed Lag (NARDL) and Error Correction Model (ECM) approaches to time-series data covering 1995–2025. The results confirmed the existence of an asymmetric relationship between trade openness, exchange rate, and economic expansion. While economic growth is positively affected by currency appreciation and improvement in trade openness, both currency depreciation and a decline in trade openness negatively influence long-term economic growth. In contrast, the short-run findings reveal that any shocks in the exchange rate (positive or negative) impede economic growth. However, positive changes in trade openness enhance economic growth, even in the short run. Based on these findings, South African policymakers and monetary authorities should ensure the stability of the country’s currency to maintain benefits from trade openness and exchange-rate expansion. Though domestic markets should remain open to global markets, better management of exports/imports is crucial to prevent the country from being an economic dumping site. Full article

37 pages, 1652 KB

Open AccessArticle

How Do US Business Conditions Respond to Climate Risks?

by Walid M. A. Ahmed, Mohamed A. E. Sleem and Amal Al-Masafri

Economies 2026, 14(6), 210; https://doi.org/10.3390/economies14060210 - 5 Jun 2026

Viewed by 573

Abstract

Climate change has become a major macroeconomic challenge with profound implications for the real economy. This study examines the influence of perceived climate-related risks, proxied by news-based indices capturing media attention to global warming, natural disasters, US climate policy, and international climate summits, [...] Read more.

Climate change has become a major macroeconomic challenge with profound implications for the real economy. This study examines the influence of perceived climate-related risks, proxied by news-based indices capturing media attention to global warming, natural disasters, US climate policy, and international climate summits, on US business activity across short- and long-term horizons. The methodological framework first employs principal component analysis to condense multiple explanatory variables into a single composite factor. A Fourier autoregressive distributed lag model is then adopted to estimate the effects of these forward-looking informational proxies over time. The results reveal marked heterogeneity across perceived climate-related risks and temporal horizons. Global warming news intensity constitutes a persistent impediment, exerting stronger and more durable effects on business activity. Natural disaster media coverage generates sharp short-term deterioration, although its influence fades over longer horizons. News-based transition-risk proxies exhibit a mixed pattern. US climate policy media coverage consistently dampens business conditions, whereas international climate summit coverage plays a comparatively modest role. Our findings underscore that a one-size-fits-all strategy is ineffective. Climate risk management should differentiate between persistent and transitory forces, recognizing that perceived risks may operate through expectations, uncertainty, and sentiment rather than realized damages or enacted policies alone. Full article

(This article belongs to the Special Issue Economics for a Low Carbon Future: Renewable Energy, Pollution Abatement and Policy Effectiveness)

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41 pages, 2618 KB

Open AccessArticle

Geopolitical Shock Transmission in Thailand: A Narrative SVAR–CGE Framework for Macroeconomic and Distributional Analysis

by Montchai Pinitjitsamut

Economies 2026, 14(6), 209; https://doi.org/10.3390/economies14060209 - 5 Jun 2026

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Abstract

Geopolitical shocks affect small open economies through multiple, correlated channels, yet applied CGE analyses typically impose the timing and persistence of those shocks by assumption. This paper develops a two-stage SVAR–CGE framework that links econometrically identified shock dynamics to general-equilibrium welfare evaluation for [...] Read more.

Geopolitical shocks affect small open economies through multiple, correlated channels, yet applied CGE analyses typically impose the timing and persistence of those shocks by assumption. This paper develops a two-stage SVAR–CGE framework that links econometrically identified shock dynamics to general-equilibrium welfare evaluation for Thailand. First, a seven-variable narrative SVAR estimated on monthly data for 2000–2025, identified using the Caldara–Iacoviello Geopolitical Risk Index, is used to recover the persistence of five transmission channels: oil prices, shipping costs, exchange rates, tourism demand, and private investment. Second, these estimated persistence parameters discipline the shock paths in a 22-sector recursive comparative-static CGE model calibrated to Thailand’s 2025 Social Accounting Matrix and simulated over three annual periods using a present-value integral transformation. Under the baseline shock bundle, GDP declines by 3.18% and CPI increases by 5.49%, with welfare losses exhibiting a bimodal distributional pattern—largest for Q1 through consumption-share exposure and for Q4 through tradeable-sector intensity—departing from the monotonically regressive pattern in single-channel analyses. Policy simulations show that targeted transfers calibrated to income rank dominate a universal fuel subsidy on fiscal efficiency, welfare effectiveness (welfare multiplier 1.377 vs. 0.334), and progressivity (1.00 vs. 0.94), at half the fiscal cost (1.48% vs. 2.97% of baseline GDP). An additional bimodal-targeting scenario (S4) at identical fiscal cost underperforms income-rank targeting on all metrics, confirming the latter as the robust second-best instrument under LES preferences with strong MPC heterogeneity. These rankings are supported by the central calibration of a 9-point sensitivity grid, with partial corroboration at off-baseline configurations. The paper contributes by showing that empirically disciplining inter-annual shock dynamics in CGE analysis can materially alter policy conclusions under correlated multi-channel external shocks, shifting the preferred response from sector-specific price subsidies toward demand-side household transfers. Full article

(This article belongs to the Special Issue International Finance and Macroeconomics: Methods, Models and Analysis (2nd Editon))

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