Economies, Volume 6, Issue 3 (September 2018) – 15 articles

We consider a test of expressive voting developed by Brennan and Lomasky (1993). They point out that in presidential elections the probability of a tie, and casting a decisive vote, increases “multi-billionfold” as the election becomes increasingly close. They conjecture that if voters are instrumentally motivated there would be enormous increases in voter turnout for presidential elections as they became close. When they find no consistent relationship between closeness and turnout in presidential elections since 1940, they conclude their test justifies a “decisive rejection of the instrumental voter hypothesis.” As dramatic as such a “multi-billionfold” increase is, we argue it would not motivate voting if an instrumental payoff was the only motivation for doing so. The Brennan–Lomasky test does give the correct result, but not for the reason they emphasize. They do see reasons why voting turnout would be moderated other than the dramatic probability of a decisive vote in close elections. Furthermore, they close their test by indicating that one reason turnout might be higher in close elections is that they are more interesting, which is congenial to an expressive account. We agree. We also argue that the observed tendency for voters to confirm their biases rather than change their minds provides additional support for expressive voting. Full article

Visegrad Group is a group of four countries in Central Europe, namely the Czech Republic, Slovakia, Poland, and Hungary. These countries share not only a similar history, but also similar economic development (measured for example by Gross Domestic Product (GDP)) and geo-political ideas. Nowadays, the economic development of every country and its competitiveness on the world market is supported by the creation of innovation (knowledge-based economy), especially from an Industry 4.0 point of view. The aim of this article is to compare the Visegrad Four (V4) from different perspectives. Firstly, the comparison of GPD development is done, next the analysis of foreign trade. The article presents the results of a comparative analysis of changes in innovativeness and competitiveness of the V4 economies over a period of 5 years. The Global Innovation Index (GII) shows the level of innovation of most countries in the world. Reports publishing GII were established thanks to the cooperation of Cornwall University with INSEAD (fr. Institut européen d'administration des affaires) Business School and World Intellectual Property Organization. The Summary Innovation Index (SII) was used in the European Innovation Scoreboard, as well as the Global Competitiveness Report and Global Competitiveness Index (GCI). The analysis shows that all members of V4 are so called moderate innovators. The Czech Republic begins to diverge from other member states in terms of SII, GII and it has been increasing its GCI as well. Poland occupies one of the last positions in the V4 innovation ranking, where Hungary was the weakest in terms of competitiveness in 2016. However, the mutual connection between GDP and above mentioned indexes shows relatively surprising results. Full article

This paper attempts to test the pass-through of the real exchange rate (RERT) to unemployment in Brazil over the period 1981M1–2015M11 using linear and nonlinear Autoregressive Distributed Lag (ARDL) models. The result of the linearity test suggests that the relationship between RERT and unemployment is linear in the short-run and nonlinear in the long-run. Therefore, using the symmetric ARDL model for the short-run analysis, we find that an increase in the RERT decreases the unemployment rate. The result of the nonlinear ARDL for the long-run analysis shows that the unemployment rate reacts to the RERT appreciations and depreciations differently with depreciations having a strong effect. However, the pass-through of the RERT to unemployment is incomplete both in the short- and long-run. These findings have important policy implications for the designing of appropriate monetary policy in response to a rise in unemployment resulting from a change in the real exchange rate. Full article

The 2017 U.S. Senate Special Election in Alabama, which was decided on 12 December 2017, was one of the most contentious and scandal-laden political campaigns in recent memory. The Republican candidate, Roy Moore, gained notoriety during the 2017 campaign when a number of women alleged to national media that as teenagers they were subject to sexual advances by Moore, who was then in his early 30s and serving as a local assistant district attorney. The process and results of this particular election provide the heretofore unexamined impact of political scandal on localism or friends-and-neighbors voting in political contests. Based on data from the 2017 special election in Alabama, econometric results presented here suggest that a candidate who is embroiled in political scandal suffers an erosion in the usual friends-and-neighbors effect on his or her local vote share. In this particular case, the scandal hanging over Moore eroded all of the friends-and-neighbors effect that would have been expected (e.g., about five percentage points) in his home county, as well as about 40% of the advantage Moore had at home over his opponent in terms of constituent political ideology. Full article

The study presents a general overview of the healthcare facility system of the Slovak Republic, especially in a field of the innovation process of the management information system, with a purpose of analysing the consistency and a unity of the system. The data applied in this analysis is collected as a part of the Gesiti research project. This project is developed for mapping out the management of an information system and information technology in healthcare facilities around the whole world. The main goal of the project is to identify the needs and the demands of the healthcare facilities and to create an integrated research report with a focus on a report research roadmap. The information and communication technologies that are applied are partially unsuitable in the healthcare facilities in the Slovak Republic. Information systems are used without exact plans of their future development. This makes it almost impossible to develop them according to the modern needs and to join them with the other systems that are currently used. The big issues also lie in financing these systems and the personnel responsible for them. The outcome of the analysis should create a direction for financial decision making support and for better management of the healthcare facilities, both in the public and the private sector. Full article

The introduction of information technology into all aspects of our lives has brought forth qualitative and quantitative changes on such a large scale that this process has come to be known as the Fourth Industrial Revolution, or Industry 4.0. The aim of this paper is to fill in the gaps and provide an overview of studies dealing with Industry 4.0 from the business and economic perspectives. A scoping review is performed regarding business, microeconomic and macroeconomic economic problems. Four investigators performed a literature search of the Web of Science, Scopus, and Science Direct. The selected period spanned from 2014 to 2018, and the following keywords were used for the search: Industry 4.0, economics, economic development, production economics, and financial sector. A total of 2275 results were returned. In all, 67 full papers were screened. Results obtained from the relevant studies were, furthermore, divided into the following categories: work and skills development; economy growth and macroeconomic aspect; sustainability; intelligent manufacturing; policy; and change in business processes. Findings show that the aspects of work and skills development, smart technology adoption, intelligent manufacturing, and digitalization are very well described. The government and its policies usually play the role of a needed supportive element. Usually studies lack a coherent view of the topic in question and solve partial questions. Full article

There has been considerable research on the effect of democracy on trade openness since the 1980s when development strategies toward free trade and democracy were rapidly adopted in developing countries. Most studies have focused on Asian, Latin American, and former soviet bloc countries and few studies have focused on Sub-Saharan Africa (SSA). This study is an attempt to fill that gap and uses a gravity model approach to test the effects of democracy in SSA on trade. Our results show that democracy has substantial impact on openness to trade and SSA democratic countries will trade more with other countries irrespective of their level of democracy, when compared to non-democratic countries. The results do not vary much even when we use different sources of democracy variable. Also, democratic countries trade more among each other perhaps due to having a shared business environment. Full article

Inclusive green growth is a sustainable development mode in pursuit of economic growth, social equity, and environmental protection. At present, a large number of articles have discussed the impact of foreign direct investment (FDI) on economic growth, green growth, and inclusive growth. However, the research about inclusive green growth is mainly descriptive. This paper constructs China’s inclusive green growth index and analyzes the impact of FDI on inclusive green growth in China. Specifically, by constructing a super efficiency slacks-based measure model (which has two undesirable outputs: income disparity and environmental pollution) to calculate the Inclusive green growth index, this paper compares and analyses the differences and regional characteristics of China’s total factor productivity, inclusive total factor productivity, green total factor productivity, and inclusive green total factor productivity. We find that total factor productivity is decreasing after considering undesirable output, and the traditional total factor productivity is higher than the inclusive green total factor productivity by 0.112; at the regional level, the trend of the total factor productivity is gradually decreasing from east to west, which indicates that there are regional differences in inclusive green growth of China, and there is room for improvement. Meanwhile, we construct a panel vector autoregressive model (PVAR) and use generalized impulse response function and variance decomposition to analyse the influence of FDI on China’s inclusive green total factor productivity. The results show that FDI is beneficial to the promotion of inclusive green total factor productivity in China, and environmental pollution in the FDI process is an important factor hindering the inclusive green total factor productivity. Full article

To assist with the achievement of the Sustainable Development Goals by 2030, this paper develops a framework to estimate infrastructure financing needs of the Asia-Pacific least developed countries (LDCs), landlocked developing countries (LLDCs), and small island developing States (SIDS) by 2030. The framework takes into account the financing required to close existing infrastructure gaps, keep up with growing demands for new infrastructure, maintain existing infrastructure, and mitigate the vulnerability of infrastructure to climate-related risks. Based on a panel of 71 developing economies from 1990 to 2015 and the application of unit costs to the level of physical infrastructure stock projected to 2030, the required resources are estimated to amount to 8.1% of GDP per annum on weighted average, which exceeds current levels of infrastructure funding of 5–7% of GDP. The paper finds that a large proportion of financing needs in LDCs and SIDS arises from the current infrastructure shortages, particularly in the transport and energy sector, implying that provision of universal access to basic infrastructure services would require large outlays of resources. The results also suggest that LLDCs and some SIDS require over one-third of their spending to be allocated to maintenance and replacement of existing assets, while those in low-lying coastal areas face substantial long-run costs in improving infrastructure to mitigate climate change and protect them against loss and damages caused by extreme weather events. Meeting future infrastructure financing needs will require greater engagement of the private sector and other global and regional initiatives to ensure that sufficient resources can be raised for investment in infrastructure. Full article

One of the basic debates in African development is whether agriculture can be the instrument for the transformation of a rural economy. A common question is whether agricultural policies can provide the impetus to move agriculture in developing economies from subsistence to commercial agriculture. Senegal’s Plan Sénégal Emergent (PSE) provides a data point in this discussion. Senegal and international donors invested in agricultural supply chains starting in 2012 to facilitate the emergence of commercial agriculture for peanuts, rice, and vegetables. This study focuses on these investments in the Senegal River Valley of northern Senegal. The empirical results presented in this study provide evidence that farms in the Senegal River Valley impacted by PSE have moved away from subsistence agriculture by planting more hectares in commercial crops. Full article

The purpose of this paper is to identify the determinants of bank profitability in 13 post-Soviet countries. Within this scope, annual data between 1996 and 2016 is analyzed by using fixed effects panel regression and the Generalized Method of Moments (GMM). It is concluded that loan amount, non-interest income and economic growth are significant indicators of profitability. Moreover, the 2008 global mortgage crisis has a negative influence on bank profitability in post-Soviet countries. According to the estimation results, there is a positive relationship between non-interest income and economic growth with profitability. This result shows that when non-interest income of the banks increases, such as credit card fees and commission, it affects the financial performance of the banks, positively, and contributes to bank profitability. Another result of this study is that economic growth positively influences bank profitability. This result allows us to conclude that higher GDP comes with higher bank profitability for post-Soviet countries. Lastly, there is a negative relationship between loan-to-GDP ratio and profitability of the banks in post-Soviet countries. This means that when the ratio of total loans to GDP increases, it affects financial performance of the banks in a negative way. While considering this result, it is recommended that banks in post-Soviet countries should focus on ways to increase their non-interest income. Additionally, it is also significant for these banks to be careful and risk averse when lending to their customers. Full article

We believe the massive rural electrification, which began in 1992, played a significant role in the varying fertility rates across rural Ghana. Rural households with electricity, tend to have fewer children ever born to a woman than households without electricity. Using control function regressions, we identify the contribution of electrification to the rural-rural variation in fertility by exploiting the exogenous variations in the access rate to electricity at the district-level. Our results indicate that electrification contributes to a fall in fertility among rural women by between one and three children. These results are qualitatively similar to results from our two-stage least squares estimations and counterfactual analysis. Although our results may not reflect what happens in other countries, they suggest that electrification reduces fertility and should be considered when examining the costs and benefits of rural electrification programs in developing countries. Full article

Industry 4.0 is the essence of the fourth Industrial revolution and is happening right now in manufacturing by using cyber-physical systems (CPS) to reach high levels of automation. Industry 4.0 is especially beneficial in highly developed countries in terms of competitive advantage, but causes unemployment because of high levels of automation. The aim of this paper is to find out if the impact of adopting Industry 4.0 on the labor markets of Iran and Japan would be the same, and to make analysis to find out whether this change is possible for Iran and Japan with their current infrastructures, economy, and policies. With the present situation of Iran in science, technology, and economy, it will be years before Iran could, or better say should, implement Industry 4.0. Japan is able to adopt Industry 4.0 much earlier than Iran and with less challenges ahead; this does not mean that the Japanese labor market would not be affected by this change but it means that those effects would not cause as many difficulties as they would for Iran. Full article

The objective of this paper is the assessment of the current state of employment in the midwife profession in the health and social care sector, especially from the viewpoint of quality assurance. Primary research focuses on the level of practical and theoretical knowledge and the skills of graduates within the last 10 years, as well as the forms of development of human resources that healthcare facilities offer for the purposes of supplementing knowledge and developing skills that are lacking. The quantitative research took place in private and public healthcare facilities in the Czech Republic in 2017. The results of the quantitative research show that the offers of workers in the midwife profession in the labor market are slightly insufficient in relation to demand. Research results show that the overall educational level of graduates has improved over time. The research also shows that the greatest deficiencies in terms of missing competencies among new graduates are seen in the area of expertise according to Regulation No. 55/2011 Coll. (newly No. 2/2016), and that what the graduates lack most are skills in communicating with patients. Conversely, current graduates are better equipped with language skills, computer skills and time-management ability. The research also shows that overall practical readiness lags far behind theoretical readiness. Full article

This paper proposes a methodology for calculating the cost of equity for unlisted agricultural companies in Poland. An analysis of a fixed effects panel model was conducted on a sample of 79 agricultural enterprises from the Farm Accountancy Data Network (FADN) field of observation in 2012–2015. The empirical model includes a value of land, agricultural area, depreciation, sale earnings, and payables. The study confirmed that in the valuation of the cost of equity capital in agricultural enterprises, factors that are specific to this sector must be taken into account. As the basic source of production is agricultural land, it must be taken into consideration while estimating the cost of equity capital. This factor was included in the theoretical model. Full article