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Economies, Volume 8, Issue 3 (September 2020) – 25 articles

Cover Story (view full-size image): The article presents the use of the ARDL model to identify military expenditure determinants of the Baltic States. Factors influencing military expenditure include the variables characterizing the economic and the security environment. Conclusions about the analysis of relationships between military expenditure and selected economics and security determinants were confirmed in the cases of government deficit/surplus, GDP per capita, and inflation. The results, therefore, indicate that the military expenditure of Estonia and Lithuania depended on the budget deficit where military expenditure tended to go down in relation to an increasing deficit within the assessed period. As far as Estonia is concerned, the findings about the relationship between the economic position and military expenditure were validated as an increasing economic performance tended to increase military expenditure. View this paper.
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Article
Does Trade Openness Affect Bank Risk-Taking Behavior? Evidence from BRICS Countries
Economies 2020, 8(3), 75; https://doi.org/10.3390/economies8030075 - 14 Sep 2020
Cited by 8 | Viewed by 1812
Abstract
In this paper, we examine the impact of trade openness on bank risk-taking behavior employing a panel dataset of 899 banks from the BRICS (i.e., Brazil, Russia, India, China, and South Africa) countries over the period 2000–2017. We find that higher trade openness [...] Read more.
In this paper, we examine the impact of trade openness on bank risk-taking behavior employing a panel dataset of 899 banks from the BRICS (i.e., Brazil, Russia, India, China, and South Africa) countries over the period 2000–2017. We find that higher trade openness lowers bank risk-taking. Our results are robust when we use alternative proxies of trade openness and bank risk-taking, estimate country-wise regressions, or use alternative estimation methods such as system Generalized Methods of Moments (GMM), fixed effects, pooled Ordinary Least Square (OLS), and Vector Error Correction Model (VECM) models. We also observe higher trade openness decreases bank risk-taking in both the short and long run. Moreover, banks in more open countries perform relatively better during the crisis period further signifying the diversification benefits of openness. Together, our findings imply the beneficial impact of trade openness for financial sector stability. Full article
Commentary
Revisiting the Environmental Kuznets Curve: The Spatial Interaction between Economy and Territory
Economies 2020, 8(3), 74; https://doi.org/10.3390/economies8030074 - 14 Sep 2020
Cited by 16 | Viewed by 1834
Abstract
A complex interplay of socio-ecological drivers of change exists at the different spatiotemporal scales affecting environmental degradation. This is a key issue worldwide and needs to be understood to develop efficient management solutions. One of the most applied theories in the regional analysis [...] Read more.
A complex interplay of socio-ecological drivers of change exists at the different spatiotemporal scales affecting environmental degradation. This is a key issue worldwide and needs to be understood to develop efficient management solutions. One of the most applied theories in the regional analysis is the U-shaped relationship between environmental degradation and the level of income in a given economic system or Environmental Kuznets Curve (EKC). Specifically, the EKC hypothesis underlines the (potentially positive) role of formal responses to environmental degradation grounded on government policies that are usually more ambitious in wealthier economic systems. However, there is a lack of knowledge on the role of space in EKC, arguing that spatial variability in the environment–income relationship may indicate additional targets for integrated socio–environmental policies. We hypothesize that a spatially differentiated response to environmental degradation could better adapt to differentiated local contexts. Therefore, to achieve this goal, we present a multi-scale investigation of degradation processes at the local level, providing a refined knowledge of the environment–economy linkages considering more traditional, cross-country and cross-region exercises. Our results demonstrated that—together with temporal, sectoral, and institutional aspects—space and, consequently, the related analysis’ spatial scales, are significant dimensions in ecological economics, whose investigation requires improvements in data collection and dedicated statistical approaches. Full article
(This article belongs to the Special Issue Current Issues in Natural Resource and Environmental Economics)
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Article
Methodological Aspects of a Comprehensive Analysis of the Fixed Capital of Machine Building Enterprises
Economies 2020, 8(3), 73; https://doi.org/10.3390/economies8030073 - 11 Sep 2020
Cited by 1 | Viewed by 1043
Abstract
The article examines in detail the main areas and methodological features of a comprehensive analysis of movement and use of fixed capital of machine building enterprises. The fixed capital of enterprises is particularly important in the process of economic activity and it requires [...] Read more.
The article examines in detail the main areas and methodological features of a comprehensive analysis of movement and use of fixed capital of machine building enterprises. The fixed capital of enterprises is particularly important in the process of economic activity and it requires considerable investment for development and improvement. The purpose of this study is to develop a comprehensive approach to the quantitative assessment of change in the fixed assets of enterprises, their structure, and efficiency of use. Full article
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Article
The Impact of Special Allocation Fund (DAK) for Health on Achievements of Health Development Performance in Indonesia
Economies 2020, 8(3), 72; https://doi.org/10.3390/economies8030072 - 07 Sep 2020
Cited by 2 | Viewed by 1380
Abstract
In the implementation of decentralization, the Special Allocation Fund (DAK) for health is given to certain areas of Indonesia to support health financing. The performance of this financing, along with national health development priorities’ achievements, is illustrated through the indicators of coverage of [...] Read more.
In the implementation of decentralization, the Special Allocation Fund (DAK) for health is given to certain areas of Indonesia to support health financing. The performance of this financing, along with national health development priorities’ achievements, is illustrated through the indicators of coverage of deliveries in health care facilities (PF) and coverage of first neonatal visits (KN1). Yearly increases in the health DAK budget have not been accompanied by increases in these coverages, and there are still significant disparities between regions. Using secondary data at the district/city level for 2014–2017, this study aims to investigate the impact of health DAK on coverage of PF and KN1. The analytical method deployed is linear regression of panel data using a fixed-effects model. The results show that in the short term, health DAK has a positive but insignificant effect on PF and KN1 coverage. However, health DAK has a positive and significant impact on PF coverage in the second year. Impact on KN1 coverage is unfeasible, even over a period of two years. These results indicate that the processes of planning, budgeting, and administering of health DAK require improvement so that benefits can be felt in the short term through better innovations in health programs. Nevertheless, given that our findings are based on a short period of study, the results from such analyses should consequently be treated with the utmost caution Therefore, future research should target a longer period of data collection to detect more trusty lagged effects and structural breaks of a policy intervention. Full article
(This article belongs to the Special Issue The Relationship between Decentralisation and Economy)
Article
Revenue Sharing and Collusive Behavior in the Major League Baseball Posting System
Economies 2020, 8(3), 71; https://doi.org/10.3390/economies8030071 - 01 Sep 2020
Cited by 1 | Viewed by 1160
Abstract
This paper uses auction theory to explain the unique design of the 1998–2013 posting system agreed to between Major League Baseball and the Japanese Nippon Professional Baseball League that allowed for the transfer of baseball players from Japan to the United States. It [...] Read more.
This paper uses auction theory to explain the unique design of the 1998–2013 posting system agreed to between Major League Baseball and the Japanese Nippon Professional Baseball League that allowed for the transfer of baseball players from Japan to the United States. It has some similarities and many differences from the transfer system used to obtain players in European football. The unique features of the posting system were a compromise between Major League Baseball clubs and Nippon Professional Baseball clubs with the understanding that the former was a collusive group of club owners. Revenue sharing is a method to enforce a system of side payments to collusive bidders. It is then profit-maximizing to have the bidder with the highest net surplus from the player win the auction. Changes to the revenue sharing system used in Major League Baseball reduced the ability of club owners to bid for Japanese players, hence changes to the bidding rules of the posting system coincided at the same time. Full article
(This article belongs to the Special Issue Advances in Sports Economics)
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Article
Impact of Monetary Policy on Private Investment: Evidence from Vietnam’s Provincial Data
Economies 2020, 8(3), 70; https://doi.org/10.3390/economies8030070 - 01 Sep 2020
Viewed by 1901
Abstract
This study sheds new light on the relationship between monetary policy and private investment using Vietnam’s provincial data and a system generalized method of moment (GMM) framework. To capture monetary policy’s effect, different indicators, viz. money supply, domestic credit to the private sector, [...] Read more.
This study sheds new light on the relationship between monetary policy and private investment using Vietnam’s provincial data and a system generalized method of moment (GMM) framework. To capture monetary policy’s effect, different indicators, viz. money supply, domestic credit to the private sector, interest rate and exchange rate are examined. We find that private investment is positively affected by respective monetary policies through broad money, domestic credit and interest rate channels, yet no credible evidence regarding the exchange rate’s effect. In which, such a surprising co-movement between real interest rate and private investment was illuminated through analysis of the economy’s distinctive characteristics over the two development stages (pre- and post-2012). Another notable finding is that economic development prospects of localities, which attract great attention and cause an intense competition between domestic and foreign investors, appear to be a major barrier to investment decisions of private firms. Full article
(This article belongs to the Special Issue The Application of Time Series Analysis in Economic Growth)
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Article
Testing the Ricardian Equivalence Theorem: Time Series Evidence from Turkey
Economies 2020, 8(3), 69; https://doi.org/10.3390/economies8030069 - 21 Aug 2020
Cited by 2 | Viewed by 1668
Abstract
Two of the most common measures adopted by the government to stimulate the economy are increasing government borrowings and implementing tax cuts. These tax cuts are financed through increased debt. According to the Ricardian equivalence theory, the consumers will not change their current [...] Read more.
Two of the most common measures adopted by the government to stimulate the economy are increasing government borrowings and implementing tax cuts. These tax cuts are financed through increased debt. According to the Ricardian equivalence theory, the consumers will not change their current spending when they anticipate a tax increase in the future. In order to pay high taxes in the future, the government should increase its present savings. However, the extent of applicability of Ricardian equivalence could vary across nations. In this context, the present study explores the long-running relationship between domestic borrowing and private savings in Turkey. For this purpose, the researcher collected the data for key variables, gross domestic savings, and government debt, for the period of 1980–2017. The researcher used unit root, cointegration, VECM, and the Granger causality test to examine the relationships among the variables. Apart from this, ARDL regression was used in order to examine the long-term relationships among the variables. The empirical results indicate that there is presence of bidirectional causality, indicating that Ricardian equivalence is applicable in the economy. Households display a rational behavior by increasing their savings during the periods in which high government expenditure is incurred. Full article
(This article belongs to the Special Issue The Application of Time Series Analysis in Economic Growth)
Article
Development of Military Spending Determinants in Baltic Countries—Empirical Analysis
Economies 2020, 8(3), 68; https://doi.org/10.3390/economies8030068 - 20 Aug 2020
Cited by 3 | Viewed by 1860
Abstract
The article presents the use of the ARDL model to identify military expenditure determinants of the Baltic States (Lithuania, Latvia, and Estonia). Factors influencing military expenditure include the variables characterizing the economic environment of the analyzed countries (GDP per Capita, Government Deficit/Surplus, General [...] Read more.
The article presents the use of the ARDL model to identify military expenditure determinants of the Baltic States (Lithuania, Latvia, and Estonia). Factors influencing military expenditure include the variables characterizing the economic environment of the analyzed countries (GDP per Capita, Government Deficit/Surplus, General Government Gross Debt, Inflation), and the security environment measured by Risk of Foreign Pressures, Risk of Cross-border Conflict, and Democratic Accountability. General conclusions about the analysis of relationships between the military expenditure level and selected economics and security determinants were confirmed in the cases of Government Deficit/Surplus, GDP per Capita and Inflation. The results, therefore, indicate that the military expenditure of Estonia and Lithuania depended on the state budget deficit where military expenditure tended to go down in relation to an increasing deficit within the assessed period. As far as Estonia is concerned, the findings about relationship between the economic position and military expenditure was validated as an increasing economic performance tended to increase military expenditure. Full article
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Review
The Effects of Pension Information on Individuals’ Economic Outcomes: A Survey
Economies 2020, 8(3), 67; https://doi.org/10.3390/economies8030067 - 20 Aug 2020
Cited by 1 | Viewed by 1627
Abstract
This paper provides an overview of a wide array of research investigating the effects of pension information on different individuals’ economic outcomes. While many studies show that information provision increases knowledge, the evidence is mixed regarding its effects on behavior. Nevertheless, we draw [...] Read more.
This paper provides an overview of a wide array of research investigating the effects of pension information on different individuals’ economic outcomes. While many studies show that information provision increases knowledge, the evidence is mixed regarding its effects on behavior. Nevertheless, we draw some conclusions about the impact of pension information on three major economic outcomes, namely, retirement planning, choices pertaining individuals’ labor supply, and savings decisions. We also highlight that the lack of knowledge prevalently hits the most vulnerable individuals in the society, such as women. As a consequence, not providing sufficient information could contribute to widening the gender gap in pensions. Full article
(This article belongs to the Special Issue Labor and Development)
Article
Anti-Tanking Pair Matching before an Elimination Phase of a Two-Phase Tournament
Economies 2020, 8(3), 66; https://doi.org/10.3390/economies8030066 - 17 Aug 2020
Cited by 3 | Viewed by 1254
Abstract
Perverse incentives are ubiquitous in different economic settings. In sports, they often take the form of temptation to deliberately lose matches (the phenomenon known as tanking or sandbagging). In practice, there were even such pathological situations as when a soccer team intentionally scored [...] Read more.
Perverse incentives are ubiquitous in different economic settings. In sports, they often take the form of temptation to deliberately lose matches (the phenomenon known as tanking or sandbagging). In practice, there were even such pathological situations as when a soccer team intentionally scored an own goal. We show how and when the temptation is generated by the current pair matching method, the one applied after the first phase of many popular tournaments, including the most prestigious soccer championships. If the organizers of important sporting contests do not introduce any organizational innovations, they risk serious match-fixing scandals. We introduce an alternative procedure and show that its practical implementation could radically mitigate the risk. We perform a comparative analysis of the methods. We analyze the format “Winners and Runners-up Advancing from Two Adjacent Groups”, particularly its FIFA World Cup variant. In order to quantify the benefits of switching from the current method to the proposed one, we refer to simulation results. The expected decrease in temptation probability is about 83% and could be even about 90% if we additionally implement the suggested scheduling innovation. Full article
(This article belongs to the Special Issue Advances in Sports Economics)
Article
Does Financial Integration Enhance Economic Growth in China?
Economies 2020, 8(3), 65; https://doi.org/10.3390/economies8030065 - 13 Aug 2020
Cited by 4 | Viewed by 1759
Abstract
China is a fascinating country in Asia, the second-largest economy in the world, with incredible economic growth and development in the last two decades. In addition, China has dramatically enjoyed a disciplined and successful financial integration with the region and the world in [...] Read more.
China is a fascinating country in Asia, the second-largest economy in the world, with incredible economic growth and development in the last two decades. In addition, China has dramatically enjoyed a disciplined and successful financial integration with the region and the world in the same period. As such, it is interesting to examine a potential link between economic growth and financial integration in this most populous country. This paper was conducted to identify whether financial integration fosters Chinese economic growth. The Auto-Regressive Distributed Lags (ARDL) model is selected, utilizing the most updated data on a globalization (or integration) index. Two distinct aspects of financial integration, the de facto (proxied for economic activities) and the de jure (proxied for the Government policies leading to integration), are considered in this paper. We apply an econometric technique, using yearly aggregated data, to examine a long-term co-integration and a causal relationship between financial integration and economic growth in China. Findings from this paper indicate a long-term co-integration between financial integration de facto and economic growth in China. The bidirectional causality between financial integration and economic growth in China is also confirmed using the Granger causality test. Full article
(This article belongs to the Special Issue Anti-Globalization vs. Regional Integration)
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Article
Effect of the Great Crisis on Sectoral Female Employment in Europe: A Structural Decomposition Analysis
Economies 2020, 8(3), 64; https://doi.org/10.3390/economies8030064 - 12 Aug 2020
Cited by 5 | Viewed by 1548
Abstract
Sectoral gender segregation in labor markets is a fact. This paper examines the female distribution of employment by sectors in the EU 28, thereby contributing to the literature on the effects of the recession and subsequent austerity measures on female employment. An input-output [...] Read more.
Sectoral gender segregation in labor markets is a fact. This paper examines the female distribution of employment by sectors in the EU 28, thereby contributing to the literature on the effects of the recession and subsequent austerity measures on female employment. An input-output model and structural decomposition analysis are used to assess the contribution of factors such as technological change, productivity change and final demand change. The latter had a positive impact over the period of analysis by creating new job opportunities for women, especially in the public service sectors, whereas productivity growth had a negative impact, particularly in the private service sectors. These changes have resulted in a reduction in the level of gender sectoral segregation; change in household expenditure again is the main driver of this reduction. Changing trends in labor requirements and gross capital formation have the opposite effect; thus, these trends increase the level of sectoral segregation. Full article
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Article
Poverty Alleviation and Microfinance for the Economy of Pakistan: A Case Study of Khushhali Bank in Sargodha
Economies 2020, 8(3), 63; https://doi.org/10.3390/economies8030063 - 10 Aug 2020
Cited by 2 | Viewed by 2387
Abstract
Poverty is a universal reality, and no one can deny the omnipresence of it all over the world. It is considered as the most harmful economic and social problem of human beings since their creation. It affects individuals as well as society as [...] Read more.
Poverty is a universal reality, and no one can deny the omnipresence of it all over the world. It is considered as the most harmful economic and social problem of human beings since their creation. It affects individuals as well as society as a whole in a very destructive way, and it is considered that poverty is the mother of all human rights violations. Perhaps no one would argue against the notion that microfinance can be a very useful apparatus in human, social, economic, political and national development. Microfinance has been established to fill the gap of a missing credit market for the poor. Among all other anti-poverty strategies, it has become one of the most important and successful tools for poverty elimination throughout the world. In this study, we investigate the impact of microfinance on poverty alleviation for the economy of Pakistan. The literacy is very poor for the area of Pakistan, so our research will help policy makers in making the right decisions in order to help the people that are living below the poverty line. Primary data of 300 households from Khushhali Microfinance Bank Limited were collected. The findings reveal that microfinance imparts a vital role in poverty eradication where the poverty level has decreased from 42.67% in comparison household (CHH) to 29.33% in the program household (PHH). Finally, it unveils the fact that there is a negative association between the provision of microfinance and poverty level of the household. The availability of micro financing facilities to the poor has declined the poverty rate from 42.67 percent to 29.33 percent. The Logistic Regression model implies that poverty has a negative association with the duration of microfinance, education and existence of a market in the locality, whereas it is positively related to family size and gender of the respondent. Full article
(This article belongs to the Special Issue The Theory Applications of Finance and Macroeconomics)
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Article
The Impact of Russia’s Import Embargo on the EU Countries’ Exports
Economies 2020, 8(3), 62; https://doi.org/10.3390/economies8030062 - 01 Aug 2020
Cited by 3 | Viewed by 2200
Abstract
Political unrest inevitably has consequences for a national economy. International trade in a globalised world has great importance for countries. Unfortunately, due to various political events, countries apply some restrictions to each other. In 2014, Western countries imposed sanctions on trade with Russia, [...] Read more.
Political unrest inevitably has consequences for a national economy. International trade in a globalised world has great importance for countries. Unfortunately, due to various political events, countries apply some restrictions to each other. In 2014, Western countries imposed sanctions on trade with Russia, due to the annexation of Crimea. As a response, Russia announced an embargo on importing of some goods from European and North American countries, as well as Australia. The current study investigates the economic impact on EU countries due to the mentioned embargo. The EU countries were grouped according to the average for 1998–2018 exports of products to Russia using a cluster analysis. After the clustering, the gravity model was employed to develop the equations representing the international trade between each cluster and Russia. Although Russia declared an embargo on countries associated with the same group of goods, the economic impact on their economies was different. This study has a couple of limitations. The research reflects only the impact of the embargo on exports regardless of some possible indirect effects; the study assesses the export of all sectors due to limited data; and because the restrictions are applied only to the food sector, the research shows only relative changes in exports. Full article
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Article
New Evidence Using a Dynamic Panel Data Approach: Cereal Supply Response in Smallholder Agriculture in Ethiopia
Economies 2020, 8(3), 61; https://doi.org/10.3390/economies8030061 - 30 Jul 2020
Viewed by 1640
Abstract
Increasing agricultural production is essential to improving food availability and farm household incomes in developing economies. This study investigated the dynamic supply responses of major cereal crops to price and nonprice factors in Ethiopia using the Ethiopian Rural Household Survey (ERHS) panel dataset [...] Read more.
Increasing agricultural production is essential to improving food availability and farm household incomes in developing economies. This study investigated the dynamic supply responses of major cereal crops to price and nonprice factors in Ethiopia using the Ethiopian Rural Household Survey (ERHS) panel dataset from 1994 to 2009. According to the Nerlovian expectation and adjustment approach in conjunction with the system GMM (generalized method of moments) estimator, both the planted areas and produced yields of major crops (teff, wheat, and barley) are influenced by price and nonprice factors in Ethiopia. The supply of major cereal crops is affected positively by their own prices and negatively by the prices of substitute crops. Nonprice factors such as education, farm size, fertilizer, land quality, and precipitation also affect supply of major cereals. Both the short-term and long-term acreage and yield response elasticities of teff and barley are positive. Moreover, the adjustment coefficients are positive for teff, barley, and wheat. The results suggest that Ethiopian farmers are capable of analyzing market signals and responding positively to price increases of staple crops. The findings also imply that the Ethiopian agricultural sector has been responsive to the cereal price increases observed since 2006. The remarkable growth of Ethiopian agriculture over recent decades is partly explained by the increase in agricultural prices. This study recommends that a fine-tuned balance between government interventions and market solutions is important, in addition to improving farmers’ agronomic practices, for increasing agricultural production. Full article
(This article belongs to the Special Issue Current Issues in Natural Resource and Environmental Economics)
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Article
Pandemic Preparedness and Public Health Expenditure
Economies 2020, 8(3), 60; https://doi.org/10.3390/economies8030060 - 27 Jul 2020
Cited by 16 | Viewed by 4180
Abstract
The motive behind this article is investigating alternative indicator measures for the effectiveness of public health expenditure on pandemic preparedness, to explain the reasons behind country variations in containing crises such as Coronavirus disease 2019 (COVID-19). The purpose is to analyse the shortcomings [...] Read more.
The motive behind this article is investigating alternative indicator measures for the effectiveness of public health expenditure on pandemic preparedness, to explain the reasons behind country variations in containing crises such as Coronavirus disease 2019 (COVID-19). The purpose is to analyse the shortcomings in the relationship between global public health expenditure and pandemic preparedness. The research methodology includes a macro-analysis of global health spending patterns, empirical and theoretical literature on global health expenditure, global health security indexes, and country case studies pre- and post-crisis. The results show that gaps in pandemic preparedness were already existent pre-COVID-19, calling for a new mind-set in the way public health expenditure is structured. Healthcare sustainability indicators should transition from traditional measures such as economic growth rates, public health expenditure rates, revenue coming from the healthcare sector, and rankings in the global health security index, to new awareness indicators. Public health expenditure, a facilitator of pandemic preparedness, coupled with the resilience of healthcare systems, could be used in conjunction with the traditional factors, along with the time element of a quick response to pandemic through preparedness schemes, the progress towards achieving sustainable health through the implementation of the United Nations Sustainable Development Goals, and investment in national healthcare capital to ensure efficient resource allocation. The policy recommendations are the restructuring of public expenditure to expand the absorptive capacities of healthcare institutes, eventually leading to sustainability and universal health insurance. Full article
(This article belongs to the Special Issue The Economics of Health Outbreaks and Epidemics)
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Article
Internal Migration in Spain: A Complementary Approach
Economies 2020, 8(3), 59; https://doi.org/10.3390/economies8030059 - 16 Jul 2020
Cited by 3 | Viewed by 2063
Abstract
This study examines the determinants of internal migration of working-age population among provinces in Spain in the aftermath of the economic crisis. It pays special attention to two features of migration that have not been sufficiently studied so far: (a) Distance, namely the [...] Read more.
This study examines the determinants of internal migration of working-age population among provinces in Spain in the aftermath of the economic crisis. It pays special attention to two features of migration that have not been sufficiently studied so far: (a) Distance, namely the differences between the determinants that are behind short-distance and long-distance movements; (b) Age, that is to say, whether young and adult migrants hold different motivations. To accomplish this aim, an extended model is used in which, apart from a variable capturing distance, both economic and non-economic (amenities) variables are included. Findings reveal that both economic factors (mainly unemployment and income) and amenities (measured by a climate condition variable) are more important for adult population and long-distance movements than for young population and movements between neighbouring provinces. Additional findings seem to convey the message that, as far as housing prices are concerned, they play a significant role when migration takes place between neighbouring provinces, but lose importance when all migrations are studied together. Moreover, the paper’s results do not cast, as expected, any doubt on the importance of distance regardless of the type of migration or age of the migrant. Full article
(This article belongs to the Special Issue Migration and Economic Development)
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Article
Macroeconomic Growth in Vietnam Transitioned to Market: An Unrestricted VES Framework
Economies 2020, 8(3), 58; https://doi.org/10.3390/economies8030058 - 16 Jul 2020
Cited by 1 | Viewed by 1909
Abstract
The Vietnamese economy has increased at high speed over the transformation decades; however, most recent studies on the economic growth of this country used the Cobb-Douglas or CES (Constant Elasticity of Substitution) production functions, which are unable to explore the relationship between the [...] Read more.
The Vietnamese economy has increased at high speed over the transformation decades; however, most recent studies on the economic growth of this country used the Cobb-Douglas or CES (Constant Elasticity of Substitution) production functions, which are unable to explore the relationship between the elasticity of capital-labour substitution and development process, and hence, are not relevant to accessing a dynamic economic system. For that reason, this study is conducted to specify an unrestricted VES (Variable Elasticity of Substitution) production function in a one-sector growth model of Vietnam, highlighted by two characteristics: successful transition from plan to market and rapid progress. The VES is given preference over the CES and the Cobb-Douglas having the elasticity of substitution between capital and labour varying with economic development. By employing a Bayesian nonlinear regression through MCMC methods, the study reported the following findings: (1) the above-unity variable elasticity of capital-labour substitution in an aggregate unrestricted VES function specified for Vietnam shows that the model generates the possibility of endogenous economic growth; (2) the capital share tends to increase, while the labour share faces a downward trend along with the development of Vietnam; (3) the VES is empirically proven through a Bayes factor test to be superior to the CES and Cobb-Douglas for analysis of the growth process of Vietnam, an emerging transition economy. Full article
(This article belongs to the Special Issue The Application of Time Series Analysis in Economic Growth)
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Article
How Heterogeneous Are the Determinants of Total Factor Productivity in Manufacturing Sectors? Panel-Data Evidence from Vietnam
Economies 2020, 8(3), 57; https://doi.org/10.3390/economies8030057 - 06 Jul 2020
Cited by 3 | Viewed by 1955
Abstract
One of the remaining challenges in explaining differences in total factor productivity is heterogeneity between sectors and within a specific sector in terms of labor and capital. This paper employs the generalized method of moments (GMM) to identify factors that affect total factor [...] Read more.
One of the remaining challenges in explaining differences in total factor productivity is heterogeneity between sectors and within a specific sector in terms of labor and capital. This paper employs the generalized method of moments (GMM) to identify factors that affect total factor productivity across 21 manufacturing sectors and to clarify the heterogeneous determinants of total factor productivity within manufacturing sectors for the period 2010–2015. Our estimations show that large firms have significantly greater total factor productivity levels than small firms in some fragmentations of firms in terms of both labor and total capital and in some manufacturing sectors. It is suggested that firm characteristics should be considered by the government in establishing relevant policies for enhancing firm productivity. Full article
(This article belongs to the Special Issue The Application of Time Series Analysis in Economic Growth)
Article
Trade-Offs in Competitive Transport Operations
Economies 2020, 8(3), 56; https://doi.org/10.3390/economies8030056 - 03 Jul 2020
Cited by 2 | Viewed by 2155
Abstract
One of the goals of developing a transport corridor is to promote socio-economic development by improving connectivity and sustainable transport operations, which largely depends on the operational strategy. Trade-off policies can be important tools for gaining the competitive advantage of road transport corridors, [...] Read more.
One of the goals of developing a transport corridor is to promote socio-economic development by improving connectivity and sustainable transport operations, which largely depends on the operational strategy. Trade-off policies can be important tools for gaining the competitive advantage of road transport corridors, and thus, help facilitate sustainable growth and welfare. This article uses a case-based approach to observe the trade-offs in the first phase of transport infrastructure development, and then, in the second stage, further explores the trade-off variables in the transport operations strategy under the China-Pakistan Economic Corridor (CPEC). The results from the three cases of the parallel route system of the CPEC indicate that trade-off is an easily understandable and applicable method, which can foresee the operational gains or compromises for significant welfare of the regions. The implications of the trade-off are two fold, first is the “importance” of the trade-off, which is related to its impact on operational competitiveness. The other is the “sensitivity” of the trade-off, in terms of the change that will be caused to one variable when changing the other. The trade-off concept can be used for several landlocked transport corridors to achieve a competitive edge in transit trade. Full article
(This article belongs to the Special Issue Asset Pricing, Investment, and Trading Strategies)
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Article
Beyond the EU Structural Funds’ Absorption Rate: How Do Regions Really Perform?
Economies 2020, 8(3), 55; https://doi.org/10.3390/economies8030055 - 01 Jul 2020
Cited by 1 | Viewed by 2083
Abstract
Although the EU structural funds aim to alleviate disparities through supporting regional development, their impact on local economies and societies is considered as uneven. As existing studies explore the absorption rate of the EU share of contribution as a point-in-time indicator at the [...] Read more.
Although the EU structural funds aim to alleviate disparities through supporting regional development, their impact on local economies and societies is considered as uneven. As existing studies explore the absorption rate of the EU share of contribution as a point-in-time indicator at the end of the policy cycle, evidence about regional co-finance and the factors dynamically affecting absorption performance is lacking. To that end, this paper aims to provide a new longitudinal investigation of the absorption time series and develop an original indicator, supported by a statistical error analysis, for offering a transparent view of the total funds’ absorption. The analysis highlights that undesired regional strategies due to low administrative capacity may increase the absorption rate, though without supporting regional growth. The proposed approach could further facilitate the equitable allocation of political accountability regarding the structural funds’ absorption to the EU and the regions. Overall, it is anticipated that this research will support the EU in monitoring actual regional performance for prompting local managing authorities to improve their administrative capacity. Full article
(This article belongs to the Special Issue The Relationship between Decentralisation and Economy)
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Article
Trade Balance Effects on Economic Growth: Evidence from European Union Countries
Economies 2020, 8(3), 54; https://doi.org/10.3390/economies8030054 - 01 Jul 2020
Cited by 6 | Viewed by 2855
Abstract
A growing number of recent research analyse the trade balance impact on economic growth. However, ambiguous results of studies imply the need for the research as the deteriorating trade balance hinders economic growth. This research aims to investigate the impact of the trade [...] Read more.
A growing number of recent research analyse the trade balance impact on economic growth. However, ambiguous results of studies imply the need for the research as the deteriorating trade balance hinders economic growth. This research aims to investigate the impact of the trade balance on economic growth as well as to evaluate it during the periods of trade deficit. Our estimations are based on the European Union (EU) 28 countries panel data over the period of 1998–2018, using the OLS method of multivariate regression analysis with fixed effects and focusing on two strategies: (i) including all trade balance periods, and (ii) adding deficit dummy variable seeking to evaluate whether during deficit periods we can find different and significant effect on economic growth. Evaluating all trade balance periods, the obtained results indicate the negative and lagging impact of the trade balance on economic growth, and no significant differences of the impact were identified during the deficit periods. The deterioration of trade balance reduces average economic growth and from linear relationship evaluation, we can state that it does not matter whether it starts from trade deficit or surplus result. The results obtained may also obscure the possibility of a non-linear effect, which would suggest a stronger negative impact on economic growth when the trade balance deteriorates in the presence of a large trade deficit. When discussing directions for further research it would make sense to consider other factors, such as the size of the deficit and its permanence. Full article
(This article belongs to the Special Issue The Theory Applications of Finance and Macroeconomics)
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Article
The Impacts of Chinese FDI and China–Africa Trade on Economic Growth of African Countries: The Role of Institutional Quality
Economies 2020, 8(3), 53; https://doi.org/10.3390/economies8030053 - 29 Jun 2020
Cited by 11 | Viewed by 4188
Abstract
While there is a consensus on the expanding importance of the China–Africa economic relationship, there is much more debate on how to portray the relationship. Thus, this study is aimed to examine the impacts of the China–Africa trade and Chinese foreign direct investment [...] Read more.
While there is a consensus on the expanding importance of the China–Africa economic relationship, there is much more debate on how to portray the relationship. Thus, this study is aimed to examine the impacts of the China–Africa trade and Chinese foreign direct investment (FDI) on the growth of African countries controlling the mediating role of institutional quality. The two-step system Generalized method of moments (GMM) model is applied using robust data for the period of 2003–2017. Drawing on complementary theoretical perspectives, this study took into account the conditional effect of China–Africa trade and Chinese FDI subject to the institutional quality of African countries and the interdependence of China–Africa trade and Chinese FDI to African countries. The benign impacts of the China–Africa trade and Chinese FDI on economic growth to African countries remain contingent upon appropriate policy action to improve the institutional quality of African countries and the synergies between the China–Africa trade and Chinese FDI to African countries. Full article
(This article belongs to the Special Issue FDI (Foreign Direct Investment) and Economic Growth)
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Article
Exploring of a Small-Scale Tourism Product under Economic Instability: The Case of a Greek Rural Border Area
Economies 2020, 8(3), 52; https://doi.org/10.3390/economies8030052 - 28 Jun 2020
Cited by 7 | Viewed by 2272
Abstract
The Regional Unit of Kastoria is a rural area in Northwestern Greece, located on the borderline with Albania. Kastoria city, the capital and the largest city of the Kastoria Regional Unit, is known for the production of high-quality fur products. The fur industry [...] Read more.
The Regional Unit of Kastoria is a rural area in Northwestern Greece, located on the borderline with Albania. Kastoria city, the capital and the largest city of the Kastoria Regional Unit, is known for the production of high-quality fur products. The fur industry has faced a marked crisis from the 1980s onwards, which has contributed to pushing the local economy towards the development of tourism. However, the tourism industry, developed during the last 20 years, has an undefined character. Specifically, tourism is characterized as small-scaled owing to the limited number of mainly domestic tourists, who, in combination with the economic crisis of the last decade, slowed down the initial accelerated trend. The purpose of this paper is to capture the opinions and attitude of Kastoria visitors towards tourism, as well as to illustrate the changes as a consequence of the economic crisis. In this context, a survey was carried out in two periods (in 2008 at the beginning of economic crisis and in 2017 at the end of this crisis) using a structured questionnaire and with a sample of 232 visitors in total. Our findings are highlighted in an effort for policy makers and marketing planners to formulate appropriate marketing strategies and to reconstruct and promote the local touristic product and attract visitors in these border areas. Full article
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Article
Herbal-Based Cosmeceuticals and Economic Sustainability among Women in South African Rural Communities
Economies 2020, 8(3), 51; https://doi.org/10.3390/economies8030051 - 27 Jun 2020
Cited by 2 | Viewed by 2115
Abstract
Access to natural resources in the immediate environment is an essential factor that contributes to livelihood in many rural areas. In the current study, we explored the economic potential(s) of the natural herbal-based cosmetic and cosmeceutical enterprise for the welfare of the Vhavenda [...] Read more.
Access to natural resources in the immediate environment is an essential factor that contributes to livelihood in many rural areas. In the current study, we explored the economic potential(s) of the natural herbal-based cosmetic and cosmeceutical enterprise for the welfare of the Vhavenda women. A purposive sampling technique was used to collect data from 79 Vhavenda women and analysed with descriptive and inferential statistics (Tobit regression) as well as budgeting analysis. The majority (61%) of the participants were married with an average household size of five members. Additionally, 39% of the participants were already ageing with an average age-group of 56–70 years. The majority (44%) of the participants were not formally employed while the monthly average total income of R1841.01 (107.37 USD) was recorded with an average per capital expenditure of R1438.42 (83.89 USD). A budgeting cost ratio of 1.28 was recorded, which indicates that for every R1.00 (0.057 USD) invested in the herbal-based cosmetic and cosmeceutical production, an expected return of R1.28 (0.073 USD) was forecasted. Tobit regression results indicated that the determinants of the income of participants were experience level (p < 0.01), religion affiliation (p < 0.05) and consumption expenditure (p < 0.01) among others. Thus, a conscious, introspective and intentional look into this marginalised herbal-based cosmetic and cosmeceutical enterprise as a panacea for improved income and welfare of rural South Africans should be considered. Full article
(This article belongs to the Special Issue Current Issues in Natural Resource and Environmental Economics)
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