Economies

The author introduces an approach for a consensual economic policy for a group of rapidly developing countries as a response to contemporary global economic challenges. This article reconsiders the problems of international economic integration in the period of deglobalization. The author puts forward the hypothetical model of a debt market of BRICS-bonds. The paper discusses approaches to servicing government debt and budget deficits in the BRICS based on the shared framework of financial and economic institutions. The author formulates the possibilities of a shared economic policy in the BRICS that could help overcome the consequences of the crisis caused by COVID-19. The author proposes a unique budget deficit optimization approach for the BRICS. The article evaluates the options for automatic and state-run budget deficit services and identifies the optimal level of taxation and the average weighted tax rate for the BRICS. The author investigates the potential of the BRICS to use financial resources of the shared debt market based on the gradualist approach for a consensual economic policy. Full article

Conceptual and applied studies assessing the linkage between economic freedom and corruption expect that economic freedom boosts economic growth, improves income, and reduces levels of corruption. However, most of them have concentrated on developed and developing groups, while the Association of Southeast Asian Nations (ASEAN) countries have drawn much less attention. Empirical findings are most often conflicting. Moreover, previous studies performed rather simple frequentist techniques regressing one or some freedom indices on corruption that do not allow for grasping all the aspects of economic freedom as well as capturing variations across countries. The study aims to investigate the effects of ten components of economic freedom index on the level of corruption in ten ASEAN countries from 1999 to 2018. By applying a Bayesian hierarchical mixed-effects regression via a Monte Carlo technique combined with the Gibbs sampler, the obtained results suggest several findings as follows: (i) In view of probability, the predictors property rights, government integrity, tax burden, business freedom, labor freedom, and investment freedom have a strongly positive impact on the response perceived corruption index; (ii) Government spending, trade freedom, and financial freedom exert a strongly negative effect, while the influence of monetary freedom is ambiguous; and (iii) There is an existence of not only random intercepts but also random coefficients at the country level impacting the model outcome. The empirical outcome could be of major importance for more efficient corruption controlling in emerging countries, including ASEAN nations. Full article

In this paper, we seek to establish ‘sequencing economics’ in an architectural theory on agglomerations that are comprised of various segments, such as infrastructure, institutions and human resources. The sequencing of such segments is based on a causal chain, with the notion of ‘economies of sequence’ regarded as a tool with which to efficiently sequence the segment construction, as defined by Granger causality relationships. The use of ‘new economic geography’ for cases in which such economies of sequence were applied to the information and communication technology (ICT) industry, the paper concludes that as the starting conditions for the sequencing of the segments of the agglomeration, the value of the share of skilled workers exceeds the threshold value at which the symmetric equilibrium shifts to an agglomeration equilibrium. The results of Granger causality testing identified that an increase in research expenses Granger-causes an increase in the number of patents, and an increase in the number of patents Granger-causes an increase in value added. Based on our results, we conclude that when sequencing the segments of an agglomeration in the ICT industry, the development and invitation of researchers is a precondition, and that the procurement of research funds for patent development precedes any increase in patents. Subsequently, the procurement of funds is necessary for the development of products based on the patents. Full article

Albania has experienced a rapid transition from a centrally planned economy to a mixed economy since the fall of communism in 1989. Policy changes, trade liberalization, and privatization have come about at a rapid pace, allowing foreign direct investment (FDI) and international trade to become key components of Albania’s economy. Against this backdrop, this study investigates the relationships among FDI, trade, and economic growth in Albania. Annual time-series data were obtained from the World Bank. Then, the following econometric tests were performed on the variables representing FDI inflows, exports, and GDP as proxies for FDI, trade, and economic growth: the unit root test; the unit root test with a structural break; Johansen cointegration analysis; the error correction model; and the Granger causality test. The results revealed a long-term relationship between FDI, trade, and economic growth. The Granger causality tests found unidirectional causality. Economic growth brought about exports and FDI in the short term but not vice versa. In conclusion, policymakers need to design policies that promote technology-based, export-promoting FDI to meet the needs of the economy and develop specialized sectors that are competitive in the global market. Furthermore, the salient takeaway is that the penetration of export markets should be promoted as much as the furtherance of FDI. Full article

The importance of a sound and stable financial system and by extension economic stability was brought to the fore by the global financial crisis (GFC). The economic and social costs of the GFC have renewed the commitment of stakeholders in the financial sector including central banks to develop instruments and methodologies that will be useful in monitoring financial stress within the financial system and the real economy. This study contributes to the growing literature by developing a financial stress indicator for the South African financial market. The financial stress indicator (FSI) is a single aggregate indicator that is constructed to reflect the systemic nature of financial instability and also to measure the vulnerability of the financial system to both internal and external shocks. Using the principal component analysis (PCA), the results show that financial stress can be identified by the financial stress indicator. Furthermore, using a recursive Vector Autoregression (VAR) model to estimate the impact of financial stress on output and investment, the result shows that financial stress has a negative impact on economic growth and investment, though not immediately. FSI is very useful for gauging the effectiveness of government measures to mitigate the impact of financial stress. Concerted effort to stimulate investment and domestic production by relevant stakeholders is necessary to mitigate the impact of financial stress. This will go a long way to alleviating the impact of the financial stress on industrial production, employment and the economy at large. Full article

The COVID-19 pandemic has forced governments around the world to implement unprecedented lockdowns, mandating businesses to shut down for extended periods of time. Previous studies have modeled the impact of disruptions to the economy at static and dynamic settings. This study develops a model to fulfil the need to account for the sustained disruption resulting from the extended shutdown of business operations. Using a persistent inoperability input-output model (PIIM), we are able to show that (1) sectors that suffer higher levels of inoperability during quarantine period may recover faster depending on their resilience; (2) initially unaffected sectors can suffer inoperability levels higher than directly affected sectors over time; (3) the economic impact on other regions not under lockdown is also significant. Full article

Accelerating demand for energy and its consumption has become a credible threat to the sustainable ecosystem due to the exploitation of scarce natural resources and environmental hazards. The adoption of renewable energy sources for sustainable development has been gaining traction among researchers and practitioners alike. Considering its hot climate, Pakistan has a huge potential to meet its energy requirements by tapping into renewable energy resources, especially through the use of solar photovoltaic (SPV) technologies. However, the adoption rate of this technology remains still quite scant among consumers. In this regard, the present research explores the factors that affect households’ purchase intention of SPV technology in Pakistan. The study has developed a comprehensive research framework by decomposing the technology acceptance model (DTAM) into second-order sub-constructs. Afterward, Structural equation modeling (SEM) was employed to analyze the data by decomposing perceived usefulness (PU) into social, economic, and environmental usefulness and perceived ease of use (PEOU) into discomfort and insecurity and to assess their cumulative effects on consumer attitude. Moreover, the moderating role of policy and propaganda was also investigated. Empirical results assert that PU and PEOU positively and significantly shape the consumer attitude toward SPV adoption. Subsequently, consumer attitude has a positive and significant impact on the actual purchase intention of SPV technology. Furthermore, the moderating role of governmental policy and propaganda between the consumer attitude and actual purchase intention was also confirmed. The policy implications of these results are discussed. Finally, the limitations and future directions of the research are also elaborated. Full article

Russia’s international comportment and geostrategic moves, particularly the invasion of Ukraine and the annexation of Crimea in 2014, caused a substantial change in its international economic and political relations. In response to Russia’s invasion, the United States of America, the European Union, and their allies imposed a series of sanctions. In this study, by applying an exponential generalized autoregressive conditional heteroscedasticity model to daily logarithmic returns of the ruble exchange rate and the closing price index of the Russian Trading System, we analyze how the returns and volatility of the exchange rate and the stock price index responded to the sanctions and oil price changes. The estimation results show that the sanctions have a significant positive short-term impact on exchange rate returns. Economic sanctions have a significant negative long-term impact on the returns and variance of the exchange rate and a significant positive long-term impact on the returns of the stock price index. Financial sanctions have a positive/negative long-term impact on the returns of the exchange rate/stock price index and a positive long-term impact on the variance of the exchange rate and the stock price index. Corporate sanctions have a positive long-term impact on exchange rate returns. Full article

Transaction Cost Economics is one of the most critical theories for business studies, including Franchise research. Knowing this stream of research well can help researchers to ground and sustain their studies on a more solid theoretical foundation. Through a Scientometric literature review via the Search-AppraisaL-Synthesis-Analysis (SALSA) procedures, this paper proposes, investigates and demonstrates the knowledge heterogenization (i.e., the knowledge structure becoming heterogeneous) of literature in the social science domain. Focused on the Transaction Cost Economics application in Franchising research that intersects Economics and Business areas, knowledge heterogenization is found and demonstrated in the following aspects of research stream development: research topics, targeted outlets, empirical (geographical) contexts, analytic approaches, as well as important scholars and publications. However, we did not find heterogenization in terms of the adoption of cross-sectional versus longitudinal research design and quantitative versus qualitative data sources. Implications for the continuous practices and theory development of this research stream are discussed. Mainly, we argue that knowledge heterogenization is an approach for a scientific community to achieve developmental sustainability. Full article

This study examines the relationship between COVID-19, government response measures, and stock market volatilities for 11 developed and developing economies within the Asia-Pacific region. Our period of study is between 15 February–30 May 2020. Using the continuous wavelet transformation (CWT) analysis and plots and GJR-GARCH analysis, we examined the effects of the COVID-19 public health crisis and the corresponding government measures on the respective domestic equity markets volatilities. The CWT plots showed a varying level of market volatilities at different investment horizons. All the sample countries, except Japan, experienced very low or low volatility over the short-term horizons. In contrast, Vietnam, Malaysia, and Laos experienced medium volatility over the medium-term horizons. Finally, China, Japan, South Korea, Malaysia, and the Philippines experienced high volatility over the long-term horizons. The GJR-GARCH results further ascertain that market volatilities are affected by domestic events, notably, the COVID-19 government intervention measures. In most sample countries, the government measures significantly reduce market volatility in the domestic equity markets. Additionally, international events have also triggered market volatilities. Overall, our study offers several contributions and implications for practitioners and policymakers. Full article

There are several reasons for environmental taxation implementation. Besides its environmental impact, the main reason for such taxation is its fiscal impact, particularly in generating revenues of public budgets. The main goal of this paper is to observe possible spatial patterns in fiscal impacts of environmental taxation in the EU countries, and to depict the groups of countries with the same (or similar) fiscal impact of these instruments on public budget revenues, including environmental and economic characteristics. Two methods of cluster analysis are used, Ward linkage and K-nearest neighbors (spatial) cluster analysis to observe potential geographical links or implication of fiscal impact. The study is performed for the years 2008 and 2017. Based on the results, we can say that in the year 2008, the EU countries were divided into “the west” and “the east”, with some exceptions. The western countries were characterized by high environmental tax revenues, the eastern countries by low environmental tax revenues. For 2017, the situation is different. The border between old and new EU member states is not so abrupt and clear. The results show higher diversification between EU countries concerning the fiscal impacts of environmental taxation. Full article

Knowledge is a determining factor in the creation of competitive advantage by generating new ways of working, which has been widely studied. However, in the agricultural sector, the contributions are minimal. Given the importance of the topic and the sector, the objective of this study is to determine the relationship between knowledge management and innovation in rural agricultural organizations in the state of Sonora in northern Mexico. A quantitative, correlational study was carried out, in which a questionnaire of 36 items with answers on a Likert scale was applied to 91 companies. The information was processed and analyzed in the SPSS program using correlation and linear regression. The results showed a positive and significant relationship between the variables under study, which supports that knowledge management in these companies, has as a consequence, innovations in them; however, it was not possible to determine the impact in economic terms. This can be taken up again in subsequent studies and in a practical sense in the companies by promoting knowledge management actions that encourage new processes, services and/or products that allow a monetary impact on them. Full article

This study examines whether a debt-to-GDP threshold exists in the public debt and economic growth relationship for 20 Middle East and North Africa (MENA) countries from 1990 to 2016 using the threshold estimation technique. The empirical results reveal that there is a threshold effect in the public debt and economic growth relationship. The MENA region’s debt-to-GDP threshold value as a developing region is lower than the debt threshold computed by earlier studies for developing countries. We found that the effect of public debt on economic growth is significant and positive only below the threshold value of debt-to-GDP. More precisely, debt has a promoting influence on economic growth when the debt is less than 58% of the GDP. This finding indicates that the relationship between public debt and economic growth is contingent on the debt-to-GDP ratio. Importantly, policymakers need to be more prudent when establishing a policy regarding debt issues. Full article

The strategies that non-profit organizations choose for volunteer engagement and financial sustainability are of the utmost importance for successful work. The main purpose of this study was to investigate feasible strategies for volunteer engagement and financial sustainability. Interviews were conducted to obtain data on the experience of volunteer managers in dealing with volunteers and financial matters together. Qualitative data analysis methods were used to code and analyze the data. Significant themes emerged from the data gathered through interviews that highlighted the strategies for volunteer engagement and financial sustainability chosen by the managers of non-profit organizations. From the manager’s perspective, the following strategies were considered important for engaging volunteers at non-profit organizations (NPOs): ‘building the skill sets of volunteers’, ‘fulfilling ulterior motives’, and ‘administering a culture of administrative support’. Moreover, ‘local fundraising preference’, ‘transparency’, and ‘building trust’ were regarded as successful strategies for maintaining financial sustainability. The findings of this study showed that, to function smoothly, non-profit organizations need to follow certain strategies to be cautious about volunteers as well as finance. The findings provide fruitful implications for practitioners and policy makers, and these are discussed in the paper. Furthermore, the limitations addressed in the study suggest a future direction for research in terms of study design and more focus on study informants. Full article

Externality problems hinder solutions to existential threats, including climate change and mass extinction. To avert environmental crises, policymakers seek mechanisms that align private incentives with societal exigencies. Successful solutions bring individuals to internalize the broad repercussions of their behavior. In some cases, privatization, Coasian bargaining, or Pigouvian taxes effectively place the weight of externalities on the relevant decision makers. Yet, the available remedies often fail to provide satisfactory outcomes, and inefficiencies persist in the markets for energy, transportation, and manufactured goods, among others. This article explains how a simple voting mechanism can achieve socially optimal decisions about many of the innumerable externality problems that remain. Full article

This study investigates the relationship between natural resource rents, human development and economic growth in Sudan using co-integration and vector error correction modelling (VECM) over the period 1970–2015. Institutions proved to play a role in determining a difference in whether a country is cured or blessed by resource abundance. In the case of Sudan, no time series data is available on institutional quality and is therefore excluded from the analysis. The role of institutions and macroeconomic policies is captured by other variables included in the empirical model. Co-integration tests confirm the existence of a long run equilibrium relationship between resource rents, human development and economic growth in Sudan. Empirical evidence from the estimated VECM shows that economic growth is positively affected by resource rents and development expenditure but surprisingly negatively affected by life expectancy at birth in the short run. In the long run, resource rents, school enrolment, life expectancy and financial development have negative significant effects on economic growth. Only development expenditure is found to affect economic growth positively. Resource rents are found to weaken education and health levels and this is indirectly channeled into negative effects of resource rents on economic growth. These results suggest that the government has been neglecting investments to build up human capital necessary for inclusive growth. Long run Granger causality tests show a unidirectional causal relationship running from resource rents to GDP growth as well as from development expenditure to GDP growth. School enrollment, life expectancy and financial development are found to be negatively Granger causing GDP growth. Long run causal relationships reconfirm that a resource curse exists indirectly mediated by weak human capital. The study recommends that the government should manage natural resource rents with a policy framework supporting creation of a virtuous economic circle between human development and economic growth. If pursued, this would promote sustained, inclusive and equitable growth in Sudan. Full article

The impact of economic growth on unemployment is commonly agreed and extensively studied. However, how age and gender shape this relationship is not as well explored, while there is an absence of research on whether education plays a role. We apply Okun’s law, aiming to estimate age-, gender- and educational attainment level-specific unemployment rate sensitivity to cyclical output fluctuations. Since the empirical literature provides evidence in favour of the non-linear impact of output change on the unemployment rate, supporting higher effects of recessions than that of expansions, we aim to enrich this analysis by estimating how the impact of positive/negative output change on the specific unemployment rate varies with the level of the total unemployment. The analysis is based on 28 European Union (EU) countries and covers the period of 1995–2019. The equations are estimated by least-squares dummy variables (LSDV), using Prais–Winsten standard errors. For the robustness check, we alternatively used Newey–West standard errors to address serial-correlations and heteroscedasticity, and the Arellano–Bond estimator for some specifications that assume dynamics in the panel. The results support previous findings of male- and youth-specific Okun’s coefficients and reveal that they significantly stand out just over the periods of negative output change. Additionally, we find that educational attainment level is an important factor explaining the heterogeneity of unemployment reaction to output change. Full article

Since 2000, Sri Lanka has embarked upon a path towards digitalization of most of the government functions and the process of public service delivery in the country. The process started with several disjointed initiatives culminating by 2010 into a full-scale program funded by many international donors around the world. Digital promotion agencies such as the Information Communication Technology Authority (ICTA) and infrastructure development entities such as the Lanka Government Network (LGN) were established, and the process significantly picked up pace in various government agencies and departments. This process, sometimes called e-governance, was set into motion to improve the efficiency of the government operations and public service delivery at all governmental levels. A decade has passed since many primary public services underwent a digital transformation. In this paper, we analyze the digital governance process and assess the efficiency status of public services in the country. We conducted an output-oriented, nonparametric analysis of the performance data by applying data envelopment analysis (DEA). The data were collected through a questionnaire-based field survey. Our findings suggest that most public services have not achieved optimal efficiency levels, and there is still plenty to be achieved by performance enhancement measures that have been adopted by the various agencies of the Sri Lankan government. Full article

This paper investigates the impact of having open 400 meter (400 m) runners on NCAA relay teams. Using data from 2012–2016 containing the top 100 4 × 400 m in each NCAA Division relay times for each year, it is found that more 400 m specialists lead to an increase in the overall performance of the team, measured by a decrease in relay times. The effect is examined across Division I–III NCAA track teams. The results are consistent across each division. We view this as a test of the role of specialization on performance. Using runners who specialize in 400 m races should increase overall team performance as long as specialization does not lead to an inefficient allocation of team human capital. An additional performance measure is used examining the difference between projected and actual relay times. Divisions I and II are found to perform better than projected with an increase in 400 m runners, but there is no effect found in Division III. Full article