Economies — Open Access Journal

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

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

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

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

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

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

“Creating conditions for more people to have property income” has become a national policy after the 17th National Congress of the Communist Party of China. Based on the micro survey data from Chinese Family Panel Studies (CFPS) in 2010, 2012, 2014, 2016 and the macro panel data at the provincial level, a logarithmic linear equation was built to estimate the impact of micro and macro factors on property income. Furthermore, the contribution of fiscal expenditure and financial development on property income equality can be recognized using the regression-based inequality decomposition method. This research revealed that fiscal expenditure improves residents’ property income and slightly reduces the inequality of property income distribution. With respect to financial development, it improves residents’ property income but aggravates the inequality of property income distribution. However, there is a significant difference between the different regions. In eastern and central regions, inequality of property income distribution greatly benefits from fiscal expenditure, while in northwest regions, fiscal expenditure makes property income inequality even worse. Therefore, the focus of financial sustainable development is to reduce property income inequality through the establishment of an effective government and the improvement of the rule of laws. Full article

Only unstructured single-path model selection techniques, i.e., Information Criteria, are used by Bounds test of cointegration for model selection. The aim of this paper was twofold; one was to evaluate the performance of these five routinely used information criteria {Akaike Information Criterion (AIC), Akaike Information Criterion Corrected (AICC), Schwarz/Bayesian Information Criterion (SIC/BIC), Schwarz/Bayesian Information Criterion Corrected (SICC/BICC), and Hannan and Quinn Information Criterion (HQC)} and three structured approaches (Forward Selection, Backward Elimination, and Stepwise) by assessing their size and power properties at different sample sizes based on Monte Carlo simulations, and second was the assessment of the same based on real economic data. The second aim was achieved by the evaluation of the long-run relationship between three pairs of macroeconomic variables, i.e., Energy Consumption and GDP, Oil Price and GDP, and Broad Money and GDP for BRICS (Brazil, Russia, India, China and South Africa) countries using Bounds cointegration test. It was found that information criteria and structured procedures have the same powers for a sample size of 50 or greater. However, BICC and Stepwise are better at small sample sizes. In the light of simulation and real data results, a modified Bounds test with Stepwise model selection procedure may be used as it is strongly theoretically supported and avoids noise in the model selection process. Full article

Prior research has emphasized the importance of bringing together quadruple helix (QH) actors (academia, industry, government and civil society) to strengthen regional innovation. The QH model forms an integral part of European innovation policy, which aims to create sustainable and inclusive growth in Europe. As part of this policy, European Union (EU) regions are to design and implement research and innovation strategies for smart specialization (RIS3) through the participatory entrepreneurial discovery process (EDP). Despite the strong emphasis on the QH model, the model is still far from a well-established concept in innovation research and policy, and civil society participation in RIS3 has remained low. Our paper aims to support regional governments to engage with and facilitate the participation of civil society in a territorial EDP based on two case studies from Finland and Sweden. It contributes to the literature on regional innovation systems through identifying mechanisms to foster the QH model and suggests lessons learnt for the operationalization of the QH model as part of RIS3. Full article

This study attempts to empirically examine the impacts of the China–Africa economic relationship on factor productivity. The two-step system Generalized method of moments (GMM) estimator is applied to analyze the impacts of the Africa–China economic relationship on factor productivity of 44 African countries controlling Africa–China trade, Chinese foreign direct investment (FDI), and aid allocation to African countries for the periods 2003–2017. The estimation strategy controls endogeneity concerns. Another novelty of this study is calculating total factor productivity (TFP) using the regression approach and driving capital stock data. Additionally, the institutional quality index of countries is derived using principal component analysis. The findings of this study refer that the impact of the China–Africa economic relationship on the TFP of African countries is conditional to the domestic institutional quality of African countries. The results imply that the productivity embodied by the Africa–China economic relationship should be backed by the domestic adaptive capacity to use the benefit of China–Africa economic relations to excel factor productivity. Hence, the capability of African countries to benefit from the China–Africa economic relationship to enhance factor productivity should improve the institutional quality. Full article

Corporate risk-taking behavior and investment is a crucial factor in order to seek higher profits and a better trading strategy. Competitive advantage and innovation, while maintaining profitability and state ownership, are considered as crucial resources. Furthermore, it is essential to connect the short-term and long-term business and investment objectives plus stakeholder’s expectations to corporate sustainability and development. This connection is especially important in the context of transforming economies and getting better trading strategies. This study estimates the relationship between state ownership, profitability, corporate risk-taking behavior, and investment in Vietnam by using Generalized Method of Moments (GMM) methods. Using the data of 501 listed non-financial corporates during the period 2007–2015 from Ho Chi Minh City and Hanoi Stock Exchanges, we find that profitability is determined as a factor to reduce corporate risk-taking acceptance caused by the chances of entrenchment. Meanwhile, the impact of state ownership on the risk appetite of corporate has a non-linear effect. In particular, state ownership reduces corporate risk-taking behavior and investment but yet increases the risk-taking behavior and investment when the state ownership rate exceeds a threshold. One the one hand, this implies that the low level of state ownership not only prevents risk-taking behavior and investment but also results in more severe agency problems, causing unsustainability due to the imbalance of interests among various stakeholders. On the other hand, a dominant role of state ownership concentration causes a boost in corporate risk-taking decision-making in investment and trading strategy, leveraging the connection of significant external resources to deal with uncertain problems. The study contributes to existing theories of corporate governance in the context of a socialist-oriented market. Full article

Women may be considered to have hidden, unutilized potential for the economy and society, if not utilized at their full capacity, i.e., with effective educational, social and political policies. Allowing women to participate fully in an economy may contribute to the sustainable development of the country in question. The empowerment of women may be accelerated if women are educated for this purpose; as a result, the political authorities in Saudi Arabia have proposed a comprehensive framework to empower women. The empowerment of women is essential in the academic sector to develop educational policies for women’s capacity-building. The empowerment of women in the political process is also very important, so they can suggest appropriate policies, rules and laws that favor the empowerment of women in all sectors of the economy and society. The present research aims at testing the effects of academic and political empowerment on the economic, social and managerial empowerment of women, and opens a new horizon of debate in the practical and theoretical domain of female empowerment in Saudi Arabia. To this end, we utilized structural equation modeling due to the endogenous nature of relationships among the hypothesized variables. Perception-based data were collected on the political, academic, economic, social and managerial empowerment of women through a well-structured questionnaire. The data were collected during the period from October 2019 to January 2020 through a simple random sampling method. Then, we tested the direct effect of political empowerment, and its indirect effects through academic empowerment, on the economic, social and managerial empowerment of women. We found that political empowerment has a positive direct effect on economic and managerial empowerment, but an insignificant effect on social empowerment. Further, political empowerment has a positive direct effect on academic empowerment, which, in turn, has positive effects on economic, social and managerial female empowerment. Moreover, these indirect effects are found to be magnitudes larger than the direct effects of political empowerment. This study recommends improving the economic, social and political status of women through political and academic policies, to accelerate sustainable development. Full article

The degree of competition in the banking industry can be observed and measured by two approaches, structural and nonstructural. Based on these two approaches, there are various indicators, which are different factors and methods. This paper aims to provide calculations, determine a good indicator, and assess the competitive environment of the Thai banking industry. Specifically, there are four indicators—concentration ratio, Herfindahl–Hirschman Index, Lerner Index, and Panzar–Rosse H statistic—which are widely used to examine the efficiency and effectiveness of policies in the banking industry. The findings indicate that the Lerner Index, calculated by stochastic frontier analysis, is the most reliable indicator of the banking competition environment in Thailand. It has a range of 0.36 to 0.60 and an average value of 0.40. Furthermore, during the period of study, the degree of Thai banking competition had a tendency to increase over time, which reflects an increase in allocative efficiency of resources in the banking industry. This is in accordance with the Financial Sector Master Plan of the country. However, this result probably leads to instability of the financial system. Therefore, policy-makers should carefully regulate competition policy by considering the systematic risk of the banking system at the same time. Full article

This study aims to assess the protection for Vietnamese agriculture under trade liberalization based on the input–output approach. From a theoretical perspective, the authors develop a general framework to estimate the effective rate of protection using an input–output table, taking into account tariffs, subsidies and value-added tax. Based on the data of 2012 and 2016, with a projection to 2020, the empirical results reveal that agricultural production, which is considered as Vietnam’s comparative advantage, is insignificantly protected. From the year 2012 to 2016, the effective rate of protection declined for primary agriculture and its supporting sectors, and would become negative by 2020. This implies that Vietnamese farmers are at a disadvantage due to the effect of trade liberalization. Furthermore, it is empirically revealed that the primary agricultural sector has a high value-added multiplier, which means a significant contribution to the domestic economy, is not protected by the government’s tax and tariff policies. Based on the study results, the authors suggest some policy recommendations to improve the situation, which are focused on the reduction of the value-added tax rate on inputs, while making industries with a high spillover effect to the domestic economy a key priority. Full article

Financial inclusion is the process of including the people who lack formal financial services. The concept of financial inclusion emerged globally in the times of millennium and is defined as the availability and usage of formal financial services. It essentially facilitates economic growth; the financially included individuals can invest in business, education, and entrepreneurship, which can pave way to poverty alleviation and economic development. In the context of Pakistan, a developing economy of South Asia, the financial landscape presents a grim picture of financial inclusion where only 16 percent of the population is financially included. Despite the current focus of policies and regulations devoted to enhancing access to finance in Pakistan from the supply side, the current state of financial inclusion is limited. Therefore, this study investigates the financial inclusion process for Pakistan from the supply side. We analyze the supply-side dimension of access by employing econometric technique of autoregressive distributive lag (ARDL) and using time series data of banking sector of Pakistan. Our empirical findings suggest that the greater the size, geographic outreach, and demographic outreach of the banks, the greater the contribution to the financial inclusion. Additionally, improvement in soft consumer loans and increase in small-sized advances reinforces the financial inclusion process. Full article

This study analyses the current debate around central bank-backed digital currency (CBDC). A comparative study was carried out considering countries for and against implementing a CBDC and their reasons, looking for common causes, differences, etc. The conclusion was that there are opposite tendencies between defenders and detractors of establishing a CBDC. However, today—and taking into account the positions of three large banking institutions (the Federal Reserve of the United States of America, the Bank of Japan and the Bank of England) on establishing (at least in the short term) a CBDC)—it seems that large-scale implementation is still far off. On the contrary, the Chinese Central Bank and banking systems of other countries that have less weight in the world, such as Uruguay, Lithuania and the Bahamas, seem to go against the trend of rejection and are seriously considering its implementation. Although this matter has been dealt with in the theoretical field, more pilot tests such as the one carried out by Uruguay are necessary in order to understand specific effects on the economy, on one hand, and on acceptance of its use by the population, on the other. Full article

This study examines the evolution of the regional per capita income from the perspective of a policymaker at the national level. To do that, it utilizes stochastic dominance analysis by including a utility function that expresses the “regional inequalities aversion” level of the policymaker. In this way, the analysis indicates how the policymakers rank income distributions according to their primary policy objectives and more specifically, GDP growth and diminishing of income inequalities. Data refer to the per capita GDPs of the Greek prefectures during the period 2000–2017, in real terms. The estimation of certainty equivalents provides a numeric index of preference among regional income distributions according to the policy objectives mix. Results indicate that the period 2000–2017 is characterized by different patterns of regional income evolutions. Overall, there is no regional convergence from year 2000 to 2017, while the evolution of regional income does not follow a constant path. The analysis provides thoughtful insights into the way that different policy targets and preferences can affect the relevant ranking of income distributions. In a certain level of policymakers’ “regional inequalities aversion”, a balance between economic growth and diminishing of regional inequalities targets is assumed. Apart from a useful tool in economic research, this quantification approach can also be utilized in policy design for setting more appropriate policy targets, based on the preferences of policymakers at the national level. Full article

In an attempt to diversify itself away from the dominance of oil on its economy, Saudi Arabia needs to emphasize on the growth of its private sector. Currently, the private sector’s contribution to economic growth is meager as the oil sector dominates the economy. This study attempts to assess the role of financial development towards the growth of the private sector. Assessing this relationship is important, as it is quite probable that the dominant oil sector attracts the financial resources, affecting the private sector adversely. Johansen’s method of cointegration is applied on the data for the period 1985–2018. The private sector’s gross domestic product has a negative relation with the supply of money, positive relation with bank credit to private sector, and no significant relationship with share market capitalization, as shown by the results of the study. In addition, the private sector’s growth has a positive and significant relationship with government expenditure, investment, and trade openness. Hence, the study recommends further strengthening of financial sector services. Besides the current trend on government expenditure, investment and trade openness should continue to enable the private sector to contribute significantly to the economic growth of the country. A previous study on the private sector’s growth and financial variables is exclusively missing, and makes this study unique. Full article

The aim of this paper is to assess the extent to which different levels of decentralisation across regions of the European Union (EU) affected citizens’ perceptions about European integration over the period 1973–2002. The paper uses Eurobarometer Surveys to explore by means of multinomial logistic regressions whether decentralisation was an important factor behind the varying perceptions about Europe. Two dimensions of decentralization—political and fiscal—are considered in the analysis, alongside several compositional and contextual effects. The results of the analysis show that fiscal decentralisation was fundamental for citizens’ support for European integration, while there is limited evidence that political decentralisation played a similar role. Hence, while fiscal decentralisation may have given prominence to the economic benefits of European integration, political decentralisation was more associated with its economic costs. Taking into account that history matters, this paper raises potentially interesting insights for the design of policies aimed at promoting social cohesion. Full article