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Volume 12
Issue 11
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Economies, Volume 12, Issue 11 (November 2024) – 34 articles

Cover Story (view full-size image): Women’s education and empowerment are crucial for household welfare, yet in Ghana and Uganda, findings show that while both male and female education levels improve outcomes like child labor, school enrollment, and nutrition, female education alone does not enhance household bargaining power. Education positively impacts welfare but does not automatically shift dynamics within families. These insights highlight the need for complementary policies, such as better labor market access and legal protections, to strengthen women’s empowerment. Further research with longitudinal data could provide a deeper understanding, especially in light of recent global shifts affecting gender dynamics and economic stability. View this paper
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18 pages, 716 KiB  
Article
Effect of per Capita Income, GDP Growth, FDI, Sectoral Composition, and Domestic Credit on Employment Patterns in GCC Countries: GMM and OLS Approaches
by Nawal Abdalla Adam and Abad Alzuman
Economies 2024, 12(11), 315; https://doi.org/10.3390/economies12110315 - 20 Nov 2024
Viewed by 980
Abstract
This paper examines the impact of per capita income, gross domestic product (GDP) growth, foreign direct investment (FDI), sectoral composition, and domestic credit on employment patterns in the Gulf Cooperation Council (GCC) countries from 2013 to 2023, based on “Okun’s law”. The dynamic [...] Read more.
This paper examines the impact of per capita income, gross domestic product (GDP) growth, foreign direct investment (FDI), sectoral composition, and domestic credit on employment patterns in the Gulf Cooperation Council (GCC) countries from 2013 to 2023, based on “Okun’s law”. The dynamic data panel was analyzed using the generalized method of moments (GMM) and the ordinary least square (OLS) method. The research findings reveal that the agricultural sector’s contributions have significantly influenced the employment patterns in GCC countries, emphasizing the traditional role of agriculture in creating job opportunities. However, the contribution of the services and industrial sectors has no significant impact on employment patterns. Domestic credit and FDI inflows have significantly influenced employment patterns in GCC countries, underscoring their vital role in sustaining long-term economic stability. Per capita income and GDP growth did not significantly impact the employment pattern in the GCC countries during the study period. This research provides valuable insights to policymakers, highlighting the need to focus on the services and industrial sectors to promote their contribution to employment in GCC countries. The research findings also augment the literature by identifying the key economic indicators contributing to GCC countries’ employment creation. Full article
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<p>Employment pattern in GCC countries from 2013 to 2023.</p> Full article ">Figure 2
<p>Employment rate trends for GCC countries from 2012 to 2023.</p> Full article ">
27 pages, 2336 KiB  
Article
Assessing the Foreign Direct Investment Performance of Middle-Income Countries Using Data Envelopment Analysis with Translation Invariance
by Runyu Yang, Youngbok Ryu and Mikhail V. Oet
Economies 2024, 12(11), 314; https://doi.org/10.3390/economies12110314 - 19 Nov 2024
Viewed by 1186
Abstract
Foreign direct investment (FDI) is a primary vehicle for manufacturing transfer. Middle-income countries can benefit by effectively utilizing FDI to achieve technological development and economic equality and possibly address the middle-income trap issue. This study assessed the FDI performance of ten middle-income countries [...] Read more.
Foreign direct investment (FDI) is a primary vehicle for manufacturing transfer. Middle-income countries can benefit by effectively utilizing FDI to achieve technological development and economic equality and possibly address the middle-income trap issue. This study assessed the FDI performance of ten middle-income countries and examined the statistical relationships between their performance and their contexts: technological development, economic equality, and during the COVID-19 pandemic. For the former, we employed non-radial data envelopment analysis, taking advantage of its translation invariance property to derive efficiency scores; for the latter, we conducted a series of Kruskal–Wallis tests to examine the statistical relationships. According to the analysis results, we found that (a) most countries, except China and India, showed stable efficiency scores over time, (b) their efficiency scores were statistically significantly associated with the level of technological development (indicated by their technology lifecycle-based sigmoid curves) and economic equality (represented by Gini index and poverty indicator); and (c) their efficiency scores were not associated with the COVID-19 pandemic. The results imply that to improve their foreign direct investment performance, host countries may need to enhance their absorptive capacity in both the technological and economic domains. Full article
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<p>Two stages of analysis.</p> Full article ">Figure 2
<p>Efficiency scores of CRS model.</p> Full article ">Figure 3
<p>Efficiency scores of VRS model.</p> Full article ">Figure 4
<p>Scale efficiency.</p> Full article ">Figure A1
<p>Patent-based S curves of ten middle-income countries. Note: C<sub>t</sub> = cumulative number of patents (actual); S<sub>t</sub> = cumulative number of patents (fitted by logistics function). (<b>a</b>) Bangladesh; (<b>b</b>) Brazil; (<b>c</b>) China; (<b>d</b>) Indonesia; (<b>e</b>) India; (<b>f</b>) Mexico; (<b>g</b>) Malaysia; (<b>h</b>) the Philippines; (<b>i</b>) Thailand; and (<b>j</b>) Vietnam.</p> Full article ">Figure A1 Cont.
<p>Patent-based S curves of ten middle-income countries. Note: C<sub>t</sub> = cumulative number of patents (actual); S<sub>t</sub> = cumulative number of patents (fitted by logistics function). (<b>a</b>) Bangladesh; (<b>b</b>) Brazil; (<b>c</b>) China; (<b>d</b>) Indonesia; (<b>e</b>) India; (<b>f</b>) Mexico; (<b>g</b>) Malaysia; (<b>h</b>) the Philippines; (<b>i</b>) Thailand; and (<b>j</b>) Vietnam.</p> Full article ">
15 pages, 696 KiB  
Article
Market-Driven Mapping of Technological Advancements in the Seafood Industry: A Country-Level Analysis
by Abhirami Subash, Hareesh N. Ramanathan and Marko Šostar
Economies 2024, 12(11), 313; https://doi.org/10.3390/economies12110313 - 18 Nov 2024
Viewed by 1858
Abstract
Seafood preservation techniques have evolved from ancient methods to modern innovations like canning, freezing, and surimi production. Canning in the 19th century introduced airtight containers, while commercial freezing technologies like flash freezing extended shelf life. Surimi pastes in the 20th century led to [...] Read more.
Seafood preservation techniques have evolved from ancient methods to modern innovations like canning, freezing, and surimi production. Canning in the 19th century introduced airtight containers, while commercial freezing technologies like flash freezing extended shelf life. Surimi pastes in the 20th century led to affordable imitation seafood products. Emerging technologies continue to enhance seafood preservation methods. Moreover, the integration of digital technology, automation, and data sharing, known as Industry 4.0, is transforming various industries. This integration encompasses blockchain technology, automation, robotics, and big data analytics, aiming to enhance production, sustainability, traceability, and efficiency in fish processing. With a focus on the seafood market dynamics affecting these advances, this research was conducted with the aim to understand how technical breakthroughs in the seafood business are dispersed and implemented across different nations. We aim to determine the correspondence between the technological sophistication of machinery in seafood processing companies and map it across different countries across the globe to obtain an understanding of the generation of technology used in prominence. Variations in adoption rates and technological trends reflect regional market dynamics. The Seafood Expo ASIA 2023 study looked at the use of Industry 4.0 technologies, operational procedures, and technology adoption in the global seafood processing industry. Notably, countries like Norway, the Republic of Korea, Spain, Turkey, and the Netherlands have rapidly embraced Industry 4.0 technologies. The market factors driving these technological advancements across different countries include rising consumer demand for sustainable seafood, economic incentives, and global competition. A correspondence analysis was employed to analyze the correspondence between countries and the level of technological sophistication in the machinery used. We successfully mapped the level of technology utilized in machinery across global seafood processing companies, providing insights into the technological advancements shaping the industry. Full article
(This article belongs to the Special Issue Innovation, Productivity and Economic Growth: New Insights)
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Graphical abstract

Graphical abstract
Full article ">Figure 1
<p>Column points denoting technology.</p> Full article ">Figure 2
<p>Row points denoting countries.</p> Full article ">Figure 3
<p>Row and column points. Note: <a href="#economies-12-00313-f001" class="html-fig">Figure 1</a>, <a href="#economies-12-00313-f002" class="html-fig">Figure 2</a> and <a href="#economies-12-00313-f003" class="html-fig">Figure 3</a> display the spatial maps of seafood companies participating in the Asian Seafood Expo ASIA 2023.</p> Full article ">
21 pages, 759 KiB  
Article
Derivative Markets and Economic Growth: A South African Perspective
by Matthew Stevens and Cobus Vermeulen
Economies 2024, 12(11), 312; https://doi.org/10.3390/economies12110312 - 17 Nov 2024
Viewed by 639
Abstract
It is well established that financial development and innovation promote economic growth through improving the allocation of capital, enhancing risk management, contributing to price discovery, and increasing market efficiencies. While a vast empirical literature is devoted to the nexus between financial development and [...] Read more.
It is well established that financial development and innovation promote economic growth through improving the allocation of capital, enhancing risk management, contributing to price discovery, and increasing market efficiencies. While a vast empirical literature is devoted to the nexus between financial development and economic growth, however, substantially less research has been done on the relationship between derivatives and growth, especially in the emerging-market context. Derivatives can be viewed as a specific category of financial innovation, which may advance economic growth through its specialised functions of risk management and price discovery. This paper contributes to bridging this gap in the literature by exploring the impact of exchange-traded futures derivatives on South African economic growth, output, and economic growth volatility. It employs ARDL bounds tests, Granger causality tests and GARCH volatility modeling to analyse the effects of exchange-traded futures derivatives on various measures of South African economic activity. The main result is that exchange-traded futures derivatives contribute positively to South African economic growth and economic activity. This may suggest that opportunities might exist in other emerging economies, with financial structures comparable to that of South Africa, to encourage the development of organised and well-regulated derivatives markets to unlock economic growth in these economies. Full article
(This article belongs to the Special Issue Studies on Factors Affecting Economic Growth)
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<p>South African real GDP and derivatives market activity (1990–2022). Source: South African Reserve Bank; Quantec.</p> Full article ">Figure 2
<p>South African real GDP growth and volatility (1990–2019). Source: Own calculations from South African Reserve Bank. Growth volatility (right-hand axis) is calculated as the conditional variance of economic growth (<math display="inline"><semantics> <msubsup> <mi>σ</mi> <mi>t</mi> <mn>2</mn> </msubsup> </semantics></math>) from Equation (<a href="#FD3-economies-12-00312" class="html-disp-formula">3</a>).</p> Full article ">Figure A1
<p>Residual diagnostics—real GDP growth.</p> Full article ">Figure A2
<p>Residual diagnostics—real GDP.</p> Full article ">Figure A3
<p>Residual diagnostics—growth volatility.</p> Full article ">
12 pages, 3191 KiB  
Article
Cost Analysis of Penitentiary Systems and Comparison Between the Countries of the Council of Europe
by Emma Altobelli, Antonello Karim Guergache, Francesca Galassi, Reimondo Petrocelli and Ciro Marziliano
Economies 2024, 12(11), 311; https://doi.org/10.3390/economies12110311 - 15 Nov 2024
Viewed by 1119
Abstract
Background: The objective was to analyze the budgets invested in prisons by the member states of the Council of Europe (CoE) and the relationships between the global cost, the cost incurred per single inmate, the number of inmates per 100,000 inhabitants (PPR), the [...] Read more.
Background: The objective was to analyze the budgets invested in prisons by the member states of the Council of Europe (CoE) and the relationships between the global cost, the cost incurred per single inmate, the number of inmates per 100,000 inhabitants (PPR), the gross domestic product (GDP) and per capita GDP. Methods: The data relating to the variables considered for the year 2020 were obtained from the SPACE-I 2021 of the CoE, the World Bank/OECD, and Eurostat. Regression models were used to evaluate the relationships between the PPR and the GDP, the daily cost per prisoner and per capita GDP, and between the PPR and the per capita GDP. A multiple correspondence analysis was performed to evaluate associations between the PPR, EU membership, cost per day, cost rate, geographical area, and inmate gender. Results: The daily expenditure per inmate in northern European countries reaches very high values, respectively: EUR 330.6 (Norway) and EUR 303 (Sweden), while, in the eastern countries, the values drop sharply (EUR 6.50 in Bulgaria and EUR 8.08 in Azerbaijani). The lowest PPR values are found in northern European countries, and the highest in the following countries: Russia, Turkey, Georgia, and Azerbaijan. Conclusions: Countries with a higher GDP per capita tend to have lower prison population rates and to invest larger amounts of funds for prison systems. Full article
(This article belongs to the Section Health Economics)
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<p>(<b>a</b>) Geographic distribution of prison population rate per 100,000 inhabitants in 2020. (<b>b</b>) Daily expenditure per inmate in 2020.</p> Full article ">Figure 2
<p>Linear regression model: it reports on the ordinate data relating to the percentage of GDP; the PPR values on the abscises. Data referring to 2020. (F-statistic: 8.756 on 1 and 39 DF, <span class="html-italic">p</span>-value: 0.005224).</p> Full article ">Figure 3
<p>Linear regression model: daily cost per inmate. Data referring to 2020. (F-statistic: 113.2 on 1 and 38 DF, <span class="html-italic">p</span>-value: 5.923 × 10<sup>−13</sup>).</p> Full article ">Figure 4
<p>Linear regression model: the PPR values vs. the GDP per capita. Data referring to 2020. (F-statistic: 16.82 on 1 and 44 DF, <span class="html-italic">p</span>-value: 0.0001746).</p> Full article ">Figure 5
<p>Multiple correlation analysis—description of three identified profiles.</p> Full article ">
24 pages, 2122 KiB  
Review
Advancements in Soybean Price Forecasting: Impact of AI and Critical Research Gaps in Global Markets
by Fernando Dupin da Cunha Mello, Prashant Kumar and Erick G. Sperandio Nascimento
Economies 2024, 12(11), 310; https://doi.org/10.3390/economies12110310 - 15 Nov 2024
Viewed by 1105
Abstract
Soybeans, a vital source of protein for animal feed and an essential industrial raw material, are the most traded agricultural commodity worldwide. Accurate price forecasting is crucial for maintaining a resilient global food supply chain and has significant implications for agricultural economics and [...] Read more.
Soybeans, a vital source of protein for animal feed and an essential industrial raw material, are the most traded agricultural commodity worldwide. Accurate price forecasting is crucial for maintaining a resilient global food supply chain and has significant implications for agricultural economics and policymaking. This review examines over 100 soybean price forecast models published in the last decade, evaluating them based on the specific markets they target—futures or spot—while highlighting how differences between these markets influence critical model design decisions. The models are also classified into AI-powered and traditional categories, with an initial aim to conduct a statistical analysis comparing the performance of these two groups. This process unveiled a fundamental gap in best practices, particularly regarding the use of common benchmarks and standardised performance metrics, which limits the ability to make meaningful cross-study comparisons. Finally, this study underscores another important research gap: the lack of models forecasting soybean futures prices in Brazil, the world’s largest producer and exporter. These insights provide valuable guidance for researchers, market participants, and policymakers in agricultural economics. Full article
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<p>Summary of the literature review on agricultural product price forecasting methods by <a href="#B64-economies-12-00310" class="html-bibr">L. Wang et al.</a> (<a href="#B64-economies-12-00310" class="html-bibr">2020</a>).</p> Full article ">Figure 2
<p>Schematic representation of the literature identified in the filtering steps of this systematic review. * Scope#1 are articles focused on other market-related metrics than price (e.g., volatility, trend, gain); ** Scope#2 are articles focused on the market’s nature, not price forecast; *** Scope#3 are articles not associated with the soybean market or its market price.</p> Full article ">Figure 3
<p>Distribution of articles by their proposed model’s forecast horizon and their split by price type.</p> Full article ">Figure 4
<p>Distribution of articles by market type and their split by real-time and non-real-time data utilisation.</p> Full article ">Figure 5
<p>Distribution of articles by market type and their split by end-of-period and period average forecast.</p> Full article ">Figure 6
<p>Distribution of articles considering their model’s price type and their split by model category.</p> Full article ">Figure 7
<p>Box plot of interquartile range for relative MAPE results of intelligent and non-intelligent soybean price forecast models extracted from <a href="#B68-economies-12-00310" class="html-bibr">Xiong and Hu</a> (<a href="#B68-economies-12-00310" class="html-bibr">2021</a>) and <a href="#B70-economies-12-00310" class="html-bibr">Xu and Zhang</a> (<a href="#B70-economies-12-00310" class="html-bibr">2022</a>).</p> Full article ">
37 pages, 4052 KiB  
Article
Should South Asian Stock Market Investors Think Globally? Investigating Safe Haven Properties and Hedging Effectiveness
by Md. Abu Issa Gazi, Md. Nahiduzzaman, Sanjoy Kumar Sarker, Mohammad Bin Amin, Md. Ahsan Kabir, Fadoua Kouki, Abdul Rahman bin S Senathirajah and László Erdey
Economies 2024, 12(11), 309; https://doi.org/10.3390/economies12110309 - 15 Nov 2024
Cited by 1 | Viewed by 1275
Abstract
In this study, we examine the critical question of whether global equity and bond assets (both green and non-green) offer effective hedging and safe haven properties against stock market risks in South Asia, with a focus on Bangladesh, India, Pakistan, and Sri Lanka. [...] Read more.
In this study, we examine the critical question of whether global equity and bond assets (both green and non-green) offer effective hedging and safe haven properties against stock market risks in South Asia, with a focus on Bangladesh, India, Pakistan, and Sri Lanka. The increasing integration of global financial markets and the volatility experienced during recent economic crises raise important questions regarding the resilience of South Asian markets and the potential protective role of global assets. Drawing on methods like VaR and CVaR tail risk estimators, the DCC-GJR-GARCH time-varying connectedness approach, and cost-effectiveness tools for hedging, we analyze data spanning from 2014 to 2022 to assess these relationships comprehensively. Our findings demonstrate that stock markets in Bangladesh experience lower levels of downside risk in each quantile; however, safe haven properties from the global financial markets are effective for Bangladeshi, Indian, and Pakistani stock markets during the crisis period. Meanwhile, the Sri Lankan stock market neither receives hedging usefulness nor safe haven benefits from the same marketplaces. Additionally, global green assets, specifically green bond assets, are more reliable sources to ensure the safest investment for South Asian investors. Finally, the portfolio implications suggest that while traditional global equity assets offer ideal portfolio weights for South Asian investors, global equity and bond assets (both green and non-green) are the cheapest hedgers for equity investors, particularly in the Bangladeshi, Pakistani, and Sri Lankan stock markets. Moreover, these results hold significant implications for investors seeking to optimize portfolios and manage risk, as well as for policymakers aiming to strengthen regional market resilience. By clarifying the protective capacities of global assets, particularly green ones, our study contributes to a nuanced understanding of portfolio diversification and financial stability strategies within emerging markets in South Asia. Full article
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<p>Price dynamic graph of each index [Notes: The vertical axis of the graph represents price, while the horizontal axis denotes the time period].</p> Full article ">Figure 2
<p>Return dynamic graph of each index [Notes: The vertical axis of the graph represents return as percentage, while the horizontal axis denotes the time period].</p> Full article ">Figure 2 Cont.
<p>Return dynamic graph of each index [Notes: The vertical axis of the graph represents return as percentage, while the horizontal axis denotes the time period].</p> Full article ">Figure 3
<p>Dynamic conditional correlation plots between global financial markets and the stock market of Bangladesh.</p> Full article ">Figure 4
<p>Dynamic conditional correlation plots between global financial markets and the stock market of India.</p> Full article ">Figure 5
<p>Dynamic conditional correlation plots between global financial markets and the stock market of Pakistan.</p> Full article ">Figure 6
<p>Dynamic conditional correlation plots between global financial markets and the stock market of Sri Lanka.</p> Full article ">
23 pages, 1075 KiB  
Article
Does Institutional Quality Enhance the Effect of Health Outcomes on Economic Growth? Insights from Sub-Saharan African Countries
by Hafte Gebreselassie Gebrihet, Yibrah Hagos Gebresilassie and Gabriel Temesgen Woldu
Economies 2024, 12(11), 308; https://doi.org/10.3390/economies12110308 - 14 Nov 2024
Viewed by 1370
Abstract
Institutional quality (InQ) plays an important role in shaping economic growth (ECG), influencing how economies develop and perform. The literature addresses the nexus between InQ and ECG and the link between health and ECG; findings are often contradictory, creating knowledge gaps. Importantly, research [...] Read more.
Institutional quality (InQ) plays an important role in shaping economic growth (ECG), influencing how economies develop and perform. The literature addresses the nexus between InQ and ECG and the link between health and ECG; findings are often contradictory, creating knowledge gaps. Importantly, research on the interplay between InQ, health, and ECG in Sub-Saharan African (SSA) countries is particularly limited. This study aims to address this gap by evaluating how health impacts ECG, with an emphasis on the mediating role of InQ in the health–growth nexus in SSA. This study examines these interplays across 35 SSA countries from 2012 to 2022. The life expectancy at birth (LEX) and real gross domestic product per capita (GDP) are used as proxies for health outcomes and ECG, respectively. The system generalised method of moments estimator is employed to analyse data. Results show that the LEX has a strong positive effect on economic growth in SSA countries. Furthermore, the InQ indicators (such as control of corruption, government effectiveness, rule of law and political stability, and absence of violence) are positively correlated with ECG. When the LEX interacts with InQ indicators, InQ is identified as a key channel through which LEX influences ECG. The findings confirm that InQ plays a crucial role in the health–growth nexus, with the positive impact of LEX on ECG being more pronounced in countries with higher levels of InQ, while the effect is weaker in countries with lower levels of InQ. The findings of this study have crucial policy implications, highlighting the intricate link among institutional quality, health outcomes, and economic growth. This study’s findings provide essential insights for policymakers to design focused strategies that improve InQ and health outcomes to achieve sustained ECG in SSA. Full article
(This article belongs to the Special Issue Studies on Factors Affecting Economic Growth)
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<p>Health outcome measured as life expectancy (total), 2012–2022. Source: Authors’ computation from WDI data source (2012–2022).</p> Full article ">Figure 2
<p>Conceptual framework of the study. Source: Adopted from <a href="#B11-economies-12-00308" class="html-bibr">Azimi and Rahman</a> (<a href="#B11-economies-12-00308" class="html-bibr">2024</a>) with slight modification.</p> Full article ">Figure 3
<p>Steps used to select a regression model. Source: Authors’ compilation from reviewed empirical literature.</p> Full article ">
22 pages, 2639 KiB  
Article
Quantile Connectedness Amongst Green Assets Amid COVID-19 and Russia–Ukraine Tussle
by Ayesha Rehan, Wahbeeah Mohti and Paulo Ferreira
Economies 2024, 12(11), 307; https://doi.org/10.3390/economies12110307 - 13 Nov 2024
Viewed by 809
Abstract
With the advent of greening the global economy and the introduction of green financial assets, this study examines the connectedness and spillover effect of green assets using a QVAR approach focusing on the average connectedness and connectedness under extreme market conditions. The time [...] Read more.
With the advent of greening the global economy and the introduction of green financial assets, this study examines the connectedness and spillover effect of green assets using a QVAR approach focusing on the average connectedness and connectedness under extreme market conditions. The time of the study captures the crucial global incidents of COVID-19 and Russia–Ukraine war to investigate the effect of major incidents on the connectedness of green assets. The results of the QVAR analysis reveal that green assets are moderately connected under normal market conditions; however, their connection is strengthened under extreme market conditions. IOTA and SP Green Bonds are the net receivers of shocks from other assets, and SP Green Bonds are connected to green energy indices and green cryptocurrencies during turbulent markets. Since green cryptocurrencies are closely connected, a lower portion of them should be added to portfolios, whereas SP Green Bonds qualify as a good diversifying agent in a portfolio. The study has significant implications for market participants, investors, and policymakers. Full article
(This article belongs to the Special Issue Public Finance and Green Growth)
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<p>Pairwise Correlation of Green Assets.</p> Full article ">Figure 2
<p>Graphs of the Closing Prices of the Series of Green Assets.</p> Full article ">Figure 3
<p>Graphs of Green Assets Returns.</p> Full article ">Figure 4
<p>Pairwise Connectedness of the Green Assets Employed. (<b>a</b>) 50th Quantile. (<b>b</b>) 5th Quantile. (<b>c</b>) 95th Quantile.</p> Full article ">Figure 5
<p>(<b>a</b>) Dynamic Net Pairwise Directional Connectedness at 50th Quantile. (<b>b</b>) Dynamic Net Pairwise Directional Connectedness at 5th Quantile. (<b>c</b>) Dynamic Net Pairwise Directional Connectedness at 95th Quantile.</p> Full article ">Figure 5 Cont.
<p>(<b>a</b>) Dynamic Net Pairwise Directional Connectedness at 50th Quantile. (<b>b</b>) Dynamic Net Pairwise Directional Connectedness at 5th Quantile. (<b>c</b>) Dynamic Net Pairwise Directional Connectedness at 95th Quantile.</p> Full article ">Figure 6
<p>Dynamic Total Connectedness. (<b>a</b>) 50th Quantile. (<b>b</b>) 5th Quantile. (<b>c</b>) 95th Quantile. Note: Findings are based on a 200-day rolling-window QVAR model with a lag length of order 1 (AIC) and a 10-step-ahead forecast.</p> Full article ">
13 pages, 332 KiB  
Article
The Influence of Firm Characteristics and Macroeconomic Factors on Financial Performance: Evidence from the Portuguese Hotel Industry
by Fernanda Matias, Sandra Rebelo, Georgette Andraz and José Guerreiro
Economies 2024, 12(11), 306; https://doi.org/10.3390/economies12110306 - 13 Nov 2024
Viewed by 882
Abstract
This study examines the determinants of the financial performance of the Portuguese hotel industry. Despite the economic relevance of the hotel industry and financial performance as an indicator of business survival, academic research on the factors that influence it in the context of [...] Read more.
This study examines the determinants of the financial performance of the Portuguese hotel industry. Despite the economic relevance of the hotel industry and financial performance as an indicator of business survival, academic research on the factors that influence it in the context of this industry, particularly in Portugal, is not extensive. This study encompassed a sample of 738 hotel companies from 2016 to 2021, using data from the Orbis database. This research was based on the assumption that a company’s size, liquidity, the tangibility of its assets, and debt level influence financial performance in the hotel industry, as well as the assumption that gross domestic product and consumer sentiment also affect the business success of hotel companies. By applying a panel data methodology, the findings indicate that all variables showed significant influence on financial performance, except liquidity. The analysis also reveals that smaller companies were more negatively affected by the demand decline induced by the COVID-19 pandemic. To improve the financial performance of the Portuguese hotel industry, the findings suggest that policymakers must work towards ensuring diversified sources of financing for the hotel business, such as investment subsidies, so that companies can minimize debt, especially during periods of slow economic growth. Additionally, companies must promote management strategies that enhance self-financing. Both measures could help companies increase their size, taking advantage of good business opportunities to explore economies of scale. Full article
(This article belongs to the Section Macroeconomics, Monetary Economics, and Financial Markets)
18 pages, 809 KiB  
Article
The Impact of Economic Factors on Saudi Arabia’s Foreign Trade with BRICS Countries: A Gravity Model Approach
by Houcine Benlaria
Economies 2024, 12(11), 305; https://doi.org/10.3390/economies12110305 - 12 Nov 2024
Viewed by 1595
Abstract
Our investigation, bolstered by the robust gravity trade model and panel data econometric technique, underscores the pivotal factors that influence trade interactions between Saudi Arabia and the BRICS nations—Brazil, Russia, India, China, and South Africa. The study, spanning from 1998 to 2023, delves [...] Read more.
Our investigation, bolstered by the robust gravity trade model and panel data econometric technique, underscores the pivotal factors that influence trade interactions between Saudi Arabia and the BRICS nations—Brazil, Russia, India, China, and South Africa. The study, spanning from 1998 to 2023, delves into key economic metrics such as the gross domestic product, exchange rate fluctuations, inflationary trends, political conditions, and trade deals. We employ a range of econometric strategies, including pooled Ordinary Least Squares (OLS) and fixed effects models, to reveal that the GDP of BRICS states consistently and significantly impacts trade volumes. Specifically, a 1% increase in the GDP of partner countries correlates with a 0.37% rise in trade volume within the pooled OLS model. This effect amplifies to 1.43% when adjusting for temporal and country-specific factors in the fixed effects, underscoring the importance of accommodating unobserved heterogeneity, which refers to the unmeasured factors that can influence the relationship between GDP and trade volume. The political stability of BRICS nations mitigates transactional risks and promotes more stable trade relationships, thereby enhancing trade flows. Fluctuations in exchange rates exert positive and significant effects. This indicates that a more robust Saudi Riyal, an essential policy instrument, can enhance trade by increasing the competitiveness of Saudi exports. This study demonstrates that economic magnitude, political stability, and exchange rates affect Saudi Arabia’s trade with BRICS nations. These results bolster the Kingdom’s Vision 2030 objectives for economic diversification. This research advocates for stable political climates and strategic trade agreements to enhance trade relations. This study asserts that this approach will guarantee sustainable growth and diminish the Kingdom’s reliance on oil exports, instilling optimism in the Saudi economy. Full article
(This article belongs to the Special Issue Foreign Direct Investment and Investment Policy (2nd Edition))
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<p>Saudi Arabia’s foreign trade volume with BRICS countries.</p> Full article ">
41 pages, 3100 KiB  
Article
Macroeconomic Uncertainty and Sectoral Output in Nigeria
by Olajide O. Oyadeyi
Economies 2024, 12(11), 304; https://doi.org/10.3390/economies12110304 - 11 Nov 2024
Cited by 1 | Viewed by 1043
Abstract
The paper examined the impact of macroeconomic uncertainty on the ten largest subsectors of the Nigerian economy using quarterly data from Q1 1981 to Q4 2023. The rationale behind selecting the subsectors is that these sectors constitute about 89 percent of the entire [...] Read more.
The paper examined the impact of macroeconomic uncertainty on the ten largest subsectors of the Nigerian economy using quarterly data from Q1 1981 to Q4 2023. The rationale behind selecting the subsectors is that these sectors constitute about 89 percent of the entire productive activities in the economy. To achieve the objectives, the paper created an index for macroeconomic uncertainty using exchange rate uncertainty, interest rate uncertainty, inflation uncertainty, and real gross domestic product (GDP) uncertainty to create this index. Furthermore, the paper explored the impacts of macroeconomic uncertainty and these individual economic uncertainty indexes on sector output. The study employed the novel dynamic autoregressive distributed lag (novel dynamic ARDL) technique to estimate the results and used the canonical cointegrating regression (CCR) and fully modified ordinary least square (FMOLS) techniques as robustness on the main findings. The findings demonstrated that during periods of recession, macroeconomic uncertainty tends to heighten or reach its peak in Nigeria. Furthermore, the paper showed that the sectors react homogenously to macroeconomic uncertainty. In addition, the impulse response results from the novel dynamic ARDL estimation show that macroeconomic uncertainty can predict robust negative movements in sector output for Nigeria. Indeed, these findings are insightful as they show the importance of macroeconomic uncertainties as key drivers of sector output in Nigeria. The paper argues that the policy authorities should improve their efforts to reduce macroeconomic uncertainty and foster a stable real sector/sectoral output to enhance the macroeconomic environment for Nigeria to aim for higher levels of growth. Full article
(This article belongs to the Special Issue Financial Market Volatility under Uncertainty)
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<p>An Evolution of the Macroeconomic Uncertainty Index. Source: Author’s Computation. Note that the markers or circles in the chart showed the main causes of macroeconomic uncertainty fluctuations in Nigeria at different points in time.</p> Full article ">Figure 2
<p>The impulse response plot for macroeconomic uncertainty and agriculture sector real GDP. Source: Author’s computation. A predicted value change in macroeconomic uncertainty and its influence on the agriculture sector, where the black line specifies the average prediction value. However, the dark blue to light blue denotes 75%, 90%, and 95% confidence intervals, respectively.</p> Full article ">Figure 3
<p>The impulse response plot for macroeconomic uncertainty and manufacturing sector real GDP. A predicted value change in macroeconomic uncertainty and its influence on the manufacturing sector, where the black line specifies the average prediction value. However, the dark blue to light blue denotes 75%, 90% and 95% confidence intervals, respectively.</p> Full article ">Figure 4
<p>The impulse response plot for macroeconomic uncertainty and solid mineral sector real GDP. A predicted value change in Macroeconomic uncertainty and its influence on the solid mineral sector, where the black line specifies the average prediction value. However, the dark blue to light blue denotes 75%, 90%, and 95% confidence intervals, respectively.</p> Full article ">Figure 5
<p>The impulse response plot for macroeconomic uncertainty and real estate sector real GDP. A predicted value change in Macroeconomic uncertainty and its influence on the real estate sector, where the black line specifies the average prediction value. However, the dark blue to light blue denotes 75%, 90%, and 95% confidence intervals, respectively.</p> Full article ">Figure 6
<p>The impulse response plot for macroeconomic uncertainty and trade sector real GDP. A predicted value change in macroeconomic uncertainty and its influence on the trade sector, where the black line specifies the average prediction value. However, the dark blue to light blue denotes 75%, 90% and, 95% confidence intervals, respectively.</p> Full article ">Figure 7
<p>The impulse response plot for macroeconomic uncertainty and ICT sector real GDP. A predicted value change in macroeconomic uncertainty and its influence on the ICT sector, where the black line specifies the average prediction value. However, the dark blue to light blue denotes 75%, 90%, and 95% confidence intervals, respectively.</p> Full article ">Figure 8
<p>The impulse response plot for macroeconomic uncertainty and finance and insurance sector real GDP. A predicted value change in macroeconomic uncertainty and its influence on the finance and insurance sector, where the black line specifies the average prediction value. However, the dark blue to light blue denotes 75%, 90% and 95% confidence intervals, respectively.</p> Full article ">Figure 9
<p>The impulse response plot for macroeconomic uncertainty and construction sector real GDP. A predicted value change in macroeconomic uncertainty and its influence on the construction sector, where the black line specifies the average prediction value. However, the dark blue to light blue denotes 75%, 90%, and 95% confidence intervals, respectively.</p> Full article ">Figure 10
<p>The impulse response plot for macroeconomic uncertainty and transport sector real GDP. A predicted value change in macroeconomic uncertainty and its influence on the transport sector, where the black line specifies the average prediction value. However, the dark blue to light blue denotes 75%, 90%, and 95% confidence intervals, respectively.</p> Full article ">Figure 11
<p>The impulse response plot for macroeconomic uncertainty and oil and gas sector real GDP. A predicted value change in macroeconomic uncertainty and its influence on the oil and gas sector, where the black line specifies the average prediction value. However, the dark blue to light blue denotes 75%, 90%, and 95% confidence intervals, respectively.</p> Full article ">
18 pages, 2668 KiB  
Article
Employment Shift in Response to a Technology Shock: An Analysis of Two Rigidities and Two Agents
by Kyuyeon Hwang and Junhee Han
Economies 2024, 12(11), 303; https://doi.org/10.3390/economies12110303 - 10 Nov 2024
Viewed by 706
Abstract
This paper examines the relationship between a technology shock and employment, considering price, wage rigidities, and heterogeneous agents. To explore this relationship, we utilized a Dynamic Stochastic General Equilibrium (DSGE) model, incorporating households with varying savings rates. For empirical validation, we conducted a [...] Read more.
This paper examines the relationship between a technology shock and employment, considering price, wage rigidities, and heterogeneous agents. To explore this relationship, we utilized a Dynamic Stochastic General Equilibrium (DSGE) model, incorporating households with varying savings rates. For empirical validation, we conducted a Structural Vector Autoregression (SVAR) analysis using data from two economies with distinct savings patterns—the United States and China. This approach allowed us to assess the impact of technology shocks on employment dynamics across different savings environments. Under these conditions, we observe that the effect of technology on aggregate employment is initially positive. Still, it gradually decreases in the mid-term, eventually switching to a negative impact before slowly recovering to equilibrium. The reason for this phenomenon depends on (i) the magnitude of fluctuations in price and wage, precisely, which variable’s fluctuations have a greater magnitude, and (ii) which effect, between income effect and substitute effect, is preferred by restricted and unrestricted households. Due to (i), real wages change, and because of (ii), households make different labor supply decisions, leading to fluctuations in employment in response to technology shocks. Full article
(This article belongs to the Section Macroeconomics, Monetary Economics, and Financial Markets)
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<p>Savings rate in the US and China.</p> Full article ">Figure 2
<p>Distribution of standardized variables.</p> Full article ">Figure 3
<p>Impulse response function to TFP shock (structural VAR).</p> Full article ">Figure 4
<p>IRF (Impulse Response Function) of variables to technology shock.</p> Full article ">
29 pages, 922 KiB  
Article
Start Switch for Innovation in “Construction Sequencing”: Research Funding
by Akifumi Kuchiki
Economies 2024, 12(11), 302; https://doi.org/10.3390/economies12110302 - 8 Nov 2024
Viewed by 599
Abstract
Clusters of knowledge-intensive industries and manufacturing industries form industrial agglomeration in Step I and activate innovation in Step II. Industry clusters are formed by building segments. “Construction sequencing” in the construction industry refers to the process of determining the sequence of segments to [...] Read more.
Clusters of knowledge-intensive industries and manufacturing industries form industrial agglomeration in Step I and activate innovation in Step II. Industry clusters are formed by building segments. “Construction sequencing” in the construction industry refers to the process of determining the sequence of segments to optimize a project’s resources, budget, and scheduled timeline. The process usually begins by dividing a project into segments. Urban segments consist of public spaces, airports, factories, health, housing, etc. A “segment” is a component of a cluster; the organization of a cluster consists of constructing segments. These segments can be divided into four main categories: human resources, physical infrastructure, institutions, and the living environment. Each segment has a specific function in the process of building a cluster. This study focused on innovation in Step II and extended the Fujita–Thisse model of spatial economics to hypothesize that research expenditure per researcher leads to value being added. The Granger causality was tested for the knowledge and manufacturing industries in nine major countries including China and the U.S. The results showed that the hypothesis was significant in identifying the starting segment of innovation in Step II. Accordingly, it can be concluded that research funding is the start switch that triggers innovation. The policy implication is that activating innovation in cluster policies begins with the establishment of a research fund for researchers in its assigned clusters. Full article
(This article belongs to the Special Issue Industrial Clusters, Agglomeration and Economic Development)
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<p>Cluster policy. Source: Author’s illustration.</p> Full article ">Figure 2
<p>Start switch in construction sequencing. Source: Author’s illustration.</p> Full article ">
21 pages, 1538 KiB  
Article
Informal Employment, the Tertiary Sector, and the Gross Domestic Product: A Structural Equations Model for the Mexican Economy
by David Robles Ortiz and Raymundo Alexei Ambriz Torres
Economies 2024, 12(11), 301; https://doi.org/10.3390/economies12110301 - 5 Nov 2024
Viewed by 1461
Abstract
In Mexico, approximately 55% of the working population is employed informally, contributing 24.4% to the Gross Domestic Product (GDP) in 2022. This study analyzed the impact of wages, taxes, government spending, and unemployment on the informal economy of Mexico from 1980 to 2022, [...] Read more.
In Mexico, approximately 55% of the working population is employed informally, contributing 24.4% to the Gross Domestic Product (GDP) in 2022. This study analyzed the impact of wages, taxes, government spending, and unemployment on the informal economy of Mexico from 1980 to 2022, as well as its relationship with the tertiary sector’s contribution to the GDP. The methodology of the study was structural equation modeling. The findings of this study revealed that an increase in taxes, the unemployment rate, and the minimum wage in Mexico tends to be accompanied by a rise in informal employment. Finally, a unitary change in the latent variable informality affected the growth of the tertiary sector’s contribution to the GDP by 0.37 units. Full article
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<p>Mexico: annual GDP variation, 2010-2023; quarterly GDP, 2010/Q1-2023/Q1 (<a href="#B34-economies-12-00301" class="html-bibr">INEGI 2023b</a>). The red color indicates negative values.</p> Full article ">Figure 2
<p>Contribution of the informal economy to Mexico’s GDP, 2003–2022 (<a href="#B34-economies-12-00301" class="html-bibr">INEGI 2023b</a>).</p> Full article ">Figure 3
<p>Unemployment rate and labor informality (<a href="#B52-economies-12-00301" class="html-bibr">OECD 2024</a>).</p> Full article ">Figure 4
<p>Evolution of wages: formal vs. informal, 2010 to 2023 (<a href="#B18-economies-12-00301" class="html-bibr">Government of Mexico 2024</a>; <a href="#B16-economies-12-00301" class="html-bibr">DOF 2024</a>). Note: Exchange rate on 31 January 2024.</p> Full article ">Figure 5
<p>Path diagram of the structural model for Mexico.</p> Full article ">Figure 6
<p>Correlation matrix.</p> Full article ">Figure 7
<p>Standardized parameters.</p> Full article ">
18 pages, 326 KiB  
Article
The Effect of Education on Economic Growth in Sub-Saharan African Countries: Do Institutions Matter?
by Mohammed N. Abu Alfoul, Ayman Hassan Bazhair, Ibrahim N. Khatatbeh, Adam G. Arian and Mahmoud N. Abu Al-Foul
Economies 2024, 12(11), 300; https://doi.org/10.3390/economies12110300 - 4 Nov 2024
Cited by 1 | Viewed by 1873
Abstract
This paper investigates the moderating role of institutional quality on the relationship between education and economic growth in Sub-Saharan Africa (SSA). The study applies the panel ARDL model to data from 18 SSA countries spanning 2000–2020 for its main analysis, along with a [...] Read more.
This paper investigates the moderating role of institutional quality on the relationship between education and economic growth in Sub-Saharan Africa (SSA). The study applies the panel ARDL model to data from 18 SSA countries spanning 2000–2020 for its main analysis, along with a battery of diagnostics test to ensure the robustness of the results. The results reveal that the long-term effect of education on economic growth is statistically insignificant, attributing this finding to high rates of education exclusion and low-quality education. Remarkably, the research emphasizes the moderating role of institutional quality, showing the positive effects of education on economic growth when countries demonstrate robust corruption control and political stability. The study contributes to the existing literature by highlighting specific institutional factors influencing the effectiveness of education in driving economic growth, emphasizing the need for a strong institutional framework alongside educational efforts for sustainable development. The findings highlight that robust institutions form a crucial infrastructure that enhances the effectiveness of education in driving productivity and fostering economic growth. Full article
(This article belongs to the Special Issue Studies on Factors Affecting Economic Growth)
19 pages, 307 KiB  
Article
Determinants of the Blue Economy Growth in the Era of Sustainability: A Case Study of Indonesia
by Taufiq Marwa, Muizzuddin, Abdul Bashir, Sri Andaiyani and Afriyadi Cahyadi
Economies 2024, 12(11), 299; https://doi.org/10.3390/economies12110299 - 2 Nov 2024
Viewed by 1540
Abstract
The Sustainable Development Goals (SDGs) represent a fundamental global commitment to addressing a wide range of socio-economic and environmental challenges. A key component of these goals is the commitment to ocean sustainability, encapsulated in the concept of the blue economy. The blue economy, [...] Read more.
The Sustainable Development Goals (SDGs) represent a fundamental global commitment to addressing a wide range of socio-economic and environmental challenges. A key component of these goals is the commitment to ocean sustainability, encapsulated in the concept of the blue economy. The blue economy, emerging in an era characterized by intricate dynamics and openness to transformation, is influenced by various determinants. This study utilizes panel data analysis and the pooled least squares method to investigate the factors influencing the share of the blue economy in the archipelagic provinces of Indonesia from 2012 to 2021. With its vast maritime territory and numerous islands, Indonesia provides a highly relevant context for examining these dynamics. The empirical results indicate that information and communication technology (ICT), fisheries capture, and aquaculture production positively impact the blue economy’s share. Conversely, trade openness and electricity consumption exhibit a negative relationship with the blue economy’s share. Moreover, the analysis reveals that investment does not have a significant effect on the blue economy’s share. These findings underscore the critical importance of developing robust infrastructure and implementing stringent regulatory oversight on fishery product trade to enhance sustainable growth within the blue economy framework. Full article
(This article belongs to the Special Issue The Asian Economy: Constraints and Opportunities)
13 pages, 262 KiB  
Article
The Impact of AI on International Trade: Opportunities and Challenges
by Ozcan Ozturk
Economies 2024, 12(11), 298; https://doi.org/10.3390/economies12110298 - 30 Oct 2024
Cited by 2 | Viewed by 6195
Abstract
This study aims to explore the transformative potential of Artificial Intelligence (AI) in international trade, focusing on its key roles in optimizing trade operations, enhancing trade finance, and expanding market access. In trade optimization, AI leverages advanced machine learning and predictive analytics to [...] Read more.
This study aims to explore the transformative potential of Artificial Intelligence (AI) in international trade, focusing on its key roles in optimizing trade operations, enhancing trade finance, and expanding market access. In trade optimization, AI leverages advanced machine learning and predictive analytics to enhance demand forecasting, route optimization, and customs procedures, leading to more efficient logistics and inventory management. In trade finance, AI can automate document processing and risk assessment, increasing access to finance and enhancing transactional transparency, particularly through integration with blockchain technology. In terms of market access, AI-driven analytics can identify consumer trends and competitive dynamics, enabling personalized marketing and overcoming linguistic and cultural barriers. Due to the lack of quantitative data, this study employed qualitative research methods, specifically a multiple-case-study approach. The case studies of leading companies such as Alibaba, DHL, and Maersk showcase how they leverage AI to optimize their trade operations, improve customer service, and achieve greater efficiency. These real-world examples demonstrate AI’s practical applications and significant benefits in the global trade landscape. However, the adoption of AI in international trade is not without challenges. These include issues around data quality, ethical concerns, technological complexity, and public perception. Policy recommendations highlight the need for a robust data infrastructure, establishing ethical AI guidelines, and fostering international cooperation to align data protection regulations. Full article
(This article belongs to the Special Issue Economic Development in the Digital Economy Era)
13 pages, 258 KiB  
Article
Employment Subsidies and Job Insertion of Higher Education Graduates in the Labor Market
by Anis Khayati, Umme Hani, Md Shabbir Alam, Nadia Sha and Chokri Terzi
Economies 2024, 12(11), 297; https://doi.org/10.3390/economies12110297 - 30 Oct 2024
Viewed by 946
Abstract
This paper uses data from the 24 governorates in Tunisia over the period 2012–2020 to study the relationship between job insertion of higher education graduates into the formal labor market and a number of independent variables, namely active labor supply, labor demand, an [...] Read more.
This paper uses data from the 24 governorates in Tunisia over the period 2012–2020 to study the relationship between job insertion of higher education graduates into the formal labor market and a number of independent variables, namely active labor supply, labor demand, an active labor market policy program (named the CIVP program), and the waiting time for job insertion. The balanced panel, which includes 216 observations for each variable, was the basis of different tests and estimations. The results of the tests allowed the assessment of a fixed effects model and a long-term relationship using FMOLS and VECM models. Results show that, in the long term, active labor supply and the CIVP program have positive effects on the job insertion of higher education graduates. In contrast, the results in the short term do not appear significant, with a negative effect of the CIVP program that reflects the fact that companies exploit most of the benefits of this wage subsidy program on job insertion before final recruitment. Using the ARDL model, the individual results by governate show specific differences across areas. Full article
(This article belongs to the Special Issue The Impact of Public Policies (Product and Labour Market Regulations and Institutions and Education Policies) on Employment, Unemployment and Human Capital)
16 pages, 618 KiB  
Article
Analysis of Exchange Rate Stability on the Economic Growth Process of a Developing Country: The Case of South Africa from 2000 to 2023
by Collin Chikwira and Mohammed Iqbal Jahed
Economies 2024, 12(11), 296; https://doi.org/10.3390/economies12110296 - 29 Oct 2024
Viewed by 2634
Abstract
This study examines the impact of exchange rate stability on the economic growth of South Africa from 2000 to 2023, a period characterised by significant political and economic changes. Exchange rate stability is critical for developing countries, affecting key macroeconomic variables such as [...] Read more.
This study examines the impact of exchange rate stability on the economic growth of South Africa from 2000 to 2023, a period characterised by significant political and economic changes. Exchange rate stability is critical for developing countries, affecting key macroeconomic variables such as trade balances, foreign direct investment (FDI), and inflation. For emerging economies like South Africa, maintaining a stable exchange rate can reduce uncertainty in international transactions, foster investor confidence, and support sustainable economic development. This research explores whether consistent exchange rate management has positively influenced South Africa’s economic trajectory, particularly by mitigating the adverse effects of global shocks and domestic volatility. Using the EasyData online database, which contains yearly time series data, the method of analysis adopted by the research is the ordinary least squares (OLS) regression method. The findings show that while exchange rate stability positively impacts GDP, the influence of FDI and political risk is more substantial. These results underscore the importance of fostering a stable economic environment through sound exchange rate policies, political stability, and efforts to attract foreign investments to ensure long-term economic growth. Full article
(This article belongs to the Special Issue Exchange Rates: Drivers, Dynamics, Impacts, and Policies)
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<p>Movement in the US dollar nominal effective exchange rate. Source: <a href="#B20-economies-12-00296" class="html-bibr">IMF</a> (<a href="#B20-economies-12-00296" class="html-bibr">2024</a>) Note: As a marker for judging the worth of a currency, the NEER uses the weighted average of many foreign currencies. Fluctuations in the nominal exchange rate of the US dollar are sometimes threats to the stability of the South African currency through aspects such as capital flows, commodity prices, and the direct relationship between the dollar and the rand.</p> Full article ">Figure 2
<p>ZAR performance against USD since 2019. Source: <a href="#B49-economies-12-00296" class="html-bibr">SARB</a> (<a href="#B49-economies-12-00296" class="html-bibr">2023</a>).</p> Full article ">
21 pages, 2718 KiB  
Article
Expenditure Rules: Limiting the Level or the Variation of Public Expenditure?
by Séverine Menguy
Economies 2024, 12(11), 295; https://doi.org/10.3390/economies12110295 - 29 Oct 2024
Viewed by 885
Abstract
The main goal of the first-generation expenditure rules was to ensure fiscal discipline: preserving a sound fiscal framework and public debt sustainability. Regarding this goal, analytically as well as empirically, limiting the share of public expenditure in GDP would be more appropriate in [...] Read more.
The main goal of the first-generation expenditure rules was to ensure fiscal discipline: preserving a sound fiscal framework and public debt sustainability. Regarding this goal, analytically as well as empirically, limiting the share of public expenditure in GDP would be more appropriate in case of weak potential economic growth or if the public expenditure-to-GDP ratio is high. On the contrary, limiting the variation of public expenditure would be more appropriate for countries with high potential economic growth or with a weak public expenditure-to-GDP ratio. The second goal of expenditure rules is to contribute to sustaining economic activity. Regarding this goal, limiting the level of public expenditure appears as more favorable than limiting the variation of public expenditure. Indeed, a rule in terms of variation could hamper economic growth, especially for countries with a high public expenditure-to-GDP ratio. Full article
(This article belongs to the Special Issue European Economic Governance and Integration at a Crossroads)
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<p>Expenditure rules and budget balances. (<b>a</b>) Case of a rule for the level of public expenditure. (<b>b</b>) Case of a rule for the variation of public expenditure. (<b>c</b>) Case for both types of fiscal rules. Budget balance: general government net lending (+) or borrowing (−) as percentage of the GDP. Source: OECD and IMF database, and the author’s own calculations.</p> Full article ">Figure 2
<p>Expenditure rules and variations of public debt. (<b>a</b>) Case of a rule for the level of public expenditure. (<b>b</b>) Case of a rule for the variation of public expenditure. (<b>c</b>) Case for both types of fiscal rules. Public debt: general government public debt as percentage of the GDP; difference between the public debt in a given country and the average public debt in OECD countries in points of GDP. Source: OECD and IMF database, and the author’s own calculations.</p> Full article ">Figure 3
<p>Expenditure rules and economic activity. (<b>a</b>) Case of a rule for the level of public expenditure. (<b>b</b>) Case of a rule for the variation of public expenditure. (<b>c</b>) Case for both types of fiscal rules. Economic activity: annual real GDP growth, percentage change from the previous period. Source: OECD and IMF data, and the author’s own calculations.</p> Full article ">Figure 4
<p>Public expenditure and real economic activity. Government expenditure (% of the GDP) and annual real GDP growth (% change from the previous year). Source: OECD and IMF data between 2000 and 2019, 55 countries, and the author’s own calculations.</p> Full article ">Figure A1
<p>Expenditure rules and budget balances in countries with a weak public expenditure-to-GDP ratio. (<b>a</b>) Case of a rule for the level of public expenditure (<b>b</b>) Case of a rule for the variation of public expenditure. (<b>c</b>) Case for both types of fiscal rules.</p> Full article ">Figure A2
<p>Expenditure rules and budget balances in countries with a high public expenditure-to-GDP ratio. (<b>a</b>) Case of a rule for the level of public expenditure (<b>b</b>) Case of a rule for the variation of public expenditure. (<b>c</b>) Case for both types of fiscal rules. Budget balance: general government net lending (+) or borrowing (−) as a percentage of the GDP. Source: OECD and IMF database, and the author’s own calculations.</p> Full article ">Figure A3
<p>Expenditure rules and variations of public debt in countries with a weak public expenditure-to-GDP ratio. (<b>a</b>) Case of a rule for the level of public expenditure (<b>b</b>) Case of a rule for the variation of public expenditure. (<b>c</b>) Case for both types of fiscal rules.</p> Full article ">Figure A4
<p>Expenditure rules and variations of public debt in countries with a high public expenditure-to-GDP ratio. (<b>a</b>) Case of a rule for the level of public expenditure (<b>b</b>) Case of a rule for the variation of public expenditure. (<b>c</b>) Case for both types of fiscal rules. Public debt: general government public debt as a percentage of the GDP; difference between the public debt in a given country and the average public debt in OECD countries in points of the GDP. Source: OECD and IMF database, and the author’s own calculations.</p> Full article ">Figure A5
<p>Expenditure rules and economic activity in countries with a weak public expenditure-to-GDP ratio. (<b>a</b>) Case of a rule for the level of public expenditure (<b>b</b>) Case of a rule for the variation of public expenditure. (<b>c</b>) Case for both types of fiscal rules.</p> Full article ">Figure A6
<p>Expenditure rules and economic activity in countries with a high public expenditure-to-GDP ratio. (<b>a</b>) Case of a rule for the level of public expenditure (<b>b</b>) Case of a rule for the variation of public expenditure. (<b>c</b>) Case for both types of fiscal rules. Economic activity: annual real GDP growth, percentage change from the previous period. Source: OECD and IMF data, and the author’s own calculations.</p> Full article ">Figure A7
<p>Public expenditure-to-GDP ratio and economic activity. (<b>a</b>) Case of a rule for the level of public expenditure (<b>b</b>) Case of a rule for the variation of public expenditure. (<b>c</b>) Case for both types of fiscal rules. Government expenditure (% of the GDP). Economic activity: annual real GDP growth, percent change from the previous period; difference between the economic growth in a given country and the average economic growth in OECD countries. Source: OECD and IMF data, and the author’s own calculations.</p> Full article ">
12 pages, 3066 KiB  
Article
Shifting Sands: Examining and Mapping the Population Structure of Greece Through the Last Three Censuses
by Kleomenis Kalogeropoulos, Dionysios Fragkopoulos, Panagiotis Andreopoulos and Alexandra Tragaki
Economies 2024, 12(11), 294; https://doi.org/10.3390/economies12110294 - 29 Oct 2024
Viewed by 787
Abstract
This paper aims to facilitate a more nuanced understanding of regional disparities in the population age structure at a local scale by applying a recent method for visualizing these disparities. Utilizing data from the three most recent population censuses in Greece, this method [...] Read more.
This paper aims to facilitate a more nuanced understanding of regional disparities in the population age structure at a local scale by applying a recent method for visualizing these disparities. Utilizing data from the three most recent population censuses in Greece, this method applies advanced data visualization techniques to map age distributions, highlighting significant variations in aging patterns across municipalities, towns, and districts. Traditional demographic analysis often overlooks local heterogeneities, leading to broad policies that often fail to address the unique needs of specific regions. Detailed maps are created by integrating geographic data with census data (using R and GIS), enabling policymakers to pinpoint areas with specific demographic challenges and opportunities. This localized approach reveals critical insights, such as regions experiencing rapid population aging, areas with younger population profiles, and zones undergoing demographic transitions. The visualization tool significantly improves the formulation of targeted strategies, enhancing the effectiveness of policies related to healthcare, workforce planning, and social services distribution. Through case studies and comparative analysis, we demonstrate the practical applications and advantages of this method in shaping public policy and strategic planning. This paper contributes to the field of geodemography by introducing and demonstrating a visualization method that enhances the accuracy of demographic analysis, providing policy makers with useful information to better address local demographic challenges and tailor strategies to specific regional needs. Full article
(This article belongs to the Special Issue Demographics and Regional Economic Development)
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<p>The study area—Greece (regions of).</p> Full article ">Figure 2
<p>Color mapping palette (each black dot is a municipality).</p> Full article ">Figure 3
<p>Population structure (2001).</p> Full article ">Figure 4
<p>Population structure (2011).</p> Full article ">Figure 5
<p>Population structure (2021).</p> Full article ">
18 pages, 331 KiB  
Article
Exploring Education-Induced Bargaining Power of Women on Household Welfare in Sub-Saharan Africa
by Raymond Boadi Frempong and David Stadelmann
Economies 2024, 12(11), 293; https://doi.org/10.3390/economies12110293 - 29 Oct 2024
Viewed by 994
Abstract
Women’s education and empowerment have engaged the interest of policymakers and academics for many years. We employ individual-level data from Ghana and Uganda in this paper to offer a comparative analysis of the impact of women’s education and empowerment on six household welfare [...] Read more.
Women’s education and empowerment have engaged the interest of policymakers and academics for many years. We employ individual-level data from Ghana and Uganda in this paper to offer a comparative analysis of the impact of women’s education and empowerment on six household welfare indicators: child labor, child school enrollment, female labor force participation, fertility rate, household food expenditure, and nutrition intake. Comparing the two countries is insightful due to their distinct socio-economic structures and cultural contexts, which might influence the dynamics of women’s empowerment differently. The study utilizes the Ordinary Least Squares (OLS) and Instrumental Variables (IV) regressions and provides a battery of robustness tests. The empirical results show that in a household, the woman’s and man’s education levels are significant determinants of household welfare. However, contrary to common assumptions, the woman’s education does not have a stronger effect than the man’s, and her relative bargaining position has negligible effects on the welfare indicators studied, at least for the cases of Ghana and Uganda. Further sensitivity checks support these findings, suggesting that female education can improve household welfare, but its impact may not necessarily operate through enhanced bargaining power within the household. Full article
(This article belongs to the Special Issue Economic Indicators Relating to Rural Development)
19 pages, 1386 KiB  
Article
Driving Forces of the Consumer Price Index During the Crises in the Eurozone: Heterogeneous Panel Approach
by Jovica Pejčić, Olgica Glavaški and Marina Beljić
Economies 2024, 12(11), 292; https://doi.org/10.3390/economies12110292 - 29 Oct 2024
Cited by 1 | Viewed by 854
Abstract
This paper examines key driving forces of inflationary pressures, taking into account supply and demand side determinants and actions of policy makers, during the pandemic and geopolitical crises in the Eurozone. Using heterogeneous nonstationary macro-panel models, especially the Mean Group (MG) and Pooled [...] Read more.
This paper examines key driving forces of inflationary pressures, taking into account supply and demand side determinants and actions of policy makers, during the pandemic and geopolitical crises in the Eurozone. Using heterogeneous nonstationary macro-panel models, especially the Mean Group (MG) and Pooled Mean Group (PMG) methods in the period 2020q1–2024q4, it is concluded that the dominant determination of inflationary pressures comes from the supply side. There is a long-run positive equilibrium relationship between the growth of energy prices and the growth of the consumer price index (CPI), and between the index representing supply bottlenecks (SBI) and the growth of CPI, while the relationship with the unemployment rate is insignificant. Also, the existence of a long-run equilibrium between the interest rate and CPI is homogeneous due to the unique monetary policy on a sample, and negative, indicating the efficiency of that policy. However, the speed of adjustment of individual economies is heterogeneous, and in the case of Greece and Ireland, insignificant. The heterogeneous or insignificant response of Eurozone member states, especially related to core-periphery asymmetry, refers to the vulnerability and structural weakness of the Eurozone economies, and the need for deeper integration. Full article
(This article belongs to the Special Issue Energy Shocks, Stock Market and the Macroeconomy)
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<p>Average movement of energy prices, interest rates, and CPI in the Eurozone economies (2020q1–2023q4). Source: Authors’ presentation.</p> Full article ">Figure 2
<p>SBI and unemployment rate in the Eurozone in the period 2020q1–2023q4. Source: Authors’ presentation.</p> Full article ">Figure 3
<p>Heterogeneity of inflationary pressures in the Eurozone economies in the period 2020q1–2023q4. Source: Authors’ presentation.</p> Full article ">
20 pages, 2928 KiB  
Article
The Use of the Data Envelopment Analysis–Malmquist Approach to Measure the Performance of Digital Transformation in EU Countries
by Jarmila Horváthová and Martina Mokrišová
Economies 2024, 12(11), 291; https://doi.org/10.3390/economies12110291 - 28 Oct 2024
Viewed by 1180
Abstract
Currently, the process of the digital transformation of EU countries is very important and often discussed. It will not only bring new opportunities for companies and the broader population but will also enable the transition to a more ecological economy. An important goal [...] Read more.
Currently, the process of the digital transformation of EU countries is very important and often discussed. It will not only bring new opportunities for companies and the broader population but will also enable the transition to a more ecological economy. An important goal is to speed up the digitalization processes taking place in companies. It is very important to use already established digitalization elements more efficiently. This also resulted in the motivation for the given research. The aim of this paper is to quantify the change in the efficiency of the digital transformation of EU countries. As part of this research, the Variable Returns to Scale Data Envelopment Analysis (VRS DEA) model and the Malmquist index (MI) based on the DEA approach were applied. The results of the model made it possible to assess how the changes in technical efficiency and technological changes contributed to the changes in efficiency. The long-term theoretical added value of this paper lies in its proposal for countries and their governments to monitor not only the number of introduced digital elements, but also the efficiency of their use relative to some aggregate output; for example, GDP (Gross Domestic Product) or unemployment rate. The added value of this research is that less developed countries use digitalization elements more effectively than developed countries. Full article
(This article belongs to the Special Issue Economic Development in the Digital Economy Era)
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<p>Selected indicators of the digitalization process for the year 2023. Source: authors.</p> Full article ">Figure 2
<p>Position of EU countries in selected digital indices. Source: processed by authors in Statistica 14.1.0.8 software.</p> Full article ">Figure 3
<p>Results of the DEA VRS model. Source: processed by authors in DEAFrontier software.</p> Full article ">Figure 4
<p>Results of the MI model. Source: processed by authors in DEAFrontier software.</p> Full article ">Figure 5
<p>Results of the efficiency change. Source: processed by authors in DEAFrontier software.</p> Full article ">Figure 6
<p>Results of the frontier shift. Source: processed by authors in DEAFrontier software.</p> Full article ">Figure 7
<p>Comparison of the position of EU countries based on selected inputs and outputs for the years (<b>a</b>) 2019 and (<b>b</b>) 2023.</p> Full article ">Figure 8
<p>Three-dimensional scatterplot of Malmquist index against efficiency change and frontier shift. Source: processed by authors in Statistica 14.1.0.8 software.</p> Full article ">
26 pages, 2186 KiB  
Article
Regional Workforce Dynamics in West Virginia: Insights from Shift-Share and Location Quotient Analysis
by Saman Janaranjana Herath Bandara
Economies 2024, 12(11), 290; https://doi.org/10.3390/economies12110290 - 28 Oct 2024
Viewed by 907
Abstract
West Virginia, home to approximately 1.77 million residents, has been grappling with significant economic challenges characterized by persistent poverty and sluggish growth. Despite ongoing development efforts, the state’s Gross State Product (GSP) has seen only a modest increase of 0.1% over the past [...] Read more.
West Virginia, home to approximately 1.77 million residents, has been grappling with significant economic challenges characterized by persistent poverty and sluggish growth. Despite ongoing development efforts, the state’s Gross State Product (GSP) has seen only a modest increase of 0.1% over the past five years, reaching USD 71.7 billion, while the unemployment rate remains at 4.0%. The annualized employment growth rate of 0.7% lags behind the national average, and only about 54% of West Virginia’s adult population is either employed or actively seeking employment, resulting in one of the lowest labor force participation rates in the nation. In contrast, certain industrial sectors, such as healthcare, social assistance, retail trade, and accommodation and food services, have shown intermittent growth at the county and regional levels. To explore the unique characteristics and significance of these regions in relation to employment growth, this study examines regional employment patterns in West Virginia from 2001 to 2020, focusing on the main regions of the state: Metro Valley, Mid-Ohio Valley, New River/Greenbrier Valley, Mountain Lakes, and Potomac Highlands. Utilizing shift-share and location quotient (LQ) analyses, this research identifies the sectors driving regional employment and assesses their performance. Key findings reveal strong sectoral performance in mining, manufacturing, and finance in the Mid-Ohio Valley; wholesale trade, transportation, and utilities in the Metro Valley; agriculture and administrative services in the New River/Greenbrier Valley; agriculture and manufacturing in the Potomac Highlands; and scientific services, healthcare, and utilities in the Mountain Lakes region. Based on these insights, this study recommends targeted policy interventions to address regional disparities, enhance sectors with significant short- and long-term benefits, and foster balanced economic development across the state. Full article
(This article belongs to the Special Issue Demographics and Regional Economic Development)
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<p>Regional map of West Virginia. Source: <a href="#B42-economies-12-00290" class="html-bibr">Virginia-map.com</a> (<a href="#B42-economies-12-00290" class="html-bibr">2022</a>).</p> Full article ">Figure 2
<p>Sectoral employment change in the Metro Valley Region, 2001 and 2020.</p> Full article ">Figure 3
<p>Sectoral employment change in the Mid-Ohio Valley Region, 2001 and 2020.</p> Full article ">Figure 4
<p>Sectoral employment change in the New River and Greenbrier Valley region, 2001 and 2020.</p> Full article ">Figure 5
<p>Sectoral employment change in the Mountain and Lakes Valley Region, 2001 and 2020.</p> Full article ">Figure 6
<p>Sectoral employment change in the Potomac Highlands Region, 2001 and 2020.</p> Full article ">
21 pages, 7273 KiB  
Article
Circular Economy: Municipal Solid Waste and Landfilling Analyses in Slovakia
by Emese Tokarčíková, Mária Ďurišová and Terézia Trojáková
Economies 2024, 12(11), 289; https://doi.org/10.3390/economies12110289 - 28 Oct 2024
Viewed by 1053
Abstract
The pursuit of shifting Slovakia towards a circular economy is met with a multitude of obstacles, including the pervasive consumerist mindset among Slovakians. This mindset favors packaged food, leading to its improper disposal in municipal waste instead of being recycled. Furthermore, the inclination [...] Read more.
The pursuit of shifting Slovakia towards a circular economy is met with a multitude of obstacles, including the pervasive consumerist mindset among Slovakians. This mindset favors packaged food, leading to its improper disposal in municipal waste instead of being recycled. Furthermore, the inclination towards landfills poses a significant challenge in the management of municipal solid waste (MSW). To address this issue, a quantitative analysis was conducted using developed and validated models, incorporating various factors related to MSW management in Slovakia. Our study confirmed the significance of parameters such as MSW management costs and population size in the amount of MSW generated. Furthermore, our findings include a short-term forecast for MSW generation in Slovakia for the next two years. These results, based on quantitative data, provide valuable insights for policymakers and waste management authorities in Slovakia, emphasizing the urgent need for a transition towards a more sustainable and circular economy. Full article
(This article belongs to the Topic Enabling Strategies and Policies toward a Sustainable Environment)
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<p>Municipal solid waste production per capita (kg) in Slovakia regions, 2022. Source: <a href="https://datacube.statistics.sk/#!/view/sk/VBD_SK_WIN/zp3002rr/v_zp3002rr_00_00_00_sk" target="_blank">https://datacube.statistics.sk/#!/view/sk/VBD_SK_WIN/zp3002rr/v_zp3002rr_00_00_00_sk</a> accessed on 1 May 2024.</p> Full article ">Figure 2
<p>Landfilling in linear and circular economy.</p> Full article ">Figure 3
<p>Output of linear regression model 1 in Gretl software. Source: own processing, 2024.</p> Full article ">Figure 4
<p>Graphical representation of the normality of model 1 residuals in Gretl software. Source: own processing, 2024.</p> Full article ">Figure 5
<p>Output of linear regression model 2 in Gretl software. Source: own processing, 2024.</p> Full article ">Figure 6
<p>Output of linear regression model 3 in Gretl software. Source: own processing, 2024.</p> Full article ">Figure 7
<p>DW test for significance of autocorrelation in the model. Source: own elaboration, 2024.</p> Full article ">Figure 8
<p>Cochrane–Orcutt method (2009–2022) using Gretl software. Source: own processing, 2024.</p> Full article ">Figure 9
<p>VIF method in Gretl software. Source: own processing, 2024.</p> Full article ">Figure 10
<p>Cochrane–Orcutt method (2009–2021) using Gretl software. Source: own processing, 2024.</p> Full article ">Figure 11
<p>White’s test for heteroskedasticity (2009–2021) using Gretl software. Source: own processing, 2024.</p> Full article ">Figure 12
<p>White’s test for heteroskedasticity (2008–2021) using Gretl software. Source: own processing, 2024.</p> Full article ">Figure 13
<p>Graph of actual and estimated values in Gretl software. Source: own processing, 2024.</p> Full article ">Figure 14
<p>Graph of predicted data in Gretl software. Source: own processing, 2023.</p> Full article ">Figure 14 Cont.
<p>Graph of predicted data in Gretl software. Source: own processing, 2023.</p> Full article ">
17 pages, 3649 KiB  
Article
Financial Development and Climate Change: A Detailed Bibliometric Investigation
by Gabriela Badareu, Marius Dalian Doran, Mihai Alexandru Firu, Sergiu Mihail Olaru and Nicoleta Mihaela Doran
Economies 2024, 12(11), 288; https://doi.org/10.3390/economies12110288 - 28 Oct 2024
Cited by 1 | Viewed by 877
Abstract
This paper presents a detailed bibliometric analysis of the interaction between financial development and climate change, with the main aim of elucidating the current state of research in this area, identifying existing gaps, and guiding future researchers interested in this rapidly expanding field. [...] Read more.
This paper presents a detailed bibliometric analysis of the interaction between financial development and climate change, with the main aim of elucidating the current state of research in this area, identifying existing gaps, and guiding future researchers interested in this rapidly expanding field. The study used VOSviewer software version 1.6.18 to analyze the bibliometric data, facilitating the mapping of co-author networks, institutional collaborations, and the identification of main research directions. Through this tool, 730 papers from the Web of Science database covering the period 2010–2024 were extracted and analyzed. The study highlights the authors and institutions that have made significant contributions to the investigation of the relationship between financial development and climate change. The identification of key contributors and international collaborative networks provides a solid foundation for future research and policy initiatives. In addition, the study identifies the most prolific journals and assesses the quality and impact of the research. This allows for a deeper understanding of current research directions and potential future developments. The study not only clarifies the current state of research but also opens up new opportunities for investigating innovative and sustainable solutions aimed at improving the quality of life and protecting the environment. Full article
(This article belongs to the Special Issue The Effects of Uncertainty Shocks in Booms and Busts)
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<p>Steps of bibliometric analysis. Source: own processing.</p> Full article ">Figure 2
<p>Evolution in the number of scientific articles. Source: Web of Science.</p> Full article ">Figure 3
<p>Evolution in the number of citations. Source: Web of Science.</p> Full article ">Figure 4
<p>Typology of documents. Source: Web of Science.</p> Full article ">Figure 5
<p>Co-citation of authors. Source: own.</p> Full article ">Figure 6
<p>The most cited papers. Source: own.</p> Full article ">Figure 7
<p>Mapping authors with publications in the field. Source: own processing.</p> Full article ">Figure 8
<p>Ranking of the most prolific authors. Source: own processing.</p> Full article ">Figure 9
<p>Institutions’ co-authorship network. Source: own processing.</p> Full article ">Figure 10
<p>Prolific countries/regions. Source: own processing.</p> Full article ">Figure 11
<p>Mapping of specialized journals. Own processing.</p> Full article ">
29 pages, 331 KiB  
Article
Diversification and the Resource Curse: An Econometric Analysis of GCC Countries
by Nagwa Amin Abdelkawy
Economies 2024, 12(11), 287; https://doi.org/10.3390/economies12110287 - 25 Oct 2024
Cited by 3 | Viewed by 1559
Abstract
This research explores the effects of significant global economic shocks, such as the 2008 Global Financial Crisis and the 2020 COVID-19 pandemic, on GDP growth in the Gulf Cooperation Council (GCC) nations. Employing a dynamic generalized method of moments (GMM) model, the analysis [...] Read more.
This research explores the effects of significant global economic shocks, such as the 2008 Global Financial Crisis and the 2020 COVID-19 pandemic, on GDP growth in the Gulf Cooperation Council (GCC) nations. Employing a dynamic generalized method of moments (GMM) model, the analysis highlights the strong momentum effect of lagged GDP growth, where past performance plays a critical role in shaping current economic outcomes. The findings also reveal that natural resources continue to positively influence short-term growth, but with diminishing returns over time, supporting the resource curse hypothesis and underscoring the need for broader structural reforms to ensure long-term sustainability. In addition, the results show that external investments flowing into the country, trade balance, and inflation emerge as key drivers of economic growth. While moderate inflation is positively associated with economic expansion, unemployment exerts a significant negative effect on GDP growth, particularly in models that account for country-specific characteristics. This emphasizes the need for labor market reforms to improve employment rates and support sustainable development. The role of gross capital formation, particularly in both the dynamic GMM and random effects models, further underscores the importance of strategic domestic investment, especially during periods of global disruption. These findings emphasize the critical need for economic diversification in the GCC. Policymakers should focus on attracting foreign investment, managing inflation, enhancing human capital, and boosting domestic investment to mitigate the adverse effects of the resource curse and secure sustainability. While market capitalization and oil rents may stimulate short-term growth, their long-term sustainability remains uncertain without greater diversification. Both external and domestic investments emerge as critical drivers of long-term growth, while persistent challenges such as inflation and unemployment continue to pose risks to economic stability. The study highlights the need to reduce reliance on oil and leverage human capital to build more resilient economies capable of adapting to future challenges. By offering dynamic, empirical insights into the balance between resource reliance and sustainable growth, this research adds valuable insights to the policy discussion on economic diversification in the GCC. Policymakers are urged to prioritize FDI, inflation management, domestic capital formation, and human capital development to mitigate vulnerabilities and ensure sustainable economic growth in the face of ongoing global uncertainties. Full article
(This article belongs to the Special Issue Economic Growth, Corruption, and Financial Development)
18 pages, 2100 KiB  
Article
Tax Evasion and Company Survival: A Brazilian Case Study
by Jorge Luis Tonetto, Josep Miquel Pique, Adelar Fochezatto and Carina Rapetti
Economies 2024, 12(11), 286; https://doi.org/10.3390/economies12110286 - 25 Oct 2024
Viewed by 1639
Abstract
Enterprises face significant growth and survival challenges in highly competitive markets. Many companies fail to meet their tax obligations, which deprives society of essential resources and often results in tax penalties. This article examines whether companies that receive tax fines for evasion have [...] Read more.
Enterprises face significant growth and survival challenges in highly competitive markets. Many companies fail to meet their tax obligations, which deprives society of essential resources and often results in tax penalties. This article examines whether companies that receive tax fines for evasion have a longer or shorter life expectancy compared to those that consistently comply with tax regulations. To analyze survival rates, the Kaplan–Meier estimator and Cox regression model were applied, considering factors such company size, sector, location, and tax evasion fines. The study included data from 11,297 firms established in 2017, in Rio Grande do Sul, Brazil. The findings indicate that companies fined for tax evasion had a higher survival rate (69%) compared to those without fines (38%) by 2023. This suggests that fines might serve as a corrective measure, helping companies realign and improve their chances of survival. Additionally, the study shows that medium-sized enterprises face significant challenges, possibly due to exceeding the limits of a simplified tax regime. This study highlights the importance of continued research across different regions and countries to validate these findings and enhance tax administration strategies. Full article
(This article belongs to the Special Issue Shadow Economy and Tax Evasion)
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<p>Model adopted for RS tax administration. Source: prepared by the authors. (<a href="#B47-economies-12-00286" class="html-bibr">OECD 2004</a>).</p> Full article ">Figure 2
<p>Kaplan–Meier survival curve, by size of business in RS, 2017–2023. Source: Compiled by the authors.</p> Full article ">Figure 3
<p>Kaplan–Meier survival curve, by activity sector, 2017–2023. Source: Compiled by the authors.</p> Full article ">Figure 4
<p>Kaplan–Meier survival curve, by company fined or not fined, and interaction between sizes and fines, and type of fines, 2017–2023. Source: Compiled by the authors. Note: AL = 0 not fined, AL = 2 evasion not declared, AL = 3 formal fine, AL = 7 fine in transit.</p> Full article ">Figure 5
<p>Kaplan–Meier survival curve for habitual evaders and fined over BRL 100 thousand. Source: Compiled by the authors. Note: Fine 100 K = 1 are firms that are fined but below BRL 100,000.00. FINE100K = 2 are firms that are fined BRL 100,000.00 or above.</p> Full article ">Figure 6
<p>Forest graph by all variables. Source: Compiled by the authors. Note: Signif. codes: * <span class="html-italic">p</span> &lt; 0.05, ** <span class="html-italic">p</span> &lt; 0.01, *** <span class="html-italic">p</span> &lt; 0.001.</p> Full article ">
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