scholarly journals New evidence on the link between ethnic fractionalization and economic freedom

2021 ◽  
Author(s):  
Marta Marson ◽  
Matteo Migheli ◽  
Donatella Saccone
Keyword(s):  
Developing Countries ◽  
Ethnic Groups ◽  
Economic Freedom ◽  
Conclusive Evidence ◽  
Empirical Literature ◽  
Ethnic Fractionalization ◽  
Economic Freedom Index ◽  
New Evidence

AbstractAmong the determinants of economic freedom, the presence of different ethnic groups within a country has sometimes been explored by the empirical literature, without conclusive evidence on the sign of the relation, its drivers, and the conditions under which it holds. This paper offers new evidence by empirically modelling how ethnic fragmentation is related to economic freedom, as measured by the Economic Freedom Index and by each of its numerous areas, components and sub-components. The results provide insights on the components driving the effect and, interestingly, detect notable differences between developed and developing countries.

On the foreign direct investment–economic growth relationship in Africa: does economic freedom mediate this relationship?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Olufemi Adewale Aluko ◽  
Muazu Ibrahim ◽  
Xuan Vinh Vo
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Economic Freedom ◽  
Empirical Literature ◽  
African Countries ◽  
Content Type ◽  
Economic Freedom Index ◽  
Bootstrap Algorithm ◽  
The Impact

PurposeIn this study, the authors examine how economic freedom mediates the impact of foreign direct investment (FDI) on economic growth in Africa.Design/methodology/approachBy using data from 41 countries over the period 2000–2017, the authors invoke Seo and Shin's (2016) sample splitting approach while relying on the recently developed Seo et al.'s (2019) computationally robust bootstrap algorithm to achieve the purpose of this study.FindingsThe authors find evidence of economic freedom threshold that bifurcates the link between FDI and economic growth in Africa. More precisely, FDI does not improve overall economic growth for African countries whose economic freedom index is below the estimated threshold while significantly spurring growth for African countries with economic freedom above this threshold.Practical implicationsAfrican countries need to strive towards improving their level of economic freedom through the strengthening of rule of law, reducing government size, promoting regulatory efficiency and further opening of the goods and capital markets.Originality/valueThe association between FDI and economic growth has been well documented. While the positive theoretical postulations are almost conclusive, empirical literature on the precise effect of FDI remains contentious and far from being settled. What is missing in the existing literature in Africa is whether countries' level of economic freedom mediates how FDI explains the variations in economic growth across African countries. The authors fill this research gap.

scholarly journals Rewards of reforms: Can economic freedom and reforms in developing countries reduce the brain drain?

2019 ◽  
Vol 22 (4) ◽  
pp. 327-347
Author(s):  
Jarand H Aarhus ◽  
Tor G Jakobsen
Keyword(s):  
Developing Countries ◽  
Brain Drain ◽  
Fixed Effects ◽  
Economic Freedom ◽  
Economic Determinants ◽  
Economic Freedom Index ◽  
Fraser Institute ◽  
Fixed Effects Regression ◽  
Rich Countries ◽  
The Impact

The objective of this paper is to investigate the impact of economic freedom on brain drain from developing countries to rich countries. Previous literature on brain drain has examined social, political and economic determinants. However, no study in the literature so far has studied this proposed relationship. We employ the Economic Freedom Index sourced from the Fraser Institute as a proxy for economic freedom and the rate of moderately skilled and highly skilled emigration functions as a proxy for brain drain. Our sample consists of 142 countries covering the period 1990–2010. We estimate the results using a two-way fixed effects regression estimator. The results show that an increase in economic freedom is strongly associated with lower levels of brain drain from developing countries to rich countries. In addition, we find that long-term benefits associated with more economic freedom outweigh short-term costs of economic reforms when it comes to restricting brain drain.

scholarly journals Ranking of Developing Countries Based on the Economic Freedom Index

2013 ◽  
Vol 2 ◽  
pp. 32-38
Author(s):  
Mohsen Mehrara ◽  
Masoumeh Zirak
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Economic Freedom ◽  
Cape Verde ◽  
Economic Openness ◽  
Economic Freedom Index ◽  
Determinants Of Fdi

In this paper we’ve ranked developing countries based on the Economic Freedom index. Therefore we are trying to do the analysis how this ranking is done using numerical taxonomic methodology. To do this, by estimating the effects of the determinants of FDI in 123 developing countries from 1997 to 2010, results showed that with regard to the degree of economic freedom or Economic openness, attract foreign direct investment in each country is different. In this study china, Equator, Liberia, Azerbaijan, Angola, Turkmenistan, Cape Verde, Kazakhstan, Panama, Vietnam, Bulgaria, Congo, Maldives, Bahrain, Cambodia, Jordan, Malaysia, Mongolia, Sudan, Trinidad, Belarus, Lesotho, Russian are the top 23 countries have been successful in attracting foreign direct investment thanks to appropriate economic and structures policies.

scholarly journals Impact of Economic Freedom on Corruption Revisited in ASEAN Countries: A Bayesian Hierarchical Mixed-Effects Analysis

Economies ◽  
2021 ◽  
Vol 9 (1) ◽  
pp. 3
Author(s):  
Nguyen Ngoc Thach ◽  
Bui Hoang Ngoc
Keyword(s):  
Economic Freedom ◽  
Positive Impact ◽  
Mixed Effects ◽  
Random Coefficients ◽  
Bayesian Hierarchical ◽  
Country Level ◽  
Corruption Index ◽  
Negative Effect ◽  
Economic Freedom Index ◽  
Asean Countries

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

scholarly journals Foreign Direct Investment, Economic Freedom and Economic Growth: Evidence from Developing Countries

2016 ◽  
Vol 8 (11) ◽  
pp. 200 ◽  
Author(s):  
Md. Shakib Hossain
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Standard Deviation ◽  
Poisson Regression ◽  
Direct Investment ◽  
Economic Freedom ◽  
Random Effect ◽  
Estimating Equation ◽  
Generalized Estimating Equation

<p class="Default">This paper has explores the interplay between economic freedom, foreign direct investment and economic growth using panel data analysis for a sample of 79 developing countries from 1998 to 2014 by considering the level of economic freedom, as provided by the “Heritage Foundation”. Panel unit root, pedroni residual co-integration test, generalized least square (GLS), feasible GLS (FGLS), pooled OLS, random effect, fixed effect, poisson regression, prais-winsten, generalized method of movement (GMM) and generalized estimating equation (GEE) methods have used to estimates the relationship. According to the OLS and generalized method of movement the coefficient implies that a one standard deviation improvement in business freedom, trade freedom, size, investment freedom, property rights, freedom from corruption, labor freedom, financial freedom, fiscal freedom, monetary freedom increases FDI by 21.4%, 15.6%, 21.6%, 17.5%, 11.55, 9.1%, 6.9%, 8.5%, 7.4%, 10.3% and 56.1%, 45.3%, 58.3%, 51.6%, 33.7%, 39.2%, 47.4%, 41.6%, 32.5%, 38.5% points respectively and  for the economic variable ,the coefficient implies that a one standard deviation improvement in GDPG and GDPPC increases FDI by 24.1%, 17.4% and 30.2%, 33.4% points respectively. By using the other method like random effect, fixed effect, poisson regression, prais-winsten and generalized estimating equation (GEE) method explores that economic freedom in the host country is a positive determinants of FDI inflows in developing countries and also the result suggests that foreign direct investment is positively correlated with the economic growth in the host countries.</p>

Impact of trade facilitation reforms on tax revenue

2017 ◽  
Vol 44 (5) ◽  
pp. 765-780 ◽  
Author(s):  
Sena Kimm Gnangnon
Keyword(s):  
Developing Countries ◽  
Fixed Effects ◽  
Data Availability ◽  
Empirical Literature ◽  
Future Research ◽  
Tax Revenue ◽  
Trade Facilitation ◽  
Content Type ◽  
The World ◽  
The Impact

Purpose The purpose of this paper is to contribute to the empirical literature of the macroeconomic effect of trade facilitation reforms by examining the impact of the latter on tax revenue in both developed and developing countries. The relevance of the topic lies on the fact that at the Bali Ministerial Conference of the World Trade Organization (WTO) in 2013, Trade Ministers agreed for the first time since the creation of the WTO (in 1995) on an Agreement to facilitate trade around the world, dubbed Trade Facilitation Agreement (TFA). The study considers both at-the-border and behind-the border measures of Trade Facilitation. Design/methodology/approach To conduct this study, the authors rely on the literature related to the structural factors that explain tax revenue mobilization. The authors mainly use within fixed effects estimator. The analysis relies on 102 countries (of which 23 industrial countries) over the period 2004-2007 (based on data availability). A focus has also been made on African countries, within the sample of developing countries. Findings The empirical analysis suggests evidence of a positive and significant effect of trade facilitation reforms on non-resources tax revenue, irrespective of the sample of countries considered in the analysis. Research limitations/implications This finding should contribute to dampening the fear of policymakers in developing countries, including Africa that the implementation of the TFA would entail higher costs, without necessarily being associated with higher benefits. An avenue for future research would be to extend the period of the study when data would be available. Originality/value To the best of the authors knowledge, this study had not been performed in the literature of the determinants of tax revenue mobilization, although fact-based analysis was performed.

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