scholarly journals Impact of COVID-19 on China's macroeconomy and agri-food system – an economy-wide multiplier model analysis

2020 ◽  
Vol 12 (3) ◽  
pp. 387-407 ◽  
Author(s):  
Yumei Zhang ◽  
Xinshen Diao ◽  
Kevin Z. Chen ◽  
Sherman Robinson ◽  
Shenggen Fan
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Food System ◽  
Job Creation ◽  
Value Added ◽  
Annual Growth Rate ◽  
Export Demand ◽  
Potential Cost ◽  
Content Type ◽  
The Impact

PurposeThe purpose of this study is to assess the potential economic cost of the COVID-19 pandemic on China's macroeconomy and agri-food system and provide policy recommendations to stimulate economic growth and agri-food system development.Design/methodology/approachAn economy-wide multisector multiplier model built on China's most recent social accounting matrix (SAM) for 2017 with 149 economic sectors is used to assess the impact of COVID-19 on China's macroeconomy and agri-food system. SAM multiplier analysis focuses on supply chain linkages and captures the complexity of an interconnected economy.FindingsThe paper finds that both the macroeconomy and agri-food systems are hit significantly by COVID-19. There are three main findings. First, affected by COVID-19, GDP decreased by 6.8% in the first quarter of 2020 compared with that in 2019, while the economic loss of the agri-food system is equivalent to 7% of its value added (about RMB 0.26 trillion). More than 46m agri-food system workers (about 27% of total employment) lost their jobs to COVID-19 in the lockdown phase. The COVID-19 affects the employment of unskilled labor more than that of skilled labor. Second, when the economy starts to recover during the second and third quarters, the growth rate in the value added of the agri-food system turns positive but still modest. Many jobs resume during the period, but the level of agri-food system employment continues to be lower than the base. The agri-food system employment recovery is slower than that of other sectors largely due to the sluggish recovery of restaurants. Agri-food system employment drops by 8.6m, which accounts for about 33% of the total jobs lost. Third, although the domestic economy is expected to be normal in the fourth quarter, external demand still faces uncertainties due to the global pandemic. The agri-food system is projected to grow by 1.1% annually in 2020 with resuming export demand, while only by 0.4% without resuming export demand. These rates are much lower than an annual growth rate of 4.3% for the agri-food system in 2019. The results also show that, without resuming export demand, China's total economy will grow less than 1% in 2020, while, with export demand resumed, the growth rate rises to 1.7%. These rates are much lower than an annual GDP growth rate of 6.1% in 2019.Practical implicationsThe results show that continuously reducing economic dependency on exports and stimulating domestic demand are key areas that require policy support. The agri-food system can play an important role in supporting broad economic growth and job creation as SMEs are major part of the AFS. Job creation requires policies to promote innovation by entrepreneurs who run numerous SMEs in China.Originality/valueThis paper represents the first systematic study assessing the impact of COVID-19 on China's agri-food system in terms of value added and employment. The assessment considers three phases of lockdown, recovery and normal phases in order to capture the full potential cost of COVID-19.

scholarly journals TERMS OF TRADE AND INDUSTRIALIZATION: REALITIES IN UKRAINE

2020 ◽  
pp. 21-34
Author(s):  
Olena Bazhenova ◽  
Ihor Chornodid
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Industrial Development ◽  
Value Added ◽  
Terms Of Trade ◽  
Gdp Per Capita ◽  
Annual Growth Rate ◽  
Vector Autoregressive ◽  
Per Capita ◽  
The Impact

he paper explores the impact of terms of trade on the industrialization and economic growth in Ukraine due to significant vulnerability of national economy to foreign economic shocks, its openness and mainly commodity structure of exports. In this research we have chosen manufacturing value added as percent in GDP to identify periods of industrialization, as its growth corresponds to periods of accelerated industrial development and vice versa. Also we considered GDP per capita as indicator of national economy’s performance. The changes in terms of trade were investigated based on the analysis of terms of trade adjustments, which are determined by the ability to import goods and services minus exports at constant prices. As an empirical research tool vector autoregressive models have been chosen to explore the relationship between endogenous and exogenous variables in dynamics. Thus, the endogenous variables in the model are the annual growth rate of GDP per capita, manufacturing value added and terms of trade adjustments in 1991-2018. Therefore, the first-order vector autoregression model was constructed to examine this relationship. According to the results of research, acceleration of terms of trade adjustments growth rate (deterioration of terms of trade) in Ukraine leads to fluctuations in the manufacturing value added growth with an increase of almost 3% in the second period and further declining. It indicates an increase in industrial production in response to the deterioration of terms of trade in the short run and possible intensification of innovative economic growth triggers. Fluctuations in manufacturing value added account for from almost 7% to 14% in fluctuations of GDP per capita growth. In turn, fluctuations in terms of trade adjustments account for only from 3% to almost 5%. At the same time, fluctuations in manufacturing value added from 8% to 13% are explained by fluctuations in terms of trade adjustments.

The effect of carbon performance on corporate financial performance in a growing economy

2018 ◽  
Vol 14 (4) ◽  
pp. 895-916 ◽  
Author(s):  
Fortune Ganda
Keyword(s):  
South Africa ◽  
Growth Rate ◽  
Financial Performance ◽  
South African ◽  
Value Added ◽  
Content Type ◽  
Firm Financial Performance ◽  
Carbon Performance ◽  
The Impact ◽  
The Relationship

Purpose This study aims to examine the impact of carbon performance on firm financial performance by using Republic of South Africa CDP company data from 2014 to 2015. Design/methodology/approach The study considered 63 companies on the Republic of South Africa CDP database. Content analysis was used to extract both carbon performance data and firm financial data. The data were analysed using panel data analysis and partial derivative approaches. Findings The findings indicate that carbon performance produces a positive relationship with return on equity (ROE) and return on sales (ROS). Conversely, it generates a negative relationship with return on investment (ROI) and market value added (MVA). Furthermore, the study highlights that carbon performance pays and that the relationship with financial performance (ROE, ROS, ROI and MVA) deepens as the corporate growth rate increases. Practical implications Companies that integrate carbon performance initiatives reap substantial financial gains, and this relationship is strengthened as the company’s growth rate increases. Originality/value The research questions and data collected from Republic of South African CDP firms are original and provide important evidence on the impact of carbon performance on firm financial indicators. Furthermore, many empirical studies focus on highly industrialised countries; this study examines this issue in the emerging South African economy which has experienced rapid growth of emissions in recent years. While most previous studies on the relationship between carbon performance and firm financial performance used a single class of corporate financial measures, this study used both accounting- and market-based indicators. It also investigated how firm growth moderates the association between carbon performance and diverse financial performance measures. Finally, pressure exerted by green stakeholders since the introduction of the Johannesburg Stock Exchange’s sustainability criteria in 2004, as well as government policies, has a profound impact on the South African business context; it is hence important to examine corporate environmental management activities in the context of the association between carbon performance and firm performance.

scholarly journals Local government debt and regional economic growth in China

2019 ◽  
Vol 2 (2) ◽  
pp. 330-353
Author(s):  
Shiyi Chen ◽  
Wang Li
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Theoretical Model ◽  
Local Government ◽  
Regional Differences ◽  
Government Debt ◽  
Eastern Region ◽  
Content Type ◽  
The Government ◽  
The Impact

Purpose With China’s economic growth slowing down and the growth rate of fiscal revenue decreasing, the pressure on local government debts is further increasing. Under this background, it is of great significance to clarify the relation between local government debts and China’s economic growth in order to give full play to the positive role of local debts in stabling growth. The paper aims to discuss this issue. Design/methodology/approach Therefore, this paper explores the impact of Chinese local government debt on economic growth from theoretical and empirical aspects, respectively, and compares the regional differences between different debts and economic growth dynamics. Findings In the theoretical model part, this paper constructs a three-sector dynamic game model, under the two circumstances of whether local government is subject to debt constraints, and examines the relation between local government debt and economic growth and other variables through numerical simulation. Research shows that when the government is not constrained by debt, there is an inverted “U” relation between government debt and economic growth. When the government is constrained by debt, the economic growth rate gradually decreases as the government debt increases. Originality/value In the theoretical analysis part, this paper tries to estimate the amount of local debts under different calibers and examines the impact of different types of local government debts on China’s economic growth and their regional differences. The results show that excessive accumulation of government hidden debts in the eastern region is not conducive to economic growth, while explicit debts in the central and western regions significantly contribute to local economic growth. The results of empirical analysis are basically consistent with the predictions of the theoretical model.

scholarly journals The Impact of Economic Growth on the Dynamics of Enterprises: Empirical Evidence for Slovenia's Non-agricultural Sector

Organizacija ◽  
2010 ◽  
Vol 43 (4) ◽  
pp. 154-162 ◽  
Author(s):  
Dijana Močnik
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Economic Development ◽  
Empirical Evidence ◽  
Agricultural Sector ◽  
Value Added ◽  
Natural Rate ◽  
Entry Rate ◽  
The Impact ◽  
The Relationship

The Impact of Economic Growth on the Dynamics of Enterprises: Empirical Evidence for Slovenia's Non-agricultural SectorThe aim of this paper was to test the hypothesized U-shaped relationship between economic development and dynamics of enterprises. The dynamics of enterprises is influenced by the achieved economic development. This paper first analyzed the association between the regional gross value added (GVA) growth rate and different measures of enterprises dynamics from Slovenian data from 2000 to 2005. Our graphical analyses indicated that 1) the rate of gross entry and GVA growth rate were linearly and negatively associated; 2) the association between the rate of gross exit and GVA growth rate is best represented by the downward U-shape function (Ç); and 3) a U-shaped association exists between the rate of net entry and GVA growth rate. The size of the impact was estimated using the regression analysis between the net entries as dependent variable and GVA growth as independent variable that showed the best fit. According to the results, 1) economic growth significantly impacts net entries; 2) the hypothesized U-shaped relationship between net entries and economic growth was confirmed as the Slovenian net entries decrease until the GVA growth rate reaches 10% yet increase when the growth in GVA is higher than 10%; and 3) a ‘natural rate’ of entrepreneurship is to some extent governed by ‘laws’ related to the economic growth rate. The results further indicate that the average net entry rate should be increased by 0.787 units (%) as a result of a region's specific environmental factors. This research confirms the theoretical assumptions that have previously been sparsely tested empirically and even rarely supported by results. Therefore, our results represent a contribution to the robustness of the theoretical as well as empirical clarification of the relationship between entrepreneurship and economic development.

scholarly journals The Adverse Impact of Air Pollution on China’s Economic Growth

2021 ◽  
Vol 13 (16) ◽  
pp. 9056
Author(s):  
Daxin Dong ◽  
Boyang Xu ◽  
Ning Shen ◽  
Qian He
Keyword(s):  
Economic Growth ◽  
Air Pollution ◽  
Growth Rate ◽  
Instrumental Variables ◽  
Gdp Per Capita ◽  
Annual Growth Rate ◽  
Instrumental Variables Estimation ◽  
Study Results ◽  
Per Capita ◽  
The Impact

This study empirically evaluates the impact of air pollution on China’s economic growth, based on a province-level sample for the period 2002–2017. Air pollution is measured by the concentration of fine particulate matter (PM2.5), and economic growth is measured by the annual growth rate of gross domestic product (GDP) per capita. A panel data fixed-effects regression model is built, and the instrumental variables estimation method is utilized for quantitative analyses. The study reports a significant negative impact of air pollution on the macroeconomic growth of China. According to our instrumental variables estimation, holding other factors constant, if the concentration of PM2.5 increases by 1%, then the GDP per capita growth rate will decline by 0.05818 percentage points. In addition, it is found that the adverse effect of atmospheric pollution is heterogeneous across different regions. The effect is stronger in the eastern region and in provinces with smaller state-owned enterprise shares, fewer governmental expenditures for public health services, and fewer medical resources. The study results reveal that air pollution poses a substantial threat to the sustainable economic growth of China. Taking actions to abate air pollution will generate great economic benefits, especially for those regions which are heavily damaged by pollution.

scholarly journals Factors of the Value Added Tax Collection Efficiency in the Republic of Serbia

2019 ◽  
Vol 57 (1) ◽  
pp. 35-49
Author(s):  
Milica Ristić ◽  
Jadranka Đurović Todorović ◽  
Marina Đorđević
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Developing Countries ◽  
Collection Efficiency ◽  
Value Added ◽  
Strong Positive Correlation ◽  
Value Added Tax ◽  
Economic Growth Rate ◽  
Standard Rate ◽  
The Impact

AbstractThe policy led by a large number of developing countries, with the aim of increasing indirect taxes, has opened the issue of Value Added Tax (VAT) performance. Reforms of tax systems of transition countries generally involve an increase in standard rates in order to increase VAT, which is the main source of public revenues. In such a way, developing countries determine the VAT performance and the amount of revenue that could be collected by indirect taxation. Theoretical analyses of standard rates and other factors that have reflections on the VAT collection efficiency explicitly prove that there are different ways to improve the efficiency of VAT collection, and exclude an increase in the standard rate. An increase in the standard rate provides a balance of negative effects, which can be blurred by recorded tax revenues. The subject of this paper is an analysis of the factors that influence the efficiency of VAT collection in Serbia. The main objective of the paper is to examine the impact of the change in the standard rate, which is the result of the reforms carried out in 2012, on the performance of VAT. Regression analysis was applied to the data series for the period 2005-2016.The results show that the change in the standard rate had a statistically significant negative impact on VAT performance. Our analysis also indicates that the economic growth rate has reflections on VAT collection. A strong positive correlation between the economic growth rate and VAT performance was calculated.

scholarly journals IMPROVING PERFORMANCE OF VAT SYSTEM IN DEVELOPING EU COUNTRIES: ESTIMATING THE DETERMINANTS OF THE RATIO C-EFFICIENCY IN THE PERIOD 1997-2017

2019 ◽  
pp. 239
Author(s):  
Marina Đorđević ◽  
Jadranka Đurović Todorović ◽  
Milica Ristić
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Developing Countries ◽  
Collection Efficiency ◽  
Value Added ◽  
Household Consumption ◽  
Economic Growth Rate ◽  
Eu Countries ◽  
The Impact ◽  
The Eu

Indirect taxes have a significant place in developing EU countries’ tax systems. The article sums up scholars of different scientists, dealing with the impact of VAT efficiency determinants. The purpose of this study is to investigate the determinants of VAT collection efficiency in the EU developing countries. The study relies on relevant data in transparent international statistical databases, covering the period from 1997 to 2017. The main research question in this paper is: does rise in value added tax rate negatively affect VAT collection efficiency in the EU developing countries. Accordingly, one of the independent variables included in the survey is standard annual VAT rate. In addition to standard VAT rate, as a determinant of VAT collection efficiency, we analyze: economic growth rate, export of goods, export of services, wages and salaries, household consumption. The hypotheses set are analyzed using correlation and regression analyses. Empirical results show a positive effect of economic growth rate, export of goods, and the negative effect of two variables: standard VAT rate and household consumption. The two observed variables, export of services and wages and salaries, do not show a statistically significant effect. The results obtained using appropriate statistical tools serve as guidelines to macroeconomic policy makers to generate higher tax revenues from VAT. By analyzing the C-efficiency determinant, we design a relevant development strategy approach for economically underdeveloped EU countries.

scholarly journals On Labor Productivity in OECD Countries: Panel Data Modeling

2021 ◽  
Vol 18 ◽  
pp. 1474-1488
Author(s):  
Mohamed R. Abonazel ◽  
Ohood Shalaby
Keyword(s):  
Growth Rate ◽  
Panel Data ◽  
Labor Productivity ◽  
Value Added ◽  
Participation Rate ◽  
Oecd Countries ◽  
Labor Cost ◽  
Annual Growth Rate ◽  
Productivity Indicators ◽  
The Impact

Labor productivity is a key measure of economic performance and an essential factor of improving the living standards. High labor productivity growth rate can reflect increased use of capital, and/or a decrease in the employment of low-productivity workers. Thus, it can be said that labor productivity indicators reflect the effectiveness of labor utilization, labor cost, and revenue accumulation. This paper studies the impact of labor market conditions, economic integration, market size, and institutional quality on labor productivity in Organization for Economic Co-operation and Development (OECD) countries during the period from 2005 to 2017 by using panel data technique. The study finds that the random effects panel data model is the appropriate model to fit this data. The results suggest that average annual hours worked, labor force participation rate, and inflation rate have a negative significant impact on labor productivity in OECD countries. However, annual growth rate of GDP per capita, value added of industry, and control of corruption have a positive significant impact on labor productivity.

scholarly journals Relationship between Economic Growth and Employment in Vietnam

2014 ◽  
Vol 222 ◽  
pp. 40-50
Author(s):  
Mạnh Phạm Hồng ◽  
Ngọc Nguyễn Văn ◽  
DAO HẠ THỊ THIỀU
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Production Function ◽  
Job Creation ◽  
Econometric Models ◽  
Annual Growth ◽  
Annual Growth Rate ◽  
Policy Recommendations ◽  
Service Sectors ◽  
The Relationship

The paper examines the relationship between employment and economic growth during the period 1991–2012 in Vietnam and obtains forecasts for employment from 2013 to 2020, using theories of production function for establishment of econometric models. The results show that the employment elasticities of economic growth are -0.49; 0.55 and 0.66 for agriculture, manufacturing and service sectors respectively and 1.71 for Vietnamese economy as a whole in the period. The results also indicate that an annual growth rate of 6% - 7% can help create from 55.322 to 56.243 million jobs by 2015 and from 61.739 – 64.519 million ones by 2020. Additionally, the research offers several important policy recommendations to promote economic growth and job creation in Vietnam in the next period.

Commodity exports to China and economic growth

2015 ◽  
Vol 6 (4) ◽  
pp. 401-416
Author(s):  
Ariuna Taivan ◽  
Gibson Nene ◽  
Inoussa Boubacar
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Time Frame ◽  
Data Availability ◽  
African Countries ◽  
Data Set ◽  
Content Type ◽  
Commodity Export ◽  
Per Capita ◽  
The Impact

Purpose – The purpose of this study is to empirically examine the effect of commodity exports from Africa to China on the growth rate of per capita gross domestic product (GDP) after controlling for variables that have been found to be important determinants of economic growth. This study uses a panel of 23 African countries for the period of 2001-2011. Design/methodology/approach – The authors make use of a Barro-type empirical economic growth model which uses per capita GDP as the dependent variable. With regard to independent variables, the authors examine the China effect after controlling for variables that have been found to affect economic growth. To account for the China effect, we use the following three measures of trade with China: commodity export to China, commodity export to China relative to total export and commodity export to China relative to the world. The authors use panel data from 2001 to 2011. Findings – Results indicate that the magnitudes of the effect, while statistically significant, are not large enough to induce positive growth rates. The results also indicate that the magnitudes of the effects depend on the colonial origin of the African countries. Research limitations/implications – The data are limited to the 2001-2011 time frame because of data availability issues. This time frame does capture the era when China increased its trade with Africa. The choices of variables were also affected by data availability. However, the authors managed to find data on the main drivers of economic growth. Further research is needed to gain a more comprehensive analysis of the effects of commodity trade with China on Africa’s economy, given the partial character of the data set used in this study. Similarly, there is also a need for more detailed information on China’s trade activities. Practical implications – While the results of this study show an improvement in the per capita growth rate, the changes are not large enough to put African countries on a path to a sustained prosperity. African governments which trade with China should consider investing more in manufacturing, so that they create more jobs locally and benefit more from their exports. Social implications – The China–Africa relationship shows a small positive impact on societal well-being. Originality/value – To the best of the authors’ knowledge, none of the existing studies on China–Africa relations attempted to understand the impact of China’s economic activity on the standards of living of African residents, where standard of living is measured by economic growth. The current study aims to bridge this gap. This study complements existing studies and uses a data set and methodology that has not been used before on this issue.

Sign in / Sign up

Export Citation Format

Share Document