Legal source, institutional quality and FDI flows in Africa

2017 ◽  
Vol 59 (5) ◽  
pp. 687-698 ◽  
Author(s):  
Godfred A. Bokpin ◽  
Lord Mensah ◽  
Michael E. Asamoah
Keyword(s):  
Panel Data ◽  
South African ◽  
Legal System ◽  
Generalized Method Of Moments ◽  
Institutional Quality ◽  
Policy Implications ◽  
African Countries ◽  
Content Type ◽  
Panel Data Regression ◽  
Data Regression

Purpose This paper aims to find out how the legal system interacts with other institutions in attracting Foreign Direct Investment (FDI) into Africa. Design/methodology/approach The authors use annual panel data of 49 African countries over the period 1980 to 2011, and use the system generalized method of moments (GMM) estimation technique and pooled panel data regression. Findings The authors find that the source of a country’s legal system deters FDI inflow as institutions alone cannot bring in the needed quantum of FDI. In terms of trading blocs, it was found that there is negative significant relationship between institutional quality and FDI for South African Development Community (SADC) as well as Economic Community of West Africa States (ECOWAS) countries. Practical implications For policy implications, the results suggest that reliance on institutions alone cannot project the continent to attract the needed FDI. Originality/value Empiricists have devoted considerable effort to estimating the relationship between institutions and FDI on the African continent, but this paper seeks to ascertain the effect of legal systems and institutional quality within African specific trade and regional blocks.

Using information from singletons in fixed-effects estimation: xtfesing

2020 ◽  
Vol 20 (4) ◽  
pp. 965-975
Author(s):  
Laura Magazzini ◽  
Randolph Luca Bruno ◽  
Marco Stampini
Keyword(s):  
Panel Data ◽  
Method Of Moments ◽  
Fixed Effects ◽  
Generalized Method Of Moments ◽  
Panel Data Regression ◽  
Data Regression ◽  
Method Of Moments Estimator ◽  
Fixed Effects Estimation

In this article, we describe the xtfesing command. The command implements a generalized method of moments estimator that allows exploiting singleton information in fixed-effects panel-data regression as in Bruno, Magazzini, and Stampini (2020, Economics Letters 186: Article 108519).

scholarly journals Reducing information asymmetry with ICT

2019 ◽  
Vol 15 (2) ◽  
pp. 130-163 ◽  
Author(s):  
Simplice Asongu ◽  
Sara le Roux ◽  
Jacinta Nwachukwu ◽  
Chris Pyke
Keyword(s):  
Information Asymmetry ◽  
Unobserved Heterogeneity ◽  
Generalized Method Of Moments ◽  
Policy Implications ◽  
African Countries ◽  
Financial Access ◽  
Content Type ◽  
Endogenous Variables ◽  
Information And Communication ◽  
Critical Policy

PurposeThe purpose of this paper is to investigate loan price and quantity effects of information sharing offices with information and communication technology (ICT), in a panel of 162 banks consisting of 42 African countries for the period 2001–2011.Design/methodology/approachThe empirical evidence is based on a panel of 162 banks in 42 African countries for the period 2001–2011. Misspecification errors associated with endogenous variables and unobserved heterogeneity in financial access are addressed with generalized method of moments and instrumental quantile regressions.FindingsThe findings uncover several major themes. First, ICT when integrated with the role of public credit registries significantly lowered the price of loans and raised the quantity of loans. Second, while the net effects from the interaction of ICT with private credit bureaus (PCBs) do not improve financial access, the corresponding marginal effects show that ICT could complement the characteristics of PCBs to reduce loan prices and increase loan quantity, but only when certain thresholds of ICT are attained. The authors compute and discuss the policy implications of these ICT thresholds for banks with low, intermediate and high levels of financial access.Originality/valueThis is one of the few studies to assess how the growing ICT can be leveraged in order to reduce information asymmetry in the banking industry with the ultimate aim of improving financial access in a continent where lack of access to finance is a critical policy syndrome.

Determinants of risk disclosure compliance in Malawi: a mixed-method approach

2016 ◽  
Vol 6 (2) ◽  
pp. 111-137 ◽  
Author(s):  
Venancio Tauringana ◽  
Lyton Chithambo
Keyword(s):  
Regression Analysis ◽  
Panel Data ◽  
Mixed Method ◽  
Risk Disclosure ◽  
Content Type ◽  
Mixed Method Approach ◽  
Panel Data Regression ◽  
Data Regression ◽  
Ifrs 7 ◽  
Method Approach

Purpose – The purpose of this paper is to investigate compliance with risk disclosure requirements under International Financial Reporting Standard (IFRS) 7 by Malawian Stock Exchange-listed companies over a three-year period. Specifically, the paper examines the extent and determinants of risk disclosure compliance with IFRS 7. Design/methodology/approach – The study uses a mixed-method approach. The quantitative approach employs the research index methodology and uses panel data regression analysis to examine the relationship between proportion of non-executive directors (NEDs), size, gearing and profitability and the extent of risk disclosure compliance. The results of the panel data regression analysis are triangulated by the qualitative research approach in the form of personal interviews with company managers. Findings – The results indicate that over the three years, the extent of compliance with IFRS 7 is, on average, 40 per cent which is very low. The regression results suggest that NEDs, size and gearing are significantly and positively associated with the extent of risk disclosure compliance under IFRS 7. The results of qualitative approach are mixed since some support and whilst others contradict the regression results. Research limitations/implications – The sample size is very small which may affect the generalisability of the study. Originality/value – The use of a mixed-methods approach to examine the determinants of risk disclosure compliance provides additional insights not provided in prior studies. The contradicting results suggest that more research using the mixed approach is required to provide more robust evidence of the determinants of risk disclosure compliance.

scholarly journals Determinants of Tourist Arrivals in Africa: A Panel Data Regression Analysis

2005 ◽  
Vol 11 (3) ◽  
pp. 365-391 ◽  
Author(s):  
Willem A. Naudé ◽  
Andrea Saayman
Keyword(s):  
Panel Data ◽  
Political Stability ◽  
African Countries ◽  
Developed Country ◽  
Relative Prices ◽  
Section Data ◽  
Panel Data Regression ◽  
Data Regression ◽  
Tourism Potential ◽  
The Cost

Africa's tourism potential is acknowledged to be significant but underdeveloped. This paper uses both cross-section data and panel data for the period 1996–2000 to identify the determinants of tourism arrivals in 43 African countries, taking into account tourists' country of origin. The results strongly suggest that political stability, tourism infrastructure, marketing and information, and the level of development at the destination are key determinants of travel to Africa. Typical ‘developed country determinants’ of tourism demand, such as the level of income in the origin country, the relative prices and the cost of travel, are not so significant in explaining the demand for Africa as a tourism destination. It is therefore recommended that attention should be given to improving the overall stability of the continent and the availability and quantity of tourism infrastructure.

scholarly journals Exchange rate undervaluation and sectoral performance of the South African economy

2017 ◽  
Vol 44 (4) ◽  
pp. 636-649
Author(s):  
Bernard Njindan Iyke
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
South African ◽  
Generalized Method Of Moments ◽  
Policy Implications ◽  
Growth Effect ◽  
Series Data ◽  
The South ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to uncover the channels through which real exchange rate undervaluation influences the performance of the South African economy. Design/methodology/approach The author decomposes the South African economy into three sectors: agriculture, industry, and services. Specifying a model for each sector, the author employs the ordinary least squares (with Newey-West and robust standard errors) and generalized method of moments estimation techniques. The annual time series data cover the period 1962-2014. Findings The author finds that real exchange rate undervaluation exerted a positive influence on agriculture and industry, and a negative impact on services. Research limitations/implications The results have practical policy implications, which are discussed in the paper. Originality/value Although the growth effect of real exchange rate undervaluation has been well established in the literature, the channels through which this occurs has received limited attention. Prior to this study, no study has considered the impact of real exchange rate undervaluation on the economy through the various sectors in the South African context.

Measuring regional competitiveness on the basis of entrepreneurship, technological readiness and quality of institutions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nirmalkumar Singh Moirangthem ◽  
Barnali Nag
Keyword(s):  
Panel Data ◽  
Generalized Method Of Moments ◽  
Composite Index ◽  
Policy Implications ◽  
Regional Competitiveness ◽  
Indian States ◽  
Content Type ◽  
Technological Readiness ◽  
Relationship Analysis

Purpose Developing composite index-regional entrepreneurship, technological readiness and institution quality index (RETRIQ) of regional entrepreneurship, technology readiness and quality of institution to measure regional competitiveness. This study, also, aims to test econometrically the effectiveness of the index in capturing the economic performance of the sub-national regions. Design/methodology/approach The data of eight indicators used in the index are from sources available freely in the public domain. The causal relationship analysis is done using panel data of 10 years from 2008 to 2017 for 32 Indian states/union territories. The generalized method of moments (GMM) is used for this dynamic regression estimation. Findings Based on RETRIQ, 32 states and union territories of India have ranked. The estimation using GMM shows a significant association between the composite index and economic growth. Research limitations/implications The limitations of the study include the broad assumption that these sub-national regions belong to a uniform macro-economic and technology environment and data constraints as it is a longitudinal study. Then, the implication of the study is that the composite index-RETRIQ could capture differences in regional competitiveness explaining regional economic disparity. Practical implications The index will be useful for policy implications in the assessment of competitiveness disparity. Originality/value It is a composite index of regional entrepreneurship, technological readiness and quality of the institution. The panel data across states along 10 years series is novel.

The role of institutions in private investment: panel data evidence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fanyu Chen ◽  
Siong Hook Law ◽  
Zi Wen Vivien Wong ◽  
W.N.W Azman-Saini
Keyword(s):  
Panel Data ◽  
Panel Data Analysis ◽  
Generalized Method Of Moments ◽  
Private Investment ◽  
Sustainable Growth ◽  
Policy Implications ◽  
Moment Conditions ◽  
System Gmm ◽  
Content Type ◽  
Gmm Estimator

Purpose This study aims to examine the effects of institutions on private investment (PI) using panel data analysis, where the sample countries consist of 100 countries around the world and the time period is covering from 2007 to 2016. The system generalized method of moments (GMM) estimator, introduced by Arellano and Bond (1991) and further developed by Blundell and Bond (1998) is used to analyze the data sets. Design/methodology/approach This study uses the panel data approach to estimate the empirical model due to the panel nature of the data. In particular, due to the presence of lagged dependent variables and the ability to capture individual country-specific effects, the system GMM estimator, introduced by Arellano and Bond (1991) and further developed by Blundell and Bond (1998), is adopted to analyze the roles of institutions in PI. The system GMM is developed specifically to solve the problems of weak instruments and persistency (Blundell and Bond, 1998). Jointly, they suggest to adopt additional moment conditions where lagged difference of the dependent variable is orthogonal to the level form of the disturbances. The system GMM estimator is able to combine the moment conditions for the different models, as well as the level model, thereby (is capable of) generate consistent and efficient parameters. Due to the dynamic nature of the data, this study uses one-step and two-step system GMM to investigate the roles of institutions in PI. Findings The empirical results based on the two-step system GMM demonstrate that the quality of institutions plays an important role in stimulating PI. The finding is reinforced by the analysis of the institutional sub-components’ effects on PI. Originality/value This study is unique as its measurement of institutions is multi-dimensional (including law and order, rules and regulation, government stability, bureaucratic quality, control of corruption, socio-economic condition, etc.), and hence are more comprehensive. Second, it is different than the previous studies as its sample of countries includes both democracies and non-democracies, as well as both developed and non-developed economies in which policy implications are widely acceptable. Third, this study contributes to the policymakers especially those in the debt-ridden economies where governments are budget-tightening (limited capacity for public investment), as to which practical direction should be focused on so as to attract PI and eventually sustainable growth can take place.

Re-examining the government expenditure–growth nexus in ECOWAS countries

2020 ◽  
Vol 36 (4) ◽  
pp. 277-301 ◽  
Author(s):  
Olumide Olusegun Olaoye ◽  
Monica Orisadare ◽  
Ukafor Ukafor Okorie ◽  
Ezekiel Abanikanda
Keyword(s):  
Economic Growth ◽  
Government Spending ◽  
Institutional Environment ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
Government Expenditure ◽  
Institutional Quality ◽  
Empirical Modeling ◽  
African Countries ◽  
Content Type

PurposeThe purpose of this study is to investigate the effect of government expenditure on economic growth in 15 Economic Community of West African States (ECOWAS) countries over the period of 2005–2017. More precisely, this paper investigates whether institutional environment influences the effect of government spending on economic growth.Design/methodology/approachThis study adopts the generalized method of moments-system method of estimation to address the problem of dynamic endogeneity inherent in the relationship. Similarly, unlike previous studies which assume that the disturbances of a panel model are cross-sectionally independent, we account for cross-section dependency and cross-country heterogeneity inherent in empirical modeling using Driscoll and Kraay's nonparametric covariance matrix estimator, adjusted for use with both balanced and unbalanced panels along with Monte Carlo simulations.FindingsThe authors find that though, government spending has a positive impact on economic growth but the level of institutional quality adversely affect that positive impact. This suggests that the institutional environment in ECOWAS countries is a drag and not a push factor for government fiscal operations and/policies. Thus, the results provide empirical evidence that there is a conditional relationship between government spending and economic growth in African countries. That is, the effect of government spending on economic growth is dependent on the quality of institutions. Lastly, these findings suggest that in order for government spending to contribute to economic growth, African countries must develop a strong institutional environment.Originality/valueUnlike previous time series studies for African countries which concentrated on the two variable case, we include institutional quality as a third variable to underline the potential importance of institutional quality for economic growth in ECOWAS countries.

Sustainability reporting in Indonesian listed banks

2019 ◽  
Vol 21 (2) ◽  
pp. 231-247
Author(s):  
Prihatnolo Gandhi Amidjaya ◽  
Ari Kuncara Widagdo
Keyword(s):  
Panel Data ◽  
Empirical Evidence ◽  
Sustainability Reporting ◽  
Foreign Ownership ◽  
Family Ownership ◽  
Content Type ◽  
Panel Data Regression ◽  
Content Analysis Method ◽  
Data Regression ◽  
Sustainable Finance

Purpose The purpose of this paper is to find empirical evidence of ownership structure and corporate governance (CG) effect on sustainability reporting in Indonesian listed banks. The study also tries to describe sustainability reporting disclosure practice. Design/methodology/approach The authors analyze balanced panel data with a total of 155 observations from 2012 to 2016 using panel data regression. Findings The findings present empirical evidence that sustainability reporting in Indonesian listed banks is still low. CG, foreign ownership and family ownership positively influence sustainability reporting. Further, the authors find that family ownership weakens the effect of CG while foreign ownership has no significant moderating role. Digital banking is not a significant determinant and OJK sustainable finance roadmap is evidenced to have no impression on bank intention to produce sustainability report. Research limitations/implications The use of content analysis method for variable measurement may contain subjectivity substance from the researcher’s perspective. Further research works need confirmation from independent parties with expertise in this subject. Further research works can also implement the mixed method by combining quantitative and qualitative approach to gain better quality. Practical implications The result of this study underlines the need for sustainability reporting improvement, followed by suggestions for Indonesian banking regulator. Originality/value This paper provides a description of Indonesian banks sustainability reporting and evidence of CG and controlling owner’s role in its practice. The research presents a novelty, examining the role of digital banking as determinant.

Team faultline: types, configuration and influence – evidence from China

2017 ◽  
Vol 28 (3) ◽  
pp. 346-367 ◽  
Author(s):  
Jing Zhang ◽  
Qiaozhuan Liang ◽  
Yue Zhang ◽  
Yuanmei (Elly) Qu
Keyword(s):  
Panel Data ◽  
Team Performance ◽  
Design Methodology ◽  
Curvilinear Relationship ◽  
Content Type ◽  
Party Government ◽  
Panel Data Regression ◽  
Data Regression ◽  
The Relationship ◽  
Different Levels

Purpose This study aims to focus on three types of team faultlines (separation-based faultlines, variety-based faultlines and disparity-based faultlines) and discuss the different ways through which their configurational properties (faultline strength and faultline distance) affect team performance. Design/methodology/approach The authors adopted panel data regression analysis to test the model. Panel data of Chinese provincial party-government top cadres teams that covers 30 provincial areas from 2007 to 2012 were collected for data analyses. Findings The results revealed that separation-based faultline strength was negatively related to team performance, variety-based faultline strength had a U-shape relationship with team performance and disparity-based faultline strength had an inversed U-shape relationship with team performance. In addition, separation-based and disparity-based faultline distances served as moderators enhancing the curvilinear relationship between faultline strength and team performance. Notably, variety-based faultline distance failed to exaggerate the U-shape relationship between variety-based faultline strength and team performance; however, the relationship changed based on different levels of variety-based faultline distance. Originality/value This study discussed team configurations based on three types of faultlines by comparing differences between team configurations reflected by diversity and faultline strength. Settled in Chinese political context, this study empirically tested the interaction effects between faultline strength and distance on team performance.

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