Impact of the institutional quality on NAFTA's international trade: a system GMM approach

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yoon Heo ◽  
Nguyen Thi Thanh Huyen ◽  
Nguyen Khanh Doanh
Keyword(s):  
Economic Development ◽  
Low Income ◽  
Institutional Quality ◽  
Trade Flows ◽  
Low Income Countries ◽  
Content Type ◽  
Long Run ◽  
Trading Partners ◽  
Level Of Economic Development ◽  
Trade Elasticity

PurposeThis paper aims to analyze the impacts of institutional quality on trade flows of NAFTA with a panel data set of 105 countries spanning the period 2006–2017.Design/methodology/approachWe applied the system generalized method of moment (GMM) estimator to investigate the impacts.FindingsThe results show that institutional quality is a positive and significant determinant of international trade flows of the NAFTA bloc and its trading partners. Our results also indicate that the impact of institutional quality depends on the level of economic development of NAFTA's trading partners. Specifically, the trade elasticity of institutional quality is the highest for NAFTA’s trade with middle-income countries and the lowest for NAFTA's trade with low-income countries. In the long run, the trade elasticity of institutional quality increased significantly, with the highest increase in the case of NAFTA's trade with medium-income countries and the lowest increase in the case of NAFTA's trade with low-income countries.Originality/valueThis study contributes to the existing literature in three different ways. First, we examine the differential impact of institutions on NAFTA's trade according to the level of economic development of NAFTA's trading partners. Second, we compare the differential trade elasticity of institutional quality in the long run. Finally, we support our findings through an improved research methodology by using the system GMM estimation. This method allows us to overcome the potential sample bias, omitted variable problems and endogeneity of explanatory variables.

Foreign capital inflows and economic growth: the experience of low-income countries in Sub Saharan Africa

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Atif Awad
Keyword(s):  
Low Income ◽  
Foreign Capital ◽  
Ordinary Least Squares ◽  
Capital Inflows ◽  
Sub Saharan Africa ◽  
Low Income Countries ◽  
Content Type ◽  
Long Run ◽  
Foreign Capital Inflows ◽  
The Impact

Purpose This paper aims to investigate the long-run impact of selected foreign capital inflows, including aid, remittances, foreign direct investment (FDI), trade and debt, on the economic growth of 21 low-income countries in the Sub Saharan Africa (SSA) region, during the period 1990–2018. Design/methodology/approach To obtain this objective and for robust analysis, a parametric approach, which was dynamic ordinary least squares, and a non-parametric technique, which was fully modified ordinary least squares, were used. Findings The results of both models confirmed that, in the long run, trade and aid affected the growth rate of the per capita income in these countries in a positive way. However, external debt seemed to have an adverse influence on such growth. Originality/value First, this is the initial study that has addressed this matter across a homogenous group of countries in the SSA region. Second, while most of the previous studies regarding capital inflows into the SSA region have focused on the impact of only one or two aspects of such foreign capital inflows on growth, the present study, instead, examined the impact of five types of foreign capital inflows (aid, remittances, FDI, trade and debt).

Sustaining Long-Run Growth and Macroeconomic Stability in Low-Income Countries—The Role of Structural Transformation and Diversification

Policy Papers ◽  
2014 ◽  
Vol 2014 (38) ◽  
Author(s):  
Keyword(s):  
Structural Transformation ◽  
Low Income ◽  
Low Income Countries ◽  
Macroeconomic Performance ◽  
Export Structure ◽  
Long Run ◽  
Trading Partners ◽  
Per Capita

Diversification and structural transformation play important roles in influencing the macroeconomic performance of low-income countries (LICs). Increases in income per capita at early stages of development are typically accompanied by a transformation in a country’s production and export structure. This can include diversification into new products and trading partners as well as increases in the quality of existing products.

scholarly journals Corruption, Economic Development and Haze Pollution: Evidence from 139 Global Countries

2020 ◽  
Vol 12 (9) ◽  
pp. 3523 ◽  
Author(s):  
Yajie Liu ◽  
Feng Dong
Keyword(s):  
Economic Development ◽  
Low Income ◽  
Explanatory Power ◽  
Spatial Differentiation ◽  
Institutional Quality ◽  
High Income ◽  
Low Income Countries ◽  
Economic Losses ◽  
Haze Pollution ◽  
Per Capita

Long-term exposure to haze pollution will not only affect citizens’ health and shorten their life expectancy, but also cause unpredictable economic losses. In addition, it has become the focus of worldwide concern whether and how institutional quality affects haze pollution. In this study, we explored the impacts of political corruption on haze pollution in 139 global countries. We employed a geographical detector model to identify the driving factors of spatial differentiation in global haze pollution. In addition, corruption degree and per capita gross domestic production (GDP) were used as threshold variables to analyze whether there is a nonlinear relationship between corruption and haze pollution. The main results are as follows. (1) The corruption perception index (CPI) was negatively correlated with haze pollution and had a strong and stable explanatory power for the heterogeneity of haze pollution. Besides, the degree of corruption had a significant triple threshold effect on haze pollution. When the CPI crossed the double threshold value, strengthening institutional quality could inhibit haze pollution. (2) Per capita GDP significantly determined how institutional quality exerted an effect on haze pollution, which was also a key factor affecting spatial heterogeneity of PM2.5 concentration. In high-income countries, choosing a more honest ruling party could substantially reduce haze pollution, while in low-income countries, an incompetent government could increase the degree of haze pollution. (3) The “Matthew effect” was manifested in our study. It indicated that the higher was the level of economic development, the lower was the severity of haze pollution. Based on these results, we state that policy makers cannot simply alleviate haze pollution through anti-corruption construction. For low-income countries, ensuring economic growth is the prerequisite for the substantial alleviation of haze pollution. On the contrary, high-income countries should pay more attention to the integrity of government institutions and strengthen the awareness of anti-corruption.

Does real exchange rate devaluation improve the current account balance of highly indebted low income countries?

2019 ◽  
Vol 10 (2) ◽  
pp. 212-225
Author(s):  
Getaneh Mihret Ayele
Keyword(s):  
Time Series ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Current Account ◽  
Low Income ◽  
Low Income Countries ◽  
Current Account Balance ◽  
Content Type ◽  
Long Run ◽  
The Current Account

Purpose The purpose of this paper is to examine whether real exchange rate devaluation improves the current account balance of four highly indebted low-income countries of East Africa. Design/methodology/approach The pooled mean group (PMG) approach is used for panel data from four countries over the period 1970–2016. The paper also applied bound testing and ARDL model for time-series data from individual sample countries. Findings The panel PMG/ARDL estimation result reveals that real exchange rate devaluation has no significant impact on the current account balance, both in the short and long run. However, the time-series analysis using the bound testing and restricted ARDL estimation suggests that real exchange rate devaluation improves the current account balance in the long run for only Ethiopia. The overall empirical results reveal that the current account balance would improve with the rising domestic income while it deteriorates with increasing foreign income and external indebtedness in the long run. Originality/value The paper is original.

scholarly journals The Supply of Calories, Proteins, and Fats in Low-Income Countries: A Four-Decade Retrospective Study

2021 ◽  
Vol 18 (14) ◽  
pp. 7356
Author(s):  
Vasilii Erokhin ◽  
Li Diao ◽  
Tianming Gao ◽  
Jean-Vasile Andrei ◽  
Anna Ivolga ◽  
...  
Keyword(s):  
Low Income ◽  
Food Supply ◽  
National Income ◽  
Agricultural Trade ◽  
Low Income Countries ◽  
Middle Income ◽  
Currency Exchange ◽  
Long Run ◽  
Food Security Status ◽  
Level Of Economic Development

Over the past decades, both the quantity and quality of food supply for millions of people have improved substantially in the course of economic growth across the developing world. However, the number of undernourished people has resumed growth in the 2010s amid food supply disruptions, economic slowdowns, and protectionist restrictions to agricultural trade. Having been common to most nations, these challenges to the food security status of the population still vary depending on the level of economic development and national income of individual countries. In order to explore the long-run determinants of food supply transformations, this study employs five-stage multiple regression analysis to identify the strengths and directions of effects of agricultural production parameters, income level, price indices, food trade, and currency exchange on supply of calories, proteins, and fats across 11 groups of agricultural products in 1980–2018. To address the diversity of effects across developing nations, the study includes 99 countries of Asia, Europe, Latin America, the Middle East, and Africa categorized as low-income, lower-middle-income, and upper-middle-income economies. It is found that in low-income countries, food supply parameters are more strongly affected by production factors compared to economic and trade variables. The effect of economic factors on the food supply of higher-value food products, such as meat and dairy products, fruit, and vegetables, increases with the rise in the level of income, but it stays marginal for staples in all three groups of countries. The influence of trade factors on food supply is stronger compared to production and economic parameters in import-dependent economies irrelevant of the gross national income per capita. The approach presented in this paper contributes to the research on how food supply patterns and their determinants evolve in the course of economic transformations in low-income countries.

scholarly journals Fiscal Incentives for Economic Development in the World under the Condition of the COVID-19

2021 ◽  
Vol 6 (1) ◽  
pp. 45-51
Author(s):  
Svitlana Hlushchenko ◽  
Anna Melnyk
Keyword(s):  
Economic Development ◽  
Low Income ◽  
Development Trend ◽  
Low Income Countries ◽  
Negative Effects ◽  
Fiscal Stimulus ◽  
Business Units ◽  
Long Run ◽  
The World ◽  
Capital Injections

The article describes the fiscal stimulus, which used in the world to overcome the negative effects of the recession in the context of the COVID-19 pandemic. The authors used historical and static methods, a combination of methods of analysis and synthesis, etc. Based on the statist analysis of the dynamics of macroeconomic indicators, the authors confirmed that the main development trend of most countries and Ukraine in 2020 is a significant economic decline (falling production, rising public debt, growing fiscal deficit, etc.) caused by the COVID-19 pandemic. The article summarizes that in the recession in 2020, countries use measures to fiscally stimulate households and business units through additional government expenditures and lost budget revenues. The size and structure of fiscal stimulus measures vary among different groups of countries. The main fiscal stimulus during this period are: deferrals and reductions in taxes, a moratorium on the payment of certain types of obligations, various forms of cash surcharges and subsidies, partial unemployment, capital injections into enterprises, loans and guarantees. The debt burden is a significant threat to low-income countries, as debt restructuring and public spending cuts will be relevant in the long run to stabilize debt in such countries. This means limited use of fiscal stimulus to exit the recession and stimulate economic development in the country. The results can have practical application within the framework of the formation of the state fiscal policy to overcome the recession and stimulate economic development in the country. In Ukrainian practice, during the pandemic, the main measures of fiscal stimulus were the use of reduced working day schemes and the expansion of unemployment benefits; changes in taxation; financial support for retirees; subsidies; social and economic support of households and enterprises. JEL classіfіcatіon: H2, H5, H6

Culture, Entrepreneurship and Economic Development. An Empirical Approach

2019 ◽  
Vol 0 (0) ◽  
Author(s):  
Monica Violeta Achim ◽  
Sorin Nicolae Borlea ◽  
Viorela Ligia Văidean
Keyword(s):  
Economic Development ◽  
Cultural Values ◽  
Low Income ◽  
Business Environment ◽  
High Income ◽  
Low Income Countries ◽  
Hierarchical Regression ◽  
Level Of Economic Development ◽  
Entrepreneurial Activities ◽  
The Relationship

AbstractThis paper investigates the influence of culture on the level of entrepreneurship and the possible moderating role of the level of economic development upon this relationship. For our purpose, an initial sample of 125 countries (43 high-income and 82 low-income countries) is used, over the 2006–2016 time period. At first, we use a panel analysis of the reduced sample which is furthermore completed by a hierarchical regression analysis. Our main results provide clear evidence that culture represents an important predictor of the level of entrepreneurship. Among the dimensions of culture, uncertainty avoidance and indulgence versus restraint are found to have the highest influence upon the level of entrepreneurship. Moreover, our empirical findings reveal that the relationship between culture and entrepreneurship is moderated differently by economic development. Thus, high-income countries face a three times higher rate of entrepreneurship than low-income countries. Our findings suggest that culture is more valued in high-income countries offering a higher social support in entrepreneurial activities than in low-income countries. We also find that some cultural patterns such as individualism, femininity, low uncertainly avoidance, short-term orientation or restrain may stimulate entrepreneurship in high-income countries but may be very dysfunctional in low-income countries. Our findings are also useful for policy makers to acknowledge the relationship between the cultural values of a country and its entrepreneurial activities, in order to adjust their policy measures for a better stimulation of the business environment.

Private school vouchers for expanding secondary school access? The case of Tanzania

2018 ◽  
Vol 32 (7) ◽  
pp. 1307-1318
Author(s):  
Donald R. Baum ◽  
Jacobus Cilliers
Keyword(s):  
Secondary Education ◽  
Secondary School ◽  
Low Income ◽  
Private School ◽  
Systems Approach ◽  
Financial Burden ◽  
Low Income Countries ◽  
Urban District ◽  
Content Type ◽  
School Voucher

Purpose The purpose of this paper is to provide insight into the current contributions of private schools to education provision in Tanzania, and to consider the feasibility of a school voucher program to contribute to the expansion of the secondary school system, compared to the alternative expansion of public secondary education. Design/methodology/approach The study offers an analysis of current educational circumstances and educational goals in Tanzania, and projects differential costs and outcomes associated with various options for expanding secondary education. Data come from two sources: a census of the private schooling market in the Morogoro Urban district, conducted as part of the World Bank’s Systems Approach for Better Education Results initiative; and Tanzania’s National Panel Survey 2010–2011. Findings For those students unable to cover the full cost of secondary education, findings suggest that a targeted private school voucher would be an efficient and equitable policy mechanism for secondary school expansion. Such an approach would ease the financial burden on government for constructing all new schools, yet assure access for the most vulnerable. Originality/value The implementation of school voucher programs is increasing in low-income countries. It is important for policy makers to carefully consider the appropriateness of this type of policy intervention for their particular educational contexts. This paper models an approach by which researchers and policymakers can assess the educational circumstances of a particular location, and determine the potential effectiveness of a private school voucher policy.

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