Effect of capital flows on financial stability in middle-income countries

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kolawole Ebire ◽  
Saif Ullah ◽  
Bosede Ngozi Adeleye ◽  
Muhammad Ibrahim Shah
Keyword(s):  
Capital Flows ◽  
Financial Stability ◽  
Financial Integration ◽  
Convincing Evidence ◽  
Foreign Direct Investments ◽  
Middle Income ◽  
Content Type ◽  
Middle Income Countries ◽  
Correlation Consistent ◽  
Emerging And Developing Countries

Purpose This study aims to examine the effect of various forms of capital flows on financial stability in middle-income countries from 2010 to 2017 using the World Bank economy classifications of 121 economies. Design/methodology/approach Panel spatial correlation consistent approach was used in this study. Findings The findings provide convincing evidence that in middle-income countries, capital flows are positive and significant predictors of financial stability and that financial systems in advanced economies are more stable than those of emerging and developing countries. However, outward foreign direct investments are shown to have the largest potential for ensuring financial stability. Originality/value Globalization has fostered financial integration of nations, which is manifested in capital flows from lower-income countries to middle-income and upper-income countries and vice versa. These flows can lead to financial instability if not properly controlled. The authors show how the various forms of capital flows affect the financial stability in middle-income countries.

scholarly journals The future of financial markets and regulation: what strategy for Europe?

foresight ◽  
2014 ◽  
Vol 16 (2) ◽  
pp. 95-108 ◽  
Author(s):  
Jean-Baptiste Gossé ◽  
Dominique Plihon
Keyword(s):  
Financial Markets ◽  
Capital Market ◽  
Financial Stability ◽  
Design Methodology ◽  
Financial Integration ◽  
Content Type ◽  
Realistic Option ◽  
The Future ◽  
Unstable Environment ◽  
Insight Into

Purpose – This article aims to provide insight into the future of financial markets and regulation in order to define what would be the best strategy for Europe. Design/methodology/approach – First the authors define the potential changes in financial markets and then the tools available for the regulator to tame them. Finally, they build five scenarios according to the main evolutions observed on the financial markets and on the tools used by the regulator to modify these trends. Findings – Among the five scenarios defined, two present highly unstable features since the regulator refuses to choose between financial opening and independently determining how to regulate finance in order to preserve financial stability. Three of them achieve financial stability. However, they are more or less efficient or feasible. In terms of market efficiency, the multi-polar scenario is the best and the fragmentation scenario is the worst, since gains of integration depend on the size of the new capital market. Regarding sovereignty of regulation, fragmentation is the best scenario and the multi-polar scenario is the worst, because it necessitates coordination at the global level which implies moving further away from respective national preferences. However, the more realistic option seems to be the regionalisation scenario: this level of coordination seems much more realistic than the global one; the market should be of sufficient size to enjoy substantial benefits of integration. Nevertheless, the “European government” might gradually increase the degree of financial integration outside Europe in line with the degree of cooperation with the rest of the world. Originality/value – Foresight studies on financial markets and regulation are quite rare. This may be explained by the difficulty to forecast what will be their evolution in the coming decades, not least because finance is fundamentally unstable. This paper provides a framework to consider what could be the best strategy of regulators in such an unstable environment.

The dynamic relationships between the female labour force and the economic growth

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Durmuş Çağrı Yıldırım ◽  
Hilal Akinci
Keyword(s):  
Economic Growth ◽  
Labour Force ◽  
Participation Rate ◽  
Labour Force Participation ◽  
Female Labour Force Participation ◽  
Middle Income ◽  
Female Labour ◽  
Content Type ◽  
Middle Income Countries ◽  
Total Labour

PurposeIn this study, the relationship between female labour force participation rate and economic growth is investigated in middle-income countries. The study covers the period of 2001–2016 by employing a dynamic panel approach. Pooled Ordinary Least Square and Fixed Effects model estimations are calculated as a decision criterion to select proper GMM Method. The outcomes indicate that the proper estimation technique, which is a System-GMM model, evidences the U Feminisation Theory for the middle-income countries while controlling all other factors.Design/methodology/approachThe novelty of this study is that the research not only employs both difference and system generalised method of moments (GMM) estimators but also includes main explanatory variables such as education, fertility, and total labour force rate. The study provides an opportunity to review the U-shape nexus between the female labour force and economic growth while controlling education, fertility and total labour participation rate.FindingsThe estimation implies that middle-income countries support a U-shaped relationship. The fertility rate does not impact on the female labour force, and education and total labour force level have a positive influence on women's participation in the labour market.Research limitations/implicationsThis study used data that include the period of 2001–2016 for middle-income countries. So, further studies can use different periods of data or different countries.Practical implicationsThe authors emphasise the importance of economic growth for female labour force for middle-income countries. Thus, a country intending to increase female labour force should also focus on its economic growth. As the study points out, middle-income countries staying under the minimum threshold, $4698.15 (per capita), should priorities their economic improvement policies to reach their female labour force participation goal. Those countries also should be prepared for a female labour force participation declining phase until they reach the turning point income level.Social implicationsFurthermore, education is one of the critical determinants that have an impact on FLFPR. The equal opportunity for both genders to engage in education should be considered as a policy. If females do not have an equal chance to enrolment in education, it may influence the policy of increasing female labour force adversely. Fertility rate appears no more statistically significant in our study. Moreover, today, there are some countries they practise equality between genders by providing equally extended parental leave, which may be a promising policy for gender equality in the labour force and may worth a try.Originality/valueSome previous studies may suffer model mistakes due to lack of consideration the endogeneity problem and bias issue of the results as suggested by Tam (2011). Moreover, previous studies tend to choose either studying U-feminisation as excluding other variables or studying determinants of female labour force participation rate as excluding U-feminisation theory. There is not any panel data study acknowledging both concepts by using recent data to the best knowledge of the authors. Thus, the novelty of this study is that the research not only employs both difference and system generalised method of moments (GMM) estimators but also includes main explanatory variables such as education, fertility, and total labour force rate. The study provides an opportunity to review the U-shape nexus between the female labour force and economic growth while controlling education, fertility and total labour participation rate.

Does Population Longevity Attract Foreign Direct Investments in Developing Countries?

2020 ◽  
pp. 097215092091536
Author(s):  
Ayona Bhattacharjee
Keyword(s):  
Developing Countries ◽  
Causal Effect ◽  
Disease Outbreaks ◽  
Good Health ◽  
Foreign Direct Investments ◽  
Middle Income ◽  
Female Population ◽  
Fdi Inflows ◽  
Middle Income Countries ◽  
Current Context

In a seminal paper, Alsan et al. (2006 , World Development, vol. 34, pp. 613–630) investigate the effect of population health on gross foreign direct investment (FDI) flows to the developing countries. The purpose of this article is to extend their work by exploring the causal effect of population longevity on attracting FDI flows to the middle-income countries over a longer and more recent period, while addressing endogeneity concerns through a novel instrumental variable (IV). The IV is constructed on the hypothesis of cross-country health convergence and generates plausibly exogenous variations in measures of longevity. Our IV estimates suggest that 1-year increase in a measure of longevity is likely to increase annual FDI inflows by at least 3 per cent in the sample of countries considered. Specifically, significant returns appear to emerge from increases in the longevity of the female population. In the current context of resurgence of FDI as a critical source of financial capital to the developing countries and the prevalence of frequent disease outbreaks, these results suggest that good health is not an end but a means to enable countries better integrate with the global markets.

Factors associated with willingness to pay for health insurance and pension scheme among informal economy workers in low- and middle-income countries: a systematic review

2020 ◽  
Vol 48 (1) ◽  
pp. 17-37
Author(s):  
Jairous Joseph Miti ◽  
Mikko Perkio ◽  
Anna Metteri ◽  
Salla Atkins
Keyword(s):  
Systematic Review ◽  
Health Insurance ◽  
Social Security ◽  
Willingness To Pay ◽  
Informal Economy ◽  
Middle Income ◽  
Content Type ◽  
Informal Workers ◽  
Middle Income Countries ◽  
Pension Schemes

PurposeThe purpose of this paper is to establish the main factors influencing willingness to pay for health insurance and pension schemes among informal workers in low- and middle-income countries (LMICs). Historically, informal economy workers have been excluded from social protection coverage. There is a growing need, interest and policy discourse in LMICs to extend social security to informal economy workers. However, little is known about informal workers' willingness to pay (WTP) for social security services in different LMIC settings.Design/methodology/approachThe authors conducted a systematic review and searched five databases from 1987 to 2017. Included papers focused on “social security”, “social insurance”, “pension”, “informal economy”, “informal sector” and “informal workers” in LMICs. Authors conducted independent data appraisal and data extraction. A total of 1790 papers were identified. After exclusion, 34 papers were included in the analysis. Given the heterogeneous results, the authors performed a narrative synthesis to consolidate the findings of the different studies.FindingsIn total, 34 studies from 17 countries were included in the review, out of which 23 studies focused on health insurance, 7 studies on pension schemes and 4 studies on social security in general. The study showed that income and trust were associated with WTP for both health insurance and pension schemes. In addition, family size, age, education and residential area were common factors for both forms of social security. For health insurance, experience of sickness, attitude and presence of medical doctors as well as distance from the healthcare facility all played a role in determining WTP. For pension schemes, low and flexible contribution rates, benefit package, government subsidies and quality of administration of the schemes influenced enrolment and contributions.Research limitations/implicationsMore evidence is needed for WTP for pensions among informal workers.Practical implicationsThe findings show that socio-economic differences, scheme-type (health or pension) and level of trust influence WTP for health insurance or pension among informal sector workers. The review results suggest that the factors influencing WTP for health insurance and pensions interplay in a complex web of relations. More evidence is needed on WTP for pensions among informal workers.Social implicationsFurther studies are particularly needed on the interrelationship of the influences to WTP, including gender issues, access barriers and socioeconomic factors, among program design issues for social security.Originality/valueThis paper is based on a systematic review methodology and contributes to the discourse on extending social security to informal economy workers based on evidence from various countries.

Service integration for improved diabetic and dental care: exploring an effective model for optimising health outcomes

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Isaac S. Obeng ◽  
Ikedinachi K. Ogamba
Keyword(s):  
Health Outcomes ◽  
Diabetic Patient ◽  
Integrated Care ◽  
Service Integration ◽  
Healthcare Systems ◽  
Medical Services ◽  
Dental Services ◽  
Middle Income ◽  
Content Type ◽  
Middle Income Countries

PurposeThis study identifies and synthesizes existing literature on the integration of diabetic and dental services and explores a service integration model for optimising diabetic patient health outcomes and improving healthcare systems in low and middle-income countries.Design/methodology/approachPeer-reviewed literature that analysed the integration of health services regarding dental and medical services were reviewed. The articles were identified using the Academic Search Complete, Business Source Complete, CINAHL Complete, Google Scholar and MEDLINE databases and screened using the PRISMA guidelines.FindingsA total of 40 full-text articles were examined for eligibility out of which 26 were selected for analysis. Diabetes was shown to contribute significantly to the global disease burden and this is also reflected in most low and middle-income countries. It is found that the integration of medical and dental services could help alleviate this burden. Hence, locally adapted Rainbow-Modified Integrated Care model is proposed to fill this integration gap.OriginalityThe integration of dental and medical services has been proven to be useful in improving diabetic patient outcomes. Hence, the need to facilitate cross-professional collaboration between dentists and physicians cannot be overemphasised and this can be extended and locally adapted by different health systems across the world.Practice ImplicationsThe integration of dental and diabetic services using models such as the Rainbow Model of Integrated Care is recommended to optimise health outcomes of diabetic patients and enhancing service delivery, especially in resource-poor healthcare systems.

Global burden of non-communicable diseases will rise

2016 ◽  
Keyword(s):  
Health Workers ◽  
Communicable Diseases ◽  
Middle Income ◽  
Non Communicable Diseases ◽  
Content Type ◽  
Policy Initiatives ◽  
Development Assistance For Health ◽  
Middle Income Countries ◽  
Health Infrastructure ◽  
Global Economic Growth

Significance In the same period, the share of deaths from communicable (or infectious) diseases has fallen from 30% to 23%. Yet there has been no corresponding shift in global development assistance for health, and policy initiatives to combat NCDs are minimal. Impacts NCDs will slow global economic growth as chronic sufferers will have limited productive capacities in the workplace. Health infrastructure in low- and middle-income countries will be increasingly overwhelmed and overburdened. Their health workers will be forced to shift their focus from treating communicable to non-communicable diseases.

Growing gender parity will aid global growth prospects

2017 ◽  
Keyword(s):  
Private Sector ◽  
Gender Equity ◽  
Financial Literacy ◽  
Leadership Positions ◽  
Middle Income ◽  
Content Type ◽  
The Public ◽  
Middle Income Countries ◽  
Gender Parity ◽  
Growth Prospects

Subject Gender parity benefits and initiatives. Significance The BBC released salary details for employees earning more than 150,000 pounds (around 200,000 dollars) in July, revealing that two thirds of its high earners, and the seven highest, are male, and showing large gaps between staff performing similar tasks. Gender inequality is a worldwide problem in both the public and the private sector. Research shows that increased parity generates GDP growth through three channels: boosting the size and quality of the workforce; enlarging the consumer market; and acting as an organisational catalyst in leadership positions. Impacts Reviewing and extending existing laws and regulations that promote and enforce gender equity will be as important as new legislation. Policy choice and progress will vary across the world, reflecting varying levels of gender parity and different traditions and religions. In low- and middle-income countries, ensuring cross-gender financial literacy and inclusion will become a key tool in equality programmes. US public spending in support of gender parity, in particular health funding, may fall, but private-sector initiatives have strong momentum.

Rapid global urbanisation will test governments

2017 ◽  
Keyword(s):  
Urban Communities ◽  
Global Economy ◽  
International Criminal ◽  
National Development ◽  
Security Threats ◽  
City Development ◽  
Middle Income ◽  
Content Type ◽  
Middle Income Countries ◽  
Social Opportunities

Subject City fragility. Significance Urbanisation can bring employment, educational and social opportunities to many people, but rapid urbanisation, especially in lower and middle-income countries, is creating areas where public service provision and economic opportunity are low and susceptibility to security threats is high. Impacts Lower and middle-income countries are set to see the bulk of the world’s urbanisation over the coming decades. City development will become synonymous with national development. Connecting urban communities with the global economy will be crucial for prosperity. However, this will require adequate protection from international criminal networks.

Vaccine nationalism could prolong pandemic

2020 ◽  
Keyword(s):  
High Income ◽  
Exit Strategy ◽  
Middle Income ◽  
Content Type ◽  
Middle Income Countries ◽  
Low And Middle Income

Significance Klugge is likely aiming to be optimistic. An effective COVID-19 vaccine is considered to be the only economically and humanely acceptable exit strategy for this pandemic. However, never before has a vaccine been developed, manufactured and distributed in the timescale now required. Impacts High-income countries will initially monopolise access to a vaccine. The country in which the vaccine is developed will be the very first to use it. Low- and middle-income countries covered by GAVI will gain some access to a vaccine, but it will not be comprehensive. Middle-income countries outside GAVI will likely be the last to get access.

Globalization in the World of Finance: An Analytical History

2006 ◽  
Vol 6 (1) ◽  
pp. 1850081 ◽  
Author(s):  
Dilip K. Das
Keyword(s):  
Capital Markets ◽  
Capital Flows ◽  
Financial Integration ◽  
Emerging Market ◽  
Insurance Companies ◽  
Emerging Market Economies ◽  
Financial Globalization ◽  
Middle Income ◽  
Market Economies ◽  
Bretton Woods

One of the many definitions of financial globalization is integration of domestic financial system of a country with the global financial markets and institutions. Enabling framework of financial globalization essentially includes liberalization and deregulation of the domestic financial sector as well as liberalization of the capital account. As economies progressively integrate globally, pari passu the financial structures of markets and the world of finance change. Financial globalization cannot be considered a novel phenomenon. Trans-country capital movements are centuries old. The oil shock of 1973 and the collapse of the Bretton Woods system, both of these developments were momentous and were responsible for laying the foundation of the contemporary era of financial globalization. After the collapse of the Bretton Woods system, some middle-income developing economies began to liberalize and open up for greater capital mobility, while keeping an autonomous control over their monetary policy. Advances in IT and computer technology are cited as one of the most important factors driving and supporting financial globalization. Transnational corporations (TNCs) also helped in global financial integration. They expanded their networks by merging with or acquiring other national and international firms. The prime movers in financial globalization are governments, borrowers, investors, and financial institutions. Each one of these market participants propelled economies towards financial integration in a proactive manner. Financial globalization has caused dramatic changes in the structure of national and international capital markets. The most significant change in the capital markets was in the banking system, which went through a process of dis-intermediation. This was a market transformation of fundamental nature. Contagions and crises are the downsides of financial globalization. Economic and financial crises of the 1990s portend to the fact that financial globalization is not a win-win game, and that it can potentially lead to serious disorder and high cost in terms of bank failures, corporate bankruptcies, stock market turbulence, depletion of foreign exchange reserves, currency depreciation and increased fiscal burden. A unique characteristic of globalized financial markets is reversal of capital flows when market perception regarding the creditworthiness of the borrowing entity changes. Cross-country financial flows to the emerging market economies were low, at during the mid-1970s. They increased at a healthy clip during the decades of 1980s and 1990s, peaking in 1997. They suffered a sharp decline after that because of the Asian and Russian financial and economic crises. The composition of external capital underwent a dramatic transformation during this period. Official flows either stagnated or declined. As a result their relative significance in global capital flows dwindled. In their place, private capital flows became the major source of external finance for a good number of emerging market economies. FDI became an important and dependable source of finance for the emerging markets and other middle-income economies during the decade of the 1980s and 1990s. Portfolio investment in stocks and bond markets also increased substantially. Global institutional investors found this channel of investment functional and profitable. Mutual funds, insurance companies, and pension funds channeled large amounts through portfolio investment into the emerging market economies. As financial globalization progressed, presence of international financial intermediaries has expanded considerably. This applies more to international commercial banks than to investment banks, insurance companies and mutual funds. It is incorrect to say that their global expansion has been uniform because this has occurred unevenly. International bond issuance activity by emerging market economies recorded a sharp spurt in 1993. Emerging market economies began using ADRs and GDRs for raising capital from the global capital markets in 1990 in a small way.

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