Can technological innovation spur economic development? The case of Indonesia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Eddy Junarsin ◽  
Mamduh Mahmadah Hanafi ◽  
Nofie Iman ◽  
Usman Arief ◽  
Ahmad Maulin Naufa ◽  
...  
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Technological Innovation ◽  
Optimal Allocation ◽  
Empirical Studies ◽  
Delayed Effect ◽  
Optimal Point ◽  
Content Type ◽  
P2p Lending ◽  
The Impact

Purpose Innovation in digital technologies has been the main force in promoting growth and inclusion. However, the impact of such innovations remains ambiguous. Within this context, this study aims to analyze the distribution of digitally empowered peer-to-peer (P2P) lending in Indonesia. Design/methodology/approach This study uses a quantitative approach to estimate the impact of technological innovation in promoting economic development. In particular, this study employs empirical panel data from 135 financial technology (FinTech) companies from 2015 to 2019 and use the dynamic panel threshold regression approach. This study collects secondary data to build the estimated model. Findings Contrary to conventional wisdom, this study’s evidence suggests that there is a delayed effect between the contribution of P2P lending by FinTech firms on economic growth in the country. While the immense growth of FinTech seems promising, the findings indicate that FinTech is far from its optimal point. This study calculates the optimal combination between productive and consumptive lending and between Java and non-Java. In view of this finding, this study proposes strategies to effectively distribute lending and bring about the expected benefit to the economy. Practical implications Since the contribution of P2P lending on economic development has not reached its optimum, the findings expose the limitation of current technological innovation in the financial sectors. In this sense, P2P penetration on the financing market needs encouragement. The calculations for optimal allocation between productive and consumptive and between Java and non-Java provide guidance to policymakers. This study helps practitioners to shape strategy and to begin experimenting with different approaches to distribute loans effectively. Originality/value To the best of the authors’ knowledge, there are no empirical studies that examine the impact of emerging FinTech companies in promoting economic growth and financial development. The findings close this research gap, especially in regard to innovation management literature, and provide insights for practitioners, policymakers and regulators.

scholarly journals The Impact of Higher Education and Human Capital Quality on “Local-Neighborhood” Economic Growth

2021 ◽  
Vol 8 (1) ◽  
pp. 1041-1057
Author(s):  
Ran Zhao ◽  
Yuhong Du
Keyword(s):  
Higher Education ◽  
Economic Growth ◽  
Human Capital ◽  
Economic Development ◽  
Technological Innovation ◽  
River Delta ◽  
Neighborhood Effect ◽  
Local Neighborhood ◽  
Catch Up ◽  
The Impact

Based on China’s provincial panel data from 1990 to 2017 and the improved Lucas, Nelson & Phelps model, the Spatial Dubin Model is used to test the spatial effects of higher education and human capital quality. The results showed that high-level human capital, characterized by higher education and urban labor income index, indirectly promoted local economic growth through technological innovation. There was also a “local-neighborhood” synergy effect. The neighborhood effect was manifested in that it affected the economic development of neighbors by promoting technological catch-up. After considering the quality factor, both the local and neighborhood effects were enhanced. From a regional perspective, higher education in the Yangtze River Delta, where the level of economic development is relatively high, was manifested as a spatial spillover effect of technological innovation and the neighborhood effect in the northeastern Bohai Rim and the Pearl River Delta was manifested as a technological catch-up.

Economics of human resources development under globalization era: a study of BRICS countries

2019 ◽  
Vol 43 (7/8) ◽  
pp. 682-698 ◽  
Author(s):  
Samir Ul Hassan ◽  
Motika Sinha Rymbai ◽  
Aasif Ali Bhat
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Human Resources ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
Human Resources Development ◽  
Content Type ◽  
Brics Countries ◽  
The Impact ◽  
Resources Development

Purpose The study aims to explore the extent to which human resources development quantifies the economic growth of BRICS countries under the globalization era by controlling country differences. Design/methodology/approach The study used the Generalized Method of Moments (GMM) and Scheffe pairwise comparison tests to quantify the impact of the variables and the level of difference among the BRICS countries onto human Resources development. Findings The study observes that the impact of human resources development on economic growth of BRICS counties is significant but limited to few countries. The study reveals that countries such as India and South Africa are unable to utilize their human resources efficiently to promote economic growth, as compared with Russia, China and Brazil. The study further argues that there is urgent need of amalgam of various economic development theories keeping in mind the regional needs to extract the positive impact from human resource on economic development. Research limitations/implications The single limitation of this research is that it was not possible to compare the results with other developing countries to unleash the capabilities of human resources development with regard to economic growth at the universal level. Originality/value To the best of the authors’ knowledge, this paper is the first of its kind to analyze human resources development at a much deeper level. The paper has chosen variables which are important from the policy perspective of government rather than the working perspective, which is a great contribution. Further, for human index the variables chose covering major aspects of human development from spending perspective.

Relationships between fluctuations of environmental regulation, technological innovation, and economic growth: a multinational perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zaiyang Xie ◽  
Liang Qu ◽  
Runhui Lin ◽  
Qiutong Guo
Keyword(s):  
Economic Growth ◽  
Environmental Regulation ◽  
Technological Innovation ◽  
Negative Impact ◽  
Oecd Country ◽  
Mediating Effect ◽  
Content Type ◽  
Innovation Activities ◽  
Continuous State ◽  
The Impact

PurposeEnvironmental regulation is in a continuous state of intense change and modification amid the long-term tensions between environmental protection and economic growth. In this article, the authors creatively investigate how fluctuations of environmental regulation influence a nation's economic growth while also examining the mediating effect of technological innovation.Design/methodology/approachUsing sample data of 36 Organisation for Economic Co-operation and Development (OECD) countries from 2013 to 2018, environmental regulation is differentiated in two aspects of formal environmental regulation (FER) and informal environmental regulation (IER) and analyzed to assess the effects of regulatory fluctuations on investment and technological innovation.FindingsThe research results demonstrate that both FER fluctuation and IER fluctuation exert a significant negative impact on economic growth. These two fluctuations in environmental regulation increase uncertainty and unpredictable risks for corporations and investors, significantly stifling the willingness to contribute to innovation activities and leading to a diminished level of innovation. Technological innovation is revealed to have a mediating influence on the relationship of environmental regulation fluctuation to economic growth.Originality/valueThese findings enrich the research on the impact of environmental regulation from a dynamic, multinational perspective, contributing to the literature by exploring the relationships between environmental regulation fluctuation, technological innovation and economic growth at the OECD-country level.

The contribution of environmental regulation to technological innovation and quality competitiveness

2017 ◽  
Vol 11 (1) ◽  
pp. 51-71 ◽  
Author(s):  
Yuhong Cao ◽  
Jianxin You
Keyword(s):  
Economic Development ◽  
Environmental Protection ◽  
Environmental Regulation ◽  
Technological Innovation ◽  
Water Control ◽  
Two Phase ◽  
Content Type ◽  
Manufacturing Quality ◽  
The Impact ◽  
First Time

Purpose This paper aims to explore the relationship between environmental regulation, technological innovation and manufacturing quality competitiveness to provide some references for emission reduction activities and improvements in manufacturing quality competitiveness to achieve environmental protection targets and economic development as part of a win–win situation. Design/methodology/approach Based on the structure-behavior-performance paradigm and Grabowski’s research, a new empirical model was provided. The software, EViews 6.0, was used for econometric analysis. Regression analysis was adopted to explore the three indicators’ relationships. Findings First, environmental regulation can promote technological innovation effectively. Second, compared with wasted gas and wasted solids, investment in wasted water control promotes Chinese technological innovation most. Third, the impact of research and development investment, induced by environmental regulation, on manufacturing quality competitiveness is greater than that induced by non-environmental regulation. Fourth, the impact of lagged two-phase environmental regulation on manufacturing quality competitiveness is similar to that of lagged one-phase regulation. Practical implications The issue that Chinese manufacturing is facing is how to manage the trade-off between pollution control investment and improved quality competitiveness. This study enables managers to understand how to better implement environmental regulation initiatives while achieving environmental protection and quality competitiveness as part of a win–win situation. Originality/value This paper analyzes the relationships between environmental regulation, technological innovation and manufacturing quality competitiveness for the first time and provides the basic argument for integrating Chinese environmental regulation with quality competitiveness to reveal the uniqueness of the circumstances determining China’s economic development.

What precipitates growth in CO2 emissions?

2019 ◽  
Vol 13 (2) ◽  
pp. 277-297 ◽  
Author(s):  
Abimelech Paye Gbatu ◽  
Zhen Wang ◽  
Presley K. Wesseh ◽  
Vamuyan A. Sesay
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Fixed Effects ◽  
Developing Economies ◽  
Natural Habitat ◽  
Pollutant Emissions ◽  
Real Output ◽  
Fixed Effects Model ◽  
Content Type ◽  
The Impact

Purpose The degradation of the natural habitat at the expense of economic development is a harmful growth that warrants environmental policy actions. For instance, the economic impacts of environmental pollution are quite visible in developed and developing economies, where human health is compromised by rapid economic growth and energy induced pollution. Therefore, the purpose of this study is to investigate the impact of CO2 emissions on economic development. Design/methodology/approach This paper investigates the correlation between pollutant emissions and key economic variables within the economic community of West African states (ECOWAS) region by applying fixed effects model to unbalanced time-series panel data for the period 1980-2014. This paper examines the full ECOWAS panel and sub-panels with export-and-import-dependent countries. Findings The authors argue that energy consumption (EC) and real output exert causal influences on CO2 emissions for the full ECOWAS panel and the sub-panels with export-and-import-dependent countries. Practical implications The results imply that increase in EC is the main factor that promotes economic growth in the region. Additionally, growth in EC and real output stimulates CO2 emissions growth. Originality/value Therefore, it is argued that technological innovations that increase energy efficiency through new carbon-free technologies that minimize CO2 emissions growth without impairing economic growth and development must be introduced in the region.

scholarly journals Reflections on neo-Kaleckian growth regimes: a Marxian reproduction perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Feng Zhao ◽  
Jiahe Tian ◽  
Yuchen Duan
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Income Distribution ◽  
Technological Progress ◽  
Supply Side ◽  
Demand Side ◽  
Content Type ◽  
The Impact ◽  
Kaleckian Model

PurposeThe neo-Kaleckian model follows the ideas of Marx, Keynes and Kalecki, that investment is a key influencing factor in the dynamics of the capitalist mode of production. Through the discussion of different forms of investment decision function, this paper constructs the analysis framework of wage-led and profit-led economic growth regimes.Design/methodology/approachThe model has become an important theoretical paradigm for current Western heterodox economists regarding the research on the impact of functional income distribution on economic growth, and it has a very large impact on both theoretical and empirical research. Starting from Marx's reproduction theory, this article discusses the theoretical shortcomings of the neo-Kaleckian growth regime model.FindingsThis paper mainly focuses on three aspects: (1) the ideological legacy of “Smith's Dogma”; (2) neglecting the restrictions on income distribution from the organic composition of capital and the surplus value rate; (3) technological progress and the formation of a new long economic wave.Originality/valueThe authors believe that the neo-Kaleckian model unilaterally emphasizes the demand-side factors in the economy and, unconsciously or not, ignores the role of the supply-side, which makes it encounter certain limitations in explaining long-term growth. Even if some empirical conclusions are employed to bridge functional income distribution and technological progress, there is still a lack of a theoretical basis for accurately describing long-term economic changes using this model. In order to better promote high-quality economic development and accelerate the formation of a new pattern of economic development in which the domestic large-scale cycle is the mainstay and the domestic and international double cycles promote each other, the authors need to adopt a policy combination with the supply-side as the main and the demand-side as the supplement, and to work from both sides.

Does corruption adversely affect economic growth in Tunisia? ARDL approach

2020 ◽  
Vol 23 (1) ◽  
pp. 38-54
Author(s):  
Anas Al Qudah ◽  
Azzouz Zouaoui ◽  
Mostafa E. Aboelsoud
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Government Expenditure ◽  
Physical Capital ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
Per Capita ◽  
The Impact

Purpose This study aims to better understand the phenomenon of corruption in Tunisia in relation to its impact on economic development. The period of study is 1995 to 2014. The auto-regressive distributed lag (ARDL) model is adopted to examine the existence of a long-term relationship between the above-mentioned variables and also the direct and indirect consequences of corruption on economic development in Tunisia. Design/methodology/approach The study uses a modern econometric technique to estimating the long-term relationship (e.g. the co-integration) between corruption and economic development; using this technique also allows us to investigate the impact of corruption on economic growth. Findings The empirical results show that corruption has a negative effect on per capita gross domestic product (GDP) in Tunisia for the period under review. This effect is described as a direct effect of corruption in the long term; specifically, declines are observed in per capita GDP, over the long run, by almost 1 per cent, following a 1 per cent increase in the level of corruption. The results also show that corruption has indirect effects via transmission channels, such as investment in physical capital, which is positively significant in the presence of corruption. The same observation is made at the level of government expenditure during the previous year, while for those of the current year, the coefficient becomes negative but not significant. With respect to human capital, the impact of corruption on education expenditures is insignificant. Originality/value The paper begins with an overview of previous literature in this area. Given the nature of corruption and the differences in the meanings attributed to it, from one country to another and from one culture to another, the paper moves on to study the impact of corruption in Tunisia as a case study for one country with one socio-cultural environment. The authors then propose several methods and possible solutions, which could be implemented to deal with this problem.

scholarly journals The economic effects of clean development mechanism afforestation and reforestation project: evidence from China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yuan Hu ◽  
Wenxue Zheng ◽  
Weizhong Zeng ◽  
Hongxing Lan
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Clean Development Mechanism ◽  
Local Economy ◽  
Short Term ◽  
Impact Mechanism ◽  
Content Type ◽  
R Project ◽  
The Impact ◽  
Development Mechanism

Purpose Forestry carbon sink (FCS) is not only an important measure to deal with the current global climate change but also an effective way to build an ecological civilization. As an important form of implementation of FCS, the afforestation and reforestation projects under the clean development mechanism (CDM A/R) have important functions such as ecological protection and economic growth. This paper aims to evaluate the short-term and long-term impact of CDM on the county economy and its impact mechanism. Design/methodology/approach This paper first uses propensity score matching to match the county (treatment group). Second, this paper uses difference in difference to estimate the net effect of CDM A/R project on county economic development to reduce estimation error. Finally, the impact mechanism of implementing CDM A/R project on county economic development was tested. Findings The CDM A/R project has significantly promoted the development of real gross domestic product (GDP) and per capita real GDP in the region. Because of the long project cycle, this promotion is not immediate in the short term and has an obvious hysteresis effect. The longer the implementation time, the greater the promotion of the local economy will develop. The results are robust after the robustness test that uses the single-difference method. The CDM A/R project has promoted local economic growth by optimizing the local industrial structure, increasing the regional capital stock and raising the regional government’s fiscal revenue and expenditure. Originality/value This paper provides a critical overview of the relationship between clean development mechanism and local economic development.

Moderating relationship of institutions for opportunity entrepreneurship and economic development

2017 ◽  
Vol 13 (4) ◽  
pp. 350-374 ◽  
Author(s):  
Hasan Ghura ◽  
Xiaoqing Li ◽  
Arezou Harraf
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Literature Review ◽  
Conceptual Framework ◽  
Empirical Studies ◽  
Content Type ◽  
Opportunity Entrepreneurship ◽  
Structural Problems ◽  
Development Institutions ◽  
Relationship Of

Purpose The purpose of this paper is to develop a conceptual framework that illustrates how resource-based countries, such as those in the Gulf Cooperation Council, can move their economies towards a more sustainable diversified model, through creating and fostering institutions that are conducive for opportunity entrepreneurship. Design/methodology/approach Several key variables pertaining to formal and informal institutions which impact opportunity entrepreneurship are presented in a conceptual framework based on a comprehensive, non-systematic literature review. Findings Findings from the comprehensive literature review suggest that institutions play a moderating role between opportunity entrepreneurship and economic development. Institutions can stimulate entrepreneur’s behaviour leading to economic growth and subsequently development. Proposals worth pursuing in empirical studies in the future are presented based on the review of the literature. Practical implications This framework offers a model for oil-based countries in resolving structural problems in fostering entrepreneurship when responding to economic challenges. Originality/value The proposed framework in this study takes into consideration a comprehensive set of formal and informal institutional factors, rarely discussed in the existing literature, that link opportunity entrepreneurship and economic growth and development. Insights offered by this study have implications for government policy changes in developing effective institutions.

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