Productive Capacities, Economic Growth and Economic Growth Volatility in Developing Countries: Does Structural Economic Vulnerability Matter?

2021 ◽  
Author(s):  
Sena Kimm Gnangnon
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
International Institutions ◽  
Economic Vulnerability ◽  
Global Shocks ◽  
The 2008 Financial Crisis ◽  
Environmental Shocks ◽  
High Level ◽  
Sustainable Economic Growth ◽  
Growth Volatility

Recent years’ global shocks (e.g., the 2008 financial crisis and the COVID-19 pandemic) and environmental shocks — such as natural disasters — have heightened the vulnerability of developing countries to future shocks, and can compromise their development prospects. International institutions and researchers have advocated that the strengthening of productive capacities in these countries would help enhance the resilience of their economies to shocks, and promote sustainable development. This paper has examined the effect of productive capacities on economic growth and economic growth volatility in developing countries, in particular when they face a high level of structural economic vulnerability. The analysis covers 117 developing countries over the period of 2000–2018. It shows that productive capacities not only promote economic growth, but also reduce economic growth volatility. On the other hand, structural economic vulnerability reduces economic growth (in particular when it exceeds a certain level), and induces greater volatility of economic growth. Interestingly, productive capacities promote economic growth and reduce economic growth volatility in countries that face a high degree of structural economic vulnerability. These findings support the recommendation by international institutions and researchers that if they were to enhance the resilience of their economies to shocks, and promote sustainable economic growth, developing countries (in particular the poorest ones) should strengthen their productive capacities.

scholarly journals Productive Capacities, Economic Growth and Economic Growth Volatility in Developing Countries: Does Structural Economic Vulnerability Matter?

2021 ◽  
Author(s):  
Sena Kimm Gnangnon
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
International Institutions ◽  
Economic Vulnerability ◽  
Global Shocks ◽  
The 2008 Financial Crisis ◽  
Environmental Shocks ◽  
High Level ◽  
Sustainable Economic Growth ◽  
Growth Volatility

Recent years' global shocks (e.g., the 2008 financial crisis and the COVID-19 pandemic) and environmental shocks - such as natural disasters - have heightened the vulnerability of developing countries to future shocks, and can compromise their development prospects. International institutions and researchers have advocated that the strengthening of productive capacities in these countries would help them enhance the resilience of their economies to shocks, and promote sustainable development. The present paper has examined the effect of productive capacities on economic growth and economic growth volatility in developing countries, in particular when they face a high level of structural economic vulnerability. The analysis covers 117 developing countries over the period 2000-2018. It shows that productive capacities do not only promote economic growth, but also reduce economic growth volatility. On the other hand, structural economic vulnerability reduces economic growth, in particular when it exceeds a certain level, and induces greater volatility of economic growth. Interestingly, the findings suggest that productive capacities promote economic growth and reduce economic growth volatility in countries that face a high degree of structural economic vulnerability. These findings support the recommendation by international institutions and researchers that if they were to enhance the resilience of their economies to shocks, and promote sustainable economic growth, developing countries (in particular the poorest ones) should strengthen their productive capacities.

scholarly journals Development Aid, Economic Growth Volatility and Poverty Volatility in Developing Countries

2021 ◽  
Vol Volume II (December 2021) ◽  
pp. 1-15
Author(s):  
Sèna Kimm GNANGNON
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Development Aid ◽  
Negative Effect ◽  
Growth Volatility

This article has analysed the effect of development aid flows on poverty volatility in developing countries, including through the economic growth volatility channel. Using a sample of 106 countries over the period 1980-2017, and the two-step system Generalized Methods of Moment (GMM) technique, the analysis has shown that development aid flows dampen the positive poverty volatility effect of economic growth volatility: the magnitude of the negative effect of development aid on poverty volatility rises as the degree of economic growth volatility increases. Additionally, development aid exerts a higher negative effect on poverty volatility as countries face higher poverty rates. These findings highlight the importance of development aid for stabilizing poverty rates.

International Agricultural Trade Reform and Developing Countries: The Case of the European Community

1998 ◽  
Vol 47 (3) ◽  
pp. 632-646
Author(s):  
Joseph A. McMahon
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Economic Performance ◽  
Agricultural Policy ◽  
Poverty Alleviation ◽  
Agricultural Sector ◽  
Agricultural Trade ◽  
Trade Reform ◽  
Food Imports ◽  
Sustainable Economic Growth

We are all aware that agriculture is important to developing countries as a source of income, employment and export earnings. To a far greater extent than in the OECD countries, agriculture it central to the economic performance of developing countries and the livelihood of their inhabitants. Rural societies in developing countries are directly dependent on the agricultural sector and urban dwellers rely on agriculture to provide food security and sustainable economic growth. Furthermore, many developing countries heavily rely on the export earnings or are highly dependent on food imports. Given the fact that the poorest and most threatened communities and countries are typically the most highly dependent, the resolution of pressing global agricultural policy and trade issues is critical to sustainable development and poverty alleviation.

scholarly journals Application of Multi-Criteria Decision-Making Model and GM (1,1) Theory for Evaluating Efficiency of FDI on Economic Growth: A Case Study in Developing Countries

2019 ◽  
Vol 11 (8) ◽  
pp. 2389 ◽  
Author(s):  
Wang ◽  
Le
Keyword(s):  
Economic Growth ◽  
Decision Making ◽  
Developing Countries ◽  
Economic Development ◽  
Exchange Rate ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Sustainable Economic Development ◽  
Sustainable Economic Growth

Foreign direct investment (FDI) and corporate social responsibility (CSR) spending are one of the major factors in improving sustainable economic development of a country. Therefore, this study focuses on the multi criteria application of FDI and sustainability factors (CSR spending) in various developing countries to explore its impact and decision making for sustainable economic growth. The study uses a case study methodology whereby FDI, exchange rate, and CSR expenditure data from 20 countries were used to assess the efficiency in sustainable economic growth. Data were collected from the World Bank for 20 Asian and African developing countries during 2012–2017 and analyzed using GM (1,1), mean absolute percentage error (MAPE), Malmquist productivity index (MPI)-data envelopment analysis (DEA), and the slacks-based measure of efficiency (SBM) model. Correlation analysis is used to find the relationship for FDI, CSR, exchange rate, gross domestic product (GDP), and GDP per capita (GDPPC). The results of the Malmquist productivity index and the frontier effect clearly highlight that a few countries have witnessed a great improvement in terms of productivity and technological progression. Therefore, the decision makers must adopt the model of those countries with respect to sustainable development of the nation. This study helps developing nations as well as researchers to benchmark efficient countries and follow their strategies to develop a new one for utilizing FDI and CSR spending in sustainable economic development. The study also helps policy makers in multi criterion application of FDI and CSR for decision making in economic development.

scholarly journals Costs, Capabilities, Conflict and Cash: The Problem of Technology and Sustainable Economic Growth in Pakistan

2016 ◽  
Vol 21 (Special Edition) ◽  
pp. 65-98 ◽  
Author(s):  
Matthew McCartney
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
South Asia ◽  
World Bank ◽  
Productivity Growth ◽  
Structural Changes ◽  
Gdp Growth ◽  
Oriented Growth ◽  
Middle Income ◽  
Sustainable Economic Growth

Growth in Pakistan has been surprisingly sustainable. GDP growth of 5 percent p.a. since independence and no recession since (at least) 1960 according to World Bank data represents a creditable performance when compared to all but the most successful developing countries. Pakistan has significantly transformed the structure of its economy during these same decades; in 1950 99 percent of its exports were agricultural goods and by the 1990s exports were largely manufactured goods. This very success indicates a growing constraint on sustaining growth into the future or the concern that Pakistan may be headed for a Middle Income Trap. Although there does exist scope for continued growth based on further structural changes - in particular the large number of people still employed in agriculture or the women not currently engaged in the labor force - for growth to be sustained a more intensive or productivity-oriented growth will be necessary. This paper first outlines the importance of productivity growth for sustaining GDP growth in Pakistan, then examines the historical and comparative productivity performance of Pakistan, and explores a number of case studies of successful technological change, particularly in South Asia, and finally attempts to draw some lessons for contemporary Pakistan.

Evaluation of export diversification on sustainable growth in Kazakhstan

2021 ◽  
pp. 49-63
Author(s):  
Olzhas Shaizandaevich Adilkhanov ◽  
Orazaly Sabden
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
International Organizations ◽  
State Level ◽  
Developed Countries ◽  
Sustainable Growth ◽  
Export Diversification ◽  
The Past ◽  
Export Policies ◽  
Sustainable Economic Growth

Over the last ten years developing countries have achieved very fast economic growth comparing to the former developed countries and gained the opportunity to vastly widen their export basket. Kazakhstan over the past years is trying to diversify its export as well by becoming a member of international organizations and supporting its exporters by implementing different programs on a state level. Thus, the need for the deep research of Kazakhstan's export opportunity has appeared. The main purpose of the article is to determine the effect of export's diversification on sustainable economic growth and evaluate the potential of the processing field on the example of regions of Kazakhstan. The research has given important results, that is, in 4 regions of Kazakhstan are great opportunities to increase the export of metallurgy, engineering and chemical industry. The results of the study will be useful tool in applying export policies of the regions.

Achieving SDG target 8.1 (sustain economic growth) in developing countries: how aid for trade policy and regulations can assist?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chandan Kumar Roy ◽  
Huang Xiaoling ◽  
Banna Banik
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Panel Data ◽  
Trade Policy ◽  
Middle Income ◽  
Content Type ◽  
Middle Income Countries ◽  
Aid For Trade ◽  
Per Capita ◽  
Sustainable Economic Growth

Purpose This study aims to examine how aid for trade policy and regulations (AfTPR) contribute to achieving Sustainable Development Goal (SDG) target 8.1 (sustain per capita economic growth) and whether the effectiveness of AfTPR is conditional to the stable political environment. Design/methodology/approach This paper uses a widely accepted endogenous growth framework and applies panel data fixed effects and two-step difference and system generalized method of moments estimation strategies on panel data of 50 developing countries over 2005–2017. Findings The findings of the study confirm that aid to trade policy promotes sustainable economic growth in developing countries, but this category of development assistance is only effective and significant for low and lower middle-income (LLMI) economies. The positive and significant effect of AfTPR in upper middle-income countries is conditional to their level of political stability. Under a stable political situation, the positive effect of AfTPR on sustainable growth remains almost same for the LLMI countries, whereas for the upper middle-income countries this growth effect reached almost double. Research limitations/implications International trade is considered as a driver for inclusive and sustainable economic growth, whereas aid for trade is acknowledged for its prospective contribution toward achieving these goals. The findings have dominant policy implications for the international development organizations and donors, which recommend that it is more desirable to transmit aid toward developing and implementing trade policy and regulations as per capita economic growth improves in the aid recipient countries. Originality/value According to the authors’ knowledge, no prior study empirically analyzes the effect of AfTPRs on SDG target 8.1.

Infrastructure Development in Developing Countries

2015 ◽  
pp. 92-119 ◽  
Author(s):  
Raj Kumar Bhattarai
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
The Other ◽  
Development Projects ◽  
Infrastructure Development ◽  
Cultural Patterns ◽  
Physical Infrastructure ◽  
Infrastructure Project ◽  
Surrounding Areas ◽  
Sustainable Economic Growth

Physical infrastructure development projects mobilize a huge number of diversified workforce, their associates, and relatives to and from the project sites and surrounding areas from initiation of the projects to post-completion period. This chapter focuses on Nepal government's National Plan and reviews the Plan's priorities of the last 60 years concerning project tourism at one part; and the opinions of key informants, socio-cultural patterns, project specifications, and tourism statistics on the other. The analysis indicates a clear fragmentation of the plan, cultural configuration, and infrastructure acceleration efforts. It concludes with a notion of urgency of integrating infrastructure project specifications with the cultural configuration of the actors. It proposes a strategic tripartite model for tourism development in order to achieve sustainable economic growth in developing countries.

scholarly journals Evaluation of the Long-Term Stability and Impact of Remittances and Development Aid on Sustainable Economic Growth in Developing Countries

2019 ◽  
Vol 11 (6) ◽  
pp. 1538 ◽  
Author(s):  
Robert Stojanov ◽  
Daniel Němec ◽  
Libor Žídek
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Regression Models ◽  
Development Aid ◽  
Linear Regression Models ◽  
Term Stability ◽  
Long Term Stability ◽  
Remittance Flows ◽  
Sustainable Economic Growth

In our paper, we analyse the long-term stability and impact of remittances and development aid on sustainable economic growth in developing countries. We use two data samples from countries that were recipients of both aid and remittances in the corresponding period. First, unbalanced data from the years 1970 to 2017; that is, how countries appear in the data. Second, balanced data, where we selected the largest possible set of countries for which data exists without gaps from the years 1970–2017. This dataset consists of 57 countries for the period from 1991 to 2017. Using linear regression models, we conclude that up until the end of the 1980s, the size of aid as a share of gross domestic product (GDP) was larger than the share of remittances. After that, the situation changed and the shares of both inflows were broadly similar. The inflow of remittances was more stable than the inflow of aid and development aid did not (on the contrary to remittances) contribute positively to sustainable economic growth if we consider the entire period between 1970 and 2017. Our results suggest that a statistically significant relationship between development aid and economic growth (per capita) may be observed only in the period from 1990 to 1999. Economic growth in developing countries is negatively influenced by the uncertainty related to the flows of official development assistance (ODA) and aid in all investigated decades. In the case of the remittance flows, the increased volatility tends to contribute negatively to sustainable economic growth only when the remittance flows represent a relatively higher share of GDP.

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