Labour Market Adjustment and Intra-Industry Trade: Empirical Results from Indian Manufacturing Sectors

2020 ◽  
Vol 15 (2) ◽  
pp. 238-269
Author(s):  
Sakshi Aggarwal ◽  
Debashis Chakraborty
Keyword(s):  
Labour Market ◽  
Negative Impact ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Policy Reforms ◽  
Fdi Inflows ◽  
Industry Trade ◽  
Skill Intensity ◽  
Manufacturing Sectors ◽  
The Relationship

During the last two decades, India has witnessed several trade and industrial policy reforms. The objective of the study is to examine the relationship between dynamism of India’s two-way trade, measured through Marginal Intra-Industry Trade (MIIT) index, and labour market adjustments, reflected through absolute employment changes, in select manufacturing sectors over 2001–2015. India’s MIIT in select sectors generally display an upward trend over the sample period, while a mixed dynamics is observed on the employment front. The generalized method of moments (GMM) estimation results indicate that MIIT, increase in productivity, skilled workforce intensity, industrial concentration, incremental FDI inflows and trade openness positively influence absolute employment changes, whereas unskilled wage exerts a negative impact on the same. The analysis further concludes that high relative growth rate, skill-intensity, incremental FDI inflows and higher productivity in a sector, also characterized by higher MIIT, may lead the firms to employ more productive and competitive resources, resulting in higher absolute changes in employment. The obtained results do not support the Smooth Adjustment Hypothesis (SAH) predictions in the Indian context.

scholarly journals Trade and FDI thresholds of CO2 emissions for a Green economy in sub-Saharan Africa

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Simplice Asongu ◽  
Nicholas M. Odhiambo
Keyword(s):  
Negative Impact ◽  
Positive Impact ◽  
Trade Openness ◽  
Sub Saharan Africa ◽  
Green Economy ◽  
Fdi Inflows ◽  
Content Type ◽  
Sub Saharan ◽  
Generalised Method Of Moments ◽  
The Relationship

Purpose This study aims to focus on assessing how improving openness influences carbon dioxide (CO2) emissions in sub-Saharan Africa (SSA). Design/methodology/approach This study focusses on 49 countries in SSA for the period 2000–2018 divided into: 44 countries in SSA for the period 2000–2012; and 49 countries for the period 2006–2018. Openness is measured in terms of trade and foreign direct investment (FDI) inflows. The empirical evidence is based on the generalised method of moments. Findings The following main findings are established. First, enhancing trade openness has a net positive impact on CO2 emissions, while increasing FDI has a net negative impact. Second, the relationship between CO2 emissions and trade is a Kuznets shape, while the nexus between CO2 emissions and FDI inflows is a U-shape. Third, a minimum trade openness (imports plus exports) threshold of 100 (% of gross domestic product (GDP)) and 200 (% of GDP) is beneficial in promoting a green economy for the first and second samples, respectively. Fourth, FDI is beneficial for the green economy below critical masses of 28.571 of net FDI inflows (% of GDP) and 33.333 of net FDI inflows (% of GDP) for first and second samples, respectively. It follows from findings that while FDI can be effectively managed to reduce CO2 emissions, this may not be the case with trade openness because the corresponding thresholds for trade openness are closer to the maximum limit. Originality/value This study complements the extant literature by providing critical masses of trade and FDI that are relevant in promoting the green economy in SSA.

scholarly journals Does Institutional Quality Matter in the Relationship Between Competition and Bank Stability? Evidence from Asia

2021 ◽  
Vol 36 (3) ◽  
pp. 283-301
Author(s):  
Muizzuddin Muizzuddin ◽  
Eduardus Tandelilin ◽  
Mamduh Mahmadah Hanafi ◽  
Bowo Setiyono
Keyword(s):  
Rule Of Law ◽  
Negative Impact ◽  
Generalized Method Of Moments ◽  
Institutional Quality ◽  
Political Stability ◽  
Bank Stability ◽  
Government Effectiveness ◽  
The Rule Of Law ◽  
Regulatory Quality ◽  
The Relationship

Introduction/Main Objectives: This study aims to investigate whether competition impacts bank stability. Furthermore, the study also analyzes the role of institutional quality in a country, such as voice and accountability, political stability, government effectiveness, regulatory quality, the rule of law, and control of corruption, forming the effect of competition on bank stability. Background Problem: Analysis of the relationship between competition and bank stability has been at the center of academic and policy debate. However, the theoretical and empirical research has not concluded whether bank competition leads to more or fewer stable banks. Novelty: We consider institutional quality's role in mitigating the negative impact of competition on bank stability, which has mainly been under-elaborated in prior studies, particularly in using measures from The World Bank’s Worldwide Governance Indicators, which measure how the institutions of each country influence bankers’ and the people's behavior, as part of the cultural system. Research Methods: Using a sample of 427 Asian commercial banks from 2011 to 2019, we employ the generalized method of moments (GMM) estimator and consider loan growth and the cost to income ratio as instrumental variables. Findings/Results: We find robust evidence that competition erodes bank stability. Besides, better institutional quality, especially government effectiveness, regulatory quality, the rule of law, and corruption control in each country are important aspects that promote bank stability and mitigate the negative impact of competition on bank stability. Conclusion: Competition has a negative impact on bank stability. Meanwhile, the quality of institutions can both promote bank stability and mitigate this negative relationship.

Does Corruption Sand or Grease the Wheels? A Case of BRICS Countries

2020 ◽  
pp. 097215092092737
Author(s):  
Imtiaz Arif ◽  
Lubna Khan ◽  
Sundus Waqar
Keyword(s):  
South Africa ◽  
Method Of Moments ◽  
Economic Effect ◽  
Generalized Method Of Moments ◽  
Data Series ◽  
Annual Data ◽  
Fdi Inflows ◽  
Brics Countries ◽  
The Government ◽  
The Relationship

This article examines the effect of corruption on the foreign direct investment (FDI) of BRICS economies, such as Brazil, Russia, India, China and South Africa. An annual data series of BRICS for 1995–2015 is used. The empirical model is estimated by using the system generalized method of moments (SGMM). The estimated outcomes suggest that corruption impacts FDI positively and significantly when these five nations are merged as a single unit. It is because corruption yields a restrictive economic effect. Moreover, the study also revealed that when we study the countries separately, corruption has a negative and significant effect on FDI in Brazil, China and India, whereas, the relationship becomes insignificant for Russia and South Africa. Results suggest that governments should enhance their policies to control corruption. Furthermore, to attract more FDI, the government of each country should look into the motivation behind their FDI inflows and tailor their polices accordingly.

scholarly journals Financial Sector Development, Openness, and Entrepreneurship: Panel Regression Analysis

2018 ◽  
Vol 10 (10) ◽  
pp. 3493 ◽  
Author(s):  
Yilmaz Bayar ◽  
Marius Gavriletea ◽  
Zeki Ucar
Keyword(s):  
Banking Sector ◽  
Negative Impact ◽  
Early Stage ◽  
Trade Openness ◽  
Financial Sector ◽  
Entrepreneurial Activity ◽  
Financial Openness ◽  
Middle Income ◽  
Fdi Inflows ◽  
Financial Sector Development

Entrepreneurship plays a major role in all countries’ economies through generating new jobs and innovation, and in turn making a contribution to the economic growth. Therefore, the determinants underlying entrepreneurship have become important for designing an environment that increases entrepreneurial activity. In this study, we considered it important to investigate the influence of factors such as financial sector development, foreign direct investment (FDI) inflows, and trade and financial openness on entrepreneurship, using information from 15 upper middle income and high-income countries over the 2001–2015 period. The findings reveal that the banking sector and capital market development, FDI inflows, and trade openness affect the total early-stage entrepreneurial activity positively. Furthermore, the crises had a negative impact on the entrepreneurship.

scholarly journals Study on the Operation Efficiency of Toll Roads in China from the Perspective of Scale Economy

2021 ◽  
Vol 2021 ◽  
pp. 1-15
Author(s):  
Yan Xu ◽  
Jianqiang Fan ◽  
Haicheng Xu
Keyword(s):  
Economic Performance ◽  
Negative Impact ◽  
Generalized Method Of Moments ◽  
Malmquist Index ◽  
Operational Efficiency ◽  
Scale Economy ◽  
Scale Efficiency ◽  
Administrative Monopoly ◽  
Operation Pattern ◽  
The Relationship

Although China’s toll highways are world-renowned, they suffer from indisputable operational inefficiencies. Operationally, China’s toll highway sector is characterized by an administrative monopoly. In particular, governmental loan-repayment highways have such characteristics as franchising, monopoly, and “one highway by one company.” Hence, this study concentrates on the relationship between economic performance, administrative monopoly, and scale efficiency with respect to toll highways, and explores how the China-specific administrative monopoly affects the transformation of toll highways from scale to efficiency. Using the globally referenced data envelopment analysis- (DEA-) Malmquist Index, this study first measures the operational efficiency of China’s toll highway sector from 2010 to 2017. Based on provincial panel data, this paper then discusses the relationship between toll highway scale and economic performance through system-generalized method of moments estimation and verifies the status quo of the transformation of toll highways from scale to efficiency. From the provincial and industrial perspectives, this study further verifies how an administrative monopoly restricts the transformation from scale to total factor productivity and scale efficiency through the unique operation pattern in the toll highway sector. Finally, this study conducts an extended analysis of the relationship between operational efficiency and debt in the toll highway sector. The administrative monopoly is found to increase the debt burden of the toll highway sector and to have a negative impact on the long-term sustainability of the sector.

scholarly journals Natural Resources and FDI in GCC Countries

2016 ◽  
Vol 6 (7) ◽  
pp. 12 ◽  
Author(s):  
Mohamed Mahjoub Elheddad
Keyword(s):  
Natural Resources ◽  
Negative Impact ◽  
Labour Force ◽  
Panel Data Analysis ◽  
Trade Openness ◽  
Price Volatility ◽  
Fdi Inflows ◽  
Oil Price Volatility ◽  
Gcc Countries ◽  
Oil Rents

<p>Natural resources are a blessing for some countries to attract FDI but cursed for others. Existing literature argues the suggestion that resource-rich countries attract less FDI because of resource (oil) price volatility. This study examines that natural resources discourage FDI in GCC countries (the FDI-Natural resources curse hypothesis), using panel data analysis for six oil dependent countries during 1980-2013 and applying several econometrics techniques. The main findings of this paper is that natural resources measured by oil rents have a negative association with FDI inflows; this negative impact is robust even when other FDI determinates of FDI  are included. FDI inflows decreased between 0.15 and 0.92% when oil rents increased by 1%. In addition, the empirical results show that trade openness and labour force are the main factors that encourage FDI, while political instability and corruption deter FDI inflows into GCC countries.</p>

Macroeconomic Determinants of Innovation: Evidence from Asian Countries

2020 ◽  
pp. 097215091988549
Author(s):  
Sakshi Malik
Keyword(s):  
Industrial Revolution ◽  
Negative Impact ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Developed Countries ◽  
Foreign Direct Investments ◽  
Asian Countries ◽  
Macroeconomic Indicators ◽  
Macroeconomic Determinants ◽  
Patenting Activity

Innovation is fundamental to the process of an economy’s growth and is crucial for its survival in today’s dynamic world. Investing in innovation, therefore, is a requisite for developing and developed countries alike. The innovation revolution has been as manifesting as the Industrial Revolution. Yet, its patterns are unevenly distributed. While some regions have witnessed a phenomenal growth in the level of patenting activity, other regions have shown a decline in the innovative output. With this backdrop, the present article analyses various institutional and macroeconomic variables that impact the level of innovation for a set of 15 Asian countries. Using two-step system generalized method of moments (GMM) technique on a panel dataset for the period 2008–2017, the study examines the determinants of macroeconomic indicators on the level of innovation (as measured by the country’s patenting activity). The econometric results indicate that institutional quality, education and trade openness influence innovation favourably. Further, foreign direct investments have a negative impact on the level of innovation. A key finding of emerging from the analysis is the U-shaped relationship between financial development and innovation. Based on the results, the article concludes from a broad policy perspective.

scholarly journals Does Gender Heterogeneity Matters: The Moderating Role of Women Directors' Independence in the Indian Corporate Sector

2021 ◽  
Vol 14 (28) ◽  
pp. 87-105
Author(s):  
Pradeep KAUR ◽  
◽  
Poonam MAHAJAN
Keyword(s):  
Firm Value ◽  
Fixed Effects ◽  
Negative Impact ◽  
Generalized Method Of Moments ◽  
Independent Directors ◽  
Women Directors ◽  
Role Of Women ◽  
The Relationship ◽  
Moderating Role

This study aims to examine the moderating role of the independent status of women directors on the relationship between gender heterogeneity and firm value. The empirical analysis is performed on the panel data of BSE 100 companies for the period of 10 years from the year 2009 to 2018. Generalized Method of Moments is employed along with Fixed Effects Model while controlling for firm and board-specific variables to examine the relationship between gender heterogeneity and firm value. Moderation impact on this relationship is also analyzed empirically as well as graphically. Results show a negative impact of board gender heterogeneity on the value of a firm. Also, there is a negative moderation effect of women independent directors on the relationship between gender heterogeneity and firm value. Empirical findings of the present study contribute to the current discourse of gender heterogeneity and depict the Indian scenario of corporate boards in this context. This is the first study examining the moderating role of women independent directors on the relationship between board gender heterogeneity and the value of a firm in the Indian climate.

Examining the FDI–Growth Nexus in BRICS: Panel Data Evidence

2021 ◽  
pp. 001946622110360
Author(s):  
Bashir Ahmad Joo ◽  
Sana Shawl
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Direct Investment ◽  
Negative Impact ◽  
Positive Impact ◽  
Fdi Inflows ◽  
Jel Codes ◽  
Explanatory Variables ◽  
Domestic Investments ◽  
The Relationship

The purpose of this article is to examine the relationship between foreign direct investment (FDI) and economic growth in Brazil, Russia, India, China and South Africa (BRICS) economies, which are considered to be the fastest-growing economies and dominant players in the global investment landscape. In order to assess the relationship between the dependent variable (economic growth) and explanatory variables (FDI inflows and other growth determinants), we analyse a 32-year panel data starting from 1987 to 2018 using feasible generalised least squares (FGLS) method. The article found a significant positive FDI impact on economic growth in BRICS. However, exports, human capital and inflation (macroeconomic instability) exert a negative impact on economic growth of BRICS, whereas domestic investments exert a positive impact on growth. JEL Codes: F21, F43, C23, O47

scholarly journals The Nexus Between Trade Openness and GDP Growth: Analyzing the Role of Human Capital Accumulation

SAGE Open ◽  
2020 ◽  
Vol 10 (4) ◽  
pp. 215824402096737
Author(s):  
Sumbal Fatima ◽  
Bateer Chen ◽  
Muhammad Ramzan ◽  
Qamar Abbas
Keyword(s):  
Human Capital ◽  
Capital Accumulation ◽  
Negative Impact ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Dynamic Panel Data ◽  
Policy Implications ◽  
Gdp Growth ◽  
Human Capital Accumulation ◽  
Indirect Relationship

The objective of this study is to explore the empirical impact of trade openness on gross domestic product (GDP) growth. Researchers have not given the externalities of trade openness the deserved scholarly attention. In this work, we propose to account for human capital accumulation (HCA) as an additional dimension of economic trade integration. To address the potential endogeneity issue, we use the system generalized method of moments (GMM) estimator developed for dynamic panel data models. The results outline an intriguing indirect relationship between trade openness and GDP growth. If HCA is taken into account as an intervening variable, trade may have a negative impact on GDP growth when countries exhibit a low level of HCA. Thus, the indirect relationship between trade openness and HCA was studied in depth, and to the best of our knowledge, this research is the first to examine this relationship in both developed and developing countries over a 34-year period (1980–2014). The established GMM-centric thresholds are robust to alternative estimation techniques and measurements of trade openness. Policy implications are discussed.

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