scholarly journals Triggering Economic Growth:Trade Liberalization as the Prominent Factor in Less-developed Countries

2021 ◽  
Vol 11 (2) ◽  
pp. 252
Author(s):  
Mohsen Mohaghegh ◽  
A. S. Valipour
Keyword(s):  
Human Capital ◽  
Trade Liberalization ◽  
Financial Development ◽  
Capital Accumulation ◽  
Empirical Studies ◽  
National Income ◽  
Developed Countries ◽  
Less Developed Countries ◽  
Policy Makers

Numerous theoretical and empirical studies have investigated the role of financial development, human capital accumulation, and trade liberalization on economic growth. Their findings, however, have been inconclusive as to which of these factors’ implementation should policy makers prioritize. We construct a panel of more than 160 `developed’, `developing’ and `less-developed’ countries between 1965 and 2017 to address this issue. We use non-stationary dynamic panel estimations to argue that quantitative effects of these factors depend on national income levels. Even though developed countries benefit the most from investing in their human capital and developing countries gain more by improving their financial institutions, our results show that both financial development and human capital are relatively ineffective in less developed countries. Nonetheless, trade liberalization has a stronger impact on GDP growth in these economies than in developing and developed countries.

How does finance influence labour market outcomes? A review of empirical studies

2020 ◽  
Vol 47 (6) ◽  
pp. 1197-1232
Author(s):  
Mark Heil
Keyword(s):  
Labour Market ◽  
Capital Accumulation ◽  
Empirical Studies ◽  
Labour Productivity ◽  
National Income ◽  
Developed Countries ◽  
Market Outcomes ◽  
Content Type ◽  
Corporate Managers ◽  
Labour Market Outcomes

PurposeThis paper reviews economic studies on the effects of various aspects of finance on labour market outcomes.Design/methodology/approachThe paper is a systematic literature review that reviews the weight of the evidence on the relationships between specific elements of finance and labour outcomes. The review is divided into three major sections: (1) job quantity and job quality; (2) distributional effects; and (3) resilience and adaptability.FindingsFinance interacts with labour market institutions to jointly determine labour outcomes. Firm financial structures influence their labour practices – highly leveraged firms show greater employment volatility during cyclical fluctuations, and leverage strengthens firm bargaining power in labour negotiations. Bank deregulation has mixed impacts on labour depending upon the state of prior bank regulations and labour markets. Leveraged buyouts tend to dampen acquired-firm job growth as they pursue labour productivity gains. The shareholder value movement may contribute to short-termism among corporate managers, which can divert funds away from firm capital accumulation toward financial markets, and crowd out productive investment. Declining wage shares of national income in most OECD countries since 1990 may be driven in part by financial globalisation. The financial sector contributes to rising income concentration near the top of the distribution in developed countries. The availability of finance is associated with increased reallocation of labour, which may either enhance or impede productivity growth. Finally, rising interest rate environments and homeowners with mortgage balances that exceed their home's value may reduce labour mobility rates.Originality/valueThis review contributes to the understanding of the effects of finance on labour by reviewing and synthesising a large volume of literature.

Advertising in a Developing Economy; Opportunity and Responsibility

1975 ◽  
Vol 9 (3) ◽  
pp. 215-223 ◽  
Author(s):  
Malcolm Harper
Keyword(s):  
Social Development ◽  
Economic Activity ◽  
Life Style ◽  
Development Process ◽  
National Income ◽  
Developed Countries ◽  
Less Developed Countries ◽  
Developing Economy ◽  
Positive Potential

Suggests that advertising has a greater influence on spending habits and life style in lesser‐developed areas than in wealthier ones – this potential imposes certain responsibilities on marketers as well as offering opportunities for balanced economic and social development of the countries concerned. Stresses that production has always been considered more respectable than distribution, and the role of the ‘middlemen’ has drawn more suspicion. States that neglecting positive potential of marketing has prevented any analysis of the possible dysfunctional effects of commercial marketing – attempts to suggest the extent of the power that lies with marketers in less‐developed countries. Concludes that if marketing techniques are viewed as valuable tools to be used in accelerating the development process, economic activity will be stimulated rather than stifled, and the increase in national income will help to contribute to a better future for all.

Financial Development and Country-Level Advertising Spending: The Moderating Role of Economic Development and National Culture

2020 ◽  
Vol 28 (3) ◽  
pp. 3-20
Author(s):  
Berrak Bahadir ◽  
S. Cem Bahadir
Keyword(s):  
Economic Development ◽  
National Culture ◽  
Financial Development ◽  
Empirical Studies ◽  
Developed Countries ◽  
Country Level ◽  
Culture Dimensions ◽  
Advertising Spending ◽  
The Impact

Firms invest in brand capital through advertising. Financial constraints hinder firms’ ability to fund their investment projects. Empirical studies in the finance literature suggest that firms’ access to external financial resources, labeled “financial development,” affects their investment behavior. The authors take the view of advertising spending as investment in brands and study the effect of financial development on advertising spending at the country level using a panel of 59 developing and developed countries during 1990–2016. The results suggest that financial development has a positive and significant effect on advertising spending, and this effect is stronger in countries with a low level of economic development. Furthermore, the authors investigate the role of national culture dimensions including uncertainty avoidance, long-term orientation, collectivism, masculinity, and power distance in the relationship between financial development and advertising. Overall, the results provide evidence that the impact of financial development on advertising spending depends on the national culture dimensions.

scholarly journals Financial Development and Economic Growth in Developed Countries

2014 ◽  
Vol 36 ◽  
pp. 75-81 ◽  
Author(s):  
Fateme Ghamati ◽  
Mohsen Mehrara
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Empirical Studies ◽  
Strong Relationship ◽  
Developed Countries ◽  
Policy Makers ◽  
Explanatory Variables ◽  
Long Run ◽  
Development Indicator ◽  
Efficient Resource

Financial development is one of the keys to the long-run economic growth. Since economic growth is one of the important goals of every country, the investigation of the causes of economic growth is vital so that planners and policy makers should pay attention to it. Economists traditionally focusing on the long-run relationship between financial development and economic growth have argued that the development of financial section by efficient resource allocation and financing innovative activities can support and boost economic growth. The relationship between financial development and economic growth is one of the macroeconomic relations which were investigated in empirical studies in Iran and other countries. Some economists believe that financial section has no effect on real section but the literature shows a strong relationship between financial development and economic growth. In this research the effect of indicators of financial development on economic growth of developed countries is investigated by using panel data in 10 chosen countries during 1997-2007. The results show that financial development indicator has an important effect on level of GDP, also other explanatory variables are statistically significant in economic growth. Therefore it can be said that supply of financial markets would boost economic growth.

Physical capital stock, technological upgrading and modernisation in Hungary

2005 ◽  
Vol 55 (2) ◽  
pp. 201-221 ◽  
Author(s):  
Andrea Szalavetz
Keyword(s):  
Capital Accumulation ◽  
Physical Capital ◽  
Developed Countries ◽  
Point Of View ◽  
Technology Generation ◽  
Development Policies ◽  
Specific Factors ◽  
Physical Capital Accumulation

This paper discusses the relation between the quality and quantity indicators of physical capital and modernisation. While international academic literature emphasises the role of intangible factors enabling technology generation and absorption rather than that of physical capital accumulation, this paper argues that the quantity and quality of physical capital are important modernisation factors, particularly in the case of small, undercapitalised countries that recently integrated into the world economy. The paper shows that in Hungary, as opposed to developed countries, the technological upgrading of capital assets was not necessarily accompanied by the upgrading of human capital i.e. the thesis of capital skill complementarity did not apply to the first decade of transformation and capital accumulation in Hungary. Finally, the paper shows that there are large differences between the average technological levels of individual industries. The dualism of the Hungarian economy, which is also manifest in terms of differences in the size of individual industries' technological gaps, is a disadvantage from the point of view of competitiveness. The increasing differences in the size of the technological gaps can be explained not only with industry-specific factors, but also with the weakness of technology and regional development policies, as well as with institutional deficiencies.

scholarly journals Promoting Clusters and Networks for Small and Medium Enterprises to Economic Development in the Globalization Era

SAGE Open ◽  
2017 ◽  
Vol 7 (1) ◽  
pp. 215824401769715 ◽  
Author(s):  
Sara Foghani ◽  
Batiah Mahadi ◽  
Rosmini Omar
Keyword(s):  
Developing Countries ◽  
Small And Medium Enterprises ◽  
Empirical Studies ◽  
Developed Countries ◽  
Policy Makers ◽  
Ongoing Research ◽  
Global Challenges ◽  
Medium Enterprises ◽  
Global Arena ◽  
Asian Developing Countries

This research attempts to explore the importance of cluster-based systems in preparation for small and medium enterprises (SMEs) to go global, and it is an ongoing research. The findings of this research are aimed at providing insights to policy makers, academicians, and practitioners with the objective of creating initiatives, strategies, and policies, which reflect the primary aim of supporting SMEs in managing global challenges. SMEs that are cluster-based have the potential to facilitate the successful inclusion of SMEs in the growth of productivity and networks of global distribution. Most Asian developing countries are in the dark when it comes to this matter. The main purpose of this study is to investigate the relations between the capabilities of the networks and clusters in developing SMEs’ preparedness in facing business players in the global arena. This study’s scope includes specific Asian developing countries. Even though the issue of clusters in SMEs has been well researched in developed countries, such empirical studies are still lacking in the Asian region despite its prevalent collectivism practice. In the concluding analysis, the study intends to develop a model emphasizing the cluster-based industrial SMEs toward globalization.

On the Effectiveness of Growth- Enhancing Policies in a Model of Growth Without Scale Effects

2002 ◽  
Vol 3 (3) ◽  
pp. 339-346 ◽  
Author(s):  
Lutz G. Arnold
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Human Capital ◽  
Population Growth ◽  
Capital Accumulation ◽  
Scale Effects ◽  
Growth Models ◽  
Empirical Studies ◽  
Human Capital Accumulation ◽  
Accelerate Growth

Abstract Standard R&D growth models have two disturbing properties: the presence of scale effects (i.e., the prediction that larger economies grow faster) and the implication that there is a multitude of growth-enhancing policies. Recent models of growth without scale effects, such as Segerstrom's (1998), not only remove the counterfactual scale effect, but also imply that the growth rate does not react to any kind of economic policy. They share a different disturbing property, however: economic growth depends positively on population growth, and the economy cannot grow in the absence of population growth. The present paper integrates human capital accumulation into Segerstrom's (1998) model of growth without scale effects. Consistent with many empirical studies, growth is positively related not to population growth, but to investment in human capital. And there is one way to accelerate growth: subsidizing education.

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