INTERNATIONAL AND REGIONAL CAPITAL MOBILITY IN LATIN AMERICAN COUNTRIES

This study examines the role of global, regional and domestic saving for domestic investment financing in the panel of Latin American and Caribbean countries along with its three regional integration blocks, namely SICA, Andean Community and MERCOSUR. Panel regression and rolling-window estimation results reveal that global saving is the main source of domestic investment financing in the region of Latin America and the Caribbean, SICA, Andean Community and MERCOSUR. The role of domestic and regional savings is rather limited, implying that there are weak regional and domestic channels that can funnel domestic and regional savings into investment in the analysed samples. The importance of regional agreement saving is insignificant and decreases over the analysed period except for the Andean Community. The results indicate low financial integration of the member-countries within the three regional trade agreements.

Natural resources and economic growth: evidence from Brunei Darussalam

PurposeThis paper explores the relationship between natural resources and economic growth of Brunei Darussalam, an underresearched area in the available literature.Design/methodology/approachAnnual data are sourced from reliable sources for the period 1989–2020. Appropriate cointegration techniques for time series data are employed to estimate the specified models and extract results.FindingsThe results provide evidence about the positive and significant role that natural resources have played in the economic growth of Brunei Darussalam. Similarly, trade openness and domestic investment have also positively and significantly impacted the long-run economic growth. On the other hand, the impacts of government expenditure and the growth of human capital on economic growth are although positive but insignificant statistically in the long run. The short-run results show that natural resources, government expenditures and domestic investment have influenced economic growth both positively and significantly. Moreover, the positive and significant impact of trade openness on economic growth, which was observed in the long run, turned negative and insignificant in the short run. Finally, the insignificant positive relationship between the growth of human capital and economic growth observed in the long run remained the same in the short run.Originality/valueThis paper studies the resource curse hypothesis for Brunei Darussalam for the first time, and therefore, the findings will be of significant interest for policymakers and researchers.

50 Years of Capital Mobility in the Eurozone: Breaking the Feldstein-Horioka Puzzle

This paper assesses capital mobility for the Eurozone countries by studying the long-run relationship between domestic investment and savings for the period 1970-2019. Our main goal is to analyze the impact of economic events on capital mobility during this period. We apply the cointegration methodology in a setting that allows us to identify endogenous breaks in the long-run saving-investment relationship. Precisely, the breaks coincide with relevant economic events. We find a downward trend in the saving-investment retention since the 70s for the so-called “core countries”, whereas this trend is not so evident in the peripheral, where the financial and sovereign crises have had a more substantial impact. In addition, our analysis captures other economic events: the Exchange Rate Mechanism (ERM) crisis, the German reunification, the European financial assistance program, and the post-crisis period. Our results also indicate that the original euro design had some flaws that remain unsolved.

The Nexus of Selected Macroeconomic Variables toward Foreign Direct Investment: Evidence from Indonesia

Foreign direct investment (FDI) inflows are a major instrument of economic growth in developing countries. Indonesia is one of the developing countries that has received more FDI with macroeconomic stability. The macroeconomic stability indicator is seen as an important factor in driving economic growth and attracting FDI inflows in Indonesia. Therefore, this study examines the relationship of selected macroeconomic variables toward the FDI in Indonesia over the period 1980-2019. Using Autoregressive Distributed Lag (ARDL), the empirical results showed that market size, domestic investment, government spending and foreign exchange rate are key factors influencing long-run FDI inflows. However, financial development revealed no relationship with FDI inflows in Indonesia. Overall findings indicated that macroeconomic variables influence FDI inflows. These findings guided policymakers in formulating new policies to ensure macroeconomic indicators' stability in driving economic growth.

ANALISIS DIMENSI SERVICE QUALITY, LOYALITAS, DAN KETERIKATAN PERUSAHAAN PENANAMAN MODAL ASING DI KAWASAN-KAWASAN INDUSTRI JAWA TIMUR.

This study examines Foreign Direct Investment (FDI/PMA) and Domestic Investment (DI/PMDN) which are relatively balanced (49.9% : 50.1%), and continue to be conducive during the Covid-19 Pandemic. In East Java Province, PMA continues to show a significant contribution to the national economy. This research is a descriptive study on the perspective of PMA tenant companies in the cities of Surabaya, Gresik, and Mojokerto, as a representation of the driver of the East Java Industry. The method used is a sequential explanatory research method, which is a quantitative descriptive study with a SERVQUAL (Service Quality) theoretical approach and dimensions of Loyalty and Engagement. The population is determined as many as 527 respondents, and then taken a sample of 228 respondents.The results of this study indicate that Customer Satisfaction has a high score of 88.02, Dissatisfaction is at a low level of 7.19, Customer Loyalty and Engagement are high at 77.59 and 88.36. These findings indicate that PMA customer satisfaction has been well appreciated by tenants, with several priority notes, especially to increase loyalty. The results of this study become an empirical indicator for management to understand important factors, especially for increasing satisfaction and loyalty, such as the focus on improving facilities and accelerating services. The main factors that contribute to loyalty are customer confidence in the management of the area which has shown good integrity and reputation among East Java industry players. The advantages of the logistics system, strategic location, and infrastructure advantages are at the top as recommendation factors.

Institutional Quality and Economic Performance in the Southern African Development Community (SADC) Region: A Dynamic Panel Analysis

The quality of institutions has increasingly become a key determinant of economic performance. This confirms a paradigm shift from the conventional macroeconomic determinants to governance as the crucial determining factor of economic performance, particularly in developing countries where economic growth is stagnant or moving at a meagre rate. With the aid of macroeconomic and governance data, this paper reports on an empirical analysis performed to quantify the impact of institutional quality on economic performance in Southern African economies over the period 2009-2019 by employing Generalized Method of Moments (GMM) technique with fixed effects. The empirical results indicate a negative and statistically significant coefficient for the governance index, inflation, and natural resources towards GDP growth. In contrast, trade openness, financial development, and domestic investment have positive and statistically significant coefficients. Based on the composite governance index, these results suggest that a weak institutional environment that aggravates corruption levels causes instability while also stimulating rent-seeking behaviour, which ultimately stifles economic performance in the region. Therefore, to attain inclusive and sustainable economic growth rates, the regional authorities should strengthen the law and enforce the rules.

Determinants of the Shifting Labor in Agricultural Sector to Nonagricultural Sectors Evidence in Indonesia

The agricultural sector has an important role in the national economy in Indonesia, especially in accommodating the labor. The contribution of the agricultural sector to economic growth has decreased in the last few years, especially from 2011 to 2019. On the other hand, it still should accommodate more workers than it should be. It shows that there is inequality in Indonesia’s economic structure. This research used the Two Stage Least Square (2SLS) method to estimate whether or not the simultaneous relationship between economic growth and the shifting labor from the agricultural sector to nonagricultural sectors. The result shows that there is a simultaneous relationship between economic growth and labor shifting. On the other hand, economic growth and domestic investment in the agricultural sector significantly has negative effects towards the percentage of labor who work in the agricultural sectors. Furthermore, the HDI significantly has a positive effect on economic growth.

ANALISIS PENGARUH PDB, EKSPOR PERTANIAN, SUKU BUNGA DAN INFLASI TERHADAP INVESTASI PMDN PADA SEKTOR PERTANIAN DI INDONESIA TAHUN 2010-2019

This study examined and analyzed the effect of GDP, Agricultural Exports, Interest Rates, and Inflation on domestic investment in the agricultural sector in Indonesia. This study used time-series data from 2010 to 2019. The analytical model used was the Multiple Linear Regression Model. The results partially showed that GDP positively and significantly influenced investment in the agricultural sector in Indonesia. Meanwhile, Agricultural Exports, Interest Rates, and Inflation had no significant and negative effect on investment in the agricultural sector in Indonesia. Simultaneously, GDP, Agricultural Exports, Interest Rates, and Inflation positively and significantly influenced investment in the agricultural sector in Indonesia.