Macroeconomic and Institutional Drivers of Current Account in Developing Asian Countries

This study empirically investigates the impact of macroeconomic and institutional variables on the current account balances of nine selected developing Asian countries over the period of 1984-2018. The Fixed Effect (FE) technique that helps to identify the major variables that can affect the dependent variable i.e., current account has been used to analyze data. The results indicate that trade openness; domestic relative income and real effective exchange rate are the variables which are significant and positively associated with the current account balances of developing Asian countries. However, when the institutional variables are included i.e. law &order and bureaucratic quality have turned out to have the significant effect on current account as well. The dummy variable is also introduced to compare the ASEAN region with South Asian region. The results suggest that it has positive and significant effect on the current account balances of ASEAN.

Institutional variables explaining the performance of accounting and administration students

The aim of this study was to analyze the association between institutional variables and the performance of Accounting and Administration students. The microdata of Enade 2018 were used, obtaining 152,491 valid observations. Performance was measured in three ways: final performance, performance in the general training test and performance in the specific component test. In addition, the following institutional variables were considered: academic organization, region, modality and shift. The data were examined using zero adjusted Box Cox Cole Green (BCCG) regression models. The results indicated the institutional variables were relevant to explain the performance. Specifically, it was staked students enrolled in federal centers of technological education had superior performance than the other forms of academic organization. Another relevant point was the students in the North region performed worse than other regions in general. However, they outdid the students from Central-East region in the issues of general training. Regarding the teaching modality, it was found that students of face-to-face teaching presented higher performance than the distance learning students (DL). And the full-time students had better performances overall. As implications, it is pointed out that institutions offering Accounting and Administration courses in the Northern region may want to improve the quality of education, as well as those of the Centre-Western shall want to do so in relation to general training education. Similarly, the teaching on the DL modality can be improved and the offer of full-time courses can be thought of and potentially implemented.

The Emergence and Persistence of Payments for Watershed Services Programs in Mexico

Payments for watershed services programs (PWS) have become a prominent tool to protect ecosystems and hydrological services but little is known about where these innovative financing tools and governance systems emerge and persist. In 2008, the Mexican government started a program where they match funding from local partners to establish user-financed PWS programs, leading to the creation of 145 programs between 2008 and 2019. We study the factors that led to the emergence and persistence of these local PWS programs across Mexico. We assemble a unique database on these programs, as well as biophysical, economic and socio-cultural, and institutional variables, at the municipality level. We use logistic regression to analyze the variables that led to the emergence and persistence of PWS. We find that PWS programs are more likely to emerge in municipalities with lower opportunity costs; that are wealthier and more populated; that have complementary conservation programs; and that have more collective land tenure and protected areas. PWS programs are more likely to persist in municipalities with poorer water quality and more floods; that have more protected areas; and that have a non-governmental organization or water utility involved as the local counterpart. These results suggest that the emergence and persistence of local, user-financed PWS could be facilitated through better information on the condition of watershed services to signal need for hydrological protection; capacity building and institutional strengthening efforts that provide the social capital needed for collective action; and involvement of decentralized non-state actors that are politically neutral and can provide more sustainable financing.

Determinants of shadow economy in OIC and non-OIC countries: the role of financial development

PurposeThe purpose of this paper is to empirically investigate the determinants and the impact of financial development on shadow economy in OIC countries and then compared with non-OIC countries.Design/methodology/approachThe study applies advanced panel GMM technique.FindingsThe study finds that macro-variables (unemployment, economic growth, money supply and foreign trade) and institutional variables reduce shadow economy both in OIC and non-OIC countries. The study also explores that financial development mitigates shadow economy; however, its impact is significantly less in case of OIC economies compared to the non-OIC countries.Research limitations/implicationsSince the focus of this study is OIC countries vs non-OIC countries, the research only includes discussion about shadow economy in 42 OIC member states and 99 non-OIC economies. The decision to restrict the study to 42 OIC economies and 99 non-OIC nations is due to the availability of data.Practical implicationsThe study suggests that free market and good business environment in the formal economy are the keys to have less shadow economy. Good institutional setup and ease in regulations can attract firms and businesses from informal sector to the official economy, while political instability is one of the main factors for having large size of shadow economy.Social implicationsThe OIC member countries should implement policies which improve accessibility to finance of every citizen of the country.Originality/valueDespite the growing importance of shadow economy, the literature investigating determinants and the role of financial development in shadow economy is scarce. To the best of the authors' knowledge, there is no literature that examined the shadow economy in the context of OIC member countries. Furthermore, this study has covered a large number of OIC and non-OIC economics over time and across different groups using largest data and advanced panel GMM techniques.

Capital Account Liberalization Institutions and Economic Growth in the Emerging World

Purpose: The relationship between capital account liberalization and economic growth has been a fervently discussed subject among economists and policy-makers. The role of institutions is imperious to comprehensively investigate the impact of financial openness on growth. The objective of the study is to inspect the nexus between financial liberalization and economic growth after incorporating the contribution of institutional quality. Methodology: A panel of data on 17 emerging market economies (EMEs) is used for the period 1995-2019. We employ the GMM technique by using different de facto and de jure measures of financial liberalization along with institutional variables. Findings: The empirical results illustrate that better quality institutions strengthen the connection between capital account liberalization and output growth in the emerging World. Implications: The policymakers should focus on the more beneficial nature of financial liberalization such as FDI. Also, the policy should be aiming at availing the services of efficient human resources with proper institutional infrastructure.

Effectiveness of controlling foreign portfolio investment inflows using macroeconomic policy instruments and institutional strengthening (case study in Indonesia and Thailand)

This study analyzed the influence of macroeconomic and institutional variables on foreign portfolio investment inflows in two ASEAN countries, Namely Indonesia and Thailand, in 2005 – 2019. The analytical tools used in this research are Panel Vector Error Correction Model (PVECM) and Panel Ordinary Least Square (POLS). The estimation results show that the macroeconomic variables that are proxied using inflation and openness economy and institutional variables that are proxied using the variable level of corruption and quality of regulation have a significant effect. In the long term, the inflation rate, the openness economy, and the quality of regulation variables significantly affect foreign portfolio investment. Meanwhile, in a short time, only the inflation rate variable and the openness ratio have a significant effect on foreign portfolio investment. The two analytical tools used found that macroeconomic and institutional variables consistently affect foreign portfolio investment.

The effect of the quality of institutions on the relationship between public health expenditure and the infant mortality rate: evidence from the PVAR (X) and PSTR approaches

Infant mortality is a major health problem in developing countries. It is an important indicator of a country's public health as it goes hand in hand with socio-economic conditions and many others. Public health spending has been committed to reducing this scourge. This has led to the completion of numerous studies which have yielded mixed results. The main objective of this study is to test the effect of public health expenditure (% GDP) on the infant mortality rate, taking into account the role that institutional quality can play. To achieve this, we use two approaches which are the autoregressive vector panel model with exogenous variables (PVAR (X)) and the smooth threshold regression model (PSTR) on annual data covering the period 2002-2016 and covering 37 African countries. Sub-Saharan. Our main results through the PVAR (X) reveal that in the absence of institutional variables, public health expenditure has a negative and significant effect on the infant mortality rate, whereas, in the presence of the various institutional variables, this effect is still negative but is no longer significant. Our results show that the presence of institutions halves the weight of public health expenditure in explaining the infant mortality rate. In addition, our results show through the PSTR that there is a certain level of institutional qualities that these countries must achieve for public health expenditure to positively affect infant mortality rates. These thresholds oscillate for all the institutional variables around 7%. Taking institutional variables into account will help reduce infant mortality in Sub-Saharan African countries.

EXTERNAL SOURCES OF FUND OF MICROFINANCE INSTITUTIONS (MFI) IN BANGLADESH: DO INSTITUTIONAL CHARACTERISTICS MATTER?

The external sources of fund for the micro-finance institutions (MFIs) include various loans and donor’s fund. The loan financing consists of loan from the government, the loan from other micro credit financial institutions, the loan from the commercial bank and the loan from Palli Karma Sahayak Foundation (PKSF). There is the impact of capital resources on the profitability performance. Therefore, it is important for a firm to know about the significant influences of institutional characteristics on external sources of fund. Hence, this study investigates the driven factors of the sources of funds of microfinance institutions, the effect of institutional characteristics on sources of fund especially on external sources. The study is conducted by examining longitudinal data of 169 microfinance institutions (MFIs) from Bangladesh covering a period of six years from 2009 to 2014. This study employs relevant data from the Mix market and Microcredit Regulatory Authority (MRA) annual reports. Results show that a reliance on external sources of the fund (ESF) has a significant correlation with interest rate cap, inflation rate, ROA, number of branches (Size) and age of the MFIs. Donations have a significant correlation with the regularity variable and size of the MFIs. Additionally, apart from location, the rest of the institutional variables significantly influence the external sources of funds (ESF).

Calling referendums on domestic policies: how political elites and citizens differ

Most national level referendums in Europe since 1793 are initiated either by political elites or by citizens. It remains unclear why these two types of initiators call for referendums. This article aims to explain under what circumstances political elites and citizens call referendums on domestic policies. The analysis is conducted at country level using an original data set that covers 461 national level referendums in Europe between 1793 and 2019. It tests the influence of four institutional variables that in theory are expected to have a divergent effect for the two types of initiators. The experience with direct democracy increases the likelihood to have referendums called by elites and reduces the incidence of citizen-initiated referendums. More authoritarian countries and longer time passed from referendums in a neighboring country explain why political elites initiate referendums. Coalition governments are more prone to citizen-initiated referendums on domestic policies compared to single-party governments.

Commodity price fluctuations and development: perspective from emerging economies

Purpose This paper aims to examine the impact of commodity price changes (crude oil, cocoa, coffee, cotton and gold) on the international market on development (development proxied by the human development index) (HDI) among emerging economies in Sub-Saharan Africa (SSA). Design/methodology/approach Empirical estimates verifying theorized relationships in question were performed using the two-step system generalized method of moments framework. Findings Results from the empirical estimates suggest that a percentage increase in the prices of crude oil, cocoa and gold in the world market have a significant positive influence on development among economies in the sub-region all things being equal; however, similar price changes in cotton and coffee showed a negative effect on development. Further empirical estimates suggest that the extent to which prices of key commodities such as crude oil, influence development in the sub-region benefit less from institutional variables such as government effectiveness, corruption control and political stability. The same institutional variables, however, were found to augment how changes in cocoa prices influence development among economies in the sub-region. Originality/value This study specifically examines the extent to which commodity price fluctuations impact a holistic measure of development, (HDI which inherently captures economic growth) among emerging economies such as those in the SSA region, and how such relationship may be moderated by conditions such as corruption control and government effectiveness. The review suggests that such a study is rare, did not find any specific empirical inquiry focusing on what this study is designed to accomplish. A major gap or deficit identified among most reviewed studies is the failure to verify how the surmised relationship between movements in prices of commodities traded on the international market and development is moderated by institutional factors such as corruption control, government effectiveness and political stability. This study specifically examines such interaction effects in its empirical analysis.