Mutual fund performance: Some recent evidence from European equity funds

This paper studies the performance of mutual funds that specialise in equity investment. We use a sample of the top sixteen actively managed European equity funds operating in the United States between July 1990 and November 2020. Using standard factor models, we show that none of our sample funds generated a positive and significant alpha. The observed funds could not outperform a simple passive strategy that involves tradeable European benchmark portfolios in the longer run. As a rule, the funds in our sample did not exploit the known asset pricing anomalies.

A neoclassical growth model with endogenous birth and mortality rates

This study examines dynamic interdependence between different socio-cultural groups? birth rates, mortality rates, populations, wealth accumulation, and the allocation of time between work, leisure, and childcare. It emphasises the role of changes in human capital, technology, and preferences on birth and mortality rates and time allocations. The economic mechanism of wealth and income distribution is based on the Walrasian general equilibrium theory, and wealth accumulation is based on the Solow growth model. The paper uses a utility function proposed by Zhang (2015) to describe the behaviour of households. It also models group and gender differences in human capital, the propensity to have children, the propensity to use leisure time, and the efficiency of childcare. The paper uses differential equations to describe the dynamics of group differences in wealth, income, birth rates, mortality rates, and populations. I simulate a model to show the motion of the system and identify the existence of an equilibrium point. I also examine the effects on the dynamics of the economic system of changes in the propensity to have children and the propensity to save, and in gender differences in the propensity to use leisure, in human capital, and in emotional involvement in childcare.

Revisiting the debt-growth nexus: Evidence from India

The main purpose of this study is to examine the debt-growth nexus in India over the period 1984-2019 using Bayer-Hanck and Autoregressive Distributed Lag (ARDL) cointegration techniques. The findings of both techniques suggest the existence of a negative relationship between public debt and economic growth in the long run. The results also confirm the significant negative relationship between foreign exchange reserves and economic growth. Interestingly, the test results confirm the unidirectional causality running from public debt to economic growth in the case of India. From a policy perspective, reducing public debt is imperative to achieve long-term sustainable growth. Efforts should be made to circumvent the burden of burgeoning interest liabilities by generating a primary surplus, which will facilitate debt servicing and timely repayment of debt.

The role of foreign banks in the transmission of monetary policy: Empirical evidence from Tunisia

This paper presents an empirical analysis of the effect of monetary policy shocks on credit supply in Tunisia, using a vector autoregressive model and a nonlinear interactive model. The focus is on the magnitude of these shocks in the presence of foreign banks. The variables of interest are the concentration index of deposit banks, and monetary policy shocks based on the monthly data of 27 universal and business banks covering the period 1993 to 2016. The results support a positive and significant impact of concentration index on credit supply. However, monetary policy shocks appear to have no significant effect when the market is concentrated with the entry of foreign banks. The findings of this study also reveal that the entry of foreign banks neutralises monetary policy shock transmission in the credit supply, which may be offset by market discipline.

‘Soft’ support infrastructure and the performance of small and medium-sized enterprises in European countries

The purpose of this paper is to examine the relationship between ?soft? support infrastructure (SSI) and the performance of small and medium enterprises (SMEs). The study encompasses European countries? economic activity and SMEs? output in 2015 and 2018. The focus of the research is SMEs in the European Union member states and the Western Balkan countries. The analysis was conducted using partial least squares structural equation modelling (PLS-SEM). This method enabled the examination of links between variables that are not directly observable. The results show that countries investing in SSI have better SME performance. Based on the statistical analysis, among other things, the authors identify the Human Development Index and the use of information and communication technology at the company level as the two most significant factors that impact on SMEs? performance.

Remittances and health outcomes in Sub-Saharan African countries: Understanding the role of financial development and institutional quality

Sub-Saharan Africa (SSA) is one of the highest recipients of remittances; however, this is inconsistent with the region?s growth and the state of its weak healthcare systems. This paper therefore analyses the effect of remittances on health outcomes for 39 selected SSA countries over the period 1996 to 2016. It considers the channels through which remittances affect health outcomes, including financial development and institutional quality. Using dynamic panel estimation, we find that remittances sustain health outcomes, while both financial development and institutional quality complement remittances in this respect. SSA countries should therefore continue to improve their financial sectors and develop the quality of institutions to an adequate level. Achieving sound financial systems and institutions would both allow and attract a substantial amount of remittances, benefitting human capital and health outcomes and alleviating poverty.

Complementary funded pensions and economic growth: Theoretical and empirical evidence using an overlapping generations model applied to the case of Tunisia

This paper presents a prospective analysis to guide effective pension reform. Using an overlapping generations model with differing returns on free savings and compulsory returns on funded pensions, we put into perspective the results largely supported in the economic literature that assume that replacing a pay-as-you-go pension scheme by funded plans boosts economic growth. We show that this reform is not necessarily synonymous with economic growth due to a crowding-out effect. Our contribution is not limited to theoretical results: we also assess the impacts empirically. Thus, we extend the theoretical model to take into account several periods and 55 generations. Simulation results, using a dynamic overlapping generations computable general equilibrium model calibrated for the Tunisian case, indicate that whether pension reform promotes capital accumulation and economic growth depends on the rate of return on funded pension savings relative to free savings.

Employee reactions to crossborder acquisitions: Evidence from an acquired Serbian company

The purpose of this paper is to examine factors influencing employee reactions to changes brought about by crossborder acquisitions. The research was conducted in a company operating in Serbia?s retail sector that was acquired by a Belgian multinational company. The data were collected from 344 respondents. Measures of central tendency, the Mann-Whitney U test, and regression analysis were used to test the research hypotheses. The research results show that employee reactions to changes brought by cross-border acquisition were generally positive. The study show that corporate cultural differences between the acquiring company and the acquired company and the support of transformational leaders resulted in employees reacting positively to the changes. The study attempts to improve understanding of employee reactions during the process of change occurring as a result of cross-border acquisition. Additionally, this study has practical implications, as it points to how the appropriate management of human resources contributes to positive employee reactions.

Are fiscal deficits inflationary in Nigeria? New evidence from bounds testing to cointegration with structural breaks

In this paper, we model the relationship between fiscal deficit and inflation for Nigeria using annual data from 1980 to 2016. We employ the linear ARDL approach and account for structural breaks using the Bai and Perron (2003) test that allows for multiple structural changes in regression models. The paper finds that the fiscal deficit is a major determinant of inflation along with other macroeconomic factors considered in the study. However, we observe that it may be necessary to pretest for structural breaks when modelling the relationship between the fiscal deficit and the price level, as it performs better than when structural events are not considered. The results imply that a fiscal management process that does not encourage increased revenue and reduce fiscal deficits will further worsen the level of inflation in the country.

Patterns and determinants of intra-industry trade in agri-food products between Bosnia and Herzegovina and CEFTA 2006

The paper aims to identify patterns and country-specific determinants of intra-industry trade (IIT) in agri-food products between Bosnia and Herzegovina (BiH) and other CEFTA 2006 parties in the period 2008-2018. The purpose of the paper is to contribute to filling the gap in the empirical literature on IIT of the South East European countries, especially in regard to non-manufacturing sectors. To investigate IIT intensity and structure the analysis employed Grubel- Lloyd indices and GHM methodology based on relative unit values. In order to examine the impact of various determinants on IIT in agri-food products, a random-effects Heckman selection model was estimated, following a sector-level approach in the analysis. The analysis indicates a lower level of IIT than expected and a strong dominance of its vertical type in all BiH bilateral relations within CEFTA 2006. The empirical results also suggest that the major determinants positively affecting IIT in agri-food products include the size of the trading economies, the similarity in their ethnic structure, membership in the common regional trade agreement, and common borders. By contrast, the results indicate that IIT is negatively affected by differences between the trading economies in terms of productivity and gross domestic product per capita.