Financial development,portfolio investments and the real economy in Africa

According to the conservative view, capital flows enhance economic growth. Focussing on Africa’s real economy, this study investigates the linkage between portfolio investments and real sector growth, and whether financial sector development strengthens this association. The study covers 30 countries over the period 1990–2017. We adopt the Lewbel instrumental variable general method of moments (IV-GMM) two-step robust estimator, which relies on heteroscedasticity for identification, while dealing with instrument insufficiency, unavailability, endogeneity and omitted variable bias. We found that portfolio equity has no growth impact on Africa’s real sector. Debt flows deter the growth of the overall real sector as well as the manufacturing and industrial sectors, but have no impact on agriculture and service growth. We found that financial development does strengthen the positive association between capital flows and economic growth, but this is dependent on the type of sector and portfolio investment, as well as on the degree of financial development. We control for known determinants of economic growth.     

中国数字经济规模测度与生产率分析

研究目标:考察中国数字经济的规模与结构特征,分析数字要素对中国经济生产率的影响及其变化趋势。研究方法:基于投入产出序列表数据,结合数字经济内涵、信息经济理论及增长核算方法,建立数字经济规模和全要素生产率测算框架进行分析。研究发现:近年来,中国数字经济规模年均实际增长率高达11.24%,已经成为支撑经济增长的重要推动力量;中国数字经济结构不断变化,数字融合部门增速高于数字替代部门,但二者均低于数字基础部门的增速;中国经济增速逐步放缓,而全要素生产率总体上行,数字资本在经济增长中的份额呈上升趋势。研究创新:提出包含三大效应的数字经济测度理论,将数字经济划分为基础部门、融合部门和替代部门,建立数字经济核算的方法框架,关注并考察了数字要素的增长效应。研究价值:有助于完善数字经济测度理论,为推动中国经济高质量发展提供依据。     

Global estimates of growth–inequality–poverty (GIP) triangle: evidence from World Bank’s classification countries

This study extended the concept of ‘growth–inequality–poverty (GIP) triangle’ by using the principle component approach which allows us to composite different poverty and inequality indicators into one single index that contains most of the useful information from the original dataset. Using the idea of GIP triangle, this study examines the long-run relationship among weighted poverty index (which comprises headcount ratio, poverty gap and squared poverty gap); weighted inequality index (i.e., Watts Index, Gini Index and MLD Index) and average monthly per capita income in the designated 138 countries according to World Bank’s classification over a period of 2005–2010. The data set mainly contain countries’ unit record household survey at least one which is conducted between the countries during the sample period. The regression model encompassing the impact of economic growth and income inequality on poverty reflects that income inequality increases poverty while economic growth decreases poverty. It indicates that the impact of inequality in increasing poverty is a somewhat greater than that of growth in average income in reducing overall poverty in a sample countries. The other regression model encompassing the impact of economic growth and poverty on income inequality showed that the poverty itself is also likely to be a barrier for poverty reduction; and inequality seems to predict lower future growth rates. The final regression model depicting the impact of poverty and income inequality on mean income of the household suggests that poverty itself reduces mean income of the household while income inequality increases economic growth. The results are interesting and simply suggest that whenever social institutions malfunction, the incidence of damage would usually be distributed unevenly over the society’s members.     

Two-level national-regional planning and mathematical programming decomposition applied to spatial price equilibrium models2

This paper is concerned with computation strategies related with the quantitative analysis of only a sector of a global economy (e.g. agriculture or energy). Under a ceteris paribus condition on the environment of the sector, and within the hypothetical context of the neoclassical economic theory, it is well known a type of partial equilibrium model that can be cast mathematically into an optimization framework. We attempt here to a typical specification which considers spatially separated markets, that has been called spatial price equilibrium model and that has contained within it many classical transportation problems (one for each commodity). The model is specially suitable for mathematical programming decomposition, resulting regional sybsystems whose coupling variables are the transportation flows. We explore here this structure, discussing two decomposition algorithms with economic interpretations that suggest decentralized procedures for planning. The first—of the price coordination type—is a variant of the Dantzig-Wolfe's principle which is expected to have a low number of cycles of information flow between the master level and the sub-problems (at each cycle it is calculated a series of regional production-consumption responses to alternative prices generated by transhipment problems at the central planning level). The second algorithm specializes the Geoffrion's projection/feasible directions technique, so interpreting the problem solution within the context of a net-output target coordination.     

A CGE Approach to Measuring the Sectoral Contribution to an Economy: An Application to Western Australian Agriculture

Typically, sectoral contribution to an economy is estimated by measures such as shares in gross domestic/regional product, employment and exports. According to these measures, agriculture's contribution declines as the economy grows. However, the indirect contribution of the sector is likely to rise due to the expansion of agriculture–based processing activities in the process of economic growth. Input–output multiplier analysis is often used to capture such flow–on contributions of the sector. This paper proposes to use a computable general equilibrium framework to estimate the direct as well as indirect contributions of agricultural growth in an economy. It also develops a methodology to distinguish the broader effects of agricultural output growth by source — input growth and productivity growth. The proposed methodologies are illustrated by applying these to analyze the contribution of agriculture to the economy of Western Australia, an agriculture and resources based state of Australia. The results for Western Australia suggest that the indirect benefits of agriculture exceed its direct contributions and that the contributions made by enhancing productivity in agriculture are indeed substantial. Importantly, the broader contribution of the agriculture sector depends critically on the specific source of the sectoral growth — input or productivity growth.     

中国经济增长与贫困减少——基于产业构成视角的分析

本文从经济增长的产业构成视角切入,就经济增长与贫困减少论题进行了实证研究。研究发现,虽然三大产业的增长都是经济增长的重要源泉,但在减少贫困方面,第一产业和第三产业增长的减贫效应非常显著,而第二产业增长的减贫效应微弱。将总体样本分为沿海地区与内陆地区的拓展回归分析表明,只有第一产业增长对沿海地区贫困减少产生显著的影响;相比之下,第一产业和第三产业增长均有助于内陆地区贫困减少。进一步研究显示,产业劳动力密集度和不同行业对劳动力技能需求的异质性是导致上述产业减贫效应差异的重要原因。     

江西矿业经济发展现状与路径分析

矿业经济已经成为江西工业经济乃至国民经济的中流砥柱,合理利用矿产资源,将资源优势有效转化为产业优势和经济优势,对江西科学发展、进位赶超、绿色崛起具有重要现实意义。本文通过分析江西矿产资源优势、矿业经济发展现状、问题以及发展前景,提出江西矿业经济发展路径关键是要实现"四个转变",即向循环矿业经济转变、向集约型矿业经济转变、向开放型矿业经济转变、向生态型绿色矿业经济转变。     

Global finance,sovereign risk and economic performance of Brazil

This paper examines the impact of globalized financial markets on domestic economic policymaking and, ultimately, on economic sovereignty. It argues that the development of dollar-denominated Brady bonds, eurobonds, and global bonds issued by Latin sovereigns opened a new venue for foreign capital to participate in economic affairs of these countries. A natural outcome of the globalization of Brazil’s financial markets has been the increased vulnerability of the Brazilian economy to contagion from financial crises in other troubled markets of the globe. This paper focuses on how the contagion channel compromised domestic economic policymaking and affected the real sector of the Brazilian economy. It offers the first analytical attempt at estimating the real cost of contagion by investigating the impact of the Russian and the Argentine crises on Brazil’s output and production.     

A micro-level insight on trade-induced job polarization and poverty in Russia

The effect of trade liberalization on workers with different skill levels at distinct types of firms is often surmised to be heterogeneous. This paper employs a longitudinal individual-level dataset—the Russian Longitudinal Monitoring Survey (RLMS)—to study the impact of trade liberalization on the relative poverty of various groups of workers in Russia. More specifically, we use the country’s accession to the World Trade Organization (WTO) as a quasi-natural experiment to analyze the impact of trade liberalization on workers at different skill levels and types of firms. Our analysis reveals significant trade-induced job polarization, meaning that, in the tradable sector, even though employment and wages are increasing for low-wage and the high-wage occupations, they are shrinking for mid-wage occupations, leading to a higher poverty rate for workers seeking employment in mid-wage occupations in that sector. Our results are robust to a battery of robustness checks, and they point to the crucial role of state-owned enterprises in attenuating the adverse effects of trade shocks on the welfare of workers.     

Multi-criteria analysis of economic complexity transition in emerging economies: The case of Paraguay

Like many emerging economies, the productive structure of the Paraguayan economy is not complex. It relies extensively on low value-added activities in the primary sector such as agriculture and cattle ranching. These activities have a lower return in terms of economic and social benefits than other potential productive activities and do not contribute to increasing capability accumulation. In this paper we present a tool to support the identification of strategic sectors and products which if taken advantage of, could leverage development through the accumulation of productive capabilities. Our guiding question is: Which productive sectors should be promoted to foster economic development in Paraguay through a transition towards a more complex economy? To answer this question, we use concepts from the Economic Complexity theory to identify new products and cluster them based on the Product Space methodology for the determination of potential products and combine it with the Analytic Hierarchy Process (AHP) for multicriteria analysis considering multiple criteria. In doing so, our proposed methodology contributes to both the Economic Complexity and the AHP literature. Through this combination, we tackle the multiplicity of juxtaposed criteria, which should be considered at the prioritization stage in the crafting of economic restructuring measures according to the country's capabilities. Our evaluation showed that the combination of the approaches is useful, and for Paraguay's case, it helped identify sectors, which, if promoted by policymakers, could help boost economic development through complexity and capability accumulation.     

The role of financial development on the underground economy in regards to Europe’s 2020 strategy

This paper attempts to investigate the relationships between development in the financial sector and the size of the underground economy in European Union countries. Our aim is to investigate the role of financial sector development when it comes to the size of the underground economy, as well as how financial development aids in meeting the growth objectives of the ‘Europe 2020 Strategy’. Panel data analysis will be conducted for the period 2004–2017 in order to examine the effects of financial sector development on the size of the underground economy. The main findings of this paper suggest that financial development has a significantly reducing effect on the size of the underground economy. In conclusion, development within the financial sector significantly lessens underground economic activity in the European Union. With further development of the financial sector, underground economies will not be an obstacle for the fulfilment of the cohesion and growth objectives of the Europe 2020 strategy.     

Financial regulations and bank credit to the real economy

We present a new agent-based model focusing on the linkage between the interbank market and the real economy with a stylised central bank acting as lender of last resort. Using this model we address the tradeoff between stability and economic performance for different structures of the interbank market. We also explore the efficacy of recent regulatory reforms using our richer model. Our results suggest that the effects of regulatory leverage ratios on the banking sector׳s performance can vary in a complex and non-monotonic way with the state of the economy, the degree of connectivity of the interbank market and the amount of information available to market participants on bank risks.     

The effects of financial liberalization on productivity: Evidence from India’s manufacturing sector

Using a panel of India’s registered manufacturing firms and both economy-wide and firm-level financial data, we investigate the effects of India’s financial liberalization on the productivity of its manufacturing sector in the 1990s and 2000s. Our dynamic panel analysis shows that the series of financial liberalization policies/measures, at both the macro and micro levels, significantly enhanced the productivity of the manufacturing sector. Total factor productivity increased for all firms, including those owned by the state government, with greater gains for the firms in the private and foreign sectors. Our results suggest that policies favoring financial liberalization should be pursued further in order for India to foster higher economic growth.     

Mineral-based Growth and Development-generated Socioeconomic Problems in Botswana

A bstract . Botswana's record of economic growth and political stability stands in sharp contrast to the economic stagnation and political turmoil endemic to Africa. Its progress was based on its fortuitous endowment of mineral wealth , and sound macroeconomic management. In effect, diamond, copper, nickel and coal mining has transformed Botswana from a least-developed, rural, agriculture-based economy into one of Africa's fastest growing, non fuel mineral exporting countries The Government has forged fiscal linkages between the companies operating in the mining sector and its public revenue collections. However, no such strong linkages have been established to the agricultural sector—particularly, to remote, rural , traditional farming areas where most of the country's people live. The growth strategy has produced underdevelopment and economic stagnation in rural agriculture, as well as increasing economic dependency on the Republic of South Africa.     

The synergistic effect of insurance and banking sector activities on economic growth in Africa

It is widely understood that the insurance and banking sectors of every economy perform some functions in driving economic growth. What is not yet well documented is whether their roles are complimentary or substitutive. With the aid of the dynamic panel generalized method of moments (GMM) estimation technique, this paper evaluates the synergistic effect of both sectors on economic growth in a panel of 10 African countries that are responsible for most of the activities in the continent’s financial sector. The insurance-banking-growth nexus was also examined through bootstrap panel causality tests. The results show that the life insurance market and the banking sector, as well as the non-life insurance market and the banking sector, are complimentary. We find that, overall, the relationship between the insurance and banking sectors in Africa is a complimentary one and that their synergistic impact on economic growth is positive. The feedback hypothesis was also confirmed in the relationship between the insurance sector and economic growth and between the banking sector and economic growth.     

ASSESSING THE IMPACT OF DISTRIBUTIVE POLICIES ON THE BRAZILIAN ECONOMY USING AN SCGE MODEL

This study investigates the impact of macroeconomic policies on the Brazilian economy. We present a two-sector, open-economy, Structuralist Computable General Equilibrium model that distinguishes among three economic classes and assumes no financial sector. The Social Accounting Matrix for Brazil in 2006 serves as a benchmark for our model. We compare the medium-run effects of five experiments: an income transfer towards formal workers, a transfer to informal labour, an investment shock, an exchange rate depreciation, and a policy mix that combines (exchange rate) depreciation with income transfer towards modern (sector) workers. The policy measures reinforce each other in terms of their potential to enhance growth. Our findings underscore the importance of redistributive policies to foster economic expansion.     

Does aging influence structural change? Evidence from panel data

Our study represents a first attempt to single out the effects of aging on the entire structure of the economy that is approximated by employment shares in different sectors. We find that even after controlling for the effects of other relevant factors - e.g., income per capita, share of trade in GDP, government consumption share in GDP, population size - aging does have a statistically significant differentiated impact on the employment shares. In particular, we find that an increase in aging exerts a statistically significant adverse effect on the employment shares in agriculture, manufacturing, construction, and mining and quarrying industries. At the same time, an increasing share of the elderly (decreasing share of the youth) in society positively affects employment shares in community, social, and personal services as well as in the financial sector.     

Interactions between financial constraints and economic growth

The financial economy and the real economy are interconnected through various, complex, and evolving transmission mechanisms, whose literary coverage is far from comprehensive. In this context, we wish to contribute to the literature on the interactions between financial constraints and economic growth. We introduce financial dynamics in the R&D-based growth literature, by bringing Bernanke, Gertler and Gilchrist’s (1999) informational asymmetries into Romer’s (1990) growth model. With the developed framework, our main goal is to examine if and how such asymmetries impact economic growth. We find that the overall impact of this form of financial constraints on long-term growth is negative.     

Contextualizing performance appraisal practices in Chinese public sector organizations: the importance of context and areas for future study

Abstract

Public sector organizations (PSOs) continue to undergo pressures for change due to economic globalization and the changing role of the state, resulting in increased focus on performance management, particularly employee performance appraisal. New public management’s emphasis on transparency, accountability, efficiency and performance highlights the multiple and often conflicting roles and performance outcomes of PSOs, the social and economic contexts in which PSOs operate, and the multiple ways they measure and manage performance. Responding to this special issue and calls for a richer understanding of performance management in PSOs we examine the impact of context on performance appraisal in Chinese PSOs. As China continues its transitions to a market-driven economy, Chinese PSOs have engaged in managerial reforms to improve governance, efficiency and productivity, including the strategic implementation of western-based HRM practices to manage employee performance. Our analysis demonstrates the challenges context poses for analysing HRM practices in Chinese PSOs.