Foreign direct investments,institutional quality,and economic growth

Institutional quality is considered to be an important factor in boosting economic growth of a country. This paper explores the role of institutional quality in economic growth and more specifically the role it plays via the channel of foreign direct investments. This paper uses a larger dataset of 104 countries and applies GMM estimation method to a dynamic panel data to evaluate the direct impact of institutional quality on economic growth and the indirect impact of institutional quality on economic growth through enhancing the FDI-induced economic growth. This paper provides evidence that both FDI inflows and institutional quality cause stronger economic growth. The FDI-led growth, however, was only experienced in the low and middle-income countries. In these countries, better institutional quality was also found to be enhancing the FDI-led economic growth. An important finding of this paper is that in the high-income countries, FDI was found to slow down the economic growth. The results are robust and consistent for individual institutional quality indicators and controlling for endogeneity.     

Emerging economies and institutional quality: Assessing the differential effects of institutional distances on ownership strategy

The current study contributes to the institution-based view of internationalization that is contingent upon the home country development. We examine the differential effects of formal and informal institutions on emerging market multinational corporations’ (EMNCs) ownership strategies. Facing a large informal institutional distance that represents diverse cultural beliefs, EMNCs opt for a low ownership position that alleviates legitimacy threat, whereas a large formal institutional distance leads EMNCs to establish dominant ownership control. EMNC home market conditions, including market size and regulatory institutional quality, further explain the differential effects of institutional distances.     

Entrepreneurship,institutional economics,and economic growth: an ecosystem perspective

We analyze conceptually and in an empirical counterpart the relationship between economic growth, factor inputs, institutions, and entrepreneurship. In particular, we investigate whether entrepreneurship and institutions, in combination in an ecosystem, can be viewed as a “missing link” in an aggregate production function analysis of cross-country differences in economic growth. To do this, we build on the concept of National Systems of Entrepreneurship (NSE) as resource allocation systems that combine institutions and human agency into an interdependent system of complementarities. We explore the empirical relevance of these ideas using data from a representative global survey and institutional sources for 46 countries over the period 2002–2011. We find support for the role of the entrepreneurial ecosystem in economic growth.     

Economic integration,market discipline and productivity growth in Spain

This paper explores the changes on productivity growth, economies of scale and market discipline experienced by a selected number of Spanish manufacturing industries as a result of the 1986?–?92 integration of Spain into the European Union. Since the intra-union trade liberalization process spanned a seven-year, multi-stage, adhesion period we employ a model with a smooth transition variable to account fully for its impact. An additional model that uses separate sets of dummy variables captures differences in the regression estimates during the transitional and liberalized periods. In both model specifications we find strong evidence of increases in returns to scale and reductions in producers' mark-ups, whereas productivity growth increases are found to be small and uneven.     

Economic growth and labor investment efficiency

We examine the relationship between economic growth and labor investment efficiency. Using a sample of US firms from 1991 to 2019, our findings suggest that labor investment inefficiency increases with the expansion of economic activities. Although economic growth increases labor overinvestment, it also decreases labor underinvestment. The magnitude effect of economic growth is more pronounced for labor overinvestment. Labor investment inefficiency is noticeable during low economic policy uncertainty. Economic growth-induced labor investment inefficiency is pronounced for (1) large firms, (2) high labor intensity firms, and (3) firms with overinvestment in non-labor investments. Further, economic growth negatively (positively) influences the firm's future performance for labor overinvested (underinvested) firms. Our findings remain robust to alternative specifications.     

The development trinity: How regional integration impacts growth,inequality and poverty

Developing countries today have become more active participants in regional trade agreements. This raises questions about how the benefits of integration are distributed, and the extent to which lower‐income countries are able to capture development gains. Historically, such impacts have been difficult to identify with precision. This paper seeks to address this gap by empirically analysing the impact of regional integration on development, particularly the effects on growth and welfare. Using both bilateral and regional integration measures, we show that the ability to capture gains from integration varies across developing country regional groups, with developing Asia benefiting on par with developed countries. The findings in the paper indicate that trade and trade policy play an important role in reducing inequality and poverty in developing countries. It also shows that regionalism can function as a channel to make multilateralism a more adept way of addressing national challenges.     

Foreign direct investment and growth under economic integration

This paper studies foreign direct investment (FDI) and economic growth in a two-country endogenous growth model. Starting with a core-periphery steady state in the world, the model shows that economic integration gives rise to FDI, leads to an expansion of R&D activity in the industrial core, and increases the world growth rate. In that process, the peripheral country enjoys a rise in the level of living standards. The model suggests that the often-observed positive correlation between inward FDI and economic growth does not necessarily imply any causal relationship—both of them respond endogenously to economic integration.     

政府行为、金融效率与经济增长关系的实证研究

本文基于面板数据模型,采用面板数据单位根检验、面板数据协整模型和面板数据固定效应模型,实证分析了1993-2007年我国金融发展变化.并以金融发展理论为基础,实证分析了金融效率、政府行为对我国经济增长的影响,结果表明:金融效率与经济增长之间具有长期稳定的正相关关系;政府培育市场促进经济增长能力显著为正;金融效率固定效应的地区差异较大.在考虑金融效率和政府职能转型的基础上,重视地区发展不平衡,有助于改善我国经济增长模式.     

Vertical integration and efficiency: an application to the Italian machine tool industry

This paper analyzes the relationship between firm efficiency and vertical integration in the Italian machine tool (MT) industry. The link may really be the result of a two-way causality: the effect may run from productive efficiency to the type of vertical organization (i.e. vertical integration or outsourcing), as a self-selection mechanism, or an effect from the organizational mode to the firm’s performance may (also) be at work. This relationship is empirically investigated in a novel panel dataset comprising about 500 Italian MT builders, implementing two equations and instrumental variables for the two directions of causality. The evidence clearly indicates the self-selection mechanism of the most efficient firms in vertically integrated structures, while an effect from the organizational mode to the firm’s efficiency is not supported.     

CEO gender,institutional context and firm exports

To what extent does the gender of Chief Executive Officers (CEOs) matter in the relationship between home country corruption and firm exports? Drawing on post-structural feminist and institutional theories, we employ self-reported micro-level and cross-country data from 4714 firms in 75 countries during 2008-2015 to examine how differences in institutional contexts affect firms exports in men- and women-led firms. We find that pervasive and arbitrary corruption types have different effects on firm exports, and that female CEOs mitigate the effects of corruption in two distinct ways. Our results contribute to institutional and post-structural feminist literature, and are robust when controlling for economic development and the quality of gender institutional characteristics. Our study suggests that female CEOs in developing and emerging economies will be less vulnerable to predictably-corrupt institutions than to uncertain institutions.     

Compensation practices in Central and Eastern European EU member states—an analytical framework based on institutional perspectives,path dependencies,and efficiency considerations

Research on compensation in Central and Eastern European (CEE) countries is scarce, and a comprehensive analysis of factors influencing the adoption and transformation of compensation practices in CEE countries is lacking. This article provides a holistic analytical framework based on a literature review, secondary data on selected compensation practices in CEE countries, and theoretical insights from various perspectives. These include path dependency from the pre‐transformation era; current coercive, mimetic, and normative isomorphic pressures; and efficiency‐based influences on compensation practices. Furthermore, implications are outlined both for future research on compensation management and for human resource management practice in CEE countries. © 2010 Wiley Periodicals, Inc.     

Fractionalization,entrepreneurship, and the institutional environment for entrepreneurship

The vast majority of the literature on ethnicity and entrepreneurship focuses on the construct of ethnic entrepreneurship. However, very little is known about how ethnic heterogeneity affects entrepreneurship, and the institutional arrangements affecting entrepreneurship. This study attempts to fill the gap, and thus examines the effect of ethnic heterogeneity on various outcomes associated with entrepreneurship and the institutional environment for entrepreneurship. Using indices of ethnic and linguistic fractionalization, we show that ethnic heterogeneity negatively influences entrepreneurship. We argue that potential channels that can explain the negative effect of fractionalization on entrepreneurship include trust, social network, and innovation, among others. This study provides a new perspective on the existing debate that seeks to understand why the levels of entrepreneurial success vary across countries.     

Assessing the global productive efficiency of Chinese banks using the cross-efficiency interval and VIKOR

The banking industry plays an essential role in China's economic growth, and the assessment of bank efficiency has attracted increasing interest in the past two decades. Given that the data envelopment analysis cross-efficiency method can provide a more reliable reference set, a large number of studies targeting performance evaluation and its applications adopt this method. Few studies, however, address the issue of the non-uniqueness of weights in cross-efficiency evaluation. Whereas, this paper proposes a cross-efficiency interval considering all weighting schemes along with a VIKOR aggregate model to gauge the universal productive efficiency of 16 major Chinese commercial banks of China and rank them for the period of 2007–14. Specifically, we use the cross-efficiency interval to generate the global performance of each bank based on internal and external assessment while using VIKOR to compare the solution with the attitude index which ranks all of the banks. The results indicate that the cross-efficiency interval can provide more information than the traditional DEA model, that the banking system efficiency of China has been improved during the study period, especially for SOBs; that JSBs are more efficient compared with SOBs; and the efficiency gap narrowed during the study period.     

Endogenous market structure and the growth and welfare effects of economic integration

This paper studies the growth and welfare effects of integration in a world economy populated by global oligopolists. In economies that move from autarky to trade, growth and welfare rise because exit of domestic firms is more than compensated by entry of foreign firms so that integration generates a larger, more competitive market where firms have access to a larger body of technological spillovers that support faster growth. The effects of a gradual reduction of tariffs are different because economies start out from a situation where all firms already serve all markets. In this case, the global number of firms falls so that the variety of consumption goods and the diversity of innovation paths fall. The surviving firms, on the other hand, are larger and exploit static and dynamic economies of scale to a larger degree. These homogenization and rationalization effects work in opposite directions. Under plausible conditions, the rationalization effect dominates and growth and welfare rise.     

Tradability, productivity, and international economic integration

This paper develops a model of endogenously tradable goods to study the implications of international integration for price dispersion and pricing to market. A distinctive feature of the model is heterogeneity in both trade costs and productivity. The model highlights the role of heterogeneity in shaping how new entrants at the extensive margin differ from incumbent traders, thereby giving extensive margin movements distinctive implications relative to the intensive margin. In particular, the model predicts that international integration mainly along the extensive margin should be associated with a more limited degree of price convergence. This prediction finds support in cross-sectional regressions on European data and offers insight into recent integration episodes.     

Financial integration,specialization, and systemic risk

This paper studies the implications of cross-border financial integration for financial stability when banks' loan portfolios adjust endogenously. Banks can be subject to sectoral and aggregate domestic shocks. After integration they can share these risks in a complete interbank market. When banks have a comparative advantage in providing credit to certain industries, financial integration may induce banks to specialize in lending. An enhanced concentration in lending does not necessarily increase risk, because a well-functioning interbank market allows to achieve the necessary diversification. This greater need for risk sharing, though, increases the risk of cross-border contagion and the likelihood of widespread banking crises. However, even though integration increases the risk of contagion it improves welfare if it permits banks to realize specialization benefits.     

Social capital,institutional innovation and Atlantic trade before 1800

The growth of the Atlantic economy during the eighteenth century has been associated with developments in business networking to mitigate the hazards of communication in long-distance trade. Such social capital-based mechanisms reduced transaction costs, but also proved to have their limitations in the changing conditions of eighteenth-century international trade. This paper argues, using the example of the British slave trade, that efforts to innovate less personalised forms of commercial exchange gave those prepared to do so a considerable competitive advantage, and promoted the unprecedented expansion of that trade between 1750 and 1807. We suggest that this shift may be viewed as a precursor of modernising tendencies in business practice in Britain during the industrial revolution.     

Financial integration, productivity and capital accumulation

Understanding the mechanism through which financial globalization affects economic performance is crucial for evaluating the costs and benefits of opening financial markets. This paper is a first attempt at disentangling the effects of financial integration on the two main determinants of economic performance: productivity (TFP) and investment. I provide empirical evidence from a sample of 70 countries observed between 1975 and 1999. The results for both de jure and de facto indicators suggest that financial integration has a positive direct effect on productivity, while it does not directly affect capital accumulation. I also control for indirect effects of financial globalization through financial development and banking and currency crises. While financial integration does not systematically increase domestic financial depth, it may raise the likelihood of banking crises, though only to a minor extent. Yet, the overall effect of financial liberalization remains positive for productivity and negligible for investment.     

Financial integration,productivity and capital accumulation

Understanding the mechanism through which financial globalization affects economic performance is crucial for evaluating the costs and benefits of opening financial markets. This paper is a first attempt at disentangling the effects of financial integration on the two main determinants of economic performance: productivity (TFP) and investment. I provide empirical evidence from a sample of 70 countries observed between 1975 and 1999. The results for both de jure and de facto indicators suggest that financial integration has a positive direct effect on productivity, while it does not directly affect capital accumulation. I also control for indirect effects of financial globalization through financial development and banking and currency crises. While financial integration does not systematically increase domestic financial depth, it may raise the likelihood of banking crises, though only to a minor extent. Yet, the overall effect of financial liberalization remains positive for productivity and negligible for investment.     

Gravity, trade integration, and heterogeneity across industries

We derive a micro-founded measure of bilateral trade integration that is consistent with a broad range of leading gravity models. This measure accounts for cross-industry heterogeneity by incorporating substitution elasticities estimated at the industry level. We then use it to provide a theory-based ranking of trade integration across manufacturing industries in European Union countries. In addition, we explore the determinants of trade integration, finding that substantial Technical Barriers to Trade in certain industries as well as high transportation costs associated with heavy-weight goods are the most notable trade barriers.