Analysing the spillover of inflation in selected Euro-area countries

Journal of Quantitative Economics - We examined the spillover of inflation in selected Euro-area countries using monthly consumer price index (CPI) based inflation data covering the period 1955M1...     

Privatizations around the world: economic or political determinants?

The article examines economic, political, and institutional determinants of privatization using a panel of 50 countries over the period of 1988–2006. Our sample includes developed, developing, and transition economies. Privatization activity is measured by the number of privatization deals as well as the revenue raised and analyzed using the negative binomial regression and Tobit regression respectively. Although more privatization activity is usually taking place in countries displaying satisfactory economic performance in some respect, the role of economic factors turns out to be limited. The results identify a number of political and institutional determinants but some effects are specific to a particular type of economy. For example, in developing countries, right‐wing governments are associated with privatizations while new, not necessarily right‐wing governments, are behind privatization in Eastern Europe. The role of financial development is also varied, with sound financial institutions related to successful privatization in developed and developing countries but not in transition economies.     

A cointegration approach to modeling human capital formation,self-employment,and economic growth: evidence from Pakistan

This study aims to empirically investigate the dynamics of relationship among human capital formation, self-employment (SE), and economic growth in Pakistan. Using quarterly data of primary school enrollment, SE, and GDP per capita, we employed ARDL bound testing approach to cointegration covering the time span of 1995–2010. We found that in the long run, primary school enrollment, high school enrollment and SE have significant impact on economic growth. Enrollment in primary schools (EP) has a strong positive and significant impact on economic growth, whereas enrollment in high school has a relatively small positive and significant impact on economic growth in the long run in Pakistan. Further, SE has a small, positive and significant impact on economic growth in the long run. In short run, enrollments in high schools and SE have weak positive impact on economic growth whereas, EP has a strong positive and significant impact on economic growth in Pakistan. Further it is found that that there is unidirectional long run causality from self employment to economic growth followed by the bidirectional short run causality between economic growth and high school enrollment, GDP per capita and primary school enrollment, high school enrollment and primary school enrollment.     

Productivity impacts of infrastructure development in Asia

This study investigates the impact of infrastructure capital on total factor productivity in selected Asian countries. The scope of the assessment is broadened by exploring the effect of infrastructure development on sectoral differences in total factor productivity. The study calculated the total factor productivity over the period 2006–2016 for 16 manufacturing industries in 19 Asian countries. Further, the impact of lagged infrastructure and endowment is also explored with an eye toward improving different infrastructural measures. The empirical findings show that lagged infrastructure and endowment exert a positive and significant impact on infrastructural improvement. The impact of telecommunications, road, and power infrastructure on sectoral productivity is investigated by applying the fully modified ordinary least squares estimation technique to control the endogeneity problem associated with infrastructure provision. Overall, the empirical findings show that infrastructure provision, particularly the provision of telecommunications and power, is an important factor for explaining patterns of comparative advantage, whereas the provision of roads is important to explain patterns of absolute advantage. The results further indicate that road infrastructure is more important for low technology-intensive industries, while power infrastructure is crucial for high technology-intensive industries.     

Research of two-period insurance contract model with a low compensation period under adverse selection

The phenomenon of adverse selection caused by asymmetric information dominates the insurance market. In this paper, based on principal-agent theory, we establish a two-period dynamic insurance contract model with a low compensation period. This model introduces the tools of a low compensation period and the increase and decrease in the bonus to identify the risk types of policyholders. We prove that this model can achieve a strict Pareto improvement relative to the two-period static insurance contract model with a low compensation period. Moreover, we also graphically analyze the conclusion, which can help insurance companies to design more comprehensive insurance contracts.     

Asymmetric effects of exchange rate changes on the Malaysia-China commodity trade

Previous research that considered the response of the trade balance between Malaysia and China to exchange rate changes used a linear model and did not find any significant long-run link. Suspecting that the results suffer from aggregation bias as well as ignoring nonlinear adjustment of the exchange rate, we consider the trade balance of 59 industries that trade between the two countries and use a nonlinear ARDL model to show that almost a third of the industries are affected by ringgit depreciation against the yuan, in an asymmetric manner. The largest industry, which accounts for more than 25% of the trade, is found to benefit from ringgit depreciation while not being hurt by appreciation. In total, 15 industries that account for 40% of the trade enjoy this property.     

Is globalization detrimental to financial development? Further evidence from a very large emerging economy with significant orientation towards policies

This study attempts to explore the relationship between globalization and financial development by endogenizing economic growth, population density, inflation and institutional quality for India during the period from 1971–2013. Using the more conclusivecombined cointegration method, the study provides evidence of cointegration among these variables. The long-run and short-run estimates from the ARDL model and causality tests, respectively, suggest that globalization in its all forms (political, social and economic) and its overall measure as well as inflation are detrimental to financial development, while economic growth and population density both promote financial development. Furthermore, the results also point out that institutional quality is not conducive to financial development in India, and there exists a feedback effect between financial development and inflation. Moreover, financial development is influenced by economic growth, institutional quality and population density.     

Can entrepreneurial orientation improve sustainable development through leveraging internal lean practices?

This study aims to examine the mediating role of internal lean practices (ILPs) on the relationship between entrepreneurial orientation and triple bottom line performance (i.e. environmental, social, and operational performance). We examine Chile, which represents a vibrant economy and one of the world's most productive entrepreneurship ecosystems but with a history of socio‐economic inequalities and strong profit‐driven pressures to overextract natural resources. The study is based on a questionnaire related to manufacturing sent to 112 companies in Chile. The proposed relationships are analysed through structural equation modelling. The results indicate that ILPs fully mediate the effect of entrepreneurial orientation on environmental performance and social performance and partially mediates the effect of entrepreneurial orientation on operational performance. Our study extends the literature by explaining that entrepreneurial orientation builds and strengthens ILPs for creating triple bottom line competitive advantage.     

The impact of tourism on deficit in balance of payments of Pakistan: an application of bounds testing approach to cointegration

The current study is intended to analyze the long-run relationship between deficit in balance of payments (BOPs) and tourism for the period of 1976–2015 using the autoregressive distributed lag (ARDL) model. The findings of the paper exposed an indirect relationship between tourism and BOP deficit in the context of Pakistan economy, while deficit balance of trade, real effective exchange rate, and deficit in fiscal balance have a positive and significant association with the deficit in the BOPs in the long run. Based on the findings, it is recommended that policies should be devised that promote the tourism industry of Pakistan as it would be helpful in reducing the deficit in the BOPs.     

Examining Dutch disease across Australian regions

The recent mining boom represents one of the largest external shocks to the Australian economy in its post‐war history. Although most agree that it had a positive effect on the Australian economy as well as on people’s living standards, there is disagreement over the extent to which this boom has caused deindustrialisation and the so‐called Dutch disease in Australia. Our empirical findings support the presence of Dutch disease nationally for Australia using data for the period 1984–2013. Regionally, the results show that Dutch disease was concentrated mainly in the eastern and southern states of Australia—Victoria, Queensland, South Australia and Tasmania.