An empirical investigation of tourism-led growth hypothesis in the European countries: evidence from augmented mean group estimator

Portuguese Economic Journal - Due to urbanization and the need for people to go from one country to another either for commercial purpose or tourism, it is therefore important to determine the...     

Wage Inequality,Increased Competition,and Trade Liberalization: Short Run vs Long Run

This paper examines the impact of increased competition and trade liberalization on skilled–unskilled wage inequality in the short run as well as the long run. It is shown that an increase in the number of firms in the producer services sector increases wage inequality in the short run even if the income shares of capital in the industrial and agricultural sectors were identical. A decrease in the services sector's fixed cost decreases wage inequality in the short run if the income share of capital in the agricultural sector is relatively large. Owing to the presence of external economies, a decrease in the services sector's fixed cost increases wage inequality in the long run. A decrease in import duty on the agricultural good increases wage inequality in the short as well as the long run but its effect in the long run is stronger due to the presence of external economies in the industrial sector.     

International Factor Mobility, Government Size and Welfare

An examination of the available data reveals that the size of government varies considerably across time and countries. By making use of a simple general equilibrium model, this paper demonstrates that size of government is affected by the availability of capital and labour within an economy. Specifically, this paper utilises a model of a closed economy that produces one-private and one-public good. Both goods are produced by means of capital and labour. Production functions are subject to constant returns to scale and perfect competition prevails in all markets. The elasticity of substitution between the public and the private good is greater than unity and there is no international factor mobility in the initial equilibrium. The size of government is measured by total spending on the public good as a proportion of the total expenditure on the private and public goods. It is shown that capital (labour) inflow can decrease (increase) the size of government. Capital inflow increases welfare if the private good is relatively capital intensive whereas labour inflow increases welfare if the public good is relatively capital intensive.     

Sources of volatility persistence: A case study of the U.K. pound/U.S. dollar exchange rate returns

This paper utilizes a new approach to examine the inherent nonlinear dynamics of the exchange rate returns volatility. Specifically, we utilize a regime switching threshold (i) generalized autoregressive conditional heteroskedasticity (RS-TGARCH) and (ii) a fractional generalized autoregressive conditional heteroskedasticity (RS-TFIGARCH) model. The RS-TGARCH model is found to be adequate in analyzing the first two moments of the U.K. pound/U.S. dollar monthly exchange rate returns series. The RS-TFIGARCH is found to be adequate for the daily returns series. The volatility persistence and leverage effects associated with exchange rate returns series are jointly tested by means of a Wald Chi-square test.     

China's export tax rebate and the duration of firm export spells

Using a survival analysis technique, this paper investigates the impact of the export tax rebate (ETR) on duration of the firm, country/destination, and product (F–C–P)‐level export spells in China. Empirical analysis of a large dataset that covers the 2001 to 2013 period shows that the effect of ETR on duration of export spells of Chinese firms is large and statistically significant. A 1 percentage point increase in ETR rate increases the duration rate of F–C–P relationships by 23.2%. Furthermore, compared with the high‐tech firms, low‐tech and middle‐tech firms experience a larger increase in the duration of export spells in response to increase in China's ETR. Firm ownership‐based analysis shows that an increase in ETR leads to a larger increase in export spells of privately owned firms than the export spells of state‐ and foreign‐owned firms. These findings have important policy implications for the design and implementation of China's ETR policy.     

FDI and market entry/exit: Evidence from China

This paper considers the impact of FDI and FDI-related spillovers on the entry and exit rates of domestic firms in mainland China's manufacturing sector. Since we suspect that aggregate results obscure differing effects based on the source of the FDI, we disaggregate FDI into that originating from Hong Kong, Macau and Taiwan (HMT) area and the rest of the world. The empirical analysis, based on 4-digit industry level panel data over the period 2003–2007, reveals that FDI originating from the rest of the world has made a significant contribution to the entry rate of domestic firms in China and the spillover effect arising from backward linkages is also positive and significant. However, FDI originating from HMT area has not encouraged domestic entry, whilst it has contributed to an increase in the exit rate of domestic firms.     

Pricing of mobile phone attributes at the retail level in a developing country: Hedonic analysis

This study has been undertaken to determine the effect of mobile phone attributes on their retail market prices. A log-linear hedonic price model was fitted to a total of 348 handsets, for which data were collected about various attributes from different websites, while the price data were obtained from mobile phone retailers in two major cities of Pakistan from November 2016 to February 2017. Results indicate that brand, battery capacity, weight, operating system, RAM, memory size and display size have a significant positive effect on mobile phone prices. Given the significant premium associated with various characteristics, manufacturers need to formulate strategies to emphasize the battery capacity of 2000-3000?mAH, RAM of more than 1GB, screen size of more than 5 inches, memory size of more than 8GB, back camera of over 15MP, 4G network mode, front camera and FM radio.     

Portfolio management of islamic banks: ‘Certainty model’

The Islamic banking and finance system is recent in origin. Its special features preclude the application of modern finance theories. The system is briefly described in this paper as part of an initial attempt to develop a simple model for the portfolio management of an Islamic bank. The model is built on the assumption of certainty for one period. A numerical example based on actual data of Faisal Islamic Bank of Sudan is given to illustrate the model and reveal its relevance.     

Labour supply, foreign investment and welfare in the presence of public infrastructure

Within the context of a small open economy where both foreign investment and the provision of public infrastructure are endogenous, this paper examines the impact of an exogenous increase in labour supply. An increase in labour supply can be attributed to labour inflow. A number of empirical studies have demonstrated the importance of public infrastructure in real economies and both developed and developing countries have attracted significant foreign investment in recent years. This paper shows that, in the case of a diversified equilibrium, variations in labour supply do not affect the wage rate, provision of public infrastructure or welfare. However, an increase in labour supply decreases foreign investment as long as the producers of the private goods derive equal benefits from public infrastructure. In the case of complete specialisation, an increase in labour supply increases the provision of public infrastructure, which leads to an increase in the wage rate and foreign investment. An increase in labour supply increases welfare as long as the provision of public infrastructure involves some fixed cost.     

Small open economies and external shocks: an application of Bayesian global vector autoregression model

Quality & Quantity - This study assesses the impact of external shocks on select small open economies (SOEs) using the Bayesian variant of the global vector autoregression model with time...