Financial Deepening and Economic Growth in Gulf Cooperation Council Countries

Abstract

The goal of this study is to investigate the causal relationship between financial development and economic growth in Gulf Cooperation Council (GCC) countries, i.e. Bahrain, Oman, Kuwait, Qatar, United Arab Emirates and Saudi Arabia, over the period 1980–2012. We employ panel unit root tests, and Error Correction Model and cointegration techniques to detect long-run and short-run causalities between the variables used in our study. The overall empirical results reveal that the financial sector development contributes significantly to economic growth in the GCC countries. Our results could be of great interest for policymakers since the financial sector could play a crucial role in lowering the dependency of the governments to oil revenues and could contribute significantly to spur economic growth.     

Entrepreneurship through Bricolage: a study of displaced entrepreneurs at times of war and conflict

ABSTRACT

War and conflict brings about adverse changes for those who are displaced. How do entrepreneurial individuals respond to such adversity to either set-up, or continue with their existing entrepreneurial endeavours that would improve their own livelihood or that of others who have been affected? Whilst previous studies have found local knowledge, networks and resources to be crucial in the development of ventures in the war and conflict context, alienation from mainstream society within the host location often means that to succeed, those who are displaced require alternative strategies and approaches. Through examining the entrepreneurial ventures of six internally displaced entrepreneurs in Pakistan, our study identifies that entrepreneurial individuals find different ways to adapt to the new order, with both internal and external bricolage becoming the key strategies deployed to either re-establish their previous businesses or to develop new endeavours in the host location. To compensate for lack of local knowledge, networks and resources, we found that entrepreneurs followed closely their previous paths in their bricolage attempts, relying on reconfigurations of their pre-existing competencies, as well as utilizing pre-established and clandestine networks.     

Forecasting profitability and earnings: a study of the UK market (1982–2000)

An approach recently developed by Fama and French (2000 Fama, EF and French, KR. 2000. Forecasting profitability and earnings. The Journal of Business, 73: 161–75.  ) is applied to the study of whether UK company profitability is mean-reverting. A sample of roughly 987 firms per year for a period from 1982–2000 is used, drawn from Datastream. In a simple partial adjustment model convergence towards the mean at a rate of about 25% per year is found. The results are very similar in direction to those of Fama and French (2000 Fama, EF and French, KR. 2000. Forecasting profitability and earnings. The Journal of Business, 73: 161–75.  ) but the results do not display significant non-linearities. The change in profitability appears to be more strongly influenced by dividends in the UK.     

A Ricardian Analysis of the Distribution of Climate Change Impacts on Agriculture across Agro-Ecological Zones in Africa

This paper examines the distribution of climate change impacts across the sixteen Agro-Ecological Zones (AEZs) of Africa. We combine net revenue from livestock and crops and regress total net revenue on a set of climate, soil, and socio-economic variables with and without country fixed effects. Although African crop net revenue is very sensitive to climate change, combined livestock and crop net revenue is more climate resilient. With the hot and dry CCC climate scenario, average damage estimates reach 27% by 2100, but with the mild and wet PCM scenario, African farmers will benefit. The analysis of AEZs implies that the effects of climate change will be quite different across Africa. For example, currently productive areas such as dry/moist savannah are more vulnerable to climate change while currently less productive agricultural zones such as humid forest or sub-humid AEZs become more productive in the future. S. Niggol Seo is the Consultant to the World Bank.     

Islamic business scorecard and the screening of Islamic businesses in a cross‐country setting

Screening of shari'ah compliant firms is incomplete without the inclusion of ethical and social responsibilities. The existing “activity screen” does not directly capture the ethical and social footprints of firms. The purpose of this study is to create and test an Islamic business scorecard that combines activity, ethical, and social responsibilities that Islamic businesses must comply with. This new Islamic business scorecard replaces the existing activity screens and is added to the financial screens to create an integrated business screening mechanism to identify shari'ah compliant firms. This study utilizes data from a sample of 410 shari'ah compliant companies listed with stock exchanges in Malaysia, Pakistan, and Bangladesh. Out of the five newly developed constructs of the Islamic business scorecard, the results indicate Islamic firms are less committed to social responsibilities and tend to push forward economic responsibilities that focus on profitability and growth. Of the three countries, this study reports Malaysian firms have the highest compliance scores, while Bangladesh displays characteristics of the “next‐big shari'ah destination”. Financial screens are more important than the Islamic business scorecard for firms in the construction, industrial, technology, and trading/services sectors. Because of its connection with the economic, ethical, and social dimensions, the scorecard helps to identify the true nature of shari'ah compliance as a useful decision tool for investors and policymakers.     

Time Discounting and the Overexploitation of Coral Reefs

Environmental and Resource Economics - The incentive to overexploit a fishery resource is thought to exist if the resource owner’s discount rate is sufficiently higher than the biological...