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The paper analyses the determinants of green development in the Central and Eastern European (CEE) countries pointing out the influence of the sophistication of productive structure and exported goods (economic complexity). The study uses OECD data regarding green development, World Bank Indicators, World Penn Table Data, and MIT Harvard data covering the period of 1996 to 2020, in a heterogeneous panel approach. Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) models are estimated in order to express the influence on green development of the economic complexity index, KOF globalization index, renewable energy consumption, human capital index, and a constructed institutional quality index (computed by using the Principal Component Analysis based on data from World Governance Indicators). All considered variables have a validated statistical influence on green growth in both models. The Dumitrescu-Hurlin causality test revealed a bidirectional causal relationship between institutional quality and green growth and unidirectional ones from economic complexity, human capital and renewable energy to green development and from green development to globalization. Policy implications are also provided.

ABSTRACTBuilding on the literature underscoring the importance of lending relationships and the role of banks’ structural and organisational features in favouring firms’ access to credit, we investigate the effect of branch closures on firms’ birth rates in the Italian local credit markets in 2000–2020. Despite the potential relevance, the implications of de-branching activity have received modest attention from scholars thus far. By employing various measures of branch closures and econometric methodologies, we find that the de-branching process negatively affects the establishment of new firms, and this detrimental impact appears stronger as the closures involve older branches. The results also show that our main findings seem ascribable to the closures carried out by large/medium-sized banks. As a policy implication, our work suggests that – although driven by technological transformations and banks’ necessity to rationalise costs – authorities should consider the potential negative consequences that bank de-branching may entail for new business creation.

The nexus between the terms of trade and marginal propensity to import and the consequent policy options arising from it among economic blocs is an area that has not been given due attention in the literature. The focus of the current paper is to examine the link between the marginal propensity to import and the terms of trade in the East African Community (EAC).

Understanding the rationale for macroeconomic policy coordination with the aim of achieving greater policy credibility and effectiveness in West Africa still remains the subject of debate.

It is commonly accepted that the success and expansion of insurance companies’ underwriting operations, which is indicated by the premiums received from insurance policies, is reflected in their profitability rates. During the period of 2010 to 2021, Iraqi insurance companies in the private sector that are listed on the Iraq Stock Exchange experienced a fluctuation in the increase and noticeable decrease of gross written premiums, which had a negative impact on their profitability ratios. The aim of this investigation is to analyze the underwriting activities carried out by all insurance companies that are publicly listed on the Iraq Stock Exchange spanning from 2010 to 2021, and assess the impact of these activities on the companies’ profitability rates. To evaluate the profitability of these firms, three indicators are used, namely the rate of return on assets, return on equity, and profit margin ratio. The study employs Data Panel models using Eviews 12 to identify the research samples during the study period. Additionally, the pooled regression model is used to compare the findings and test the hypotheses of the study. In a structured manner, data is collected from the annual reports released by the Iraq Stock Exchange. The statistical examination of the findings reveals that the gross written premium has a significant and positive influence on all of the profitability ratios that were evaluated in this study, namely the rate of return on assets, return on equity, and profit margin ratio.

The present study aims to investigate the effect of financial development on energy intensity (EI) at different levels of innovation and technology. In addition, this study seeks to answer whether financial development affects EI and how such effect alters in the presence of varying levels of innovation and technology. To this aim, a panel smoothing transition regression (PSTR) method was used on a sample of OPEC + countries during 2000–20. Sectors of financial development affect EI at various levels of innovation and technology differently. Based on the results, the development of the banking sector and stock market increases EI to a certain level of the threshold variable (0.28 and 0.21 %, respectively), which is research and development (R&D) expenditure as a percentage of gross domestic production (GDP). Total financial development affects EI slightly differently. The above-mentioned process reduces EI up to a certain level of the threshold (0.25 %). Then, the process decreases EI more significantly. The present study aims to assess the specific effect of financial development on EI based on the level of innovation and technology. The results indicate that the behavior of the evaluated countries, which plays a significant role in proven oil reserves, crude oil production, and oil trade in the world, becomes similar to that of developed countries after reaching a certain threshold level of innovation and technology.

This study investigates the socio-economic and environmental drivers shaping renewable energy demand and supply within a meso-level setting (Italian regions, 2004–2020). Employing a panel vector error correction mechanism (PVECM) and an integrative biplot analysis, the research outcomes reveal a market equilibrium between demand and supply in the short and long run. Human capital accumulation is identified as pivotal in driving the renewable energy transition. Significant regional heterogeneities indicate challenges in achieving convergence towards sustainability and socio-economic development and well-being. Key empirical implications include enhancing education and vocational training to strengthen human capital and implementing tailored regional strategies for sustainable infrastructure development. These findings support policymakers in formulating targeted policies for a resilient, balanced energy future and addressing regional disparities in renewable energy adoption.

Today, digital governments are creating novel digital business environments to promote enterprise innovation. How can enterprises benefit from this while minimizing the risks of working with the digital government?We explored this issue using data from China's1528 A-share firms over a decade. We find that China's digital government construction (DGC) significantly promotes firms' exploratory innovation (EI). Moreover, the enterprise's invention knowledge inertia (IKI) is an important mediation to develop its exploratory innovation in response to the construction of digital government. However, during this process, whether enterprises can maintain low risk and continuously promote EI by leveraging IKI is moderated by the extent of knowledge openness within the senior leadership team (KOM). For instance, the diversified knowledge of executives with financial backgrounds weakens the DGC→IKI, and the effect is obvious in state-owned and high-tech enterprises. In contrast, knowledge without such backgrounds strengthens the IKI→EI.This study provides valuable insights into government-enterprise cooperation, emphasizing the role of innovation knowledge inertia and clarifying the debate on whether knowledge inertia has a positive or negative impact on innovation.

Forest degradation by fires is growing in a fast pace in the Brazilian portion of the Amazonian rainforest, damaging the regional environment and economy. Seeking to measure the impact of such process on rainfall, the paper analyses a wide diversity of fine-grained satellite measurements with causal inference techniques. Results show that agricultural fires increase forest fires in 40 % of the usual rise in forest fires due to seasonal warming. Rainfall is reduced in 25 % of the rainfall decay normally caused by seasonal drying. Impacts on agricultural production were detected, but the evidence was not strong. These findings considerably expand the hitherto available evidence, which is not only scarce and biased by confounders, but essentially uni-disciplinary and thus partial in terms of the acknowledged consequences.

Financial inclusion and gender equality are the key constituents of the principle of “leaving no one behind” upheld by the Sustainable Development Goals, which emphasise a holistic approach for the sustainable development of all. Financial inclusion and gender equality are interrelated factors that can influence economic growth in complex ways. In addition to their independent impact on economic growth, there is an active interaction between the two which also plays an important role in determining the level of economic growth. This interaction has been neglected by the existing literature. Based on this gap, the paper investigates the existence and type of this interaction between financial inclusion and gender equality in determining economic growth for a group of 48 developing countries for the period 2004–2019 using the Generalised Method of Moments. The study found a complementary interaction between gender equality and financial inclusion, such that improvements in financial inclusion in the presence of better gender parity have a multiplicative effect on economic growth and vice versa. The study concludes that gender equality creates various pull and push factors for better financial inclusion. Similarly, financial inclusion eliminates gender inequality in access to financial products, exacerbating the influence on economic growth both individually and collectively.

AbstractCapital inflows, such as foreign aid, can serve as a means to enhance infrastructure development in developing countries. This suggests that foreign aid might have an impact on the level of industrialization in African nations. While existing studies indicate that foreign aid can affect the competitiveness of the manufacturing sector by appreciating the real exchange rate, the veracity of this claim relies on empirical evidence. This paper explores the influence of aid on manufacturing value added using time-series data spanning from 1990 to 2018 for 27 African countries. Employing a panel vector autoregression technique and generating associated impulse response functions, the study scrutinizes the interactions between foreign aid and manufacturing. The analysis is conducted on both the full dataset and subsamples disaggregated based on the income levels of countries. The results indicate that foreign aid acts as a stimulus for manufacturing, primarily through a sustained depreciation of the real exchange rate. This finding holds true for both the overall dataset and the subset of low-income countries. The study attributes this phenomenon to the strategic utilization of aid to enhance infrastructure, leading to a reduction in the price of non-tradables relative to tradables. Consequently, this enhances the profitability and output capacity of the manufacturing sector in African countries. In essence, the results suggest that foreign aid plays a role in influencing or stimulating industrialization in African countries. The study concludes with a discussion on the implications of these findings for industrial policy in African nations.

ABSTRACTThis article examines the impact of tax revenue mobilization on capital flight in 30 African countries, focusing on the role of natural resources. Over the period 1998–2018, econometric analysis based on dynamic generalized method of moments suggests that tax revenue mobilization reduces capital flight in Africa. However, when countries have more natural or oil resources, the negative impact of tax revenues on capital flight weakens. Therefore, despite the importance of the benefits associated with natural resource wealth (in particular, oil wealth), the latter compromises the impact of tax revenue mobilization on stemming capital flight. Finally, greater responsibility in the management of natural resources and more transparent reporting by companies operating in this sector are needed.

Exploring the influencing factors of the ecological footprint is a current focus. However, the impacts of globalization on the ecological footprint are inconclusive due to the complexity among variables. The objective of this paper is to investigate the effects of globalization on the ecological footprint in 35 European countries in 1970–2020. While conducting the research, causality, which goes beyond correlation, was emphasized, and the new panel noncausality test is employed. The results indicate that globalization is generally Granger-cause of the ecological footprint in European countries. Additionally, the individual causation test results also show a unidirectional causality from economic globalization to the ecological footprint, bidirectional causality between social globalization and the ecological footprint, and no causality exists between political globalization and the ecological footprint. In conclusion, this paper not only provides valuable insights into the complex dynamics between globalization and ecological footprints but also offers nuanced policy recommendations tailored to European countries. These recommendations are designed to guide them toward achieving long-term sustainability in the face of the intricate relationships between globalization and ecological footprints.

ABSTRACTThis paper analyses the geographical variations in income level and income inequality in Greece over a long time period allowing comparisons between pre- and during the economic and fiscal crisis periods. The analysis is based on a novel database that includes individual micro-data of declared and taxable income aggregated at municipal level over the period 2002–14. Results indicate that economic crisis and fiscal reforms changed substantially both inter- and intra-municipal/interpersonal income inequalities. The geographies of income inequality are subject to the period of analysis, type of municipality and level of income. The geographies of inequality question the fairness and inclusiveness of the implemented reforms during the recession.

This paper aims to investigate whether China can reduce urban-rural energy inequality during its transition to low-carbon energy. Using data from 30 Chinese provinces between 2006 and 2019, we employ the system generalized method of moments (SYS-GMM) to investigate the correlation between low-carbon energy transition (LET) and urban-rural energy inequality. Furthermore, to investigate the mechanism, this study also considers energy service accessibility and industrial structure upgrading. The results of the study show that the degree of LET in China is increasing but with uneven spatial distribution. Moreover, LET is effective in reducing urban-rural energy inequality in China. Specifically, 1 % increase in LET corresponds to 0.045 % reduction in the urban-rural energy inequality index. Additionally, energy service accessibility and industrial structure upgrading are identified as effective channels for LET to mitigate urban-rural energy inequality. Furthermore, our study demonstrates that the alleviating impact of LET on energy inequality is more significant in regions where LET and urban-rural energy inequality levels are high. Drawing on our research results, we suggest policy recommendations to encourage the adoption of low-carbon energy sources and diminish urban-rural energy inequality.

The recent pandemic and aftermath debate regarding bank interest margins deserve special attention and have become policy dialogue in emerging economies. However, the previous literature's findings were largely inconclusive and ignored influential variables such as the impact of default risk on bank interest margins. Using a two-step system GMM estimation considering 32 Bangladeshi commercial banks from 2000 to 2022, we produce robust evidence that higher regulatory capital restrictions reduce the bank interest margin, while increased default risk induces the bank interest margin. The impact intensity during the COVID pandemic is higher than in the pre-COVID period. Moreover, we find the synergy effect of regulatory capital and default risk assists in reducing the bank interest margin. Bank margin persistently fell during the capital market crash period, whereas it rose in the financial crisis period. We cast several robustness tests to confirm our main findings. These findings could generate important implications for bank stakeholders and policymakers.

In the globalization era, the economic policy of a specific country might be influenced by the development of neighboring countries. Thus, this study aims to probe the direct and spillover effects of financial development, economic growth, and globalization on environmental sustainability in ASEAN countries during the period of 1992-2021. By applying three spatial regression models, the results are summarized: (1) There are positive spillover effects of financial development in neighboring countries on ecological footprint in a particular country; (2) Economic growth has a positive impact on ecological deficits in both the host country and neighboring countries in the short-run; (3) The expansion of globalization in neighboring countries has a negative spillover effect on the ecological footprint in a particular country and vice versa. Based on these findings, the study recommends that when a country formulates its economic policies, it is necessary to calculate the impact of that policy on neighboring countries and vice versa. Encouraging economic growth and expanding the money supply ought to go hand in hand with fostering greater integration. This integration is essential to counterbalance the potential adverse effects of these macroeconomic variables on environmental quality and ecological balance.

Under the impact of the business sinking of large commercial banks and the cross-border competition of fintech companies, digital transformation has become a strategic priority for rural commercial banks. However, can digital transformation improve the profitability of rural commercial banks (PORCB)? This aspect has not been thoroughly examined in academic literature. This study utilizes unbalanced panel data from 54 Chinese rural commercial banks spanning from 2010 to 2021. The Peking University Commercial Bank Digital Transformation Index is employed to gauge the extent of digital transformation, while ordinary least squares estimation is used to examine its effect on the profitability of rural commercial banks and elucidate its underlying mechanisms. The findings show that: (1) Digital transformation can significantly improve the PORCB. (2) Digital transformation improves the PORCB by enhancing asset quality, operating efficiency and risk-taking. (3) The profitability-enhancing effect of digital transformation is more pronounced among rural commercial business banks with larger assets and lower equity concentration, as well as among state-owned rural commercial banks. This paper's findings represent a novel investigation into the correlation between digital transformation and the profitability of rural commercial banks. They offer a theoretical foundation and empirical evidence for future studies examining the economic implications of bank digital transformation, and offer valuable insights for enhancing the digitalisation of rural banks.

Digital economy has been the essential driving force for green development and energy transition, while the role of digital economy in the development of renewable energy remains limited. This paper explores how digital economy development alters renewable energy in China. Based on the panel data of 31 provinces and the fixed effects model, this paper finds a positive association between digital economy and renewable energy development. The digital economy exhibits a stronger positive impact on hydro energy compared to wind energy and solar energy. Local government intervention can enhance the positive association between digital economy and hydro energy development, while reducing the positive effect of digital economy on wind energy and solar energy development. We also find that digital economy produces larger promoting effects on renewable energy development in the central and western provinces compared with the eastern provinces.

The study aims to empirically determine whether a higher level of trade openness and the presence of better legal protection for investors enhances the impact of trade bloc membership on capital mobility based on four trading blocs: Eurasian Economic Union (EAEU), Central American and Dominican Republic Free Trade Agreement (CAFTADR), Central European Free Trade Agreement (CEFTA), and the Pacific Alliance. This study employs the fully modified and dynamic ordinary least squares estimators and a panel quantile regression cointegration estimator. The study finds that a country’s affiliation with a trade bloc improves capital mobility in the whole group and EAEU region, low capital mobility in the Pacific Alliance region and moderate low capital mobility in the CAFTA-DR region. The legal protection system alone provided for the investors does not improve the level of capital mobility unless its interaction with investment is included. Also the study reveals that high trade openness does not necessarily lead to better capital mobility for the studied trade blocs.

This study aims to examine the relationship between firm size and firm growth in Vietnam. The literature does not in general give support to Gibrat’s law stating that the expected increase in firm size is proportionate to its initial size, or that firm growth rates are independent of firm size. The present study relies on a sample of 578 listed Vietnamese companies representing eight different industries and covering the period 2010 to 2020. The analysis reveals that growth in firm revenues does not give support to a hypothesis of independence of initial firm sizes. When the firm size is measured by total assets the opposite result appears, i.e. the Gibrat’s law is not rejected. When including also the age of the firms in the test methodology the conclusion will be that firm growth—measured by revenue or assets—in all cases will decrease with firm size.

The aim of this study is to examine the relationship between the level of GDP per capita and social capital provinces and regions in Türkiye in the period of 2007–2018. The social capital index was used as a comprehensive variable to represent social capital. The relationships between the variables were analysed with the use of the panel Granger causality test. It was determined that there is a unilateral causality from GDP per capita to social capital in sixteen provinces, from social capital to GDP per capita in nine provinces and bilateral causality in 45 provinces. On the other hand, no significant relationship was found in eleven provinces. The results reveal that the level of social capital in terms of GDP per capita in 45 provinces in Türkiye and the level of GDP per capita in terms of social capital is a factor that should be considered. Regional causality results for Türkiye support the provincial causality results. These results provide key insights regarding the nexus between social capital and economic growth for policymakers and researchers.

This study aims to determine whether big business or institutions comprise a more significant entrepreneurship determinant. In addition, we have three subobjectives: We examine (1) how the relationship between big businesses and entrepreneurship changes according to the economic development stage; (2) if big businesses affect the two different entrepreneurship types, namely, opportunity- and necessity-driven entrepreneurship, differently; and (3) which institutional factors are effective for these two different entrepreneurship types. To this end, we compare the effects of big businesses and institutions on entrepreneurship among 33 countries covering lower-middle-, upper-middle-, and high-income countries during the 2001–2015 period. Among the various determinants of entrepreneurship, we focus on two key factors that affect entrepreneurship, namely, big businesses and institutions while controlling for the demand- and supply-side factors that influence entrepreneurship. This study conducts fixed-effect estimations. We find that the relationship among entrepreneurship, big businesses, and economic development is “N-shaped.” In particular, there is a positive relationship between big businesses and opportunity-driven entrepreneurship in high-income countries. Moreover, among the various institutional factors, only supportive public policies toward new firms and positive social perceptions toward entrepreneurs are effective for opportunity-driven entrepreneurs, whereas none of the institutional factors are effective for necessity-driven entrepreneurs.

While corporate indebtedness has increased substantially in emerging countries over the last decade, the literature on the negative consequences of this large build-up of debt on real consequences is very limited. In addition, they provide mixed results and suffer from the lack of representativeness of their samples, which can be attributed to data availability. Unlike the previous studies, this study investigates the link between corporate indebtedness and investment by utilizing a novel firm-level data covering the universe of all incorporated manufacturing firms in Türkiye over the last decade. The results of the panel regression model with multi-dimensional fixed effects provide significant evidence of an inverted-U relationship between indebtedness and investment, indicating that leverage increases investment up to a certain level, and after that, further increase in leverage has an adverse impact on investment. This non-monotonic relationship is evident for all firm size groups. Conspicuously, the indebtedness level that impedes investment is significantly lower for Small- and Medium-Sized Enterprises (SMEs) than large firms, which supports the arguments that small firms are more likely to be affected by debt overhang. Results also reveal that firms holding more cash can sustain higher levels of debt without hurting investment activity. This is also the case for high capital-intensive firms and exporters. Findings of this paper highlight the importance of policies to make equity financing more attractive, incentivize the uptake and provision of equity capital from private investors, and deepen the capital markets.

This study investigates the impact of artificial intelligence (AI) and big data technologies on unemployment in the G7 countries using a dynamic panel estimation approach. The analysis covers the period from 2005 to 2020 and incorporates various control variables related to unemployment rates, along with AI, big data, data science, and machine learning Google Trend Index (GTI). The Arellano–Bover/Blundell–Bond (1998) system estimator is employed to ensure robust results, particularly in cases involving multiple lags of the dependent variable. The most noteworthy results highlight a negative association between AI, big data technologies, and unemployment. These technologies enhance productivity, leading to increased capital accumulation and the creation of new jobs. This validates the ''displacement effect'' for AI and big data technologies, implying that while certain jobs may be automated, the net effect is job creation. Consequently, implementing AI and big data technologies in economic processes can effectively reduce unemployment rates and boost wages by creating new job opportunities.

This study empirically investigates the existence or not of Environmental Kuznets Curve (EKC) hypothesis in Nordic and Non-Nordic European countries, with carbon dioxide emissions (and ecological footprint for robustness tests) as proxy of environmental quality. The data are spanning from the years 2005–2019 and covering 22 countries. Using the Gross National Income per capita as measure of economic growth, we show on one hand as first contribution that initially, EKC hypothesis is significantly not valid in the full sample. Interestingly, when taking the Economic Complexity into account, our results show evidence of a consistent leveraging effect that changes the U-Shaped into an inverted U-Shaped structure. As second contribution, a step forward into our results with quantile analysis shows evidence of a significant countries’ threshold effect only in median and upper quantiles where the EKC hypothesis is confirmed. On the other hand, a first disaggregation of the sample into Nordic and Non-Nordic European countries, show no evidence of EKC structure among the two sub-groups. Nevertheless, a further disaggregation based on Euro zone currency criteria, show as third contribution that Euro zone countries are characterized by a U-Shaped structure whether Nordic or Non-Nordic, contrary to an inverted U-Shaped structure for Non-Nordic countries belonging to Non-Euro zone. Policy implications are discussed.

This study examines the effect of artificial intelligence on unemployment in high-tech developed countries. While artificial intelligence is more discussed in futuristic aspects, comprehensive empirical studies are limited in the literature. Therefore, this study uses the dataset, which includes 24 high-tech developed countries from 2005 to 2021 and examines the relationship between a country's Google Trend Index related to AI and the unemployment rate. In the empirical approach, we control the dynamic effect of unemployment by using dynamic panel data and GMM-system estimation to determine the effect of AI on unemployment. The main results show that artificial intelligence decreases the level of unemployment, and the ‘displacement effect’ of AI is validated.

In this study, we aim to assess the relevance of credit composition to entrepreneurship empirically in light of the Schumpeterian perspective. The results of such an analysis can imply whether central banks should continue with the so-called neutrality principle or undertake an active credit policy. We employ a panel data model to quantify the effect of credit composition on entrepreneurship in 54 high- and middle-income economies from 2001 to 2016. To capture credit composition, we disaggregate total credit as credit to non-financial and financial businesses as well as credit to households and mortgages, and we hypothesize that the larger share of credit for non-financial businesses and households would be associated with greater entrepreneurship. The results indicate that credit composition is important for both high- and middle-income economies, but the effective composition of credit is different in the two sub-samples, which is why the effectiveness of credit allocation should not be taken for granted and active remedies are required. This paper corroborates the Schumpeterian view on the ties between credit allocation and entrepreneurship in both high- and middle-income economies.

The concept of centrality is widely used to monitor systems with a network structure because it allows identifying their most influential participants. This monitoring task can be difficult if the number of system participants is considerably large or if the wide variety of centrality measures currently available produce non-coincident (or mixed) signals. This document uses robust principal component analysis to evaluate a set of centrality measures calculated for the financial institutions that participate in Colombia's four financial market infrastructures. The results obtained are used to construct general indices of centrality, using the most robust measures of centrality as inputs and leaving aside those considered redundant.

As African countries grapple with the challenges of terms of trade occasioned by economic uncertainty, there is a need for a study on the effect of terms of trade on household income in Africa. Also, as African countries continue to commit to the role of institutional quality in improving terms of trade, this study further reinforces the role of governance on household income in Africa. The study employs the Two-stage Least Squares (2SLS) fixed effects estimation technique based on data spanning 2002–2021 for 36 selected African countries. This study provides more robust evidence by employing household final consumption expenditure as a measure of household income. Findings suggest that improvement in the terms of trade stimulates household income. Similarly, the results indicate that governance plays a critical role in enhancing household income status in Africa. Specifically, government effectiveness, control of corruption, regulatory quality, rule of law, and political stability positively and statistically significantly influence household income levels in Africa. Furthermore, GDP per capita growth positively impacts household income, albeit the effect is statistically insignificant. On the contrary, higher inflation rates, exchange rate volatility, and foreign direct investment (net inflows) have a limiting effect on household income, although, the effect of currency depreciation is generally not statistically significant. Sequel to these findings, the study calls for strong institutional quality and export promotion strategies in Africa.

ABSTRACTWorldwide, it is widely recognized that violent conflicts constrain economic growth and development. Thus, it is necessary to research and analyse the main causes of violence and their relationship with development. This paper analyses how violence has affected economic development in the Mexican context during the 2000–2015 period. It takes into account that in the last decade, this country has had increased levels of violence, especially since the ‘war on drugs’ against drug trafficking was promulgated in 2006. This study uses different econometric models that apply the assessments of the panel unit root and cointegration tests and panel cointegration estimation. The results indicate that the tests used to validate the data allow the panel data cointegration relationships to be calculated. They demonstrate the existence of a long-run relationship between violence and economic development. Specifically, the results take into account that gross domestic product per capita and public investments have inverse relationships with the homicide rate, whereas poverty, unemployment, illiteracy and the Gini index have direct relationships with the homicide rate. Moreover, violence is strongly related to the deterrence variables. The findings of this study demonstrate that drug trafficking explains the increased violence in Mexico. Thus, it is important to develop and formulate adequate policies to control this situation, take measures to control violence starting with its root causes and promote social and economic development with a strategy to strengthen legal activities in society.

Digital finance is a mode of financial innovation conducive to raising the level of urban innovation. Using city-level panel data on 268 Chinese cities from 2011 to 2019, this paper investigates the relationship between digital finance and urban innovation with a fixed-effects model. Further, this paper carries out a heterogeneity analysis and studies the impact mechanism of digital finance on urban innovation by constructing a moderating effects model. The empirical results are as follows. First, digital finance can effectively increase urban innovation, but significant differences exist in various dimensions. Second, the heterogeneous impact of digital finance on urban innovation is reflected in cities with different levels of commercial attractiveness. Third, the supply of traditional finance plays a moderating role in the promotional effect of digital finance on urban innovation. These conclusions lead to significant policy implications for cities that aim to use digital finance to optimize their financial system and develop an innovation-driven economy.

Biotic and abiotic carbon sequestration currently seems to be the only viable tools at the disposal of mankind for mitigating greenhouse gas (GHG) emissions and thus a remedy for tackling global warming challenges. This study accesses the global carbon capture and storage (CCS) programme: the level of success in its implementation and its impact using panel data from eight countries, the majority of which have begun one or more operational CCS facilities. To achieve this objective, fifteen years period time series data was sourced for the eight selected countries based on data availability, namely the United States (US), the United Kingdom (UK), Canada, China, Australia, Norway, South Africa, and Nigeria; ranging from 1990 to 2015. The panel ARDL results show that the explanatory variables, global industrial production (LIP), Electricity production (LEP), Agricultural production (LAP), transportation (LTR), and energy supply (LES) have a long-run relationship with the dependent variable (LGHG emissions). While the short-run results show that none of the variables have a significant contribution to LGHG emissions. In the long-run results, LIP and LTR significantly contribute to the reduction of LGHG courtesy of the CCS programme while LEP, LAP, and LES contribute to a rise in the LGHG emission. The cross-sectional results show that all the variables have significant impacts on LGHG in all the sampled countries except Australia. Suggesting that, the CCS programme is viable for mitigating global warming and climate change and therefore should be considered by the various countries of the world.

Exploring the factors that affect energy intensity is a worthy research topic because a decline of energy intensity lowers greenhouse gas emissions and increases energy security. Therefore, using the World Bank data from 2000 to 2020, this study examined how industrialisation, trade openness, financial development, and urbanisation affected energy intensity in 12 Newly Industrialized Countries (NICs). We used panel autoregressive distributed lag/pooled mean group (ARDL/PMG), cross-sectional ARDL (CS-ARDL), and fully modified ordinary least squares (FMOLS) to determine the long- and short-run effects of explanatory variables on the dependent variable, energy intensity. All variables are found stationary after the unit root test and cointegration test confirms that variables are linked in the long run. Panel ARDL/PMG and CS-ARDL results show that industrialisation increases energy intensity in the long and short runs. These tests also show that financial development increases energy intensity over time but not immediately. Trade openness decreases energy intensity in the long run but not in the short run. Urbanisation has negligible effects. Dumitrescu and Hurlin (2012) Granger causality test result shows that energy intensity causes trade openness. The test also shows two-way causality between industrialisation, financial development, and energy intensity. Results-driven policy recommendations, such as investment in efficient and environmentally friendly technologies, and facilitation of trade openness, are made following the conclusion.

We contribute new empirical evidence on monetary policy communication and inflation expectations by firms. First, we construct a new indicator of the perceived tone of monetary policy communication that complements traditional indicators of the effective tone. Both have the expected negative sign and are statistically significant in panel data regressions with firms’ inflation expectations as the dependent variable, suggesting that communication has an important effect over inflation expectations. We also compute readability and perspicuity indicators of the communications. Better readability of monetary policy communication reinforces the effect of the tone. Impact is larger when combined with the indicator of effective tone, suggesting that readability is an important component in monetary policy communication.

The purpose of this paper is to determine the significance of female entrepreneurship for economic growth in Southeast Asian countries. A panel data model was applied, with GDP per employed person serving as the dependent variable and seven key factors in female entrepreneurship serving as independent variables. Empirical panel quantile regression using the Method of Moments Quantile Regression (MM-QR) approach found that both the female entrepreneurship indicator and the female workplace indicator have a positive impact on economic growth. However, the Gender Inequality Index, Gender Development Index, female pay indicator, female parenthood indicator, and female marriage indicator all have negative effects.

ABSTRACTThis study examines the productivity and efficiency spillovers in the presence of trade linkages in 27 European Union countries from 1990 to 2019. The European Union is one of the largest trading blocs in the world and has implemented costly policies and reforms to improve productivity growth. Meanwhile, trade-induced productivity and efficiency spillovers have often been overlooked in the literature, and examining them could provide further clarity to the productivity puzzle. Using a spatial Durbin model and a bilateral trade matrix, this study estimates a spatial stochastic production frontier model using data from the Penn World Table and the World Integrated Trade Solution. We decompose production frontier estimates to obtain the spillover effects of total factor productivity growth and technical efficiency from a network of bilateral trading partners. Our results provide evidence of productivity and efficiency spillovers; however, the gains are uneven. Policy implications are discussed.

Behavioral theories suggest that overconfident investors overestimate the quality of their information and underestimate risk. They have a high demand for risky assets and require a lower risk premium, causing asset prices to rise and leading to overvaluation. We investigate how overconfidence affects firm valuation in Saudi Arabia's emerging stock market. We used 4004 firm-quarter observations. To ensure that our results are robust to unobserved firm-specific heterogeneity and endogeneity issues, we used the fixed-effects panel data model and the dynamic panel data model. The findings show that overconfidence positively and significantly affects firm valuation. Results remain robust when using various overconfidence proxies and when replacing the different econometric models. This study has important implications for academics, investors, and regulators. Hopefully, it will make investors more aware of the impact of their psychology on asset pricing; thus, increasing the rationality of their stock market decision making for improved market efficiency.

This paper investigates the impact of foreign direct investment (FDI) on economic growth in a sample of 10 ex-socialist European and Asian countries. While the link between FDI and economic growth has been extensively investigated in empirical literature, this paper contributes to this literature by econometrically investigating the effects of FDI inflows in specific sectors using the panel data estimation techniques. In addition to confirming the positive impact of total FDI inflows on economic growth, using the WiiW (the Vienna Institute for International Economic Studies) FDI database, which disentangles the FDI data across different industries, the paper finds significant effects of FDI inflows in manufacturing on growth, whereas FDI inflows in other sectors are only sporadically statistically significant. This finding serves as a basis for further investigation of the specific subsectors (NACE 2-letter classification) within manufacturing, and the empirical investigation finds that not all FDI inflows within manufacturing enhance economic growth.

This article studies the effects of Chinese aid on economic development in Africa. We geographically match Chinese aid in Africa to the satellite nightlight and other variables. Using a grid-cell panel dataset, we find that Chinese aid, particularly infrastructure projects, has significant and robust positive impacts on the economic development in Africa. Mechanism analysis suggests that Chinese aid substantially reduces violent rebel activities and growth in population and industries. The heterogeneous analysis demonstrates that Chinese infrastructure projects foster development not via resource exploitation.

One of the regulatory responses to the 2008 financial crisis was to internalize the costs related to banks’ distress by introducing bank levies. More than 23 European banking sectors have been confronted with the new levy regime imposing the additional tax on banks’ balance sheet. This study analyzes the effect of the levy introduction on banks’ profitability, credit activity, and on their business models. More importantly, we confront two different levy regimes – one imposed on banks’ assets and the other on liabilities – to assess their differential impact. A generalized least squares regression with a random effect is performed on a data sample of Hungarian and German credit institutions from 2005 to 2015. The results show that levy introduction weakened banking sectors in terms of their profitability as well as their lending activity. Even though banks try to compensate for the cost of the levies by passing some of the costs on to the customers and restructuring their operations to limit the tax burden, we find that these activities are not sufficient to offset the whole tax burden. We also note that while the asset levy has a more severe effect on banks’ profits, the liability levy severely affects banks’ lending due to lower interest margin resulting from higher cost of funding. Our research results provide important conclusions for regulators, especially during turbulent periods such as the COVID-19 pandemic to strengthen the banking sectors by considering the levy suspension.

This study analyses the impact of mergers and acquisitions on performance of Indian pharmaceutical firms following the implementation of TRIPS in 1995. In order to identify adequately the effect of mergers, we investigate the impact on firm performance of the merged vis-a-vis the non-merged firms in the post-TRIPS period using difference-in-differences and propensity score matching approaches. Our results suggest that firm performance improved in merged firms, following the mergers. We argue that our finding represents the incidence of “positioning” merger (Gorton et al., 2009). Moreover, transfer of technologies and capabilities helped to improve firm performance in merged firms. Our findings have significant policy implications for Asian countries.

This study takes a new look at the stock price-exchange rate nexus and attempts contributions to the extant studies in a number of intuitive ways. First, we analyze the reverse relationships given the theory-backed two-way causality between the two variables. We reassess the nexus across the First, Second and Third Waves of the COVID-19 pandemic, as well as comparison between advanced and emerging economies. Third, we adopt a panel modeling approach that simultaneously takes nonstationarity, cross sectional dependence, and asymmetry into account. The data analyses show that the relationship is statistically negative for the two nexuses. The magnitudes were higher during the crisis (the COVID-19 pandemic) although the relationship broke down during the Second Wave as the Delta variant surged. We identify relevant investment and policy implications of the findings.

One of the most effective ideas for comparing the values of two or more currencies is the purchasing power parity hypothesis (PPP). Most earlier works on PPP focused on using the standard cointegration approach by assuming a unit root for the observed series. This assumption is not always valid, especially in series with short-term dynamics. Thus, in this paper, we developed the fractional cointegrated panel approach for testing the absolute Purchasing Power Parity (PPP) model. The empirical illustration was achieved using the exchange rates and price ratios for the 16 West African countries for 52 years (1970 - 2021). The results from the fractional cointegration test confirm the presence of relative PPP for the panel of countries in the long run, while the estimation of long-run intercepts and cointegration vector confirms the absence of the absolute PPP for the panel of countries.

AbstractThe current study aims to analyze the factors influencing ASEAN economic growth and integration. Specifically, the variables of inter-regional trade, human resource development, and corruption were investigated in six lower-middle-income countries from 1996 to 2019 through Driscoll and Kraay’s, Newey and West’s, and Dumitrescu and Hurlin’s as causal analysis. The study’s results found that capital had an impact of 0.248%, labor had an impact of 0.467%, human development had 3.010%, intra-regional trade had an impact of 0.014%, and corruption control had 0.260%. Statistically, all variables have a significant effect except for inflation. Furthermore, a bidirectional found in economic growth from the capital, corruption control, and intra-trade. A unidirectional was found for economic growth between the labor force and human development. At the same time, a neutral relationship was found between inflation and economic growth. Based on these findings, strengthening the economy in the integration area needs to be done, even if it’s only trading with fellow LMIs. Besides that, there is an increasing need to increase the allocation of education and health, which stimulates productivity. The government also needs to strengthen corruption control, which is detrimental to developing nations and economic growth.

Increased competition has forced banks to undertake off-balance sheet business (OBS), but the contribution of OBS to bank efficiency remains controversial. Therefore, using panel data collected from 57 Chinese commercial banks for 2013-19, this paper takes a step and investigates the relationship between OBS and bank efficiency at various levels of financial innovation matching. Results reveal that OBS generally has a negative effect on bank efficiency and that the effect wanes when local financial innovation matching levels increase. Scale heterogeneity is also found in the link as in small-sized banks OBS bring about more profits than risks. Besides, opening a direct bank mitigates the negative impact of off-balance sheet business, especially in regions with lower financial innovation matching levels. Findings suggest that conducting OBS is most beneficial in small-sized banks and that local governments should improve regional financial innovation matching levels as ways to harness the development of banks.

The aim of this study is to investigate the influence of military expenditure on the relationship between terrorism and investment in twenty-four African countries for the period 2001 to 2018. The study utilizes fixed effects regression with Driscoll and Kraay standard error and cushions the effect of simultaneity and reverse causality using the lags of the regressors as instruments. The empirical results reveal the negative effect of terrorism on both domestic investment and foreign direct investment (FDI). The study further reveals a negative net effect of military expenditure on the relationship between terrorism and investment. Furthermore, it was discovered that a threshold of 2% to 5% of military expenditure in GDP is required for military expenditure to offset the negative effect of terrorism on FDI. The study recommends that counter-terrorism initiatives be tailored more towards inclusive growth policies, increasing access to education, and improving the quality of governance.

This paper analyzes the impact of health indicators on an individual's trip and mode choices to out-patient care facilities. The study's focus is an out-patient trip to a health care facility, and the source of data is the China Health and Retirement Longitudinal Study (CHARLS) for 2011, 2013 and 2015. Based on a random utility framework, the study finds that making a trip to treat an illness or for a check-up increases the likelihood of an out-patient trip by 52 and 31 probability points, respectively. Out-patient visits for which insurance is not relevant, when the individual pays most of the out-of-pocket costs and when the facility is a public facility are also important factors. Diagnosed and other personal health factors have some but much more modest effects on one's trip choice. The analysis also identifies differential modal impacts of health indicators. A series of robustness tests generally confirm the results and identify areas for further research. Including a no-trip option, the biannual survey and infrequent out-patient trip-making mitigate endogeneity concerns. The analysis has broad health policy and transportation implications for an ageing population whose share is increasing.

Land value capture can be defined as a policy approach that allows communities to restore and reinvest land value increases that result from public investment and other government actions. For that reason, public action should generate public benefit. The recurrent property tax, one of many tools for land value capture, is the foundation of a stable, enduring revenue source that supports the provision of essential housing and amenities services. This empirical paper aims to examine the influence of recurrent property tax income, and general government spending on housing and community amenities on house prices. To assess the hypothesized direction of the effects, yearly data structured in a balanced panel on a sample of 26 European Union economies from 2010 to 2019 was used. Fixed effects regression model with Driscoll and Kraay standard errors was employed and the results confirmed a negative but statistically insignificant effect of increased property tax revenue on house prices, while increased expenditure on housing and amenities confirmed a positive and statistically significant effect on house prices dynamics in European Union countries.

In this article, the author examines the impact of government expenditure on economic growth. A review of empirical studies shows that researchers have found a negative link between government spending and economic growth in most cases. This paper is based on yearly data between 1995 and 2020 in euro area countries, with the application of linear regression on panel data. The main purpose is to determine whether government spending affects economic growth and, if so, how. Based on the econometrics model applied, the author established that in panel data, government expenditure has a negative impact on economic growth, more precisely, if government spending as a share of GDP increases by 1%, economic growth decreases by 0.509%. In addition, there is a significant negative relationship between government expenditure and economic growth for each country as well as the entire panel.